In a major setback for Cyrus Mistry, the National Company Law Appellate Tribunal (NCLAT) on Friday dismissed his petition seeking a direction to Tata Sons to stay the extraordinary general meeting called for February 6 to remove him from its board. Though Mistry can appeal against the appellate tribunal’s order in Supreme Court, it won’t be possible before February 7 as the order, which is necessary for filing an appeal, will be made available on that very day. This means Tata Sons can go ahead with its EGM on February 6 and sack Mistry from its board.
Mistry had moved NCLAT on February 2 after the Mumbai bench of the National Company Law Tribunal (NCLT) had on January 31 for a second time refused to stay the EGM.
Dismissing the appeal, a bench comprising NCLAT chairperson SJ Mukhopadhaya and member Balvinder Singh said that the NCLT should decide the company’s original petition expeditiously. Mistry’s original petition has alleged oppression of minority shareholders and mismanagement at Tata Sons.
Though on Friday Mistry’s counsel had also sought transfer of their cases to another bench of the NCLT, the appellate tribunal declined it, saying, “If we pass such order, it would affect the integrity of the judges. You can move the president (of NCLT) and seek transfer. We will not say anything.”
Mistry had moved the Mumbai bench of the NCLT on December 22, 2016, which had asked both sides to file affidavits and rejoinders as well as not to “initiate any action or proceedings over this subject matter pending disposal of this company petition”. However, a fortnight after this order, Tata Sons called for an EGM on February 6 to remove Mistry from the company’s board.
Mistry responded to the move by filing a contempt petition contending that it amounted to contempt of court.
The NCLT, however, dismissed the contempt petition stating that it had not given any consent order against Tata Sons to restrain in dealing with the affairs of the company and its management.
The NCLT had decided to expeditiously hear the original petition on January 31 but Mistry’s counsel on that day declined to argue the main petition and instead first sought a stay on the EGM and a waiver from the clause that disallows stakeholders with less than 10% stake (equity plus preference shares) from approaching the tribunal. A displeased NCLT refused to oblige and adjourned the matter for further hearing on February 13 while warning Mistry’s counsel that if on that day it did not argue the main petition, the case would be dismissed