What NCLT’s decision means for ousted Cyrus Mistry
It was always known that the legal fight between the Tatas and Cyrus Mistry would be long and protracted, and Monday morning’s developments, when the National Company Law Tribunal (NCLT) ruled that the petition of the Mistry family firms alleging mismanagement at Tata Sons is not maintainable is one move, and a procedural one, in a complex process.
Still, Cyrus Mistry, removed as executive chairman of Tata Sons in a boardroom putsch on 24 October, may have wanted a better beginning.
Sure, it was always expected that NCLT would hold the petition of the two Mistry firms “not maintainable” because, according to the new companies law, they do not have enough shareholding to file a complaint, but it was also expected that the tribunal would hear their waiver petition, which was filed along with the original one, simultaneously and rule on it.
By saying it will hear the waiver petition on 7 March, NCLT has introduced a minor element of drama in the proceedings.
Experts say that while a waiver can be expected—allegations of mismanagement by a minority shareholder are serious, and using a technicality to dismiss such complaints isn’t on, they say—that will not be the end of the matter.
Any waiver granted can be challenged by Tata Sons before the National Company Law Appellate Tribunal because the rules say that the Mistry should have sought the waiver first before filing their petition alleging mismanagement.
And if a waiver isn’t granted, the Mistry firms could challenge it.