#TataMistry: Mistry tries to tackle ‘maintainability’ at the NCLT

As pointed out earlier, Mistry’s petition filed in the National Company Law Tribunal (NCLT) under Sections 241, 242 and 244 of the Companies Act, 2013 (Act) for oppression and mismanagement, faced a critical challenge, that of maintainability. And the lawyers representing Mistry are trying hard to tackle that challenge..In an attempt to justify the maintainability of the petition, an affidavit has been filed on behalf of Mistry in the NCLT. Tata had challenged the maintainability of the petition, inter alia, on grounds of the petitioners actually holding merely ‘2.17%’ of the ‘issued’ share capital, which is far less than the statutory requirement of 10%..The technical standpoint taken by Mistry is to counter the seemingly hyper-technical view of the term ‘share capital’ taken by Tata. As per Mistry’s submissions,.“….preference shareholders are not, except to the extent receipt of dividend at a fixed rate, a stakeholder in the business of Respondent 1, the substantial interest and shareholding of the Petitioner as equity shareholders alone warrants the exercise of discretion and power as prayed for in the Company Application”.The affidavit, further contends that, of the 51 members in Tata Sons, the petitioner companies are, in fact, the only other set of members, other than those affiliated with the Tata Group in one way or the other..Briefly reiterating the various acts of alleged ‘oppression and mismanagement’, the affidavit nonetheless prays for a ‘waiver’ from the strict requirements of Section 244(a) of the Act; and further requests the NCLT to proceed on merits, to adjudicate on the larger question which affects a large pool of public shareholders falling under Tata Sons, and not just the petitioners.