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#TataMistry Suit ‘not maintainable’, waiver arguments to be heard tomorrow

Varun Marwah

“The petitioners have failed to convince the court that the application is maintainable,” said Judicial Member BSV Prakash Kumar at Court Room 1, of the Mumbai Bench of National Company Law Tribunal (NCLT)

NCLT has held that the oppression and mismanagement suit filed by Cyrus Mistry’s investment entities is not maintainable under Section 244 of the Companies Act, 2013 (Act).

While the written order isn’t out yet, what the brief oral order reveals is that the NCLT Mumbai Bench has not subscribed to the arguments presented by on behalf of Cyrus Mistry and his investment entities, thereby maintaining status quo with the old interpretation of these sections.

Cyrus Mistry’s investment entities hold 18.37% of the ‘equity share capital’ and only 2.17% of the ‘issued share capital’. Section 244(1)(a) of the Act requires that the party filing the suit under Section 241 must have a minimum of 10% of the ‘issued share capital’.

The NCLT was, however, quick to add that the petition has not been dismissed and that the arguments on waiver will be heard tomorrow, i.e. February 7, in consonance with the NCLAT order.

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