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NCLAT accepts Cyrus Mistry counsel’s appeal

This order overrules the NCLT’s January 31 order that Mistry’s lawyers should argue their main case without worrying about the maintainability or the waiver petition.

Cyrus Mistry, NCLAT, national comapny law tribunal, cyrus mistry case, tata sons, indian express news, business news Cyrus Mistry Former Tata Sons Chairman.

In a breather for Cyrus Mistry, the National Company Law Appellate Tribunal (NCLAT) has accepted his counsel’s appeal that the National Company Law Tribunal (NCLT) should first decide whether his petition is maintainable or not. If the NCLT decides against it, it should then decide whether a waiver, as requested, is being provided to him and, thereafter, hear the merits of the main case.

“We are of the opinion that during the final hearing the question of maintainability should be decided first and if it is answered in negative, against the appellants, the question of waiver of the petition be decided if any strong ground has been made out to claim exception under provisions to sub section (1) of Section 244. In case, aforesaid issues are decided in favour of the appellants, then the tribunal can decide the case on merit,” the appellate tribunal’s judgment reads.

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This order overrules the NCLT’s January 31 order that Mistry’s lawyers should argue their main case without worrying about the maintainability or the waiver petition.

“It is settled proposition of law that a party can raise maintainability at any point of time, therefore, it is the discretion of the court to decide whether the maintainability point is to be decided at threshold or along with the main company petition,” the January 31 order of the NCLT’s Mumbai bench reads.

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Mistry had, a week before the January 31 hearing, sought a waiver of section 244 of the Companies Act, 2013, which states that to seek relief under sections 241 and 242, the petitioner(s) need to comprise “not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less, or any member or members holding not less than one-tenth of the issued share capital of the company”.

In his petition seeking a waiver, Mistry had stated that although the petitioners do not meet the strict legal requirements because of the number of members in the register of members, the reality of the matter is that they constitute one of the only two group of members in a very closely held company.

First published on: 09-02-2017 at 02:25:19 am
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