The National Company Law Appellate Tribunal (NCLAT) Tuesday resumed its hearing over the batch of petitions filed by ousted Tata group Chairman Cyrus Mistry and the two investment firms supporting him.
During the proceedings, senior advocate C A Sundaram representing Mistry camp submitted that the new company law (the Companies Act, 2013) has expanded the scope of the minority protection from the previous Companies Act 1956.
According to Sundaram, section 241 and 242 of the Companies Act, 2013 even cover the prejudicial acts against the minority shareholders besides oppressive acts.
"The new company act also takes care of prejudicial acts against the minority shareholders," Sundaram submitted before a two-member bench headed by NCLAT Chairman Justice S J Mukhopadhaya.
The Tata side was represented by senior advocates Harish Salve and Abhishek Manu Singhvi during the hearing.
The appellate tribunal would continue its hearing tomorrow also.
The Mistry camp had challenged the July 9 order of the Mumbai bench of the NCLT which dismissed the pleas against his removal as Tata Sons chairman, as also the allegations of rampant misconduct on part of Ratan Tata and the company's board.
A special bench of the tribunal had held that the board of directors at Tata Sons was "competent" to remove the executive chairperson of the company. The NCLT bench had also said that Mistry was ousted as chairman because the Tata Sons' Board and its majority shareholders had "lost confidence in him".
Under the Companies Act 2013, an order of NCLT can be challenged before the National Company Law Appellate Tribunal (NCLAT). Mistry, who was the sixth chairman of Tata Sons, was ousted from the position in October 2016. He had taken over as the chairman in 2012 after Ratan Tata announced his retirement.
Two months after his removal, Mistry's family-run firms Cyrus Investments Pvt Ltd and Sterling Investments Corp approached the NCLT as minority shareholders, against Tata Sons, Ratan Tata, and some other board members.
Mistry in his pleas primarily argued that his removal was not in accordance with the Companies Act and that there was rampant mismanagement of affairs across Tata Sons.
He also alleged that Tata Trust chairperson Ratan Tata and trustee N Soonawala interfered with the day-to-day operations of the group companies, they acted as shadow directors, and all of the above caused massive revenue loss for the group.
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