In Thursday’s hearing, Mistry lawyer said the Act’s requirement only pertained to one-tenth of members from a class that had been aggrieved and could not be held to include both equity and preference shareholders in such cases, as this interpretation would undermine the purpose of the provision to curb mismanagement in a company and remedy the mischief being caused. Highlighting articles of association of Tata Sons and relevant provisions of the Act, the lawyer for the Mistry companies said the rights of preference shareholders did not include making decisions on the affairs of the company and were merely akin to a debt. This distinction had not been considered by the NCLT while making its decision, he added and said the appeal to NCLAT would become a test case on issues of oppression and mismanagement.
On the issue of waiver, the lawyer also said the Mistry petitions had significant aspects of public and national importance, and were a fit case for waiver, regardless of the issue of maintainability.
Rejecting any chance of a settlement between the two sides, the lawyer for the Mistry companies said the issue would have to be heard by the tribunal to finally put the matter to rest. This led NCLAT to remark the issue had now become one of prestige. After hearing the submissions, the court said it would look at the issue of maintainability in further detail and establish the grounds under which a waiver could be allowed. The appeal will be heard again on July 3.