TheNFAPost Podcast

The Supreme Court is set to pronounce today its verdict on the cross-appeals by Tata Sons and Cyrus Investments challenging the NCLAT order, which restored Cyrus Mistry as the executive chairman of the Tata conglomerate.

The court had reserved the verdict on December 17, last year.

The National Company Law Appellate Tribunal (NCLAT), in its order, had reinstated Cyrus Mistry as Tata Sons Chairman.

Many legal experts then were surprised by NCLAT’s verdict to reinstate Mistry as chairman of Tata Sons, because he had never sought the relief of reinstatement, both before NCLT and NCLAT.

Moreover, Mistry’s reinstatement would not have any meaning, because his term had already ended in March 2017, they had opined.

Aggrieved by the judgment, the firm filed an appeal before the Supreme Court on January 2, 2020, challenging the impugned judgment in its entirety.

Ratan Tata, on January 3, 2020, had also filed a separate appeal before the SC
claiming that the NCLAT’s order holding him guilty of oppressive and prejudicial actions against the minority shareholders’ interest, is without any factual or legal foundation whatsoever.

The apex court on January 1, 2020 stayed the operation of the impugned judgment of the NCLAT dated December 18, 2019 and further issued notice to the parties involved.

On December 17, Shapoorji Pallonji Group had submitted to the SC that Mistry’s removal as Tata Sons’ chairman in a board meeting held in October 2016 was in complete violation of principles of corporate governance.

Raising objections to Sapoorji’s submission, Tatas said the proposal to seek a change of guard at Tata Sons Limited was initiated by the majority shareholders and it was not on account of any personal ill will or animosity against Mistry.

Seven of the 9 members had voted against Mistry.

“A selection committee selects a candidate for the position of chairman. However, the removal can only be done by the Board because only the Board is privy to the incumbent chairman’s work and can take a decision on removal,” Tata Sons’ Counsel Harish Salve submitted before the SC.

He also contended that the allegations pertaining to the removal of Mistry, are in the nature of directorial complaints, that cannot be raised in a petition under Sections 241 of the Companies Act, 2013.

“All actions have been taken as per the provisions of AoA, Companies Act, 2013 and the Secretarial Standards on Meetings of the Board of Directors framed under Section 118(10) of the Companies Act, 2013,” he added.

Previous articleSebi Makes Sweeping Changes, Eases Listing Norms For Startups
Next articleGroupe Atlantic To Invest Rs 68.3 Crore in SHIL’s Subsidiary for 50% Stake In Water Heater Business


Please enter your comment!
Please enter your name here