On 17th December, 2020, the Supreme Court reserved its verdict on the cross appeals filed by Tata Sons Pvt. Ltd. and Cyrus Investments Pvt. Ltd., against the appellate tribunal NCLAT order (December 18, 2019), which had ordered the reinstatement of Cyrus Mistry as the Executive Chairperson of Tata Sons Limited – the $100 billion plus salt-to-software Tata conglomerate.
A bench comprising Chief Justice S A Bobde and Justices A S Bopanna and V Ramasubramanian, asked the parties to file compiled written submissions. During the hearing conducted via video-conferencing, Shapoorji Pallonji (SP) Group claimed that there was breach of Articles of Association and provisions of the Companies Act in the removal of Cyrus Mistry as the Chairman of Tata Sons, in October 2016. The Tatas denied the allegations and claimed there was no wrong-doing as they were well within their rights to oust Mistry.
On 10th January, 2020, the apex court granted relief to Tata group by staying the National Company Law Appellate Tribunal (NCLAT) order of December 18, 2019, by which Mistry was restored as the Executive Chairman of the conglomerate. Mistry had succeeded Ratan Tata as chairman of Tata Sons in 2012, but was ousted four years later on October 24, 2016.
In May, 2020, the Supreme Court had issued notice to Tata Sons and others on a cross-appeal filed by Cyrus Investments Pvt Ltd. Tata Sons had earlier told the top court that it was not a ‘two-group company’ and there was no ‘quasi-partnership’ between it and Cyrus Investments Pvt Ltd. Tata Sons made the averments in an affidavit while responding to the cross-appeal filed by Cyrus Investments seeking removal of alleged anomalies in the NCLAT order for getting representation on the TSPL’s board in proportion to the stakes held by his family.
In his reply to the Tatas’ petition challenging his reinstatement by the NCLAT last December, Mistry demanded that Group Chairman Emeritus – Ratan Tata reimburse all the expenses to Tata Sons since his departure in December 2012, in keeping with best global governance standards.
Mistry is seeking representation in the company in proportion to the 18.37% stake held by SP Group, according to the cross-appeal. Reinstating Mistry as the Chairman, the NCLAT had also termed the action of the Registrar of Companies to allow conversion of Tata Sons into a private limited company illegal.
The hearing is ongoing.
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