26 Mar 2021: Win for Tata Sons; Supreme Court upholds Cyrus Mistry's sacking
The Supreme Court on Friday set aside an order of the National Company Law Appellate Tribunal (NCLAT) reinstating Cyrus Mistry as the Chairperson of Tata Sons Limited.
Back in December 2019, the NCLAT had restored Mistry as Tata Group's Executive Chairman, deeming his ouster from the company in October 2016 an "oppressive" action taken by Chairman Emeritus Ratan Tata.
Here are more details.
Court: Court dismisses appeals by Mistry, Shapoorji Pallonji Group
An SC bench comprising Chief Justice of India SA Bobde and Justices AS Bopanna and V Ramasubramanian allowed Tata Sons' appeal against the NCLAT order and dismissed the appeals filed by Mistry and Shapoorji Pallonji Group or SP Group (Mistry's family firm).
The order of the NCLAT dated December 18, 2019, is set aside, the apex court said.
Court: SC refuses to act on SP's plea to separate interests
The court said it cannot rule on SP Group's plea regarding directions to Tata Sons to cause the separation of ownership interest of SP Group in Tata Sons by extinguishing the shares held by it in lieu of fair compensation.
"We will leave it to the parties to take the Article 75 route or any other legally available route in this regard," it said.
Tata statement: SC order reinforces fairness and justice displayed by judiciary: Tata
In a statement, Tata said that he is "grateful" for the apex court's ruling.
"After relentless attacks on my integrity and the ethical conduct of the group, the judgment upholding Tata Sons is a validation of the values and ethics that have always been the guiding principles of the group. It reinforces the fairness and justice displayed by our judiciary," he said.
Fact: You can view Tata's tweet here
Background: Mistry was removed as Tata Sons' Chairperson in October 2016
Mistry joined the board of Tata Sons in 2002 and in 2011, he was appointed the Deputy Chairperson.
In 2012, he took over as Tata Sons' Chairperson after Ratan Tata.
In October 2016, however, a reported spat between Mistry and Tata led to the former's ouster from the salt-to-software conglomerate.
In December that year, Mistry resigned as Director from all Tata Group companies.
NCLAT: Alleging minority shareholder oppression, Mistry moved tribunals
After Tata was briefly appointed interim Chairman, Natarajan Chandrasekaran took charge in February 2017.
Investment firms Cyrus Investments Pvt Ltd and Sterling Investments Corp—run by Mistry's family—then challenged Mistry's ouster in the National Company Law Tribunal (NCLT), alleging minority shareholders' oppression, since Mistry's family holds 18.4% stake in Tata Group.
After NCLT dismissed their plea in 2017, Mistry moved NCLAT, challenging NCLT's order.
Supreme Court: Tata Sons moved SC after tribunal reinstated Mistry
On December 18, 2019, the NCLAT ordered Mistry's reinstatement as Tata Group's Executive Chairperson.
The tribunal had stayed Mistry's reinstatement for four weeks to allow Tata to challenge the ruling.
In January 2020, Tata Sons moved the Supreme Court against the NCLAT order. The court had then stayed the tribunal's order as it heard submissions from both parties.