The Supreme Court has on Friday agreed to hear Cyrus Mistry’s cross-appeal against the National Company Appellate Tribunal’s (NCLAT) order of December 2019 which has reinstated him as the Executive Chairman of Tata Group, claiming that the Tribunal did not do full justice to his appeals.
The SC bench comprising Justice AS Bopanna and Hrishikesh Roy ordered that his plea should be tagged with the appeals filed by Ratan Tata and Tata Sons, who have also challenged the judgment of the NCLAT. Through the present cross-action appeal, Mistry has sought expansive relief against the NCLAT judgment.
Senior Advocate CA Sundaram appearing on behalf of Cyrus Investments and Mistry submitted that the “Tata group had come up by way of Special Leave. Our grievance is that Article 121 [of the Articles of Association] was misused and Tribunal made an error.” Senior Advocate Harish Salve appeared on behalf of Tata Sons (and Ratan Tata) and stated that appeals of both sides can be heard expeditiously.
The NCLAT in its 18th December order held that the decision to remove Mistry as Tata Sons chairman was illegal and that he should be reinstated. He should also be given charge as director of three other group firms. The appellate tribunal had also held that the appointment of a new chairman in his place was illegal. However, the appellate tribunal refused to amend the Article of Association (AoA), which was claimed to have been “misused” to undermine the Shapoorji Pallonji Group. As per Mistry, NCLAT should have granted protection to the Shapoorji Pallonji Group against any future prejudicial conduct while claiming that it was within the jurisdiction of NCLAT to strike down the AoA.
However, on 10th January 2020, the apex court put a stay on the NCLAT Judgement of December 2019 granting relief to Tata Sons Pvt. Ltd. and issued a formal notice to Cyrus Investments Pvt. Ltd. and others on the appeals separately filed by Tata Sons Pvt. Ltd. and its chairman emeritus Ratan Tata. On 24th January, SC issued a notice in a plea filed by Tata Sons assailing the decision of the NCLAT wherein it had rejected an application seeking a modification of its December 2019 judgment.
In his cross-appeal, Mistry said the Shapoorji Pallonji group should be given proportionate representation on the Tata Sons board and claimed that the Group owns 18.37% of equity share capital in Tata Sons, making it the single largest non-Tata shareholder. He also sought that the affirmative votes in the hands of select Tata Sons directors should be struck down and directors of the Shapoorji Pallonji Group should be given similar powers. He said that thought the NCLAT has reinstated him as chairman, the tribunal failed to deliver complete justice in his case by granting him representation on the Tata Board only for the remainder of his tenure.
Meanwhile, Ratan Tata, who controls Tata Trusts that owns two-thirds of Tata Sons, the group’s holding company, had appealed that the NCLAT had held him guilty “without explaining what the factual or legal foundation of the oppressive and prejudicial grounds was.” He also claimed that Mistry was removed since “he had failed to timely capitalize on business opportunities when they presented themselves and Tata Sons’ financial performance, under his tenure, was also deeply unsatisfactory”.
Subsequently, on Friday, the apex court issued notice to Tata Sons Pvt Ltd (TSPL) and others and tagged the cross-appeals with the appeals filed by Tata Sons, Ratan Tata, and others challenging the NCLAT verdict, which reinstated Mistry as the Executive Director of Tata Sons. Mistry and his firm sought removal of anomalies in the National Company Law Appellate Tribunal (NCLAT) verdict to get representation on the TSPL board.
