The Supreme Court on Friday set aside the National Company Law Appellate Tribunal (NCLAT) order of December 18, 2019 restoring Cyrus Mistry as executive chairman of Tata Group.
The Supreme Court’s verdict in nearly fiye-year-old case puts and end to the corporate war between Tata Group and the Mistrys. A bench headed by Chief Justice SA Bobde also dismissed the appeals moved by the SP Group and Cyrus Investments.
A bitter legal erupted between the two sides after Cyrus Mistry was removed from Tata Sons’ chairman post in October 2016. While the National Company Law Tribunal (NCLT) sided with the Tatas, the NCLAT had termed Mistry’s removal as illegal. The NCLAT in its 2019 order reinstated Mistry as Tata Group chairman and also termed N Chandrasekaran’s appointment to the chairman’s post of the over USD 100 billion salt-to-software conglomerate as ‘illegal’.
The Tatas then moved the Supreme Court seeking to overturn the NCLAT judgement. Tata Trusts, which owns 66 per cent stake in Tata Sons, is chaired by Ratan Tata, the patriarch of the Tata group, while the Mistry family owns 18.4 per cent stake in the company.
The bench, also comprising Justices AS Bopanna and V Ramasubramanian, had on December 17 last year reserved the verdict in the matter.
Shapoorji Pallonji (SP) Group had told the top court on December 17 that removal of Cyrus Mistry as the chairman of Tata Sons in a board meeting held in October 2016 was akin to a “blood sport” and “ambush” and was in complete violation of principles of corporate governance and pervasive violation of Articles of Association in the process.
Tata Group, on other hand, had vehemently opposed the allegations and said there was no wrong doing and the board was well within its right to remove Mistry as the chairman.
The apex court had on January 10 last year granted relief to Tata Group by staying the 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.
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.
In his reply to the Tatas’ petition challenging his reinstatement by the NCLAT last December, Mistry had also demanded that group chairman emeritus Ratan Tata should reimburse all the expenses to Tata Sons since his departure in December 2012 in keeping with best global governance standards.