- Tata Sons had removed Mistry as chairman in 2016 after Mistry challenged the decision
- The National Company Law Appellate Tribunal ruled in favor of Mistry on 18 December
- The tribunal had said – Mistry be re-appointed as chairman of Tata Sons; Tata Sons got 4 weeks to appeal
- TCS has a board meeting on 9 January, so when the Supreme Court bench sits on 6 January, Tata Sons’ lawyers can demand an immediate hearing
In the case of Cyrus Mistry, Tata Sons have challenged the National Company Law Appellate Tribunal (NCLAT) decision in the Supreme Court. The board meeting of Tata Consultancy Services (TCS), the flagship company of the Tata group, is scheduled to take place on 9 January. In such a situation, when the Supreme Court opens on 6 January, Tata Sons’ lawyers can demand an immediate hearing.
TATA SONS CHALLENGED THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL DECISION IN THE SUPREME COURT
On December 18, the NCLAT ordered Mistry to appoint him again as chairman of Tata Sons. The tribunal had dismissed Tata Sons’ decision to remove Mistry and appoint N Chandrasekaran as chairman. Tata Sons had 4 weeks to appeal.
5 IMPORTANT ARGUMENTS OF TATA SONS
1. The Appellate Tribunal did not give any reason as to how the decision to remove Cyrus Mistry was illegal.
2. The order of the Appellate Tribunal for reinstatement of Cyrus Mistry has led to confusion about the functioning of the Group’s key companies.
3. Cyrus Mistry’s tenure as chairman and director of Tata Sons ended in March 2017. Mistry did not seek reinstatement, but the Appellate Tribunal went further than the petitioner’s demand.
4. Prohibiting the decision-making of nominees of Ratan Tata and Tata Trusts is to suppress the rights of shareholders and the Board of Members. It is harming corporate democracy.
5. Tribunal order exemplifies dangerous legal verdicts.
THE APPELLATE TRIBUNAL WILL HEAR ON THE PETITION OF THE REGISTRAR OF COMPANIES ON FRIDAY
The Appellate Tribunal had ruled in the Tata Sons-Mistry case that the decision to allow the conversion of Tata Sons from a public to a private company was illegal. The Registrar of Companies (ROC) objected to this, stating that the approval was given as per law. The ROC has appealed to the Appellate Tribunal’s decision to remove the unlawful term. The tribunal postponed the hearing till Friday. The tribunal has sought details from the Corporate Affairs Ministry on the definition of private and public companies under the rules of the Companies Act.
MISTRY FAMILY HOLDS 18.4% SHARES OF TATA SONS
In September 2017, Tata Sons approved by shareholders to make it a public-to-private company. ROC then registered Tata Sons as a private company. After this, shareholders’ approval is not necessary for important decisions of the company, only decisions can be taken with the approval of the board. The Cyrus Mistry family was against it. The Mistry family owns 18.4% shares of Tata Sons. Tata Sons is the holding company of the Tata Group.
MISTRY HAD ACCUSED TATA SONS OF SUPPRESSING THE MINORITY SHAREHOLDERS
The board of Tata Sons removed Mistry as chairman on 24 October 2016. Board members said that there was no trust in Mistry. Subsequently, in December 2016, Mistry also resigned as the director of Tata group companies. He challenged the decision in the National Company Law Tribunal (NCLT) on his removal from the post of chairman. Mistry had alleged loopholes in the management of Tata Sons and suppressing minority shareholders. However, NCLT ruled in favor of Tata Sons in July last year. After this, Mistry reached the Appellate Tribunal. Mistry is currently the MD of Shapoorji Pallonji & Co, a family business firm.