Supreme Court of India has provided a big relief to Ratan Tata when it gave the judgment in favor of Tata Groups against Cyrus Mistry’s plea. Cyrus Mistry was the Tata Sons Chairman from 2012 to 2016. He was not happy with a board decision to remove him from the chairman position in 2016.
Since then, the legal battle between Tata Sons and Cyrus Mistry is going on. Mistry blamed the Tata group for mismanagement and unjustified behavior against the shareholders. Mistry and Family hold the majority stakes in Tata Sons.
What Supreme Court Judgement Says about Tata vs Mistry Case?
In 2016, the board of Directors took a unanimous decision to oust Mistry from the Chairman position. The whole management was not happy with Mistry’s activities as Chairman.
The top court found no irregularities in the board of directors’ decision. The three-judge bench rejected the Mistry plea. Mistry was fighting a battle on the ground that his removal from the chairman position was illegal and he should be reinstated again.
Related to Mistry’s plea of separation from Tata Group, the court also said that Tata Group and Mistry can solve the share issue through the legal route.
Chief Justice of India SA Bobde during the order as per legal news platform Bar & Bench, said:
“We cannot adjudicate on the question of compensation and they can take the route under Article 75. Order of NCLAT is set aside. Appeal by TATA group is upheld. Appeal by SP group is dismissed. Appeal by Cyrus Investments is dismissed,”
CJI Bobde, Justice AS Bopanna, and Justice V Subramanian pronounced this landmark judgment.
The judgment further said:
“We leave it to Tata Sons, Mistry to take the legal route to resolve the issue of shares. Value of Tata Sons shares depends on equity.”
In 2016, Ratan Tata asked Mistry to step down from the chairman post as the top management has lost faith in his working styles. Cyrus Mistry refused to do so. This is how the public spat between Tata and Mistry started.
Series of Events related to Tata vs Mistry Case
December 2012 – Cyrus Mistry was appointed the Chairman of Tata Sons Limited.
October 24, 2016 – in a meeting, the Tata board of Directors decided that Mistry is not working properly and he should be ousted. The decision was conveyed to Cyrus Mistry.
December 2016 – Mistry and his family knocked on the door of the National Company Law Tribunal (NCLT). They blamed Tata Sons for mismanagement.
February 6, 2017 – Tata Shareholders also showed no interest in Mistry. They voted to remove him from the board members of Tata Sons.
July 12, 2018 – NCLT gave the judgment in favor of Tata Sons. Mistry then appealed to the National Company Law Appellate Tribunal.
December 19, 2019 – The National Company Law Appellate Tribunal (NCLAT) supported Mistry with its judgment and said that it was illegal to remove him and he should be reinstated.
January 2, 2020 – Tata Sons challenged the NCLAT decision in the Supreme Court.
January 10, 2020 – Supreme Court stays the NCLAT judgment.
February 2020 – Mistry filed a cross-appeal against the NCLAT judgment.
“The NCLAT by limiting the relief granted to the appellants in connection with their prayer for Board representation, only to the remainder of Mr. Cyrus Mistry’s tenure has not secured the interest of the Shapoorji Pallonji group from any prejudicial conduct in the future.”
December 8, 2020 – final hearing three-judge bench completed final hearing related to the case.
December 17, 2020 – Supreme Court reserves judgment.