New Delhi: The Supreme Court on Friday stayed the NCLAT order restoring Cyrus Mistry as executive chairman of the Tata Group.
A bench of Chief Justice S.A. Bobde and Justices B.R. Gavai and Surya Kant agreed to hear Tata Sons’ plea challenging the National Company Law Appellate Tribunal (NCLAT) decision and issued notices to Mistry and others.
Tata Sons Private Ltd (TSPL) challenged the December 18 decision of NCLAT that gave a big relief to Cyrus Investment Pvt Ltd and Mistry, restoring him as the executive chairman of TSPL.
The National Company Law Appellate Tribunal also ruled that the appointment of N. Chandrasekaran as head of the holding company of the $110 billion salt-to-software conglomerate was illegal.
According to LiveLaw, the Tata side gave an assurance in court that they would not take any steps invoking powers under Article 75 of the Articles of Association against the minority shareholders of Shapoorji Pallonji group, the family to which Mistry belongs.
Tata Sons’s appeal described the NCLAT judgment as setting a ‘dangerous legal precedent’ and described it as a ‘blow to corporate democracy’. It is contended in appeal that the judgment has virtually “re-written” the Articles of Association of the company to confer new rights on the minority shareholders, which were not otherwise existing.
The Shapoorji Pallonji Group, under Sections 241 and 242 of the Companies Act 2013, had filed petitions alleging oppression and mismanagement in Tata Sons after Mistry’s removal as executive chairman. The NCLT Mumbai bench dismissed the petitions, against which appeals were filed in the NCLAT. Cyrus Mistry also filed a separate appeal seeking to expunge certain remarks made against him by the NCLT.
On December 18, the Appellate Tribunal ordered the reinstatement of Mistry as the executive chairman. The Tatas contend that this relief was not even sought by Mistry and the other appellants. Ratan Tata has also filed an appeal in the Supreme Court against the NCLAT judgment, saying it was based on the wrong premise that Tata Sons is owned by just two groups.