The Supreme Court Thursday reserved its verdict on the cross appeals filed by Tata Sons Pvt Ltd and Cyrus Investments Pvt Ltd against the appellate tribunal NCLAT order which had restored Cyrus Mistry as the executive chairman of the over USD 100 billion salt-to-software Tata conglomerate. A bench comprising Chief Justice S A Bobde and Justices A S Bopanna and V Ramasubramanian asked the parties to file compiled written submissions and subject index in the matter.
During the hearing conducted through video-conferencing, Shapoorji Pallonji (SP) Group claimed that there was breach of Articles of Association and provisions of the Companies Act in the removal of Cyrus Mistry as the chairman of Tata Sons in October 2016. The Tatas denied the allegations and claimed there was no wrong doing as they were well within their rights to remove Mistry. The apex court had on January 10 granted relief to Tata group by staying the National Company Law Appellate Tribunal (NCLAT) order of December 18 last year 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 on October 24, 2016. The top court on May 29 had issued notice to Tata Sons and others on a cross-appeal filed by Cyrus Investments Pvt Ltd.
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. Tata Sons had made the averments in an affidavit filed in the apex court while responding to the cross-appeal filed by Cyrus Investments seeking removal of alleged anomalies in the NCLAT order for getting representation on the TSPL’s board in proportion to the stakes held by his family. Mistry had also filed an affidavit to the apex court saying the Tata Group had an adjusted net loss of Rs 13,000 crore in 2019 — the worst losses in three decades.
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. Mistry is seeking representation in the company in proportion to the 18.37 per cent stake held by his family, the cross-appeal has said. Reinstating Mistry as the chairman, the NCLAT had also termed the action of the Registrar of Companies to allow conversion of Tata Sons into a private limited company illegal.