Supreme Court reserves verdict on Cyrus Mistry
The Supreme Court on Thursday concluded the seven-day marathon hearing of rival arguments on the appeal filed by Tata Sons challenging the National Company Law Appellate Tribunal’s (NCLAT) order of December 18, 2019, directing the reinstatement of Cyrus Mistry as the executive chairman of the company.
The NCLAT order was subsequently stayed by the Supreme Court in January this year.
A bench of Chief Justice S.A. Bobde, Justices A.S. Bopanna and V.Ramasubramanian after hearing the concluding arguments reserved its verdict which is expected to be pronounced after January 2, 2021.
Resuming his Wednesday’s arguments, senior advocate Shyam Divan appearing for the SP (Shapoorji Pallonji) group told the court that Cyrus Mistry’s removal in 2016 was illegal and even Farida Kambhata refused to vote in favor of ouster of Mistry, while another board member abstained himself from voting in favour of Mistry’s departure.
Divan said three directors who voted for Mistry’s ouster were yet to even undergo an induction programme.
“There was a complete pervasive violation of Articles of Association, Companies Act and principles of corporate governance went for a toss. Duty and good faith of directors should be towards all shareholders, not a few,” he remarked.
Justice Bobde asked: “Did Mistry knew he would be removed ?” to which Divan responded saying “No, it was complete ambush.”
Divan said Mistry’s performance was recognised by over 50 directors of Tata Group companies yet he was removed as executive chairman abruptly.
Mistry had succeeded Ratan Tata as chairman of Tata Sons in 2012 but was ousted four years later.
The top court on May 29 had issued notices to Tata Sons and others on a cross-appeal filed by Cyrus Investments Pvt Ltd.
Tata Sons had earlier told thetop 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 the 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 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.