The Supreme Court on Friday allowed Tata Sons' appeal against the order of the National Company Law Tribunal (NCLT) that had ordered to reinstate the ousted Chairman Cyrus Mistry. This comes as big win for Tata Sons.
With this order, NCLAT's order of December 17, 2019 to reinstate Cyrus Mistry as Chairman of Tata Sons has been set aside.
The apex Court further stated Shapoorji Pallonji (SP) Group's appeal has been dismissed along with the appeal of Cyrus Investments.
A three- judge bench comprising of Chief Justice of India (CJI) SA Bobde, Justice AS Bopanna and Justice V Ramasubramanian delivered the judgment.
Meanwhile, the court left it to Tata Sons and Mistry to take legal course of action to resolve issue of shares. The valuation of shares of SP Group depends on the value of stake of Tata Sons in listed equities, unlisted equities, immovable assets etc. and also perhaps the funds raised by SP Group on the security pledge of the shares, the court observed. "Therefore, at this stage and in this court, we cannot adjudicate on the fair compensation. We will leave it to the parties to take the article 75 route or any other legaly available route in this regard."
The apex court also stated that the actions of Tata Sons board against Mistry cannot be considered as oppression of minority shareholders or mismanagement.
The CJI informed that all the questions raised in the appeal has been answered in the order. The reason for passing this order can only be known once the complete judgement is available.
The order was passed by the court in response to the cross appeals filed by Tata Sons Pvt Ltd and Cyrus Investments Pvt Ltd.
SP Group had told the top court on December 17 that removal of Cyrus Mistry as the chairman of Tata Sons in a board meeting held in October 2016 was akin to a "blood sport" and "ambush" and was in complete violation of principles of corporate governance and pervasive violation of Articles of Association in the process.
Tata Group, on other hand, had vehemently opposed the allegations and said there was no wrong doing and the board was well within its right to remove Mistry as the chairman.
The apex court had on January 10 last year granted relief to Tata group by staying the NCLT order of December 18, 2019 by which Mistry was restored as the executive chairman of the over USD 100 billion salt-to-software Tata conglomerate.