The court rejected the pleas that Mr Mistry’s resignation as chairman of the Tata Sons board was “oppressive”.
The Supreme Court on Friday ruled outright in favor of the multi-billion salt-to-software conglomerate Tata Sons Private Limited, which again scrapped Cyrus, the scourge of minority provider Shapoorji Pallonji Group, by a National Company Law Appellate Tribunal (NCLAT). It was decided to install from. Mistry, as its president.
Chief Justice of India Sharad A. The three-judge bench headed by Bobde dismissed the pleas that Mr. Mistry had been removed from the post of chairman of the Tata Sons board.
Chief Justice Bobde, who read the judgment, said that every question of law raised in the dispute is in favor of Tata.
The court dismissed the appeal filed by Shapoorji Pallonji Group.
The bench said that the question of “fair compensation” for Shapoorji Pallonji Group cannot be adjourned to the Supreme Court in this case.
While ruling in favor of Tata, the apex court accepted their contention that the NCLAT judgment effectively combined the control of the company with the minority (Shapoorji Pallonji Group).
Harish Salve, senior advocate of Tata Sons, said during the extensive hearing, “The minority with 18% holding has been given the power to govern all Tata companies.”
The NCLAT decision had dealt a blow to corporate democracy and the authority of the Board of Directors, Tata Sons, argued in its appeal.
Tata Sons stated that the tribunal had appointed the current chairman N.N. Chandrashekharan’s appointment was invalid and reinstated Mr. Mistry as president and invalid.
Mistry’s tenure as chairman and director of Tata Sons expired in March 2017. The NCLAT’s decision to reinstate him to the “original position” for “the rest of the term” is contrary to company law, a recipe for disaster and a precedent in a dangerous law.
Furthermore, Mistry never sought his reinstatement. The NCLAT went beyond its jurisdiction to dismiss Tata Sons’ appeal filed through Karanjawala & Company.
A majority of Tata Sons’ board of directors voted for Mr. Mistry’s presidency on October 24, 2016 after losing confidence in him. On 6 February 2017, he was again removed as director of Tata Sons following a process that applied to corporate appointments.
“Instead of adopting an approach that is consistent with corporate democracy and shareholders’ rights in the way they deem appropriate, NCLAT raised itself to go for such an idea on various issues … there were no reasons why. Replacement And the removal process was wrong and illegal, ”Tata argued.
Mr. Salve submitted that NCLAT’s findings were based on an error that Tata Sons remained a public company. The areas of inquiry of the tribunal were clearly beyond its scope.
Shapoorji Pallonji Group, a minority shareholder, had argued that the removal of Mr. Mistry as acting chairman of Tata Sons was repressive and illegal.
It was said that the beaver was against good faith and faith, Shapoorji Pallonji enjoyed with the Tata group for decades.
Shyam Dewan, senior advocate for the Shapoorji Pallonji Group, had said that the amended Companies Act was quite different from the “Raja-Praja” model of the past as compared to the corporate governance model.