Tata-Mistry case: Supreme Court rules in favour of Tata Sons

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The Supreme Court on March 26 set aside NCLAT’s order reinstating Cyrus Mistry as Executive Chairman of Tata Sons.

A bench comprising Chief Justice SA Bobde, Justice AS Bopanna and Justice V Ramasubramanium allowed appeals of the Tata Group.

The stand-off between Tatas and Mistrys began in October 2016, with the ouster of Cyrus Mistry as executive chairman of Tata Sons and from the directorship on Tata Sons.

Mistry had succeeded Ratan Tata as Chairman of Tata Sons in 2012 but was ousted four years later. Differences between the two lie at the heart of the dispute. The clash between Mistry and Tata has been one of the most high-profile and publicly fought corporate battles in India.

Mistry’s family, the Shapoorji Pallonji family, owns an eponymous business group that spans across construction, real estate and engineering business. It owns 18.47% of the equity capital of Tata Sons, the main holding company of the Tata Group while 66% of Tata Sons is owned by Tata Trusts, currently controlled by Ratan Tata, the group’s former chairman.

The dispute over removal of Mistry then landed in the National Company Law Tribunal (NCLT), which in July 2018 ruled in favour of the Tatas, saying that there was no illegality in the removal of Mistry as the chairman of Tata Sons.

But in December 2019, the order of NCLT was reverse by National Company Law Appellate Tribunal (NCLAT) in appeal by Mistry. NCLAT restored Mystry as the executive Chairman of Tata Sons and held that removal of Mistry from the board of Tata Sons was illegal.

NCLAT also gave a breather to Tatas, saying that the order will not be implemented for four months and allowed Tatas to approach the Supreme Court.

After the appeal by Tata Sons was filed in Supreme court, the top court stayed NCLAT order.

The top court concluded hearing in the case and reserved judgment on the issue in earlier this year.