Supreme Court has set aside the order passed by the National Company Law Appellate Tribunal (NCLAT) and ruled in favour of Tata Sons limited. It effectively has upheld the decision of the Tata Group to remove Mistry from the post in 2016.
The three-judge bench of Chief Justice of India SA Bobde, AS Bopanna and V Ramasubramanian ruled: “Company petition no 82/2016 filed by two companies belonging to Shapoorji Pallonji Group shall stand dismissed. Civil Appeal 1802 filed by Cyrus Investments Limited and Sterling Investment Corporation is dismissed. There will be no order as to costs,” the Court ordered.
It further said, “We find all the questions of law are liable to be answered in favour of the appellants, Tata Group and the appeals filed by the Tata Group are liable to be allowed and Shapoorji Pallonji group is liable to be dismissed.” Ratan Tata, who served as the Chairman of Tata Sons Limited between 1991 and 2012, has hailed the verdict.
It was the contention of senior advocate Harish Salve that the NCLAT order gave minority shareholders (Shapoorji Pallonji firms) control of Tata companies. He said in normal “corporate democracy”, stakeholders with 18% will not even have a single director in the Board of Directors, leave alone the position of executive chairman.