India’s salt-to-software conglomerate Tata Group has won a crucial legal battle against its ousted former chairman Cyrus Mistry.
The country’s highest court rejected an appeal filed by Mistry’s family concern Shapoorji Pallonji Group to review its 2021 judgment that backed Tata Sons’ decision to remove him as chairman.
Mistry wanted the Supreme Court to reconsider its March 2021 order that upheld the Tata Group’s decision to remove him as executive chairman of Tata Sons.
The apex court also dismissed a plea by the Shapoorji Pallonji Group seeking the separation of ownership interests in Tata Sons Pvt Ltd, the holding company of the Tata Group.
However, Mistry’s request to expunge certain remarks against him in the March 2021 order was accepted by the Supreme Court bench, headed by Chief Justice N V Ramana. Tata Group’s advocate Harish Salve said the court may permit the deletion of one or a few sentences, but not for the reasons given by the Shapoorji Pallonji Group.
Reacting to the verdict, Tata Group Chairman Emeritus Ratan Tata said it “reinforces the value system and the ethics of our judiciary.”
The supreme court on March 26, 2021, set aside a National Company Law Appellate Tribunal order restoring Mistry as executive chairman of the Tata Group.
In December 2019, the tribunal restored Mistry as executive chairman of the conglomerate. It also held that the appointment of N Chandrasekaran, the current chairman of Tata Sons, was “illegal.” Tata Sons later challenged the tribunal’s decision in the Supreme Court.
Mistry, the son of billionaire Shapoor Pallonji Mistry, had succeeded Ratan Tata as chairman of Tata Sons in 2012, while the latter took on the role of Chairman Emeritus. He was chosen by a selection panel after a long screening process.
Back then, Mistry was 44 and became the youngest person to occupy the corner office of the US$100 billion conglomerate.
But he was ousted four years later in October 2016 after the Tata Sons board expressed doubts about “his ability to lead the Tata Group.” This was followed by a series of boardroom battles during which Mistry was removed as director in several listed and unlisted entities of the group, including Tata Consultancy Services, Tata Steel, Tata Motors, Indian Hotels Co Ltd, Tata Chemicals, Tata Power, Tata Teleservices and Tata Industries.
Two Mistry family-backed firms, Cyrus Investments Pvt Ltd and Sterling Investments Corporation Pvt Ltd, had asked the National Company Law Tribunal to challenge Mistry’s removal.
The tribunal rejected their plea and they moved to the National Company Law Appellate Tribunal, which restored Mistry as executive chairman of Tata Sons. It, however, suspended its implementation for four weeks in order to provide time for the Tatas to appeal.
Tata Sons later challenged the appellate tribunal order before the Supreme Court. On March 26, 2021, the top court delivered its verdict, allowing Tata Group’s appeals, and set aside the appellate tribunal order restoring Mistry as Tata Group executive chairman.