Tata-Mistry Case: The Tata Sons have received a major relief from the Supreme Court on the country’s largest corporate dispute. The Supreme Court overturned the decision of the National Company Law Appellate Tribunal NCLAT to appoint Cyrus Mistry as the company’s re-chairman. Tata Sons filed a petition against this decision. The NCLAT had ruled on 17 December 2019 that Mistry would be reinstated as the chairman of Tata Sons. The Supreme Court has reversed this decision today.
The NCLAT, in its order, reinstated Cyrus Mistry Mistry as executive chairman in the $ 100 billion Tata group. The bench of Chief Justice SA Bobde, Justice AS Bopanna and Justice V Ramasubramanian has pronounced this decision. The Supreme Court reserved its decision in this case on 17 December 2020.
What was the old decision of NCLAT
The NCLAT, in its order, called the decision of October 24, 2016 invalid, in which Mistry was removed from the post of director and chairman. The tribunal says that this decision has been taken incorrectly, so now Mistry has been reinstated. The tribunal also said that the appointment of N Chandrasekaran as the new chairman of Tata Sons is not legal. 4 weeks have been given to implement this decision so that the Tata group can appeal.
In the second part of the judgment, the court has said that the three companies have been asked to implement Mistry with immediate effect. This decision will apply only to the three companies from which Mistry was removed. According to SEBI rules, any change in any company will have to be given to the stock market because those decisions have an impact on the shares. However, the Tata group has not yet officially informed Mistry’s reinstatement to the stock market.
What is the whole matter
On 24 October 2016, Ratan Tata of Tata Sons sacked Cyrus Mistry as the chairman of Tata Sons. Cyrus Mistry filed a petition in the Company Law Tribunal against this decision. The tribunal rejected Mistry’s plea, stating that Tata Sons had the right to remove the chairman at any time. The decision was challenged in the National Company Law Appellate Tribunal (NCLAT). The NCLAT termed the removal of Cyrus Mistry as chairman in December 2019 illegal. Apart from this, there has also been talk of many irregularities in Tata Sons.
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