NEW DELHI: In what may come as a big win for Tata Son’s ex-chairman Cyrus Mistry, the Supreme Court has agreed to hear his plea seeking proportionate representation for his family (Shapoorji Pallonji Group) on the Tata Sons Board of Directors. The latest petition filed by Mistry also challenges Article 121 of the Articles of Association of Tata Sons, which notes that it allows select directors to override the views of the board of directors.
The new plea will be heard along with the appeal of the Tata group, which challenged the NCLAT order of December 2019 which had asked the software-to-automobile conglomerate to reinstate Mistry as chairman. The NCLAT had ruled that Tata Sons’ affairs were carried out in a manner ‘prejudicial and oppressive’ to the Mistry’s group and that his ouster from the Tata Sons Board was ‘illegal’. However, the NCLAT hadn’t offered any judicial protection to the minority shareholder rights of the Mistry family.
The apex court, however, had stayed the appellate tribunal’s order in January. Earlier this year, Mistry had said that he does not intend to pursue the executive chairmanship of Tata Sons, or a directorship in TCS, Tata Teleservices or Tata Industries.But, he said he vigorously plans to pursue all options to protect their rights as minority shareholders.
The Shapoorji Pallonji Group is the single largest shareholder with over 18.37 per cent equity in Tata Sons and the relationship between the two groups is a century old. A three-judge bench comprising Chief Justice of India SA Bobde and Justices BR Gavai and Surya Kant will hear the appeals on the matter. The top court has allowed both sides four weeks’ time to complete pleadings.
The Ratan Tata-led Tata Group and Cyrus Mistry’s Pallonji Group have been involved in one of the country’s biggest corporate legal tussles since the ousting of Mistry. In October 2016, Mistry was removed as the chairman of Tata Sons and later as a director.