Tata Vs Mistry: Tata Sons have got a big relief from the Supreme Court. The apex court on Friday stayed the decision of the National Company Law Appellate Tribunal (NCLAT) to reinstate Cyrus Mistry as the chairman of the Tata Group. A bench of Chief Justice SA Bobde and Justices BR Gavai and Surya Kant agreed to hear the petition of Tata Sons against the NCLAT order. The bench also issued a notice to Mistry and others.
Tata Sons Private Limited (TSPL) has challenged NCLAT’s December 18 decision. The NCLAT ordered Cyrus Mistry to be reinstated to the post of Executive Chairman of TSPL, giving major relief to Cyrus Investment Pvt Ltd and Misty. The tribunal appointed N. as the head of Tata Sons. Chandrasekaran’s appointment was also ruled illegal. The $ 110 billion Tata Group is involved in the business of salt to software.
Actually, Cyrus Mistry challenged the removal from the post of Chairman of the Tata Group. The NCLAT, while relieving Mistry, ordered his reinstatement to the post of executive chairman of Tata Sons. However, the tribunal gave Tata Sons 4 weeks to appeal against the verdict. Till then the compliance of the order will be stopped.
Let me tell you, Cyrus Mistry, former chairman of Tata group, was removed from his post in October 2016. He was appointed the 6th chairman of Tata Sons. In 2012, Cyrus Mistry took over as chairman of the group following the announcement of retirement by Ratan Tata.
Mistry family’s 18.4% stake in Tata Sons
The Mistry family holds 18.4 per cent stake in Tata Sons. Cyrus Mistry appealed in the National Company Law Tribunal (NCLT) against the decision to be removed from the Tata group. A case of harassment and mismanagement was filed against Tata Sons and 20 others, including Ratan Tata, by Mistry family companies Ceres Investments and Sterling Investments. However, in March 2017, the tribunal dismissed it and said that he was not eligible to make such allegations.
Under section 244 of the Companies Act 2013, if a shareholder holds more than 10% of the issued share capital, he can file a lawsuit against the company for harassment and mismanagement.