New Delhi, May 29: The Supreme Court Friday issued notice to Tata Sons Pvt Ltd (TSPL) and others on a cross-appeal filed by Cyrus Mistry and his firm seeking removal of anomalies in the NCLAT order for getting representation on the TSPL board in proportion to the stake held by his family.
The top court had on January 10 granted relief to Tata group by staying the National Company Law Appellate Tribunal (NCLAT) order of December 18 last year, by which Mistry was restored as the executive chairman of the salt-to-software conglomerate, The Indian Express reported.
A bench of Justices A S Bopanna and Hrishikesh Roy in Friday’s proceedings, held through video-conferencing, also issued notice on the cross-appeal of Cyrus Investment Pvt Ltd and tagged the plea with that of TSPL.
“Issue notice. Tag with Civil Appeal Nos…and connected matters, if any. In the meantime, pleadings be completed by the parties within a period of four weeks from today. List the matter(s) thereafter,” the bench said in its order.
Mistry, the ousted chairman of TSPL, is seeking representation in the company in proportion to the 18.37 per cent stake held by his family, the cross-appeal said.
The NCLAT by limiting the relief granted to the appellants (Mistry and others) in connection with their prayer for board representation, only to the remainder of Cyrus Mistry’s tenure, has not secured the interests of the Shapoorji Pallonji group from any prejudicial conduct in the future. Therefore it was incumbent on this NCLAT to have granted proportionate representation that would have ensured that the interests of the SP Group are protected in future, it said.
In the petition, Mistry has described the group’s relationship with Tatas as “a quasi-partnership relationship of a vintage of over 60 years, holding 18.37 per cent in the equity share capital of Tata Sons and whose stake is now worth over Rs 1.5 lakh crore”.
According to the petition, the Mistry group firm has sought remedies for many anomalies in the NCLAT order, including about not looking at alleged oppression of minority shareholders as well as converting Tata Sons into a private limited company as a post-facto move.
As per the petition, the tribunal order clearly and unequivocally found the prejudicial conduct by Tata Sons, but failed to provide certain important reliefs that would have put an end to the oppressive conduct of the majority shareholder.
Reinstating Mistry as the chairman, NCLAT had also termed the action of the Registrar of Companies to allow conversion of Tata Sons into a private limited company illegal.
However, the tribunal “has erred in not granting vital reliefs, including proportionate representation on the board of Tata Sons, and striking down of certain provisions in the articles of association, which were the tools of oppression that enabled prejudicial conduct by the majority shareholder,” it said.
The petition also contended that the tribunal erroneously said it did not have the powers to alter the Articles of Association even though it had correctly recorded that the relationship between the Tatas and the Mistry family was in the nature of a “quasi-partnership”.
Further, Mistry has sought proportionate representation on the board of Tata Sons to ensure that its interests and investments now worth over Rs 1 lakh crore are protected in the future.
Mistry succeeded Ratan Tata as chairman of Tata Sons (TSPL) in 2012 but was ousted four years later. While taking note of appeal of Tata group on January 10, the apex court had stayed the NCLAT order restoring Mistry as executive chairman of the Tata Group, observing that there were “lacunae” in the orders passed by the tribunal.
The apex court had said there was no prayer in the petition for reinstatement of Mistry but the tribunal (NCLAT) went ahead with it and ordered that.
Tata Sons Private Ltd (TSPL) had challenged the December 18 decision of NCLAT that gave a big relief to Cyrus Investment Pvt Ltd and Mistry, restoring him as the executive chairman of TSPL.
The bench issued notices to Cyrus Investment Pvt Ltd, Mistry and others and posted the matter for hearing after four weeks.