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Tata Sons Vs Cyrus Mistry

Cyrus Mistry was appointed chairman of Tata Sons in 2012 but removed in 2016 due to loss of confidence by the board of directors. He filed a suit alleging oppression of minority shareholder rights and mismanagement. The NCLT initially ruled in favor of Tata Sons but the NCLAT overturned this and ordered Mistry be reinstated. However, the Supreme Court ultimately ruled in favor of Tata Sons, dismissing all charges of oppression and mismanagement and finding no case for reinstating Mistry.

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125 views2 pages

Tata Sons Vs Cyrus Mistry

Cyrus Mistry was appointed chairman of Tata Sons in 2012 but removed in 2016 due to loss of confidence by the board of directors. He filed a suit alleging oppression of minority shareholder rights and mismanagement. The NCLT initially ruled in favor of Tata Sons but the NCLAT overturned this and ordered Mistry be reinstated. However, the Supreme Court ultimately ruled in favor of Tata Sons, dismissing all charges of oppression and mismanagement and finding no case for reinstating Mistry.

Uploaded by

SUPREET SAGAR KANTE
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Tata Sons v/s Cyrus Mistry

In December 2012, a Tata Group selection panel appointed Cyrus Mistry as the chairman of Tata Sons
Limited post stepping down of Ratan Tata. In October 2016: Due to a loss of confidence, most of the
Board of Directors removed Cyrus Mistry from the chairman of Tata Sons. On January 12, 2017: N
Chandrasekharan was named the chairman of Tata Sons Limited. In February 2017: Mistry was removed
as a director of the board of Tata Sons.

After that, Cyrus Mistry filed a suit before National Company Law Tribunal (NCLT), Mumbai alleging
oppression of minority shareholder rights and operational mismanagement of the Tata Sons.

Charges that Cyrus Mistry’s made on the part of Tata Sons to Show Oppression and mismanagement by
the group:

 Under certain circumstances, there was an abuse of power by Tata Sons.


 Removing him as the chairman.
 Transactions made with Siva and Sterling group of companies.
 Fraudulent transaction of Rs. 22 Crores by Tata Trust in Air Asia.
 Tata Sons overpaid in the acquisition of Corus.
 The losses suffered in the Nano car project depict the oppression of minority shareholder rights
and mismanagement by the Tata Group.

NCLT Mumbai Verdict:


In July 2018: The NCLT had ruled the verdict in favor of Tata Sons and found no merit in the oppression
argument of minority shareholder's rights and operational mismanagement of Tata Sons.

NCLAT Verdict:

In December 2019: NCLAT overturned NCLT Verdict and ruled it in favor of Cyrus Mistry. It stated the
removal of Mistry was illegal and ordered Tata Sons to reinstate Mistry. Post this, Tata Sons and Ratan
Tata moved to the supreme court to challenge the NCLAT decision and contended that there was no
wrongdoing in removing Mistry as the chairman. Subsequently, in January 2020, the Supreme Court
granted relief to Tata Group and stayed the NCLAT order of December 2019 to reinstate Cyrus Mistry as
the executive chairman of Tata Sons.

Supreme Court Verdict:

On March 26, 2021, the Supreme Court pronounced its long-awaited judgment in the Tata- Cyrus Mistry
case. The judgment by a bench of Supreme Court headed by Chief Justice S A Bobde and comprising
Justice V Ramasubramanian and Justice A S Bopanna. The judgment in favor of the Tata Group. The bench
dismissed all the charges of oppression and mismanagement against the Tata Sons Limited made by
entities owned by Cyrus Mistry.

The bench also held that there was never a case to begin. The only dispute that arose was the removal of
Cyrus Mistry as chairman of Tata Sons Limited, and the companies were padding up their actual grievance
with various historical facts.

Conclusion

Cyrus Mistry was ousted from the Executive Chairman of Tata Sons Limited on October 24, 2016. The
Majority Shareholders and Board of Directors of the company lost confidence in Cyrus Mistry as
Chairman, not because by contemplating that Cyrus Mistry would cause discomfort to Ratan Tata.

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