Tata-Mistry case: SC upholds Tata Sons decision to remove Cyrus Mistry

On Friday, the Supreme Court ruled in Tata Sons' favour, upholding the company's appeals against the National Company Law Appellate Tribunal's (NCLAT) order reinstituting Cyrus Mistry as Chairman of the conglomerate. Tata Sons' decision to expel Cyrus Mistry from the chairman position was upheld by the apex court.

The decision to remove Cyrus Mistry was right, according to the bench led by Chief Justice SA Bobde, Justices AS Bopanna and V Ramasubramanian. The bench said, “We find all the questions of law are liable to be answered in favour of the appellants, Tata Group and the appeals file by the Tata Group are liable to be allowed and Shapoorji Pallonji group is liable to be dismissed."

The Supreme Court said it cannot determine a fair compensation for the Shapoorji Pallonji Group's stake in Tata Group companies. The Chief Justice stated, "We cannot adjudicate on the question of compensation and they can take route under Article 75. Order of NCLAT is set aside. Appeal by Tata group is upheld. Appeal by SP group is dismissed. Appeal by Cyrus Investments is dismissed," he further added, "We leave it to Tata Sons, Mistry to take legal route to resolve issue of shares. Value of Tata Sons shares depends on equity."

Shapoorji Pallonji had announced in September,2020 that it will split from Tata Sons. The Mistry family proposed a share swap deal, but the company turned it down.

After hearing both sides, the Supreme Court had earlier reserved its verdict on December 17th. Shapoorji Pallonji Group had expressed at the time that the expulsion of Cyrus Mistry as the chairman of Tata Sons in a board meeting held in October 2016 was like a "blood sport", describing it as "ambush" and labelling it a complete violation of the principles of corporate governance and pervasive violation of Articles of Association in the process.

Ratan Tata, Chairman Emeritus of Tata Sons, tweeted his response to the Supreme Court judgement, “It is not an issue of winning or losing. After relentless attacks on my integrity and the ethical conduct of the group, judgement upholding all the appeals of Tata Sons is a validation of values and ethics that have always been the guiding principles of the group."