{"id":198601,"date":"2018-07-17T10:30:26","date_gmt":"2018-07-17T05:00:26","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=198601"},"modified":"2018-07-17T11:10:21","modified_gmt":"2018-07-17T05:40:21","slug":"no-merit-in-cyrus-mistrys-petition-against-removal-as-chairman-tata-sons-nclt","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2018\/07\/17\/no-merit-in-cyrus-mistrys-petition-against-removal-as-chairman-tata-sons-nclt\/","title":{"rendered":"No merit in Cyrus Mistry\u2019s petition against removal as Chairman (Tata Sons): NCLT"},"content":{"rendered":"

National Company Law Tribunal (NCLT)<\/strong>: The petitioner\u2019s who held over 18% equity shares in Tata Sons Ltd., were propelled to file the company petition against Tata Sons Ltd., Ratan Tata (Chairman Emeritus) and others. The petition arose consequent to the incident on 24-10-2016 wherein the Co.\u00a0 Board meeting, Cyrus Mistry (Chairman) was removed from his position without giving 15 days notice. The petitioners alleged that the respondents conducted the affairs of the Co. In an oppressive manner which was prejudicial to the interest of the petitioners, the Co., and the public.<\/p>\n

As per the petition, the factum of oppressive, arbitrary and prejudicial mismanagement lies in bleeding of Corus acquisition and overpriced take over, doomed Nano car project, Ratan Tata\u2019s relationship with C. Sivasankaran (owner of Sterling Infotech Ltd.), DoCoMo Arbitration, and unjust investment of Ratan Tata at the cost of the Co., aviation industry misadventures, removal of Cyrus Mistry as Chairman of the Co., loss to the Co., in purchase of shares of Tata Motors. It was alleged that over time Tata Trusts directors had become the handmaiden of Ratan Tata and his lieutenant Noshir A. Soonawala (Vice Chairman, Tata Sons Ltd.); they had become a \u2018Super Board\u2019. They were alleged to control the Trusts Nominee Directors and thereby suppress the minority shareholders, the petitioners. It was further alleged that respondents acted as per Ratan Tata\u2019s bidding, violating the Articles of Association. A grievance was also made against \u2018legacy hotspots\u2019. On the premise of these allegations modification in AoA was prayed for, along with demand to appoint an administrator to look after day-to-day affairs of the Co.; appointment of a retired Supreme Court Judge as non-executive Chairman, direction to the board not to remove Cyrus Mistry from the post of Chairman, restriction on the role of Soonawala, investigation into the affairs of the company, etc.<\/p>\n

The Tribunal, in order to decide the petition, took upon an arduous task of visiting the history of Tata\u2019s and the development of their corporations. In its 368-pages judgment, the Tribunal discussed each and every point raised by the petitioners and reached a conclusion that the petition was liable to be dismissed. The findings of the Tribunal are summarized (inter alia<\/em>) hereinafter:<\/p>\n