The verdict was pronounced by a bench headed by Chief Justice S A Bobde and also comprising Justices A S Bopanna and V Ramasubramanian.
The ruling comes after years of protracted legal procedures, bitter accusations and counter-accusations and no-holds-barred mudslinging.
The case pertains to cross-appeals filed by Tata Sons and Cyrus Investments with respect to the restoration of Cyrus Mistry as the executive chairman of Tata Sons by the NCLAT through a December 2019 order.
In this case, well-settled principles were overturned by NCLAT, the Supreme Court observed while delivering the verdict today.
NCLAT’s ruling had ordered Mistry’s reinstatement as executive chairman of Tata Sons, the over 100 billion salt-to-software comglomerate, as well as as director in three other Tata Group entities.
Tata Group was later granted relief by the SC which stayed the NCLAT order in a January 2020 hearing.
In its appeal, the Tata Group had said there was no wrongdoing involved in Mistry’s October 2016 ouster as Chairman, adding that the board was “well within its rights to do so”.
The Shapoorji Pallonji (SP) Group, on the other hand, had contended that the ouster was similar to a “blood sport”, saying that it had completely violated the Articles of Association and all principles of corporate governance.
In December last year, the same bench that gave today’s ruling had reserved the verdict in the matter.
Tata Sons had told the SC that it was not a ‘two-group company’ and there was no ‘quasi-partnership’ between it and Cyrus Investments.
Mistry, who had represented Shapoorji Pallonji Group on Tata board, sought representation commensurate to the 18.37% stake his family holds. He also said that Ratan Tata should reimburse all the expenses to Tata Sons since his departure in December 2012 in keeping with best global governance standards.
Representing Tata Sons, Senior advocate Harish Salve had submitted that Mistry walked away and later wrote a stinker. Representing Cyrus Investments, Senior advocate C. A. Sundaram, on the other hand, had contended that Mistry had not walked away, but was removed.
Main points in the SC verdict:
— All questions of law in favour of Tata Group
— Well-settled principles overturned by NCLAT
— Leave it to Tata Sons, Mistry to take legal route to resolve issue of shares
— Pleas by Cyrus Investments, Sterling Investments dismissed
— SC leaves issue of valuation of Tata Sons’ shares open