Tata Sons ex-chairman Cyrus Mistry once took Ratan Tata in the court; Read full controversy here

Cyrus Mistry became the chairman of Tata Sons in 2012 followed by Ratan Tata. However, he was dethroned unceremoniously in 2016 as Tata sons chairman by the majority of the board of directors of the company. Anguished by the decision, Cyrus Mistry filed a lawsuit in National Company Law Tribunal (NCLT).

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New Delhi: Cyrus Mistry died in a road accident while returning to Mumbai from Ahemdabad when his car struck on a divider. This untimely death of India’s one of the wealthiest men is devastating and shocking. Looking at the history, then it’s not a long time back when Cyrus Mistry was in a legal battle against Tata Sons for removing him unceremoniously from the chairman post and then from the board. 

Cyrus Mistry was the youngest son of Pallonji Mistry and joined the family business after the completion of his studies. He then took over as the board member of Tata sons after Pallonji Mistry’s retirement. Finally in 2012, he succeeded Ratan Tata as chairman of Tata sons.

However, he was dethroned unceremoniously in 2016 as Tata sons chairman by the majority of the board of directors of the company. Later, he was voted out by shareholders from the board of Tata sons, which was a great setback for Cyrus Mistry.

N. Chandrasekaran was made the chairman of Tata Sons in 2017 after the dismissal of Cyrus Mistry. Anguished by the decision, Cyrus Mistry filed a lawsuit in National Company Law Tribunal (NCLT) against the Tata Sons alleging oppression and mismanagement under the sections of Companies act 2013.

The Tribunal dismissed Cyrus Mistry’s petition and agreed that the board of directors are capable to remove the chairman and that no selection committee is required to remove the executive chairman. The court also said that he had no found evidences of mismanagment in Tata Sons.

Mistry applied to the National Company Law Appellate Tribunal (NCLAT). Finally, NCLAT accepted his appeal and overturned the judgement of NCLT. It called the removal from the board of directors as illegal and quashed the appointement of Chandrashekaran as the chairman of Tata Sons.

Tata Sons applied to the Supreme Court againt the NCLAT judgement. SC placed a stay on NCLAT order to reinstate Mistry as executive chairman of Tata Sons and began hearing the case.

Finally, Supreme Court on 26 March, 2021 ruled in favour of Ratan Tata and Tata Sons and dismissed an appellate tribunal order.

The top court said that all the laws were in favour of the Tata Group. “We cannot adjudicate on the question of compensation and they can take the 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,” said Chief Justice of India SA Bobde during the order.

The top court further said, “We leave it to Tata Sons, Mistry to take legal route to resolve issue of shares. Value of Tata Sons shares depends on equity.”