Published 14:22 IST, January 2nd 2020
'Restoring Cyrus Mistry undermines corporate democracy': Tata Sons to SC
In a 182-page petition filed before the Supreme Court, Tata Sons has described the order reinstating Cyrus Mistry as a “dangerous legal precedent”.
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Tata Sons on Thursday moved the Supreme Court challenging the reappointment of Cyrus Mistry as the Executive Chairman of Tata Sons and declaration of the appointment of the incumbent Executive Chairman N. Chandrasekharan as illegal. In a 182-page petition filed before the Supreme Court, Tata Sons has described the order reinstating Mistry as a “dangerous legal precedent”.
'Detrimental to the interests of the company'
At the very outset, Tata Sons have stated before the Supreme Court that the National Company Law Tribunal (NCLAT) restored Cyrus Mistry as the Executive Chairman of the company without the relief being sought from the tribunal at all. Granting a relief that has not been asked for in this case is "detrimental to the interests of the company" and “completely inconsistent with the annals of corporate law”, Tata Sons has argued.
'Undermines the corporate democracy'
Further, it also said that Cyrus Mistry was replaced as the Chairman of Tata Sons on October 24, 2016 by the majority of the board of directors (where all directors voted in favour of replacement except for two — one abstained from voting and another was Mistry himself) for loss of confidence. Restoring him, it said, “undermines the corporate democracy and rights of the board of directors”.
'A recipe for disaster'
Cyrus Mistry’s term as the Chairman and Director of the company expired in March 2017. Highlighting this in its petition, Tata Sons called Mistry’s reappointment a “recipe for disaster”, saying that it will create unnecessary confusion and lead to more conflict. The company further claimed that “the Tata Group employs half a million people and contributes substantially to the economy of the country. Any shadow over the management of any of these companies puts public interest in jeopardy”.
The petition is likely to be mentioned before the Chief Justice of India S.A. Bobde on January 6 by the lawyers for Tata Sons who seek an urgent hearing and an interim stay on the NCLAT order. A meeting of the board is reportedly scheduled on January 9.
14:22 IST, January 2nd 2020