BREAKING| Supreme Court Dismisses Review Plea Of SP Group Against Tata Sons Judgment; Agrees To Expunge Few Remarks Against Cyrus Mistry

The Court however agreed to expunge certain adverse remarks against Cyrus Mistry from the judgment.

"Sorry review not entertained. Dismissed", CJI said after hearing Senior Advocates C Aryama Sundaram and Shyam for the review petitioners for a brief while.

 As regards the application of Mistry to expunge the remarks, the bench took objection to the remark in the application that "the judgment is worse than a press statement".

The bench told Advocate Somasekharan Sundaram, who appeared for Mistry, to withdraw such statements. The counsel replied that there was no intention to hurt the judges and agreed to withdraw the statements.

Senior Advocate Harish Salve, appearing for Tata Sons, conceded that some remarks could be expunged.

"As an act of grace, you may delete one or two observation", Salve told the Court.

"We'll confer and delete some sentences", the CJI said while concluding the hearing.

On last occasion, when the Review Petitions were placed before the Bench comprising the Chief Justice of India NV Ramana, Justice AS Bopanna and Justice V. Ramasubramanian, the majority had agreed to hear the review and had directed the Supreme Court Registry to list the matter for open court hearing. Justice Ramasubramanian had however dissented observing that there was no valid ground for review.

The NCLAT, in its order passed on December 18, 2019, had quashed the decision taken by the Board of Tata Sons in October 2016 to remove Mistry as the Chairman and had directed to restore Mistry.

The present legal battle has its genesis in the company petitions filed by Shapoorji Pallonji Group under Sections 241 and 242 of the Companies Act 2013 alleging oppression and mismanagement in Tata Sons. These petitions were filed in the wake of Mistry's removal. The NCLT Mumbai bench dismissed the petitions, against which appeals were filed in NCLAT.

On December 18, 2019, The National Company Law Appellate Tribunal restored Cyrus Mistry as the Executive Chairman of Tata Group. Allowing Mistry's appeal, the Appellate Tribunal had set aside the judgment of Mumbai bench of National Company Law Tribunal (NCLT) that had upheld the appointment of N Chandrasekharan as Chairman in his place.

The said NCLAT order was sets aside by the Supreme Court bench comprising the then CJI SA Bobde, Justice AS Bopanna and V Ramasubramanian.

The Top Court did not find merit in the Company petitioners initially filed by SP Group under Section 241 and 242 of the Companies Act, 2013 before the NCLT alleging oppression of minority shareholders and mismanagement.

While dismissing the contentions of mismanagement and oppression, the Court noted that SP Group had filed an application praying for the alternative relief of directing Tata Sons to cause a separation of ownership interests of the S.P. Group in Tata sons through a scheme of reduction of capital by extinguishing the shares held by the S.P. Group in lieu of fair compensation effected through a transfer of proportionate shares of the underlying listed companies, with the balance value of unlisted companies and intangibles including brand value being settled in cash.

The Apex Court stated that the valuation of shares of SP group depends on the value of stake of TATA Sons in listed equities, unlisted equities, immovable assets, etc and also perhaps the funds raised by SP Group on security pledge of the shares. Therefore, the Court refused to adjudicate on the fair compensation and left it to the parties to take the remedy in terms of Article 75 of the Articles of Association or any other legally available routes.

[Case Title: Cyrus Investments Pvt. Ltd. v. Tata Consultancy Services Limited And Ors. RP (C) No. 653-654 of 2021]