Tata Sons v Cyrus Mistry : Live Updates From Supreme Court Hearing -Day 2

Salve now traces the history of how Pallonji Mistry joined the company and in 2006, Cyrus Mistry joined. Further, all transactions have been legacy transactions and there have been no issues. 

Salve: The Article cannot be banned, but the exercise of your right can be banned.

CJI: There are many allegations about the grievances in the way the registration has been done.

Salve: Mr. Mistry was offered shares which he didn’t think it was worth buying. Where is the lack of probity in this ?

CJI: There was some underhand transaction which also took place.

Salve is now referring to the cross appeal filed by Mistry, wherein they had claimed a valuation of 1.5 lakh crores.

“They have now asked that they be given 18% in all downstream Tata companies. As per their latest Application, the valuation is 1.75 lakh crores.”

Salve: They are say that there was a happy relationship before, which is true.

CJI: So the Tribunal should have found losses that had to be borne by the minority alone.

Salve: Correct.

Salve: When there’s a deadlock, it means you’re so close and the company cannot run because two partners don’t talk to each other. The other is quasi-partnership, where there is a breakdown in trust.

Salve is now making submissions on “good faith”.

“We sometimes get lost in words and actions and provide fair justification sometimes for what we consider to be in good faith.”

Salve: The burden lies on someone to say that I had a special relationship which went beyond the articles and that could be set aside. 

Salve now traces English jurisprudence pertaining to honouring of agreements, legitimate expectation and the extent to which a Court can interfere in the matters of a company.

He also iterates the principle of “Complying with your contract”.

CJI states that his brother Judge remembered an instance when a Judge on the Bench for 9 years sought to become the Chief Justice on the grounds of “legitimate expectation”.

CJI also notes - “Lord Krishna had explained to Arjuna the issues of such expectation”.