Tata Sons v Cyrus Mistry : Supreme Court Agrees To Hear SP Group's Review In Open Court; Justice Ramasubramanian Dissents

The Review Petitions were placed before the Bench comprising the Chief Justice of India, NV Ramana and Justices AS Bopanna and V. Ramasubramanian. While the majority agreed to hear the review and directed the Supreme Court Registry to list the matter on 09.03.2021 for open court hearing. Justice Ramasubramanian dissented, stating -

"With utmost respect, I regret my inability to agree with the order. I have carefully gone through the Review Petitions and I do not find any valid ground to review the judgment. The grounds raised in the Review Petitions do not fall within the parameters of a review and hence the applications seeking oral hearing deserve to be dismissed."

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]