Tata Sons vs Cyrus Mistry : Live Updates From Supreme Court Hearing

Salve : If Tata Sons is distributing huge amounts of dividends, where is the question of winding up Tata Sons? That is a long and short of this case.

Salve : In ordinary circumstances, Mistry, with 18% shares, will not get even 1% share in the Board, that too in a private company.

Salve points out that the 1956 did not have a condition that the Company Court should come to a conclusion that winding up order is otherwise necessary.

Parliament has now decided that this condition should be there in the 2013 Act.

CJI : So your contention is that the Tribunal cannot choose a particular person as the Director?

Salve : Generally, yes. Tribunal cannot say so and so will be the Director.

Salve : This power (Section 242(k)) is nuanced. The appointment is for a specific purpose. In that case the Directors come with a mandate.

CJI : It is like appointing a Commissioner.

Salve : Yes

CJI : Section 242(k) talks about the power to appoint a Director to report to the Tribunal. It is like appointing a Commissioner Director.

Salve : Virtually, yes.

CJI : Section 242(h) speaks about power of Tribunal to remove as Managing Director etc. But there is no power given to set aside an order of removal.

Salve : Ultimately the selection must be by the Shareholder.

CJI : Precisely. We do not see any power for the Tribunal to select Chairman.

Salve : Can the Tribunals select the Chairman? The answer is No. It is for the shareholders to decide.

Salve coming back to arguments.

The Tribunal has no power to rewrite the Articles of Association.