106 Times 'Demonetization' Across the Country, Loss of Rs. 9245 Crores in a YearThe Supreme Court has stayed the NCLAT order during the hearing of the petition filed in the dispute between Tata Sons and Cyrus Mistry. Notice has been issued to Cyrus Mistry on behalf of the court.
The court has summoned Cyrus Mistry to answer the questions raised in the petition. Significantly, the National Company Law Appellate Tribunal (NCLAT), in its order dated 18 December, ordered Cyrus Mistry to be reinstated as the executive chairman of Tata Sons. This order has been challenged in the Supreme Court.
The Supreme Court said that there is a fundamental deficiency in the order of NCLAT. The court said that when we looked at the judicial attitude of NCLAT, it found that there was a fundamental deficiency in it.
What was the order of NCLAT
The NCLAT had invalidated the removal of Cyrus Mistry from the post of chairman of Tata Sons and ordered him to be reinstated to the post.
In its order dated December 18, the NCLAT had also rejected the management's decision to appoint N Chandrasekaran as executive chairman. The NCLAT outlawed the removal of Cyrus Mistry from the post of chairman of Tata Sons and ordered him to be reinstated. The National Company Law Appellate Tribunal (NCLAT) had said in its order that Cyrus be re-appointed as executive chairman of Tata Sons.
Earlier, the Mumbai Bench of the National Company Law Tribunal (NCLT) dismissed the petitions filed against the removal of Cyrus Mistry. The petitions were filed by two investment firms Cyrus Investment Pvt Ltd and Sterling Investment Corp.
After this, Mistry himself approached NCLAT. Mistry was removed as the chairman of Tata Sons in October 2016. He was the sixth chairman of Tata Sons. He became the chairman of Tata Sons in 2012 after Ratan Tata announced his retirement.
Ratan Tata Camp and the company board had expelled Cyrus Mistry, alleging misconduct. The board of Tata Sons removed Cyrus Mistry as chairman on October 24, 2016. Along with this, he had asked Cyrus to exit other companies of the group as well. After this, Cyrus resigned from the board of 6 companies of the group. However, he also dragged Tata Sons and Ratan Tata to the NCLT.
Favour of Tata group
The Tata group said that Cyrus Mistry was fired because the board had lost faith in him. The group had alleged that Mistry leaked sensitive information intentionally and with intent to harm the company. Due to this, there was a big loss in the market value of the group.
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