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Supreme Court stands by Tata Sons decision to remove Cyrus Mistry in 2016

Cyrus Mistry had succeeded Ratan Tata as the Chairman of Tata Sons in 2012 but was ousted four years later. He was only the second chairman to not bear the surname Tata.

Supreme Court stands by Tata Sons decision to remove Cyrus Mistry in 2016

Friday March 26, 2021 , 3 min Read

The Supreme Court of India on Friday ruled in favour of the Tata Sons’ decision to remove Cyrus Mistry as executive chairman in 2016.


A three-judge bench led by Chief Justice SA Bobde, including Justices AS Bopanna and V Ramasubramanian, ruled out oppression and mismanagement at Tata Sons, as alleged by Cyrus Mistry.


Taking to Twitter, Ratan Tata, Chairman Emeritus and the former Chairman, Tata Sons Private Limited, said, “I appreciate and am grateful for the judgement passed by the honourable Supreme Court today.”

He added, “After the relentless attack on my integrity and the ethical conduct of the group, the judgement upholding all the appeals of the Tata Sons is a validation of the values and ethics that have always been the guiding principles of the group.”

Ratan Tata further noted that “it is not an issue of winning or losing.”

Earlier in December 2020, the bench had reserved the verdict. Mistry — who is part of the Shapoorji Pallonji family — owns 18.47 percent equity capital of Tata Sons — the holding company of Tata group of companies.


Tata Trusts, controlled by Ratan Tata, holds a 66 percent stake in Tata Sons.


In 2012, Cyrus Mistry was chosen as the chairman of Tata Group. He was the sixth chairman of the group, and only the second to not bear the surname Tata. However, the Tata Sons’ board voted to remove Mistry from the post of chairman after offering him an opportunity to resign voluntarily.


The National Company Law Tribunal (NCLT) received an appeal from Mistry about his removal, and in July 2018, issued a verdict in favour of Tata Sons.


However, in December 2019, National Company Law Appellate Tribunal (NCLAT) reinstated Mistry. It said that affairs at Tata Sons were conducted in a manner prejudicial and oppressive to its minority shareholders, namely Cyrus Mistry and his family companies.

Tata Sons, in January 2020, knocked on the doors of the Supreme Court against NCLAT’s order, terming it a “recipe for unmitigated disaster.” The apex court put a stay on NCLAT’s order. However, the very next month, Mistry filed a cross-appeal against NCLAT judgment, claiming NCLAT failed to grant certain crucial reliefs to the Mistry firms.

Later, Tata Sons offered to buy out a stake held by its largest minority shareholder — the Mistry family — as part of a proposal to end the long legal dispute between the two parties.


In September 2020, the Supreme Court restrained Cyrus Mistry's Shapoorji Pallonji Group from pledging any of its shares in Tata Sons for raising funds.


Edited by Suman Singh