TATA Sons v Cyrus Mistry: Supreme Court dismisses review petition challenging apex court's March 2021 verdict

The Supreme Court on Thursday dismissed a review petition filed by Shapporji Pallonji group challenging the top court's March 26 verdict in the dispute between Tata Sons Limited and Cyrus Mistry in which the Court had ruled in favour of Tata [Tata Consultancy Services Ltd v. Cyrus Investments]..The case was heard by a Bench of Chief Justice of India NV Ramana, Justices AS Bopanna and V Ramasubramanian along with an application seeking expunction of certain remarks against Mistry in the judgment. "Sorry, review we are not entertaining. It is dismissed," said the CJI. .However, the bench agreed to consider the expunging certain observations in the judgments which were objected to by Mistry. Before agreeing to do so, the Court took exception to the grounds taken in in the application. The CJI, in fact, asked Mistry's counsel to withdraw improper remarks before granting the relief. Nevertheless, the bench went on to agree to the prayer advising that, "you can't take the fight to the other side, to a fight with the court.".With regard to the review petition, Senior Advocates Sundaram and Shyam Divan had submitted that the issue arose from findings in the judgment which had far reaching effects as it went against the cardinal rule of mergers. "If in every case, an appellate court reverses a judgment and does not specifically deal with certain issues in the original judgment.. it might be ground for an appeal. For the appellate court to then say, which of these is correct," said senior counsel Sundaram.However, the court was not inclined to allow the review petition to continue..The review was filed against the judgment of the top court setting aside the December 2019 order of National Company Law Appellate Tribunal (NCLAT) which had reinstated Cyrus Mistry as the Chairperson of Tata Sons Limited.It had answered all the legal questions involved in the dispute in favour of Tata Sons bringing quietus to the half-decade old legal battle which started in 2016 with the removal of Mistry as Tata Sons Chairman.The Bench headed by then Chief Justice of India SA Bobde had allowed the appeal filed by Tata Sons against the NCLAT judgment and dismissed the appeals filed by Mistry and Shapoorji Pallonji Group (SP Group)."We find all the questions of law are liable to be answered in favour of the appellants, Tata Group and the appeals file by the Tata Group are liable to be allowed and Shapoorji Pallonji group is liable to be dismissed," the Court had ruled..BackgroundBoth Tata Sons and Mistry had challenged a December 18, 2019 order of National Company Law Appellate Tribunal (NCLAT) which had ordered reinstatement of Cyrus Mistry as the Chairperson of Tata Sons Limited.The Supreme court had on January 10, 2020 stayed the NCLAT order.The NCLAT, in its December 2019 judgment, had held that the proceedings of the Board meeting of Tata Sons held on October 24, 2016 removing Cyrus Mistry as Chairperson was illegal.It had also directed that Ratan Tata should not take any decision in advance which requires majority decision of the Board of Directors of Tata Sons or a majority in the Annual General Meeting.Mistry took over as Chairman of Tata Sons, in December 2012 and was removed from the post on October 24, 2016 by the majority of the board of directors of the company. Subsequently, at an Extraordinary General Meeting convened on February 6, 2017, the shareholders voted for the removal of Mistry from the board of Tata Sons. Subsequently, N Chandrasekaran took over as Executive Chairman of Tata Sons.Two Shapoorji Pallonji firms, who are the shareholders in Tata Sons, moved National Company Law Tribunal over Mistry’s removal and alleging “oppression” of minority shareholders and “mismanagement”.In July 2018, NCLT dismissed the petition in July 2018 against which appeal was filed by Pallonji firms before the NCLAT. The NCLAT proceeded to overturn the NCLT order prompting the current appeals before the Supreme Court.Tata Sons claimed in its petition that the NCLAT granted reliefs which were not prayed for by restoring Cyrus Mistry to his “original position” as the Executive Chairman of Tata Sons and declaring the appointment of Chandrasekaran the incumbent Executive Chairman of Tata Sons as illegal.The plea highlighted that the tenure of Cyrus Mistry as the Chairman and Director of Tata Sons expired in March 2017 and a direction by the NCLAT to allow Mistry to continue as a functionary beyond the term would be contrary to the articles of association of the company and the established principles of company law.Shapoorji Pallonji firms in their cross appeals contended that the NCLAT failed to give certain crucial reliefs to MistryIt was prayed that the Mistry firms should be entitled to representation in all committees formed by the board of directors of Tata Sons.Further, they also sought striking down of placing the right of affirmative vote in the hands of select directors of Tata Sons which would enable them to override the view of the entire board.The Supreme Court eventually ruled in favour of Tata prompting Shapoorji Pallonji group to file the present review petition. .Tata was represented by Senior Advocates Harish N Salve, Dr AM Singhvi assisted by Advocates Dhruv Dewan and Avishkar Singhvi. They were briefed by a team from Karanjawala & Co. Advocates led by Senior Partner Ruby Singh Ahuja, Principal Associates Tahira Karanjawala and Arjun Sharma, and Senior Associate Ashutosh P Shukla. Cyrus Mistry and Shapoorji Pallonji companies were represented by Senior Advocates CA Sundaram and Shyam Divan, advocates Somasekhar Sundaresan, Rohini Musa, Rohan Jaitley, Samiksha Godiyal, Abhishek Venkataraman, Ravi Tyagi, Jaiyesh Bakhshi and Rini Badoni.