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The NCLAT has restored former Tata group Chairman Cyrus Mistry as executive chairman of Tata Group. The Appellate Tribunal has also held the appointment of N. Chandra as executive chairman illegal.
The NCLAT has also set aside Tata Sons’ conversion from a public company to a private one.
The order was passed by a two-judge bench of the NCLAT headed by Justice SJ Mukhopadhyaya.
In August last year, Mistry had appealed against the order of the National Company Law Tribunal (NCLT), Mumbai Bench, which dismissed his plea challenging his removal as the Executive Chairperson of Tata Group’s holding company in October 2016.
While admitting the appeal, NCLAT had directed that Mistry could not be “forced to sell” his shares in Tata while the appeal was pending.
After being sacked from the Board, Mistry had moved NCLT against Tata Sons, Ratan Tata, and several others under Sections 241 and 244 of the Companies Act, 2013 alleging oppression and mismanagement in Tata Sons.
It was Mistry’s case that the company’s conversion into a private company was a fraud on him and was legally impermissible.
On the other hand, Tata Sons had argued that it had been functioning like a private firm since its inception. Therefore, the proceedings before the Registrar of Companies were only to update the records and not for “conversion” from public to private.
Mistry’s petition was dismissed by the NCLT on July 9. Apart from ruling that the Board of Directors was competent to remove Mistry from the post of Executive Chairman, the NCLT had also held that Tata Sons cannot be prevented from becoming a private company.
Read the Judgement: