'Justice Displayed': Ratan Tata Welcomes SC Decision Upholding Tata Sons' Call To Sack Cyrus Mistry

Tata Sons, in a statement, said that the Hon'ble Supreme Court's judgment vindicates the position of Tata Sons and upholds the governance standards adopted by the Tata Group over the years.

Ratan Tata. (File Photo/ Getty)

Mumbai: In a significant relief to $110 billion Tata Sons, the Supreme Court on Friday backed the removal of Cyrus Mistry as chairman of the salt-to-software conglomerate in 2016 and set aside the National Company Law AppellateTribunal (NCLAT) order to reinstate him as the chairman.

"All the questions of law are liable to be answered in favour of the appellants­Tata group, and the appeals filed by the Tata Group are liable to be allowed, and the appeal filed by SP Group is liable to be dismissed," said the bench headed by Chief Justice SA Bobde, on the cross-appeals filed by Tata Sons and Cyrus Investments against the NCLAT order, which had restored Mistry as the chairman of Tata Sons.

Welcoming the court's order, Ratan Tata, chairman emeritus, Tata Sons, and chairman, Tata Trusts, said, "I appreciate, and I am grateful for the judgment passed by the honorable Supreme Court today. It is not an issue of winning or losing. After relentless attacks on my integrity and the ethical conduct of the group, the judgment upholding all appeals of the Tata Sons is a validation of the values and the ethics that has always been the guiding principles of the group."

"It reinforces the fairness and justice displayed by our judiciary," Mr. Tata said in his tweet after the judgment.

Tata Sons, in a statement, said that the Hon'ble Supreme Court's judgment vindicates the position of Tata Sons and upholds the governance standards adopted by the Tata Group over the years. "Tata Sons is grateful to the Hon'ble Supreme Court. Tata Group remains deeply committed to continue its efforts towards development of the nation and building the business keeping the long-term interest of shareholders and the community at large".

While the court allowed all petitions filed by the Tata Group, it dismissed the appeals filed by the Mistry-family controlled Shapoorji Pallonji Group and even refused to entertain its plea for fair compensation of their equity shares in Tata Sons.

As per the court,  the value of SP group shares will depend on the valuation of Tata Sons' equities, and that the SC would not determine what should be a fair value.

"After attacking Article 75 before NCLT, the SP Group cannot ask this Court to go into the question of fixation of fair value compensation for exercising an exit option," the court noted.

"We will leave it to the parties to take the Article 75 route or any other legally available route in this regard," said the order.

SP Group owns an 18.37% stake in the salt-to-steel conglomerate.

When asked for comments, Ashish K Singh,  managing partner of law firm Capstone Legal told ABP News, "One of the most contentious issues between the parties was fair compensation for shares owned by Cyrus Group. The Supreme Court has refused to interfere on this and pass any order on this. Reliance has been placed on Article 75 of the Articles of Association of the Company for determination of compensation which is an internal matter of the company. This is likely to cause a considerable difference in the valuation of shares and unless it is amicably settled."

The judgment comes after four-and-half years of protracted legal procedures, bitter accusations and counter-accusations, and no-holds-barred mudslinging from both sides.

Cyrus Mistry was made the chairman of Tata Group in 2012 after Ratan Tata's retirement but was unceremoniously removed in October 2016, leading to the dispute. Most Tata Group comes ended in green after the judgment, while SP Group listed firms slipped in red in a firm Mumbai market on Friday.

SP Group is yet to comment on the SC judgment.