Tata Sons and Cyrus Mistry have challenged order passed by National Company Law Appellate Tribunal on 18th December 2019, wherein the tribunal had ordered the reinstatement of Cyrus Mistry as the Chairperson of Tata Sons Limited
The Bench headed by Chief Justice of India SA Bobde will continue hearing the matter on 9th December .
Harish salve continued his arguments on 9th December wherein he specifically argued on following points:
- Legitimate expectation.
- English jurisprudence pertaining to honouring of agreements, legitimate expectation and the extent to which a Court can interfere in the matters of a Company
- Principle of “Complying with your contract”
- “Good faith”
- Referring to the cross appeal filed by Mistry, wherein they had claimed a valuation of 1.5 lakh crores.
- History of how Pallonji Mistry joined the company and in 2006, Cyrus Mistry joined.
- Just and Equitable reasons grounds which would warrant interference by court with the affairs of company.
Salve relied on Saul Harrison judgment of Court of Appeal on the scope of breach of "legitimate expectations' of members of company.
While arguing on English positions Harish Salve says that “where Articles of Association do not fully reflect the relationship between shareholders, then the burden lies on the concerned shareholder to prove that there was special relationship with the company beyond the Articles.”
While commenting on disputed the mismanagement allegations, he stated that the valuation of SP Group's stake in Tata Sons rose from Rs 1 lakh crore in 2017 to Rs 1.75 lakh crore in 2020.
Salve further stated that the SP Group's cross-appeal in which they claimed to have a valuation of Rs 1.75 lakh crore in Tata Sons. He argued that SP Group is seeking over 18 percent stake in all downstream Tata companies, which shows mismanagement.
Salve further pointed out that Pallonji Mistry is a business man of eminence. He was with Tata till 2004. No dissonance ever. Cyrus Mistry joined in 2006 and did not have any dissonance till 2014
While raising queries CJI, SA Bobde ask salve that “But who has said that Tata Sons should be wound up? Party in their comparing need not say that company should be wound up. Party only needs to say that there is oppression and mismanagement”
Among other details, Salve pointed out to CJI SA Bobde that Tata Sons have been a private company which limits transfer of shares and number of members to 50 and after the 2013 Act, by definition, they became a private company.
After a long hearing, the bench rose for the day and adjourned the Hearing to continue tomorrow.( December 10, 2020)
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