On Friday, the Supreme Court upheld Cyrus P Mistry’s elimination from the post of executive chairman of Tata Sons. It rejected the Shapoorji Pallonji Group’s accusations towards Ratan Tata, including the Tata Sons board’s allegedly oppressive practices towards minority shareholders.

The court terminated SP Group’s last-minute plea for evaluating its stocks for an honorable go-out from Tata Sons via charge of truthful compensation. The bench stated, “At this stage, and on this court, we can not adjudicate on truthful compensation. We will go away it to the parties to take the Article seventy-five direction or some other legally to be had direction.”

A bench of Chief Justice SA Bobde and Justices AS Bopanna and V Ramasubramanian in a 282-page judgment shredded SP Group and Mistry’s arguments towards Tata Sons. It puzzled how the National Company Law Appellate Tribunal (NCLAT) should have deviated from the law to order Mistry’s reinstatement even after the expiry of his tenure as chairman and direct conversion of Tata Sons right into a public corporation.

The court stated, “In fact, it can be conceded these days with the aid of using Tata Sons that one essential choice that the board took on March 16, 2012 (appointment of Mistry as deputy chairman) truly became out to be the wrong choice of a lifetime.”

Writing the judgment for the bench, CJI Bobde laid the blame squarely on the doors of Mistry and SP Group for beginning the fight with Tata Group and Ratan Tata. “It is a sarcasm that the very same person who represents shareholders owning simply 18.37% of the overall paid-up share capital and but diagnosed because the successor to the empire, has selected to accuse the very same board of conduct oppressive and unfairly prejudicial to the interests of the minorities,” the bench stated.

The SC blamed Mistry for bringing misfortune on himself by setting the house on fire, the safekeeping of which became entrusted to him. “In any event, the elimination of someone from the submit of erchairman can not be termed as oppressive or prejudicial,” the SC stated.

“Mistry himself sought, while accepting the office, the continuing guidance of Ratan Tata. When the board, of which Mistry became chairman, nominated Ratan Tata as chairman emeritus and recorded their want to look ahead to his assist and guidance, it became no longer open to the SP Group to call Ratan Tata a shadow director. Suppose someone, aggrieved after his elimination from the office, can interact in shadow boxing via the organizations managed to use him. In that case, he can not accuse the very identical individual who selected him as successor to be a shadow director. Someone who gained access via the very same door can not condemn it while asked to go out,” the CJI stated.

Dismissing the declare of SP Group agencies that Tata Sons’ affairs have been conducted in a way oppressive closer to minority shareholders like SP Group, the SC stated, “If the organization’s affairs were or are being performed in a way oppressive or prejudicial to the interests of the SP Group, we surprise how a representative of the SP Group, keeping a touch over 18% of the stock capital, should have moved as much as the topmost position inside a period of six years of his induction.”

Referring to Mistry’s conduct in inflicting a sensation by leaking to media his confidential email accusing Tata Son’s administrators of now no longer discharging their duties and calling Tata Trust’s nominee administrators “postmen” and his writing to tax government about Tata Sons’ accounts, the bench stated such conduct certainly warranted his elimination.

“A person who attempts to set his own house on fire for now no longer getting what he perceives as legitimately because of him does not need to continue as a part of any decision-making body (not simply the board of an organization). It is possibly this realization that made the complainant organizations (SP Group) give up their original prayer for restraining the organization from eliminating Mistry and singing a special tune looking for proportionate representation at the board,” the SC stated.

The SC slammed the NCLAT for ordering Mistry’s reinstatement even if it became now no longer sought through the SP Group. “It is meaningless that the NCLAT directed reinstatement, and that too of a director of an organization, after the expiry of his term of office. Needless to mention that such a remedy could not be granted even though a labor court/service tribunal in topics coming within their jurisdiction,” the CJI stated.

Referring to Mistry’s team’s allegation about failed business ventures just like the Tata Nano automobile project and telecom project Docomo, the SC stated, “Failed business decisions and the elimination of someone from directorship can by no means be projected as acts oppressive or prejudicial to the hobbies of the minorities, it’s far too properly settled.”

The SC additionally rejected the SP Group declaration for proportionate representation at the Tata Sons board.
“The proper to claim proportionate representation is not to be had even to a minority shareholder statutorily, both below the 1956 Act and below the 2013 (Companies) Act. It is to be had only to a small shareholder, which SP Group is surely not. The right to claim proportionate representation is not to be had to the SP Group even contractually, in phrases of the articles of association. Neither SP Group nor Mistry can request the tribunal to rewrite the contract, by in search of a modification of the articles of association,” the SC stated.