The Supreme Court ruled in favour of Tata Sons today. The NCLAT’s decision to re-appoint Cyrus Mistry as the company’s chairman was reversed by the court. Tata Sons filed a lawsuit to reverse the ruling.
On December 17, 2019, the National Company Law Appellate Tribunal (NCLAT) ruled that Mistry will be reinstated as Chairman of Tata Sons. This decision was reversed by the Supreme Court today.
The Supreme Court, on the other hand, upheld the NCLAT’s ruling from January 10, 2020. Chief Justice SA Bobde, Justice AS Bopanna, and Justice V Ramasubramanian delivered the verdict. On December 17, 2020, the Supreme Court will make a ruling in this case.
What was the previous NCLAT decision?
In its ruling, the NCLAT declared the October 24, 2016 decision, in which Mistry was dismissed as director and chairman, to be invalid. According to the tribunal, this decision was made incorrectly, and Mistry has now been restored.
The tribunal also ruled that N Chandrasekaran’s nomination as Tata Sons’ new chairman was illegitimate. The Tata party has been given four weeks to enforce this decision before filing an appeal. The court claimed in the second part of the judgement that the three companies have been directed to enforce Mistry immediately. Only the three companies from which Mistry will be fired will be affected by this decision.
According to SEBI regulations, any change in a company must be disclosed to the stock exchange because such decisions affect the stock price. However, Mistry’s reinstatement to the stock market has yet to be formally announced by the Tata group.