The petition said the NCLAT order wrongly suggests that "someone from the SP Group had been a director because of some entrenched right or convention".
Ratan Tata on Friday filed a petition in the Supreme Court seeking to quash a company law appellate court order directing Tata Sons to rehire the chairman it had fired in 2016, saying the judgment was “wrong, erroneous and contrary to the record of the case”. His petition is separate from the one filed by Tata Sons Ltd, the holding company of the USD 110 billion salt-to-software conglomerate, in the Supreme Court on Thursday that sought a stay on the National Company Law Appellate Tribunal’s December 18, 2019 order to reinstate Cyrus Mistry as the chairman.
Ratan Tata, who is chairman emeritus and a shareholder of Tata Sons, in the petition said the NCLAT judgment was wrong as it treats Tata Sons as a two-group company. Mistry, he contended, was made the Executive Chairman of Tata Sons in a purely professional capacity and not as a representative of the Shapoorji Pallonji Group, which holds 18.4 per cent in Tata Sons. Tata Trusts, of whom Ratan Tata had been a chairman for many years, holds 65.89 per cent of Tata Sons.
The petition said the NCLAT order wrongly suggests that “someone from the SP Group had been a director because of some entrenched right or convention”. “This is untrue and contrary to the records and the articles of association of Tata Sons, which are undisputed and binding on the shareholders including the SP Group,” he contended. He said Mistry’s leadership “was lacking” in “his reluctance to timely and meaningfully disassociate himself from his family business after he became the Chairman of Tata Sons and address any conflict in this regard, which was a condition precedent to his appointment as Chairman of Tata Sons”.
Mistry, he alleged, “concentrated power and authority in his own hands” and “board members were being alienated on matters relating to Tata Operating Companies where Tata Sons had huge financial exposure and the Board of Tata Sons had to contend with such decisions being cast upon it as fait accompli”.
The chairman emeritus targeted Mistry for the handling of the failed partnership with Japan’s DoCoMo saying it showed his “complete obstinacy” as he attempted to resist complying with the legal obligations further. “This is not what the Tata Sons brand stands for. Quite to the contrary, honouring its commitments is one of Tata Sons’ highest virtues it takes great pride in. Spat with DoCoMo brought ill-repute and reputational losses to Tata Sons.”
Ratan Tata said the NCLAT reached a judgment based on “a contrived and self-serving reading of certain correspondence from which it derives erroneous findings which kaleidoscopically portray the larger theme of the judgment on purported oppression and prejudice to the Shapoorji Pallonji Group (SP Group)”.
“The Impugned Judgment is also infirm because it blatantly indulges in propagating a selective narrative where relevant facts and records have been glossed over,” he said. “The pretense of reasoning and judicial approach is betrayed by omission to consider the record itself.” He said there are no 550 mails between him and Cyrus Mistry as mentioned in the NCLAT judgment. “These mails were between Chairman Emeritus and Chairman Cyrus Mistry and not by entities in Court.”
“The whole case of oppression and prejudice is based entirely on words and statements contained in correspondence without there being an iota of evidence to buttress any actual loss/injury being caused to Tata Sons as a result of Cyrus Mistry being forced to act on such interference/interdiction against his wishes,” the petition said. It went on to state that it was “very unfortunate and distressing” that the NCLAT judgment without providing any proper evidence has passed adverse remarks against Ratan Tata who has spent more than half of his life in building the name of the Tata Sons and other Tata operating companies to one of the top global companies.
The judgment creates a wrong legal precedent that is vulnerable to being misused against several companies, including the public sector and government companies, it said.