Tata Sons vs Cyrus Mistry: Boardroom battle goes to Supreme Court, what next

While NCLAT ruled in Mistry's favour last month, Tata Sons had four weeks to challenge the NCLAT order. The company has now asked Supreme Court to put a stay on the appointment order on six grounds. ata Sons on Thursday knocked the Supreme Court's door challenging the National Company Law Appellate Tribunal (NCLAT) order reinstating Cyrus Mistry as the executive chairman of the holding company. While NCLAT ruled in Mistry's favour last month, Tata Sons had four weeks to challenge the NCLAT order. It has now asked the Supreme Court to put a stay on the appointment order on six grounds. In its appeal, the salt-to-steel conglomerate has raised six grounds, reported The Economic Times. It said NCLAT has not given any reason specifying why Mistry's removal was illegal. Tata Sons also expressed dissatisfaction and claimed that the NCLAT order undermined corporate democracy and the rights of existing board members. It added that NCLAT's judgment may set a "dangerous precedent" in such cases in future. Terming the decision as "inconsistent with annals of corporate law", Tata Sons said that the reinstatement order has created confusion in the working of important listed corporate entities as well. The company also said that Mistry had specifically pleaded before National Company's Law Tribunal (NCLT) that he did not seek reinstatement as executive chairman as the tenure of his term expired in March 2017. The appeal comes days before a Tata Consultancy Service (TCS) board meeting scheduled to be held on January 9. Tata's lawyers are believed to seek an urgent hearing on the matter after the top court reopens on January 6. Tata Group's lawyers also said that the company is challenging all the points mentioned in the NCLAT order. "We have challenged the NCLAT decision in its entirety," a Tata lawyer associated with the matter said. While the matter will only become clear after it is heard by the Supreme Court on January 6, legal experts have already shared possible scenarios. According to a Livemint report, legal experts made it clear that if Supreme Court quashes NCLAT's order, N Chandrasekaran will continue to be the executive chairman of Tata Sons. Mistry, on the other hand, will not be left with any option with respect to his chairmanship. However, if Tata Sons loses the appeal in the top court, it still has another option. After the top court's order, Tata Sons can call for a board meeting and pass a vote of no confidence against Mistry again. Subsequently, it could call for a poll by all its existing shareholders to decide Mistry's fate. If the shareholders and board vote against Mistry's reappointment, Tata Sons can remove Mistry again and reappoint Chandrasekaran or any other board member, added the report quoting legal experts. All eyes will now be on the Supreme Court's decision on the matter as it will be the last chapter of one of the worst boardroom battles witnessed in the country.

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