NCLAT restores Cyrus Mistry as Tata Sons head

New Delhi: In a major setback to Tata group, the NCLAT on Wednesday restored Cyrus Mistry as executive chairman of Tata Sons and ruled that appointment of N Chandrasekaran as the head of the holding company of salt-to-software conglomerate was illegal.

The NCLAT, however, stayed the operation of the order concerning reinstatement for four weeks to allow Tatas to appeal.

Setting aside a lower court order, the National Company Law Appellate Tribunal (NCLAT) also quashed the conversion of Tata Sons into a private company from a public firm. The judgment was pronounced by a two-judge bench headed by Justice S J Mukhopadhyay.

Mistry, a scion of wealthy Shapoorji Pallonji family, was in a coup removed as Chairman of Tata Sons in October 2016. He was later also removed as director on board of Tata Sons.

Mistry termed the judgement as "victory for the principles of good governance and minority shareholder rights" and not just his victory.

Mistry, whose family owns 18.4 per cent stake in Tata Sons, challenged his removal in the National Company Law Tribunal (NCLT). The case of oppression and mismanagement against Tata Sons and 20 others, including Ratan Tata, filed by Mistry family entities - Cyrus Investments and Sterling Investments - were however in March 2017 dismissed by the NCLT ruling that they were not eligible to pursue the allegations.

Meanwhile, Tata Sons said that it strongly believes in the strength of its case and will take appropriate legal recourse.

Tata Sons has received and is analysing the order of the NCLAT," Tata Sons said in a statement.

"It is not clear as to how the NCLAT Order seeks to overrule the decisions taken by shareholders of Tata Sons and listed Tata operating companies at validly constituted shareholder meetings."