Tata Sons v Cyrus Mistry : CJI Bobde Says His Son Appeared For SPG Subsidiary; Lawyers Express No Objection To CJI Hearing

The lawyers appearing in the case between Tata Sons Private Ltd and Cyrus Mistry in the Supreme Court expressed that they have no objection to the Chief Justice of India hearing the case merely because his son is appearing for a subsidiary of Shapoorji Pallonji Group in a case in Mumbai.When the arguments started on the fourth day of the case hearing, CJI SA Bobde told the lawyers :"I discovered during the weekend that my son, who is practicing in Bombay, has been appearing for 2 years for a subsidiary of Shapoorji Pallonji Group in a matter related to slum rehabilitation. I must disclose this to you all".The CJI asked if anyone had objection to he being part of the bench.Senior Advocate Harish Salve, who is appearing for Tata Sons, said that he has no objection at all to the CJI hearing the case.Senior Advocates Dr AM Singhvi, CA Sundaram, Mohan Parasaran, Syam Divan and Advocate Fereshta Sethna also concurred with Salve.Following that, the CJI recorded the 'no-objection' in the order."This might otherwise create problems later on", CJI orally remarked after that.Senior Advocate C A Sundaram, who is appearing for Cyrus Mistry, submitted that in courts of England, there have been instances where sons have appeared before their fathers.The CJI replied that Justice PN Bhagwati has appeared as a lawyer before his father Justice N H Bhagwati.On the fourth day of the hearing, Senior Advocate Sundaram continued to refer to the Articles of Association of Tata Sons to argue that they were used to 'oppress' the minority shareholders.Apropos Sundaram's submissions regarding interference by Tata Trust in the company, CJI Bobde observed :"Our experience of private companies is that there is a 'pater familias' figure acting like a head of family, asking for information from others. This is true for Tatas, Birlas etc". In lighter vein, the CJI continued, "This might be happening with the SPG group of companies too"."What is wrong in the head of family asking for information in a family run company?', CJI asked.Sundaram submitted that Tata Sons is a company with thousands of shareholders. If the company was meant to be family run, it should have remained that way and should not have gone public, he added."There has to be some kind of consultation. Otherwise there will be chaos with these kinds of intrusions. The company cannot function in this fashion. Pater familias can be informed about the happenings. No problem with that. The problem is when they claim that they have absolute right to run the company under the Articles.You cannot use the Articles in a manner where you say that you have an absolute right over the affairs", Sundaram continued.The bench will continue the hearing tomorrow.Last week, Senior Advocate Salve completed arguments for Tata Sons. He argued that the the NCLAT can invoke powers under Sections 241 and 242 of the Companies Act 2013 only if it finds that there are just and equitable reasons to wind up the company. Mere differences of opinions between the minority and majority shareholders regarding various company decisions cannot be regarded as 'opperssion' or 'mismanagement'.Salve also questioned the powers of the NCLAT to direct that a particular person has to be appointed as the Executive Chairman. That amounts to taking away the rights of the shareholders. Also, Mistry's term under the contract had expired in 2017 itself and therefore the reinstatement order was wholly untenable, he continued. Detailed report about Salve's submissions may be read here.BackgroundOn January 10, the Supreme Court had stayed the December 18 order of the National Company Law Appellate Tribunal which reinstated Cyrus Mistry as the Executive Chairman of the company.Tata side had given assurance in court that they do not propose to take any steps invoking powers under Article 75 of the Articles of Association against the minority shareholders of Shapoorji Pallonji group.In the appeal, Tata Sons says that the NCLAT judgment sets a 'dangerous legal precedent' and is a 'blow to corporate democracy'. It is contended in appeal that judgment has virtually re-written the Articles of Association of the company to confer new rights on the minority shareholders, which were not otherwise existing.The present legal battle has its genesis in the company petitions filed by Shapoorji Pallonji Group under Sections 241 and 242 of the Companies Act 2013 alleging oppression and mismanagement in Tata Sons. These petitions were filed in the wake of Mistry's removal. The NCLT Mumbai bench dismissed the petitions, against which appeals were filed in NCLAT. Cyrus Mistry also filed a separate appeal seeking to expunge certain remarks made against him by the NCLT.On December 18, the Appellate Tribunal ordered the reinstatement of Mistry as the Chairman. Tatas contend that this relief was not even sought by Mistry and the other appellants.Tatas v Cyrus Mistry : 15 Grounds Of Challenge Against NCLAT Order Tata...

Tata Sons v Cyrus Mistry : CJI Bobde Says His Son Appeared For SPG Subsidiary; Lawyers Express No Objection To CJI Hearing

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