Mistry was removed as executive chairman of Tata Sons on October 24 2016 by its board of directors. It led to two of his family-run investment firms dragging the corporate monolith and 22 others including Tata Sons former chairman Ratan Tata, various other Tata trustees and directors that December to the company law tribunal to complain of aggressive oppression and mismanagement.

The NCLT held that Mistry as Chairman was removed because board of directors lost faith. “The Board is competent to remove Mistry. No selection committee was needed,” said judicial member B S V Prakash Kumar as he read out from the verdict.

The pronouncement has come as a very sweet and joyful victory for Tata Sons represented by the main counsel Advocate Abhishek Singhvi who had argued extensively that the whole petition was a “proxy battle” by Mistry who he had likened to a “Trojan horse” while arguing the petition earlier.

The bench held, “Removal of Mistry as director is because of acrimonious behaviour and is justified.” It also said, “Proportional representation not possible as articles do not mandate it.”

“No merit in legacy issues – do not fall within section 241 of the Company’s Act which provides for minority shareholders to move for relief against acts of oppression,” the bench added.

“Ratan Tata and Soonawala’s suggestions cannot trigger the plea for relief under sections 241 and 242 of the Company’s Act. No merit in shadow directors argument,” said NCLT. The tribunal also found that “No merit that articles including article 75 are oppressive against petitioner,” and said. “Just and equitable ground is added to mismanagement and hence petition is dismissed.”

The main reason is that Mistry’s removal in itself is an act of oppression by Tata Sons, the group holding company, “to prevent him from carrying out a clean-up op against the mismanagement.’’ Tata Trusts owns 66 per cent shareholding in Tata Sons. The challenge also centres around five articles of association, including veto rights of majority of Trust nominated directors, of which Mistry’s family feel are oppressive to both, public and their interest as minority shareholders.

The petition before NCLT against Tata Sons is filed by Cyrus Investments and Sterling Investment Corporation. But Tata Sons’ counsel  Adv. Abhishek Singhvi called it a “scurillous’’ attack and “Mistry’s proxy litigation.’’

The Mistry family firms owns 18.6 per cent in Tata Sons, making it the second largest shareholder. But voting rights is for holding less than 4 percent. Mistry took over the reins of the horse (Tata Sons) to a $103 billion conglomerate from Ratan Tata, when he turned 70 years old, in December 2012. Five months after his removal as chairman, Tata Sons removed Mistry as its director too.

The investments of the Mistry firms had appreciated from the initial Rs 70 crore when they first became shareholders in 1965, to Rs 58000 crore in March 2016, said Tata Sons. In over 50 years, they had never ever for even once complained of any mismanagement or oppression, much less of any prohibition by Ratan Tata or N A Soonawala, as they did now, argued Tata Sons. The ultimate relief provided under the Companies Act for the challenge now raised is winding up of the company—among India’s largest.

The NCLT while earlier denying Mistry relief, had praised the Tata Group as a “salt to software’’ giant, an “untiring provider’’ and a “household name’’ with a global footprint. After a chequered battle with the matter being sent back to the Mumbai tribunal by its appellate body in Delhi, it was heard since last November by the main bench of BSV Prakash Kumar and V Nallasenapathy, on merits. The bench had concluded a lengthy, animated, seemingly bitter sometimes stormy hearing early February.

Mistry camp’s legal team of counsel C A Sundaram and Janak Dwarkadas launched an all-out legal battle and made long submissions to bring home their five point allegations that the actions of Tata Sons run by majority shareholders, its chairman emeritus Ratan Tata and various other Trustees right from removing Mistry was oppressive to the minority shareholders’ interest along with mismanagement and contrary to provisions of the company law. There was no cause on merits to remove Mistry whose performance was rated high by the company itself, argued his counsels.

Tata Sons’ Counsel Abhishek Singhvi hit back at length too to refute Mistry’s entire case as nothing but an “act of vendetta’’ lacking in any merits by “a Trojan horse’’ relying only on a “ruse’’ to publicly air his displeasure at the loss of his office.’’ Tata Sons had Nitesh Jain of Shardul Amarchand Mangaldas, and host of other senior counsel including Ravi Kadam, Mohan Parasaran, Sudipto Sarkar Mistry for various trustees. Their collective plea was that “Business decisions taken over a decade ago, some even two decades ago, also those which have Mistry’s “express consent” are being raised as “so-called issues and concerns’’ by two of his family owned companies making it apparent that “it is yet another attempt to harm the reputation of Tata Group,’’ with “no credible material to establish any oppression or mismanagement.’’

Singhvi also said the attack on “lack of corporate governance was a bogey.’’ He hailed Ratan Tata as a revered corporate legend and said Tatas are held up as examples on corporate governance for rest of India Inc. It was also argued by Tata group lawyers that a board position with Tata Sons is offered by invitation and cannot be sought as of right based on shareholdings.

Tata Sons argued that the law clearly allows removal of a chairperson and director and Mistry was removed by a majority of 7 out of 9, Mistry being one who didn’t vote for his removal and one had abstained. Singhvi had dived into legal semantics on use of word “ prejudice” from the Companies Act 2013 and said that Mistry failed to prove any.

A key allegation was that the Tata Sons Board had turned into a ‘super board’ was ‘shadow’ directors, and its oppressive articles 121, 121A vested veto powers with majority of the Trust nominated directors which could “prejudice’’ interest of public, minority shareholders and the company itself. The Mistry camp cited as examples of alleged mismanagement, the “Nano project, Corus, discovery and handling of the alleged Air Asia India fraud, NTT Docomo case.’’

Recommended By Colombia, Sundaram had argued that the proposed conversion Tata Sons from public to private was also an oppressive move. Much force was put by Sundaram also into how article 75 in the company memorandum of association would be a significant oppressive tool. The apprehension was that it would be used now as a tool for oppression as it allows the compulsory purchase of shares of any shareholder including Mistry, whose two petitioning companies together hold over 18 percent shares, he said.

Singhvi had said that at all times for over 100 years, irrespective of the changes in Indian law, Tata Sons had always “remained a company exhibiting private characteristics”. The change was now only a technicality under the law, was his response.

After Mistry replied to some letters from the Income Tax department after he was removed from office, without any authority to do so, Tatas counsel Singhvi had submitted that the behaviour amounted to that of a Trojan Horse as costing the Tata group dearly.

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The Indian legal profession today consists of approximately 12 lakhs registered advocates, around 950 law schools and approximately 4-5 lakhs law students across the country. Every year, approximately 60,000 – 70,000 law graduates join the legal profession in India. To become an eminent lawyer, one needs years of experience, dedication, rigorous study and track of the amendment laws and rules. All this helps an advocate to perform at his best in the court room and helps him interpret the law according to the nature of the case presented in front of them.

Here we would like to pen down topmost lawyers of India with reference to data of 2015 and 2016.

Harish Salve: Expertise in the areas of constitutional, commercial and taxation laws. He primarily practices at the India, but also appears in various High Courts and in international arbitral disputes, sometimes as a counsel and other times as an adjudicator. He served as the Solicitor General of India from 1 November 1999 to 3 November 2002. Land mark case:  Mukesh Ambani’s Reliance Industries Limited case of the Krishna Godavari Basin gas dispute case against the latter’s brother is the main Anil Ambani’s Reliance Natural Resources Limited.

Ram Jethmalani: Primarily known as only a criminal lawyer, although he has appeared in many important cases concerning constitutional matters.Ram Jethmalani first came to spot light with his appearance in the famous K. M. Nanavati vs. State of Maharashtra case in 1959 with Yeshwant Vishnu Chandrachud. And this case is about to show cased as Rustom realeasing on 12^th August, 2016.

Mukul Rohtagi: Works with various profiles of cases. Landmark case: Represented Gujarat government in the Supreme Court in the 2002 Gujarat riots and fake encounter death cases, including the Best Bakery and Zahira Sheikh Cases. He has also served earlier as Additional Solicitor General of India and presently appointed as Attorney General of India.

Majid Memon: Specialised in criminal law. Landmark case: He represented Yakub Memon but could not set him free.

Satish Maneshinde: Expertise in: Advocate FEMA, Custom Law Consultants, Service Matter Advocate, Will Legal Consultant, Labour Law Advocate, Online Dgft Licensing, Court Domicile Certificate, Excise, Civil, Factory, Consultant, Writ Advocate, Share Market Advocate. Landmark case: he secured bail for Sanjay Dutt in the Bombay Blast Case and for Salman Khan who allegedly killed one person for drunk driving.

Aryama Sundaram: Primarily practices corporate law but also takes up constitutional law and media related cases. Landmark Case:Lawyer in the S. Rangarajan case which resulted in one of the landmark judgments on the freedom of speech and expression.

Arvind Datar: He is a senior advocate of Madras High court who specializes in tax laws and a writer as well. His books ‘Nani Palkhivala: The Courtroom Genius’, ‘Datar Commentary on Constitution of India’ and ‘Guide to Central Excise Law and Practice: With Accounting Practices’. Landmark Case: High Court of Madras on the Sahara v. SEBI case (Sahara India Real Estate Corporation Limited v. Securities and Exchange Board of India).

Abhishek Manu Singhvi: Specialized in Constitutional law. Landmark case: Naveen Jindal vs M/S Zee Media Corporation Ltd & Anr.

Gopal Subramanium: Works with wide range of topics, from matters involving complex questions of constitutional and criminal law. Landmark case: concerning the law of arbitration in India, including the BALCO case.

Soli J. Sorabjee: Renowned human rights lawyer. He was appointed by the UN as a Special Rapporteur for Nigeria, in 1997, to report on the human rights situation in that country. Landmark cases: Keshavananda Bharati, Maneka Gandhi, S.R. Bommai. He has been honored with Padma Vibhushan for his defense of the freedom of expression and the protection of human rights.

Fali S. Nariman: Distinguished Indian Constitutional jurist and senior advocate to the Supreme Court of India since 1971. Landmark case: Nariman argued in favour of Dow chemicals (the owned by Union carbide) in the infamous Bhopal gas disaster case, which he admitted as a mistake in recent times. He has been awarded the Padma Bhushan (1991), Padma Vibhushan (2007) and Gruber Prize for Justice (2002).

By: Sanjukta Biswas, Staff Writer at Legal Desire Media & Publications

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