Lawstreet Journal

Ratan Tata's Affidavit Shows That Tata Sons is Not Meant to Be a Family Run Company : Cyrus Mistry's Lawyer In SC

Lawstreet Journal 18 Dec 2020 12:04am

Image courtesy: Lawstreet Journal Business Ratan Tata's Affidavit Shows That Tata Sons is Not Meant to Be a Family Run Company : Cyrus Mistry's Lawyer In SC

The courtroom battle in the Tata Sons case reached to day 5 of continuous hearings by the parties. CA Sundaram on behalf of Cyrus Mistry. Mr. Sundaram continued his arguments on the importance of prior consultation mentioned under Article 121 and Article 121A and 121B of the AoA of Tata Sons. Just three months prior to the removal of Cyrus Mistry, the meeting was convened. 

According to the findings of NCLAT, it was of the view that Board of Directors had endorsed the recommendation of this Committee to applaud the performance of Cyrus Mistry and others by nearly 50 Independent Directors of Tata Group. On the argument of prior consultation, CJI SA Bobde asked Mr. Sundaram that merely because prior consultation is not permitted under Article 121, has it been completely prohibited under the AoA? Is there any national or international law which governs the issue of prohibition of pre consultation? CJI asked.

Mr. Sundaram replied “A conjoined reading of Article 121, 121A and 121B suggest that the intention was to have a majority control of Tata Sons.”The arguments then turned towards the discussion of independence of Directors which according to the submissions of Cyrus Mistry, was deeply affected and lost with the course of time due to the interference by other shareholders.

To make the situation easier to understand, CJI gave an example and sought Mr. Sundaram's response. Mr. Sundaram replied in the negative and remarked No, your lordship. If in order to preserve money in a company, somebody seeks assistance of someone outside respected by him or a former chairman, does it amount to loss of independence of board? Yes it does, yourlordship. This… Continue Reading...

Tagged: Tata-Mistry  
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