Anushka Manasharamani
On 9th December, the Supreme Court continued the hearings in the disputation between Tata Group’s holding company, Tata Sons Limited, and Shapoorji Pallonji Groups’ Cyrus Mistry.
The Supreme Court was hearing the matter continued from 9th December 2020.
Harish Salve pointed out that in the cross-appeal filed by the SP Group, they have claimed a valuation of 1.5 lakh crore and now asking for 1.75 lakh crore, concluding that strange mismanagement has taken place in the company.
Harish Salve contends that there was no lack of probity in any of the transactions taken place earlier.
The penthouse that was given at a discounted rent to Shivasankaran, one of the shareholders, is also not a lack of probity as Cyrus Mistry’s brother was given the same deal.
Salve submitted that according to the timeline and chronology of events, Pallonji Mistry was with Tata till 2004, and no dissonance arose during that time, when Cyrus Mistry joined in 2006, dissonance existed till 2014.
CJI stated that the tribunal can look into the matter, and maybe there is no need to plead for winding up.
To this, Harish Salve stated that the person filing the complaint must show that the conduct of management lacked probity and affects his proprietary rights.
Further, a discussion took place regarding the winding up pleading and whether the complaint should be under Section 241.
Salve indicated that the valuation of their holding rose from 69 crores in 1965 to 58 thousand crores in 2016, and, therefore, the question of mismanagement should not arise as the company is doing well.
Cyrus Mistry was the first chairperson outside of the Tata Sons group.
Earlier, a person from Tata Sons used to represent the boards of Tata companies, and Mistry – after taking over as the chairperson appointed his people to those companies, which led to a disconnect between Tata Sons and the operating companies, said Salve.
He further stated the order passed by the NCLAT is based on the minority as the majority is out. He lastly started to explain the articles of the company to the bench.
After hearing the Senior Counsel Harish Salve, the Supreme Court then postponed the hearing to 10th December.