Entire TATA MISTRY DISPUTE based on the Information available on the Internet. It contains the Claims of Mr.Cyrus Pallonji Mistry and all remarks made by NCLT and NCLAT.

1. TATA-Mistry Dispute
Introduction:
Name of the Company: Tata Sons Limited
Incorporated on: November 08, 1917
Corporate Identification Number: U99999MH1917PLC000478
Type of Company: Public Company Limited by Shares
Registered Address: Bombay House 24 Homi Mody Street Mumbai IN
Company Status (E-filing): Active
Charges: Exist
Listed or Unlisted: Unlisted.
Tata Sons is the holding company of the Tata Group Companies and it is currently chaired
by Mr. Nataranjan Chandrasekaran. About 66.66% equity capital of Tata Sons is held by
philanthropic trust endowed by Tata Family (i.e. Sir Dorabji Tata Trust, Sir Ratan Tata
Trust and Navajbai Ratan Tata trust). It is the owner of Tata Name and Tata trademarks.
Some of the operating companies under Tata Sons Limited are Tata Consultancy Services,
Tata Steel, Tata Global Beverages, Tata Powers, Tata Motors, Tata Teleservices, etc,.
Cyrus Pallonji Mistry (DIN: 00010178) is an Irish Businessmen of Indian Citizen who
headed the Tata Group from 2012 to 2016. He was the sixth chairman of the group and
only second not bearing the Surname “Tata”. Cyrus Pallonji Mistry is the younger son of
Pallonji Mistry and have one elder brother and two sisters. Among the two sisters, one of
them is married to Neol Tata, half brother of Ratan Tata. The Pallonji Family is connected
with the Tata Sons since 1930 and the Mistry family investment firms(Cyrus Investment
Private Limited and Sterling Investment Private Limited) together holds approximately
18% shares in the company.
Before Cyrus Mistry is being appointed as the Chairperson of the Tata Sons, he is
Chairman of various Tata Subsidiaries like Tata Teleservices Limited, Tata Motors
Limited, Tata Chemicals and Tata Global Beverages. On October 24, 2016 Board Meeting
was called in which Cyrus Pallonji Mistry was removed from the position of chairman of
the company. The Resolution is passed with not much difficulty as the same require simple
majority of the directors of the company. Thereafter, on February 06, 2017 an extra-
ordinary general meeting was called and conducted in which Cyrus Pallonji Mistry was
removed from the position of Directorship of the Tata Sons by passing special resolution.
There is no clarity in the reasons for which Cyrus Pallonji Mistry is removed from the
Chairmanship of the Tata Sons Limited and Directorship of the Tata Group Companies.
Some claims that he is removed because of going trust deficits and repeated departures
from the culture and ethos of the Tata group was the reason behind the removal of Mistry.
Major Reasons for the Removal of Mr. Cyrus Pallonji Mistry:

2. Dispute between NTT Docomo and Tata Teleservices Limited: The dispute between Tata
Teleservices Limited and Japanese Telecom Giant NTT Docomo Inc. was one of the major
reason for the removal of Cyrus Pallonji Mistry from the Chairmanship of Tata Sons
Limited. Sources quote that Mistry is not able to handle the case well. Several Business
Newspaper claimed that the manner in which Mistry handled the NTT Docomo affair was
one of the reason why he was fired because the same is in conflict with the “Culture and
Ethos” of the Tata Group. The Docomo entered into an agreement with the Tata
Teleservices limited in 2009 to buy 26.50% stake in the company at roughly $2.6 billion
under Put Option (i.e. it has the right to sell either at Fair Value or Half the acquisition
Price), if it exits within five years. In 2014(i.e. the fifth year), the NTT wanted to exit Tata
Teleservices Limited by exercising his Put Option, but it is not as simple to exit as it visible.
In the same year, the RBI come up with the rules that prescribe that foreign companies
could only exit Investment at Valuation based on return on equity. The Dispute have
tarnished the image of the Tata Group which further gives fuel to the fire and is one of the
major reason for the removal of Cyrus Mistry Pallonji from the Chairmanship of the
Company.
Dependencies on Two Groups for Revenue: The Tata Group is dependent on only two
groups’ i.e. Jaguar and Land Rover and Tata Consultancy Services for the generation of
revenue. This upset the Ratan Tata most because Tata Group consists of many subsidiaries
but most of their revenue come from the two companies’ i.e. JLR and TCS. The other
companies under the Tata Group are not doing well. This will further add fuel to the fire
and is considered one of the reason for firing the Cyrus Pallonji Mistry from the
Chairmanship of the Tata Sons Limited.
Disparities between the Vision of Tata Group and Cyrus Pallonji Mistry: The Tata Group
since its inception focused on the serving the society and the development of the country in
every aspect. According to JRD Tata, “No Success in material terms is worthwhile unless it
serves the needs or interests of the country and its people”. The work done by the Cyrus
Pallonji Mistry was not in alignment with the vision of Jamsteji Tata (founder of the Tata
Group) and was in conflict with the “Culture and Ethos” of the Tata Group. He was given
sufficient time to demonstrate his true alignment but it is not upto the mark. This is one of
vital reason because of which he is fired from the Chairmanship of the Tata Sons Limited.
Other Factors: There are various other factors which led to the firing of Cyrus Pallonji
Mistry from the Chairmanship of the Tata Sons Limited. Some of them are Poor
Performance in the group companies except in JLR and TCS, having no solid plans for
growth, being a Slow Learner and delay in decision making and compromising on
corporate governance standards being one of the many reason due to which he is fired from
the Chairmanship of the Tata Sons.

3. Tug of Wars between Ratan Tata and Cyrus Pallonji Mistry (relating to SEBI, NCLT and
NCLAT):
Soon after Cyrus Pallonji Mistry was removed from the Chairmanship of the Tata Sons
Limited, the war started between former and the then Interim Chairman of the Tata Sons
i.e. Mr. Ratan Tata. At the same time the market value of the company decreases
considerably and the brand was hitted most during this time since its inception.
It is rightly said by Warren Buffett that, “It takes 20 years to build a
reputation and five minutes to ruin it”.
Mr. Cyrus Pallonji Mistry approached SEBI with two allegations i.e. Corporate
Governance lapses and mismanagement, insider trading and violations of various SEBI
Rules.
SEBI after probing the allegation and conducting thorough investigation, gave clean chit to
Mr. Ratan Tata and the listed Tata Group Companies.
The Clash between the both started and Mr. Cyrus Pallonji Mistry approached the
National Company Law Tribunal and National Company Law Appellate Tribunal under
the following Sections of the Companies Act, 2013:
• Removal of Director under Section 169 of Chapter XI of Companies Act, 2013.
• Prevention of Oppression and Mismanagement under Chapter XVI of the
Companies Act, 2013 (i.e. under Section 241, 242 and 244 of the Companies Act,
2013) and
• Appealed against the order of National Company Law Tribunal to the National
Company Law Appellate Tribunal in accordance with the power given under
Section 421 of the Chapter XXVII of the Companies Act, 2013.

4. The Petitioner (i.e. Cyrus Pallonji Mistry) allegation in the case are (Company Petition No.
82/241,242,244/NCLT/MAH/2016):
• Articles of Association are oppressive, misused and abused by Sir Ratan Tata Trust
and Sir Dorabji Tata Trust.
• There is need to strike off completely some clause of Articles.
• The Investment made by Tata Steel Limited at a substantial premium in the Corus
Group PLC.
• The continuation of the business of Nano Car Project undertaken by Tata Motors
upon the insistence of Mr.Ratan Tata.
• The Removal of Mr. Cyrus Pallonji Mistry from the Chairman of the Board of the
Tata Sons Limited on October 24, 2016 is in complete violation of law, principals of
governance, fairness, transparency and probity. It is stated that when the chairman
is about to take action against Shiva (to whom shares are allotted in Tata
Teleservices Limited), he was removed from the chairmanship of the Board.
• Mr. Ratan Tata uses his shareholding majority in certain Tata group Companies to
call EGM requisition under Section 100 of Companies Act, 2013 to remove Mr.
Cyrus Pallonji Mistry as director from Group Companies.
• Actions taken by Tata Sons Limited undermining the position and status of
Independent Directors in the listed Tata Group Companies by taking steps to
requisition a meeting to remove Mr. Nusli Wadia because he expressed support for
the leadership of Mr. Cyrus Pallonji Mistry.
• Actions of Mr. Ratan Tata and other constitute breach of SEBI Regulations on
Prohibition of Insider Trading by giving access to price sensitive information of the
listed Tata Group Companies.
• Close relation of Mr. Ratan Tata with Shiva to whom shares of Tata Teleservices
Limited are offered at throw away prices.
• Actions in relation to Immovable Property of Tata Sons Limited and awarding
contracts to favor and benefit persons close to Mr. Ratan Tata.
• Making Mr. Mehil Mistry rich at the cost of Tata Companies.
• Matters pertaining to the Joint Venture between Air Asia Limited and Telstra
Trade Place Private Limited.
• Since no other court have jurisdiction to entertain any suit or proceeding in respect
of any matter which the Tribunal or Appellate Tribunal is empowered to determine
(as defined under Section 430 of the Companies Act, 2013). Therefore, the case is
fallen within the ambit of Section 241 of the Companies Act, 2013.
• Calling an Extra Ordinary Meeting to remove Mr. Cyrus Pallonji Mistry from the
directorship of the Tata Group Companies under Section 169 of the Companies
Act, 2013.

5. The following remarks are made by National Company Law Tribunal in the petition filed
by Cyrus Pallonji Mistry against Tata Sons Limited (Company Petition No. 82/241,242,244/
NCLT/MAH/2016):
• Difference between the old Section (i.e. Section 397 and 398 of the Companies Act,
1956) and new Section (i.e. Section 241, 242, 244 of the Companies Act, 2013).
• Cause of Action in the Old Section (acts happened only in the past is to be
considered) and New Section (acts happened in the past and presently going on are
to be considered).
• Personal Grievances become Personal Claim whereas the claim on the behalf of
the company become derivative claim.
• The Interest enunciated in the oppression remedy can only be economic interest.
So, when the economic interest of the shareholder is unfairly treated, then the
shareholder can initiate action under Section 241 of the Companies Act, 2013.
Provided such action is not with the consent of such shareholder.
• There are two aspects to be seen before passing a relief i.e. the shareholder and the
shareholder’s own conduct.
• The Laws Existing in England relating to Oppression and Mismanagement of the
Shareholders and Derivate Claims. In England, initial oppression remedy is
bifurcated into derivative action (for Corporate Action) and unfair prejudice
action (for Personal Action).
• Detailed analysis of Section 241(1) and Section 241(2) and its comparison. The
former deals with the affairs of the company and also take into consideration the
Public Interest. While the latter deals with the material change and does not take
into account the Public Interest. This section is the combination of Personal and
Derivative Actions.
• Detailed Analysis of Section 242 of the Companies Act, 2013 and its comparison
with Section 241.
• Exception is applicable in all cases whereas Provision is not applicable in all cases
(in relation to Provisions contained under Section 244 of the Companies Act,
2013).
• Any Suit or Proceeding will have three stages i.e. Cause of Action Test, Prima
Facie Test and Proof or Merit Test. The Proceeding will be followed in this order
only.
• Waiver Plea is heard on the directions of the Honorable Appellate Tribunal.
• Articles of Association cannot be completely struck off since the same is amended
with the acquiesced of the Petitioner.
• The Investment made by the Tata Steel Limited in Corus Steel Limited in 2007 is
internal matter and the same is taken by the general body. The Petitioner never
complained of the same in the last 9 years. The Tata Steel Limited is not the
subsidiary of the Tata Sons Limited at that point of time and therefore, it is not the
affair of the Tata Sons Limited and Section 241 of the Companies Act, 2013 cannot
be invoked.

6. • The Nano Car Project undertaken by the Tata Motors is an internal matter and it
is not mentioned that whether at that point of time Tata Sons Limited is the
holding of the Tata Motors. Therefore, the same is not the affair of Tata Sons
Limited and Section 241 cannot be invoked for this purpose.
• The Tribunal quoted the Needle Case and said that the decision taken by the Board
which need to be taken by the Selection Committee does not make any difference
because the Committee is to be constituted by the Trust directors which are
majority in number on the board of Tata Sons Limited. Later, it said that it is
grievance to the Trust and not to the Tata Sons Limited. Moreover, Directorial
Compliant will not become a grievance under Section 241of the Companies Act,
2013 because it is not a Shareholder right.
• Section 241 of the Companies Act, 2013 is designed to remedy the grievances of the
shareholders and shareholders alone. Removal of Mr. Cyrus Mistry should be
discussed separately because shareholders are sovereign authority to take a call
over it.
• This issue cannot be made cause of action because the companies from which he is
removed as director are not party to the proceeding. Therefore no cause of action
arose under Section 241 of the Companies Act, 2013.
• Affairs of other companies which are not parties to the proceeding cannot become
affairs of the company as envisaged under Section 241 of Companies Act, 2013.
• The Allegation relating to SEBI to be decided by the SEBI and not the Tribunal
and the same is not cause of action under Section 241 of Companies Act, 2013.
• The Allegation are made in relation to other companies which are not party to the
proceeding and the same cannot be considered as the affairs of the company.
Therefore, no cause of action arose under Section 241 of Companies Act, 2013.
• This is only an allegation without holding any cause of action under Section 241 of
Companies Act, 2013.
• All these allegations are vague and relate back to 20 years ago.
• Mr. Ratan Tata is nowhere mentioned in all these allegations.
• The Bench will interfere in these cases only when the governance of the company is
going out of mandate of the Constitutional documents i.e. Memorandum of
Association and Article of Associations and when the actions of the persons
conducting the affairs of the company are unfairly prejudicial to the interest of the
members.

7. Mr. Cyrus Pallonji Mistry being an aggrieved party against the order of National Company
Law Tribunal appealed to the National Company Law Tribunal under Section 421 of
Chapter XXVII of the Companies Act, 2013 (Company Appeal(AT) No. 17, 18 and 19 of
2017):
The following are the grievances of Mr. Cyrus Pallonji Mistry in the National Company
Law Appellate Tribunal:
• The Tribunal refused to pass interim order when Mr. Mistry was removed from the
position of the Directorship of the Tata Group Companies.
• The Tribunal has fixed a very tight schedule on the parties without any pleading
being filed and in the absence of granting any interlocutory reliefs to the appellants.
• A consent order was passed whereby the urgent hearing could be done.
• Removal of Mr. Cyrus Pallonji Mistry from the Board of Directors constitute
contempt of court.
• Referring the number of cases pending with the Appellate Tribunal since 2013.
• Holding of EGM to remove Mr. Cyrus Pallonji Mistry from the directorship of the
Tata Group Companies further oppresses Mr. Cyrus who are minority shareholders.

8. The following remarks are made by the National Company Law Appellate Tribunal in the
appeal filed by the Mr. Cyrus Pallonji Mistry against Tata Sons Limited (Company Appeal
(AT) No. 17, 18 and 19 of 2017):
• Referring Section 421(2) under Chapter XXVII of the Companies Act, 2013 that no
appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with
the consent of parties.
• Removal of Mr. Cyrus Pallonji Mistry from the Board of Directors did not
constitute contempt of court on the ground that contempt jurisdiction is a narrow
and strict jurisdiction.
• Referring Section 422 under Chapter XXVII of the Companies Act, 2013 that an
application or petition presented before the NCLT/NCLAT to be disposed of
expeditiously as possible within 3 months from the date of presentation before the
Tribunal/Appellate Tribunal and records the reason for the same if it is not
disposed of within the aforesaid time. This means the company petition in any case
is required to be disposed of at an early date.
• The Tribunal in response said that this appellate tribunal cannot sit in appeal nor
can substitute its opinion.
• Different facts are highlighted in the company petition in support of allegation of
“oppression and mismanagement” but the parties have not argued on the same on
merit as the case is pending before the Tribunal.
• The Tribunal quote the case law “Life Insurance Corporation of India vs. Escorts
Limited and others” and said that the holder of majority of a stock of a corporation
have the power to appoint, by election, Directors of their choice and the power to
regulate them by a resolution for their removal and an injunction cannot be
granted to restraint the holding of a general meeting to remove a Director and
appoint another.
• The NCLAT is of the opinion that during the final hearing, the question of
Maintainability should be decided first and if answer is negative in the favor of
Appellants, then the question of Waiver of Petition be decided. If it is decided in the
favor of Appellants, then the Tribunal can decide the case on Merit. Therefore, no
relief can be granted to the Appellants.
• All the appeals are dismissed with the aforesaid observations. However, in the facts
and circumstances of the case there shall be no order as to cost.

9. Note:
The Applicant on the behalf of Mr. Cyrus Pallonji Mistry in the Petition filed before
National Company Law Tribunal are:
• Cyrus Investments Private Limited and
• Sterling Investment Corporation Private Limited.
The Appellant on the behalf of Mr. Cyrus Pallonji Mistry in the appeal filed before the
National Company Law Appellate Tribunal is:
• Cyrus Investments Private Limited.