Senior Counsel C Aryama Sundaram appearing for Cyrus Investments and Sterling Investments resumed his submissions in the Supreme Court on Article 121 and 121A.

Sundaram then pointed out the submissions in the counter-affidavit  filed by Ratan Tata where it was stated that the operating companies under Tata Sons have an independent entity. He submitted,

“This is what I’m saying that it is not a family controlled company. I might be a shareholder of 18.6% but this company controls the management of a large number of companies”

Sundaram further submitted that  all information relating to the group companies were being passed to the Trustees to which the Chief Justice SA Bobde queried that Mistry was also a part of the company when the information was being passed on to the Trustees.

Sundaram clarified that though Mistry conveyed the information when he was instructed to do so but later he objected for which he was ousted. He further submitted, “This opposition was the reason that three months before my ouster I was given a standing ovation for my performance but when I objected I was ousted before my tenure.”

Sundaram then stressed on the independence of the board  

The CJI, however, questioned Sundaram, “If there is a board which requires some financial information then what is wrong in seeking such information?”

Sundaram replied that there is a direction that such information cannot be sought.

The Chief Justice then, giving an example of a Chief Minister who consults with his ministers before a cabinet meeting, questioned Sundaram whether such consultation takes away the independence of the Chief Minister. 

Not concurring with the Chief Justice, Sundaram said, “There is a difference between commercial law and politics. In politics majoritarian rules everything but in commercial world rules have been made to protect the minority.”

Sundaram thereafter began his submissions on quasi-partnership and on Chief Justices query as to how a quasi-partnership affected the interest of a minority shareholder, Sundaram replied, “I’m a minority shareholder, my interest needs to be safeguarded and I need to know what decisions are being taken against the company. Nano lost thousands of crores but it was the majority’s view not to close the company.”

Not satisfied with Sundaram’s argument, the Chief Justice queried how the minority shareholder exclusively suffered loss. 

Sundaram replied, “I, being a minority shareholder, if the company is losing I am also losing and the majority cannot take the view that it is also losing so it is okay if I am losing.”

When the Chief Justice questioned the suo motu powers of the NCLAT, Sundaram submitted that the NCLAT found the removal illegal on the basis of their submissions that the removal was illegal but the relief was not sought for reinstatement. 

The Chief Justice thereafter remarked,

“This is amazing that without having asked for you to be reinstated. The NCLAT perhaps wanted you to continue as chairman of Tata Sons. We are completely surprised with the features of the case.”

Dr Abhishek Manu Singhvi  intervened and said the Bench may not have noticed but the NCLAT not only reinstated Mistry as chairman of Tata Sons but also reinstated him as chairman of other downstream companies.

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Sundaram concluded his arguments on Tuesday. Senior Counsel Shyam Divan appearing for Cyrus investments and Sterling Investments Pvt Ltd will begin his arguments in the next hearing tomorrow.

On the fourth day of hearing in the cross-appeals filed by Tata Sons and Cyrus Investments against the National Company Law Appellate Tribunal (NCLAT) order reinstating Cyrus Misty as Chairman of Tata Sons, Senior Counsel C. Aryama Sundaram, appearing for Cyrus Investments and Sterling Investments, resumed his submissions on just and equitable winding up of the company.

While Sundaram was giving reference of 5 important cases on just and equitable winding up, Chief Justice S.A. Bobde intervene,

“Over the weekend, I discovered that my son has been for two years appearing for one of the subsidiaries of Pallonji Group in a slum rehabilitation case and if any party objects to my hearing the case can do so now.”

On being asked by the parties to submit their objection, Senior Counsel Harish Salve said he was also a part of the case and had no objection to CJI hearing the case. Other parties similarly clarified that they had no objection.

Resuming his submissions on just and equitable winding up of a company, Sundaram submitted that continuation of operations of this kind by a company should be considered as just and equitable case for winding up of the company and put an end to such operations.

Sundaram then made submissions on the misuse of Article 121 and 121A against the minority shareholders and Mistry. He further submitted, “Even for taking decisions for the group companies they used interpretation of Article 121 as power of pre-consultation.”

Sundaram, thereafter, submitted that Ratan Tata had personal interest in Ola. The CJI then queried whether the submissions made by Sundaram was true to which Sundaram replied that the submissions were not objected in the pleadings and the deal was with Uber but Tata wanted the deal to be with Ola.

Senior Counsel Abhishek Manu Singhvi appearing for Tata Sons, however, submitted that Ratan Tata wanted to maximize the use of Tata Taxis in both Uber and Ola because these are the only two platforms offering such services. He had a very insignificant share in Ola, which was being used by Sundaram to conclude that he had a personal interest in Ola.

The CJI then asked Sundaram to consider the fact that Tata Sons was a family constituted company and it is often seen that in companies like this when a member of the family is made the head, it is like a family and often the person asks for information.
Sundaram, however, was not in agreement with the CJI and said,

“My lord is talking about family but one should remember that a family talks about inclusions and not exclusions. As a shareholder, my value is eroding and I don’t want that to happen. The problem is not asking for information, the problem comes when you say that under the articles you have an absolute right.”

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The bench has adjourned the matter for next hearing tomorrow.