- (1.) Nobody knows when problem comes, now problem has come upon TATA (Tata Sons Ltd. (R1)) which everybody knows in India, there can't be anyone who has not experienced the product of Tata. Many of rural folk may not know TATA as a company, but everybody, east to west and north to south, knows Tata salt, Tata tea, Tata car, Tata bus, likewise many, it is a household name in India. Salt to software, it has seasoned this country with all spheres and makes its presence felt all over the world. The time has now become excruciating to this Tata Sons (R1) owing to Board Room battle. Tata Sons is a driving force and funding machine to all its subsidiaries spread all over the World. These days, trying time has come for TATA, perhaps to hold out that it keeps journeying no matter how devastating the storm is - it waded through British India regime, and then has successfully hoisted in sovereign India. We believe that none of the persons in this story have any dislike or disrespect to this untiring provider.
(2.) Tata sons Ltd. was incorporated on 3rd November 1917 and soon going to celebrate its platinum jubilee and is a conglomerate leading all its group companies to new heights. It is comprised of shareholding of Tata Trusts, Shapoorji Pallonji Group companies through the petitioners, some financial institutions and a few individuals. Finally, the board room fight has reached to NCLT, Mumbai for determination of the issues in between Shapoorji Pallonji Group and Tata Trusts.
(3.) The petitioners, namely Cyrus Investments Pvt. Ltd. and Sterling Investment Corporation Pvt. Ltd. (Shapoorji Pallonji Group companies owned by father of R11 and their family members) filed this CP82/2016 u/s. 241, 242 & 244 of the Companies Act 2013 on the footing that they together hold 18.37% equity shareholding in Tata Sons. The issue before this Bench today is when both the petitioner companies have filed this CP against the Respondents, principally the directors of R1 Company, Mr. Ratan Tata (R2), and persons running Tata Trusts and Mr. Cyrus Pallonji Mistry (R11), who was recently removed as Chairman of Tata Sons, assailing that the acts of the answering Respondents in relation to the affairs of R1 Company (Tata Sons) are prejudicial to the interest of not only the petitioners but also the company. The reliefs the petitioners sought in this CP are as follows: - That in 2012, Tata Trusts altered Articles of Association in such a way that no policy decision could be taken without affirmative vote of Tata Trusts. - That Tata Trusts Nominee Directors in R1 Company have virtually become postmen enabling Mr. Ratan Tata (R2) and Mr. Soonawala (R14) to take decisions and ensure them carried through these nominee directors (R3, R7 & R9). - That Mr. Ratan Tata and Mr. Soonawala acting as Super Board to see their wishes carried out through Trustees nominee directors. - That R2 in the year 2007, while he was Chairman of R1, led the purchase of Corns Group PLC (England Company) by Tata Steel Limited promoted by R1 for a sum in excess of USD 12 billion which was more than 33% of its original price, which eventually led Tata Steel go down by this purchase, when it was not doing well, Mr. Mistry initiated to merge this Tata Steel U.K. with Thysseen Krupp so as to rid Tata Steel of the financial sufferance, but it is R2 who objected to restructuring of Tata Steel UK company causing loss to everybody including the petitioners. - That sometime in 2007-2008, R2 came out with a proposal to manufacture a car that could be enjoyed by poor of this nation, with an installed capacity of 2,50,000 cars annually, but the demand for these cars is only 3,000 cars per year, by which Tata Motors consistently loosing Rs. 1000 crores causing once upon profit making company i.e., Tata Motors gone into losses, inspite of it, R2, for his emotional reasons, has prevented R11 from taking crucial decision to shut down Nano Car Project. - That R2 caused issuance of 520 billion shares of TTSL at the rate of Rs. 17 to Sterling for a throw away price of Rs. 884 crores, and then issued TTSL shares to Singapore Company at the price of Rs. 26 per share immediately after transaction with Sterling owned by Shivsankaran (called as Shiva) who is close to R2. Thereafter, Shiva sold Rs. 20.74 million shares out of above shares in the year 2008 to DoCoMo at the rate of Rs. 117.81 per share making huge profit of above Rs. 200 crores, all these facts were admitted by Shiva himself saving he is benefitted by his closeness with R2. - That there being an arbitration dispute in between TTSL and DoCoMo, TTSL deposited entire Rs. 8,450 crore, including the proportionate claim of Rs. 694 crore to be paid by Sterling (owned by Shiva) in the Arbitration proceeding DoCoMo filed before Honourable High Court of Delhi, on seeing the above said Shivasankaran has not paid his share of amount in the deposited money, R11, being a chairman of R1 Company, on 15th September 2016, obtained Board approval to take action for recovery of Rs. 694 crores payable by the Sterling. But by this, TTSL and DoCoMo, to the surprise of R11, received a notice back dated to 15th September 2016 from Shiva alleging oppression and mismanagement in the affairs of TTSL, by which, it is evident that decision taken in the Board meeting dated 15th September 2016 in all probability was leaked to Shiva through R2. - That Shiva was benefited to Rs. 600 crores from Tata Group companies through various contracts in between 2003 to 2008, at the cost of Tata Group companies. - That R2 pocketed Rs. 3 crores come from MPCPL towards surrendering tenancy rights of the residential apartment that R2 used to reside in a building called Bakhtawar at Colaba, otherwise that money should have come to the account of a company called FFC, which was at that time Tata Group Company. - That R2 through Tata companies bestowed upon various contracts to one Mr. Mehli Mistry and his associates making Mr. Mehli rich because of the closeness he has with R2. - That Air Asia Limited deal was forced upon R11 as a fait accompli as soon as he became Chairman of R1, it has later come out on forensic examination of the Accounts of Air Asia that fraudulent transactions of about Rs. 22 crore were carried out, involving nonexistent parties in India and Singapore and all this happened at the behest of R2. - That R11 was unfairly removed as Chairman of R1 on October 24, 2016 contrary to the express provisions of Articles of Association. - That in pursuance of the allegations levied against the answering Respondents, the petitioners, having 18.37% shareholding in R1, sought various reliefs on the ground that the alleged actions of R2 and his men are oppressive and prejudicial to the interest of the petitioners and R1 Company and its group companies. Arguments of the Respondents Counsel:;