TATA CONSULTANCY

SERVICES
VS
CYRUS INVESTMENTS
PVT LTD.

Group 9
AAMIR MOHAMMAD 20BSP0008
RITIKA ANAND 20BSP1901
AADHAR MEHTA 20BSP0002
NIKHIL SEHGAL 20BSP1451
SUMIT SEHRAWAT 20BSP2548
VIJENDRA PRAJAPATI 20BSP2733
CONTENTS
TOPICS TO BE COVERED

• INTRODUCTION
• BACKGROUND FACTS
• ISSUES
• JUDGEMENT
• GOVERNING LAWS
• CONCLUSION
 INTRODUCTION
• Tata Consultancy Services (TCS) is a division of Tata Sons founded on April 1, 1968. It is
an Indian multinational information technology (IT) services and consulting company
having its headquartered in Mumbai, Maharashtra, India. TCS operates in 46 countries
throughout the world.
• Cyrus Investments Private Limited is a Non-govt company, incorporated on 7 March,
1923. It operates as an investment advisor. It’s a private unlisted company and is
classified as ‘company limited by shares.
• Ratan Tata is an Indian industrialist as well as one of India’s most prominent business
leaders. He was the former Chairman of Tata Sons and the former Chairman of Tata
Group.
• Cyrus Mistry is an Indian businessman. He served as the Chairman (2012–16) of the
gigantic Tata Group conglomerate. He is also one of the directors of Cyrus Investments
Private Limited.
 BACKGROUD FACTS
Timeline of the Events:-
• In December 2012: Cyrus Mistry was appointed as the Chairman of Tata Sons Limited chosen by a
selection panel of Tata Group when Ratan Tata stepped down from the post.
• In October 2016: Cyrus Mistry was removed from the post of Chairman of Tata Sons Limited by
most of the Board of Directors for loss of confidence.
• On January 12, 2017: Tata Sons names N Chandrashekaran as the Chairman of Tata Sons Limited,
the then TCS Chief Executive Officer and Managing Director.
• In February 2017: Cyrus Mistry was removed as a Director of the board of Tata Sons, by the
shareholders’ vote during a general meeting.

Thereafter, Cyrus Mistry files a suit under Sections 241, 242 and 244 of the
Companies Act, 2013 before National Company Law Tribunal (NCLT), Mumbai alleging
oppression of minority shareholder rights and operational mismanagement of the
Tata Sons.
 ISSUES
Mistry’s Charges Alleging Oppression And
Mismanagement:--
• Charges that Cyrus Mistry’s made on part of Tata Sons to Show
Oppression and mismanagement by the group:-
• Tata Sons abused their powers under few articles and Tata Trust
exercised control over the Tata Sons board.
• Removal of Cyrus Mistry as an executive chairman from Tata Sons
Limited.
• Transactions made with Siva and Sterling Group of Companies by Tata
Groups.
• Fraudulent transaction worth Rs. 22 crore in Air Asia by Tata Trusts.
• The losses suffered in Nano car project clearly depicts the oppression
of minority shareholder rights and mismanagement by the Tata
Group.
• The acquisition of Corus at overpayment by Tata Trusts.
 GOVERNING LAWS

• Section 241 of the Companies Act, 2013

– This section provides relief to the
members of a company in cases of
oppression.
• Section 242 of the Companies Act, 2013
– Powers of the Tribunal
• Section 244 of the Companies Act, 2013
– This section provides for the eligibility
criteria to file an application under
section 241 of the Companies Act, 2013.
 JUDGEMENT

NCLT, Mumbai Verdict:-

• In July 2018, NCLT Mumbai Bench dismissed all the charges made
against Tata Sons. The bench also rules that the Board of Directors of
Tata Sons are competent enough to remove Cyrus Mistry From the post
of Chairman of Tata Sons Limited.
• For the allegation regarding Air Asia, the bench held that it have been
made with impunity by Cyrus Mistry flouting all legal principles.
• As regards allegations on the Nano project, NCLT held that allegations
were made without making Tata Motors a party to the case.
• The NCLT also rejected allegations on the acquisition of Corus and the
transactions made with Shiva and Sterling Group by Tata Group.
• The bench also states that it found no merit in the arguments on the
oppression of minority shareholder rights and operational
mismanagement of the Tata Sons.
 JUDGEMENT
National Company Law Appellate Tribunal
(NCLAT) Verdict:-
• In December 2019, the National Company Law Appellate Tribunal
(NCLAT) overturns the NCLT, Mumbai Bench judgment, and had ruled
in favor of Cyrus Mistry firms.
• The NCLAT states that Mistry’s removal as Chairman of Tata Sons was
illegal.
• The NCLAT also ordered to reinstate Cyrus Mistry as chairman of Tata
Sons and also termed N Chandrasekaran’s appointment to the
chairman’s post of the over USD 100 billion salt-to-software
conglomerates as ‘illegal’.
 JUDGEMENT

Supreme Court Verdict:-

• The Supreme Court on March 26, 2021, pronounced its long-awaited judgement in the
Tata- Cyrus Mistry case.
• The judgement was pronounced in favor of the Tata Group. The bench dismissed all the
charges of oppression and mismanagement against the Tata Sons Limited made by entities
owned by Cyrus Mistry.
• Company Law Tribunal cannot interfere with the removal of a person as a Chairman of a
Company in a petition under Section 241 of the Companies Act, 2013.
• The court held that Sections 241 and 242 of the Companies Act, 2013 do not specifically
confer the power of reinstatement.
• Therefore, The Supreme Court set aside the December 18, 2019 order of the National
Company Law Appellate Tribunal (NCLAT) to reinstate Cyrus Mistry as executive chairman
of Tata Sons.
 CONCLUSION
• The five-year-long and the most high-profile corporate legal battle
between Cyrus Mistry and Ratan Tata gave us the precise definition of
Section 241 of the Companies Act, 2013 and its applicability.
• The Judgement also gave a brief idea concerning the power of the
Company Law Tribunal and held that it cannot interfere with the
removal of a person as a Chairman of a Company in a petition under
Section 241 of the Companies Act, 2013 unless such removal is
“oppressive or prejudicial in nature”.
• There wasn’t a case, to begin with, the only dispute that arise was the
removal of Cyrus Mistry as chairman of Tata Sons Limited.
• Cyrus Mistry was removed from the post of Executive Chairman of
Tata Sons Limited on October 24, 2016, is because the Majority
Shareholders and Board of Directors of the company lost confidence
in Cyrus Mistry as Chairman, not because by contemplating that Cyrus
Mistry would cause discomfort to Ratan Tata.