Dismissing a company petition filed against Tata Sons by the Cyrus Mistry camp, the Mumbai bench of the National Company Law Tribunal said it made out no case of minority shareholders' economic interest nor any compelling case in public interest. The tribunal said that the alleged oppressive acts that target “fair functioning of a company” must be “in progress”, not past acts, adding that the Companies Act provides for relief against such acts “but certainly not at the cost of the company.”
“In business, it is not the management head, in this case Ratan Tata, will have a Midas touch that he can turn any and every venture profitable. At least, we don't think he has any such magic in his hands.” The tribunal significantly pointed out that both English and Indian courts have repeatedly held again against interfering with business decisions of a company, unless management decisions are vitiated by fraud and are shown to be self-serving. NCLT said, “In such a long travel, some business decisions miss out that Midas touch. Nothing prevented Mistry from raising concerns over business decisions during his chairmanship.”
“When Nano was launched, the car market situation was different, competition was not like today. Business decisions are business decisions... if minority is given a free ride over majority, then no company can take any decision. Thus, any courts will only interfere when actions are unconscionable, unjust and laced with fraud to oppress the complainants.” The petition, filed by shareholders linked to Mistry, who was unceremoniously removed as the company chairman last October, had complained of oppression and mismanagement by Tata Sons. It alleged that Tata Sons, Ratan Tata and others were conducting the affairs of the $103 billion group in an oppressive manner.
