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Ratan Tata: Personal letters to Pallonji Mistry give legal right

Mistry had filed an application to place 3 letters written by Ratan Tata to Pallonji Mistry, who had served on the board of Tata Sons

A fresh twist has emerged in the tussle between Tata Group chairman emeritus Ratan and the group’s ousted chairman Cyrus Mistry. Tata discarded claims that his “personal letters of appreciation” to Cyrus Mistry’s father Pallonji Mistry can be treated as proof of a quasi-partnership or any vested legal right in Tata Sons.

The attempt by Cyrus Mistry, ousted as Sons chairman in October 2016, to seek “proportionate representation” on the Tata Sons board in the apex court, on basis of these letters, is an ‘afterthought since he had not done so in the original appeal filed in the National Company Law Tribunal (NCLT) in 2016’, a Tata confidant said.

On Friday, the Supreme Court had agreed to hear cross-appeal filed by Cyrus Mistry seeking representation on the board of Sons over the judgment of the National Company Law Appellate Tribunal (NCLAT) along with the plea filed by Tata Sons challenging the December 2019 ruling of the tribunal in the top court.

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“These letters cannot be called ‘commitment’ or ‘agreement’ after 15 years,” said the person close to Tata. Cyrus Mistry had filed an application to place three letters written by Ratan to Pallonji Mistry, who had served on the board of Tata Sons between 1980 and 2004, on the record in support of his claims.

The first letter was an informal one written in 1991, soon after Ratan took over as chairman of Tata Sons. The second was written in May 2004 when Tata asked Mistry to continue as director of Tata Sons to ensure continuity in the midst of the ongoing Tata Consultancy Services (TCS) share sale. The third was an informal one in January 2005 that Tata wrote to thank the elder Mistry after he stepped down as director for his “support and confidence.”

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Soon after taking charge as chairman of Sons, Ratan Tata wrote an informal letter to Pallonji Mistry in 1991. In May 2014, the second letter was written when Tata asked Mistry to continue as director of Tata Sons to ensure continuity amid the ongoing Tata Consultancy Services (TCS) share sale. Tata wrote the third informal letter in January 2005 that to thank the elder Mistry after he stepped down as director for his “support and confidence.”

quoted the person close to as saying, “If this were to be granted to the Mistry family, the Supreme Court will have to rewrite the company’s Articles of Association.”

To recap, the Group and the Mistry camp had challenged the December ruling of the NCLAT in the top court. In January, the court had stayed the NCLAT order reinstating Cyrus Mistry as executive chairman of Tata Sons and restoring his directorships in the holding company as well as three group companies.

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