It is a major win for Cyrus Mistry in his legal battle against the Tata Sons. The National Company Law Appellate Tribunal (NCLAT) has reinstated him as the executive chairman of the Tata Group. The tribunal also ruled that the appointment of N Chandrasekaran as executive chairman is illegal. However, it has given the Tata Group four weeks to appeal against the order.

Mistry was removed as the Tata Sons chairman in November 2016. He had then moved the NCLT, which was the start of a long protracted legal battle.

CNBC-TV18 spoke to Shailesh Haribhakti of Desai Haribhakti Group and JN Gupta, Former ED of Sebi, to decode the judgement.

Haribhakti said the verdict would create a managerial blackhole and a bit of a vacuum. The Tatas will continue to manage as if there is no change. However, it is certainly a setback," he noted.

According to Gupta, NCLT and NCLAT judgements are totally opposite to each other. "As far as my understanding goes NCLT can always find the flaw in a process. So, NCLT would have determined that the process for removal of Cyrus Mistry was wrong. We have been saying right from the beginning that it was in a hurried manner and the process was not followed properly. However, NCLAT cannot say or ensure that even after Mistry is reinstated he cannot be removed after following the due process of law because you cannot take away from the shareholders the right to manage their company unless until the government puts its own management there and that is not the case. Whatever decisions Chandrasekaran has taken will be upheld because the law clearly says that even if the appointment of a director was wrong, the decisions will be binding to the company unless and until some personal malafide is there and for which the person can be prosecuted," he observed.

First Published:Dec 18, 2019 6:26 PM IST