Cyrus Mistry speaks to shareholders during the Tata Consultancy Services (TCS) annual general meeting in Mumbai, India on June 28, 2013. Photograph:( Reuters )
Speculations are afloat in India Inc. that Cyrus Mistry, who was replaced as the chairman of Tata Sons on Monday by predecessor Ratan Tata, may challenge the board's move in the court.
Corporate lawyers argue, however, that he has no case.
Sources say that Mistry feels the move to replace him tarnishes his reputation. He also thinks that the move tarnishes the reputation of the Shapoorji Pallonji Group, which is the single largest stakeholder in the company outside of the Tatas.
Further, according to sources, Mistry describes the board proceedings as 'illegal'.
The imperative question now is that does Mistry really hold a case if he decides to move the court? Will he enter into a legal battle to save face?
Corporate lawyers hold that his challenge will not hold little merit in the court of law as this is an internal company matter.
According to the lawyers, however, he can file a defamatory lawsuit to protect his credibility and the reputation of the Shapoorji Pallonji Group. That is the only place where he can claim damages, the legal experts say.
Meanwhile, no formal confirmation on moving to the court has come from Mistry's office. The Tatas have filed caveats in anticipation of a legal backlash.