MUMBAI: India’s quasi-judicial appeals body dealing with corporate law cases on Wednesday reinstated Cyrus Mistry as the executive chairman of Tata Sons , the holding company of the Tata Group , three years after he was sacked due to ‘non-performance’.The National Company Law Appellate Tribunal (NCLAT) termed Mistry’s removal in October 2016 by Tata Sons as ‘illegal’ and made him chairman again, queering the pitch for the salt-to-software conglomerate headed by the soft-spoken N Chandrasekaran , who replaced him.The NCLAT also set aside Tata Sons’ decision to convert itself into a private company and accepted Mistry’s argument that Tata Sons as well as its directors and shareholders acted in a prejudicial and oppressive manner towards minority shareholders.Shares of Tata Group companies fell after the ruling, with Tata Motors — the conglomerate’s most indebted company — falling nearly 3%. Tata Global Beverages fell 4% while Indian Hotels slipped 3%.Celebrations erupted at the headquarters of the Shapoorji Pallonji Group, founded by Cyrus’ father Pallonji Mistry’s ancestors, while a stunned Tata Group reacted with shock and surprise. “It is not clear how the NCLAT order seeks to overrule the decisions taken by shareholders of Tata Sons and listed Tata operating companies at validly constituted shareholder meetings. The NCLAT order even appears to go beyond the specific reliefs sought by appellant,” a Tata Sons statement said.The group is likely to challenge the order before the Supreme Court. Late Wednesday evening, Chandrasekaran wrote to employees, assuring them that the conglomerate will “pursue the appropriate legal recourse”. He concluded by asking all employees to “stay focussed on their businesses”.Senior lawyer Abhishek Singhvi, who appeared for Tata Sons, confirmed to ET that the group would seek legal remedy. “Though (the order is) disappointing, we will certainly take the next legal recourse, including the option of moving the Supreme Court, well before the onemonth time given,” he said.The NCLAT judgment threatens to create more uncertainty for the Tata Group as it has immediately restored Mistry’s directorship in Tata Sons as well as three group companies — Tata Consultancy Services, Tata Industries and Tata Teleservices.The appellate tribunal said the reinstatement of Mistry as executive chairman of Tata Sons will be operational after four weeks.The two-judge NCLAT bench has also asked Tata Sons chairman-emeritus Ratan Tata and the nominee of the Tata Trusts — who hold about 66% stake in the group’s main holding company — to “desist from taking any decision in advance which requires a majority decision of the board of directors or in the annual general meeting.”The order also ruled against the conversion of Tata Sons from a ‘public company’ to ‘private company’, and termed its approval by the Registrar of Companies as being against the provisions of Section 14 of the Companies Act, 2013. Declaring the conversion illegal, the order said it is ‘prejudicial’ and ‘oppressive’ to the minority members and depositors.The NCLAT questioned the response of Tata Sons and its directors to the charge that Mistry’s removal was necessitated by poor performance of the group. The judges noted that the nominee directors of the Tata Trusts have affirmative voting rights over the majority decision. That is, their approval is necessary for any majority decision. “The affirmative vote of the directors nominated by Tata Trusts has an overriding effect and renders the majority decision subservient to it,” the judges said. Given this situation, the NCLAT bench wondered how the Tata Sons board could blame Mistry for poor performance.Mistry, whose family — through investment firms — is a minority shareholder in Tata Sons with 18.4% stake, has been embroiled in a legal battle with the Tata Group after he was ousted in 2016 over charges of shareholder oppression and mismanagement.The reclusive Mistry, who was inundated with congratulatory phone calls on Wednesday, said it was not a personal victory. “Today’s judgment is not a personal victory for me, but is a victory for the principles of good governance and minority shareholder rights,” he said in a statement.The Tata-Mistry clash has been one of the most high-profile and publicly fought corporate battles in India.While Mistry had preferred to keep a low profile, he had adopted an aggressive stance and approached several legal forums to challenge his sacking. He had made allegations of inappropriate interference in the company’s affairs by Ratan Tata.“There will be an impact on Tata Group shares, as it introduces tremendous uncertainty,” said a senior executive at a management consultancy.Tata Sons group general counsel Shuva Mandal said the group has always acted in a fair and equitable manner. “Tata Sons strongly believes in the strength of its case and will take appropriate legal recourse,” he said.Aryama Sundaram, the senior counsel for Mistry, told ET that he was not surprised with the judgment. “I am not looking at it as a major victory for any group. I am looking at it as a very important victory for the purpose of corporate governance and for the purpose of ensuring proper and adequate corporate governance and transparency in management.”