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The Tata-Mistry judgement: Narova Kunjerova and the moral dilemma of Indian corporate governance

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The Tata-Mistry judgement: Narova Kunjerova and the moral dilemma of Indian corporate governance

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The sotto voce of Narova Kunjerova used in the Tata-Mistry case judgement leaves behind many knotty problems.

The Tata-Mistry judgement: Narova Kunjerova and the moral dilemma of Indian corporate governance
The Mahabharata is the story of the epic battle fought by warring cousins to inherit a great empire. Divided into 18 books or Parvas, it contains the widely revered Bhagavad Gita and its concept of Dharma, as selfless or detached duty, unconcerned with fruits of the action. But the Bhagavad Gita is not the only lesson from the Mahabharata for modern times.
The 7th Parva, the Drona Parva, narrates the story of Dronacharya, from his taking over as the Commander-in-Chief (CIC) of the Kaurava army on the 11th day of the battle (after the fall of the venerable Bhishma), till his death on the 15th day.
The CIC is a formidable warrior, wreaking havoc on the battlefield. For the Pandavas to win the war, it is imperative that he is removed. Krishna plots a stratagem. Dronacharya dotes on his only son, Ashwatthama. If Ashwatthama was to die, the CIC would lay down arms and therefore, vulnerable to being killed. But the problem is that Ashwatthama is an accomplished fighter, and not easy to kill in battle. It is therefore plotted that Bhima would kill an elephant of the same name, and loudly boast about killing Ashwatthama in front of Dronacharya. But there is a problem.
Knowing that Dronacharya would not believe the story, the death has to be confirmed by a person of unimpeachable integrity. One in whom he has implicit faith. Somebody he knows would not lie. Dharmaraj Yudhishthir. Yudhishthir is therefore persuaded by the others of the necessity for this dubious subterfuge, in the cause of the Greater Good of winning the war.
Accordingly, Bhima kills the elephant and proclaims Ashwatthama as dead. Dronacharya asks for confirmation from Yudhishthir. The Dharmaraj utters the famous lines: “Ashwatthama hatha”, pausing before uttering softly, “iti Narova Kunjerova”. Dronacharya does not wait to hear the final lines, and laying down arms, is easily killed. “Ashwatthama is dead ….. man or elephant I do not know”, has been a troubling aspect of dharma and jurisprudence ever since.
Was it a half-truth or a half-lie? Should Yudhishthir—widely respected as Dharmaraj—have leveraged his public reputation for truth, honesty and fairness, just this once for an outcome of personal benefit? Was it a fair outcome, to Dronacharya and the Kaurava army? Were ends of justice served and within permitted rules of war? To what extent does a nebulous and undefined “Greater Good” overrule laws of justice or impartiality or fair play? How are the two reconciled? What then, is Dharma?
The Epic had no answers, and it would seem neither do we in the modern corporate age.
The first leg of the Tata-Mistry battle has made its way through the judicial system. The multiple judgements have however waxed eloquent more on public reputation and personal perception of the individuals and groups involved, particularly the Tatas, than restricting themselves only to the merits of the case. The spectrum of judgements have ranged from fawning hagiographies in the NCLT, to an absurd relief of reappointment not even sought for by the plaintiff in the NCLAT, to the final judgement by the Supreme Court—considered, but with fulsome praise and gratuitous opinion for the defendant.
A significant part of this has to do with the public reputation of the Tata group enjoys, a modern-day equivalent of the Dharmaraj. A reputation and a brand that the group has not been shy to leverage, ranging from Nira Radia tapes to other transgressions which may not have been looked at as kindly, if it had involved others of less-than-sterling reputation. The question is not if the reputation is well deserved. The question is also not of the judgement itself, meritorious and serving both the law and the greater good. The troubling aspect is the manner in which it has been written and the implications it carries. In its criticism of Mistry, as a self-serving whistleblower, to its gratuitous advice to the Tatas of their “biggest mistake” being the appointment of Mistry, et al.
The sotto voce of Narova Kunjerova used in the judgement leaves behind many knotty problems.
There is the immediate matter of the valuation of the Mistry group from Tata Sons yet to be resolved, and which is likely to end up in court. That this tactical judgement—which sheds no light on jurisprudential principles on key aspects of corporate governance, minority shareholder protection in closely held companies—makes its prejudicial preferences and opinion clear on a matter which may yet come before it, is unfortunate. Whether this gives a tactical advantage to one litigant over the other in the “fair valuation” to be undertaken, only time will tell.
In a larger perspective, in an environment where the legal framework and enforcement of contract rights is poor, judicial authorities are expected to take every opportunity to strengthen the message of corporate governance. By writing judgements that will lay down principles, and serve as case laws, that will guide action in these uncharted waters. This would reinforce confidence in the rule of law and commitment to transparent corporate governance in India, essential to the emergence of India as a major economy and as a destination for private investment in the incorporated form. “Show me the man, and I will show you the rules” is a malady that has already gripped large sections of the executive. While the same has not spread to the judiciary, judgements written in the manner as this one has, do little to boost public confidence.
The consequences of non-articulation of principle in the consequence of outcome is best illustrated in the conclusions of the Mahabharata.
What began as a battle with defined principles and rules soon descended into anarchy. Both sides used whatever they could to gain an advantage and win. Nothing was sacred or honourable. Lies, plots, conspiracies, all justice and principles were sacrificed as the moral compass and rule of law was lost. In the final act of moral debasement, after the war had been lost, Ashwatthama along with two accomplices, slaughters most in the Pandava camp even as they sleep. His associates in this dastardly act were notably Kripacharya—guru to the Pandavas and Kauravas, and Kritavarma—the duty-bound chief of Krishna’s Narayani army fighting on behalf of the Kauravas. Yet it is notable that neither of these honourable men objected to or refused this amoral task. In the final analysis, there were no victors for most were dead. Only 12 survived the battle, seven on the Pandava side, five on the Kaurava side.
Most battles, then or now, are Pyrrhic.
It is however only in the abandonment of principles, of Dharma, that the larger war is lost.
—Sandeep Hasurkar is an ex-investment banker, and author of Never Too Big to Fail: The Collapse of IL&FS and its trillion rupee maze. The views expressed in the column are his own
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