Tata-Mistry Case: NCLAT Reserves Order On RoC Plea, Judgment Likely Monday
The National Company Law Appellate Tribunal on Friday reserved its order on the plea filed by the Registrar of Companies seeking modifications in the judgment that reinstated Cyrus Mistry as the executive chairman of Tata Sons Pvt. Ltd.
A two-member bench headed by Chairman Justice SJ Mukhopadhaya indicated that its order is likely to come on Monday.
During the proceedings, the Ministry of Corporate Affairs said that it was discharging its duty and has not committed any illegality in the conversion of Tata Sons from a public company to a private company. On Thursday, NCLAT had asked clarification specifics of paid-up capital requirement for the same.
NCLAT had on Dec. 18 directed the $110-billion Tata Group to reinstate Cyrus Mistry as Tata Sons chairman. The tribunal termed as "illegal" the appointment of Natarajan Chandrasekaran following the October 2016 sacking of Mistry. It had also directed the RoC to reverse Tata Sons' status to a 'public company'.
In the order, the appellate tribunal had also quashed the conversion of Tata Sons—the principal holding company and promoter of Tata firms—into a private company from a public firm and had termed it as "illegal".
The tribunal has said that the action taken by the RoC to allow the firm to become a private company was against the provisions of the Companies Act, 2013, and "prejudicial" and "oppressive" to the minority member—Mistry and his companies.
In an urgent application, which was mentioned on Dec. 23, just five days after the NCLAT's judgment, RoC Mumbai asked the appellate tribunal "to carry out requisite amendments" in Para 186 and 187 (iv) of its judgement "to correctly reflect conduct of the RoC Mumbai as not being illegal and being as per provisions of the Companies Act".
In its plea, the RoC, which functions under the Ministry of Corporate Affairs, had sought to be impleaded as a party in the two petitions and deletion of the words "illegal" and "with the help of the RoC" used by the NCLAT in its judgement.
Besides, it has also urged "to delete the aspersions made regarding any hurried help accorded by the RoC Mumbai to Tata Sons, except what was statutorily required" in para 181 of the order.
The RoC also said it has acted in "bonafide manner" in converting the status of Tata Sons as "there was no stay granted by this appellate tribunal on the operation of the judgement dated July 9, 2018 of Mumbai, NCLT, at the time when this intimation was filed by Tata Sons Ltd".
On Thursday, Tata Sons moved the Supreme Court against NCLAT's order.
Months after Mistry was sacked, Tata Sons had received its shareholders' nod in September 2017, to convert itself into a private limited company from a public limited company, thereby absolving it of the need to take shareholder consent in taking crucial decisions, which could be passed with just the board's approval.
Tata Sons was initially a 'private company', but after insertion of Section 43A (1A) in the Companies Act, 1956, on the basis of average annual turnover, it assumed character of a deemed 'public company' with effect from February 1, 1975, the order said.