The National Company Law Appellate Tribunal (NCLAT) on Monday dismissed a plea by Registrar of Companies (RoC) in Mumbai seeking a modification to the judgement in the Cyrus Mistry-Tata Sons dispute.
NCLAT, however, clarified that its judgement had neither cast aspersions on the RoC nor ascribed any mala fide intention to it.
“No observations have been made against the Registrar of Companies Mumbai nor anything alleged against it,” a two-member bench led by justice SJ Mukhopadhaya said. The bench said it had only referred to actions on part of the company and its board, and “nothing has been alleged against RoC Mumbai … No specific mala fide action has been alleged against it.”
In its December 18 ruling, NCLAT had termed “illegal” the conversion of Tata Sons from a public limited to a private limited company, and asked for the decision to be reversed.
NCLAT had observed that action taken by the RoC in allowing the conversion was “against the provisions of Section 14 of the Companies Act, 2013 and ‘prejudicial’ and ‘oppressive’ to the minority member and depositors (of the company).”
RoC had filed an urgent application seeking modifications to the judgement, including deletion of the word “illegal” in reference to the conversion as well as a clause suggesting that the board of Tata Sons had sought to hurriedly change the company from public to private “with the help of the Registrar of Companies”.
RoC had argued that it was dutybound to change the status of Tata Sons and that there had been no hurry on its part in the conversion. The registrar said it acted in a “bona fide 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.”
Tata Sons, its chairman emeritus Ratan Tata and Tata Consultancy Services have each separately moved the Supreme Court in appeal against the judgement by the NCLAT. Tata Sons said it “would cause chaos in functioning of Tata Sons, undermine shareholder sovereignty and lead to breakdown of its governance structure.”
SC to Hear Tata Pleas on Fri
(Samanwaya Rautray)
The Supreme Court will, on Friday, hear a host of petitions filed by the Tata group against a recent National Company Law Appellate Tribunal (NCLAT) order reinstating Cyrus Mistry as chairman of Tata Sons, lawyers involved in the case said. Friday is a ‘miscellaneous’ day when fresh cases are listed for preliminary hearing and the apex court will, most likely, issue notices to Mistry and others to formally explain their legal positions, and adjourn for a final hearing.
Though Mistry has said he will not press his claim, the case is expected to have a huge bearing on Tata group affairs. Among other things at stake is the nature of the holding company, as NCLAT termed as “illegal” the conversion of Tata Sons to a private limited company, and asked for it to be reversed.
The case is also expected to see arguments over the rights of minority shareholders, and throw light on events that led to Mistry’s removal.
Tata Sons, chairman emeritus Ratan Tata and Tata Consultancy Services have appealed separately. Petitions have accused Mistry of damaging the group’s interests. Given the pendency in court, even a high-stakes matter like this — involving principles crucial to corporate governance — may take well beyond six months, legal experts said.
Source: Economic Times