NCLAT Dismisses ROC - The National Company Law Appellate Tribunal on Monday dismissed the Registrar of Companies' petition seeking modification of the judgement in the Tata-Mistry case and said its ruling had not cast any aspersions on the RoC. "There is no ground to amend judgement dated December 18, 2019," a two-member NCLAT bench said.
On December 18, the tribunal ruled reinstating Cyrus Mistry as the Executive Chairman of Tata Group and also termed conversion of Tata Sons from a public company to a private one by the RoC as "illegal". Tata Sons, Chairman Emeritus Ratan Tata and Tata Consultancy Services (TCS) have separately moved the Supreme Court against the NCLAT order. In its plea, RoC -- under the corporate affairs ministry -- had sought to be impleaded as a party in the two petitions and deletion of words "illegal" and "with the help of the RoC" used by the NCLAT in its 172-page judgement.
In its plea, RoC, which functions under the Ministry of Corporate Affairs, had sought to be impleaded as a party in the two petitions and deletion of words "illegal" and "with the help of the RoC" used by the NCLAT in its 172-page-long judgement. The tribunal had termed the appointment of N Chandrasekaran, as 'illegal' following the October 2016 sacking of Mistry as Tata Sons' executive chairman. It had also directed the RoC to reverse Tata Sons' status from a 'private company' to a 'public company'. In its urgent application, which was mentioned on December 23, just five days after the NCLAT's December 18, judgement, RoC Mumbai had asked the appellate tribunal "to carry out requisite amendments" in Para 186 and 187 (iv) of its judgement "to correctly reflect the conduct of the RoC, Mumbai as not being illegal and being as per the provisions of the Companies Act".
Besides, it had 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. In the order, the appellate tribunal had 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 had 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 Camp). "The Company (Tata Sons) shall be recorded as 'Public Company'.
The RoC will make corrections in its record showing the Company as 'Public Company'," the NCLAT had said. Contesting the observations, RoC Mumbai asked the NCLAT to "delete the aspersion made regarding any hurried help accorded by RoC Mumbai to Tata Sons except what was statutorily required by RoC Mumbai". 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".
In its petition, the RoC had asked "to carry out the requisite amendment in paragraphs ... of the judgement dated December 18, 2019 to correctly reflect the conduct of RoC Mumbai as not being illegal and being as per the provisions of the Companies Act along with the rules". 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 Ltd 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 the character of a deemed 'Public Company' with effect from February 1, 1975, the order said.
Meanwhile, Cyrus Mistry on Sunday ruled out pursuing chairmanship of Tata Sons or any other executive positions at group entities but asserted that he is interested in a board seat at the holding company. Ruling out taking up any position at the group or any group entities, Mistry in a late Sunday evening public statement said that he is "walking the talk" to uphold corporate governance, and this is not a quest for position or power and he "will not be pursuing the executive chairmanship of Tata Sons, or directorship of TCS, Tata Teleservices or Tata Industries".
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