The National Company Law Appellate Tribunal (NCLAT) on Friday reserved its order on the plea filed by the Registrar of Companies (RoC) seeking modifications in the judgement that reinstated Cyrus Mistry as the executive chairman of Tata Sons.
Five days after the NCLAT’s December 18 order, the Registrar of Companies moved the tribunal to be impleaded as a party in the case and asked for the deletion of certain words by way of amendment to the judgment so as to “correctly reflect the conduct of the RoC Mumbai as not being illegal and being as per the provisions of the Companies Act.”
NCLAT in its order had termed the instatement of N. Chandrasekaran as executive chairman in Mistry’s place as “illegal” and the illegal conversion of the company as being “with the help of the RoC” against which the Registrar of Companies, functioning under the Ministry of Corporate Affairs, moved an urgent application on December 23, 2019 for its impleadment and for the requisite amendments to the tribunal’s order.
The RoC, in its application also said that it had acted in a bona fide manner based on the July 9, 2018 judgment of the National Company Law Tribunal (NCLT), against which the appellate forum, NCLAT, had not ordered any interim stay.
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 the character of a deemed ‘public company’ with effect from February 1, 1975. The company received the shareholders’ approval to convert it to a private limited company few months after Mistry was sacked. It absolved Tata Sons of the need to take shareholders’ consent on crucial decisions which can now be passed by a Board’s resolution only.
Tata Sons had yesterday moved the Supreme Court against NCLAT’s order holding the company’s conversion from public to private illegal as well as sought the quashing of the reinstatement order. The Ministry of Corporate Affairs has maintained that there was no illegality in converting Tata Sons from public to a private company.