SC stays NCLAT order reinstating Cyrus Mistry as Tata Group chairman
10 Jan 2020
The Supreme Court today stayed an order by the National Company Law Appellate Tribunal (NCLAT) reinstating Cyrus Mistry as executive chairman of the Tata Group.
A bench of Chief Justice S A Bobde and Justices B R Gavai and Surya Kant ordered a stay on the NCLAT order on a petition filed by Tata Sons challenging tribunal’s decision and issued notices to Mistry and others.
Observing that there were "lacunae" in the orders passed by the tribunal, the apex court bench said the NCLAT decision suffers from "basic errors and we have to hear the matter in detail".
The bench also said, "You (Cyrus) have been out of the saddle quite a long time. Does this hurt you....How does it hurt you today".
The bench also noted that there was no prayer in Cyrus Mistry’s petition for reinstatement but the tribunal went ahead with it and ordered his reinstatement.
Mistry, however, has made it clear that he was least interested in the post of executive chairman of Tata Group.
"We find there are lacunae in the judicial orders passed by the NCLAT," the bench said issuing notices to Mistry and others.
NCLAT also held the appointment of N Chandrasekaran as the group’s chairman illegal, in a loss of face for the conglomerate’s chairman emeritus Ratan Tata.
Tata Sons Private Ltd (TSPL) challenged the December 18 decision of NCLAT that gave a big relief to Cyrus Investment Pvt Ltd and Mistry.
The NCLAT had, also, last week, refused to allow a review petition filed by Mumbai bench of the Registrar of Companies (RoC) seeking amendments to its 18 December judgement on the Tata-Mistry dispute that made the transition of Tata Sons from a public company to a private one “illegal”.
“No ground is made out to amend the judgment dated 18th December, 2019, in absence of any factual or legal error apparent on the body of the aforesaid judgement," the NCLAT bench said, adding that Tata Sons’ reversal of status to a public company following the NCLAT judgement stands.
The appeals court, in its 18 December judgement, had said the RoC’s decision to convert Tata Sons Ltd from a public company to a private entity was “illegal".
NCLAT in its 172-page judgement, had used the terms “illegal" and “with the help of the RoC", and the RoC in its review petition had sought deletion of these references from the judgement “...to correctly reflect the conduct of RoC, Mumbai, as not being illegal".
RoC, which functions under the corporate affairs ministry, had further sought directions from NCLAT for amendment in certain portions “...to delete the aspersions made regarding any hurried help accorded by the Registrar of Companies, Mumbai, to Tata Sons Ltd, except what was statutorily required to be done".