January 3, 2020 1:06:52 am
Tata Sons Private Limited on Thursday moved the Supreme Court with a plea challenging the National Company Law Appellate Tribunal (NCLAT)’s judgment reinstating Cyrus Mistry as the chairman of the group. The plea has not yet been listed, but is likely to be heard on Monday once the apex court reopens after winter vacations.
In its plea, Tata Sons has claimed that the NCLAT granted Mistry “various reliefs in a manner that is completely inconsistent with the annals of corporate law”, which “reflects non-appreciation of facts and is untenable in law”. The NCLAT judgment, Tata Sons said in its plea, sets a “dangerous legal precedent”.
A two-member bench of the NCLAT had on December 18 restored Cyrus Pallonji Mistry as the executive chairman of Tata Sons and director in the Tata Group for the rest of his tenure.
The appellate tribunal had, however, stayed for four weeks the immediate reinstatement of Mistry to the top position at Tata Sons, allowing time to the Tatas to approach the apex court against its judgment.
Mistry — whose family owns close to 20 per cent in the Tata Group — was removed as chairman by the board of Tata Sons on October 24, 2016, nearly five months before his tenure was due to end.
In its plea, Tata Sons has claimed that even Mistry had in his plea in the National Company Law Tribunal (NCLT) not sought reappointment to the top post at the group, since he was aware that his tenure had ended in March 2017.
“The direction to restore Cyrus Mistry for his remaining term, without noticing that the term has come to an end, is a recipe for disaster, for the reason that it will create unnecessary confusion in the working of companies and lead to more conflict,” Tata Sons said in its plea, a copy of which has been perused by The Indian Express.
Apart from restoring Mistry as the chairman of Tata Sons, the NCLAT had also ordered that he be immediately restored as the director of a number of Tata Group companies.
This, Tata Sons has said in its plea to the SC, is beyond the appellate tribunal’s jurisdiction, and hence must be set aside.
The appellate tribunal’s directive that Tata Sons also consult Mistry and other minority investors before making any future appointments had “re-written the Articles of Tata Sons,” the group said in its plea.
Apart from Tata Sons, the Registrar of Companies (RoC), Bombay was also aggrieved by the NCLAT judgment. It had approached the NCLAT with a plea that the appellate tribunal delete from its judgment on reinstating Cyrus Mistry as chairman of Tata Sons the part which casts aspersions “made regarding any hurried help” to Tata Sons.
During the hearing on RoC’s plea, the NCLAT on Thursday said that it was ready to remove any “strictures” made by it against the companies’ registrar.
The appellate tribunal also sought to know from the Ministry of Corporate Affairs as to how what was the definition of a “private” company post 2015, when the Companies Act was amended.
It also sought to know the new paid-up capital requirements for companies. The petition will now be heard on Friday.
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