Tata-Mistry: Supreme Court agrees to hear plea against NCLAT's rejection of RoC's modification application

The Supreme Court today issued notice in a plea filed by Tata Sons against the National Company Law Appellate Tribunal's decision of January 6 by which it had rejected an application seeking a modification of its December 2019 judgment.

In its December judgment, the NCLAT had effectively paved the way for reinstating Cyrus Mistry as Executive Chairman of Tata Sons.

The Registrar of Companies had subsequently approached the NCLAT seeking removal of certain observations on the issue of conversion of Tata Sons from a public company to a private company.

This conversion was held to be "illegal", among other things and the same was sought to be removed from the order by the RoC. This application, however, was rejected by the NCLAT on January 6, prompting Tata Sons to approach the Supreme Court in appeal.

The Bench of Chief Justice of India SA Bobde with Justices BR Gavai and Surya Kant issued notice on the plea today.

Earlier this month, the Apex Court had agreed to hear Tata Sons' appeal against the December 2019 judgment of the NCLAT through which Cyrus Mistry was directed to be reinstated as the executive director of Tata Sons.

While staying the operation of the order, the Court had observed that the order of the appellate tribunal was sorely lacking and agreed to hear the appeals on the case.

Tata Sons had approached the Apex Court assailing the NCLAT order on the grounds that the same sets a “dangerous legal precedent” and will be adverse to the interests of the company and its members.

It is alleged by the company that the NCLAT set aside the order of the NCLT’s Mumbai Bench without discussing the findings and reasonings of the same. It is averred that the reliefs granted by the appellate tribunal raise serious questions of law.

Further, it is claimed that the NCLAT had granted reliefs that were not prayed for. The relief of restoring Cyrus Mistry as Executive Chairman for the “rest of the tenure” is untenable given the fact that his tenure extinguished in March 2017 itself.

In an order passed on January 6, the NCLAT refused to amend its judgment passed in the Tata Mistry matter. The Tribunal had stated that the no apsersions were cast on the RoC and that no specific malafide action was alleged against the RoC.