The Supreme Court today (January 10, 2020) stayed the order of NCLAT which had reinstated Crus Mistry as the Executive Chairman of Tata Sons. The Supreme Court said that there is a basic adjudication defect in the order of NCLAT reinstating Mistry as Executive Chairman. It said we are looking at the judicial attitude with which the NCLAT made the December 18, 2019 order and "find that it is sorely lacking".
The Tata-Mistry war has dragged on for long and has constantly been in the public eye. Prior to turning Tata Sons to a public company from a private one, the Registrar of Companies (RoC) will allow and take in to consideration for the apex court's hearing on the National Company Law Appellate Tribunals (NCLAT) judgment. The Supreme Court had previously announced that it would hear on January 10 Tata Sons plea against the NCLATs decision to restore Cyrus Mistry as chairman of Tata Sons and three group companies.
NCLAT had also deemed Tata Sons conversion to a private company from a public company 'illegal', and asked the RoC to reverse its decision. RoC does not intend on taking legal action further after the NCLAT provided a clarification on January 6, 2020. The larger consensus within the ministry is to wait till the Supreme Court hears the matter on January 10, 2020. NCLAT had not accepted the RoCs request for modification of the judgment.
After NCLAT's decision in December last year, Mistry said he will not go after chairmanship of Tata Sons, Tata Consultancy Services (TCS), Tata Teleservices, or Tata Industries, but will be chasing a seat at table.
On December 18, 2019, the tribunal ruled reinstating Cyrus Mistry at the chairman of Tata Sons. Tata Sons emeritus chairman, Ratan Tata moved to the SC against NCLATs 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 judgment.
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.
