The Supreme Court Friday stayed the order of appellate tribunal NCLAT which had dismissed the plea filed by Registrar of Companies (RoC) seeking impleadment and modification of its last month's verdict in the Tata-Mistry case.
In its January 6 order, the National Company Law Appellate Tribunal (NCLAT) had rejected RoC's plea saying that no aspersions were cast on the Registrar in terming as illegal the decision to allow conversion of Tata Sons Pvt Ltd (TSPL) into a private company.
Aggrieved by the order, TSPL filed a fresh appeal in the apex court claiming that the NCLAT, while dismissing RoC's plea, had assigned "fresh and additional reasons" to support the conclusion reached by it in its last month's verdict.
The NCLAT verdict of December 18, 2019, which had restored Cyrus Mistry as the executive chairman of the Tata Group, has already been stayed on January 10 by the apex court which observed that there were "lacunae" in the orders passed by the appellate tribunal.
The TSPL's fresh appeal came up for hearing on Friday before a bench comprising Chief Justice S A Bobde and Justices B R Gavai and Surya Kant.
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"We will pass the same order," the bench told senior advocate Abhishek Manu Singhvi, who was appearing for Tata Sons Pvt Ltd, and stayed the NCLAT's order.
The bench also issued notices to Cyrus Mistry, Cyrus Investments Pvt Ltd and others on the plea and said it would be heard along with the main matter.
In its appeal against the January 6 order, TSPL has said, "Notwithstanding such dismissal, inexplicably and for no justified reason, the impugned order assigns fresh and additional reasons to support the conclusion reached by it in the NCLAT judgement."
It said that in the plea filed in NCLAT, the RoC had taken a stand that even though it was not a party to the main matter, the tribunal had made certain adverse observations against it, more particularly in the manner in which RoC had allowed conversion of Tata Sons as a 'private company'.
It said the order contains additional reasons to support the conclusion reached by the tribunal in its December last year judgement.
"This is clearly impermissible given that the jurisdiction under section 420 of the 2013 Act (Companies Act) is only intended to correct errors which are apparent on the face of the record and not to render substantive findings on merits in order to explain, amplify and justify the conclusion reached in the judgement which is the subject matter of the application under section 420 of the 2013 Act," it said.
"Unfortunately, the impugned order completely ignores the scope of jurisdiction under section 420 and travels far beyond its ambit. The fact that such fresh conclusions have been reached without even a notice being issued in the application to other parties to make submissions thereupon is another fatal anomaly in the impugned order," it said.
It said the January 6 order "seeks to support" NCLAT's last year verdict by broadly giving three new reasons including that since the Centre has not prescribed any minimum paid up share capital for a private company under the 2013 Act, there cannot be a private company or at any rate, arise the issue of conversion of a public company into a private company.
It alleged that the three conclusions were "patently specious and wrong".
"In view of all the above, the appellant seeks setting aside of the impugned order to the extent the same supplements the reasons assigned in the NCLAT judgment to re-affirm the conclusion that the actions of the RoC in effecting alterations in the appellant's certificate of incorporation were wrong and that the appellant is a public company," the plea said.
In its December last year verdict, the NCLAT had given a big relief to Cyrus Investment Pvt Ltd and Mistry, restoring him as the executive chairman of TSPL.
NCLAT had ordered the reinstatement of Mistry as the head of Tata Sons, the holding company of USD 110 billion salt-to-software conglomerate, saying his 2016 sacking was wrong.
It also held that conversion of Tata Sons from a public company to a private one by the RoC was "illegal".
Subsequently, the RoC, under the Union Corporate Affairs Ministry, had moved a plea in NCLAT seeking deletion of words "illegal" and "with the help of the RoC" on the issue of conversion of Tata Sons into a private company.
The NCLAT had rejected RoC's plea on January 6.
In its January 10 order, the top court had directed that the Tatas will not exercise power under Article 75 of the 'Articles of Association' for pushing out shares of minority holders in the company.
The Article empowers the company to, at any time, to transfer ordinary shares of any shareholders without following the normal procedure of transfer.
Tata Sons Pvt Ltd, formerly known as Tata Sons Limited, has sought setting aside of the NCLAT verdict in toto, alleging it was "completely inconsistent with the annals of corporate law" and reflected "non-appreciation of facts", which was "untenable in law".
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