Ministry of Corporate Affairs may challenge part of NCLAT decision in Tata-Cyrus Mistry Case: Sources

Ministry of Corporate Affairs (MCA) is likely to challenge a part of National Company Law Appellate Tribunal’s (NCLAT) decision related to Mistry vs Tata case in Supreme Court. Sources aware of the development informed Zee Business that Ministry of Corporate Affairs is deliberating to challenge that part of the order where the conversion of the Tata Sons from Public to Private by RoC is termed illegal.

MCA is of the view that conversion of Tata Sons from the public to private was approved by NCLT. And, thereafter Registrar of Companies converted it in its records. So how can it be called ‘illegal’ by NCLAT.

NCLAT in its order had noted that "The conversion of the company from 'Public Company' to 'Private Company' as by the RoC is against the provisions of Section 14 of the Companies Act, 2013 and 'prejudicial’ and ‘oppressive’ to the minority members and depositors etc.  and declared conversion of the ‘Tata Sons Limited’ from ‘Public Company’ to 'Private Company’ by Registrar of Companies, as illegal.'

NCLAT further said, “ The decision of the Registrar of Companies changing the Company (‘Tata Sons Limited’) from ‘Public Company’ to ‘Private Company’ is declared illegal and set aside. The Company (‘Tata Sons Limited’) shall be recorded as ‘Public Company’. The ‘Registrar of Companies’ will make correction in its record showing the Company (‘Tata Sons Limited’) as ‘Public Company’.”      

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Earlier on Wednesday, NCLAT ordered the Tata Group to reinstate Cyrus Mistry as executive chairman, a post from which he was ousted following a boardroom battle on October 24, 2016. The tribunal in its decision termed appointment of TCS head N Chandrasekaran as Tata Group's Executive Chairman and conversion of Tata Sons from a public company to a private company as illegal. The two-member NCLAT bench, headed by chairperson Justice SJ Mukhopadhaya, directed the Registrar of Companies (RoC) to revert Tata Sons to its public status.