Tata-Mistry: No aspersions, allegations cast against the ROC, NCLAT

The National Company Law Appellate Tribunal (NCLAT) today refused to amend its judgment passed in the Tata Mistry matter. NCLAT today stated that the no apsersions were cast on the Registrar of Companies (ROC) and no specific malafide action was alleged against the ROC.

"..we find that there is a wrong perception of the Registrar of Companies as no observation has been made against the Registrar of Companies, Mumbai, nor anything alleged against him.", it clarified.

The Appellate Tribunal thus opined that no case for amendment of the judgement was made out in ROC's application.

The NCLAT, however, agreed to amend a typographical error at Paragraph 171 of the judgement wherein un-amended Section 2(68) was wrongly been typed.

The order was pronounced by a Two member bench of the Appellate Tribunal headed by Chairperson Justice SJ Mukhopadhyay.

The NCLAT had on Friday reserved its order in a plea by the ROC seeking the removal of certain factual and legal errors in Tata-Mistry judgment passed last month.

The NCLAT iterated that on the basis of definition of ‘Private Company’ as amended by Section 2(68) which was applicable on the date of correction of Certificate of Incorporation and in the absence of any prescription of minimum paid up share capital, the Registrar of Companies had no power or jurisdiction to carry out any changes in the Register of Companies or Certificate of Incorporation of Tata Sons.

The Registrar of Companies, Mumbai (ROC) had moved an application under Sections 420(2), 424(1) of the Companies Act, 2013 read with Rule 11 of the NCLAT Rules for amendment of the judgement, on the ground that certain strictures passed by NCLAT against the statutory actions of ROC were unwarranted and against the principles of natural justice.

The ROC's grievances were directed against NCLAT's observation that the change of status from a public limited to private limited company for Tata Sons was done in a hurried manner with the help of the ROC and that the action of ROC was illegal.

In its application filed before NCLAT, the ROC had contended that Tata Sons Ltd, a private Ltd company, was deemed to be a public limited company by virtue of falling under the purview of section 43A (1A) on 01/05/1975, after the enactment of the Companies Amendment Act of 1974.

However, the company retained the characteristics of a private company in terms of Section 43A(1A) and became a 'deemed public company with characteristics of a private company' post 1975.

Therefore, in 2018, when Tata Sons intimated the ROC that it was desirous of exercising its option under Section 43A(2A) for turning back into a private company, ROC was statutorily obligated to carry out the necessary changes.

The ROC has, thus, contended that the change of legal status of Tata Sons was done in utmost compliance of the prevailing law and was not illegal.

Rejecting the contentions, the NCLAT observed,

"There being a specific provision of conversions of Companies already registered in terms of Section 18 of the Companies Act, 2013 and “alteration of articles” in terms of Section 14, the Registrar of Companies cannot rely on Section 43A (2A) that too without relying on Clause (4) therein which relates to requirement of approval of the Central Government."

The NCLAT thus concluded that no ground was made out to amend the Judgment in absence of any factual or legal error.

Read the Order:

Tata Mistry - ROC order.pdf
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