The Supreme Court‘s order on Friday has upheld the stand taken by the National Company Law Tribunal (NCLT) that had given a clean chit to the Tata Group over the allegations levelled by Shapoorji Pallonji Group companies, including on the Nano car project, transactions with Mehli Mistry, the Air Asia joint venture and the C Sivasankaran issue.
An apex court bench of Chief Justice SA Bobde and Justices AS Bopanna and V Ramasubramanian observed that though the NCLT had addressed each one of the issues raised by the SP Group and recorded its findings, the National Company Law Appellate Tribunal (NCLAT) did not deal with those one by one while favouring the appeal against the ruling.
Also, the NCLAT did not “render any opinion on the correctness or otherwise of the findings” recorded by the NCLT, the top court said in its 282-page judgement on Friday.
Ashish K Singh, managing partner of law firm Capstone Legal, said the ruling had set a benchmark for future decisions by the NCLAT on the determination of factual issues. “The Supreme Court has reiterated that the NCLAT is the final fact-finding body under the Companies Act,” he said.
On the issue of a loan given to Sivasankaran by Tata Steel subsidiary Kalimati Investments, the NCLT had observed that it had already been paid back by the Siva Group of Companies. Also, Sivasankaran himself had provided a personal guarantee for the loan, the NCLT order had said.
Dismissing the allegation of fraudulent transactions around the AirAsia joint venture, the Mumbai bench of the NCLT had observed that in a Tata Sons board meeting held on December 6, 2012, then chairman Cyrus Mistry did not raise any objection to the approval given for infusing funds in Air Asia India.
On the allegation of Mehli Mistry deriving benefits due to his personal relationship with Ratan Tata, the NCLT in its July 2018 order said the only document that the SP Group firms and Cyrus Mistry had filed and relied on was an email Mehli Mistry had addressed, among others, to S Padmanabhan of Tata Power.
The tribunal had also dismissed the allegation of Ratan Tata pushing the Nano car project despite it being a loss-making one, upholding Tata Sons’ argument that Ratan Tata was not a director of Tata Motors. “There is not a single instance where the advice of RNT (Ratan Tata) was directly implemented without consideration by the respective board,” said the tribunal order.
Chandubhai Mehta, managing partner of law firm Dhruve Liladhar & Co, said the Supreme Court’s ruling would set a precedent for the NCLAT. While passing any final order, the appellate tribunal will have to deal with every specific aspect of NCLT’s ruling as well, he said.
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