Tata Trusts on Sunday said the resolution to reappoint N Chandrasekaran as chairman of Tata Sons was not validly passed at the September 17 board meeting, arguing that the affirmative support required from its nominee directors under the company’s Articles of Association (AoA) was not secured.
The Trusts also invoked the Supreme Court proceedings arising from the removal of former Tata Sons chairman Cyrus Mistry, arguing that Tata Sons had itself defended the affirmative voting rights of the Trusts’ nominee directors in that case and could not now disown the protections it had successfully fought to preserve.
The reference is significant to the Trusts’ case against Chandrasekaran’s reappointment because the rights it is asserting now — under Articles 104B and 121 of Tata Sons’ AoA — were among those challenged during the Mistry litigation. Tata Sons had defended these provisions as legitimate protections available to the Trusts as majority shareholder, according to Sunday’s statement. The Supreme Court subsequently set aside the National Company Law Appellate Tribunal’s finding that the Articles were oppressive.
The statement marks a further escalation in the disagreement over Chandrasekaran’s third term, days after the Tata Sons board voted 4:1 in favour of his reappointment for another five years. Tata Trusts holds around 66 percent in Tata Sons.
“The resolution to reappoint Mr N. Chandrasekaran as the Chairman of Tata Sons, considered at the Board meeting on September 17, 2026, was not validly passed and has no legal effect,” Tata Trusts said, describing it as “void ab initio”.
The Trusts’ contention rests on provisions in Tata Sons’ AoA requiring decisions to have the affirmative support of at least a majority of the directors nominated by Tata Trusts, in addition to the vote at the overall board level.
There are currently two Tata Trusts nominee directors on the Tata Sons board — Tata Trusts Chairman Noel Tata and TVS Motor Chairman Emeritus Venu Srinivasan. At the September 17 meeting, Noel Tata voted against Chandrasekaran’s reappointment, while Srinivasan supported it. According to the Trusts’ statement, a majority among two nominee directors means both must support the resolution. The 1:1 split therefore meant the required affirmative support was not secured, it argued.
Tata Trusts said the overall voting numbers did not alter its interpretation of the AoA.
“Whether the result of the vote was 4:1, or any other figure, is irrelevant. A condition is either met, or it is not. In this case the condition was not met,” the statement said.
It also rejected the argument that the disagreement constituted a deadlock that could be resolved through a casting vote by the chairman of the meeting. According to the Trusts, a chairman’s casting vote is available only when there is an equality of votes at the overall board level and does not apply to the separate requirement for affirmative support from Tata Trusts’ nominee directors.
“There was no paralysis and there was no deadlock. The Board put a question, and the AoA answered it in the negative,” the Trusts said. It argued that exercising a protective right provided under a company’s constitution could not itself be treated as a deadlock.
Mistry case and nominee rights
The Trusts’ reference to the Mistry litigation goes back to the dispute following Cyrus Mistry’s removal as chairman of Tata Sons.
According to Sunday’s statement, the affirmative voting rights of Tata Trusts nominee directors under Articles 104B and 121 were directly at issue in those proceedings. The National Company Law Appellate Tribunal held the provisions to be oppressive, and the complainants sought their deletion or restriction.
Tata Sons resisted that attempt, defending the provisions as legitimate protections agreed between shareholders and arguing that the rights represented the Trusts’ entitlement as majority shareholder, the statement said.
The Supreme Court subsequently accepted Tata Sons’ case and set aside the finding that the Articles were oppressive.
“The Company cannot now disown the protection it went to the Supreme Court to preserve,” Tata Trusts said. The Articles of Association are not a convenience to be relied upon when they help and ignored when they don’t. Tata Sons is not at liberty to take this position, because it has already taken the opposite one and won in the Supreme Court, the Sunday’s statement said.
The Trusts’ statement comes after months of uncertainty over Chandrasekaran’s tenure. His second five-year term runs until February 2027. He had informed the Tata Sons board in August that he would not offer himself for a third term after the issue had remained unresolved for around six months, Business Standard reported earlier.
Pushes back on governance case for listing
Tata Trusts also used Sunday’s statement to reject the argument that listing Tata Sons would improve corporate governance, saying the company had voluntarily adopted several standards applicable to public companies and long before any of the present questions arose.
These include appointment of independent directors, constitution of an audit committee, a nomination and remuneration committee, provisions governing related-party transactions and retirement of directors by rotation, and a code of conduct for prevention of insider trading, it said.
The listing issue has assumed urgency after the Reserve Bank of India rejected Tata Sons’ application to surrender its registration as a core investment company. In its September 11 communication, the central bank asked Tata Sons to proceed with an immediate stock-market listing.
Tata Trusts on Sunday argued that a company which had voluntarily adopted public-company governance standards did not need listing to provide such discipline.
It framed the larger issue as one concerning the role of the Trusts within the Tata structure.
“The question is not which framework governs Tata Sons better or who governs Tata Sons better,” the statement said, adding that the issue was who would remain “in the room” to speak for the millions of underserved and excluded Indians who had been central to the work of Tata Trusts for more than 130 years.
