Tata Trusts, the majority owner of Tata Sons, has challenged the validity of Tata Sons’ September 17 decision to reappoint N. Chandrasekaran as its chairman, arguing that the company’s Articles of Association require affirmative support from both its Trust-nominated directors. A chairman’s casting — or tie-breaking — vote cannot override that condition, Tata Trusts said.
Tata Trusts also denied the existence of any deadlock at the Tata Sons board meeting that took place on September 17. It insisted that the casting vote by the chairman of the meeting, independent director Harish Manwani, which led to the board approving two crucial resolutions by a majority vote, had no locus standi.
“The Articles of Association (AoA) of Tata Sons do not leave any decision of the Board to a mere head count of Directors. They provide that no decision can be taken unless it has the affirmative support of at least a majority of the Directors nominated by the Tata Trusts, who hold approximately 66% of the Company,” Tata Trusts said in a statement on Sunday (September 20, 2026).
‘Majority of two is two’
Stating that this was a separate condition under the AoA, the Tata Trusts said, “There are two Tata Trusts nominees on the Board of Tata Sons [Venu Srinivasan and Noel Naval Tata]. The majority amongst the two is two and not one.”
“On September 17, 2026, one such director [Noel Naval Tata] voted against the resolution. Thus, the affirmative support of Tata Trusts Nominee Directors as mandated by the AoA was not given. The condition failed, and so did the resolution,” the Tata Trusts emphasised.
Pointing out that the chairman’s casting vote is available only where there is equality of votes at the overall board level, the Tata Trusts said it does not apply amongst Tata Trusts’ nominee directors. “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,” it stated.
‘No paralysis or deadlock’
“On the suggestion that a refusal of support [by nominee Director Mr. Tata] amounted to a deadlock which would paralyse the company and that the chairman of the meeting was therefore entitled to resolve the position by a casting vote, there was no paralysis and there was no deadlock,” it reiterated.
“The Board put a question, and the AoA answered it in the negative. The exercise of a protective right conferred by a company’s own constitution is not a deadlock; it is that constitution working as it was written to work,” Tata Trusts said.
According to Tata Trusts, the resolution to reappoint N. Chandrasekaran as the chairman of Tata Sons, considered at the Board meeting on September 17, was not validly passed and has no legal effect.
“In the eyes of the law, it is void ab initio [from the beginning],” it reiterated.
‘Cannot disown protection upheld by Supreme Court’
Stating that the Articles of Association are not a convenience to be relied upon when they help and ignored when they don’t, Tata Trusts said, “Tata Sons is not at liberty to take this position, because it has already taken the opposite one and won in the Supreme Court.”
In the proceedings arising out of the removal of former Tata Sons chairman Cyrus Mistry, the affirmative voting rights of the Trusts’ Nominee Directors under Articles 104B and 121 were squarely in issue, it said.
“The National Company Law Appellate Tribunal held them to be oppressive, and the complainants [Mistry & his SP Group Co] asked that they be deleted or confined. Tata Sons resisted that attempt. It defended these rights as a legitimate protection agreed upon between the shareholders, and it argued that far from being oppressive, they were in truth the Trusts’ entitlement as a majority shareholder,” it pointed out.
In 2020, the Supreme Court of India had accepted Tata Sons’ case and set aside the finding that these articles were oppressive.
“The Company cannot now disown the protection it went to the Supreme Court to preserve. They are either in the Articles, or they are not. Tata Sons has already told the highest court in the country that they are,” it said.
‘No corporate governance gap’
“It is unfortunate that the Chairman [Mr. Chandrasekaran] of Tata Sons, a company renowned for setting high standards of corporate governance, is contending reappointment on such an untenable interpretation of the Articles,” it stated.
To the suggestion that listing will bring enhanced corporate governance, Tata Trusts said the argument of a governance gap does not exist. “Pulling apart a hundred-year-old structure to fill an imaginary gap is taking a sledgehammer to crack a nut,” it said.
High standards
“Independently of listing, Tata Sons has for years chosen to hold itself to the standards of a public company. Its own AoA contains provisions applicable to public companies, including the appointment of independent directors, the constitution of an audit committee and a nomination and remuneration committee, provisions governing related party transactions and the retirement of directors by rotation, together with a code of conduct for the prevention of insider trading,” Tata Trusts noted.
It said this was done voluntarily, for reasons of transparency and governance, and long before any of the present questions arose. “A company that adopted these standards by choice is not a company in need of the discipline that listing is said to supply,” it emphasised.
“The question is not which framework governs Tata Sons better or who governs Tata Sons better. Rather, it is who is left in the room to speak for the millions of underserved and excluded Indians, who have been at the centre of everything Tata Trusts have done, for more than a hundred and thirty years,” it said.
Published – September 20, 2026 05:17 pm IST
