Noel Tata Prepares for Legal Battle Over Chandrasekaran’s Reappointment at Tata Sons

Legal fight against reappointment of N Chandrasekaran as the executive chairman of Tata Sons could be a new addition in the ongoing tussle over the leadership of the Tata group’s holding company. 

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The Tata Trusts, who own 66% stake in Tata Sons, have stated that the resolution dated September 17 which has favored the reappointment of Chandrasekaran for another five years doesn’t fulfill the conditions set out in the Articles of Association (AoA) of the company. 

Abhishek Manu Singhvi, senior advocate of the Supreme Court, has also joined the fight on the behalf of Noel Tata. The move comes when the Trusts are considering the legal options available to them while simultaneously fighting the resolution outside the court. 

Chandrasekaran’s tenure will end in February 2027. 

Tata Trusts disputes validity of September 17 vote 

The Tata Sons board backed Chandrasekaran’s third term by a 4:1 vote on September 17. Noel Tata, chairman of Tata Trusts and one of its nominee directors on the Tata Sons board, cast the sole dissenting vote. 

Tata Trusts has argued that the overall 4:1 result does not by itself determine whether the resolution is valid. 

Its position rests on provisions in Tata Sons’ Articles of Association that, according to the Trusts, require affirmative support from at least a majority of the directors nominated by Tata Trusts before a board decision can be taken. 

There are currently two such nominee directors. With one voting against Chandrasekaran’s reappointment, Tata Trusts said the required affirmative support was not secured and described the resolution as invalid from the outset. 

Noel Tata had raised concerns about the nominee directors’ veto rights and the use of a casting vote during the board meeting and subsequently. 

Casting vote emerges as another point of disagreement 

The use of a casting vote has become another central issue in the dispute. 

Harish Salve, who is advising Tata Sons, said in a recent media interview that without a chairman’s casting vote in such a situation, the company could face a deadlock and paralysis. 

Tata Trusts disputes that interpretation. It argues that a chairman’s casting vote is relevant only when the overall board vote is equally divided and does not apply to the separate voting requirement involving Tata Trusts’ nominee directors. 

The Trusts therefore maintains that whether the wider board vote stood at 4:1 or another figure does not change its position: the condition relating to its nominee directors, in its view, was not fulfilled. 

Cyrus Mistry case returns to the centre of the argument 

Tata Trusts has also invoked the legal battle that followed Cyrus Mistry’s removal as Tata Sons chairman. 

According to its statement, the affirmative voting rights of Tata Trusts nominee directors under Articles 104B and 121 were challenged during those proceedings. 

The National Company Law Appellate Tribunal had held those rights to be oppressive, and their deletion or restriction was sought. Tata Sons opposed that move and defended the provisions as legitimate protections agreed between shareholders, the Trusts said. 

Tata Trusts is now relying on that history to argue that Tata Sons cannot take a different position on those provisions in the present dispute. 

Singhvi, who had earlier worked closely with Ratan Tata during the Cyrus Mistry case, has also argued that shareholder-owner rights cannot be nullified in this manner. He has questioned any move that would separate the long-established relationship between Tata Trusts and Tata Sons or disregard the voting protections available to the Trusts. 

Chandrasekaran had earlier decided against seeking third term 

The latest dispute follows a change in Chandrasekaran’s own position on continuing as chairman. 

Last month, he informed the Tata Sons board that he would not offer himself for another term. At the time, he said discussions over the group’s future leadership had been put on hold after Noel Tata raised concerns about the performance of some Tata group businesses, including Air India and Tata Digital. 

At the September 17 meeting, however, the Tata Sons board moved a resolution offering Chandrasekaran another five-year term. He accepted the board’s request, with Noel Tata opposing the proposal. 

The disagreement has now moved beyond the boardroom. Tata Trusts continues to contest the validity of the resolution, while the involvement of senior legal counsel signals that the dispute could proceed to court if the matter is not resolved.