Tata Sons has rejected objections raised by Tata Trusts Chairman Noel Tata over.
N Chandrasekaran’s reappointment, citing legal opinions from former Chief Justice of India U U Lalit, former Supreme Court judge B N Srikrishna and senior advocate Sudipto Sarkar to support the validity of the September 17 board decision.
The dispute centres on Articles 121 and 104(B) of Tata Sons’ Articles of Association. Article 121 requires certain board decisions to also secure the approval of a majority of directors nominated by Tata Trusts. The company currently has two such nominees — Noel Tata and Venu Srinivasan.
At the September 17 meeting, Srinivasan and three other directors voted in favour of Chandrasekaran’s reappointment, while Noel Tata opposed it. Tata Sons then relied on the chairman’s casting vote to pass the resolution.
Tata Trusts has challenged that interpretation, arguing that with two Trust-nominated directors, both would have to support the resolution to constitute a majority. The Trusts also contend that a casting vote can be used only when there is a tie among the board as a whole and cannot override the separate requirement involving Trust nominees.
Tata Sons, however, has maintained that the resolution complied with its Articles of Association. In his opinion, former CJI U U Lalit said that four of the five directors who voted backed Chandrasekaran and that the resulting equality under Article 104(B) allowed the presiding chairman to exercise a casting vote, thereby satisfying Article 121.
Former Supreme Court judge B N Srikrishna similarly concluded that the procedure followed was consistent with the “letter and spirit” of Article 121. He also argued that directors owe a statutory fiduciary duty to the company and that this duty would take precedence over obligations to the entity that nominated them if the two came into conflict.
Senior advocate Sudipto Sarkar offered a similar interpretation, saying Article 121 could reasonably allow a casting vote where there is an equality of votes either among the directors appointed under Article 104(B) or among the board as a whole.
Sarkar also argued that Article 118, which deals with the appointment of a “new chairman”, does not apply to Chandrasekaran’s reappointment. According to this interpretation, Chandrasekaran remains the incumbent chairman until his current term expires in February 2027, even though he had indicated that he would not seek another term.
The Tata Trusts, meanwhile, continue to maintain that the September 17 resolution was not validly passed because the required approval from its nominee directors was not secured. The disagreement has placed the interpretation of Tata Sons’ governance framework at the centre of the ongoing dispute between the holding company and the Trusts.
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