Tata Sons Private Limited (“Tata Sons”), the holding company of the Tata group, is undergoing a leadership transition. Its chairman, Mr. Natarajan Chandrasekaran, announced on August 12, 2026, that he will not seek re-appointment as chairman (the “August 2026 Announcement”).
This note focuses on certain corporate law issues emerging from the August 2026 Announcement, certain related events and the ensuing transition; it does not seek to review or analyze the rationale for the decisions or views of the parties involved.
The Requirement of ‘unanimous’ Approval under the Tata Sons’ Articles
The Sir Ratan Tata Trust (“SRTT”), together with the Sir Dorabji Tata Trust (“SDTT“) and other designated trusts, holds approximately 66% of Tata Sons’ shareholding (collectively, the “Tata Trusts”).
Mr. N. Chandrasekaran’s statement noted that his re-appointment proposal, raised at the Tata Sons’ board meeting on February 24, 2026, did not receive unanimous approval of the Tata Sons board because one board member did not support it. The statement further recorded that: “…in the absence of unanimous support, I chose to defer the decision.”
Notably, the articles of association of Tata Sons (“AoA”) grant the Tata Trusts, as long as they hold at least 40% of the paid-up ordinary share capital, a right to jointly appoint at least one-third of the directors.1 In addition, any matter requiring board approval must also receive the affirmative vote of a ‘majority’ of directors nominated by the Tata Trusts.2
The board of Tata Sons currently has six directors, including two nominees of the Tata Trusts. This means that both nominees must vote in favor of any proposal to meet the ‘majority’ threshold required under the AoA, thereby effectively making each nominee’s affirmative vote essential.
Based on the above, it appears that in February 2026, Mr. N. Chandrasekaran likely needed unanimous support from both Tata Trust nominees to be appointed for a third term.
The 2025 Amendment to the Maharashtra Public Trusts Act
SRTT, a public charitable trust regulated by the Maharashtra Public Trusts Act, 1950, and one of the major shareholders of Tata Sons, has been barred from holding meetings of its trustees by an ex-parte order3 of the Charity Commissioner of Maharashtra issued on May 15, 2026 (the “May 15 Order”). The order was issued based on representations filed by Ms. Katyayani Agrawal and Mr. Venu Srinivasan, himself a trustee of SRTT. These representations alleged that SRTT’s board of trustees violates the Maharashtra Public Trusts Act, 1950 (as amended by the Maharashtra Public Trusts (Second) Amendment Act of 2025 effective September 1, 2025) (such amendment, the “2025 Amendment”) on the basis that the 2025 Amendment requires that perpetual or life-trustees must not exceed one-fourth of the total number of trustees.4
The Tata Trusts have refuted this position in a press statement issued on May 15, 2026 on the basis that the application of the 2025 Amendment is prospective in nature and does not affect the appointments of perpetual trustees made prior to the coming into force of the 2025 Amendment on September 1, 2025.
It is noteworthy that the relevant provisions introduced by the 2025 Amendment (Sections 30A(1) and 30A(2)) address appointment of tenure trustees and perpetual trustees, respectively. Evidently, the legislature has addressed fresh appointments. As regards appointment of a (fresh) perpetual trustee, this would be subject to a restriction under Section 30A(2) that the number of perpetual trustees cannot exceed one-fourth of the total number of trustees.
The Statement of Objects of the 2025 Amendment reinforces this interpretation. Paragraph 2 of the Statement of Objects provides the following:
“2. It is noticed that in various instruments of trusts there is no clarity about appointment of perpetual or permanent trustees and tenure trustees and their tenure, which leads to multiple litigations before the Charity Commissioner and the court. This affects the working of the trusts, welfare of beneficiaries and the public.
It is considered expedient to provide in the Act, by inserting new Section 30A, for appointment of tenure trustees and perpetual trustees where the instrument of trusts does contain any specific provisions therefor…” (emphasis added)
The authors submit that the 2025 Amendment has, on its terms, been consciously limited to the appointment of (fresh) tenure and perpetual trustees without disrupting existing appointments in order that public trusts regulated by such legislation can be gradually (and in phased manner) be converged to the requirement of the number of perpetual trustees not exceeding one-fourth.
The Adjourned Tata Sons AGM
The AoA provides that quorum for an AGM shall be at least five members and shall include an authorized representative jointly nominated by SRTT and SDTT, as long as the Tata Trusts hold at least 40% of the paid-up ordinary share capital of Tata Sons.5
The shareholders’ meeting of Tata Sons scheduled for August 18, 2026 was adjourned due to “lack of quorum” which was attributed to the May 15 Order of the Charity Commissioner.
The authors submit that the May 15 Order was issued in the context of the constitution of SRTT (and specifically in the context of the agenda of the meeting of SRTT that was originally scheduled to be held on May 16, 2026) and not in relation to routine matters concerning appointment of representatives for attending shareholders’ meetings of Tata Sons.
In support of such view, the authors rely on the following:
- paragraph 1 of the May 15 Order which records the petitioner’s contention that if the meeting scheduled on May 16, 2026 were held, it would be contrary to the mandate of Section 30A(2). (emphasis added)
- paragraph 8 of the May 15 Order which records the reason for issuance of such order and is set out below.
“…In case, a meeting of the Board of Trustees is called and any important decisions regarding the administration, management or composition of the Trust are taken during the pendency of the said inquiry, that would lead to further complications and multiplicity of the proceedings. It would therefore be in the interest of the Trust as well as the interest of justice that such meeting is deferred till submission of the report of the Inspector inquiry ordered by ld. ACC.” (emphasis added) - the operative portion in paragraph 10 of such order which is set out below.
“10. Therefore, in exercise of the powers conferred upon the Charity Commissioner i.e., the undersigned by Section 36A(1) and other provisions of the Maharashtra Public Trusts Act, a direction is issued to the Board of Trustees of Tata Trusts to defer the meeting of the Board of Trustees scheduled to be held on 16-05-2026. It is further directed not to hold any such meeting till submission of report of Inspector inquiry.” (emphasis added)
The authors submit that the intent of the May 15 Order appears to have been to issue a direction to not hold meetings of SRTT where “important decisions regarding the administration, management or composition of the Trust are taken.” (emphasis added)
It does not appear to have been intended as an absolute bar on all SRTT meetings (for example, meetings to consider routine matters such as appointment of representatives to attend a shareholders’ meeting of a company in which the Trust owns shares).
Search for a New Chairperson
Immediately after Mr. N. Chandrasekaran’s announcement, SDTT issued a press release initiating the formation of a selection committee to identify a new chairperson for Tata Sons. The AoA prescribes that as long as the Tata Trusts hold at least 40% of the paid-up ordinary share capital of Tata Sons, the selection committee must comprise: (a) three persons jointly appointed by SRTT and SDTT; (b) one person nominated by and from amongst the board of Tata Sons; and (c) one external independent person. The chairman of the selection committee must be chosen from among the nominees of SRTT and SDTT. Further, the quorum for the selection committee requires a majority of the nominees of SRTT and SDTT to be present.6
An SRTT meeting for nomination of selection committee members to appoint a chairperson of a company in which the Trust owns shares may be another example of a meeting that should not be construed as barred by the May 15 Order. This may require a similar approach as discussed above in the context of appointment of representatives for attending the Tata Sons shareholders’ meetings.
1 Article 104B, Articles of Association
2 Article 121, Articles of Association
3 In an ex-parte order, the affected party has not been given the opportunity to present its case before the order is issued.
4 Section 30A(2), Maharashtra Public Trusts Act, 1950
5 Article 86, Articles of Association
6 Article 118, Articles of Association
This insight has been authored by Rajat Sethi (Partner), Durga Prasad Mohapatra (Senior Associate) and Shreyans Parakh (Associate). They can be reached on rsethi@snrlaw.in, dmohapatra@snrlaw.in and sparakh@snrlaw.in, respectively, for any questions. This insight is intended only as a general discussion of issues and is not intended for any solicitation of work. It should not be regarded as legal advice and no legal or business decision should be based on its content.
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