Tata Trusts says Chandra reappointment invalid, invokes Mistry case

Tata Trusts have contested the validity of N. Chandrasekaran's reappointment as chairman of Tata Sons, questioning the legality of the September 17 board decision to retain him. The Trusts argue that the resolution passed to reappoint Chandrasekaran was invalid because it did not meet the affirmative support requirement from Trusts' nominee directors under the Articles of Association (AoA).

The Trusts' nominee directors, Noel Tata and Venu Srinivasan, are on the Tata Sons board, with Srinivasan supporting Chandrasekaran's reappointment while Noel voted against it. Four directors backed the resolution, and Chandrasekaran did not vote. The board declared a majority vote in favor of reappointing Chandrasekaran for another five years, but Tata Trusts maintains that the affirmative support condition was not met, making the resolution invalid.

The Trusts cite a legal opinion from former Chief Justice D Y Chandrachud, who stated that a chairperson's casting vote cannot replace a missing majority and that the condition failed. They argue that the Chairman's casting vote is only applicable when there is an equality of votes at the overall board level and cannot override the AoA requirement for affirmative support from Tata Trusts' nominee directors.

Tata Trusts contends that the affirmation of Chandrasekaran's reappointment is void ab initio and goes against the company's own constitutional rules. The company has previously defended these rights in a Supreme Court case, and Tata Trusts insists that the trust's entitlement as a majority shareholder must be upheld.