Tata Sons has sent a letter to Tata Trusts defending the reappointment of N. Chandrasekaran as Chairman, stating that the decision followed all relevant laws and company rules. This response comes after Tata Trusts raised concerns following a board meeting where nominee directors opposed the reappointment, leading to a tie broken by an independent director's casting vote. Tata Sons has secured legal opinions from Barrister Sudipto Sarkar, former Chief Justice U.U. Lalit, and former Supreme Court judge B.N. Srikrishna to validate their procedural stance. Conversely, Tata Trusts has obtained a legal opinion from former Chief Justice DY Chandrachud, which argues that the resolution for Chandrasekaran's third term is invalid without a majority vote, as a casting vote cannot revive a resolution that lacks sufficient support. This legal disagreement is escalating, with Tata Trusts reportedly preparing to take the matter to court, having enlisted the services of Supreme Court advocate Abhishek Singhvi, while Tata Sons has also assembled a legal team led by Harish Salve to counter any legal challenges.

Tata Sons has sent a letter to Tata Trusts defending the reappointment of N. Chandrasekaran as Chairman, stating that the decision followed all relevant laws and company rules. This response comes after Tata Trusts raised concerns following a board meeting where nominee directors opposed the reappointment, leading to a tie broken by an independent director's casting vote. Tata Sons has secured legal opinions from Barrister Sudipto Sarkar, former Chief Justice U.U. Lalit, and former Supreme Court judge B.N. Srikrishna to validate their procedural stance. Conversely, Tata Trusts has obtained a legal opinion from former Chief Justice DY Chandrachud, which argues that the resolution for Chandrasekaran's third term is invalid without a majority vote, as a casting vote cannot revive a resolution that lacks sufficient support. This legal disagreement is escalating, with Tata Trusts reportedly preparing to take the matter to court, having enlisted the services of Supreme Court advocate Abhishek Singhvi, while Tata Sons has also assembled a legal team led by Harish Salve to counter any legal challenges.

Tata Sons has sent a letter to Tata Trusts defending the reappointment of N. Chandrasekaran as Chairman, stating that the decision followed all relevant laws and company rules. This response comes after Tata Trusts raised concerns following a board meeting where nominee directors opposed the reappointment, leading to a tie broken by an independent director's casting vote. Tata Sons has secured legal opinions from Barrister Sudipto Sarkar, former Chief Justice U.U. Lalit, and former Supreme Court judge B.N. Srikrishna to validate their procedural stance. Conversely, Tata Trusts has obtained a legal opinion from former Chief Justice DY Chandrachud, which argues that the resolution for Chandrasekaran's third term is invalid without a majority vote, as a casting vote cannot revive a resolution that lacks sufficient support. This legal disagreement is escalating, with Tata Trusts reportedly preparing to take the matter to court, having enlisted the services of Supreme Court advocate Abhishek Singhvi, while Tata Sons has also assembled a legal team led by Harish Salve to counter any legal challenges.

The discourse around N. Chandrasekaran’s reappointment as chairman is intensifying as Tata Sons is learnt to have written to Tata Trusts chair Noel Tata, saying that the decision followed all relevant laws and company rules. The letter was sent in response to queries from Tata Trusts after the controversial board meeting on September 17.

The letter was accessed by two anonymous corporate insiders who spoke to Reuters. It was dated September 24, addressed to Noel Tata and signed by Tata Sons group company secretary Suprakash Mukhopadhyay.

According to Tata Sons, they sought legal advice from Barrister Sudipto Sarkar prior to the board meeting last week. They also cited legal opinions from former Chief Justice of India U.U. Lalit and former Supreme Court judge B.N. Srikrishna.

On September 17, the Tata Sons, the holding company of the Tata group, went against its shareholder that holds a 66 per cent majority stake, Tata Trusts. Tata Trusts nominee directors Noel Tata and Venu Srinivasan cast opposing votes for the reappointment of Chandrasekaran.

Harish Manwani, an independent director who led the process, cast the deciding vote in favour of the reappointment. Tata Sons upheld Sarkar’s legal opinion that a tie can be broken with a casting vote from the meeting’s chairman.

However, Tata Trusts got the former Chief Justice of India Justice DY Chandrachud’s legal opinion that the resolution to grant Chandrasekaran a third term was invalid without a majority vote, citing Article 121 of Tata Sons’ rules that only a majority vote of Trustees can approve a chairman’s reappointment.

“A casting vote cannot revive a stillborn resolution,” Tata Trusts argued.

According to two executives who spoke to HT, Tata Sons defended their tie-breaking decision in the letter with an 11-page legal opinion from Justice Lalit and an eight-page opinion from Srikrishna.

“In my opinion, what has been done is perfectly consonant with the letter and spirit of Article 121,’’ Srikrishna said.

“On a plain reading of Article 121, it can be said that the chairman’s casting vote can be invoked in either of the following situations: (i) where there is an equality of votes amongst the directors appointed pursuant to Article 104B; and (ii) where there is an equality of votes of the board as a whole after taking into account the votes cast by all directors”, said Sarkar.

“Since there was equality of votes among the directors’ appointment pursuant to Article 104(B), the presiding or the officiating chairman, by putting his casting vote, satisfied the requirement under Article 121,” Justice Lalit said.

Tata Trusts has been preparing to take legal action ever since the stormy board meeting and was waiting to decide once it received communication from Tata Sons. Reports indicate that this letter will play a key role in Tata Trusts’ decision to drag the issue to the court.

Supreme Court advocate Abhishek Singhvi posted on social media, announcing that he was joining the Tata Trusts legal team to challenge Chandrasekaran’s reappointment. Led by former Solicitor General Harish Salve, Tata Sons has also formed a strong team of lawyers if the issue is taken to court. 

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