“The Articles of Association (AoA) of Tata Sons do not leave any decision of the board to a mere head count of directors. They provide that no decision can be taken unless it has the affirmative support of at least a majority of the directors nominated by the Tata Trusts, who hold approximately 66% of the company. This is a separate condition under the AoA,” said a release.
“There are two Tata Trusts nominees on the board of Tata Sons. Majority amongst two is two and not one. On September 17, 2026, one such director voted against the resolution. Thus, the affirmative support of Tata Trusts nominee directors as mandated by the AoA was not given. The condition failed, and so did the resolution. The chairman’s casting vote is available only where there is equality of votes at the overall board level. It does not apply amongst Tata Trusts’ nominee directors. Whether the result of the vote was 4:1, or any other figure, is irrelevant. A condition is either met, or it is not. In this case the condition was not met,” said the release.
“It is now being suggested that a refusal of support amounts to a deadlock which would paralyse the company and that the chairman of the meeting was, therefore, entitled to resolve the position by a casting vote. There was no paralysis and there was no deadlock. The board put a question and the AoA answered it in the negative. The exercise of a protective right conferred by a company’s own constitution is not a deadlock,” the release added.
Hence, the resolution to reappoint Mr N. Chandrasekaran as the chairman of Tata Sons, considered at the board meeting on September 17, 2026, was not validly passed and had no legal effect, the release said. “In the eyes of the law, it is void ab initio,” it added.Â
“Tata Sons is not at liberty to take this position because it has already taken the opposite one and won in the Supreme Court. In the proceedings arising out of the removal of Mr Cyrus Mistry, the affirmative voting rights of the Trusts’ nominee directors under Articles 104B and 121 were squarely in issue. The National Company Law Appellate Tribunal held them to be oppressive, and the complainants asked that they be deleted or confined. Tata Sons resisted that attempt. It defended these rights as a legitimate protection agreed between the shareholders, and it argued that far from being oppressive they were in truth the Trusts’ entitlement as a majority shareholder. The Supreme Court of India accepted the company’s case and set aside the finding that these Articles were oppressive. The company cannot now disown the protection it went to the Supreme Court to preserve. They are either in the Articles or they are not. Tata Sons has already told the highest court in the country that they are,” the release said.