Singhvi Calls Tata Trusts-Tata Sons Split Unthinkable, Says Courts Must Resolve Row

Senior Supreme Court advocate Abhishek Manu Singhvi has described any attempt to sever the long-standing relationship between Tata Trusts and Tata Sons as untenable, saying the ongoing dispute will ultimately have to be settled in court.

"Rupturing the over 100 years of Tata Trusts and Tata Sons which have an established, hyphenated relationship and trying to divorce one from the other seems to me to be unthinkable," Singhvi said.

Speaking about his familiarity with the key figures in the dispute and with the group during Ratan Tata's tenure, Singhvi expressed regret that the matter could not be resolved amicably outside the courtroom. He said legal intervention becomes unavoidable when core ownership interests are infringed.

Singhvi, who said he is professionally engaged to lead on one side of the matter, argued that the fundamental rights of shareholder-owners cannot be nullified in the manner they have been. Allowing shareholder rights to be stultified, he said, would in principle spell doomsday for the thousands of companies owned by shareholders or groups of shareholders.

The senior advocate also questioned procedural curbs placed on the internal management of the trusts. He called it strange and wrong that intra-trust decision-making had been stymied by what he described as a sudden, inexplicable and mysterious fetter imposed by the charity commissioner.

According to Singhvi, established voting thresholds and safeguards within the trusts were disregarded in recent actions. He said the requirement of unanimity in trust decision-making and clear veto provisions were ignored, adding that such mandatory procedures form the legal backbone of the trust structure and cannot be set aside arbitrarily.

He also pointed to the Supreme Court's earlier judgment in the Tata case, in which he said he had the privilege of appearing. That ruling, he noted, clearly gave Tata Trusts primacy in its relationship with Tata Sons and specifically upheld the special articles in Tata Sons' articles of association. Those findings, he said, appear to have been selectively forgotten.

With collegiality and conviviality having broken down between the principal actors, Singhvi said judicial adjudication remains the only path forward.

The dispute has intensified after Tata Trusts maintained on September 17 that the resolution to re-appoint N. Chandrasekaran as Chairman of Tata Sons was illegal. The position was reiterated at the Tata Sons Board meeting by Noel Tata, Chairman of Tata Trusts, following a move to revisit Chandrasekaran's reappointment.

In its statement, the Trust said the Board cannot lawfully hold a meeting or pass a resolution on the Chairman's appointment or reappointment unless both nominee directors are present, and cannot validly pass such a resolution unless both nominee directors vote in favour. Since Noel Tata, one of the Trust nominee directors, voted against the proposal, the Trust said the resolution was rendered legally void and without any basis.