The escalating power struggle within Tata Trusts has taken a fresh turn, with Venu Srinivasan, trustee of the Sir Dorabji Tata Trust (SDTT), approaching the Maharashtra Charity Commissioner seeking an immediate inquiry into the trust’s administration and governance.

Mr. Srinivasan said the move was necessary to “preserve the institutional integrity and proper administration of SDTT.”

SDTT, the lead Tata Trust with a 27.98% stake in Tata Sons, has emerged as a key player in the ongoing developments at the group’s holding company. The second-largest trust, the Sir Ratan Tata Trust (SRTT), which holds 23.56%, has had its voting rights effectively paralysed since May after the Charity Commissioner began examining a complaint filed earlier by Mr. Srinivasan in his capacity as an SRTT trustee.

In his latest complaint, Mr. Srinivasan alleged that SDTT’s growing involvement in Tata Sons’ commercial and strategic decisions could jeopardise its charitable status.

“SDTT is a public charitable trust and its substantial shareholding in Tata Sons cannot result in the Trust itself assuming the functions of a commercial enterprise or participating directly in the conduct of Tata Sons’ business affairs,” he said.

Citing recent Tata Trusts announcements, Mr. Srinivasan alleged that the trusts, through their chairman and operating team, had taken a direct role in identifying, negotiating and implementing major commercial decisions involving Tata Sons — activities he claimed were beyond their charitable mandate.

He warned that such conduct could expose SDTT’s charitable corpus to significant tax implications under provisions governing non-profit organisations’ commercial activities.

“Such conduct constitutes mismanagement of the affairs and property of SDTT and a breach of duties owed by its trustees,” he said.

Mr. Srinivasan also accused SDTT of attempting to influence the independent functioning of nominee directors on the Tata Sons board. Referring to SDTT’s September 16 circular restraining him from participating in or voting on the proposed listing of Tata Sons, he said the move was “an extraordinary attempt to prevent me from exercising my independent judgement and vote.”

He described it as part of a broader effort to “suppress differing views and concentrate decision-making power within a smaller group of trustees.”

The complaint seeks a probe into the appointment and continuation of Noel N. Tata as perpetual trustee and Chairman of Tata Trusts, the appointment of his son Neville N. Tata, his [Mr. Srinivasan] exclusion from related decision-making processes, and the role of SDTT trustees in Tata Sons’ affairs.

Mr. Srinivasan has also sought directions preventing Noel Tata from participating in SDTT decisions related to appointing or instructing Tata Sons nominees, or exercising voting rights on behalf of the trust at Tata Sons’ general meetings.

The latest confrontation follows the September 17 Tata Sons board meeting, where Mr. Srinivasan supported another term for Chairman N. Chandrasekaran and compliance with the Reserve Bank of India’s directive on listing Tata Sons. Noel Tata opposed both positions, bringing differences between Tata Trust nominee directors into the open.

Mr. Srinivasan has asked the Charity Commissioner to maintain the status quo on SDTT’s trustee composition and prevent any appointment, removal, retirement or induction of trustees until the inquiry is completed.

Any regulatory intervention affecting SDTT could significantly restrict the functioning of Tata Trusts, which collectively own 66% of Tata Sons. With SDTT and SRTT together holding over 51%, the trusts remain the controlling shareholders of the conglomerate.

Tata Trusts’ proposal to merge two operating companies of the Tata Group — Tata Electronics Systems Solutions Private Ltd and Tata Consulting Engineers — with Tata Sons to avoid a listing could trigger a governance and legal battle if the holding company’s board refuses to approve it, according to legal experts.

“Tata Sons can legally challenge such a direction if what is asserted goes beyond the rights conferred under the Articles [of Association] or the Companies Act,” said Sooraj Sharma, Partner at Clavius Legal.

However, he added that if Tata Trusts has only placed a proposal before the board, “there may presently be nothing to challenge.”

A legal dispute would arise only if either side claims governance powers that the other disputes. For instance, if Tata Trusts asserts that the board is bound to implement the restructuring regardless of its statutory decision-making process, Tata Sons could contest that position.

“Any such dispute would primarily depend on the interpretation of Tata Sons’ Articles, the respective powers of shareholders and the board, rights of Trust-nominated directors, and directors’ statutory duties,” Mr. Sharma said. Depending on the nature of the claim, proceedings before the National Company Law Tribunal (NCLT) could follow, he added.

On whether Tata Trusts has the right to propose such restructuring, Mr. Sharma said “as the controlling shareholder, Tata Trusts is entitled to propose restructuring and exercise shareholder and governance rights available under the Companies Act, 2013 and Tata Sons’ Articles of Association.”

However, he clarified that Tata Trusts has sought the board’s approval rather than issuing a binding directive.

Section 179(3)(i) of the Companies Act requires the board to approve amalgamation, merger or reconstruction proposals through a resolution. That power, however, remains subject to the Act and the company’s Articles, according to him.

Tata Sons’ Articles provide Tata Trusts with significant governance rights, including nomination rights under Article 104B and affirmative voting provisions under Article 121.

“In Tata Consultancy Services Ltd. v. Cyrus Investments Pvt. Ltd. (2021), the Supreme Court described Article 121 as conferring a limited right regarding the manner in which matters before the board are decided,” Mr. Sharma said.

Therefore, while Tata Trusts cannot replace the board’s decision-making role, the board must also operate within the governance framework laid out in the Articles. Trust-nominated directors, meanwhile, remain bound by their statutory duties, including exercising independent judgment under Section 166 of the Companies Act.

If Tata Sons challenges the proposal, the restructuring process could become prolonged. Any merger would still require multiple approvals, including board approval, member and creditor approvals under Sections 230–232 of the Companies Act; NCLT sanction; and regulatory clearance, including from the Reserve Bank of India where applicable.

The proposed restructuring aims to ensure that the reorganised Tata Sons no longer falls under the NBFC/Core Investment Company (CIC) framework. However, whether that objective is achieved would depend on the final structure and RBI’s regulatory assessment, not on a unilateral decision by either Tata Trusts or Tata Sons, Mr. Sharma said.

A legal contest could delay both the restructuring plan and any alternative route, including a potential listing. It could also lead to judicial interpretation of the extent of Tata Trusts’ special governance rights under Tata Sons’ Articles.

“The issue is not merely whether Tata Trusts can direct Tata Sons. The real question is where decision-making power lies at each stage — with shareholders, the board under Tata Sons’ Articles, or statutory and regulatory authorities,” he said.

The Tata Trusts today reiterated their considered position that the decision of Mr. N. Chandrasekaran, Chairman of Tata Sons, not to offer himself for reappointment upon the conclusion of his current tenure on 20 February 2027, has been duly accepted and has attained finality.

On 12 August 2026, Mr. Chandrasekaran communicated to the Tata Sons Board, his own decision not to offer himself for reappointment — a decision that was freely taken, clearly expressed and not the outcome of any process of review, Tata Trusts said.

“It was made public without prior intimation or any deliberations with the shareholders of the company. Once such a decision has been publicly communicated, it has consequences which cannot be afterwards undone, since the Group’s employees, its lenders and counterparties, the market and the majority shareholder have all proceeded on it,” the statement added.

The Tata Trusts formally placed on record their acceptance of the decision the following day and advised Tata Sons to initiate the process for setting up a Selection Committee for appointing a successor, in accordance with the Articles of Association of Tata Sons, it added.

“The Trusts’ position remains unchanged, as a considered judgement of a majority shareholder. This position was reiterated in today’s board meeting by the Chairman, Tata Trusts. The resolution seeking to reappoint Mr. N. Chandrasekaran in the Board meeting today, with four Directors voting in favour, and Mr Noel Tata against, was a legal nullity in view of the provisions of the Articles of Association of Tata Sons,” the statement said.

It said the process for appointing a Chairman under the Article of Association requires a majority of the Trusts’ Nominee Directors voting in favour of the resolution.

“That process applies equally to a first appointment and to reappointing someone who already holds the office. The Board, accordingly, 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,” it said.

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Given that Mr. Noel Tata, being one of the Trust nominee directors, voted against the proposal, it was rendered legally void and without any basis, it stated.

Mr. Noel N. Tata further submitted a legal opinion obtained from Justice Dr. DY Chandrachud (former Chief Justice of India) regarding the correctness of the Trusts’ stand. The same was not taken note of by the Board, Tata Trusts said.

The Tata Trusts remain committed to ensuring an orderly and timely leadership transition in the long- term interests of Tata Sons and the Tata Group, it said.

The formation of the selection committee by Tata Trusts to choose the next chairman is likely to be delayed due to restrictions imposed by the Maharashtra Charity Commissioner on Sir Ratan Tata Trust (SRTT), which has been barred from convening any meeting or passing any resolution until the dispute over its board composition is decided. The next hearing in the matter is scheduled for September 8, 2026.

As per the Articles of Association (AoA) of Tata Sons, both Sir Dorab Tata Trust (SDTT) and SRTT have to jointly nominate three members to the five-member selection committee. One member will be from Tata Sons and one external member.

Since SRTT is under a regulatory ban, it cannot participate in the selection process for the time being, said analysts. And so the entire selection process will not move forward as desired, they added.

While SRTT owns 23.5% of Tata Sons, SDTT has 27.9%. 

A day after N Chandrasekaran, the Chairman of Tata Sons announced his decision not to go for the third term, SDTT passed a resolution to initiate the setting up of a selection committee as soon as possible in accordance with the AoA of Tata Sons, for the purpose of recommending a person for appointment as the new chairman of the Board of Directors. This has been interpreted as a move by SDTT to initiate the process though a decision on SRTT would come later.

Since Mr Chandrasekaran will continue as Chairman till February, 2027, there is time available to finalise the names of the selection committee..

It is believed that Maharashtra Charity Commissioner’s office maybe moved to allow SRTT to convene a meeting and pass a resolution in this matter, which is a procedural one needing urgent intervention rather than approving any budget and having any financial dealing..

According to people familiar with the development, the Tata Trusts may move the court to deal with this extraordinary situation.