A significant corporate power struggle at India's largest conglomerate, Tata Sons, is escalating into an unavoidable legal confrontation. Two of the country's most prominent legal minds, Senior Advocates Abhishek Manu Singhvi and Harish Salve, have publicly articulated sharply opposing views on corporate governance, shareholder rights, and board independence.
The Core Dispute: Chandrasekaran's Reappointment
The friction erupted following the Tata Sons board's decision to reappoint N Chandrasekaran for a second five-year term as Chairman. The vote passed 4-1, with Noel Tata, Chairman of Tata Trusts—the controlling 66% stakeholder—voting against the reappointment. Venu Srinivasan, the second Trust-nominated director, voted in favor, creating a split within the Trust's representation that is central to the disagreement.
Singhvi's Stance: Shareholder Prerogative
Representing Tata Trusts, Abhishek Manu Singhvi argues that Chandrasekaran's reappointment is legally invalid without the affirmative support of a majority of the Trust-nominated directors, as mandated by Article 121 of Tata Sons' Articles of Association.
"What has happened is that you cannot have a runaway board which decides things with the active disagreement of 66% shareholders," Singhvi stated, emphasizing the principle of shareholder-owner privacy. "The issue is about the privacy of a 66% collective called a trust. How is the runaway board allowed to run independently of its 66% owner? Then you would have disastrous consequences of corporate governance across the country."
Singhvi highlighted that the Articles of Association were amended in 2014 to require a majority of Trust nominees for such decisions, asserting that a 1:1 split effectively acts as a veto. He also invoked the 2021 Supreme Court ruling in the Cyrus Mistry litigation, which upheld the special rights of Tata Trusts' nominee directors.
Salve's Counter: Fiduciary Duties and Governance
Advising Tata Sons and Chandrasekaran, Harish Salve contends that focusing on whether the board can override shareholders distracts from crucial procedural clarity and governance duties. Salve points to casting-vote provisions under Article 121, arguing that an internal split among nominees cannot lead to a company deadlock.
"They are a global institution. A global institution cannot be run by three trustees saying we want it to go by our culture, what culture are we talking about?" Salve remarked. "Today, in the day and age of transparency, an institution must refresh itself from time to time and the best talent must run this institution for the sake of not just the company, not for the shareholders, but for India."
Salve stressed that nominee directors have fiduciary obligations directly to Tata Sons, rather than merely acting as proxy delegates for the Trusts.
Public Listing and Regulatory Path
Beyond the board vote, the senior counsels hold divergent views on Tata Sons' regulatory trajectory, specifically its path toward becoming a public company after the Reserve Bank of India (RBI) declined to deregister it as an upper-layer Non-Banking Financial Company (NBFC).
- Singhvi's View: He characterized the public listing discussion as an "unhelpful distraction" from the primary procedural dispute regarding the Chairman's appointment. Singhvi underscored the importance of protecting the group's philanthropic architecture, ensuring that all proceeds from Tata Sons are directed towards charitable work.
- Salve's View: Salve framed compliance and public listing as essential indicators of modern corporate accountability for an enterprise of Tata Sons' systemic importance. With the Tata Group valued at $270 billion, he argued that regulators have a right to expect adherence to certain standards when companies reach such a scale.
An Unavoidable Legal Showdown
Both advocates acknowledge that the dispute has moved beyond informal resolution. Singhvi expressed regret that the situation has escalated but conceded that a legal battle now appears "irreversible." The stage is set for a protracted legal confrontation that will likely delve deep into India's corporate law and governance principles.