Stories
Justice Nariman: Tata Trusts Can't Dictate Nominee Votes on Board
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CNBC TV18•24-09-2026, 16:23
Justice Nariman: Tata Trusts Can't Dictate Nominee Votes on Board
- •Former Supreme Court Justice Rohinton F Nariman opined in 2025 that Tata Trusts cannot compel their nominee directors to vote on command, citing the Companies Act, 2013, and the Supreme Court's 2021 Tata-Mistry judgment.
- •The opinion arose after a split vote on the Tata Sons board, where Tata Trusts' nominee Noel Tata voted against N Chandrasekaran's reappointment, while fellow nominee Venu Srinivasan voted for it.
- •Justice Nariman examined a draft protocol that would have required nominee directors to consult trustees and vote according to their guidance, with non-compliance leading to removal.
- •He stated that such a protocol would contradict Section 166 of the Companies Act, which mandates directors to act in the company's best interests and exercise independent judgment, despite their role as nominee directors.
- •The Trusts are challenging Chandrasekaran's reappointment, arguing that Article 121 of Tata Sons' Articles of Association requires the affirmative vote of a majority of their nominee directors, which they interpret as both directors.
Key Questions Answered
Former Supreme Court judge Justice Rohinton F. Nariman opined that Tata Trusts cannot require their nominee directors to vote according to trustee guidance on pain of removal, as it violates the Companies Act, 2013 and directors' duties under Section 166.
At the September 17 meeting, Tata Trusts nominee directors Venu Srinivasan voted in favour of reappointing N. Chandrasekaran as executive chairman, while Tata Trusts chairman Noel Tata voted against it.
Tata Trusts argue that Article 121 requires board decisions to carry an affirmative vote from a majority of their nominee directors. With Noel Tata dissenting and Venu Srinivasan supporting, they claim the required majority of two was not met.
