As the dispute with Tata Sons escalates, Tata Trusts appointed senior advocate Abhishek Manu Singhvi for legal representation following the reappointment of N Chandrasekaran as chairman and support for listing by the Tata group holding company.
Singhvi, taking it to social media post on X, said, in the current case, the fundamental rights of the shareholder-owners “cannot be nullified”.
“To stultify shareholder ownership rights would spell doomsday for corporate governance across hundreds of Indian companies,” Singhvi said in a post on X.
Singhvi said he is entering the fray with “sadness and regret” as he had worked closely with the late Ratan Tata and also knew all the principal actors on both sides of the case.
“To stymie democratic intra-Trust decision-making by Tata Trusts by putting a sudden and completely unwarranted fetter on even their convening for a meeting is another matter of patent legality. Rupturing the over hundred years of Tata Trust and Tata Sons established hyphenated relationship and divorcing one from the other seems unthinkable. Ignoring the unvarying precondition of Trust unanimity in voting & the clear veto in provisions applied without cavil for decades appears patently unjustified,” he added.
Citing a previous Supreme Court judgement in the Tata-Mistry case, where he said the top court “clearly gave Tata Trusts the primacy” in its relationship with Tata Sons.
“Sadly, the Supreme Court judgement in Tata-Mistry which clearly gave Tata Trusts primacy in the relationship with Tata Sons, upheld the special Articles in this regard in the Tata Sons articles and spoke of the fiduciary duty to millions of Indians, seems to have been selectively forgotten. Unfortunately, in the absence of collegiality and conviviality, these and many other related issues can only have legal solutions,” he added.
What legal experts say?
On the legal options available with the Tata Sons after the Reserve Bank of India (RBI) order on listing, and filing caveat later in the Bombay High Court, in an interaction with Times Now Digital, Anuroop Omkar, Managing Partner – AK & Partners said, “Tata Group has two broad paths forward. On litigation, a writ petition under Article 226 before the Bombay High Court can challenge the rejection as arbitrary, though interim relief will be contested given RBI’s caveat.”
“Structurally, under Paragraph 29 of the RBI (NBFC-Registration, Exemption and Framework for Scale-Based Regulation) Directions, 2025, Tata Sons could pursue a “voluntary strategic move”, restructuring group holdings to fall outside CIC/NBFC-UL criteria, though RBI requires this to be a genuine readjustment, not a repackaged attempt to avoid listing. This is distinct from Tata Sons’ earlier application to surrender its CIC registration. A commercial settlement with SP Group remains a separate track worth exploring.”
The Roots Of The Legal Dispute:
The legal escalation comes after the Tata Sons board on September 17 approved a fresh five-year term for Chandrasekaran. According to Tata Sons, Chandrasekaran agreed to reconsider his earlier decision not to seek another term after the board’s nomination and remuneration committee requested him to continue.
A second major point of contention is the proposed listing of Tata Sons. The company has said it will initiate steps to comply with applicable Reserve Bank of India requirements and seek guidance from the central bank, Tata Trusts and other stakeholders.
The listing question gained urgency after the RBI declined Tata Sons’ request to surrender its registration as a Core Investment Company, keeping the regulatory framework around a potential public listing in focus.
Can Tatas challenge RBI’s decision?
Anuroop Omkar, Managing Partner – AK & Partners, said, “Yes, the RBI’s decision is amenable to judicial review under Article 226 of the Constitution of India. The relevant consideration would be whether the Reserve Bank of India followed a fair, reasoned, and non-arbitrary decision-making process in accordance with Section 45-IA of the RBI Act, 1934 and the RBI (Core Investment Companies) Directions, 2025, and whether its regulatory framework was applied consistently. In exercising judicial review, courts generally focus on the legality and procedural fairness of the decision-making process rather than re-evaluating the merits of the decision itself.”
“Any challenge would therefore be assessed on the basis of the factual record, the reasoning set out by the RBI, and the extent to which the applicable statutory and regulatory requirements were complied with.”