Tata Trusts File Caveats With Maharashtra Charity Commissioner Following Complaint by Venu Srinivasan

Six Tata Trusts, which collectively own 66 percent of Tata Sons, filed caveats before the Maharashtra charity commissioner on Wednesday. The legal move is aimed at preventing any adverse orders from being passed against them without their side being heard first.

The filing follows a complaint submitted on September 24 by vice-chairman Venu Srinivasan. In his complaint, Srinivasan accused the Sir Dorabji Tata Trust (SDTT) of interfering in the commercial and strategic affairs of Tata Sons, the holding company of the Tata group, and straying beyond its charitable mandate. This dispute comes after a September 17 resolution by the Tata Sons board supporting N Chandrasekaran for a third term as chairman.

Legal Preemptive Measures by Tata Trusts

By filing the caveats, the Tata Trusts are seeking to avoid a situation similar to an ex parte order issued by the charity commissioner in May. That previous order barred the Sir Ratan Tata Trust (SRTT), the second-largest shareholder in Tata Sons, from holding board meetings. The May order was issued after Srinivasan complained that the composition of SRTT's board violated the Maharashtra Public Trusts Act.

To prevent a similar outcome, SDTT, which is the largest shareholder in Tata Sons, along with five other Tata Trusts, filed caveats under Sections 41D, 41E, and 47 of the Maharashtra Public Trusts Act. Sections 41D and 47 govern the removal of trustees and the suspension of the board, while Section 41E relates to restraining dealings in trust property.

In his latest complaint, Srinivasan requested the charity commissioner to initiate an inquiry into the governance of SDTT. He also urged the commissioner to bar SDTT from holding board meetings, freeze any changes to its board, and reserve the option to suspend or remove its trustees if violations are established.

According to Tata Group observers, if the orders sought by Srinivasan are granted, they could incapacitate SDTT. With SRTT already restricted by the May ban, both SDTT and SRTT would be constrained from functioning normally and exercising their shareholder rights in Tata Sons on critical matters.

Allegations of Commercial Interference

Srinivasan's complaint also targeted the role of Noel Tata. Srinivasan requested directions from the charity commissioner to require Noel Tata to recuse himself from decisions regarding the appointment of nominees to Tata Sons’ Annual General Meetings (AGMs). He also sought to bar Noel Tata from exercising the Trusts' voting rights at those meetings and to prevent him, as a nominee director, from participating in Tata Sons board decisions.

To support his allegations of interference, Srinivasan pointed to Noel Tata's involvement in discussions concerning liquidity for the Shapoorji Pallonji (SP) Group and a proposal to monetise a portion of its stake in Tata Sons. Noel Tata had reportedly sought authorisation for the Tata Sons operating team and the Trusts to continue negotiations with the SP Group and bankers. Srinivasan argued that this involvement represents the Trusts taking a direct role in substantial commercial transactions of Tata Sons.

Additionally, Srinivasan cited the Trusts' public opposition to a potential listing of Tata Sons. He stated that the Trusts had resolved that Tata Sons should remain unlisted and instructed the company to implement this stance. Srinivasan also alleged that SDTT attempted to influence his independent judgment as a nominee director of the Trusts on the Tata Sons board. He noted that a resolution was circulated earlier this month to prevent him from participating in or voting on the proposed listing, describing the action as an attempt to suppress dissenting views and concentrate decision-making power among a smaller group of trustees.

Objections to Governance and Tax Implications

Srinivasan further questioned the basis of Noel Tata's chairmanship of the Trusts and raised concerns regarding the appointment of his son, Neville Tata, to the SDTT board in November 2025, citing his own exclusion from the decision-making process.

Srinivasan argued that the active involvement of the Trusts in the commercial affairs of Tata Sons could jeopardize their income-tax exemptions. This exposure could subject them to tax on accreted income, which he warned could have immense consequences for SDTT's charitable corpus given the substantial value of its holding in Tata Sons.

The ongoing legal disputes have also impacted the governance of Tata Sons. The prior May order against SRTT has already created uncertainty regarding the Tata Sons AGM. Under the company's Articles of Association, SDTT and SRTT must jointly appoint a nominee to represent their shareholding before an AGM can be conducted. Because of the active restrictions on SRTT, it cannot participate in this process. The upcoming AGM is required to approve the continuation of N Chandrasekaran as a director of Tata Sons, an outcome that the Trusts, excluding SRTT, hold the voting power to influence.