N Chandrasekaran’s third term as Tata Sons chairman faces questions over the company’s appointment rules. The dispute centres on its Articles of Association (AoA), particularly Article 118. These articles govern how the company selects its chairman and grants executive powers.
Lawyer Gaurav Pingle spoke to Mint Money about the AoA as a contract between companies and members. In this case, three articles help explain the disagreement: Articles 118, 121 and 105.
Article 118 requires a selection committee to recommend a candidate for chairman. The board can appoint that candidate only if Article 121 permits it.
That article requires support from a majority of Tata Trusts’ nominees. Article 105 allows the board to decide the chairman’s pay and management powers.
Simply put, Article 118 concerns the selection of the chairman. Article 105 concerns giving that chairman executive responsibilities. Their connection matters because Chandrasekaran’s earlier appointment and reappointment specifically referred to both articles.
The January 2017 resolution cited Articles 118 and 105. The February 2022 reappointment resolution also named both provisions. However, the latest filing refers generally to the AoA. It does not name any of these specific articles.
The latest resolution grants another five years as executive chairman. His proposed term runs from 21 February 2027 to 20 February 2032. It also gives him substantial management powers.
Lawyer H P Ranina said Tata Sons should explain which articles supported its decision.
“They can’t break away from the past practice. If the appointment and reappointment happened under Article 118 to be read with Article 105, and the same was communicated to the MCA, then needs to clarify what Articles were relied on when it reappointed the Chairman and why the specific Articles have not been disclosed,” the senior Supreme Court lawyer said.
According to Pingle, the general wording could provide more grounds for challenging the reappointment. However, he noted that few provisions of the Companies Act would require resolutions to identify specific articles.
The key question remains whether Tata Sons followed its own rules. For Chandrasekaran’s third term, the selection process and the approval of the Trust’s nominees remain crucial.
What Noel Tata says
Tata Trusts chairman argues that Article 118 applies to reappointments, too. He says that the company followed this provision in 2022 but changed its approach in 2026. No new selection committee was formed for Chandrasekaran’s latest reappointment.
The voting process has also become a central concern. At the 17 September meeting, Noel opposed the reappointment. Venu Srinivasan, the other Trusts nominee, supported it. Harish Manwani then used his casting vote to clear the reappointment.
Tata Trusts argues that the required majority among its nominees was missing. It, therefore, considers the reappointment decision invalid. Tata Sons has defended its process by citing legal advice.
Noel later wrote that the entire process had gone against the company’s articles. He also said the 2022 meeting records were not presented before the board. Those records, he argued, showed that Article 118 had governed the earlier reappointment.