Tata Sons plans AGM within a month, but Tata Trust restrictions may pose a hurdle

Tata Sons is planning to hold its annual general meeting (AGM) within the next month, but a continuing dispute over the participation of the Sir Ratan Tata Trust (SRTT) could once again create a hurdle for the meeting, reported The Economic Times.The AGM is significant because it will have to take up the reappointment of N Chandrasekaran as a director of Tata Sons, a matter that has already exposed differences between Tata Trusts chairman Noel Tata and the rest of the Tata Sons board.The company's previous AGM, scheduled for August 18, was deferred after the required quorum was not available. Tata Sons has since received a three-month extension from the Registrar of Companies to hold the meeting. economictimes.indiatimes.com-TaIf the quorum problem continues, Tata Sons could approach the National Company Law Tribunal (NCLT) for directions to convene the AGM, the ET report said, citing people familiar with the matter. WHY THE AGM MATTERSThe meeting comes against the backdrop of a wider disagreement within Tata Sons.At a board meeting last week, two major issues led to a conflict between Noel Tata and the rest of the board — Chandrasekaran's reappointment as chairman and the listing of Tata Sons. According to the report, both proposals were opposed by Noel Tata but backed by the other directors. Chandrasekaran's reappointment as a director requires shareholder approval at the AGM. The latest development therefore puts the meeting at the centre of the ongoing dispute.Executives familiar with Tata Sons' Articles of Association told ET that if the AGM cannot be constituted because of a lack of quorum, Chandrasekaran would continue as a director until a valid AGM is held at which his reappointment can be considered.WHY TATA SONS COULD STRUGGLE TO GET QUORUMThe immediate problem is linked to restrictions on SRTT.The Maharashtra Charity Commissioner has not lifted restrictions on SRTT to hold meetings or take decisions. SRTT is one of the two Tata Trusts that together hold a majority stake in Tata Sons.Because SRTT remains restricted, a jointly appointed representative of SRTT and the Sir Dorabji Tata Trust (SDTT) could not participate in the earlier AGM, resulting in the lack of quorum.Tata Sons' Articles of Association require at least five members to be personally present for a general meeting. The quorum must also include an authorised representative jointly nominated by SDTT and SRTT as long as the Tata Trusts together hold at least 40% of Tata Sons' paid-up ordinary share capital.SDTT holds 27.98% of Tata Sons, while SRTT holds 23.56%. Together, they hold 51.54%. Other philanthropic Tata trusts take the overall charitable trust ownership to around 66%, according to the report.WHAT HAPPENED AT THE PREVIOUS AGM?The August 18 AGM could not proceed because the required quorum was not available.The company subsequently secured a three-month extension from the Registrar of Companies. Tata Sons now plans to convene the AGM again within a month.But unless the restrictions on SRTT change, the same quorum issue could arise again.This is why the company is considering a legal route through the NCLT if the required quorum cannot be constituted.CAN NCLT ALLOW THE AGM TO GO AHEAD?Section 97(1) of the Companies Act gives the NCLT the power to direct that an AGM be held and determine how it should be called, held and conducted.Legal experts cited by ET said this could potentially allow Tata Sons to proceed with the meeting despite the quorum problem. The tribunal has the power to facilitate a shareholders' meeting, including deeming even one member present in person or by proxy as constituting the meeting.However, such an order would not override the Maharashtra Charity Commissioner's restrictions on SRTT, according to legal experts quoted in the report. The NCLT's powers under company law and the Charity Commissioner's powers over SRTT operate under separate statutory regimes.That leaves open another legal question: whether an AGM conducted through an NCLT order could itself face a challenge.Vimal Taparia, partner at Morphis Management Services, told ET that an affected shareholder could challenge the AGM or resolutions passed at it, potentially opening another legal battle over the validity of the meeting and its decisions.- EndsPublished On: Sep 24, 2026 12:33 IST