MUMBAI: Former chief justice of India D Y Chandrachud has opined that Tata Sons cannot validly reappoint N Chandrasekaran as executive chairman without the majority support of Tata Trusts’ nominee directors. The legal opinion, obtained by Trusts, centres on the interpretation of Tata Sons’ Articles of Association and the interaction between the special voting rights enjoyed by the Trusts’ nominee directors and the chairman’s casting vote.Trusts chairman Noel Tata voted against reappointing Chandrasekaran while vice-chairman Venu Srinivasan backed it. The deadlock among nominee directors was broken when independent director Harish Manwani, who chaired the meeting for the resolution, exercised a casting vote.In his opinion, Chandrachud said, “The affirmative vote of the nominee directors is an independent and standalone requirement and operates on a wholly different plane from the chairperson’s casting vote which is designed to resolve a tied vote among all directors of the board taken cumulatively.” He added that the chairperson’s casting vote is only applicable where there is an equality of votes among two factions of the board as a whole, and not among two specific directors, whether they be nominee directors or not.Applying this to Chandrasekaran’s reappointment, Chandrachud found the resolution invalid because only one of the two nominee directors backed it. “Given that one of the two nominee directors has not voted in favour of the resolution, the requirement that a majority of nominee directors support the resolution has not been satisfied.”
