Sir Ratan Tata Trust (SRTT), one of the two principal Tata Trusts and a major shareholder in Tata Sons, has written to the Maharashtra Charity Commissioner seeking urgent relief from an order restraining it from holding meetings, saying around Rs 400 crore of grants are currently held up and the impasse could also affect the declaration of Tata Sons’ annual dividend, people familiar with the matter told Moneycontrol.
In a letter sent to the Charity Commissioner on Friday morning, SRTT sought removal of the restriction, arguing that its inability to convene trustee meetings is beginning to affect its philanthropic activities as well as its ability to participate in key shareholder decisions at Tata Sons, the people cited above said.
According to the letter, grants and disbursements aggregating around Rs 400 crore are awaiting decisions because SRTT cannot convene meetings to consider and approve them. The trust has argued that the restriction is consequently hampering its ability to carry out its philanthropic activities, the people cited said.
SRTT has also drawn the Charity Commissioner’s attention to the forthcoming annual general meeting of Tata Sons, scheduled for August 18, and the potential implications of the current restrictions for the holding company’s annual dividend.
The dividend issue is significant because Tata Sons’ payouts have risen sharply in recent years and constitute an important source of funding for the philanthropic activities of Tata Trusts.
Tata Sons’ board has recommended a dividend of Rs 1,10,717 per ordinary share for FY26, entailing an aggregate payout of around Rs 4,475 crore, subject to shareholder approval at the AGM. This compares with a dividend payout of Rs 2,622.91 crore for FY25 and Rs 1,414.51 crore for FY24.
Tata Trusts collectively own around two-thirds of Tata Sons and are therefore the principal beneficiaries of the holding company’s dividend distributions. The income received from Tata Sons helps fund the trusts’ philanthropic programmes across healthcare, education, livelihoods and other areas.
SRTT has argued that the restriction on its ability to meet could complicate the process through which the principal Tata Trusts participate in Tata Sons’ shareholder meetings, sources said.
Quorum Requirements for AGM
Tata Sons’ Articles of Association contain an unusual quorum requirement. Article 86 requires the presence at a general meeting of an authorised representative jointly nominated by SRTT and Sir Dorabji Tata Trust (SDTT), provided the trusts continue to meet the stipulated shareholding threshold.
With SRTT currently unable to convene a meeting, uncertainty has arisen over how it can participate in the process of nominating such a representative for the August 18 AGM.
The issue assumes greater significance because the dividend recommended by the Tata Sons board requires shareholder approval at the AGM. SRTT has argued that its inability to participate in the process could potentially affect approval of the dividend and, consequently, the flow of funds available for philanthropic activities, the people cited above said.
Chandra reappointment in focus
The August 18 AGM has assumed further significance because Tata Sons Chairman N Chandrasekaran is due to retire by rotation as a director and seek shareholder approval for his reappointment.
Moneycontrol had earlier reported that the restrictions on SRTT could test Tata Sons’ unique governance framework when Chandrasekaran’s reappointment comes before shareholders.
Chandrasekaran joined the Tata Sons board in October 2016 and took over as chairman in February 2017. His current term as chairman runs until February 2027. His continuation as a director, however, is separately subject to the retirement-by-rotation provisions applicable to the Tata Sons board.
While such reappointments have ordinarily been routine, the restriction on SRTT has introduced an unusual complication because one of Tata Sons’ two principal trust shareholders is currently unable to convene a meeting to deliberate and take decisions ahead of the AGM.
Article 87 of Tata Sons’ Articles provides for adjournment of a general meeting in the absence of the prescribed quorum. However, as Moneycontrol reported earlier, the Articles do not expressly address whether an adjourned meeting can subsequently proceed if the Article 86 requirement concerning the jointly nominated representative of SRTT and SDTT remains unmet.
How the dispute began
The restrictions on SRTT stem from complaints over the composition of its board of trustees and whether the number of permanent trustees complies with the Maharashtra Public Trusts Act.
The first complaint was filed on April 18 by advocate Katyayani Agarwal on behalf of Suresh Tulsiram Patilkhede, alleging that the composition of SRTT violated Section 30A(2) of the Maharashtra Public Trusts Act, 1950, as amended in 2025.
The complaint contended that three of SRTT’s six trustees — Jimmy Tata, J N Mistry and Noel N Tata — were permanent or lifetime trustees, amounting to 50 percent of the board, against what the complainant argued was a statutory ceiling of 25 percent. The complaint sought an inquiry and corrective action from the Charity Commissioner.
A second complaint was filed on April 28 by Venu Srinivasan, vice-chairman of Tata Trusts and himself a trustee of SRTT, raising concerns over the composition of the trust and seeking regulatory intervention.
The Charity Commissioner subsequently initiated proceedings. On May 15, the authority directed that an SRTT meeting scheduled for May 16 be deferred and that the trust should not convene further meetings pending the proceedings.
Tata Trusts had disputed the interpretation underlying the complaints, maintaining that the 2025 amendment was prospective and did not affect appointments of permanent trustees made before the amendment came into force.
An email sent to Tata Trusts seeking comment remained unanswered at the time of publication
SRTT flags ex-parte order
SRTT has now also questioned the manner in which the Charity Commissioner’s restriction was imposed.
According to people familiar with the latest letter, the trust has pointed out that it had filed a caveat before the Charity Commissioner. Despite this, SRTT has said, the direction preventing it from holding meetings was issued ex parte without the trust being heard.
Tata Trusts had made a similar contention after the May order, maintaining that SRTT had not been afforded a hearing before the direction was issued.
The restriction has now taken on wider significance as the Tata Sons AGM approaches. While SDTT remains able to convene meetings and take decisions, SRTT currently cannot, creating uncertainty over how the two principal trusts can jointly nominate the authorised representative contemplated under Tata Sons’ Articles.
