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Chandra's directorship dispute could pose legal risk for Tata Sons: Experts
The comments come after the Tata Sons board approved N Chandrasekaran's reappointment as chairman for another five years despite opposition from Tata Trusts Chairman Noel Tata.
5 min read Last Updated : Sep 17 2026 | 11:13 PM IST
N Chandrasekaran’s reappointment as chairman of Tata Sons for five years on Thursday with a pending shareholder decision on his directorship could risk the board of directors’ future decisions to legal challenges but not all of it will automatically be void, law experts said.
A person can ordinarily be appointed or reappointed as chairman of the board only if he is a validly subsisting director, particularly where the company’s articles of association or charter contemplate the chairman as the head of the Board, experts said.
However, a defect in the underlying directorship does not necessarily render every act retrospectively void, they added.
The comments come after the Tata Sons board approved N Chandrasekaran’s reappointment as chairman for another five years despite opposition from Tata Trusts Chairman Noel Tata. The Trusts disputed the validity of the decision under Tata Sons’ Articles.
The issue assumes significance as Chandrasekaran’s directorship was to come up for consideration at the Tata Sons annual general meeting (AGM), which was adjourned in August for want of quorum. The Registrar of Companies subsequently extended the deadline for the AGM to December 31.
“The Companies Act, 2013 does not separately regulate the office of ‘Chairman of the Board’. The Act regulates directors, Board constitution and Board proceedings,” said Rohit Jain, Managing Partner, Singhania & Co.
Jain said Secretarial Standard-1 contemplates directors electing “one of themselves” as chairman where there is no standing chairman, indicating that chairmanship ordinarily presupposes Board membership.
“Where the Articles describe the office as ‘Chairman of the Board of Directors’, valid and subsisting directorship is ordinarily an implied condition precedent,” he said.
Tushar Kumar, Advocate, Supreme Court of India, said the principle assumes particular importance in Tata Sons because Article 118 specifically deals with appointment of the “Chairman of the Board of Directors” and provides for a Selection Committee mechanism, with the Board empowered to appoint the person recommended, subject to Article 121.
“If the constitutional architecture requires the Chairman to occupy the office as a member of the Board, the validity and continuity of the underlying directorship cannot sensibly be treated as an incidental consideration,” Kumar said.
Tarun Sharma, Principal Associate, Bahuguna Law Associates, said where the directorship itself is under challenge, a chairman’s reappointment would be exposed to a challenge that the Board had appointed someone not legally entitled to constitute or preside over it.
“The precise position, however, would depend upon the company’s Articles and the nature of the defect alleged in the directorship,” Sharma said.
He added that a Board resolution passed while the directorship remained unresolved would carry “significant legal risk” and could be challenged on that basis.
The experts, however, cautioned against treating such a defect as automatically invalidating all acts performed by the chairman.
Kumar pointed to Section 176 of the Companies Act, which protects acts done by a person as director despite a defect or disqualification in his appointment that is subsequently noticed, subject to the statutory conditions.
“If the directorship is ultimately determined adversely, the continued entitlement to occupy the Chair may fail with the underlying office; but questions concerning acts already undertaken would require separate examination under Section 176, the Articles and the precise nature and timing of the defect,” he said.
“It would therefore be legally imprecise to suggest either that everything automatically becomes void ab initio or, conversely, that an antecedent Board resolution conclusively insulates the chairmanship from challenge,” Kumar added.
Ekta Rai, Advocate, Delhi High Court, said the Companies Act does not create a separate statutory office of chairman and the Articles consequently assume significance.
“In Tata Sons, the Articles contemplate the Chairman being appointed from within the Board, which makes a subsisting directorship an important prerequisite to occupying that office,” Rai said.
She said any resolution would also have to comply with the Articles, including provisions concerning nominee directors. “A resolution passed contrary to those provisions could be challenged as being beyond the Board’s authority,” she said.
The dispute is further complicated by Chandrasekaran’s August 12 communication that he would not seek another term after February 20, 2027. Tata Trusts subsequently accepted that position and sought commencement of the succession process under the Articles.
Sharma said the subsequent reappointment could invite scrutiny over “the competence of such a resolution, its adherence to the Articles of the Company, and whether the board’s decision constitutes a procedural irregularity or a colourable exercise of power.”
The controversy comes as Tata Sons also moves towards listing after the Reserve Bank of India rejected its request to surrender its Core Investment Company registration.
The immediate legal questions are therefore whether Chandrasekaran’s directorship remains valid, whether the Article 118 appointment mechanism was followed and whether the requirements under Article 121 were satisfied.