Bombay High Court to Address Legal Dispute Over Tata Share Transfers
Legal Challenge Against Tata Group Share Transfers
New Delhi: The Bombay High Court is poised to deliberate on a legal dispute regarding purported illegal share transfers associated with the Tata Group. This case is scheduled for a hearing today before a division bench led by Justice Advait Sethna and Justice Sandesh Patil. The issue originated from a legal notice filed by advocate Katyayani Agrawal on behalf of Suresh Tulsiram Patilkhede, targeting ten individuals linked to the Tata Group, including Noel Tata, Chairman of Tata Trusts, and N Chandrasekaran, Chairman of Tata Sons. The notice claims that a series of share transfers involving charitable trusts associated with the Tata family were executed unlawfully, resulting in financial detriment to the trusts and their beneficiaries.
Controversial 1989 Share Transfer
The focal point of this legal contention is a share transfer that took place in January 1989, involving 833 equity shares of Tata Sons, which were held by the Navajbai Ratan Tata Trust (NRTT) and transferred to Naval Tata, the father of the late Ratan Tata and Noel Tata. The notice asserts that these shares were transferred without any financial compensation shortly after Naval Tata stepped down as a trustee of NRTT. It contends that there was no board resolution to authorize this transfer and no proof that the trust gained any benefit from relinquishing the shares, rendering the transaction legally invalid. These shares originated from a corpus donation made by SRTT in December 1974, just a week after NRTT was established, and increased to 833 shares following bonus shares received in 1979, with a book value estimated at Rs 7.79 lakhs at that time.
Concerns Over Trust and Corporate Governance Violations
The complaint further alleges that following Naval Tata’s passing in 1993, the shares transitioned into private family ownership through inheritance by Simone Tata and her children—Ratan, Jimmy, and Noel Tata—constituting an unlawful diversion of trust assets. It claims breaches of the Companies Act, the Articles of Association of Tata Sons, and the trust's stated objectives. The notice also highlights Ratan Tata's involvement as a related-party transaction due to his role as one of the settlors of NRTT. In addition to Noel Tata and Chandrasekaran, Neville Tata is also named among the individuals served with the notice. The complainant has requested the restoration of the alleged losses within a 15-day timeframe, failing which civil and criminal actions may be pursued.