Tata Trusts: The battle now shifts to Sir Ratan Tata Trust

There appears to be no let-up in the battle at Tata Trusts. After discord over the Trusts’ nominees on the board of Tata Sons, the holding company, now there are questions about compliance with a Maharashtra law that caps the number of lifetime trustees.

The most recent development pertains to an amendment to Section 30A(2) of the Maharashtra Public Trusts Act, 1950, which caps the proportion of lifetime trustees at 25% of the total board strength. However, at the Sir Ratan Tata Trust that has six trustees, three have lifetime status—the late Ratan Tata’s brother Jimmy N. Tata, Tata Trusts’ Chairman Noel Tata, and Jehangir HC Jehangir, Chairman of Jehangir Hospital in Pune—taking the proportion to 50%. That means, two lifetime trustees may have to step down to ensure compliance with the law.

All this came after a complaint was filed that the current composition of Sir Ratan Tata Trust violates the 2025 amendment to the Maharashtra Public Trusts Act. The issue gains significance since Sir Ratan Tata Trust holds 23.56% of Tata Sons shares. The other big trust, Sir Dorabji Tata Trust, holds 27.98%. Tata Sons is the holding company of the $180 billion conglomerate.  

“There has been an issue with the management of charitable trusts and more specifically in Maharashtra, with a classic case being Lilavati Hospitals,” says Shiju P.V., Managing Partner at India Law LLP. On the issue of the various entities under Tata Trusts, he thinks the respective deeds are likely to remain silent on the issue of proportion of life trusteeship. “If there is no provision, the trusts can always request to make an amendment.” At Lilavati Hospital, there have been multiple legal battles and issues of misappropriation of funds to the extent of Rs 1,500 crore.

The Maharashtra law applies to all charitable trusts in the state. Thus, the attention is likely to shift to Sir Dorabji Tata Trusts soon. Amit A. Tungare, Managing Partner at Asahi Legal is of the view that the likes of Tata Trusts will now function more like an independent corporate with higher levels of accountability and scrutiny. “Obviously, any decision that relates to appointing a trustee for life will be closely examined,” he says.