Recently, the Maharashtra government has increased the stir in the country's oldest industrial house Tata by making changes in the Public Trust Act. People familiar with the matter said that Tata Trusts is now evaluating the status of 'permanent trustees' in the two major trusts in view of the changes in Maharashtra's Public Trust Act.
This change has limited the number of such appointments, increasing the possibility of legal challenges to their board decisions. A new section 30A(2) has been added to the Maharashtra Public Trusts (Amendment) Ordinance, 2025. Under this, where there is no mention or any special provision regarding the appointment of a permanent trustee in the trust document, the number of permanent trustees has been limited to one-fourth of the total number of the trust.
This will have a direct impact on Sir Ratan Tata Trust (SRTT) and Tata Education and Development Trust (TEDT), where at least half of the trustees have permanent status. This new rule has come into effect from September 1 last year, and under it it is mandatory for all existing trusts to follow this limit at all times.
Officials said there could be legal consequences on the validity of decisions taken by the boards of SRTT and TEDT. SRTT currently has five trustees, three of whom have permanent status – Jimmy Tata, Noel Tata and Jahangir. Jimmy has been serving since 1989, while Noel and Jahangir joined in 2019. Similarly, TEDT has three life trustees – Jahangir Mistry, Mehli Mistry and Noel Tata. The tenure of Venu Srinivasan and Vijay Singh will come up for renewal in June.
TEDT does not have any stake in Tata Sons, but it manages a large amount of capital. SRTT holds about 23.56 per cent stake in Tata Sons, while Sir Dorabji Tata Trust (SDTT) holds 27.98 per cent. However, no official statement has come out from Tata Trusts on this.
Meanwhile, PIL petitioner lawyer Katyayani Aggarwal has written a letter to SRTT urging it to take immediate corrective action. In his letter, Agarwal said he submitted a detailed representation to the Charity Commissioner of Maharashtra on Saturday, drawing attention to the alleged violation of Section 30A(2) of the Maharashtra Public Trusts Act, 1950.
He said the trust currently has six trustees, out of which three are “permanent/life trustees”, which is 50 per cent of the total strength of the board. According to him, this is a “direct violation” of the legal provision under which the number of permanent trustees “should not exceed one-fourth of the total number of trustees.”
He said the continuation of the existing board structure is not only illegal, but it also defeats the legislative purpose of preventing concentration of a small group of lifetime trustees and ensuring greater accountability in the management of public charitable trusts.
Aggarwal urged the Trust to call an emergency meeting of the Board within the next seven days and propose to the Board that as per the law, the number of lifetime trustees should be reduced to no more than one.
Under the amendment made to Maharashtra's Public Trust Act, new rules have also been implemented for tenure-based trustees. These also include a tenure limit of five years, which will be applicable in cases where there is no clear mention in the trust deed (document) about the period of tenure or reappointment. Some believe that these changes are a part of broader efforts to strengthen governance-administration in charitable institutions. Venu Srinivasan's reappointment as life trustee of SRTT in October was reconsidered in view of the revised legal position, people familiar with the situation said.
Uday Ved, partner, global tax and advisory firm KNAV, said that if the trustees have the power to amend the trust deed, then it can be examined whether a trustee can be named as a 'permanent trustee' by amending the deed. After this, the amended deed will have to be submitted to the Charity Commissioner. Another option would be to increase the total number of trustees, if possible, to meet the 'one-fourth' limit.
Ved said that in the statement issued along with the ordinance, it has been mentioned that several cases related to permanent/life trustees versus tenure-based trustees are pending before the Charity Commissioner and courts. He further said that this impacts the functioning of the trusts, the welfare of the beneficiaries and the general public. This change will help resolve these issues and ensure smooth functioning of public trusts.
Legal experts say that the purpose of this amendment is to reduce centralization of control, promote the process of including new members in the board from time to time, and strengthen accountability and succession planning. For the Tata Trusts—which collectively hold 66 per cent of Tata Sons—the development could become the basis for a comprehensive review of trustee appointments and governance structures.
Sohil Shah, partner at law firm Pioneer Legal, said in an ET report that the Maharashtra government aims to reduce the ongoing litigation that has created hurdles in the functioning of important public trusts like the Tata Trusts. He said the purpose of this structural change is to promote greater internal accountability and reduce the administrative burden on the Charity Commissioner. Commissioners have historically been embroiled in complex and interpretive disputes that have dragged on for years.
