Mistry’s criminality claims may struggle to hold in Tata Trusts row

“Proving criminality in this case will be very difficult. At most, one may be able to establish negligence (on the part of Singh and Srinivasan),” senior Supreme Court Advocate H P Ranina said.

He, however, agreed on the points regarding lapses in corporate governance made in the affidavit. “Not holding trust meetings for two years amounts to dereliction of duties on the part of the trustees,” Ranina said, adding that trust accounts must be filed every year with the charity commissioner.

What did Mistry allege?

In his missive, Mistry alleged that Singh and Srinivasan were ineligible to be trustees of the Bai Hirabai Jamsetji Tata Navsari Charitable Institution (BHJTNCI) as they did not meet trust deed criteria.

Despite this, they acted as trustees, voted on resolutions, and exercised control over trust affairs, which he claimed amounts to fraud, misrepresentation, and criminal breach of trust.

Mistry’s claim of ineligibility rests on a stipulation in the trust deed requiring trustees to be of Parsi Zoroastrian faith and residing somewhere in the Bombay Presidency (the deed was formulated in 1923, before the split of the Presidency into present day Maharashtra and Gujarat) or Navsari.

Proving criminal intent based on these arguments will be a tough ask, Ranina observed. “As trustees, one is expected to know the stipulations set out in the trust deed. However, Singh and Srinivasan can claim they did not read the deed and accepted the nomination/ appointment from the existing trustees in good faith,” he added.

This would amount to accepting negligence, but not criminal intent.

BHJTNCI is part of the Sir Ratan Tata Trusts and Allied Trusts. Srinivasan has since resigned from the trust in question citing personal reasons, though he continues to serve on other trusts under the Allied Trusts umbrella.

Mistry’s affidavit casts the dispute in explicitly criminal terms, arguing that the issue goes well beyond a procedural or governance lapse. It alleges that certain individuals, despite being ineligible under the trust deed, assumed and continued to function as trustees, thereby exercising authority over the trust and its assets without legal basis.

At the heart of the claim is the charge of “dishonest inducement”. The affidavit contends that accepting trusteeship without meeting mandatory qualifications amounts to a false representation, which induced the trust to vest control of its properties in their hands. This, it argues, squarely falls within the definition of “cheating under criminal law”.

It further alleges that once in control, the continued exercise of powers by such ineligible trustees constitutes “criminal breach of trust and misrepresentation, resulting in wrongful gain to themselves and wrongful loss to the trust”. Their actions over time are described as a “continuing representation” of eligibility, deepening the alleged fraud.

The affidavit situates these acts within a broader pattern of misconduct, claiming that decisions taken by such trustees — including key resolutions and filings — are not only void in law but part of a larger attempt to usurp control.

It invokes provisions of the Bharatiya Nyaya Sanhita and the Maharashtra Public Trusts Act to argue that the “conduct amounts to cheating, fraud and criminal breach of trust”, warranting regulatory scrutiny and action under the Maharashtra Public Trusts Act.

Section 41A of the Act empowers the charity commissioner to remove a trustee who is found guilty of breach of trust, misconduct, or mismanagement. This doesn’t apply to Srinivasan who has already quit. Some observers say a criminal finding, if upheld, could result in disqualification from serving on any public charitable trust in Maharashtra.

“The ball is now in the charity commissioner’s court. The authority will need to communicate whatever action it decides to take with the trusts. It may however take some time to do so,” another legal expert said on condition of anonymity.

If the charity commissioner does not act upon his allegations, or Mistry is not satisfied with the resolution offered, he can appeal in higher courts. Following Mistry’s complaint to the commissioner, Tata Trusts Chief Executive Siddharth Sharma is said to have written to board members stressing that the eligibility criteria the former trustee has referred to does not hold.

He wrote that the late Ratan Tata had sought legal advice from former Chief Justice of India M H Kaina on the clauses in question, and Kaina had said they were “bad law”. However, legal experts said that legal opinion, even from a former CJI, does not override trust law or the trust deed. “His opinion does not have any legal force. Only judgment of the Supreme Court is binding,” Ranina said.

The affidavit filed by Mistry last Friday could have wider ramifications, observers say. Srinivasan, TVS Motor chairman-emeritus, and Vijay Singh, former defence secretary, are vice-chairmen of Tata Trusts. The former resigned as a trustee of BHJTNCI after Mistry argued before the charity commissioner that both Srinivasan as well as Singh were ineligible under the 1923 deed and called for an official enquiry.