Ratan Tata’s listed and unlisted shares: Bombay HC reveals who gets what

The Bombay High Court has provided clarity on the distribution of the late Ratan Tata’s listed and unlisted shares. Earlier this week, Justice Manish Pitale ruled that shares not specifically detailed in the will form part of the residue of Tata’s estate and are to be divided equally between the Ratan Tata Endowment Foundation and the Ratan Tata Endowment Trust, according to a Livelaw report. The decision follows the integration of four codicils with the original will, executed on February 23, 2022.

The court’s decision came after Tata’s half-sisters, Shireen and Deanne Jejeebhoy, along with other executors, sought clarification on the will’s interpretation, which was amended four times before Tata’s death on October 9 last year.

Codicils executed on April 6, 2022, September 30, 2022, March 24, 2023, and December 22, 2023, introduced changes that affected the distribution of shares not explicitly mentioned in the will. This process ensured that the will accurately reflected Tata’s final wishes.

A key point of contention was Clause 13 of the will, which was altered by the fourth codicil. “Clause 1 of the fourth Codicil substitutes only clause A of paragraph No.13 of the Will, while clauses B, C, and D of paragraph No.13 of the Will continue to remain in force,” explained the court. This adjustment clarified that unallocated shares should be included in the estate’s residue, highlighting the significance of codicils in determining inheritance.

The court further explained the legal standing of codicils under Indian law. “It is relevant to note here that Section 2(b) of the Indian Succession Act, 1925, defines Codicil to mean an instrument made in relation to a Will, and explaining, altering or adding to its dispositions, and shall be deemed to form part of the Will,” the court detailed, underscoring the role of codicils in legal proceedings.

Justice Pitale’s ruling emphasised the precedence of codicils over the original will, stating, “It is clear that the Codicil, while altering or adding to the dispositions under the Will is deemed to be forming part of the Will and the original Will has to be considered with the alterations introduced by the Codicils.” This established the codicils as integral to the interpretation of Tata’s will.

The ruling highlighted that the shares not specified in previous clauses would be assigned to Tata’s charitable organisations. “Listed and unlisted shares of the deceased not specifically covered elsewhere in the Will form part of the rest and residue of his estate and stand bequeathed to Ratan Tata Endowment Foundation and Ratan Tata Endowment Trust in equal shares absolutely,” Justice Pitale stated. 

Records also noted that there was no dispute among the parties regarding the will’s distribution. However, executors sought judicial clarification to ensure accurate interpretation. “So, the confusion was about the clause in the earlier Will and the changes in it later on. Note that the parties did not contend; they only sought clarification to interpret the Will and Codicil,” stated the court, confirming the need for clarity.

Ratan Tata, a prominent industrialist, was renowned for his leadership of the Tata Group and philanthropic contributions. Recognised with national honours, his will’s execution underscores his commitment to charity, exemplified by the allocation of his shares to beneficial foundations. Tata’s vision for philanthropy continues to inspire, as his legacy lives on through these charitable acts, ensuring a lasting impact on society. His dedication to such causes is a testament to his enduring influence.