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WHEN???
India has adopted the concept from U.S. very late. Class Action lawsuit concept was not
present in Indian Law people had no right to combine civil lawsuits. Had to file individual
suits even if for same cause as of various others. Courts had option to take them as MDL. The
concept first came to the picture when Satyam Scam came into play.
In the Satyam Scam the company had done an accounts fraud with regulators, stock
exchanges, investors, stakeholders, etc. to show the fake image of its financial health. Where
the rights of state holders were infringed, the stakeholders won a compensation of 125
million dollars (700 crores) from US courts in a class action suit against the Satyam
corporation whereas their Indian counterparts which were to be compensated to the tune of
5000 crores as a whole had no such resort of class action suits and when lakhs of
shareholders came together to sue the company they approached from National Consumer
Disputes Redressal Commission to the Supreme Court but their claims were rejected.
HOW???
The concept of Class Action Suit is provided u/Sec. 245 of the Companies Act, as introduced
in the year 2013. Thus such an action can be brought in accordance with these provisions:
Who can File?
1. Members of a company
In case of share capital 100 or more/ more than 10% of total members (whichever is
less) or members holding at least 10% of issued share capital.
In case of not share capital members equal to or exceeding 1/5th of total members.
2. Depositors of a company - 100 or more/ more than 10% of total depositors (whichever
is less) or depositors holding at least 10% of total deposit of company.
3. Central Government In public interest.
Before Whom?
1. Application to be made before National Company Law Board/ Tribunal.
Against Whom?
1.
2.
3.
4.
A company
Any of its directors
Any of its Auditors, including audit firm
Expert/ Advisor/ Consultant/ Any other person.
1. To restrain a company from committing any act ultra vires the Articles of Association.
2. .