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The Tax Publishers Companies Act, 2013 Class Action--Powerful Tool For Stakeholders Pragya Bhandari Class Action will not only be an effective tool to stakeholders of the company but also restrict the company's malpractices and unlawful acts. The present write-up aims at making an overview of provisions relating to class action and related amendments thereof. 1. Introduction The concept of 'class action suit' has been brought in Indian legislature by means of section 245 of the Companies Act, 2013. Moreover, rule 84 of the National Company Tribunal Rules, 2016, amended from time to time, also deals with the same. It is the most potent and powerful legal tool for stakeholders. It helps in reducing the number of litigations, saves time of the court and supports poor persons in fight for their interest. The need for class action suit was emerged in India at the time of Satyam scam, in which Managing Directors and other managerial staff of company indulged in large-scale fraud and misappropriation of company's money and due to this, huge number of shareholders, employees and creditors of the company were affected by the same. Since there was no provision in Indian law to resort to any 'joint legal action' against any company and its directors or officers, which can be termed as 'class action suit'. Thus, in respect of such a scam, the Indian investors couldn't take any legal recourse against company or its management, jointly. However, counterparts in USA,the American shareholders of company filed class action suit against company, claiming damages, and got compensation due to class action framework in the America. 2. Class Action- Meaning of A class action suit is a mode of filing an application before the Tribunal on behalf of a large number of persons having similar interests and rights. Dictionary meaning of term 'class action' is joint action by a class of persons, who are aggrieved by wrong(s) perpetuated or likely to perpetuate against them by one or more entities. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Companies Act, 2013

Class Action--Powerful Tool For Stakeholders

Pragya Bhandari

Class Action will not only be an effective tool to stakeholders of the company but also restrict the company's malpractices and unlawful acts. The present write-up aims at making an overview of provisions relating to class action and related amendments thereof.

1. Introduction

The concept of 'class action suit' has been brought in Indian legislature by means of section 245 of the Companies Act, 2013. Moreover, rule 84 of the National Company Tribunal Rules, 2016, amended from time to time, also deals with the same. It is the most potent and powerful legal tool for stakeholders. It helps in reducing the number of litigations, saves time of the court and supports poor persons in fight for their interest. The need for class action suit was emerged in India at the time of Satyam scam, in which Managing Directors and other managerial staff of company indulged in large-scale fraud and misappropriation of company's money and due to this, huge number of shareholders, employees and creditors of the company were affected by the same. Since there was no provision in Indian law to resort to any 'joint legal action' against any company and its directors or officers, which can be termed as 'class action suit'. Thus, in respect of such a scam, the Indian investors couldn't take any legal recourse against company or its management, jointly. However, counterparts in USA,the American shareholders of company filed class action suit against company, claiming damages, and got compensation due to class action framework in the America.

2. Class Action- Meaning of

A class action suit is a mode of filing an application before the Tribunal on behalf of a large number of persons having similar interests and rights. Dictionary meaning of term 'class action' is joint action by a class of persons, who are aggrieved by wrong(s) perpetuated or likely to perpetuate against them by one or more entities.