What is a class action suit under Section 245 of the Companies Act?

A group of shareholders and depositors want to jointly sue our company's management for fraudulent conduct. Can we file a class action under Section 245? I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

What is a class action suit under Section 245 of the Companies Act? is governed in India primarily by Companies Act 2013, Section 245, Companies Act 2013, Section 447 and Companies Act 2013, Section 241. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Section 245 allows specified numbers of members or depositors to file an application before the NCLT on behalf of a class if they believe the company's affairs are being conducted prejudicially.

The threshold for members is not less than one hundred or a prescribed percentage of total members, while for depositors it is a prescribed number or percentage of total depositors.

Relief that can be sought includes restraining the company from acting beyond its articles, restraining breach of any provision of the memorandum, and claiming damages from the company, its directors, auditors or experts.

Section 245 explicitly excludes banking companies and requires the applicant to satisfy the Tribunal that the application is filed in good faith and not for personal gain.

This remedy overlaps in practice with Section 241 oppression proceedings but is designed for wider class grievances rather than an individual member's dispute.

What to do next: 1) Verify that the requisite number of members or depositors have consented to join the application; 2) Draft the application setting out the prejudicial conduct and relief sought with supporting documents; 3) File before the NCLT and obtain the Tribunal's leave to proceed with the class action; 4) Coordinate with a lawyer to manage notice to all class members as directed by the Tribunal.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Companies Act 2013, Section 245 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.

Disclaimer: This information is for general awareness and does not constitute legal advice. Statutes and their interpretation change, and outcomes depend on the facts of your case. Please consult a qualified advocate before acting on it.