Appointment of director elected by small shareholders
Section 151 of the Companies Act, 2013 deals with appointment of director elected by small shareholders. A listed company may have one director elected by such small shareholders in such manner and with such terms and conditions as may be prescribed. The Act came into force on 01 Apr 2014.
A listed company may have one director elected by such small shareholders in such manner and with such terms and conditions as may be prescribed.
Explanation.-- For the purposes of this section "small shareholders" means a shareholder holding shares of nominal value of not more than twenty thousand rupees or such other sum as may be prescribed.
Section 151, The Companies Act, 2013 (Act 18 of 2013).
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Tata Industries Limited vs Cyrus Investments Pvt. LTD
Court's Decision & Legal Precedent
The removal of a Director from office, even if carried out in a manner that may be questioned on procedural grounds, cannot be termed as oppressive or prejudicial conduct under Sections 241 and 242 of the Companies Act, 2013, unless it is part of a larger design to oppress or prejudice the interests of some members. The invocation of the 'just and equitable' clause for winding up requires either a functional deadlock or an irretrievable breakdown of trust and confidence in a quasi-partnership relationship. The affirmative voting rights of Directors nominated by institutional shareholders holding majority stakes are valid and do not constitute oppressive conduct. The Tribunal cannot grant reliefs not sought by the petitioners or not permitted under law, including reinstatement of a director after the expiry of his tenure. The conversion of a company from public to private status is valid if the company satisfies the statutory criteria for being classified as a private company, and the Tribunal cannot interfere with such conversion on the ground of lack of probity without establishing actual oppressive or prejudicial conduct.
On this section: Appointment of director elected by small shareholders. The Court clarified that this provision applies only to listed companies and does not provide a right to proportionate representation for minority shareholders.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Made under this section, and citing it
15 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
- G.S.R No. 38(E) Companies Appointment and Qualification of Directors Amendment Rules 2023 dated 20.01.2023Rule 2023
- G.S.R NO. 410 Companies (Appointment and Qualification of Directors) Amendment Rules, 2022 dated 01.06.2022Rule 2022
- G.S.R. NO. 662(E) The Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2022 dated 29.08.2022Rule 2022
- Companies (Appointment and Qualification of Directors) 2nd Amendment Rules, 2019Rule 2019
- Companies (Appointment and Qualification of Directors) Amendment Rules, 2019Rule 2019
- Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2019.Rule 2019
- Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2019.Rule 2019
- Companies (Appointment and Qualification of Directors)Rule 2018
- Companies (Appointment and Qualification of Directors) 4th Amendment Rules, 2018.Rule 2018
- Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2018Rule 2018
- Companies (Appointment and Qualification of Directors)6th Amendment Rule,2018Rule 2018
- Companies (Appointment and Qualification of Directors) Rules,2017Rule 2017
- The Companies (Appointment and Qualification of Directors) Amendment Rules, 2015Rule 2015
- Chapter XI - The Companies (Appointment and Qualification of Directors) Rules, 2014.Rule 2014
- The Companies (Appointment and Qualification of Directors) Amendment Rules, 2014Rule 2014
Questions about Section 151
What have the courts held on Section 151 of the Companies Act?
Tata Industries Limited vs Cyrus Investments Pvt. LTD (26 Mar 2021) is the leading judgment on this section among those set out below: Appointment of director elected by small shareholders. The Court clarified that this provision applies only to listed companies and does not provide a right to proportionate representation for minority shareholders.
How do I find court cases under Section 151 of the Companies Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Companies Act 151, section 151 Companies Act, section 151 of the Companies Act. People searching for it also type companies act 2013 section 151. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Tata Industries Limited vs Cyrus Investments Pvt. LTD (26 Mar 2021).
What should I read with Section 151 of the Companies Act, and has it changed?
The rules and notifications made under it are where it actually bites, and there are 15: most recently G.S.R No. 38(E) Companies Appointment and Qualification of Directors Amendment Rules 2023 dated 20.01.2023 (2023), then G.S.R NO. 410 Companies (Appointment and Qualification of Directors) Amendment Rules, 2022 dated 01.06.2022 (2022), and 13 more.
When did Section 151 of the Companies Act come into force?
Section 151 of the Companies Act, cited as Companies Act 151, came into force on 01 Apr 2014, having been enacted on 29 Aug 2013. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions5089 words
- 143. Powers and duties of auditors and auditing standards1867 words
- 230. Power to compromise or make arrangements with creditors and members1432 words
- 232. Merger and amalgamation of companies1416 words
- 149. Company to have Board of Directors1403 words
- 217. Procedure, powers, etc., of inspectors1390 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.