Application to Tribunal for relief in cases of oppression, etc
Section 241 of the Companies Act, 2013 deals with application to Tribunal for relief in cases of oppression, etc. Any member of a company who complains that-- (a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company; The Act came into force on 01 Apr 2014.
(1) Any member of a company who complains that--
(a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company; or
(b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the companys shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members,
may apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this Chapter.
(2) The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this Chapter.
1[Provided that the applicants under this sub-section, in respect of such company or class of companies, as may be prescribed, shall be made before the Principal Bench of the Tribunal which shall be dealt with by such Bench.]
1[(3) Where in the opinion of the Central Government there exist circumstances suggesting that--
(a) any person concerned in the conduct and management of the affairs of a company is or has been in connection therewith guilty of fraud, misfeasance, persistent negligence or default in carrying out his obligations and functions under the law or of breach of trust;
(b) the business of a company is not or has not been conducted and managed by such person in accordance with sound business principle or prudent commercial practices;
(c) a company is or has been conducted and managed by such person in a manner which likely to cause, or has caused, serious injury or damage to the interest of the trade, industry or business to which such company pertains; or
(d) the business of a company is or has been conducted and managed by such person with intent to default its creditors, members or any other person or otherwise for a fraudulent or unlawful purpose or in a manner prejudicial to public interest,
the Central Government may intiate a case against such person and refer the same to the Tribunal with a request that the Tribunal may inquire into the case and record a decision as to whether or not such person is a fit and proper person to hold the officer of director or any other office connected with the conduct and management of any company.
(4) The person against whom a case is referred to the Tribunal under sub-section (3), shall be jointed as a respondent to the applicantion.
(5) Every application under sub-section (3)--
(a) shall contain a concise statement of such circumstances and materials as the Central Government may consider necessary for the purpose of the inquiry; and
(b) shall be signed and verified in the manner laid down in the Code of Civil Procedure (5 of 1908), for the signature and verification of a plaint in a suit by the Central Government.]
Section 241, The Companies Act, 2013 (Act 18 of 2013).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 14
- s. 224 Actions to be taken in pursuance of inspector‘s report
- s. 226 Voluntary winding up of company, etc., not to stop investigation proceedings
- s. 242 Powers of Tribunal
- s. 244 Right to apply under section 241
- s. 246 Application of certain provisions to proceedings under section 241 or section 245
- Finance Act, 2019 (No. 2) s. 22 Substitution of section 79
- Finance Act, 2019 (No. 2) s. 34 Amendment of section 115JB
- Income-tax Act s. 79 Carry forward and set off of losses in case of certain companies
- Income-tax Act s. 115JB Special provision for payment of tax by certain companies
- Income-tax Act s. 119 Carry forward and set off of losses not permissible in certain cases
- Income-tax Act s. 206 Special provision for minimum alternate tax and alternate minimum tax
- Income-tax Rules s. 11UAC [Prescribed class of persons for the purpose of clause (XI) of the proviso to clause (x) of sub-section (2) of section 56
and 2 more
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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Cyrus Investments Pvt. Ltd. v. Tata Sons Ltd.
Court's Decision & Legal Precedent
The Supreme Court set aside the NCLAT order that had restored Cyrus Mistry and restrained Tata Sons. Removal of an executive chairman, and conversion to a private company, did not by themselves amount to oppression or mismanagement under sections 241/242 of the Companies Act, 2013. Tribunal intervention in commercial decisions of a company's board is tightly confined.
On this section: Removal of executive chairman / conversion to private company did not constitute oppression under s.241; NCLAT set aside.
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Usha Ananthasubramanian vs Union of India
Court's Decision & Legal Precedent
The powers conferred on the National Company Law Tribunal under Sections 337 and 339 of the Companies Act, 2013, in the context of Section 241 proceedings for oppression and mismanagement, are limited to the specific company in which acts of mismanagement or fraudulent conduct are alleged. These powers cannot be exercised to freeze assets of or impose liability on a person who is an officer or head of another organization, unless that person was directly and knowingly party to the carrying on of the fraudulent business of the company in question. The jurisdiction of the NCLT is circumscribed by the company in relation to which the application is made, and cannot extend to other corporate entities or their officers merely because they may have failed to prevent fraud.
On this section: Provides that the Central Government may apply to the Tribunal if affairs of a company are being conducted in a manner prejudicial to public interest. The Court held that powers under this section are limited to the specific company in question.
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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: Core provisions dealing with relief in cases of oppression and mismanagement. The Court analyzed the statutory requirements for invoking these sections and the scope of remedies available to the Tribunal.
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Rapid Metrorail Gurgaon Limited Etc vs Haryana Mass Rapid Transport Corporation Limited
Court's Decision & Legal Precedent
A consent order passed by a court is a binding agreement with the imprimatur of the court and carries special status as something more than a mere contract, containing elements of both command and contract. When parties knowingly agree to settlement terms before a court, including obligations to deposit funds in escrow based on determination by an independent third party (CAG), and those parties are fully aware of the circumstances and investigations at the time of consent, it is impermissible for one party to subsequently resile from the obligations by raising facts known at the time of consent. The scope of an independent determination (financial audit) must be understood as limited to the matter for which the independent body was appointed, and the conclusion that certain matters fall outside this scope does not render the determination incomplete within its defined parameters. Public bodies are bound by consent orders entered into by their authorized representatives and cannot be permitted to resile from solemn commitments made before courts, particularly where such obligations relate to protection of financial institutions' interests in infrastructure projects and carry vital elements of public interest in maintaining the financing structure for infrastructure development.
On this section: Basis for NCLT petition by Union of India to supersede IL&FS Board on grounds of affairs being conducted in prejudicial manner to public interest; establishes jurisdiction for NCLAT to appoint supervising judge and issue directions to group companies
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.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… He further submitted that a specific statement has been made by one Mr. Sameer Odhabai Degamadiya that he did not sign the Power of Attorney and had not given his consent to the applicants to pursue application under Section 241 of the Companies Act, before the NCLT Ahmadabad. He further submitted that the custodial interrogation of the applicants is required for the purpose of knowing how 77 non-shareholders had signed the Power of Attorney. Their signatures, identification and credentials are yet to be examined. Signatures of the …
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… He further submitted that a specific statement has been made by one Mr. Sameer Odhabai Degamadiya that he did not sign the Power of Attorney and had not given his consent to the applicants to pursue application under Section 241 of the Companies Act, before the NCLT Ahmadabad. He further submitted that the custodial interrogation of the applicants is required for the purpose of knowing how 77 non-shareholders had signed the Power of Attorney. Their signatures, identification and credentials are yet to be examined. Signatures of the …
Questions about Section 241
What have the courts held on Section 241 of the Companies Act?
Cyrus Investments Pvt. Ltd. v. Tata Sons Ltd. (26 Mar 2021) is the leading judgment on this section among those set out below: Removal of executive chairman / conversion to private company did not constitute oppression under s.241; NCLAT set aside. Another 3 judgments on this section are set out below, all of them from the Supreme Court. They run from 2020 to 2021.
How do I find court cases under Section 241 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 241, section 241 Companies Act, section 241 of the Companies Act. People searching for it also type companies act 241 242 and companies act 2013 section 241. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 4 reported judgments on this section are set out on this page, beginning with Cyrus Investments Pvt. Ltd. v. Tata Sons Ltd. (26 Mar 2021).
What should I read with Section 241 of the Companies Act, and has it changed?
Its own text turns on section 244 (Right to apply under section 241), so none of them can safely be read on its own. 14 other provisions in this corpus refer back to it.
When did Section 241 of the Companies Act come into force?
Section 241 of the Companies Act, commonly called oppression and mismanagement, and cited as Companies Act 241, 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.