Class action
Section 245 of the Companies Act, 2013 deals with class action. Such number of member or members, depositor or depositors or any class of them, as the case may be, as are indicated in sub-section (2) may, if they are of the opinion that the management or conduct of the affairs of the company are being conducted in a manner prejudicial to the interests of the com The Act came into force on 01 Apr 2014.
(1) Such number of member or members, depositor or depositors or any class of them, as the case may be, as are indicated in sub-section (2) may, if they are of the opinion that the management or conduct of the affairs of the company are being conducted in a manner prejudicial to the interests of the company or its members or depositors, file an application before the Tribunal on behalf of the members or depositors for seeking all or any of the following orders, namely:--
(a) to restrain the company from committing an act which is ultra vires the articles or memorandum of the company;
(b) to restrain the company from committing breach of any provision of the companys memorandum or articles;
(c) to declare a resolution altering the memorandum or articles of the company as void if the resolution was passed by suppression of material facts or obtained by mis-statement to the members or depositors;
(d) to restrain the company and its directors from acting on such resolution;
(e) to restrain the company from doing an act which is contrary to the provisions of this Act or any other law for the time being in force;
(f) to restrain the company from taking action contrary to any resolution passed by the members;
(g) to claim damages or compensation or demand any other suitable action from or against
(i) the company or its directors for any fraudulent, unlawful or wrongful act or omission or conduct or any likely act or omission or conduct on its or their part;
(ii) the auditor including audit firm of the company for any improper or misleading statement of particulars made in his audit report or for any fraudulent, unlawful or wrongful act or conduct; or
(iii) any expert or advisor or consultant or any other person for any incorrect or misleading statement made to the company or for any fraudulent, unlawful or wrongful act or conduct or any likely act or conduct on his part;
(h) to seek any other remedy as the Tribunal may deem fit.
(2) Where the members or depositors seek any damages or compensation or demand any other suitable action from or against an audit firm, the liability shall be of the firm as well as of each partner who was involved in making any improper or misleading statement of particulars in the audit report or who acted in a fraudulent, unlawful or wrongful manner.
(3) (i) The requisite number of members provided in sub-section (1) shall be as under:
(a) in the case of a company having a share capital, not less than one hundred members of the company or not less than such percentage of the total number of its members as may be prescribed, whichever is less, or any member or members holding not less than such percentage of the issued share capital of the company as may be prescribed, subject to the condition that the applicant or applicants has or have paid all calls and other sums due on his or their shares;
(b) in the case of a company not having a share capital, not less than one-fifth of the total number of its members.
(ii) The requisite number of depositors provided in sub-section (1) shall not be less than one hundred depositors or not less than such percentage of the total number of depositors as may be prescribed, whichever is less, or any depositor or depositors to whom the company owes such percentage of total deposits of the company as may be prescribed.
(4) In considering an application under sub-section (1), the Tribunal shall take into account, in particular--
(a) whether the member or depositor is acting in good faith in making the application for seeking an order;
(b) any evidence before it as to the involvement of any person other than directors or officers of the company on any of the matters provided in clauses (a) to (f) of subsection (1);
(c) whether the cause of action is one which the member or depositor could pursue in his own right rather than through an order under this section;
(d) any evidence before it as to the views of the members or depositors of the company who have no personal interest, direct or indirect, in the matter being proceeded under this section;
(e) where the cause of action is an act or omission that is yet to occur, whether the act or omission could be, and in the circumstances would be likely to be
(i) authorised by the company before it occurs; or
(ii) ratified by the company after it occurs;
(f) where the cause of action is an act or omission that has already occurred, whether the act or omission could be, and in the circumstances would be likely to be, ratified by the company.
(5) If an application filed under sub-section (1) is admitted, then the Tribunal shall have regard to the following, namely:--
(a) public notice shall be served on admission of the application to all the members or depositors of the class in such manner as may be prescribed;
(b) all similar applications prevalent in any jurisdiction should be consolidated into a single application and the class members or depositors should be allowed to choose the lead applicant and in the event the members or depositors of the class are unable to come to a consensus, the Tribunal shall have the power to appoint a lead applicant, who shall be in charge of the proceedings from the applicants side;
(c) two class action applications for the same cause of action shall not be allowed;
(d) the cost or expenses connected with the application for class action shall be defrayed by the company or any other person responsible for any oppressive act.
(6) Any order passed by the Tribunal shall be binding on the company and all its members, depositors and auditor including audit firm or expert or consultant or advisor or any other person associated with the company.
(7) Any company which fails to comply with an order passed by the Tribunal under this section shall be punishable with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.
(8) Where any application filed before the Tribunal is found to be frivolous or vexatious, it shall, for reasons to be recorded in writing, reject the application and make an order that the applicant shall pay to the opposite party such cost, not exceeding one lakh rupees, as may be specified in the order.
(9) Nothing contained in this section shall apply to a banking company.
(10) Subject to the compliance of this section, an application may be filed or any other action may be taken under this section by any person, group of persons or any association of persons representing the persons affected by any act or omission, specified in sub-section (1).
Section 245, 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.
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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Siddharth Sahib Singh v. Apex Council of DDCA
Court's Decision & Legal Precedent
Labelled Final Order 10.07.2023 (order-1.pdf; body date 10th JULY 2023 matches judgmentOrders index 2023-07-10 — case-status decisionDate 2023-07-04 is earlier listing noise): Delhi HC refused to entertain a writ challenging DDCA Apex Council actions where the petitioner’s grievances were framed as oppression/mismanagement and class-action style reliefs under the Companies Act. Court held an equally efficacious alternate remedy lies before the NCLT under ss.241/244/245 (class action) and, applying South Indian Bank on alternate-remedy discipline, declined writ interference at that stage without deciding merits, while granting liberty to approach the NCLT.
On this section: Teaches that member/class grievances of the kind contemplated by s.245 are for the NCLT’s statutory class-action jurisdiction, not first-instance writ adjudication when that remedy is available.
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 drew our attention to paragraph-43 of the Pioneer (supra). He pointed out that the requirement that the applicants must be of the same class and there must be 100 of them rendered the provisions unachievable. He drew our attention to Sections 244 and 245 of the Companies Act, 2013. He pointed out that the threshold under the said Act could be relaxed whereas under the code the law giver has inflicted the requirement as an inflexible mandate. He also complained of there being no information qua the requirement of 10 percent. He drew our attention to Rule 8A. He would …
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… He drew our attention to paragraph-43 of the Pioneer (supra). He pointed out that the requirement that the applicants must be of the same class and there must be 100 of them rendered the provisions unachievable. He drew our attention to Sections 244 and 245 of the Companies Act, 2013. He pointed out that the threshold under the said Act could be relaxed whereas under the code the law giver has inflicted the requirement as an inflexible mandate. He also complained of there being no information qua the requirement of 10 percent. He drew our attention to Rule 8A. He would …
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… He drew our attention to paragraph-43 of the Pioneer (supra). He pointed out that the requirement that the applicants must be of the same class and there must be 100 of them rendered the provisions unachievable. He drew our attention to Sections 244 and 245 of the Companies Act, 2013. He pointed out that the threshold under the said Act could be relaxed whereas under the code the law giver has inflicted the requirement as an inflexible mandate. He also complained of there being no information qua the requirement of 10 percent. He drew our attention to Rule 8A. He would …
Made under this section, and citing it
2 instruments name this provision in its title or its text without being made under it.
Questions about Section 245
What have the courts held on Section 245 of the Companies Act?
Siddharth Sahib Singh v. Apex Council of DDCA (10 Jul 2023) is the leading judgment on this section among those set out below: Teaches that member/class grievances of the kind contemplated by s.245 are for the NCLT’s statutory class-action jurisdiction, not first-instance writ adjudication when that remedy is available.
How do I find court cases under Section 245 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 245, section 245 Companies Act, section 245 of the Companies Act. People searching for it also type companies act 2013 section 245. 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 Siddharth Sahib Singh v. Apex Council of DDCA (10 Jul 2023).
What should I read with Section 245 of the Companies Act, and has it changed?
2 other provisions in this corpus refer back to it. 2 instruments name it without being made under it, most recently National Company Law Tribunal(Second Amendment) Rules, 2019 (2019), then The Investor Education and Protection Fund Authority (Appointment of Chairperson and Members, holding meetings and provision for offices and officers) Rules. 2016. (2016).
When did Section 245 of the Companies Act come into force?
Section 245 of the Companies Act, cited as Companies Act 245, 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 14 Oct 2026. This page is not a substitute for legal advice.