Class Action Suits in India: A Journey of Challenges and Potential
Mahak Agarwal | corplaw@vinodkothari.com
Background
Investor protection provisions have been an inherent part of company laws in India. Whether it be S.34 of the Companies Act, 2013 (‘the Act’) imposing criminal liability on directors/ promoters in case of misrepresentation in prospectus, S.35 which imposes civil liability on persons involved in mis-statement of prospectus, S. 36 which imposes criminal liability on any person who fraudulently inducing persons to invest money and so on.
Following the Satyam fiasco in India, investor protection gained further light and the Company Law Bills of 2009 as well as 2011 contained provisions for introducing class actions as a measure available to the members and depositors of the company if the affairs of the company are conducted in a manner prejudicial to the interest of the company, or its members and depositors. However, it was only in 2016 that the same was introduced under S.245 of the Act.
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