The Eligibility Threshold
Section 245(1) permits a class action by members or depositors where the company’s affairs are being conducted in a manner prejudicial to the interests of the company, its members, or its depositors. The eligibility threshold under Section 245(3) mirrors the Section 244 threshold: at least one hundred members or members holding at least one-tenth of the issued share capital, whichever is less; or at least one-fifth of the total number of members for a company without share capital. A depositor class action requires at least one hundred depositors or depositors holding at least one-tenth of the total deposits.
The Notice Requirement
Before filing, the applicant must issue a public notice to all other members or depositors, inviting them to join the application. The notice must be published in the prescribed manner. A class action filed without the public notice is procedurally defective. The notice is not a formality; it defines the class and gives other stakeholders the opportunity to opt in.
The Consent Requirement
Section 245(1) requires the consent of the requisite number of members or depositors to be filed with the application. The consent must be in writing and must be obtained before the application is filed. A consent obtained after filing does not cure the initial defect.
What the Class Action Reaches
The NCLT Principal Bench in Ankit Jain v. Jindal Poly Films Ltd. admitted a Section 245 petition challenging past and concluded transactions, and the NCLAT upheld maintainability. The Tribunal held that Section 245 is not limited to preventive or prospective relief; it encompasses compensation and damages for past transactions. The relief under Section 245(1)(g) can be claimed “from or against the company or its directors,” and the statutory language does not restrict relief to the company’s benefit alone.
The Exclusion of the Auditors and Experts
Section 245(1) permits the class action against the company, its directors, auditors, and experts. The auditor’s liability under this provision is not a professional-negligence claim; it is a statutory class-action exposure. The auditor’s defence file should document the audit procedures, the reliance on management representations, and the absence of knowledge of the alleged prejudice.
Call to Action: For Section 245 eligibility assessment, public notice drafting, or class action defence, contact Anuj Desai & Associates at office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.