Minimum Percentage of Shareholders and Depositors to File a Class Action Suit Prescribed

The Ministry of Corporate Affairs (“MCA”) has amended Rule 84 of the National Company Law Tribunal Rules, 2016 with effect from May 08, 2019. Pursuant to this change, the minimum number or percentage of ‘shareholders’ or’ depositors’ required to file a ‘class action suit’ under Section 245 of the Companies Act, 2013 have been provided as per below.

Class Actions Suits - to be filed by ‘members’ of a Company

  • (a) at least 5% of the total number of members of the Company; or (b) hundred (100) members of the Company, whichever is lesser; or
  • (a)  members holding not less than 5% in value of the issued share capital of an unlisted Company; or (b) holding not less than 2% in value of the issued share capital of a listed Company, as the case may be.

Class Action Suits - to be filed by ‘depositors’ of a Company

  • (a) at least 5% of the total number of depositors of the Company; or (b) hundred (100) depositors of the company, whichever is lesser; or
  • such number of depositor(s) to whom the Company owes 5% of the total deposits of the Company.

Prior to this amendment, only the minimum number of members and/or depositors required to file a class action suit was prescribed. Post this amendment, the number of members and depositors who can file class action suits against the concerned company has been clearly defined. This is a big step in ensuring the rights of the minority shareholders by providing them an effective redressal mechanism.