1. Oppression and Mismanagement — Background

The remedy of oppression and mismanagement under Sections 241–246 protects minority shareholders against the abuse of majority power. The key concern is that the majority, by exercising their voting power, might conduct company affairs in a manner that is prejudicial to the company, the public interest, or to the minority members.

2. Grounds for Application — Section 241

Any member who satisfies the eligibility under Section 244 may apply to the NCLT if:

• The affairs of the company are being conducted in a manner prejudicial to public interest or prejudicial to the interests of the company, or prejudicial to the interests of the members; or
• There has been a material change in the management or control of the company (by way of alteration of the board, share-holding pattern, etc.) likely to affect the company's affairs prejudicially.
• Additionally, the Central Government may apply to NCLT if a person guilty of fraud, negligence, or misconduct is managing the company.

3. Eligibility to File — Section 244

• For a company with share capital: at least 100 members, or members holding at least 10% of issued share capital (whichever is lower).
• For a company without share capital: at least one-fifth (1/5th) of total members.
• NCLT has discretion to waive these eligibility requirements if the facts justify it.
• Once filed, the application continues even if the number of applicants falls below the required threshold during proceedings.

4. Powers of NCLT — Section 242

On receiving an application under Section 241, NCLT may, by order, do all or any of the following:

• Regulate the conduct of the company's affairs prospectively in any manner NCLT deems fit.
• Order purchase of shares of any member by other members or by the company at a price determined by NCLT (buyout remedy).
• Restrict the transfer or allotment of shares of the company.
• Remove any managing or whole-time director or other director from office, with directions that they cannot be re-appointed in the company or any other company for up to 5 years without NCLT approval; no compensation is payable for such removal.
• Recover undue gains made by any managing director, director, or manager and recover them for the benefit of the company.
• Modify or terminate any agreement between the company and its MD, other directors, or managerial personnel.
• Set aside any transfer, delivery, payment or act done in breach of any NCLT order.
• Alteration of MoA or AoA as directed by NCLT — and the company cannot thereafter make any modification inconsistent with NCLT's order without NCLT's leave.
• Pass interim orders to preserve the company's assets or rights pending final determination.

Filing with RoC: every NCLT order must be filed by the company with the Registrar of Companies within 30 days.

5. Class Action Suit — Section 245

A Class Action is a suit filed by a group of members or depositors on behalf of themselves and all others similarly situated, seeking a common remedy without requiring each affected person to file individually. It addresses systemic wrongs by company management.

Who can file — Section 245(3):

• Members: at least 100 members or 10% of total members (whichever is less) for a company with share capital; for listed companies, members holding at least 2% of issued share capital; for unlisted companies, 5% of share capital.
• Depositors: at least 100 depositors or 10% of total depositors (whichever is less); or depositors holding at least 10% of outstanding deposits.

Reliefs available under Section 245:

• Restrain the company from committing an act contrary to AoA, MoA, or any statutory provision.
• Restrain the company from committing any act against the resolution passed at a general meeting.
• Declare any resolution altering the MoA or AoA void if such alteration harms the members.
• Award damages or compensation to the members or depositors who suffered loss due to the company's wrongful acts.
• Direct the audit of company accounts.
• Seek any other appropriate remedy.