INTRODUCTION TO PREVENTION

OF OPPRESSION AND Subject – Corporate & Information

Technology Law
MISMANAGEMENT
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- Chapter XVI of the Companies Act, 2013 deals with the provisions relating to prevention of oppression and
mismanagement of a company.
- Oppression is the exercise of authority or power in a burdensome, cruel or unjust manner.
- During the course of business, oppression of small or minority shareholders could take place by the majority
shareholders who are in control of the company.
- Mismanagement of resources is also not uncommon. Mismanagement could mean siphoning of funds, causing
losses due to rash decision, not maintaining proper records, not calling requisite meetings.
- Finer version of mismanagement could arise where the management does not act/react to a business situation
leading to downfall of business.
- Oppression and mismanagement of a company indicates that the affairs of the company are being conducted in
a manner that is oppressive and biased towards the minority shareholders or any member or members of the
company.
- Therefore, to protect their interest and prevent oppression and mismanagement, provisions were made under the
Companies Act, 1956 as well as under Companies Act, 2013
- The minority shareholders are empowered to bring action with a view to preventing the majority from
oppression and mismanagement. These are the statutory rights of the minority shareholders
- Companies Act, 2013 provides for provisions relating to oppression and mismanagement under Sections 241-
246

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Oppression
- In layman’s version, Oppression can be defined as an act or instance of oppressing, the state of being
oppressed, and the feeling of being heavily burdened, mentally or physically, by troubles, adverse conditions,
and anxiety.
- Oppression in the 1956 act had been defined as when affairs of the company are being conducted in a manner
prejudiced to public interest or in a manner prejudicial to public interest or in a manner oppressive to any
member or members.
- Although, a company has an existence independent from its members, its affairs are carried on by the
management. Difficulty arises when the interests of shareholders vary. However, the management of companies
depends upon the majority.
- The words “oppression” and “mismanagement” are not defined in the 2013 Act
- Minor acts of mismanagement, however, are not to be regarded as oppression.
- A member can complain of oppression only in his capacity as a member and not in his capacity as director
or creditor

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Rule of Majority
- Companies are governed by the rule of majority.
- The rule of majority implies that the will of the majority of members of a company prevails in the
management of affairs of the company.
- Therefore, every question relating to the management of the company is decided by a resolution passed by a
requisite majority in the meeting of the company.
- A resolution is passed either by a simple majority or by a special majority of votes of the members as required by
the Companies Act.
- When a resolution is passed, it is binding on every member of the company, whether he votes for or against
the resolution or absents himself from voting.
- majority of the members of the company are entitled to exercise the powers of the company. It is therefore
generally said that in companies, majority prevails.
- Majority of members enjoys supremacy of power over the minority shareholders.
- Under such a situation, the protection of interests of minority shareholders in corporate activities remains one of
the most complex problems.
- for effective and efficient management of a company proper balance of rights of majority as well as of minority
shareholders is essential.

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 Implications of the rule of majority
- A person becoming a member of a company is deemed to know that the will of the majority prevails in the
company.
- A member, therefore, is deemed to have agreed to submit to the will of the majority.
- The majority of the members have a right to decide everything connected with the management of affairs of
the company.
- Anything decided by a resolution with requisite majority at duly convened and constituted meeting is binding
upon all the members (including the minority members and the members not taking part in polling) and the
company as a whole.
- If anything wrong is done to the company by the majority shareholders, the minority generally cannot
complain.
- It is only the company to sue in its own name and individual shareholders cannot sue in the name of the
company.
- Generally, the courts will not intervene in the management of the internal affairs of a company by its directors, as
long as they are acting within the powers conferred on them under the articles of the company.
- Generally, individual member or even the minority shareholders cannot sue against the directors of the
company. However, where directors owe a duty to an individual member personally and make a breach of
such duty, the individual member can sue the directors.
- For instance, a member is denied his right to vote or to receive dividend, he can sue the directors even if the
decision of denial of such right is taken by majority
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 Exceptions to the Rule of Majority
- Acts ultra vires company: where the act done is ultra vires memorandum (ie. Beyond the powers of the company).
It is so because ultra vires acts cannot be ratified by any majority.
- Acts ultra vires statutes: Where the act done is inconsistent with any law of the land including the Companies Act,
it is illegal and the majority rule does not apply. For instance, directors get passed a resolution by huge majority to
pay dividend out of capital or to forfeit share illegally. Such resolutions can be challenged even by a single member
because these are against the provisions of Companies Act.
- Acts requiring special majority: According to the provisions of Companies Act certain acts can be done by a
special resolution passed at a general meeting of the company. If any such act is done without passing special
resolution (ie. By a resolution with less than three-fourth majority) any member can bring an action to restrain the
majority
- Wrongful doers in control: Sometimes, the wrongful doers are themselves in control of the affairs of the
company. In such cases the rule of majority is relaxed in favor of the aggrieved minority shareholders.

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- Infringement of individual membership rights: Every individual shareholder has certain rights against the
company. For instance, a shareholder has a right to receive notice of general meeting, to vote at the meeting, to
contest for directorship, to claim payment of declared dividend etc. These are the individual membership rights
conferred by the act. Some other rights may be conferred by the Articles of the company. In such cases, the
majority rule does not operate and no majority can take away the individual rights of a member. If any
individual member is denied of any such right, he is entitled to sue the company.
- Fraud on Minority: The majority rule does not apply where the majority of members use their power to
defraud the minority or to take a discriminatory action. The court will allow any action by minority where the
majority of the shareholders attempt to benefit themselves at the expense of minority.

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 The principal of supremacy of majority was laid down in the celebrated case of
Foss vs. Harbottle.
- In this case, two shareholders of a company brought an action against the directors of the company charging
them guilty of fraudulent acts resulting in loss to the company.
- They prayed the court to ask the directors to pay damages to the company for the loss caused to it on account
of their acts.
- The company by majority had already decided and resolved not to take any action against them.
- The court dismissed the suit on the ground that injury was not to the plaintiffs exclusively. It was an injury to the
whole company.
- In such a case, the action should have been brought by the company itself and not by minority members.
- Besides that, the acts of directors were such as could be confirmed by the majority members
- The effect of the ruling in the above case is that the minority shareholders cannot complain of any irregular act
which the majority are entitled to do regularly

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 The Indian case illustrating the rule in Foss v. Harbottle is
Bhajekar v. Shinkar (1934)
- wherein The Board of Directors of a Company passed a resolution appointing certain persons as managing
agents (now abolished).
- The resolution was confirmed by the company in general meeting with full knowledge of all the material
facts.
- Some of the directors brought a suit for a declaration that the resolution was invalid on the grounds of
certain irregularities.
- Held, it was open to the company to ratify the resolution even if it was irregular and the plaintiffs were not,
under these circumstances, entitled to maintain the suit and ask the court to interfere.

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Acts held as oppressive
- Not calling a general meeting and keeping shareholders in the dark.
- Non-maintenance of statutory records and not conducting the affairs of the company in accordance with the
Companies Act.
- Depriving a member of the right to dividend.
- Refusal to register transmission under will.
- Issue of further shares benefiting a section of shareholders.
- Pushing a shareholder into hopeless minority.
- Violating statutory rights of shareholders.
- Not giving notices.
- Not allowing attendance in general meetings.
- Not permitting inspection of records.
- Disposing of the assets of the company in an illegal manner.
- Depriving a member of his membership.
- Imposition of new and risky objects that are being opposed by the other fraction of shareholders.

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Acts held as non-oppressive
- An unwise, inefficient or careless conduct of a director.
- Non-holding of the meeting of the directors.
- Not declaring dividends when the company is making losses.
- Lack of details in the notice of a meeting.
- Non-maintenance or non-filing of records.
- Increasing the voting rights of the shares held by the management.
- Drawing of remuneration by a director to which he is not legally entitled.

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Section 241 - Application to Tribunal for relief in cases of
oppression, etc
- Section 241(a) states that Oppression is when the affairs which are conducted in a manner prejudicial to
public interest, members of the Company
- Section 241(b) states Mismanagement is any material change which is conducted in a manner prejudicial to
public interest by altering the material aspects of the Company.
- An Application can be made to the NCLT under section 241 if the members of the Company believe
that affairs of the Company are done in a manner which is detrimental towards the members of the
Company and against public interest.
- If the Central Government feels that the activities of a Company are conducted in a manner which is
prejudicial to public interest it may itself apply to the tribunal.

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Basis of complaints by any member —
(a) The affairs of the company have been or are being conducted –
─ in a manner prejudicial to public interest, or
─ in a manner prejudicial or oppressive to him or any other member or members,
─ in a manner prejudicial to the interests of the company; or

(b) The material change, has taken place in the management or control of the company, whether by –
─ an alteration in the Board of Directors, or manager, or
─ in the ownership of the company’s shares, or ─ if it has no share capital, in its membership, or
─ in any other manner whatsoever

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What shall not comprise a material change u/s 241?
Ans: such material change shall not be a change brought about by, or in the interests of, any creditors, including
debenture holders or any class of shareholders of the company.

By analysing section 241 of the Act it can be noted:

ØSome unfair abuse of power by the person(s) in-charge of the management of the company.
ØAn unwise and inefficient management does not amount to oppression, though it may amount to mismanagement
under section 241.
ØWhere the company is run overriding the wishes and interest of the majority of shareholders involving the
company into costly litigations, the management can be said to be prejudicial to interest of the company.

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Point to be noted:
Continuity of mismanagement required: Where the wrongs contemplated were against a past director, the
application was not maintainable under section 241.
- Charges of mismanagement even if proved in the past are not enough to establish an existing injury to the
company or public interest.
- The mismanagement should be present and continuous (R.S. Mathur v H.S Mathur (1970)1 Comp LJ 35).
- If a director responsible for mismanagement is removed, mismanagement ends, and therefore application
under section 241 is not maintainable.

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Section 241 lays down eligibility criteria for filing an application for relief
against oppression and mismanagement.
According to 241 (1) following members shall have right to apply:
- In case of Company having Share Capital: Not less than 100 member or not less than 1/10 of the total
number of members whichever is less or any member(s) holding not less than 1/10th of the issue share
capital.
- In case of Company without Share Capital: Not less than 1/10th of the total number of members (Note:
The Tribunal may waive all or any of the requirement specified therein)
- An Application, shall be filed in the requisite Form.
- If there are more than One Applicant – the Letter of Consent signed by the rest of the members so
entitled, shall be annexed to the Application, and the names and addresses of all the members shall be
set out in a schedule to the Application.
- A copy of every Application made under this rule shall be served on the company, other respondents
and all such persons as the Tribunal may direct.

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The Tribunal shall look into the following matters before considering the application:
1. The application should be made in good faith and the tribunal shall consider whether the application is
made by some other persons other than the directors or officers of the company.
2. Whether the matter could be taken up in member’s own right.
3. Any evidence of the views of the members who have no direct or indirect personal interest in the
matters.
4. Where the cause of action is yet to occur and if it is capable of being authorised/ratified by the
company before it occurs and where the cause of action has already occurred if it is capable of
being ratified.

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After the application is admitted the following aspects are worthy of note:
1. The members of the class have to be served with a public notice
2. All applications which are similar shall be taken as one and the lead applicant shall be selected by the
class members. If no decision is reached regarding the appointment of the lead applicant the Tribunal
shall appoint the same.
3. The same cause of action cannot have more than one application.
4. The cost shall be borne by the company or the person responsible for the oppressive act.
5. All orders passed by the tribunal shall be binding.
6. This section pertaining to a class action is not applicable to Banking Companies.

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Section 244 - right to apply under section 241
Section 244(1)(a)
in the case of a company having a share capital,
(i) not less than one hundred members of the company or
(ii) not less than one-tenth of the total number of its members, whichever is less, or
(iii) any member or members holding not less than one tenth of the issued share capital of the company, subject to
the condition that the applicant or applicants has or have paid all calls and other sums due on his or their shares;

Section 244(1)(b)
in the case of a company not having a share capital,
- not less than one-fifth of the total number of its members

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Tribunal’s Right to Waive –
Provided that the Tribunal may, on an application made to it in this behalf, waive all or any of the requirements
specified in clause (a) or clause (b) so as to enable the members to apply under section 241.

Point to be noted –
- where any share or shares are held by two or more persons jointly, they shall be counted only as one member.

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Section 242 - Powers of Tribunal to prevent Oppression and
Mismanagement
- On receipt of the application u/s 241 the Tribunal may pass the order of the winding up of the Company on the
basis of grounds which are just and equitable to the Winding up of the Company or may pass any other order as
it deems fit.

- Tribunal may pass the following orders other than to windup the company.
1. Regulation of the conduct of affairs of the company in future
2. Purchase of shares /interests of any members of the company by other members
3. If any shares purchased its consequent reduction of share capital
4. Restriction on the transfer/allotment of shares
5. Termination, setting aside or modification of any agreement between the company and its Managing Director,
any other director or manager

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Tribunal may pass the following orders other than to windup the company.

6. Termination, setting aside or modification of any agreement between the company and any other person
7. The setting aside of any transfer, delivery of goods, Payment, execution or Other act relating to property
Made /done by/against the company within 3 months before the date of the application which would if made
/done by/against an individual, be deemed in his insolvency to be a fraudulent preference.
8. Removal of managing director, manager or any director of the company
9. Recovery of undue gain made by any managing director, manager or director and the manner of utilization
of the recovery.
10. Manner of appointment of managing director or manager of the company may subsequent to an order
removing
11. Appointment of the such number of persons as directors.
12. Imposition of costs as may be deemed fit by the tribunal.
13. Any other matters which the Tribunal thinks it is just and equitable

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Compliance:
A certified copy of the order shall be filed with the registrar within 30 days of the order by the tribunal.

Penalty:
- Any contravention of the provisions of this chapter shall lead company towards the imposing of fine which
shall not be less than 10 lakh rupees and which may extend to 25 lakh rupees and
- every officer of the company who is in default shall be punished with an imprisonment of six months and with
fine which shall not be less than twenty-five thousand rupees and which may extend to one lakh rupees.

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Appeals against the Orders of the Tribunal and Variation of the Order
of the Tribunal
- The Award pronounced by the NCLT (National Company Law Tribunal) may be appealed before the NCLAT
(National Company Law Appellate Tribunal).
- The appeal may be preferred by any person who is aggrieved by the decision of the tribunal.
- No appeal shall be entertained when the decision is given by the tribunal is based upon the consent of the
parties.
- Appeals must be made within a period of 45 days from the disputed order passed by the tribunal and the
extension may be given only when sufficient cause for such delayed filing is brought before the court by such
party and such extension shall only be for another 45 days.
- On receiving such appeal, the appellate tribunal must give a reasonable opportunity to the parties and then pass
an order confirming or modifying or setting aside the order appealed against.

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Maintainability of Petitions under Sections 241
- The validity of a petition must be judged from the facts as they were, at the time of its presentation, and a
petition which was valid when presented cannot cease to be maintainable by reason of events subsequent to its
presentation.
- For the purposes of the petition under Sections 241, it was only necessary that members who were already
constructively before the court should continue the proceedings.
- The provision under the Companies Act provides substantive provisions regarding an application that is to be
made when there is complaint of oppression and mismanagement. It clearly specifies who may complain and
when.
- Shareholders may make a complaint when the company affairs are conducted prejudicial to the company and its
shareholders.
- The central government may even take suo-moto action regarding the same under the aforementioned
provisions.

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- The initiation of class action suits is one of the major changes introduced by the Companies Act, 2013.
- Section 245 of Companies Act, 2013 contains provisions regarding Class Action.
- The major objective behind the provision of class action suits is to safeguard the interests of the minority
shareholders.
- A class action suit is a lawsuit where a group of people representing a common interest may approach the
Tribunal
- It is a procedural instrument that enables one or more plaintiffs to file and prosecute litigation on behalf of a
larger group or class having common rights and grievances.
- Class Action Suits, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit
where one of the parties is a group of people who are represented collectively by a member of that group.
- In a class action, a single plaintiff or small group of plaintiffs seeks to proceed on behalf of an entire class
who has been harmed by the same conduct by the same defendants.
- The concept of class action suits first came to highlight in the context of securities market when Satyam scam broke
out.

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WHO CAN FILE CLASS ACTION:
- Members or depositors of a class who are of the opinion that the management or conduct 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.
In case of Company having a Share Capital:
- Not less than 100 Members or
- Not less than 5 % of the total number of its members, whichever is less OR
- Any member or members holding not less than 5% of the issued share capital in case of the unlisted Company and
- not less than 2% of the issued share capital in case of listed Company, subject to the condition that such member/s
have paid all calls and other dues on the shares
In case of Company not having a Share Capital:
- Not less than 1/5th of the total number of its Members
- Not less than 100 depositors or 5% of the total number of depositors of the Company, whichever is less, Or Any
depositor/s to whom the Company owes 5% of total deposits of the Company.
- Also, 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 the act of omission, if any. [Section
245(10)]

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Deposit” includes any receipt of money by way of deposit or loan or in any
other form, by a company, but does not include:
- Any amount received from the government
- Loan from Bank/NBFC/Investment institutions
- Amount received from Directors, relatives out of their own funds
- Any amount raised by issue of Listed, unsecured, Non-Convertible Debentures
- Any amount received from an employee of the company not exceeding his annual salary under a contract of
employment with the company in the nature of non-interest bearing security deposit.
- Any amount brought by the Promoter as a condition of Bank Loan.
- Share Application money pending for allotment
- Any amount brought by the Promoter as a condition of Bank Loan
- Any Business Advance received by the Company outstanding for less than 365 days.
- Amount received as Security Deposit towards supply of goods/Services.
- Any advance received for an immovable property under an agreement which is adjusted against such property.
- Non-interest bearing amount received and held in Trust.
- Amount received by Nidhi companies.

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AGAINST WHOM CLASS ACTION CAN BE FILED:
- The company or directors for any fraudulent, unlawful or wrongful act or omission or conduct.
- 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
- 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.
In case of any suit against auditor or 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.

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RELIEFS THAT CAN BE SOUGHT:
- to restrain the company from committing an act which is ultra vires the articles or memorandum of the company;
- to restrain the company from committing a breach of any provision of the company’s memorandum or articles;
- 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 misstatement to the members or depositors;
- to restrain the company and its directors from acting on such resolution;
- 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;
- to restrain the company from taking action contrary to any resolution passed by the members.

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POWERS OF THE TRIBUNAL:
On receipt of a class action suit application, the Tribunal will look into the following before admitting it:
- whether the member or depositor is acting in good faith in making the application for seeking an order;
- any evidence before it as to the involvement of any person other than directors or officers of the company on
any of the matters;
- 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;
- 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;
- 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 authorized by the company before it occurs or ratified by the company
after it occurs;
- 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.

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Pre-requisites/ Conditions for considering admissibility of Application filed [Section
245(4) read with Rule 85]
Mandatory obligation
- Whether the member or depositor is acting in good faith in making the Application for seeking an order [Section
245(4)(a)];
- Any evidence before it as to involvement of any person other than directors or officers of the Company on any
matters which involve the Orders to be taken against the Company or its directors as provided in Clauses (a) to
(f) of Section 245(1) [Section 245(4) (b)];
- Whether the cause of action is one which the member/depositor could pursue in his own right than through an
order under this section [Section 245(4)(c)];

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If the application is admitted: The tribunal shall have regard to the following:
- public notice shall be served on the admission of the application to all the members or depositors of the class in
such manner as may be prescribed;
- 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 applicant’s side;
- two class action applications for the same cause of action shall not be allowed;
- 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.
- 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.

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Procedure to be followed by the Tribunal upon acceptance of Application
[Section 245(5) read with Rule 85, 86, 87]
1. The Application shall be filed before the Tribunal in Form NCLT-9. A copy of every Application shall be
served on the Company, other Respondent and all such person as the Tribunal may Direct.
(https://www.webtel.in/Image/$FORM-NO-NCLT-9.pdf)
2. Public Notice shall be served on admission of the application to all the members or depositors of the class,
as per Form No. NCLT 13, by – Publishing the same within 7 days of admission of the Application by the
Tribunal at least once in vernacular Newspaper in the principal vernacular language of the State in which
the registered office of the Company is situated and at least once in English in English Newspaper
circulating in the State; (https://www.webtel.in/Image/$FORM-NO-NCLT-13.pdf)
- Requiring the Company to place the public Notice on the website of such Company, if any;
- Notice shall also be placed on the website of the Tribunal, MCA, concerned RoC and in case of the Listed
Company on the website of the concerned Stock Exchange where the securities of the Company are listed, until
the Application is disposed off by the Tribunal.
- The date of issue of the newspaper in which such notice appears shall be considered on the date of serving the
public notice to all the members of the class.

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Rule of Opt-Out [Rule 86]
- As a general Rule, a Class member who receives a Public Notice as per the provisions of the Section shall be
deemed to be a member of the Class unless he expressly opts out of the proceedings.
- A member of the Class action has an option to opt out of the proceedings at any time after the Institution of Suit,
with the permission of the Tribunal as per Form NCLT-1. (https://www.webtel.in/Image/$FORM-NO-NCLT-1.pdf)
- A class member opting out shall not be precluded from pursuing a claim against the Company on an individual
basis under any other law, subject to any conditions imposed by the Tribunal.

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Orders of the Tribunal
- Any Orders passed by the Tribunal Shall be binding on The Company and All its members/depositors and
Auditor including Audit Firm Expert, Consultant or Advisor or any other person associated with the Company.
[Section 245(6)]
Non-Compliance of Order [Section 245(7)]
- The Company shall be punishable with a minimum fine of Rs 5 Lakh which may extend to Rs 25 Lakhs and
- every Officer in default shall be punishable with the Imprisonment for a term which may extend to 3 years
and with a minimum fine of Rs 25,000 which may extend to Rs 1 Lakh.

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Cost of Frivolous Complaints [Section 245(8)]
- Under this sub section the Tribunal has been provided with a right to reject the Application with the cost on
Applicant where it finds that the Application was frivolous or vexatious.
- Thus, if an Application if found frivolous or vexatious, the same shall be rejected by the Tribunal and the
reasons shall be recorded in writing and shall make an Order imposing a cost on the Applicant which shall not
exceed Rs 1 Lakh, to be paid to the Opposite Party.

Non- Applicability [Section 245(9)] - the provisions of Section 245 shall not apply to the Banking
Companies.

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EFFECT OF ORDER PASSED BY TRIBUNAL:
- 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.
- If a company 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.
COSTS AND EXPENSES:
- The cost or expenses connected with the publication of the public notice shall be borne by the applicant and shall
be defrayed by the company or any other person responsible for any oppressive act.

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CLASS ACTION VS. OPPRESSION:
- Section 241 limits its protection to the shareholders of a company, while section 245 also includes depositors
in its purview.
- as compared to Section 245, the scope of remedies available under Section 241 is much wider (such as
order for purchase of shares by any member, restrictions on transfer or allotment, termination or
modification of an agreement, removal or appointment of director etc.)
- Section 245 is much more generous with an award for damages and compensation to the applicants.
- Any order made under Section 245 is in nature of rem and is binding even on those members or depositors
who are not party to the application as opposed to an order of oppression and mismanagement which is
only binding on the parties to the application.
- While a Class Action can be invoked in case of any act prejudicial to the interest of the members, the
depositors or the company; in case of oppression and management, public interest is also taken into account.

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 THANK YOU Ruchi Bharda Jain

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