Oppression, Mismanagement, And the Role of Class Actions in Strengthening Corporate Governance in India

ABSTRACT Corporate Governance is the backbone of a Company’s integrity, long-term sustainability and accountability in India. Under Companies Act, 2013, the powers have been divided into two segments to run and regulate the Company: one is the Board of Directors and other is the Shareholders or owners. The Directors exercise their powers through Board Meetings being responsible for day to day operations of the Company, whereas the Shareholders exercises their powers through General Meetings. It is a widely acclaimed fact that in any corporate entity, the shareholders are the owners. But they are rarely able to exercise any ownership rights in the company except for casting votes in General Meeting, therefore they are only the passive investors and not active participants to the governance process. This research paper critically analyses the legal remedies available in Companies Act, 2013 against oppression of minority shareholders and mismanagement by Directors of a company prejudicial to Company’s interest. Additionally, it examines the currently explored yet underdeveloped mechanism of class action suits available but infrequently used, provided in Section 245 of the Act, and demonstrates how stakeholders can use class actions suits to harness and strengthen governance frameworks of accountability. It examines procedural challenges, implementing gaps, and the emerging area of law around corporate behaviour in leadership accountability by situating polite conversation within the broader framework of corporate governance and sustainable development. Keywords: Oppression, Mismanagement, Class Action Suit, Companies Act, 2013, Minority Shareholders.