INDIA Law and Practice Contributed by: Roopali Singh, Yugank Goel, Aayushi Rout and Sushanth Sanjay, Vritti Law Partners
2. Legal Framework 2.1 Collective Redress and Class Action Legislation There is no single law governing class actions in India. Instead, different statutes across civil procedure, com- pany law, competition, securities, consumer protec- tion, and environment law provide collective remedies in their respective domains. Together, these form an integrated ecosystem of procedural and substantive remedies. Code of Civil Procedure Order I Rule 8 of the CPC forms the foundation for collective civil actions in India. It allows “one or more persons” to sue or defend on behalf of others “having the same interest in one suit”, subject to the court’s permission and adequate notice to all affected parties. This provision applies broadly to civil disputes where a number of parties are affected by a common legal or factual issue. Though introduced long before modern class action systems, it continues to be widely used, particularly where no special law exists. Public Interest Litigation under the Constitution PILs evolved entirely through judicial interpretation of Articles 32 and 226 of the Constitution of India, 1950 (“Constitution”). Unlike statutory collective actions, it was not created by legislation but by the Supreme Court and high courts in response to social and con- stitutional needs. PILs allow any person or organisa- tion acting pro bono to seek redress for violations of fundamental or legal rights affecting the public at large. PILs can be initiated through formal petitions or through letters to the courts. These remain a cor- nerstone of India’s collective redress landscape, par- ticularly for enforcing constitutional and fundamental rights, administrative accountability, and environmen- tal protection. Companies Act The Companies Act provides two main remedies for shareholders and depositors: (i) Section 241, which allows members to bring actions alleging oppres- sion and mismanagement in a company; and (ii) Sec- tion 245, which established India’s first comprehen- sive statutory class action, permitting members and depositors to act collectively against a company, its
directors, auditors, or advisers for actions prejudicial to their interests. Such petitions are adjudicated by the National Company Law Tribunal (“NCLT”), under Section 245 read together with Rule 84 of the NCLT Rules, 2016 (“NCLT Rules”). Competition Act The Competition Act authorises collective claims in cases involving anti-competitive practices such as cartels or abuse of dominance. Following the princi- ples of Order I Rule 8 of the CPC, Section 53N (4) of the Competition Act allows “one or more persons” to apply to the National Company Law Appellate Tribunal (“NCLAT”) on behalf of others with similar interests. Importantly, such claims can only be made after the CCI has issued a final finding of contravention, a safe- guard that prevents premature or speculative filings. Securities Law and SEBI Framework Although the Securities and Exchange Board of India Act, 1992, does not provide for class actions, the Securities and Exchange Board of India (“SEBI”) sup- ports collective investor remedies through the SEBI (Investor Protection and Education Fund) Regula- tions, 2009 (“SEBI Regulations”). Under Regulation 5 (2)(e), SEBI can finance legal proceedings that involve issues affecting a large number of investors, thereby enabling collective redress. Additionally, enforcement orders and findings from SEBI serve as quasi-judicial determinations, with the potential to support follow-on private claims for compensation or recovery. Consumer Protection Act Under Section 35 (1)(c), the CPA enables “one or more consumers” to file complaints “on behalf of, or for the benefit of, all consumers so interested”, with the permission of the appropriate Consumer Disputes Redressal Commission. Importantly, Section 18 of the CPA empowers the CCPA to initiate class-wide regulatory actions for product recalls, refunds, or pro- hibition against unfair trade practices. Thus, the CPA provides for both participatory (through groups) and regulatory enforcement. National Green Tribunal Act The NGT Act establishes a specialised tribunal with wide jurisdiction over cases involving “substantial questions relating to the environment”. Under Section
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