INDIA Law and Practice Contributed by: Roopali Singh, Yugank Goel, Aayushi Rout and Sushanth Sanjay, Vritti Law Partners
Throughout this life cycle, judicial supervision is not merely adversarial oversight but managerial steward- ship. 3.3 Standing Rules on who can bring a collective action (known as standing) vary depending on the type of proceed- ing and the forum. In India, standing is shaped by both constitutional principles and statutory require- ments, reflecting a balance between broad access to justice and protection against frivolous litigation. The writ jurisdiction is expansive, and the Supreme Court and high courts have allowed public-spirited persons and organisations to sue in the public interest where those directly affected are unable to do so – an approach crystallised in cases such as Bar Council of Maharashtra v M V Dabholkar , AIR 1976 SC 242; Hus- sainara Khatoon (VII) v Home Secretary , AIR 1995 SC 2445; and S P Gupta v Union of India , AIR 1982 SC 149. However, the courts have emphasised bona fides and have developed filing formalities and disclosure obligations to deter mala fide petitions. Statutory routes adopt more prescriptive standing rules. The Companies Act prescribes quantitative thresholds for eligibility: (i) in a listed company, at least 100 members or not less than 5% of total members, or any member(s) holding not less than 2% of issued share capital; (ii) in an unlisted company, at least 100 members or not less than 5% of total members, or any member(s) holding not less than 5% of issued share capital; and (iii) for depositors, at least 100 deposi- tors or not less than 5% of total depositors, or any depositor(s) to whom the company owes at least 5% of total deposits. These criteria accommodate differ- ent company structures while ensuring substantial stakeholder support for class actions. Under the CPA, the District Commission’s jurisdic- tion can be invoked where the claim does not exceed INR10,000,000, whereas the State and National Commission’s jurisdiction is attracted in claims val- ued between INR10,000,000 and INR20,000,000 and above INR20,000,000 respectively. The defini- tion of “consumer” is prescriptive: only persons who purchase goods or hire services “for consideration” and “for personal use and not for resale or commer- cial purpose” qualify as consumers. This delineation
ensures that collective complaints address genu- ine consumer grievances rather than commercial disputes. According to Section 35 (1)(c), consumer class actions require permission from the concerned commission, which must determine whether the com- plainants have “the same interest” and whether col- lective adjudication would ensure judicial efficiency. The commission must also confirm that only legitimate “consumers” are represented, and the claim concerns genuine consumer grievances rather than disputes of a commercial nature. The NGT Act provides broad standing for “any person aggrieved”, including representative bodies. The policy underlying these differences is transpar- ent – that the public law route maximises access to remedy and institutional reform, while statutory private law routes prioritise procedural certainty and limits on speculative litigation. 3.4 Class Members, Size and Mechanism – Opting In or Out In India, the definition of a class in collective actions is functional rather than strictly numeral. Except where specific statutes prescribe thresholds, courts deter- mine class membership based on commonality of interest – whether factual, legal or both. The test is intentionally flexible, and members need not have identical claims, but their claims must be sufficiently homogeneous for common adjudication. Companies Act: Hybrid Approach Section 245 establishes a hybrid class action model where eligibility begins with applicant thresholds, fol- lowed by public notice in Form NCLT 13 issued “to all members and depositors of the class”. Those notified are included by default unless they opt out within the specified period. This structure maintains procedural efficiency while preserving individual autonomy and choice rights. Consumer Protection: Primarily Opt-In Consumer class actions under Section 35 (1)(c) require permission from the commission, making participation primarily opt-in. Once permitted, individuals with the same interest are automatically included and barred from filing separate complaints.
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