Sherin Rachel Santhosh, O.P. Jindal Global University
ABSTRACT
Under the corporate governance structure, the will of the majority prevails which leads to instances of oppression and mismanagement in a company. Common Law and Company’s Act has provided various remedies for the same which includes derivative actions under Common law and direct actions under sections 141-145 of the Company’s Act 2013. However, these remedies are rarely used and have remained as non-starters. When it comes to the remedies under the Companies Act, the main reason behind it being hardly used could be due to the restrictive nature of the provisions itself. However, sections 141-144 is used more compared to a class action suit under section 145 or a common law derivative action. Derivative suits, being the most important and effective of all remedies have remained as non- starters. If we look at the past last 12 years i.e., post 2010, less that 10 derivative action have reached high court and less than 5 have gone to supreme courts. It is extremely important to provide statutory importance to derivative actions under the Company’s Act. Increased use of these remedies especially derivative suits will help in better enforcement of corporate laws in India.
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