National Company Law Tribunal (Second Amendment) Rules, 2019 (Class Action Suit to NCLT and Omission of Fees for Compounding of certain Offences U/S 441
Ministry of Corporate Affairs vide its Notification No. G.S.R. 351(E) dated 08th May, 2019 has notify National Company Law Tribunal (Second Amendment) Rules, 2019 which is effective from the date of their publication in the Official Gazette i.e. 08th May, 2019.
The Notification is in pursuant to Rule 84 and Specified Fees of National Company Law Tribunal Rules, 2016 (hereinafter referred to as the principal rules).
1. Rule 84 of the Principal Rules is for Right to apply under section 245 (i.e. Class Action)
What is Class Action?
Class Action is a type of suit file to specified adjudicating authority on behalf of a larger group or class, wherein such class has common rights and grievances.
Notification dated 08th May, 2019 has newly inserted sub rule (3) and (4) after sub rule (2) of the Principal Rules stated following:
“(3) In case of a company having a share capital, the requisite number of member or members to file an application under sub-section (1) of section 245 shall be –
(i) (a) at least five per cent. of the total number of members of the company; or
(b) one hundred members of the company,
whichever is less; or
(ii) (a) member or members holding not less than five per cent. of the issued share capital of the company, in case of an unlisted company;
(b) member or members holding not less than two per cent. of the issued share capital of the company, in case of a listed company.
(4) The requisite number of depositor or depositors to file an application under sub-section (1) of section 245 shall be –
(i) (a) at least five per cent. of the total number of depositors of the company; or
(b) one hundred depositors of the company,
whichever is less; or;
(ii) depositor or depositors to whom the company owes five per cent. of total deposits of the company.”
For Class Action Suit MCA has specify the requisite preliminary requirement to initiate Class Action which is as follows:
i. Number of Members:
(A) 5% or more of the Total number of Members of the Company
(B) 100 Members
(A) or (B) Whichever is less
(E.g. If Company is having 500 Members:
500*5%= 25 Members
Whichever is less i.e. 25 Members can initiate Class Action against Company)
ii. Notification further include the criteria on the basis of Share Capital too which is as follows:
(A) In case of Unlisted Company (Private and Public):
Not less than 5% of Issued Share Capital
(B) In Case of Listed Company:
Not less than 2 % of Issued Share Capital
iii. Depositors can file Application for Class Action with following strength:
iv. On the basis of Number of Depositors:
(A) 5% OR more of Total Number of Depositors
(B) 100 Depositors
(A) Or (B) whichever is less
v. On the bases of Debt Owed by Company:
Company Owes 5 % of Total Deposits of the Company.
2. In the schedule of fees, serial No. 28 shall be omitted
Serial No. 28 is following:
Sec. 441 (Compounding of Certain Offences)
Fees for Application for compounding of certain offences: 1,000/-