Mint Explainer: Why are class actions on the rise in India?

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Subscribe to enjoy similar stories. Class actions are gaining prominence in India following recent cases against Ola Electric Ltd and Jindal Poly Films Ltd. Earlier this year, minority shareholders of Jindal Poly Films filed a class action lawsuit – the first in India – against the company’s promoters, claiming fraudulent conduct.

And Ola Electric now faces the possibility of a class action after the Central Consumer Protection Authority (CCPA) issued a show-cause notice, alleging violations of consumer rights and misleading advertising. Mint explains what a class action is and why it is on the rise in India. A class action is a legal mechanism that allows a group of people with a common grievance to file a single case against a party rather than separate lawsuits.

It can be used for such things as reversing illegal activities, stopping harmful decisions or demanding compensation for damages. In India, class actions in corporate governance were formally introduced through Section 245 of the Companies Act in 2013. These cases are adjudicated by the National Company Law Tribunal (NCLT).

Last week the Central Consumer Protection Authority (CCPA) issued a show-cause notice to Ola Electric after nearly 10,000 consumer complaints were lodged on the National Consumer Helpline from September 2023 to August 2024. These complaints involve a range of issues including delayed deliveries, faulty vehicles, misleading advertisements and inadequate customer service. Also read | Ola Electric: Cutting the noise and next steps The CCPA has accused Ola of violating the Consumer Protection Act, 2019.