HDF Limited, a listed entity was into real-estate business. Over a period in an attempt to diversify its operations it borrowed heavily from banks and financial institutions. The Company appointed a Merchant Banking firm

As per the provisions of Section 245(1) of the Companies Act, 2013, the member or members, depositor or depositors or any class of them, as the case may be, as are indicated in sub-section 245(3) may, if they are of the opinion that the management or conduct of the affairs of the company are being conducted in a manner prejudicial to the interests of the company or its members or depositors, file an application before the Tribunal on behalf of the members or depositors to claim damages or compensation or demand any other suitable action from or against: the Company or its directors for any fraudulent, unlawful or wrongful act or omission; the auditor including audit firm of a Company for any improper or misleading statement of particulars made in the audit report or for any unlawful or fraudulent conduct; any expert or advisor or consultant or an incorrect or misleading statement made to the Company. However, Rule 84 of the National Company Law Tribunal Rules, 2016 provides that: An application under sub-section (1) of section 245, read with sub-section (3) of section 245 of the Act, shall be filled in Form NCLT-9. A copy of every application under sub-rule (1) shall be served on the company, other respondents and all such persons as the Tribunal may direct. 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 - (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 (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. The requisite number of depositor or depositors to file an application under sub-section (1) of section 245 shall be - (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. Based on the aforementioned provisions, it can be concluded that shareholders of HDF Limited will be successful in filing Class Action Suit against the company, its directors and consultants including merchant banking firm/rating agencies.