Updated: 17 September 2026

Section 241 of Companies Act 2013: Application to NCLT for Oppression and Mismanagement

Section 241 of the Companies Act, 2013 is part of Chapter XVI, dealing with prevention of oppression and mismanagement. It enables an eligible member to approach the National Company Law Tribunal (NCLT) when the affairs of a company are conducted in a prejudicial or oppressive manner, or when a material change in management or control is likely to prejudice the company or its members.

In brief: Section 241 creates the right to seek relief; Section 244 governs which members may apply; and Section 242 sets out the Tribunal's powers and the orders it may pass.
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Meaning and scope of Section 241

For the purpose of this provision, "Tribunal" means the National Company Law Tribunal constituted under Section 408 of the Companies Act, 2013. Section 241 is directed at company affairs that are oppressive to members, prejudicial to members or the company, or prejudicial to public interest. It also addresses certain material changes in the management or control of a company where the resulting conduct is likely to be prejudicial.

The statutory remedy is not confined to a complaint about an isolated disagreement. The application must bring the case within the grounds stated in Section 241 and, for a member's application under Section 241(1), the applicant must satisfy Section 244 or obtain an applicable waiver from the Tribunal.

Section 241(1): when a member may apply to the Tribunal

Section 241(1)(a). A member may complain that the affairs of the company have been or are being conducted in a manner prejudicial to public interest, prejudicial or oppressive to that member or other member or members, or prejudicial to the interests of the company.

Section 241(1)(b). A member may also apply where a material change has taken place in the management or control of the company, other than a change brought about by or in the interests of specified creditors or shareholders, and because of that change it is likely that the company's affairs will be conducted in a manner prejudicial to the company, its members or a class of members.

A material change may concern, among other matters, the Board of Directors, the manager, ownership of shares, membership of a company having no share capital, or another change in management or control. The member's right to apply is expressly linked to Section 244.

Who can apply: Section 244

Section 244 prescribes the member eligibility requirements for an application under Section 241. In a company having share capital, the statutory threshold is linked to the number of members or the proportion of issued share capital, subject to the conditions in Section 244. In a company without share capital, the provision uses a proportion of the total number of members. The Tribunal also has statutory power to waive all or any of the requirements specified in Section 244(1), enabling an application under Section 241 in an appropriate case.

Because eligibility can turn on the company's membership and shareholding structure, Section 244 should be checked together with Section 241 before filing a petition.

Section 241(2): application by the Central Government

Where the Central Government is of the opinion that the affairs of a company are being conducted in a manner prejudicial to public interest, Section 241(2) authorises the Central Government itself to apply to the Tribunal for an order under Chapter XVI.

The proviso inserted by the Companies (Amendment) Act, 2019 provides for applications concerning such company or class of companies as may be prescribed to be made before and dealt with by the Principal Bench of the Tribunal.

Section 241(3) to (5): proceedings concerning a fit and proper person

The 2019 amendment also inserted sub-sections (3) to (5). These provisions permit the Central Government, where the statutory circumstances exist, to initiate a case against a person concerned in the conduct and management of a company's affairs and refer it to the Tribunal for a decision on whether that person is fit and proper to hold the office of director or another office connected with the conduct and management of a company.

The circumstances specified in Section 241(3) include allegations involving fraud, misfeasance, persistent negligence, default in legal obligations or functions, breach of trust, departure from sound business principles or prudent commercial practices, serious injury or damage to the relevant trade, industry or business, intent to default creditors or members, fraudulent or unlawful purpose, or conduct prejudicial to public interest.

Under Section 241(4), the person against whom the case is referred must be joined as a respondent. Under Section 241(5), the Central Government's application must contain a concise statement of the relevant circumstances and materials and must be signed and verified in the manner prescribed for a plaint by the Central Government under the Code of Civil Procedure, 1908.

What relief can NCLT grant under Section 242?

Section 242 is the principal remedial provision connected with a Section 241 application. Where the statutory conditions in Section 242(1) are satisfied, the Tribunal may make such order as it thinks fit with a view to bringing an end to the matters complained of.

ProvisionPurpose
Section 241Grounds and applications concerning oppression, prejudice and related mismanagement.
Section 242Powers of the Tribunal to make orders for bringing an end to the matters complained of.
Sections 243 and 244Consequences relating to specified agreements and the right of members to apply under Section 241.
Sections 245 and 246Class action and application of specified provisions to proceedings under Section 241 or Section 245.

Depending on the facts and the statutory requirements, orders under Section 242 may address the future regulation of company affairs, purchase of shares or interests, restrictions relating to transfer or allotment of shares, changes to certain agreements, removal of managerial personnel, recovery of undue gains, appointment of directors and other measures permitted by the section.

NCLT procedure and applicable rules

Proceedings under Section 241 are before the NCLT and should be read with the Companies Act, 2013 and the National Company Law Tribunal Rules, 2016, including the applicable filing, pleading, service, affidavit and procedural requirements. Parties should also verify the current NCLT practice directions, bench jurisdiction and filing requirements before submission.

Practical point: A petition should clearly identify the acts complained of, explain how they fall within Section 241, establish the applicant's standing under Section 244 where applicable, identify the relief sought under Section 242, and support material factual allegations with relevant company records and other admissible material.

Section 241 should ordinarily be read with Sections 242 to 246 of the Companies Act, 2013. Section 242 deals with the powers of the Tribunal; Section 243 addresses consequences of termination or modification of certain agreements; Section 244 governs the right to apply under Section 241; Section 245 concerns class action; and Section 246 applies specified provisions to proceedings under Section 241 or Section 245.

Official legal resources

For the authoritative statutory text and current procedural material, refer to the official resources linked in the sidebar. The text of the Act and applicable rules should be checked for amendments, notifications and current filing requirements before legal action is taken.

This page is a general legal information resource and is not a substitute for advice on the facts of a particular company dispute.