How class action lawsuits work in India and why such cases remain rare

The Anthropic copyright settlement puts class actions back in the spotlight. Here's how similar collective legal remedies operate under Indian law

When Julia Roberts won an Oscar for portraying Erin Brockovich in 2001, she brought one of the world's most powerful legal tools into popular culture -- class action. The film told the true story of a single mother and legal clerk who helped hundreds of residents take on a California utility company over contaminated water.

 

Class actions are again in the spotlight after a US federal judge approved a $1.5 billion settlement in a copyright case involving artificial intelligence (AI) company Anthropic. Several authors alleged that millions of pirated books had been used to train Claude, Anthropic's most advanced large language model. The deal is the largest known copyright settlement in US history and one of the biggest class actions involving AI.

 

 

A class action allows one or a few people to sue on behalf of a larger group that has suffered the same alleged harm. Instead of hundreds or thousands of people filing separate cases over the same issue, a representative plaintiff brings one case for the entire group.

 

India, however, does not have a single US-style law governing class actions. Instead, collective remedies are available under different statutes, depending on whether the dispute involves consumers, shareholders or broader civil claims.

What collective legal routes are available in India?

Representative suits under Order I, Rule 8 of the Code of Civil Procedure, 1908 (CPC), come closest to conventional class actions. The provision allows one or more people, with the court’s permission, to sue or defend a case on behalf of others with the same interest.

 

Before allowing such a suit to proceed, the court must ensure that notice is issued to affected people, giving them an opportunity to participate or raise objections.

 

Apart from the representative suits, the other two routes are:

 

- Section 245 of the Companies Act, 2013, allows eligible shareholders or depositors to approach the National Company Law Tribunal (NCLT) if they believe a company’s affairs are being conducted in a manner prejudicial to their interests or to the company. They may ask the tribunal to restrain certain company actions, challenge key decisions and seek compensation from the company or those responsible, including directors, auditors, consultants and advisers.

 

- The Consumer Protection Act, 2019, permits one or more consumers to file a complaint on behalf of numerous consumers with the same interest, subject to permission from the relevant consumer commission. Recognised consumer associations, the central or state governments, and the Central Consumer Protection Authority (CCPA) can also initiate proceedings in appropriate cases.

How does a class action work?

A class action begins with identifying a common grievance and a group of people who have suffered the same harm. The next step is choosing the right legal forum, whether the National Company Law Tribunal (NCLT) for shareholder disputes, a consumer commission for consumer complaints, or a civil court for representative suits.

 

Where the law sets eligibility requirements, such as under Section 245 of the Companies Act, these must first be met. A representative applicant then files the case on behalf of the entire group, supported by evidence showing that all claims arise from substantially the same facts. The court or tribunal decides whether the case is fit to proceed as a collective action.

 

In shareholder class actions, the NCLT also considers whether the applicants are acting in good faith, whether they share a common interest and whether hearing a single collective case is more appropriate than multiple individual lawsuits. If the petition is admitted, a public notice is issued so other affected members can join the proceedings, raise objections or choose not to participate.

Key Indian cases around collective legal action

One of the best-known examples is the Nestle Maggi case. In 2015, following food safety concerns over Maggi noodles, the Department of Consumer Affairs, Ministry of Consumer Affairs, Food & Public Distribution, filed a complaint before the National Consumer Disputes Redressal Commission (NCDRC) under Section 12(1)(d) of the Consumer Protection Act, 1986, which allowed the government to file a complaint on behalf of numerous consumers with the same interest. The complaint alleged unfair trade practices, false labelling and the sale of defective and hazardous goods, and sought nearly ₹640 crore, including punitive damages. In April 2024, the NCDRC dismissed the complaint in Nestle India's favour. 

Another closely watched case involves Jindal Poly Films Ltd. Minority shareholders holding about 4.99 per cent of the company's shareholding invoked Section 245 of the Companies Act, 2013, alleging that certain corporate transactions were prejudicial to minority investors. In February 2026, the NCLT rejected preliminary objections on the maintainability of the petition and admitted it for issuance of notice. Importantly, the tribunal clarified that it had not ruled on the merits of the allegations, which remain to be adjudicated. Even so, the order is widely seen as one of the clearest judicial examinations of India's shareholder class action provisions to date.

 

Collective litigation has also played an important role in cases involving homebuyers. Proceedings relating to stalled housing projects such as Amrapali saw thousands of affected buyers pursue common remedies through court-supervised processes, although these were not class actions in the strict American legal sense. They nevertheless illustrate how Indian courts have increasingly dealt with disputes involving large groups of similarly affected individuals.

Why are class actions still uncommon in India?

Class action cases remain relatively uncommon in India because the framework is spread across different laws instead of a single statute. Each forum has its own procedures, while eligibility requirements, particularly under company law, can be difficult for minority shareholders to meet. Building a clearly defined class is often another challenge. Lengthy court proceedings, high litigation costs and the absence of a well-developed litigation funding ecosystem can discourage claimants from pursuing collective actions, according to legal experts at Legal 500.

 

That could gradually change. Legal experts at AZB & Partners believe that as disputes involving artificial intelligence, digital platforms, financial products and consumer rights become more common, collective litigation is likely to gain greater relevance in India.