By S&S Co. Advocates & Solicitors · Published 15 September 2026 · Informational content, not legal advice — see our disclaimer
What "Oppression and Mismanagement" Relief Is For
Sections 241 and 242 of the Companies Act, 2013 give a member of a company a route to approach the National Company Law Tribunal where the affairs of the company are being conducted in a manner that is oppressive to one or more members, or prejudicial to the interests of the company or to the public interest. It is the primary statutory remedy available to a minority shareholder, or a founder who has been squeezed out of management, where ordinary internal governance mechanisms — board resolutions, shareholder votes — have effectively been captured by a majority or controlling faction acting against the complainant's legitimate interests as a member.
"Oppression," in this context, generally requires conduct that is burdensome, harsh and wrongful toward the complainant specifically in their capacity as a member or shareholder — not merely conduct the complainant personally dislikes or disagrees with as a matter of business judgment. "Mismanagement" generally requires conduct prejudicial to the company's own interests, typically arising from some material change in the management or control of the company's affairs. The two grounds often overlap in practice — a controlling faction's mismanagement of company affairs frequently also operates oppressively against a minority shareholder whose economic interest is thereby diminished — but a well-drafted petition should address both grounds with the specific facts that support each.
Who Can File: The Section 244 Eligibility Thresholds
Not every member can file an oppression and mismanagement petition as of right — Section 244 sets minimum eligibility thresholds designed to filter out petitions brought by shareholders with too small a stake to warrant the Tribunal's intervention as of right. For a company having share capital, a petition can be filed by not less than 100 members, or one-tenth of the total number of members, whichever is less, or by any member or members holding not less than one-tenth of the issued share capital of the company (subject to the requirement that calls and other sums due on the relevant shares have been paid). For a company without share capital, the threshold is instead framed by reference to a specified proportion of the total number of members.
Founders and minority shareholders assessing whether they independently meet this threshold should calculate their own holding, and that of any co-petitioners willing to join the petition, carefully and early — a petition filed by a petitioner or group of petitioners who do not in fact meet the Section 244 threshold is vulnerable to a preliminary objection on maintainability before the substantive oppression allegations are even reached.
The Waiver Route for Shareholders Below the Threshold
Where a member or group of members does not independently meet the Section 244 threshold, the Tribunal has power to waive the requirement in an appropriate case, allowing the petition to proceed despite the petitioner's smaller stake. A waiver application is assessed on its own footing, and Tribunals and the National Company Law Appellate Tribunal have generally treated a waiver application as calling for an assessment of the petitioner's eligibility circumstances — such as whether the petitioner's shareholding was diluted through the very conduct complained of, or other case-specific reasons the low threshold should not bar the petition — rather than an assessment of the underlying merits of the oppression allegations themselves, which are reserved for the substantive hearing if the waiver is granted. A founder or minority shareholder who does not meet the bare Section 244 threshold should not assume they are without a remedy purely on that account, but should expect the waiver application itself to require a properly reasoned, fact-specific case for why the threshold ought to be relaxed.
What the NCLT Can Order
Section 242 gives the Tribunal wide remedial powers once oppression or mismanagement is established, going well beyond a simple declaration. These include the power to regulate the conduct of the company's affairs going forward; to order the purchase of the shares of one group of members by another, or by the company itself; to remove or appoint directors; to set aside or modify agreements the Tribunal finds were entered into to the detriment of the company or the complaining members; and generally to make such other order as the Tribunal thinks fit to bring the oppression or mismanagement to an end and provide a workable path forward for the company's affairs. Because the range of relief is genuinely broad, a petition should be drafted with a clear view of what practical outcome the petitioner is actually seeking — a buy-out of the petitioner's shares at a fair valuation, restoration to a management role, or a structural change in governance, for instance — rather than pleading only in general terms and leaving the specific remedy to be worked out later.
A Recent Clarification on Who Counts as a "Member"
A petition under Sections 241-244 can generally only be maintained by a "member" of the company, which has traditionally been understood to require the petitioner's name to appear in the company's register of members. The Supreme Court's 2026 ruling in Dr. Bais Surgical and Medical Institute Pvt. Ltd. v. Dhananjay Pande (2026 INSC 447) has meaningfully qualified this position, holding that an investor whose name was never formally entered in the register of members can nonetheless maintain an oppression and mismanagement petition where the company's own conduct — treating the investor as a stakeholder, allotting them a managerial role such as Managing Director, and accepting substantial investment on that footing — consistently recognised the investor as a member in substance, even though share certificates were never formally issued. The ruling closes off what had been a common preliminary objection: that the petitioner's claim should fail purely on the technical ground of non-entry in the statutory register, where the company itself had otherwise treated the petitioner as a member throughout.
Frequently Asked Questions
What shareholding threshold do I need to file an oppression and mismanagement petition?
For a company with share capital, Section 244 of the Companies Act requires the petition to be filed by not less than 100 members, or one-tenth of the total number of members (whichever is less), or by members holding not less than one-tenth of the issued share capital. Petitioners should calculate their own holding, and any co-petitioners', carefully before filing, since falling short of the threshold invites a preliminary maintainability objection.
Can I still file a petition if I don't meet the minimum shareholding threshold?
Possibly. The NCLT has power to waive the Section 244 threshold in an appropriate case, based on the petitioner's specific circumstances — such as where the shareholding was diluted through the very conduct being complained of. The waiver application itself is assessed on eligibility grounds, not on the underlying merits of the oppression allegations, so it needs its own properly reasoned case.
What remedies can the NCLT order in an oppression and mismanagement case?
The Tribunal's powers under Section 242 are broad, including regulating the company's future conduct, ordering a buy-out of shares between groups of members or by the company, removing or appointing directors, and setting aside agreements found to be prejudicial. Petitioners should be clear about the specific practical outcome they are seeking, since the range of available relief is wide.
Can someone file an oppression petition if their name was never entered in the company's register of members?
In some cases, yes. The Supreme Court's 2026 ruling in Dr. Bais Surgical and Medical Institute Pvt. Ltd. v. Dhananjay Pande held that a petitioner never formally entered in the register of members can still maintain a petition where the company's own conduct — accepting investment, allotting a managerial role, and otherwise treating the petitioner as a stakeholder — consistently recognised them as a member in substance.
References & Further Reading
This article references the following statutory provisions. Readers should always verify current rules, fees and timelines against the applicable statute and rules as amended, since these are revised from time to time.
- Companies Act, 2013, Sections 241, 242, 243 and 244, as amended.
- Dr. Bais Surgical and Medical Institute Pvt. Ltd. & Ors. v. Dhananjay Pande, 2026 INSC 447 (decided 4 May 2026) — membership in substance despite non-entry in the register of members.