Jindal Films' class action suit: NCLAT declines to stay NCLT order

The National Company Law Appellate Tribunal (NCLAT) has declined to stay an order by the National Company Law Tribunal (NCLT) that admitted a class action petition against Jindal Poly Films, filed by its shareholders. The petition alleges the siphoning of more than Rs 2,500 crore through undervalued asset sales and related-party transactions. The NCLAT bench determined that the NCLT had correctly assessed the fulfillment of the criteria outlined in Section 245 of the Companies Act.

Jindal Poly Films argued that the notice issued following the NCLT’s decision had negatively impacted the company’s reputation and share price, which fell by 31% between February 23, 2024, and February 5, 2026. They also contended that Section 245 should not apply to past transactions. However, the NCLAT dismissed these arguments, noting that the NCLT had considered additional petitions from shareholders representing over 5% of the company’s shares, who chose to consolidate their claims.

The allegations center around investments made between 2013 and 2017 in Jindal Powertech and Jindal India Thermal Power, which later received debt waivers and were subsequently sold at undervalued prices to promoter-linked entities, resulting in significant losses for public investors. The NCLAT’s decision allows the class action suit to proceed, potentially leading to damages, compensation, or injunctions to protect the interests of the shareholders.

(Source：News18)