Jindal Poly Films Class Action Dispute Referred to Arbitration

Jindal Poly Films Limited's shareholder class action, which alleged losses of ₹2,518.45 crore from certain promoter-linked transactions, was referred to arbitration by the Supreme Court on June 8, 2026. The order set aside NCLT and NCLAT rulings limited to maintainability, while keeping all parties' substantive contentions open.

What is the Jindal Poly Films class action dispute about?

The Jindal Poly Films Limited dispute began with a Section 245 class action petition filed in March 2024 by minority shareholders who together held 4.99% of the company's issued and paid-up share capital. The petition alleged that certain related-party transactions involving promoter-linked entities resulted in losses for the company and public shareholders.

The shareholders named transactions involving Jindal Powertech and Jindal Thermal. Their allegations included the sale of OCPS and RPS in Jindal Powertech to SSJ Trust and Jindal Poly Investment for about ₹105 crore, against a claimed fair value running into several thousand crore rupees. The petition also referred to loan write-offs and an allegedly undervalued sale of a subsidiary stake.

Reports cited FTI Consulting's estimate of losses at more than ₹2,500 crore. Separately, the three original petitioners - Ankit Jain, Rina Jain and Ruchi Jain Hanasoge - alleged a loss of ₹2,518.45 crore to Jindal Poly Films and its public shareholders. The company has maintained that admission of the petition did not amount to a finding on the merits of the allegations.

How did the NCLT and NCLAT deal with the petition?

The National Company Law Tribunal admitted the Section 245 petition on February 5, 2026, after rejecting Jindal Poly Films' challenge to its maintainability. The NCLT directed the issuance of a public notice to shareholders, allowing the matter to proceed as a class action.

The NCLT's order considered whether Section 245 of the Companies Act, 2013 could cover completed or concluded transactions. It held that the provision protects both the company and its members and that the compensation remedy under Section 245(1)(g) could apply to past transactions. The tribunal also did not accept an interpretation based on the US direct-versus-derivative action distinction.

The National Company Law Appellate Tribunal subsequently upheld the NCLT's view on maintainability on February 26, 2026. A reported NCLAT order also declined to stay the NCLT proceedings, stating that the minority shareholders' petition met the criteria prescribed under Section 245.

Why was the matter referred to arbitration?

The Supreme Court disposed of Jindal Poly Films Limited vs Monet Securities Private Limited on June 8, 2026 through a consent order. A Bench of Justices Prashant Kumar Mishra and Atul S Chandurkar recorded signed draft minutes presented by both sides.

The Court appointed former Chief Justice Manindra Mohan Shrivastava as the sole arbitrator and fixed Delhi as the seat of arbitration. It also set aside the NCLT and NCLAT orders, but only to the extent that those orders addressed the maintainability of the class action. All contentions of the parties were expressly kept open.

Monet Securities Private Limited was the contesting respondent recorded in the proceedings. The order noted that Monet Securities was not the original petitioner and had been substituted as class representative in place of Ankit Jain and other original petitioners after acquiring shares in the company.

Why does the Section 245 issue matter to shareholders?

Section 245 of the Companies Act provides a statutory route for members or depositors to seek relief where a company's affairs are conducted in a manner prejudicial to their interests, the company, or its members. The Jindal Poly Films case gained attention because it was described as the country's first admitted corporate class action under this provision.

The NCLT's approach was significant because it treated claims concerning past and completed transactions as potentially maintainable under Section 245. The appellate tribunal's decision to uphold that view strengthened the immediate legal basis for the petition before the Supreme Court consent order changed the forum for resolving the dispute.

For investors, the case concerns both the alleged financial effect of related-party transactions and the process available to minority shareholders to seek collective remedies. However, neither the NCLT admission order nor the NCLAT ruling determined whether the underlying allegations were established. The Supreme Court order likewise preserved the parties' positions for arbitration.

What is the current status of the Jindal Poly Films case?

The dispute has been referred to arbitration, with the former Chief Justice Manindra Mohan Shrivastava appointed as sole arbitrator. The NCLT and NCLAT decisions on maintainability no longer stand following the June 8 consent order, while the substantive dispute remains unresolved.

A group of 29 minority shareholders has also filed a plea seeking recall of the Supreme Court order that referred the dispute to arbitration. The Supreme Court agreed to hear that plea on a Friday, according to the case update. The matter is identified as Jindal Poly Films Limited vs Monet Securities Private Limited, Diary No. 37515/2026.

The recall plea introduces a further procedural issue around the June consent order and the appropriate forum for the shareholder claims. No final judicial finding on the alleged transactions, the claimed loss amount, or liability has been reported in the material provided.

Conclusion

The Jindal Poly Films dispute has moved from an admitted Section 245 class action before the NCLT to arbitration under a Supreme Court consent order. The allegations concern transactions said to have caused losses exceeding ₹2,500 crore, but the merits have not been adjudicated and Jindal Poly Films has said that the earlier admission order was not a conclusion on those allegations.

The next development to watch is the Supreme Court hearing on the minority shareholders' recall plea. Its treatment of that request could determine whether the June 8 arbitration arrangement continues unchanged or faces further judicial consideration.