In January 2009, India witnessed one of its biggest corporate
scandals – the 'Satyam scandal' also referred to as
'India's Enron'. Satyam Computers Services Limited
("SCSL") was under the microscope for
fraudulent activity and misrepresentation of its accounts to its
board, stock exchanges, regulators, investors and all other
stakeholders. Thereafter, shareholders of SCSL, approximately
300,000 were unsuccessful in claiming damages worth millions due to
the absence of the provision for filing a class action suit under
the Companies Act, 1956. American investors on the other hand were
able to claim their part of damages in the US courts through a
class action suit against SCSL.
The concept of class action was first introduced in the US in
the year 1938. 'Class Action', which is also known as
'Representative Action', is actually a form of lawsuit
where a large group of people collectively brings a claim to the
court through a representative. A class action suit is
