NCLAT dismisses Jindal Poly Films’ plea challenging class action lawsuit

In a setback for Jindal Poly Films, the National Company Law Appellate Tribunal (NCLAT) on February 26 dismissed the company’s plea against a previous order allowing a class action suit to proceed. The ruling upholds the National Company Law Tribunal’s (NCLT) decision to admit the lawsuit and issued a formal notice to the company.The class action suit, initiated by minority shareholders, alleges the siphoning of funds to entities linked to the company’s promoters. Shareholders claim these actions have resulted in an estimated loss of ₹2,000 crore to Jindal Poly Films, arguing that the maneuvers were prejudicial to public investors.

In reference to the NCLAT’s order today, Jindal Poly Films said in a statement, “Today, the Hon’ble National Company Law Appellate Tribunal (NCLAT) decided the appeal filed by us against the order passed by the Hon’ble National Company Law Tribunal (NCLT) on 05.02.2026. This decision rendered today does not have any implications or bearing on the merits of the case as the Hon’ble NCLT is yet to start hearing the matter.”
“Jindal Poly reiterates that all business decisions were taken under commercial wisdom with necessary approvals as required under applicable laws. This decision does not impose any findings on the allegations made in the petition. The company is reviewing the order and shall decide on the next steps accordingly,” said a spokesperson of Jindal Poly Films.Shares of Jindal Poly Films were down 4.91% on the day and traded at ₹609.10 apiece at the BSE as of 1:08 pm IST.

The timeline of transactionsThe shareholders’ plea to the NCLT details a series of financial moves occurring between FY13 and FY17. Jindal Poly Films invested ₹700 crore into two related entities — Jindal Powertech and Jindal Thermal — using Optionally Convertible Preference Shares (OCPS) and Redeemable Preference Shares (RPS).

These investments of ₹700 crore were allegedly written off almost simultaneously after being made.

When the related entities defaulted on their debts and entered settlement talks with lenders, Jindal Poly Films invested an additional ₹600 crore to facilitate those settlements.

Jindal Poly Films invested approximately ₹1,300 crore into these entities during a downturn. However, once the health of the power sector improved, the company allegedly sold its shares in these related entities to a promoter group trust for only ₹106 crore.

The minority shareholders contend that this sequence of events — investing heavily when “the chips were down” and selling cheaply during a recovery — is the primary driver of the ₹2,000 crore loss.

Read more: Jindal Poly on SEBI Radar: Regulator moves NCLT on investment write-offs in group company