The Illusion Of Stakeholder Protection Under S. 166 Of The Companies Act, 2013: A Critical Analysis
- IJLLR Journal
- May 17
- 1 min read
Zzhara Batra, O.P Jindal Global University
ABSTRACT
This paper critically examines Section 166(2) of the Companies Act, 2013 arguing that while prima-facie, the section seems to adopt a stakeholder- inclusive framework, it ultimately perpetuates shareholder primacy. By analyzing legislative history, comparative law and literature, this paper demonstrably showcases how section 166(2)’s pluralist language is weakened by its four structural failures: the absence of hierarchy of interests, pronounced enforcement gap, India’s promoter ownership structure and its operational equivalent to the UK’s ESV model. By drawing on the works of acclaimed scholars, this paper concludes that non-shareholder stakeholders lack justiciable rights under the current architecture and proposes targeted reforms to operationalize the provision’s stated pluralist intent.
