The National Company Law Appellate Tribunal (NCLAT) has upheld a waiver allowing members of the Indian Motion Picture Producers Association to pursue an oppression and mismanagement case against the Association, despite IMPPA’s objection over the number of members supporting the petition.
A bench of judicial member Justice Sharad Kumar Sharma, and technical members Arun Baroka and Indevar Pandey upheld the National Company Law Tribunal’s decision to grant the waiver. The bench held that the Tribunal had properly exercised its discretion under section 244(1)(b) of the Companies Act.
The dispute arose from a petition filed by 209 IMPPA members on May 8, 2026. They alleged misuse and diversion of funds, lack of disclosure of expenditure, irregularities in circulation of notices and minutes, discrepancies in accounts, and illegal appointment of two senior vice presidents. The members also alleged illegal suspension and expulsion of members.
IMPPA opposed the maintainability of the petition and argued that the members were required to meet the statutory threshold under section 244 before pursuing the case. Section 244(1)(b) of the Companies Act requires members of a company without share capital to have the support of at least one-fifth of its members to apply under section 241. But the Tribunal is allowed to waive this requirement and enable members to pursue the proceedings.
IMPPA told the NCLAT that it had 26,000 members of whom 1,250 were eligible to vote. On that basis, it argued that at least 250 members were required. It further claimed that only 98 of the 209 members who had signed the petition, were eligible voters. The remaining 111 had not paid their annual membership fees, it mentioned.
The NCLAT rejected IMPPA’s challenge.