The National Company Law Appellate Tribunal has dismissed appeals filed by the Indian Motion Picture Producers Association (IMPPA), clearing the way for a group of dissenting members to pursue allegations of oppression and mismanagement against the association's office-bearers. The appellate tribunal found no infirmity in an earlier order of the National Company Law Tribunal's Mumbai bench that had granted the members a waiver to bring the petition.
A three-member NCLAT bench, comprising Justice Sharad Kumar Sharma as judicial member and technical members Arun Baroka and Indevar Pandey, held that the members had met the threshold requirement for waiver under Section 244(1)(b) of the Companies Act, 2013. With this, the NCLT will now hear the petition under Sections 241 and 242 — which deal with oppression and mismanagement — on its merits. The bench also closed all pending interlocutory applications.
What the petitioners allege
According to reports, the members behind the petition allege misuse and diversion of funds, unapproved operational expenditure, irregularities in the circulation of notices and minutes of executive committee meetings, and lapses in maintaining accounts under the association's Articles of Association. They also allege the unlawful appointment of two senior vice-presidents and the improper suspension and expulsion of members. The petitioners, whose plea is supported by consent letters from 209 members, had also sought an investigation under Section 213 of the Companies Act. These allegations are yet to be tested on merits and will now be examined by the NCLT.
Why IMPPA's objections failed
IMPPA had challenged the petition's maintainability, arguing it has around 26,000 members and therefore needed at least 250 valid consents, against the 209 submitted. It further claimed many of the consenting members were not eligible to vote, that consent had not been informed, and that several signatures were forged.
The NCLAT rejected these arguments, relying on a voters' list that IMPPA itself had circulated on April 1, 2022 for its own elections, which showed 977 eligible voting members — making 209 consents sufficient under the one-fifth requirement. On the forgery claim, the tribunal said the burden of proof lay on IMPPA under Section 101 of the Evidence Act, noting the association had neither sought forensic verification of the signatures nor produced any consenting member to deny having signed. The bench also observed that the Supreme Court's ruling in Cyrus Investments bars tribunals from deciding the merits of a case at the waiver stage.
IMPPA, established in 1937, is described as India's oldest and largest association of film producers and operates as a Section 8 company without share capital. Sections 241 and 242 of the Companies Act give the tribunal wide powers, including the removal of directors and the recovery of undue gains.
Sources:
NCLAT allows oppression, mismanagement plea against office-bearers of film producers' body IMPPA — The Economic Times
NCLAT allows oppression, mismanagement case against IMPPA office-bearers — The Hindu BusinessLine
A three-member NCLAT bench, comprising Justice Sharad Kumar Sharma as judicial member and technical members Arun Baroka and Indevar Pandey, held that the members had met the threshold requirement for waiver under Section 244(1)(b) of the Companies Act, 2013. With this, the NCLT will now hear the petition under Sections 241 and 242 — which deal with oppression and mismanagement — on its merits. The bench also closed all pending interlocutory applications.
What the petitioners allege
According to reports, the members behind the petition allege misuse and diversion of funds, unapproved operational expenditure, irregularities in the circulation of notices and minutes of executive committee meetings, and lapses in maintaining accounts under the association's Articles of Association. They also allege the unlawful appointment of two senior vice-presidents and the improper suspension and expulsion of members. The petitioners, whose plea is supported by consent letters from 209 members, had also sought an investigation under Section 213 of the Companies Act. These allegations are yet to be tested on merits and will now be examined by the NCLT.
Why IMPPA's objections failed
IMPPA had challenged the petition's maintainability, arguing it has around 26,000 members and therefore needed at least 250 valid consents, against the 209 submitted. It further claimed many of the consenting members were not eligible to vote, that consent had not been informed, and that several signatures were forged.
The NCLAT rejected these arguments, relying on a voters' list that IMPPA itself had circulated on April 1, 2022 for its own elections, which showed 977 eligible voting members — making 209 consents sufficient under the one-fifth requirement. On the forgery claim, the tribunal said the burden of proof lay on IMPPA under Section 101 of the Evidence Act, noting the association had neither sought forensic verification of the signatures nor produced any consenting member to deny having signed. The bench also observed that the Supreme Court's ruling in Cyrus Investments bars tribunals from deciding the merits of a case at the waiver stage.
IMPPA, established in 1937, is described as India's oldest and largest association of film producers and operates as a Section 8 company without share capital. Sections 241 and 242 of the Companies Act give the tribunal wide powers, including the removal of directors and the recovery of undue gains.
Sources:
NCLAT allows oppression, mismanagement plea against office-bearers of film producers' body IMPPA — The Economic Times
NCLAT allows oppression, mismanagement case against IMPPA office-bearers — The Hindu BusinessLine
