NCLT Mumbai Waives Membership Threshold For Film Producers' Association Members' Oppression Plea

The Mumbai Bench of the National Company Law Tribunal has allowed members of the Indian Motion Picture Producers' Association (IMPPA) to pursue an oppression and mismanagement petition by waiving the statutory membership requirement.

It held that the allegations warranted further examination. The tribunal also found that the alleged refusal to approve publicity material for a member's already registered film, if correct, amounted to an exceptional circumstance justifying the waiver.

A bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar observed that the member's rights could be prejudiced because the film had already been registered with IMPPA.

"It was contended by the Respondent Company that this submission is misplaced as the film producer can get the film registered with another such company and Petitioner No. 4 is a member of CINTA as well. However, it is told that the film is already registered with the Respondent Company. This allegation, if correct, in itself is an exceptional circumstance warranting waiver in the present case, as it prejudices the right of a person as a member of Respondent Company.", the tribunal ruled.

The dispute arose from a company petition filed on May 9, 2026 by four IMPPA members. They alleged financial irregularities, violations of the association's Articles of Association, wrongful suspension of members and refusal to approve publicity material for a film produced by one of them.

When IMPPA challenged the maintainability of the petition on the ground that it did not have the support of the required number of members, the applicants moved a waiver application on June 2, 2026.

IMPPA contended that the petition lacked support from one-fifth of its members, as required by law. It also argued that several consenting members had ceased to be members after failing to pay annual fees. According to IMPPA, some members had withdrawn their consent, while others had not given informed consent.

The applicants countered that there was uncertainty over IMPPA's actual membership strength. They pointed out that different records reflected different membership figures. They also argued that they had already secured written consent from 209 members and sought a waiver to avoid technical objections over maintainability.

Rejecting IMPPA's objection that the company petition should be dismissed without first considering the waiver request, the tribunal held that the waiver application deserved to be decided on its own merits.

"In view of these facts, the assertion of IMPPA that the company petition should be dismissed at threshold as not meeting the threshold requirement in terms of Section 244(1)(b) without considering the waiver application of Original Petitioner having been filed on the very next of the Company Petition listed on 1.6.2026 does not merit consideration, because it is trite that substance make take precedence over form and the Petitioners, having approached this Tribunal with their grievances arising from alleged acts of oppression and mismanagement, ought to be heard when their case deserve exercise of discretionary power in terms of proviso to Section 244(1) of the Companies Act, 2013", the tribunal observed.

The tribunal also rejected IMPPA's argument that several consenting members had automatically ceased to be members for non-payment of annual fees. It held that the Articles of Association required notice before membership could cease.

The tribunal noted that no such notices had been issued. It further observed that none of the consenting members had approached it claiming that they had withdrawn their consent or that their signatures had been forged.

Although the tribunal held that the consent letters did not amount to informed consent for every allegation raised in the petition, it found that they sufficiently supported the challenge to the suspension of the applicants. The tribunal held that this did not defeat the waiver application.

The tribunal further observed that the allegations concerning financial mismanagement, appointment of two Senior Vice Presidents, authentication of financial statements and suspension of members warranted scrutiny. It held that these allegations disclosed a prima facie case requiring examination.

"In these facts, the examination of allegations in relation to financial mismanagement also requires scrutiny, more so, when such allegations are alleged to be contrary to the decisions of the Executive committee. Further, the allegations in relation to appointment of Sr. Vice President and authentication of financial statements are stated to be in contravention of other provisions of the AoA. These issues certainly makes out a prima-facie case of oppression and mismanagement in case of Section 8 company set up for non profit motive.", the court opined.

Accordingly, the tribunal allowed the waiver application. It dismissed IMPPA's application seeking dismissal of the company petition. The tribunal directed that the main petition be listed for further consideration on July 24, 2026.

For the Applicant: Counsel Gaurav Joshi a/w Adv. Yahya Batatawala, Adv. Shilpa Joshi, Adv. Sneha Mishra

For the Respondent No. 1: Senior Advocate Chetan Kapadia, Sr. Adv. Ashish Kamat, Adv. Ashok Saraugi Pooja Sera, Adv. Nausher Kohli

For Respondent No. 2 to 4: Advocate Ashok Saraugi

For Respondent No. 5 to 7: Advocate Amit Dubey, Adv. Ajay Pal, Adv. Neeraj Yadav

For the Respondent 8, 9 & 10: Advocate Harsh Kesharia, Adv. Kavita Sandhi