NCLAT Delhi Upholds NCLT Mumbai's Grant of Section 244 Waiver in Oppression and Mismanagement Case Against IMPPA
Background and Overview
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has dismissed the appeals filed by Indian Motion Picture Producers Association (IMPPA) challenging an order passed by the NCLT Mumbai Bench dated 8 July 2026. The NCLT's order had granted a waiver under Section 244(1)(b) of the Companies Act, 2013, thereby permitting the respondents to proceed with a petition under Sections 241 and 242 of the Companies Act, 2013, alleging oppression and mismanagement within the association.
The decision carries significant weight for companies not having share capital — particularly Section 8 companies — and clarifies the procedural boundaries applicable to waiver applications, the evidentiary burden regarding membership thresholds, and the scope of inquiry permissible at the waiver stage.
About the Parties and the Association
Indian Motion Picture Producers Association, the appellant before NCLAT, is a body incorporated as far back as 8 October 1938, originally under Section 25 of the Companies Act, 1956, and presently governed as a Section 8 company under the Companies Act, 2013. Its stated objectives include promotion of film, art, and culture and facilitation of activities in the Indian Films and Television Industry. Being an entity without share capital, all questions of membership thresholds for filing petitions are governed by Section 244(1)(b).
The respondents — Sanjeev Kumar Singh and others — are members who sought to bring a petition under Sections 241 and 242 citing multiple alleged acts of oppression and mismanagement within the association.
Allegations of Oppression and Mismanagement
The respondents/petitioners in the underlying company petition raised several serious grievances against those managing the association. These included:
- Diversion and misuse of IMPPA's funds
- Undisclosed and unapproved operational expenditure incurred without circulation of information to members
- Procedural irregularities in the executive committee meetings, including improper or absent circulation of notices, agenda notes, and minutes
- Non-compliance with
Article 53of the Articles of Association in relation to statements of accounts and balance sheets - Illegal appointment and continuation of two Senior Vice Presidents in their respective offices
- Illegal suspension and expulsion of Petitioner No. 4, Mr. Ratnakar Kumar, and Petitioners No. 1 to 3 from the executive committee
- Restraint on registration of title in the name of the association
On the basis of these grievances, the respondents prayed for quashing the illegal suspensions, restraining the appellants from contesting elections and participating in association affairs, and invoking an investigation under Section 213 of the Companies Act, 2013.
The Section 244 Threshold and the Waiver Dispute
Statutory Framework
Section 244 of the Companies Act, 2013 governs the right to apply under Section 241. Its relevant provisions read as follows: