B R KUNDRA Vs. MOTION PICTURES ASSOCIATION

JUDGEMENT

(1.) This order would dispose of C. As 720/76,736/76,737/76,103/77, 4/77 and 180/77 made in C.P. 32 of 1976.

(2.) C.P. 32 of 1976, a petition, under Sections 155, 397, 398 of theCompanies Act, 1956 (for short, the Act) by a member of Motion Pictures Association, a company incorporated under Section 25 of the Act(for short, the Company), with the purported support of more than therequisite number of members, as required under Section 399 of the Act,is based inter alia, on allegations of oppression of the minority by themajority in the control of the management of the company with a view,inter alia, to perpetuate the control of the group in power in the management of the company, to conduct the affairs of the comany in a partisanmanner so as to benefit the group in control and their supporters and toprejudice the interest of the minority and to take vindictive action, including action of expulsion from membership and other adverse actions in thematter of registration of Motion Pictures and settlement of claims. Oneof the allegations is that the group in the control of the management ofthe company is running rough shod over its affairs and conducting theaffairs of the company in a manner which is contrary to the provisions ofthe Articles of Association, of the company and the various Bye-laws,Rules and Regulations made by the company for the conduct of its business. On the basis of these allegations, and certain others, the petitionersseeks the removal of certain directors and their being debarred for folding any office under the Act, adequate representation on the ExecutiveCommittee for the minority group, free and fair election to the Executive Committee in a general meeting, to be convened for the purpose, inaccordance with the Rules and Regulations and certain other directionswith regard to the admissions and expulsion of members and registration of motion pictures by the members. The company, though registeredas such under the Act, is essentially an association set up to promoteand develop production, distribution and exhibition of motion picturesin the territory known in the film trade as the Delhi-U. P. circuit. Themembership of the company is confined to these carrying on, within thesaid territory, the business of production, distribution and exhibitionof motion pictures. By and large, the scheme of the Article of Association of the company and the various Bye-laws, Rules and Regulationsof the company is such that it is not possible for any person to carryon the aforesaid business within the said territory without being a member of the company, and without the picture being registered with thecompany. There are solutary provisions in the Articles, Bye-laws, Rulesand Regulations to regulate the conduct of business by the members,the adjudication of disputes between members inter se and there are anumber of provisions which make it impossible for a person to deal ina picture in relation to which there is an outstanding claim by anothermember unless the claim is satisfied. Having regard to the various provisions, the non-registration of a picture by the company and the expulsion by it of any member virtually incapicitates the member to carry onthe aforesaid trade in the said territory. The relevant Rules and Regulations provide for arbitration by an arbitrator, to be nominated by thecompany from among its members.

(3.) The various allegations on which the petition is grounded arevehemently denied by the company and those having the control of its management. A preliminary objection is also raised that the petitionis not maintainable inasmuch as the purported support to it by the othermembers is fictitious and the support, if any, has since been withdrawnin course of affidavits said to have been sworn by these members, which have also been filed along with the reply.