The three songs from the film that are vying to be in the final nomination list include "Dakkanaga Dugu Dugu", "DAM999 Theme Song" and "Mujhe Chhod Ke".
The film's director, Sohan Roy, a marine engineer by profession, is upbeat about the news.
"This is a crowning achievement for 'DAM 999' and my dream project has attained the true recognition it deserves," Roy said in a press statement.
The movie, a $10 million production, tells the tale of a cracking dam built during colonial rule and revolves around nine characters and their emotions. The lives of all the nine characters revolve around the central edifice - the pressure-mounted dam.
"DAM 999" was released in the last week of November across the country barring Tamil Nadu, which banned the film, as the dispute between Tamil Nadu and Kerala reached a crescendo over the Mullaperiyar Dam, which is 115 years old and has started to leak.
The movie had a week-long Oscar qualifying screening at Los Angeles from Oct 28.
The final 84th Academy Awards nominations will be announced on January 24, 2012, in the Academy's Samuel Goldwyn Theater.