NCLAT upholds Central government takeover of Delhi Gymkhana Club
The National Company Law Appellate Tribunal (NCLAT) on Monday upheld the Central government's takeover of the prestigious Delhi Gymkhana Club [Major Atul Dev (Retd) v. Union of India Ministry of Corporate Affairs Through Regional Director (North Region)]
A coram of NCLAT comprising Chairperson Justice (retd) Ashok Bhushan and Technical Member Arun Baroka dismissed appeals against an order of National Company Law Tribunal (NCLT) approving the takeover.
The Appellate Tribunal directed the government-appointed 15-member committee to carry out all remedial measures as mandated by the NCLT, by March 31, 2025. The committee has further been directed to conduct an election at the club three months after March 31, 2025 in order to appoint elected representatives to govern the Club.
It has also been directed to act in accordance with the Articles of Association and the Memorandum of Association of the Club.
The petitioners were represented by Senior Advocate Krishnendu Dutta and advocate Gaurav M. Liberhan
Advocates Raunak Dhillon and Ishan Malik represented the Central government.
Today's NCLAT order puts an end to a two-year-old appeal by some members of the former management of the Delhi Gymkhana Club. In April 2022, the NCLT allowed the Central government to take over the affairs of the Club, appointing a 15-member committee to manage its affairs.
The NCLT passed the order in a petition moved by the Central government under Sections 241 and 242 of the Companies Act, 2013 alleging that the affairs of Delhi Gymkhana Club were being conducted in a manner prejudicial to public interest.
“We hold that it will be just and equitable to allow the prayer of the Union Government to nominate 15 persons to be appointed as directors on the general committee," the NCLT stated.
The NCLT found merit in the Centre's contention that there were instances of mismanagement and financial arbitrariness in collecting various amounts by the Club, which was contrary to the Articles of Association and in violation of provisions of the Companies Act.
It was alleged that the members of the General Committee of the Club were acting for the benefit of a few chosen members, and at the expense of the general public.
The admission process could only be described as 'parivaar-vaad' (dynastic), the Centre alleged.