Centre challenges NCLT order on Delhi Gymkhana Club

NEW DELHI: The

Centre

has

challenged

an

order

by National Company Law Tribunal (

NCLT

) that

allowed

two

central nominees

to be

part

of the management of

Delhi Gymkhana Club

(DGC) instead of

appointing

an

administrator

.

Accusing the club’s general committee of treating it as their “riyaasat” while turning DGC from a “vyayamshaala to a madhushaala”, the Ministry of Corporate Affairs (MCA) said in its appeal before National Company Law Appellate Tribunal (NCLAT) that the relief by NCLT was “cosmetic and ineffective” and reiterated its demand to suspend the club’s general committee to appoint an administrator.

“Union of India prefers this appeal as Hon’ble NCLT has erred in not granting effective safeguard and remedy... aggrieved by the ineffective, cosmetic and feather-touch nature of interim relief, UOI has been constrained to approach” this tribunal, the plea states.

MCA argues that the process of inducting members into the much-sought-after club is “dubious and the criteria is a mystery”, which is the reason behind seeking an administrator to manage its affairs. It further argues that while NCLT accepted most of its submissions and agreed with the allegation that DGC was mismanaged, it refused to grant the interim relief.

In June, NCLT observed that the affairs of the club “prima facie” were being conducted in a “manner prejudicial to the public interest”. Besides appointing two members in the general committee, it had also directed the Centre to constitute a five-member special committee to inquire the affairs of the club and examine the issues related to the utility of the land leased out by the government and membership issues. The tribunal had also put several restrictions on the general committee till its further order.

The NCLT order came over a petition moved by the government through MCA, which had alleged “fraudulent and rampant mismanagement” by the general committee, besides others, and sought to take over the management control under sections 241 and 242 of the Companies Act 2003.

According to NCLT, the five-member committee will file a report of recommendations, suggesting for better use of the club premises for the larger good in a transparent manner on equity basis within two months. While putting several restrictions, NCLT has permitted the general committee to carry daily functions of the club by using funds other than fees collected from applicants for new membership.