The National Company Law Tribunal, Principal Bench at New Delhi, has directed the Central Government to constitute a special committee to look into the functioning of the Delhi Gymkhana Club.
The Principal Bench headed by Acting President BSV Prakash Kumar has further directed the General Committee of the Club to not carry out the following activities:
- proceed with any construction on site
- make any policy decision
- make any changes to the Memorandum of Association or Articles of Association
- utilise funds received from members
- conduct balloting
The General Committee, however, is allowed to carry out the day to day functions of the club by utilising funds other than the fee collected from the members.
The order has come in a company petition moved by the Ministry of Corporate Affairs against the General Committee of the Delhi Gymkhana Club under section 241(2) of the Companies Act, 2013, alleging that the affairs of the club are being conducted in manners prejudicial to the public interest.
Therefore, the Central Government has sought Tribunal's direction to allow it to nominate 15 persons as Directors on the General Committee of the Club to manage the affairs of it and report to this Tribunal on such matters as it may direct, including restructuring of the Club.
While holding that the affairs of the club are, prima facie, being conducted in a manner prejudicial to public interest, the Tribunal directed the Centre to appoint two of its nominees of its choice as Members in the General Committee to monitor the affairs of the Club along with other GC Members and give suggestions to the GC.
The Tribunal has further directed:
'direct the Union of India to constitute a Special Committee with five Members of its choice to enquire into the affairs of the Club, utility of the land leased out by the State, with regard to constructions in progress without requisite approvals or with approvals, suggestions for changes in Articles and Memorandum of Association, membership issues including waitlist and about accelerated membership, adherence of the Club to the Rules governed by Section 8 of the Companies Act 2013 and other miscellaneous issues if any and file 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 hereof.'
In order to justify the notion that the club is being run in a manner prejudicial to public interest, the Tribunal remarked:
'Government owned land, is run by a coterie of people bringing in the children of permanent members and children's children for using facilities of the club despite several members remaining outside for decades together, when Government Officer retires taking him into private members quota, and using crores of rupees collected from waitlist members as its own money, and using public property of 27 acres of land in the Lutyen's Delhi adjacent to Prime Minister residence worth of thousands of crores on minimal annual rent of ₹1000 annual rent for lazing around in the evening for drinking amounts to prejudice to the public interest, all these are born out from the records, of course any interpretation could be given, but they cannot deny the fact that the club is basically for pastimes.'