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'Vacancies Remain;Time Has Come To Declare Tribunals Defunct': Supreme Court To Centre In Delhi Gymkhana Club Case

Shruti Kakkar
12 March 2022 7:43 AM GMT
Vacancies Remain;Time Has Come To Declare Tribunals Defunct: Supreme Court To Centre In Delhi Gymkhana Club Case
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The Supreme Court on Friday again pulled up the Central Government over the unfilled vacancies in Tribunals and went to the extent of orally remarking that time had come to declare the tribunals as defunct."Look at the vacancies. There are no officers to man the tribunal. Mr Solicitor General, names are recommended, why they are not cleared is not known to anyone?. Vacancies remain. Look at...

The Supreme Court on Friday again pulled up the Central Government over the unfilled vacancies in Tribunals and went to the extent of orally remarking that time had come to declare the tribunals as defunct.

"Look at the vacancies. There are no officers to man the tribunal. Mr Solicitor General, names are recommended, why they are not cleared is not known to anyone?. Vacancies remain. Look at the situation there. Time has come to declare the tribunals defunct," a bench led by Justice AM Khanwilkar observed orally.

The bench of Justices AM Khanwilkar and CT Ravikumar made these oral observations while considering a miscellaneous application preferred by the Central Government seeking extension of time to conclude the matter pertaining to Delhi Gymkhana Club before the NCLT Principal Bench at New Delhi.

"How can we pressurise the Tribunal like this to do it in one month? There are other cases where we have directed the Tribunal to conclude. Tribunal does not have any space to accommodate now. That is the tenor of the order. What the other litigants are suffering, you should feel the same here," the bench told the Solicitor General.

The Ministry of Corporate Affairs has filed a petition before the NCLT under section 241(2) of the Companies Act, 2013 against the General Committee of the Delhi Gymkhana Club alleging that the affairs of the club were being conducted in manners prejudicial to the public interest. The Tribunal had in July 2020 directed the suspension of Delhi Gymkhana Club's General Committee and appointment of an Administrator nominated by the Union of India.  

In appeal against the Tribunal's order, the Supreme Court had in September last year observed that the Delhi Gymkhana Club administrator cannot continue perennially, and directed the Tribunal to complete the proceedings within four months. If the proceedings are not complete within the said period, the Administrator was directed to hold elections.

On Friday, Solicitor General Tushar Mehta for the Union while seeking time two more months to finalize the proceedings said, "Our submissions are over, your Lordships gave 4 months, the other side is arguing & there is no delay on either side. If the time limit granted for conclusion can be extended for 2 more months."

"Why should we extend it? It is a self operating order," remarked Justice AM Khanwilkar at this juncture.

Drawing Court's attention to the order dated September 30, 2021, the SG said, "Elections will have to be held. Our arguments are over. The other side is on their legs. We may conclude."

Objecting to the application seeking extension of time, Senior Advocate Neeraj Kishan Kaul (appearing for Major Atul Dev (Retd), a former member of the Committee) stressed on conducting elections in case of failure of NCLT to dispose of the proceedings.

"We as an elected committee in 2020 had made a submission that we had nothing to do with the period being and there should be an elected body. If the hearing is not done, an election will be held," submitted Senior Advocate Neeraj Kishan Kaul.

"What else are we saying? Did we say something else? We are pointing out the same thing to him," remarked Justice Khanwilkar.

"Intention was it should be clearly immediately disposed of. No delay on their and our part. COVID intevrened," submitted SG.

Stressing on the multiple vacancies in the Tribunal, Justice AM Khanwilkar said, "Look at the vacancies. There are no officers to man the tribunal. Mr Solicitor General, names are recommended, why they are not cleared is not known to anyone. Vacancies remain. Look at the situation there. Time has come to declare the tribunals defunct.'

"We are holding meetings at the highest level," responded the SG.

"Your Lordships may consider having it. The matter was posted for hearing on Feb 2. I concluded. Your lordship may consider some reasonable time. There is no duly elected committee- that's our case. Instead of going to the assertions, let 2 weeks be granted. We have not shown any non cooperation as litigants," he further submitted.

"It's self operating order, let it take its course now. Why should we interfere? How can we pressurize the tribunal like this to do it in one month? There are other cases where we have directed the tribunal to conclude. Tribunal does not have any space to accommodate now. That is the tenor of the order. What the other litigants are suffering, you should feel the same here," remarked Justice Khanwilkar.

Senior Advocate Neeraj Kishan Kaul submitted that the administrator could not continue like this in perpetuity. He further submitted that the four month period was over in February and yet the administrator was not ready to hold the elections. It was also his contention that the allegations of misgovernance were to be decided by the appropriate forum and the same should not impede the process of holding elections in the club.

"The 4 month period was over on 1st February. We are perturbed by the administrator. Administrator can't continue like this in perpetuity. As far as the management committee is concerned, the decision is to be taken with regards to the high membership fee of the children of members being given membership. Let NCLT & NCLAT decide that. Union asks for appointment of administrator & his litigation costs are being paid by the club. He wants to continue in perpetuity. Whatever issue is there. Malfunctioning- that is to be decided by the forum. My learned Friend is trying to link the disposal of the matter with the elections. Those issues appropriate forums are seized of. The election should not be delayed," submitted Senior Advocate Neeraj Kishan Kaul.

Again requesting the Court to grant extension of time, SG said, "Let the Tribunal go into it. It will have the final result within 2 weeks. Severe injustice will be caused unintentionally. False members that have been included will become members. 100's of false members will be included in the list of voters."

Additional Solicitor General K.M. Nataraj also submitted that there were allegations of illegal memberships and those members would also vote in the election process.

Accordingly the bench at this juncture while acceding to SG's request granted the NCLT four weeks to dispose the proceedings. The bench also made it clear that it would not entertain any request by the Centre to extend the time period for the tribunal to complete the proceedings.

It may be noted that the bench headed by CJI NV Ramana while dealing with the matter related to filling up of vacancies in Tribunals on various occasions has criticized Union Government over the delay in filling up Tribunal vacancies.

Case Title: Rajeev Sabharwal and Another v. Union of India and Others| MA 422 of 2022

Appearances : For petitioners - Mr. Neeraj Kishan Kaul, Sr. Adv.Mr. Ritin Rai, Sr. Adv .Ms. Ruby Singh Ahuja, Adv. Mr. Gaurav Liberhan, Adv. Mr. Jatin Mongia, Adv. Ms. Deepti Sarin, Adv. Ms. Tahira Karanjawala, Adv.Mr. Vasu Singh, Adv.Mr. Toshiv Goyal, Adv.Mr. Dhruv Sharma, Adv.Mr. Raghav Agrawal, Adv.Ms. Tahira Kathpalia, Adv. Ms. Ritika, Adv. M/S. Karanjawala & Co., AOR;

For respondents : Mr. Tushar Mehta, SG, Mr. K.M. Nataraj, LD ASG, Mr. Akshay Amritanshu, Adv, Mr. Sughosh Subramanyam, Adv,Ms. Neela Kedar Gokhale, Adv, Mr. Kanu Agrawal, Adv, Mr. Arvind Kumar Sharma, AOR,

Ms. Ranjeeta Rohatgi, AOR,

M/S. Cyril Amarchand Mangaldas Aor, AOR, Mr. Siddharth Batra, AOR

Mr. Namit Saxena, AOR,Mr. Sonali Chopra, Adv.

Click here to read/download the order


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