AgenciesThe NCLAT has handed over control of the 107-year old Delhi Gymkhana Club to a government administrator, siding with the corporate affairs ministry’s prima facie fi ndings that the club’s affairs were conducted in manner prejudicial to public interest. ET takes a look at the developments.
CASE FILE
Centre had in April last year filed a petition alleging that the affairs of the Club were being conducted in a manner prejudicial to public interest. In an interim order, the National Company Law Tribunal had in June last year said there was a prima facie case.
*It asked govt to appoint 2 members in general committee
*5-member committee to review club’s affairs
*Govt appealed decision saying relief was inadequate
*Club also appealed decision
*NCLAT clubbed both appeals, passed common order
GOVT’S INVESTIGATIONS
1] INSPECTION REPORT
*MCA found fabricated financial statements
*Board favoured selected members at cost of public
2] PROPOSED ACTION
*Take over management
*Charge club’s board, auditors
*Ban new membership
3] ARGUMENTS
*Interest on membership fee of aspirants against public interest
*Membership based on nepotism, favouritism
*Prime land on perpetual lease is ‘state largesse’
CLUB’S REBUTTAL
1] ON INSPECTION REPORT
*Doesn’t render any findings of club’s conduct prejudicial to public interest
*Lower court misconstrued idea of public interest to exercise jurisdiction
2] ON GOVT’S ACTIONS
*Complete non-application of mind by government
*Petition filed based on complaints of disgruntled members
3] ARGUMENTS
*27 acres of land given to club does not invoke public interest
* Non-grant of membership nonjusticiable as public interest not involved
*No public interest involved in deposit money of prospective members
NCLAT’S INTERIM ORDER
*Interest of membership candidates constitutes public interest
*Club perpetuating apartheid under the garb of ‘distinctive character’
JUDGEMENT
*Suspension of club’s general committee
*Govt-nominated administrator to manage club’s affairs
*Ban on acceptance of new memberships and fees
*Case to go back to Tribunal
CASE FILE
Centre had in April last year filed a petition alleging that the affairs of the Club were being conducted in a manner prejudicial to public interest. In an interim order, the National Company Law Tribunal had in June last year said there was a prima facie case.
*It asked govt to appoint 2 members in general committee
*5-member committee to review club’s affairs
*Govt appealed decision saying relief was inadequate
*Club also appealed decision
*NCLAT clubbed both appeals, passed common order
GOVT’S INVESTIGATIONS
1] INSPECTION REPORT
*MCA found fabricated financial statements
*Board favoured selected members at cost of public
2] PROPOSED ACTION
*Take over management
*Charge club’s board, auditors
*Ban new membership
3] ARGUMENTS
*Interest on membership fee of aspirants against public interest
*Membership based on nepotism, favouritism
*Prime land on perpetual lease is ‘state largesse’
CLUB’S REBUTTAL
1] ON INSPECTION REPORT
*Doesn’t render any findings of club’s conduct prejudicial to public interest
*Lower court misconstrued idea of public interest to exercise jurisdiction
2] ON GOVT’S ACTIONS
*Complete non-application of mind by government
*Petition filed based on complaints of disgruntled members
3] ARGUMENTS
*27 acres of land given to club does not invoke public interest
* Non-grant of membership nonjusticiable as public interest not involved
*No public interest involved in deposit money of prospective members
NCLAT’S INTERIM ORDER
*Interest of membership candidates constitutes public interest
*Club perpetuating apartheid under the garb of ‘distinctive character’
JUDGEMENT
*Suspension of club’s general committee
*Govt-nominated administrator to manage club’s affairs
*Ban on acceptance of new memberships and fees
*Case to go back to Tribunal
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