NCLAT directs govt committee to conduct Delhi Gymkhana Club polls

Though the coram comprising Chairperson Justice (retd) Ashok Bhushan and Technical Member Arun Baroka, upheld an order allowing central government to take over the management of the prestigious Delhi Gymkhana Club, it at the same time clarified that the club must go back to the members, and it should have their own management committee.

In its 108-page ruling, the appellate tribunal fixed March 31, 2025, as the timeline for the committee to take the remedial actions, mandated by the NCLT and thereafter conduct the polls within three months.

To be sure, the NCLT in its April 1, 2022, order had directed the committee to take all actions for restructuring the Club in terms of the memorandum and Articles of Association (AOA) and take corrective measures which were in violation of the MOA and AOA.

Also Read: Centre’s panel takes over Delhi Gymkhana’s affairs

“The Committee nominated by the Central Government has to take remedial actions as indicted in the order dated 01.04.2022, with a view to bringing to an end the matter complained of. Completion of the process of remedial actions have to be taken within a time frame. Taking all remedial actions by the Committee to end the matter complained of is both in the public interest and in the interest of the Club. We, thus, are of the view that the Committee nominated by the Central Government has to complete the process of taking actions to bring to an end the matters complained of expeditiously,” the tribunal said in the ruling.

The tribunal added, “We are inclined to fix a time frame for completing the process of remedial actions by Committee to subserve the object for which NCLT passed an order under Section 241 and 242. We direct the Committee to complete its process of taking remedial action to bring to an end the matters complained of by 31.03.2025. The Committee to also conduct the elections as per the Article of Association, Clause 20 of the Article of Association deals with ‘Management of the Club to be vested in a General Committee’, which provides the mode and manner of the election of the General Committee. The Committee nominated by the Central Government in pursuance of the impugned order dated 01.04.2022, is directed to conduct the election of President and Members of the General Council in accordance with Clause 20 of the Article of Association within three months after 31.03.2025 and install the duly elected General Council accordingly.”

In its appeal argued by senior advocate Krishnendu Dutta and advocate Gaurav M Liberhan, the erstwhile management had argued that the NCLT committed errors in allowing Centre’s plea. The counsels further added that NCLTs order was for an indefinite period and the tribunal had neither prescribed any time limit for the 15 members committee to bring an end to the affairs prejudicial to the public interest complained of and the committee could not be allowed to continue indefinitely.

The tribunal passed the order while considering a petition filed by the erstwhile management members against NCLT’s April 1, 2022, order allowing the Centre to nominate 15 persons as Directors in the General Committee of Delhi Gymkhana Club Limited in place of the General Counsel of the Club and manage its affairs, citing “violations” of the Company Law.

The April 2022 order was passed after the Ministry of Corporate Affairs (MCA) had moved the NCLT under sections 241 and 242 of the Companies Act, 2013, seeking to supersede the club’s general committee. Sections 241 and 242 of the Companies Act deal with oppression and mismanagement and give wide powers to the tribunal, which include removal of the managing director, manager or any of the directors of the company and recovery of undue gains. The government had alleged that the club over a period of time, had slightly started drifting away from the permitted objectives, which could have impacted the subsistence of the lease.

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