NCLAT orders removal of Delhi Gymkhana’s governing body: Govt to appoint administrator


In a major blow to the current management of the Delhi Gymkhana, the National Company Law Appellate Tribunal (NCLAT) has ordered the suspension of the colonial era premier club’s governing body — General Committee (GC) — and directed the Centre to appoint an administrator to manage the affairs of the more than century-old club, located in the heart of Lutyens Delhi.

The Principle bench of the Appellate Tribunal has also directed that acceptance of new membership or fee or any enhancement thereof till disposal of wait list applications be kept on hold till disposal of the company petition.

In its order, NCLAT said that the considerations which must be present to the mind of tribunal at the conclusion of the Inquiry while recording the finding that the acts of “oppression and mismanagement” complained of are of a degree warranting winding up of the company but that it would be unfair to any class of stakeholders to wind up the company and therefore, would justify only passing of suitable direction, would not weigh at the stage of grant of interim relief when only interlocutory order may be required to be passed for regulating the conduct of the company’s affairs.

“We accordingly modify the interim relief by directing suspension of the GC and appointment of an Administrator to be nominated by the Union of India to manage the affairs of the Club and also direct that acceptance of new membership or fee or any enhancement thereof till disposal of wait list applications be kept on hold till disposal of the company petition,” said the order.

The appellate tribunal has ordered that its interim order should be carried into effect within two weeks.

The management has failed to protect the distinctive character of the Club which stands converted into “recreational club only”.

The order said: “Under the garb of distinctive character of the Club which is a relic of the Imperial past, the doors for membership are virtually limited to people having blue blood in their veins thereby perpetrating apartheid and shattering the most cherished Constitutional goal of securing social justice and equality of status and opportunity.”

The appellate tribunal upheld National Company Law Tribunal’s (NCLT) prima facie finding that the affairs of the Delhi Gymkhana Club were being conducted in a manner prejudicial to public interest, and, therefore, stayed the acceptance of new membership or fees and disposal of waitlist applications at the Club.

The Principle bench of NCLT had ordered the appointment of two “nominees” in the General Committee of the Delhi Gymkhana Club, which the NCLAT has modified and ordered for an overall suspension.

In April last year the Centre had moved a petition in the NCLT seeking a change of management of the Delhi Gymkhana Club by immediate appointment of 15 government nominees in its General Committee and transfer of absolute power to run the affairs of the posh club located adjacent to the PM’s residence.

Seeking to appoint its 15 nominees as administrators, the Centre, in its petition, had then said: “Fraudulent and rampant mismanagement of affairs of the Respondent 1 (Delhi Gymkhana Club) company (a Section 8 company under the Companies Act 2013) by the General committee of the company, to a great detriment of significant public interest.”

The government has used the same provision of the Companies Act while superseding the board of IL&FS.

The Delhi Gymkhana Club started as the Imperial Delhi Gymkhana Club Limited and the name was changed in 1959. The main objective of the club was to promote various sports and pastimes, and the petition contended of the total income earned from 2014-15 to 2018-19, there is no income directly from sports.