‘To implement order of NCLT in letter & spirit’: Centre’s panel member on Delhi Gymkhana affairs

The Central government on Sunday appointed a six-member Committee to take charge of the Delhi Gymkhana Club, and it has initiated the process of examining the issues associated with the management of its affairs, and prioritised the smooth functioning of its operations of the club.

Talking to IANS, lawyer and BJP spokesperson Nalin Kohli, who is among the members on the Committee, said: “The board has taken the charge. The aim of the Committee is to run unhindered operations of the club. To implement the order of the NCLT in letter and spirit.”

The Committee, in a press statement, said: “This Committee, after taking charge of the affairs of the club, has already began the process of studying the concerned issues. The priority of the general committee is to ensure smooth functioning of the operations of the club.”

It added that its objective and mandate is to manage the affairs of the club for resolution of all issues that form part of the NCLT order and findings and also ensure compliance of the same in the letter and spirit. On April 1, the NCLT directed Centre to nominate 15 persons to be appointed as directors on the General Committee (GC) of the club, with six appointments already made on Sunday.

The club, the capital’s elite watering hole, has been embroiled in a legal battle with the government for nearly two years.

The Ministry of Corporate Affairs (MCA), in April 2020, moved NCLT under Sections 241 and 242 of the Companies Act, 2013, seeking direction to supersede the club’s GC. The National Company Law Appellate Tribunal (NCLAT), on February 15 last year, dissolved the GC and directed the Centre to appoint an administrator to manage its affairs. The MCA had moved the tribunal alleging corruption, mismanagement, and nepotism in the club.

The Delhi Gymkhana Club, initially registered as Section 8 company with specific objectives connected with sports and pastimes, obtained land on lease from the government. The government alleged the club started drifting away from the permitted objectives, which directly impacted its lease subsistence.

The NCLT noted that there is sufficient material for holding that it is a case of mismanagement of the affairs of the club and the GC members of each financial year have been propagating the same violations year after year, and some have been continuing from one period to another. The tribunal added that all this gives credence to the stand of the government that the club is run in the nature of “parivaarvaad” (nepotism), which cannot be countenanced in the light of provisions of the Companies Act.

The tribunal said: “The conduct of the General Council to devise methods to collect more amounts in the name of the registration fee and penalty clearly establishes a case of conduct prejudicial to interest of the company and against public interest.”

It added that the further act of investing the amounts in mutual funds and taking benefit for the use of the company also does not augur well for a club of this nature.

The NCLT said from 2014-15 onwards, the club adopted the method of increasing the registration fee, additional registration fee, application processing fee, etc and invested this amount in the interest-bearing investment/mutual fund, and the amount of income generated then became part of the income of the club.

Moreover, the amount received as registration fee was also subsumed as income, the tribunal’s order pointed out.

The other members named on the general committee are: former GOI Secretary Malay Kumar Sinha, BJP member Kuljeet Singh Chahal, former Electronics and Information technology Ajay Sawhney, Sashastra Seema Bal’s former Director General Kumar Rajesh Chandra, and former Indian Revenue Service officer Ashish Verma.

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