New Delhi, April 1 : The National Company Law Tribunal (NCLT) on Friday allowed the Centre to nominate 15 persons to be appointed as Directors on the general committee (GC) of the Delhi Gymkhana Club to manage its affairs.
President, Justice Ramalingam Sudhakar and Member Narender Kumar Bhola passed the order on a petition by the Centre under Sections 241 and 242 of the Companies Act, 2013, alleging club’s affairs were being conducted in a manner prejudicial to public interest.
The tribunal said: “The petition is allowed and the Central government is permitted to nominate 15 number of persons to be appointed as Directors on the General Committee of respondent no.1 company (Delhi Gymkhana Club) and manage the affairs of the company in accordance with the memorandum and Articles of Association and the Companies Act, 2013.”
The tribunal directed the directors to file a report before it, once in three months or whenever required.”They are directed to take all actions for restructuring the respondent no.1 company in terms of the memorandum and Articles of Association and take corrective measures which are in violation of the memorandum and Articles of Association, and the Companies Act, 2013,” it said in its 149-page order.
It noted that there is sufficient material for holding that it is a case of mismanagement of the affairs of the club and the General Council 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 said all this gives credence to the stand of the government that the club is run in the nature of “parivaarvaad”, which cannot be countenanced in the light of provisions of the Companies Act.
The tribunal noted that the Centre represents the people and therefore, public interest becomes relevant and the manner in which the company is run prejudicial to the interest of the company therefore, though it is beneficial to the member or members of the company, such company which is run in violations of the Companies Act is very a serious issue.
The Central government had sought direction to arrest the long-standing artificial hereditary succession mode of membership.
The tribunal directed the present administrator of the club to hand over the charge to the newly-appointed Directors of the club forthwith.
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.
On March 11, the top court gave four weeks’ time to the NCLT to complete the proceedings in the matter.
The National Company Law Appellate Tribunal, on February 15 last year, dissolved the club’s General Committee and directed the Centre to appoint an administrator to manage its affairs, after the Ministry of Corporate Affairs moved the tribunal alleging corruption, mismanagement, and nepotism in theAclub.
On September 30, last year, the Supreme Court, while hearing the appeals filed against the NCLAT, remanded the matter back to the NCLT and asked it to settle it within four months.
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