NCLT allows govt to takeover management of Delhi Gymkhana Club

Nearly two years after submitting its plea citing ''violations'' of companies law, the National Company Law Tribunal (NCLT) on Friday allowed the central government to take over the management of the prestigious Delhi Gymkhana Club.

Passing a 149-page order on the petition filed by the corporate affairs ministry, a two-member of the NCLT, headed by President Justice Ramalingam Sudhakar said there was ''sufficient material'' for holding that it is a case of mismanagement for the affairs of the club.

Earlier, the tribunal had allowed the ministry to nominate 15 persons as directors on the club's general committee as well as manage the affairs of the club.

''They (ministry) are directed to take all the actions for restructuring of the respondent no 1 (Gymkhana Club) in terms of memorandum and articles of Association and take corrective measures, which are in violation,'' the order passed on Friday said.

Further, it asked the present administrator or any other person, who are in charge of the affairs of the club, to ''hand over the charges to the newly appointed directors forthwith''.

''The new directors of the general committee appointed by the government in terms of this order shall file a report before this tribunal immediately after taking over charge of the club,'' the tribunal said.

Referring to some members continuing to be part of the previous general committee for a long period, the bench said, ''some have been continuing from one period to another giving credence to the stand of the central government the club is run in the nature of 'parivarvaad' (nepotism) which cannot be countenanced in the light of the provision of the Companies Act''.

Also, the tribunal asked the government directors to file a report before it once in three months or whenever it is required.

In April 2020, the government through the Ministry of Corporate Affairs had moved 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.

Delhi Gymkhana Club was initially registered as Section 8 Company with specific objects related to sports and pastimes, obtained land on lease from the government.

The government had alleged that over a period of time, it had slightly started drifting away and deviated from the permitted objects which may also impact subsistence of lease.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)