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Journalism of Courage
The National Company Law Appellate Tribunal (NCLAT) on Monday suspended the general committee of the Delhi Gymkhana Club and asked the central government to appoint an administrator to manage the affairs of the club in the interim. A three-member Bench, led by acting NCLAT chairperson Justice Bansi Lal Bhat, in its judgment, also said that the club shall, in the interim, not accept any new membership or fee from the members.
The NCLAT was hearing a plea moved by the Centre which had challenged an order by the principal Bench of the National Company Law Tribunal (NCLT). In its order last June, the NCLT had, while refusing to suspend the entire general committee of the Delhi Gymkhana Club, asked the Centre to appoint two members to the managing committee instead.
Aggrieved by the order, the Centre had, in its plea before the NCLAT, said that appointing two members to the general committee did not give it “effective and efficacious remedy to stem the rot” present in the Gymkhana Club.
Last April, the Ministry of Corporate Affairs (MCA) had moved the NCLT alleging that the club’s affairs were being run in a manner “prejudicial to public interest”. The Delhi Gymkhana Club is registered as a company under section 8 of the Companies Act.
Among various other charges, the MCA alleged that the club had over the course of time become a den of nepotism and gave preferential treatment in membership only to existing members and their children.
Due to various complex rules around admission to club, the membership was consistently denied to applicants, while the application fee they submitted was used by the club for its activities, the MCA had alleged.
