The National Company Law Tribunal (NCLT) has allowed the Central government to take over the management of Delhi Gymkhana Club and nominate 15 persons as directors of the general committee of the club.
Holding that the club was being run in the nature of “parivarvaad”, a two-member Bench, led by NCLT President Justice Ramalingam Sudhakar, said there was sufficient evidence to for holding that “it is a case of mismanagement for the affairs of the company and the general council members of each financial year have been propagating the same violations year after year”.
“The continued conduct of the governing body of the company whose acts are prejudicial to the public interest and against the interest of the company justify that the company of this kind should be wound up,” the tribunal noted in its judgment. In April 2020, the Ministry of Corporate Affairs (MCA) had moved a plea before the NCLT that a management committee appointed by the government should immediately take over Delhi Gymkhana Club as there was “fraudulent and rampant mismanagement of affairs” prevalent at the century-old club.
In its plea, the MCA had also requested that the club should be barred from accepting new members and a new 15-member government-appointed committee should manage the club. The MCA had said that since Delhi Gymkhana Club was initially registered as Section 8 Company and had obtained land on lease from the government, the government should be allowed to supersede the club’s board under Sections 241 and 242 of the Companies Act.