The National Company Law Appellate Tribunal (NCLAT) on Monday ordered the appointment of a Central government-nominated administrator to manage the affairs of the Delhi Gymkhana Club after prima facie finding several irregularities.
The tribunal also ordered the suspension of the General Committee of the 107-year-old club, along with a halt on acceptance of new membership till further orders.
‘Perpetrating apartheid’
In a strongly-worded judgment, the tribunal said the club, which was granted government land on perpetual lease primarily for sports related activity, has been “converted into a recreational club for a chosen few with doors virtually shut for an aspirant belonging to the common stock”.
“Under the garb of distinctive character of the club which is a relic of the Imperial past, the doors for membership are virtually limited to people having blue blood thereby perpetrating apartheid and shattering the most cherished Constitutional goal of securing social justice and equality of status and opportunity,” the tribunal said.
The number of permanent members of the club is 5,600.
However, the users are stated to be double the number of permanent members.
The club is spread across 27 acres of land near the Prime Minister’s residence.
The Ministry of Corporate Affairs had claimed that new applicants seeking membership, and having paid registration fee, are on a waiting list for more than 37 years in the non-government category and more than 15 years in the government category.
The Ministry said the club virtually barred entry of people who applied for membership as the children of permanent members managed to sneak in as green card holders and finally as UCP (use of club premises) holders.
Public interest
The Ministry further alleged that the money taken from the waitlisted applicants was being utilised by the club by persons coming through various channels, a practice which it claimed was unfair and prejudicial to public interest. It stressed that barely 3% of the total expenditure was being incurred by the club towards sports activity and over 60% was being spent on maintaining the recreational club.
The club argued that it was entitled to decide membership issue in accordance with the Articles of Association and its action cannot be called into question by the government on the grounds of being prejudicial to public interest.
It pleaded that the land was allotted to the club after its incorporation in July 1913 for sports and pastimes along with other objectives, which have neither been altered nor is the club pursuing any other objective.
The tribunal opined that there was a “prima facie case demonstrating that the affairs of the club are being conducted in a manner prejudicial to public interest”.
“It is abundantly clear that misuse of the club meant for pastime and sports activities and denying access of membership even after accepting the enhanced membership fee... involved public interest,” the tribunal said.
