New Delhi: The general committee members of the Delhi Gymkhana have approached the Supreme Court, challenging the order passed by the National Company Law Appellate Tribunal (NCLAT) suspending the Club’s general committee.
The appeal, filed on 26 February, alleges that the NCLAT order is “arbitrary, without any basis and suffers from complete non-application of mind”. It points out that the current general committee was elected in December 2020, while allegations against the club pertain to the period from 2013 to 2018.
It asserts that the NCLAT’s order violates Article 19 of the Constitution, as it has “imposed obligations on the Club which do not attach to private institutions like the Club”.
The government, it says, “are not and ought not to concern themselves with the affairs of private members clubs”.
“The action of the Central Government in singling out the Club is arbitrary, unfair and in violation of Article 14 of the Constitution. The action of the Central Government is a colourable exercise of power and simply an attempt to take over management of a private members’ club,” it alleges.
The NCLAT had, on 15 February, dissolved the governing council of the Delhi Gymkhana and appointed an administrator to oversee and check “mismanagement” even as the case that will decide the future of one of the national capital’s hoary old clubs continues at the National Company Law Tribunal (NCLT).
The administrator was to be nominated by the central government. Consequently, M.M. Juneja, director general of the Ministry of Corporate Affairs, took charge of the club soon after.
NCLAT had criticised the club for “perpetuating apartheid…under the garb of distinctive character”.
“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 in their veins thereby perpetrating apartheid and shattering the most cherished Constitutional goal of securing social justice and equality of status and opportunity,” it had observed.
The appeal, therefore, now contends that the NCLAT “passed uncalled for and unwarranted remarks against the Club and all such institutions and clubs”.
‘Against the fundamental right of the club’
The appeal contends that “clubs have the absolute freedom to govern themselves in accordance with their charters’ and the courts, including the Ld. NCLT and Hon’ble NCLAT, have a very limited scope of judicial review in the matter of the functioning of such clubs”.
It says that just because a refundable application fee is taken from prospective members, it cannot be said that there is an element of ‘public interest’ in the affairs of the club.
The appeal goes on to assert that the contention that all people should have an equal right to become members of a club “is wholly untenable as this militates against the fundamental right of the club or association to decide who it will admit as its member”.
Club under govt lens since last year
The NCLT had on 26 June last year placed the Club under the government scanner on a petition filed by the Ministry of Corporate Affairs in April last year. This plea claimed that the club was being run in a manner which was “prejudicial to public interest”.
It sought action against the Delhi Gymkhana Club management under Section 241 and 242 of the Companies Act — which allows member of a company or the government to seek relief if the affairs of the entity are being run in a manner “prejudicial to public interest”, or are deemed “oppressive”, among other things.
The ministry had, therefore, sought a change of management at the Gymkhana and the appointment of 15 nominees as administrators to run its affairs.
The NCLT had then said that affairs of the club are prima facie being conducted in a “manner prejudicial to the public interest” and had directed the government to appoint two members on its general committee.
It had also asked the government to constitute a five-member special committee to probe the affairs of the club, as well as issues related to the utility of the land leased out by the government and the club’s membership.
The NCLT had also passed several other remarks against the exclusivity of the club’s membership, saying that even though it has a right to function as it chooses under Article 19 of the Constitution, it cannot supersede the rights of the common public under Article 14, which guarantees the right to equality.
“The shadow over the club is it is so obsessive of its privilege. Maybe it is because the club is of the view that its privilege will remain intact only if people of certain stature become members. Privilege and privileged are misconceived notions and they are all nothing but a reminiscence of earlier legacy, which is a vanity in a democratic society,” the NCLT had observed.
The Gymkhana had then challenged this order in the NCLAT in July last year. The MCA had also challenged the NCLT order in NCLAT, saying that the tribunal did not grant it “effective safeguard and efficacious remedy”, by not suspending the club’s general committee.
(Edited by Neha Mahajan)