New Delhi: The current central government-nominated and erstwhile management of Delhi Gymkhana Club are locked in a peculiar dispute before the Supreme Court. Related to the current management’s appeal before the top court, the squabble is on whether the judge, who is hearing the matter, had condoned the 203 days of delay in filing of the appeal.
The government’s appeal in the top court is against National Company Law Appellate Tribunal’s (NCLAT) October 2024 order that allowed Union Ministry of Corporate Affairs (MCA) to take over Gymkhana’s control, but fixed a deadline of 31 March, 2025 to complete the remedial measures and restructure the club as per the Companies Act, 2013.
The appeal challenges the deadline, calling it unreasonable, and wants the MCA to continue with its control.
It may be recalled that the MCA had moved the National Company Law Tribunal (NCLT) to take control of the club citing financial irregularities in its functioning. NCLT had permitted MCA’s petition on 1 April, 2020. NCLAT affirmed NCLT’s view.
Since the MCA’s appeal in the top court was filed beyond the 60-day statutory time limit, the club’s erstwhile management, who are opposed to government takeover of Gymkhana, raised doubts over its maintainability. This was conveyed to the bench led by Justice J.K. Maheshwari on 1 September, when the MCA’s appeal was heard.
According to the erstwhile management, though the bench had issued notice on the maintainability of the government’s appeal, it did not condone the delay. However, when a copy of the 1 September order was officially released, it said the delay in filing of the appeal was condoned.
Quick to take note of this anomaly, the erstwhile management and its members requested to modify its order. This application for recall of the 1 September order was listed before the court for 15 September.
The erstwhile management’s counsel, senior advocates Vikas Singh and Krishnendu Dutta along with Gaurav Liberhan highlighted the written order, which talked about condonation of the delay.
Saying that this line was mentioned inadvertently, the recall application explained the settled legal position on the subject. It was contended that under the Companies Act, 2013, an appeal has to be filed within 60 days. This deadline can be extended by another two months.
While asking the top court to recall the written order, the erstwhile management said Article 142 cannot be invoked to circumvent statutory framework and cited an earlier Supreme Court on why delayed appeals under the Companies Act, 2013 cannot be allowed.
Upon hearing them, the bench issued notice to the Centre, asking for its response to the erstwhile management’s recall application.
Filed on 22 September, the MCA’s response denies the assertion made by the erstwhile management as well as the members. It conceded that the court permitted them to file their objections to the maintainability, if any.
However, MCA added, the direction can in no manner be construed to mean that the top court restricted its notice only to seek an explanation on the belated filing of the appeal. MCA described the erstwhile management’s claim over the delay not being condoned as “wholly incorrect” and misleading.
Justice Maheshwari’s bench was to hear the matter Wednesday. However, due to paucity of time it could not and, therefore, fixed 14 October to hear the two parties on the conflict over the 1 September order.
The genesis of the dispute lies in MCA’s appeal that has questioned NCLAT’s order to fix a timeline for the government-appointed management committee to complete remedial measures by 31 March, 2025 and then conduct elections in the club, as per the new Articles of Association, to install the duly elected General Committee.
MCA submitted in the appeal that it first requested the NCLAT to extend the timeline. But the same was dismissed on 28 March this year.
MCA has argued in its appeal before the top court that NCLAT’s October 2024 order is inherently contradictory. On one hand it affirms rampant financial mismanagement and irregularities and, on the other, has set an unfeasible and impractical timeline to stem the rot that has plagued the club’s functioning for years. The appeal claimed the current management is at an advanced stage of taking several steps to clean up the place.
If the appeal is not allowed, the MCA warned, the club’s control will revert to the previous management responsible for its financial downfall. This, it said, would not be in public interest and undermine progress undertaken so far.
(Edited by Amrtansh Arora)
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