The Supreme Court on Tuesday adjourned, for two weeks, an appeal against the NCLAT order directing the suspension of the general committee of the Delhi Gymkhana Club and appointment of a Centre-nominated administrator to manage the affairs of the Club.
A Bench of Justices A.M. Khanwilkar, Sanjiv Khanna, and J.K. Maheshwari said: "List these matters on September 13 before appropriate bench wherein one of us (Justice Khanna), is not a Member.”
The club's directors of the board (general committee) have filed one of the appeals under Section 423 of the Companies Act, 2013. The NCLAT's order further mandated that any new membership or fee, as well as an increase in the charge for waitlist applications, be put on hold until the petition before the NCLT is resolved. The appeal stated that the NCLAT order is unconstitutional in law and effectively kills the club and similar organisations.
"The Hon'ble NCLAT has without any basis and in an arbitrary manner suspended and substituted the GC of the Club with an Administrator to be nominated by Respondent No.I/Union of India. It is submitted that this appointment, which supplants corporate democracy, is drastic, vastly excessive, has far-reaching consequences, and is usually a remedy of the last," said the appeal.
A battery of senior advocates such as Abhishek Manu Singhvi, Harish Salve, Kapil Sibal, and C. Aryama Sundaram are appearing for parties in the matter.
The appeal added: "It is respectfully submitted that Government is not and ought not to concern themselves with the affairs of private members clubs. Without prejudice to the foregoing, the impugned order even otherwise suffers from non-application of mind as the present GC was democratically elected at the AGM held on 31 December 2020, and the allegations do not pertain to this GC, but admittedly to the period from 2013-2018.”
The NCLAT stated that the club's policy, in which a person's membership becomes hereditary and the general public is forced to wait decades for membership, is clearly adverse to the public interest. The appeal argued that the operation of a club that acts for the benefit of its private members, especially when it operates within the limitations of its charter articles, does not constitute "public interest" within the sense of Section 241 (2) of the Companies Act.
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