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Supreme Court directs NCLT to look into the Gymkhana Club dispute afresh and dispose of the matter within 4 months

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By Sangeeta Sharma

New Delhi, Sept 30 (ILNS) The Supreme Court today disposed of the appeal filed by the Board of directors of Delhi’s premier Gymkhana Club, challenging an order of the National Company Law Appellate Tribunal (NCLAT) which had suspended the General Committee of and appointed an Administrator to manage the affairs of the Club, and directed the NCLT to dispose of the matter within 4 months.

A bench comprising Justice A.M. Khanwilkar, Justice Dinesh Maheshwari and Justice CT Ravikumar disposed of the appeal and directed the National Company Law Tribunal to dispose of the matter within 4 months.

The appeal was filed in the Supreme Court by the Board of Directors/ General Committee of the Delhi Gymkhana Club, challenging an order of the National Company Law Appellate Tribunal passed on February 15, 2021, which had not only upheld the order of the National Company Law Tribunal but also, suspended the General Committee of the Club and appointed an Administrator to be nominated by the Union of India to manage the affairs of the Club.

The petition said that Gymkhana Club is a Private Members Club run on the principles of mutuality and is housed on land granted vide a perpetual lease by the Government. The Union of India conducted investigations into the affairs of the Club by appointing inspectors and after investigation reports were filed. Thereafter, the National Company Law Tribunal, by exercising its powers under Section 241 and Section 242 of the Companies Act, 2013 passed certain interim directions and directed the Union of India to appoint two of its members in the General Committee to monitor the Club’s affairs. 

The BOD of the club appealed against the order of the NCLT in the NCALT. The National Company Appellate Law Tribunal not only upheld the order of the National Company Law Tribunal but also, suspended the General Committee of the Club and appointed an Administrator to be nominated by the Union of India to manage the affairs of the Club.

The National Company Appellate Law Tribunal further put a hold on the acceptance by the Club of new memberships, fees or any enhancement thereof. It is against this decision of the National Company Appellate Law Tribunal, that the Directors of the Board / General Committee appealed to the Supreme Court.

Given the above premise, the Supreme court bench disposed of the said appeal by giving the following directions, that i) The National Company Law Tribunal will endeavour to dispose of the matter within 4 months, uninfluenced by the prima facie observations and findings of the National Company Law Tribunal, National Company Law Appellate Tribunal and the Supreme Court.

ii) If National Company Law Tribunal is unable to decide the matter within 4 months, the administrator is to take steps to hold fresh elections. However, if the same is due to non-cooperation by the parties, the same may be deferred by the Supreme Court.

iii) Members of the General Committee have been permitted to file applications to obtain records relevant to the matter within a period of one week. The said application is to be decided by National Company Law Tribunal.

iv) Members of the General committee are allowed to appear before the National Company Law Tribunal 

The Directors of the Board / General Committee of the Club were represented by Senior Advocates Neeraj Kaul, Arun Kathpalia, and Ritin Rai. Advocates Jatin Mongia, Gaurav Liberhan, instructed by the advocates of M/s Karanjawala & Co. led by Ms Ruby Singh Ahuja, Senior Partner and comprising of advocates Ms Tahira Karanjawala, Ms Deepti Sarin, Anmol Jassal and Vasu Singh.

Senior Advocate, Dr Abhishek Manu Singhvi, appeared for the petitioner in the main appeal [Civil Appeal D. No. 5221 of 2021], Senior Advocate C.A. Sundaram appeared for Ashish Khanna, Appellant in the connected appeal [Civil Appeal No. 2856 of 2021], Senior Advocate Harish Salve, appearing for the Administrator instructed by Cyril Amarchand Mangaldas. Solicitor General Tushar Mehta appeared for the Union of India./ILNS/SNG

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