 "Supreme Court")
The Supreme Court Thursday said the National Company Law Tribunal (NCLT) may endeavour to dispose of within four months the matter pertaining to Delhi Gymkhana Club in which the NCLAT had in February directed suspension of the club's general committee and asked the government to appoint an administrator.
The apex court was hearing the pleas, including those against the February 15 order of the National Company Law Appellate Tribunal (NCLAT) passed on petitions by the corporate affairs ministry as well as the club which had challenged an interim order of the NCLT in the matter in 2020.
Considering the nature of the controversy, it is appropriate that the main proceedings are disposed of expeditiously. The NCLT may endeavour to finally dispose of the main proceedings within four months from receipt of the copy of this order, said a bench headed by Justice A M Khanwilkar.
The bench acceded to the suggestion given by senior advocate N K Kaul, who was appearing for some of the appellants, that if the NCLT could not be in a position to dispose of the main proceedings in the time-line specified in the apex court order, the administrator may take necessary steps for conducting elections after four months.
We accede to that request, the bench, also comprising justices Dinesh Maheshwari and C T Ravikumar, said.
It said if the NCLT would be of the opinion that any party is not cooperating in early disposal of the case, then that factual aspect be placed on record so that appropriate direction can be issued by the apex court, if required, including for extending the time frame for conducting the election depending on the nature of grievance or allegation.
The bench said all contentions would be available to the parties and the NCLT would decide it without being influenced by the observations or findings passed in the matter.
It also allowed some of the appellants to move a formal application before the NCLT in the pending proceedings for permitting them to participate in it and to bring on record relevant facts and materials, as deemed appropriate.
Senior advocate A M Singhvi, appearing for some of the appellants, said it is essential that they be supplied with relevant documents which are in the custody of the administration to enable them to effectively present their cases.
The bench said they may make a formal application to the management within a week for furnishing certain documents or for allowing them to make an inspection and the same can be decided by the appropriate authority in accordance with the law.
During the hearing, senior advocate Harish Salve, appearing for the administrator, said a forensic audit is going on in to the issue of membership.
There is a forensic audit going on into the membership. The administrator has found all sorts of problems with the way members have been admitted and people have been denied membership, he said.
The bench asked Salve, Forensic audit is going to take how long?.
Salve said it should be done within three to four months.
The apex court had on September 23 took note of the allegation that the records of Delhi Gymkhana Club were being destroyed and directed the administrator of the club to ensure that CCTV footage of its premises is preserved till further orders.
In its order passed in February, the NCLAT had also stayed acceptance of new club memberships till further orders.
It had observed that "under the garb of the 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".
The NCLAT order had come on pleas against an interim order passed by the NCLT last year.
The ministry was requesting for superseding the club's General Committee (GC) citing alleged oppression and mismanagement of the club's affairs.
Emphasising that the interim relief must prove to be result-oriented, the NCLAT had modified the NCLT's order and directed "suspension of the GC and appointment of an administrator to be nominated by the Union of India to manage the affairs of the club".
Further, it had ordered that "acceptance of new membership or fee or any enhancement thereof till disposal of waitlist applications be kept on hold till disposal of the company petition".
"The observations made hereinabove are limited to grant of interim relief. The same shall not be construed as an expression of opinion on the merits of the case," the NCLAT had noted.
In its order passed on June 26, 2020, the NCLT had asked the government to constitute a five-member special committee to enquire into the affairs of the club and also to look into the issues related to the utility of the land leased out by the government, among other issues.
The ministry, in April last year, had moved the NCLT under sections 241 and 242 of the Companies Act, 2013, seeking to supersede the club's GC and also allow it to nominate 15 persons as directors to run the club's affairs.
Sections 241 and 242 of the Companies Act deal with oppression and mismanagement and give wide powers to the tribunal, which include removal of the managing director, manager, or any of the directors of the company and recovery of undue gains.
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