NCLT allows govt to takeover management of Delhi Gymkhana Club

The National Company Law Tribunal (NCLT) on Friday allowed the central government to take over the management of the Delhi Gymkhana Club.

The corporate affairs ministry had petitioned the NCLT, accusing the club's managing committee of nepotism and mismanagement. In a 149-page order, a two-member bench of the tribunal headed by Justice Ramalingam Sudhakar accepted the government's argument, holding that it was backed by "sufficient material."

The tribunal had earlier allowed the ministry to nominate 15 members to the general committee that manages the affairs of the club, one of India's oldest.


On Friday, it directed the ministry to take steps to restructure the terms of memorandum and articles of association of the club, as well any other necessary corrective measure.

It asked the current administrator, or any other person who is in charge of the affairs of the club, to "hand over the charges to the newly appointed directors forthwith." The new general committee appointed by the government must file a report before the tribunal immediately after taking over charge, it said.

Referring to the previous general committees, the bench said, "Some (members) have been continuing from one period to another, giving credence to the stand of the central government that the club is run in the nature of 'parivarvaad' (nepotism), which cannot be countenanced in the light of the provision of the Companies Act."

Case Since 2020

In April 2020, the government, through the ministry of corporate affairs, had moved the NCLT under Sections 241 and 242 of the Companies Act, seeking to supersede the club's general committee.

The sections deal with oppression and mismanagement and give powers to the tribunal, including those to remove the managing director or any directors of a company and recover undue gains.

Delhi Gymkhana was registered as a company with specific objectives related to sports and pastimes. It obtained land on lease from the government.

The government alleged that over a period of time, it had started drifting away from the permitted objects, which could impact subsistence of lease.