Delhi Gymkhana Club fights MCA attempts at control, NCLT reserves order

New Delhi, May 27 (IANS) A host of disgruntled members, who lost elections, and applicants, who were denied membership, including a former high ranking member of the Ministry of Corporate Affairs (MCA), launched a tirade against one of the oldest club in India, said the Delhi Gymkhana Club fighting back a petition by MCA seeking its managements control.

The Centre, through an urgent petition moved by MCA, had alleged "fraudulent and rampant mismanagement" by the general committee of the club, besides others, and sought to take over the management control under section 241 and 242 of the Companies Act, 2003.

The club has refuted MCA's allegations that the affairs are being mismanaged by its general committee. The National Company Law Tribunal (NCLT) has reserved the order on the matter.

The club said many disgruntled members', including Krishna Varma and others, complained against it after having lost the election. Responding to the complaint of Navrang Saini, former high-ranking member in the MCA, the club said it is facing the heat from MCA, after it denied him membership. The club termed MCA's letter recommending filing a petition against it a "lazy job".

The written submissions, filed by advocate Gaurav Liberhan on behalf of the club, argued that the MCA merely repeated the word "fraud" several times in its petition, yet it failed to establish fraud.

"Fraud must be specifically pleaded, and the manner of the fraud has to be specifically brought out in the pleadings. This allegation is bereft of pleadings and even otherwise there is no fraud," argued Liberhan, insisting it is a company by the members and for the members. An outsider to the company even otherwise had neither any locus nor any right to interfere in the internal management of the company, he added.

The club insisted that the MCA failed to establish what is the public interest involved and how the affairs of the company are being run prejudicial to public interest. Citing an authority letter, which was used to file the petition, it said the club letter shows no application of mind or formation of an opinion and it is simply a poor cut and paste job/direction of the Inspector.

"The club functions in terms of its Objects and there is absolutely no misuse of the land for which it holds a perpetual lease under a valid document," argued the club.

Responding to the membership row, the club said the applicants' money is refundable on demand and since the monies have been given voluntarily by the applicant, without any promise of time for grant of membership to the applicant by the club, the question of payment of interest does not arise.

The club argued that the present General Committee (GC) is duly elected by its members and all the allegations in the MCA's petition relate to a period prior to the present GC got elected and since there is no other prayer in the petition, the same ought to be dismissed outright.