Elections must be conducted, administrator can't continue perennially: SC in Delhi Gymkhana Club case

New Delhi: The Supreme Court on Friday observed that elections must be conducted and the Delhi Gymkhana Club administrator cannot continue perennially, as it gave four weeks to National Company Law Tribunal (NCLT) to conclude the proceedings into the matter.

A bench comprising Justices A.M. Khanwilkar and C.T. Ravikumar queried Solicitor General Tushar Mehta, representing the Centre, "Elections must be conducted sometime, what is the difficulty...administrator cannot continue perennially. Elections have to take place. You cannot have associations without elections."

Senior advocate Neeraj Kishan Kaul, representing Delhi Gymkhana Club members, said: "We want to hold the elections. The administrator cannot continue in perpetuity."

Kaul cited the apex court order, passed on September 30, last year, directing the NCLT to decide the entire matter afresh within four months' time, and if not decided within this period, then the administrator should conduct elections to install a duly elected committee.

Kaul said the four-month period was completed in February, yet the administrator is not ready to hold the elections. He added that the allegations of misgovernance have to be decided by appropriate forum and it should not impede the process of holding elections in the club.

Justice Khanwilkar told Mehta that a self-operating order was passed in September last year. Mehta requested the court to grant two-weeks to NCLT to complete the proceedings in the matter. Additional Solicitor General K.M. Nataraj submitted that there are allegations of illegal memberships and those members would also vote in the election process.

Concluding the hearing, Justice Khanwilkar said: "It must be made clear, if the tribunal is unable to complete the proceedings (within four weeks), the self-operating order will come into play, thereafter the administrator would have to install a committee by conducting elections."

The bench made it clear that it will not entertain any request by the Centre to extend the time period for the tribunal to complete the proceedings.

An application, filed by retired Major Atul Dev and others (club members), said: "Following the directions passed by this court vide order dated September 30, 2021, the appellants vide email dated February 4, 2022, had also written to the administrator (Om Pathak), Delhi Gymkhana Club to take appropriate steps for reinstituting the elected committee by elections."

The application contended that a period of four months has lapsed since the passing of the order and no steps have even been initiated towards the holding of elections. "The applicant vide the instant application requests this court to direct the administrator to take necessary steps for conducting elections without any further delay as the club requires the same for efficient functioning and to restore normalcy," added the application.

The NCLAT, on February 15 last year, dissolved the club's General Committee and directed the Centre to appoint an administrator to manage its affairs, after the Ministry of Corporate Affairs moved the tribunal alleging corruption, mismanagement, and nepotism in the club.

On September 30, in a major relief for the former general committee of the club, the Supreme Court, while hearing the appeals filed against the NCLAT, remanded the matter back to the NCLT and asked it to settle it within four months.