Delhi Gymkhana Club elite, hit by nepotism, favouritism: NCLAT

New Delhi, Feb 15 : The National Company Law Appellate Tribunal (NCLAT) on Monday held that the Delhi Gymkhana Club policy under which membership of a person attains hereditary character and general public seeking membership are being made to wait for decades, is certainly prejudicial to the public interest.
In a scathing condemnation of the club’s policy, the tribunal said largesse by the state cannot be said to be intended for enjoyment or use by highly placed individuals only. The government had given land to the club on perpetual lease, and it was initially registered as a Section 8 company with specific objectives related to sports and pastimes.
In a critical 57-page order, a three-member NCLAT bench, headed by Acting Chairperson Justice Bansi Lal Bhat noted that the club has been perusing a policy under which membership of a person with a dependent child clothes him with the right to use the club’s facilities for his lifetime as also for his child, subject to a formality of applying for membership when the child attains the age of 21 years and upon such child gaining membership before his child is 21 years old.
“… the grand child of the basic member, the facility would be available for such child also with the process continuing ad infinitium. Such enjoyment of state largesse partaking of a hereditary character cannot be said to be promoting public interest. It would rather fall foul of Article 14 of the Constitution of India rendering such enjoyment abhorrent to public interest ad nauseum”, said NCLAT in its order.
The Centre submitted that when the prime object of sports facility is taken over by the elite for recreational purposes and activities of the company are hit by nepotism and favouritism while the company was formed on the basis of state largesse, there was an injury to public interest.
This ruling has come on petitions by the Corporate Affairs Ministry as well as the club, challenging an interim order passed by the National Company Law Tribunal (NCLT) last year.