Delhi HC Dismisses DDCA's Objections Against Proposed Articles Of Association; New AoA To Be Published In 2 Weeks; Elections In 8 Weeks [Read Judgment]

The Delhi High Court, on Friday, dismissed the objections raised by the Delhi District Cricket Association (DDCA) against amendments to its Articles of Association (AoA), as directed by the Court in January last year.

The Applications

A Division Bench of the High Court had, in January, 2017, issued a slew of directions against DDCA to improve its functioning. It had directed the Administrator, Justice Vikramajit Sen to appoint an external auditor to audit DDCA's accounts for 2012-13, 2013-14 and 2014-15 and submit a report within three months. In its 49-page judgment, it had also directed DDCA to amend its AoA, in order to incorporate the recommendations made by Justice Mukul Mudgal.

However, the DDCA General Body had, at a meeting held in September last year, rejected almost all amendments proposed to its AoA by the Supreme Court and the High Court. The Court was now hearing several applications concerned with the implementation of the Lodha Committee recommendations as well as its orders for amendments of the AoA.

9-year term limit for Directors

One of the objections raised by the Applicants was against the 9-year term limit for office bearers and Directors alike. While the Applicants had submitted that Directors should not be treated as office bearers, Justice Sen had pointed out that the Supreme Court had recognized that regardless of nomenclature, the members of the executive committee wield authority, which, unchecked would result in their self perpetuation, in some manner.

The Bench comprising Justice S. Ravindra Bhat and Justice A.K. Chawla agreed with Justice Sen, observing, "This Court is of opinion that the objectors’ argument that Directors are not to be treated as governing council members, as they are not “office bearers” is unacceptable. The existing Articles of Association clearly contemplate that they are part of the Executive Committee; Article 46(e) even contemplates that if they are absent for more than 3 executive committee meetings in a row, a vacancy would occur. As such they are very much integral to the decision making body or institution of DDCA. The objections to inclusion of the tenure spent by a director as member of the executive committee, therefore, are unmerited."

It further clarified that the principle of rotation would apply to the Directors and that their nomination term would be subject to Section 152 of the Companies Act, 2013, which inter alia directs that unless the Articles of Association provide that all directors shall retire in every annual general meeting, not less than two thirds of them shall be "persons whose period of office is liable to determination by retirement of directors by rotation".

Application of proposed AoA to upcoming elections

The Applicants had argued that the proposed AoA should be made effective prospectively and should not apply to the forthcoming elections. It was contended that the new conditions would unfairly take away the chances of those who had served as directors, for previous periods, though they were not office bearers.

The Court, however, did not agree with this reasoning, highlighting the objective of such provision. It explained, "The objective of ensuring that the same people or a clutch of individuals do not maintain their control over sport bodies like cricket associations is to encourage budding talent and promote fresh blood, not only in the sport, but also in the management of its affairs.

By occupying one executive or decision making position in an organization after another, a set of individuals can shut out an entire generation of new talent, which would possess greater energy and be more open to innovation. The plea to give prospective effect, in essence is a cry of existing directors who might be staring at the 9 year tenure restriction, to somehow get a “look in” into the fresh election process. It has no merit and is accordingly rejected."

Direction

The High Court, therefore, dismissed the objections put forth by the DDCA members and directed Justice Sen to ensure that the proposed amendments to the AoA are incorporated. This was directed to be completed within two weeks. Thereafter, the elections, in accordance with the AoA have been directed to be held within eight weeks.