Delhi Gymkhana Club Case: Supreme Court Directs Preservation Of CCTV Records Till Further Orders

The bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar was hearing civil appeal(s) filed challenging NCLAT's order directing the suspension of the General Committee of the Delhi Gymkhana Club and appointment of an Administrator nominated by the Union of India to manage the affairs of the Club.

"The apprehension expressed by this appellant is that someone is trying to destroy or manipulate the record in the office. It is not necessary for us to address this at present. However, since CCTV footage is there, we direct the administrator to preserve CCTV records till further orders from today onwards," the bench observed in its order.

The bench while posting the matter for next Tuesday i.e. September 28, 2021, in its order made clear that no request of adjournment on the ground of non-availability of arguing counsel would be entertained at the instance of any party.

When the matter was called for hearing today, Advocate Gauri Rastogra appearing for the administrator of the club sought for adjournment since the arguing counsel was not well.

Objecting to the adjournment sought, Senior Advocate C Aryama Sundaram, appearing for former Secretary of the Club Colonel(Retired) Ashish Khanna, submitted that Khanna was terminated without following due procedure of law.

Alleging that evidence was being destroyed, Senior Counsel further submitted that,

"I could not be removed under section 218 of the Companies Act. People are being removed without notice. Evidence is being destroyed."

When Advocate appearing for the Administrator claimed that the statements were incorrect, the bench observed, "There is no harm in accepting the submission that recording is there. If there is grievance about destruction of evidence, it is a serious grievance right."

Appearing for the Centre, Solicitor General submitted that the administrator is appointed by the Central Government. SG further submitted that he would convey the Court's suggestion and footage would be preserved.

"Mr SG, this is a serious issue. This should not have happened. If the records are being destroyed, what remains in the inquiry. If the grievance is made, there must be some basis. In the office particularly, you preserve it immediately," Justice Khanwilkar said.

Earlier, Justice Sanjiv Khanna had recused from hearing appeals.

Background Of The Case

Company petition by Union of India Before NCLT: A company petition was moved by the Ministry of Corporate Affairs against the General Committee of the Delhi Gymkhana Club under section 241(2) of the Companies Act, 2013, alleging that the affairs of the club are being conducted in manners prejudicial to the public interest.

The petition was filed seeking suspension of the General Committee and to appoint Administrator nominated by the petitioner to manage the affairs of the Club and report to this Bench

Interim Order By NCLT: The National Company Law Tribunal, Principal Bench at New Delhi, directed the Central Government to constitute a special committee to look into the functioning of the Delhi Gymkhana Club.

The Principal Bench headed by Acting President BSV Prakash Kumar further directed the General Committee of the Club to not carry out the following activities:

• proceed with any construction on site

• make any policy decision

• make any changes to the Memorandum of Association or Articles of Association

• utilise funds received from members

• conduct balloting

An appeal was then filed by the Union of India challenging the NCLT's order arguing that the interim relief granted was inadequate and prayed for modification of the relief by providing for the nomination of an Administrator by the Central Government to manage the affairs of the Club. The DGC also moved an appeal seeking the setting aside of the order.

NCLAT through its impugned order dismissed DGC's company appeal and allowed the Union of India's appeal, by directing suspension of the GC of the DGC and appointing an Administrator to be nominated by the Union of India to manage the affairs of the Club.

Case Title: Rajeev Sabharwal v Union of India