TaxTMI 
TaxTMI 
2024 (10) TMI 1135
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....allenging the same order dated 1st April 2022 passed by the National Company Law Tribunal, Principal Bench (hereinafter referred to as the "NCLT") in C.P.-71/241-242/PB/2020. The impugned order has been passed by the NCLT in petitions filed under Section 241-242 of the Companies Act, 2013 (hereinafter referred to as "the 2013 Act"). By the impugned order, the NCLT has allowed the petition filed by the Union of India permitting the Union of India to nominate 15 number of persons as Directors in General Committee of Delhi Gymkhana Club Limited. The appellants in these appeals being Members of the Delhi Gymkhana Club Limited who were permitted to intervene in the proceedings, feeling aggrieved by the impugned order, have come up in these appeals. 2. Brief background facts giving rise to these two appeals are as follows; (a) The Delhi Gymkhana Club Limited (hereinafter referred to as 'the Company') was incorporated as Company Limited under Section 26 of the 1913 Act on 14.07.1913 which corresponds to Section 8 of the 2013 Act. A perpetual lease admeasuring 27.03 acres situate at 2, Safdarganj Road, New Delhi was granted to the Company vide lease deed dated 20th February, 19....
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....o appoint two members to monitor the Company along with other General Council Members and give suggestion to the General Council and also directed the Union of India to inquire into the affairs of the Company. (d) An appeal was filed by the Company being Company Appeal (AT) No.95 of 2020 before the Appellate Tribunal challenging the order dated 26th June, 2020. On 15th February, 2021, the Appellate Tribunal dismissed the appeal filed by the Company upholding the order dated 26th June, 2020. An appeal was filed before Hon'ble the Supreme Court by one of the Appellant in these Appeal, in which Hon'ble the Supreme Court passed an order dated 30th September, 2021 directing the NCLT to decide the matter expeditiously and provided a time of four months to the NCLT to dispose of the matter, failing which Administrator was to conduct elections. On a misc. application, Hon'ble the Supreme Court vide order dated 11th March, 2022 further granted four weeks' time for disposal of the petition. On 1st April, 2022, the NCLT allowed the petition filed by the Union of India. Aggrieved against the said judgment, these two appeals have been filed. 3. The NCLT vide impugned judgment and or....
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....ALTERNATIVE AND WITHOUT PREJUDICE b) Amend the final order and judgment dated 01.04.2022 passed by the Hon'ble National Company Law Appellate Tribunal in Petition No. C.P.- 71/241-242/PB/2020 titled "Union of India vs. Delhi Gymkhana Club Ltd. & Ors."to the extent that (i) Allow a duly elected Board of Directors to manage the club with suitable checks and balances. Suitable timelines may be drawn for the board of Directors to correct anomalies under NCLT's guidance. Additional government appointed directors may be nominated if considered essential. (ii) The management of the present GC appointed by the Central Government be directed to hold elections to elect a new General Committee c) Pass such other and further order(s) as this Hon'ble Court may deem fit and proper to meet the ends of justice." 6. We have heard Sri Krishnendu Dutta, learned Senior Advocate for the appellants in Company Appeal (AT) No. 93 of 2022, Sri Kailash Vasudev, learned Senior Counsel has appeared for the appellant in Company Appeal (AT) No. 141 of 2022. Sri U.K. Chaudhary, Senior Advocate and Sri Raunak Dhillon have appeared for the Union of India. We have also....
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....mitted that a company incorporated under Section 8 of the 2013 Act corresponding to Section 26 of the 2013 Act is a company not incorporated for a public purpose nor can public interest be assumed in every Section 8 company. The objects as enumerated in Section 8 of the 2013 Act cannot be read as public interest/public purpose. "Sports" as an object was introduced for the first time only in the year 2013. The Central Government cannot be permitted to take advantage of a newly introduced term and apply the same retrospectively which was incorporated in 1913 legislation. The fact that the land which was leased to the Company, was owed by the Union of India does not ipso facto translate into public interest. For the perpetual lease deed the company/club had paid an amount of Rs. 5,460/- with yearly rent. The lease deed itself makes it clear that the land has not been leased to the Club either for public or for public purpose. The mere fact that the Club/Company has been given on perpetual lease an area of 27.3 acres on which it can function or carry out its activities cannot involve public interest. 10. It is further submitted that the petition under Section 241-242 of the 2013 Act....
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....General Council is an appointment which is to continue in perpetuity without any time limit prescribed. 11. Learned counsel for the appellant referring to the orders passed by Hon'ble the Supreme Court dated 30.9.2021 and 11.3.2022, has contended that Hon'ble the Supreme Court intended that new elected committee would be installed within four months if the NCLT is unable to conclude the proceedings within four months. It is submitted that Hon'ble the Supreme Court clearly intended that elected committee of the Club would be installed to run the affairs of the Club. The NCLT has not followed the spirit and intent of the order of Hon'ble the Supreme Court dated 30.9.2021 and 11.3.2022. The 15 Members committee appointed by the impugned order cannot be allowed to continue in perpetuity. The final order passed by the NCLT dated 1st April, 2022 is in nature of an interim order under Section 242(4) of the 2013 Act and not a final order under Section 241(1) and 242(2) of the 2013 Act. Learned counsel for the appellants reiterating his submission has submitted that twin conditions which are to be fulfilled for invoking jurisdiction under Section 241(2) being not present, the order impug....
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....dering the aforesaid, the Ministry of Corporate Affairs vide letter dated 12th September, 2019 directed for a supplementary inspection specifically on the issues (a) allotment of membership; (b) registration fee; (c) accounting treatment of the registration fee; (d) investments made by the Club from the amount received as registration fee; and (e) processing charges received by the Club from the new applicants. The Inspecting Officers asked the Club to furnish various documents including details of type of membership granted and the registration fee charged. The entry fee fixed in the Article of Association is Rs. 25,000/- and no registration fee beyond the said amount can be collected. The collection of registration fee of an amount running into lacs is a deposit violating the provisions of 2013 Act and the Acceptance of Deposit Rules. There were several other financial irregularities committed by the Club which was noticed in the inspection report and the supplementary inspection report. The appointment of permanent members as Auditors of the Club is violative of Section 141(3)(d)(i) of the 2013 Act. The provisions of Article of Association regarding membership have been violated....
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.... the learned counsel for the appellants, were orders directing the NCLT to hold the election in the event the NCLT is not being able to conclude the petition within a stipulated time period. In the present case, the NCLT has concluded the proceedings within the time allowed along with the extended time, hence there was no direction of Hon'ble the Supreme Court for conducting the election. The intent of the impugned judgment was for the General Council to undertake all necessary actions, under the aegis and guidance of the NCLT which would be brought on record by way of status update reports. Eight status update reports have been submitted so far bringing before the NCLT various action taken by the General Council appointed by the impugned order. The General Council has in no manner usurped the power of the NCLT. The NCLT has retained its superintendence by directing for filing update status report within every three months. The submission that the NCLT has delegated its jurisdiction to the Committee is not correct. The management of the Club having acted in violation of the Article of Association as well as the 2013 Act, the NCLT has rightly exercised its jurisdiction under Section....
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.... Members. He has also prayed for witness protection. 19. Ms. Niji Sapra has also appeared and referred to a criminal complaint filed before the Metropolitan Magistrate and contended that she has supported the Union of India in the proceedings and she is also entitled for witness protection. 20. From the submissions of learned counsel for the parties and the materials on record, the following questions arise for consideration in these appeals:- (I) What are the requisite conditions precedent for invoking provisions of Section 241(2) of the Companies Act, 2013? (II) Whether the requisite conditions precedent within the meaning of Section 241(2) of the Companies Act, 2013 in the application filed by the Union of India under Sections 241 and 242 are met i.e. (i) formation of opinion by the Central Government under Section 241(2); and (ii) that the affairs of the Company are being conducted in a manner prejudicial to the public interest? (III) Whether there was sufficient materials on the record for formation of requisite opinion under Section 241(2) by the Central Government? (IV) Whether affairs of the Company (Delhi Gymkhana Club) were being ....
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....ion 244, for an order under this Chapter. (2) The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this Chapter. 22. As indicated by the heading of Chapter XVI i.e. "Prevention of Oppression and Mismanagement", the object of an application under Section 241 of the 2013 Act is for relief in cases of oppression and mismanagement. A perusal of Section 241(1) indicates that entitlement is given to Member of a Company on fulfilment of conditions as contemplated under Section 244 of the 2013 Act to apply to the Tribunal. Sub section (2) of Section 241 of the 2013 Act empowers the Central Government to apply to the Tribunal for an order under Chapter XVI "if it is of the opinion that the affairs of the Company is conducted in a manner prejudicial to the public interest". 23. Section 242 of the 2013 Act enumerates various nature of orders which may be passed under this section "without prejudice to the generality of the power under sub-section (1). Relevant provisions of Sub-section (2) of Section 242 of the 2013 Act are as follows....
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....before Hon'ble the Supreme Court arose out of an order from an application under Section 241-242 of the 2013 Act filed by Cyrus Investment Private Limited and others, the respondent in the appeal before Hon'ble the Supreme Court. The provisions contained in Section 153C of the Indian Companies Act, 1913, which were inserted by Amendment Act 58 of 1951, the provisions of Sections 397, 398 and 402 of the Companies Act, 1956 have been noticed in the said judgment. The change of language and the consequential changes and parameters in all the three Statutes i.e. 1913, Act, 1956 Act and 2013 Act have been noticed in paragraph 86 of the said judgment, which is as follows:- "86. The change of language and the consequential change of parameters for an inquiry relating to oppression and mismanagement from 1951 to 1956 and from 1956 to 2013 and thereafter can be best understood, if the anatomy of the statutory provisions are dissected and presented in a table: 1913 Act (after the Amendment Act 52 of 1951) 1956 Act (with the amendment made under Act 53 of 1963) 2013 Act 1) Company's affairs are being conducted in a manner- (a) Prejudicial to the company's....
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....rejudice" the interests of the company or any part of its members. But in the 1956 Act and the 2013 Act, the words "and materially" do not follow the word "unfairly". Moreover, under the 1956 Act and the 2013 Act all that is required to be seen is whether the winding up will unfairly prejudice "such member or members" indicating thereby that the focus was on complaining/affected members." 28. In paragraph 90 of the said judgment, Hon'ble the Supreme Court noticing the above three enactments, has held that the above enactments are ordaining the Court generally to pass such orders "with a view to brining to an end the matters complained of". In paragraph 90 of the said judgment following has been held:- "90. But despite the huge shift in England, there appears to be a common thread running in all the enactments, both in India and England. In all the three Indian enactments, namely, the 1913 Act, the 1956 Act and the 2013 Act, the court is ordained, generally to pass such orders "with a view to bringing to an end the matters complained of". This sentence is found in Section 153-C(4) of the 1913 Act. It is found in Section 397(2) as well as Section 398(2) of the 1956 Act an....
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....IR 1967 SC 295] , contained separate opinions as to what the phrase "in the opinion of" contained in Section 237(b) meant. In Rohtas Industries [Rohtas Industries Ltd. v. S.D. Agarwal, (1969) 1 SCC 325 : (1969) 3 SCR 108] , this Court adopted the test laid down by Hidayatullah, J. (as he then was) and Shelat, J. as follows : (Rohtas Industries case [Rohtas Industries Ltd. v. S.D. Agarwal, (1969) 1 SCC 325 : (1969) 3 SCR 108] , SCC pp. 333-35 & 340-41, paras 5-6 & 11 : SCR pp. 119-121 & 128-29) "5. Before taking action under Sections 237(b)(i) and (ii), the Central Government has to form an opinion that there are circumstances suggesting that the business of the company is being conducted with intent to defraud its creditors, members or any other persons, or otherwise for a fraudulent or unlawful purpose or in a manner oppressive to any member or that the company was formed for any fraudulent or unlawful purpose or that the persons concerned in the formation or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members. From the facts placed before us, it is clea....
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....ey are, because the circumstances must be such as to lead to conclusions of certain definiteness; the conclusions must relate to an intent to defraud, a fraudulent or unlawful purpose, fraud or misconduct. In other words they held that although the formation of opinion by the Central Government is a purely subjective process and such an opinion cannot be challenged in a court on the ground of propriety, reasonableness or sufficiency, the authority concerned is nevertheless required to arrive at such an opinion from circumstances suggesting the conclusion set out in sub-clauses (i), (ii) and (iii) of Section 237(b) and the expression "circumstances suggesting" cannot support the construction that even the existence of circumstances is a matter of subjective opinion. Shelat, J., further observed that it is hard to contemplate that the legislature could have left to the subjective process both the formation of opinion and also the existence of circumstances on which it is to be founded; it is also not reasonable to say that the clause permitted the authority to say that it has formed the opinion on circumstances which in its opinion exist and which in its opinion suggest an intent to ....
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.... (1) or the persons mentioned in sub-clause (2) were guilty of fraud or misfeasance or other misconduct towards the company or towards any of its members is a condition precedent for the Government to form the required opinion and if the existence of those conditions is challenged, the courts are entitled to examine whether those circumstances were existing when the order was made. In other words, the existence of the circumstances in question are open to judicial review though the opinion formed by the Government is not amenable to review by the courts. As held earlier the required circumstances did not exist in this case." (emphasis in original) 30. The judgment of Hon'ble the Supreme Court in the case of Rohtas Industries Limited (supra) was quoted with approval in the case of 63 Moons Technologies Limited (supra). The ratio of the judgment as extracted above in the case of Rohtas Industries Limited (supra) is as follows:- "For the reasons stated earlier we agree with the conclusion reached by Hidayatullah and Shelat, JJ. in Barium Chemicals case [Barium Chemicals Ltd. v. Company Law Board, 1966 Supp SCR 311 : AIR 1967 SC 295] that the existence of circumstances s....
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....being interrelated, are taken together. 35. The challenge to the impugned order by the appellants in the present case is on the ground that the twin conditions under Section 241(2) of the 2013 Act did not stand satisfied i.e. (i) "formation of an opinion by the Central Government; and (ii) that the affairs of the company are being conducted in a manner prejudicial to the public interest". The first limb of argument of the appellants is that there is no opinion formed by the Central Government and the letters dated 18th March and 4th March, 2020 are not opinion. Elaborating the submission, it is contended that formation of opinion under Section 241 of the 2013 Act is not mere formality. The Central Government has to apply its mind to the materials and give reason for forming an opinion to file a petition under Section 241-242 of the 2013 Act. The letter darted 18th March, 2020 does not constitute an opinion within the meaning of Section 241-242 of the 2013 Act. Letter dated 4th March, 2020 which provides the opinion of 18th March, 2020 only mentions "I agree with the opinion of the Inspecting Officer as mentioned above". 36. The challenge to the impugned order by the appellant....
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....panies Ad. 2013 in respect of DELHI GYMKHANA CLUB LIMITED conducted by Shri. Ajay Kumar Meena, Deputy Director. The Inspection of this company was ordered by the Ministry vide letter No. 7/29/2016/2016-CL.II (NR) dated 16.03.2016 directing to examine 1M complaints by the members and Directors of the club alleging various irregularities in the management of the affairs of the company. The inspecting officer has highlighted the contraventions of sections 58A of companies act 1956 and section 74, section 76 of Companies Act 2013, section 5, 166, 179 of the Companies Act. 2013 for mismanagement of funds received by way of registration fee from applicants, section 209, 211 of the Companies Act, 1956, section 128, 129 of the Companies Act 2013 for mismanagement of funds received by way of registration fee from applicants, violation under section 141 of the Companies Act 2013, section 628 of Companies Act, 1956 for misstatement in the eform, section 448 of the Companies Act, 2013, violation u/s 628 of Companies Act, 1956 for anomaly in the number of members of the company, violation u/s 628 of companies oct.1956 for false statement in the balance sheet as at 31.03.2013 under PART....
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....nies Act, 2013 in respect of M/s Delhi Gymkhana Club Limited conducted by Smt. Seema Rath, Deputy Registrar of Companies/Delhi & Inspector. The supplementary inspection of the company was directed by the Ministry vide letter No. 1/97/2019/CLII(NR) dated 12.09.2019 broadly on the following issues: a) to take up issues related to allotment of membership; b) the money received from new applicants as registration fee for membership; c) accounting treatment of the amount received from new applicants for membership (registration fee received was treated as revenue before the financial year 2015-16 and should. have been treated as long term liabilities as it is a refundable item); d) investment made by the company of the amount received from new applicants; and e) the processing charges received by the company from new applicants. 2. Shri Ajay Meena, Deputy Director RD (NR) had earlier submitted the Inspection report dated 31.07.2019. Shri A.K. Sahoo, DRoC, Delhi and Shri VyomeshSheth, Assistant Director, DGCoA were appointed as Inspectors vide letter dated 13.09.2019. Both the Inspecting officers could not join the supplementary inspection due....
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....13 gets attracted which prescribes punishment for intentionally giving false evidence. g. Ministry/ICAI to take disciplinary action u/s 226 of the Companies Act, 1956 and section 141(3)(d)(i) of the Companies Act, 2013 for Mr. Vinod Chander Chandiok who being an auditor of the company was also the member of the company. Further, in view of the false statement given by Mr. Vinod Chander Chandiok, the provisions of section 229 r/w section 449 of the Companies Act, 2013 gets attracted and has to be initiates against him. 4. The IO, in her concluding remarks, has recommended the following: (i) To file petition under section 241 and 242 of the Companies Act, 2013 and take over the management control of the company in public Interest by the Government of India; (ii) Charging the company and its General Committee members under section 447 of the Companies Act, 2013; (iii)Immediate appointment of Government appointed administrator(s) in the General Committee and transfer of absolute power to such administrator(s); (iv)Immediate ban on acceptance of any further membership applications and fees; and (v) The prime location of the land with....
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....f the public. 2. This issues with the approval of the Competent Authority." 41. The letter dated 18th March, 2020 itself contained a statement that "this is issued with the approval of the competent authority". The letter dated 18th March, 2020, which specifically contained a stipulation that it has been issued with the approval of the competent authority, clearly indicates the opinion was formed by the Central Government to file a petition under Section 241-242 of the 2013 Act. The expression used in Section 241-242 that "Central Government is of the opinion" does not contemplate any particular manner of formation of opinion. The opinion formed by the Central Government is clearly reflected in communication dated 18th March, 2020 as extracted above. The formation of opinion was on the basis of the statutory inspection report, supplementary inspection report and the recommendation sent by the Regional Director as well as other materials including the reply received from Delhi Gymkhana Club and queries and summons issued by the Inspectors. All the documents were with the Central Government containing voluminous materials viz. inspection report and supplementary inspectio....
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....in the public interest. "Public interest" is an expression which is wide and amorphous and takes colour from the context in which it is used. However, like the expression "public purpose", what is important to be noted is that public interest is the general interest of the community, as distinguished from the private interest of an individual [see State of Bihar v. Kameshwar Singh [State of Bihar v. Kameshwar Singh, (1952) 1 SCC 528 : 1952 SCR 889 : AIR 1952 SC 252] at pp. 1073-1075]." 44. The above judgment of Hon'ble the Supreme Court clearly indicates that the expression "public interest" is of wide amplitude when it is used in different statutes. We have to look into the concept of public interest in reference to Section 241 of the 2013 Act. What is contended by the counsel for the appellants is that the Company is a charitable company registered under Section 26 of the Companies Act 1913 and the Company exists for its members and there is no public interest in functioning of the Company nor any public interest can be said to be prejudiced by the conduct of the affairs of the Company by its members and its General Council. Before we proceed further, we need to notice Section....
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....he company; (xii) minimum subscription, amount payable by way of premium, issue of shares otherwise than on cash; (xiii) details of directors including their appointments and remuneration, and such particulars of the nature and extent of their interests in the company as may be prescribed; and (xiv) disclosures in such manner as may be prescribed about sources of promoter's contribution; (b) set out the following reports for the purposes of the financial information, namely:- (i) reports by the auditors of the company with respect to its profits and losses and assets and liabilities and such other matters as may be prescribed; (ii) reports relating to profits and losses for each of the five financial years immediately preceding the financial year of the issue of prospectus including such reports of its subsidiaries and in such manner as may be prescribed: Provided that in case of a company with respect to which a period of five years has not elapsed from the date of incorporation, the prospectus shall set out in such manner as may be prescribed, the reports relating to profits and losses for each of the financial years ....
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....xplanation.-The date indicated in the prospectus shall be deemed to be the date of its publication. (4) No prospectus shall be issued by or on behalf of a company or in relation to an intended company unless on or before the date of its publication, there has been delivered to the Registrar for registration, a copy thereof signed by every person who is named therein as a director or proposed director of the company or by his duly authorised attorney. (5) A prospectus issued under sub-section (1) shall not include a statement purporting to be made by an expert unless the expert is a person who is not, and has not been, engaged or interested in the formation or promotion or management, of the company and has given his written consent to the issue of the prospectus and has not withdrawn such consent before the delivery of a copy of the prospectus to the Registrar for registration and a statement to that effect shall be included in the prospectus. (6) Every prospectus issued under sub-section (1) shall, on the face of it,- (a) state that a copy has been delivered for registration to the Registrar as required under sub-section (4); and (b) sp....
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.... for the purposes of the Company and to provide club houses, pavilions, lavatories, kitchens, refreshment rooms, workshops, stables, sheds and other conveniences in connection therewith and to furnish and maintain the same and to permit the same and the property of the Company to be used by members and other persons either gratuitously or for payment; c) to purchase, hire, make or provide and maintain all kind of horses, live stock, furniture. implements, tools, utensils, plates, glass, linen, books, paper, periodicals, stationery, cards games and other things required or which may be conveniently used, in connection with the courses, grounds, houses and other premises of the Company by persons frequenting the same whether members of the Company or not; d) to buy, prepare, make, apply, sell, deal in all kinds of apparatus used in connection with any sport, game or pastime and all kinds of provisions and refreshments required to be used by members of the Company or other persons frequenting the courses, grounds, club houses or premises of the company; e) to purchase, take on lease or in exchange. Or otherwise acquire. any property movable or immovable whic....
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....mited company- (a) has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object; (b) intends to apply its profits, if any, or other income in promoting its objects; and (c) intends to prohibit the payment of any dividend to its members, the Central Government may, by licence issued in such manner as may be prescribed, and on such conditions as it deems fit, allow that person or association of persons to be registered as a limited company under this section without the addition to its name of the word "Limited", or as the case may be, the words "Private Limited" , and thereupon the Registrar shall, on application, in the prescribed form, register such person or association of persons as a company under this section. (2) The company registered under this section shall enjoy all the privileges and be subject to all the obligations of limited companies. (3) A firm may be a member of the company registered under this section. (4) (i) A company registered under this section shall not alter the provisions of its memorandum ....
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....he company is given a reasonable opportunity of being heard. (8) Where a licence is revoked under sub-section (6) and where the Central Government is satisfied that it is essential in the public interest that the company registered under this section should be amalgamated with another company registered under this section and having similar objects, then, notwithstanding anything to the contrary contained in this Act, the Central Government may, by order, provide for such amalgamation to form a single company with such constitution, properties, powers, rights, interest, authorities and privileges and with such liabilities, duties and obligations as may be specified in the order. (9) If on the winding up or dissolution of a company registered under this section, there remains, after the satisfaction of its debts and liabilities, any asset, they may be transferred to another company registered under this section and having similar objects, subject to such conditions as the Tribunal may impose, or may be sold and proceeds thereof credited to the Rehabilitation and Insolvency Fund formed under section 269. (10) A company registered under this section shall am....
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....ich the Company is incorporated. It is true that in addition to promoting different sports, the Delhi Gymkhana Club can also lawfully carry other objects as delineated in Memorandum of Association. However, when we look into different sub-clauses of Clause (3) of the Memorandum of Association, we find that other objects are in aid and the sport is the main object of the Company which are object of promoting polo, hunting, racing, tennis, other game, athletic sport and pastime. 49. Learned counsel for the appellants has relied on a judgment of Delhi High Court in the case of Air Vice Marshal J.S. Kumar vs. Governing Council of Air Force Sports Complex and another reported in 2006 SCC Online Delhi 8 to support his submission that no public functions are discharged by such entities like Air Force Sports Complex. In the case before the Delhi High Court writ petition under Article 226 of the Constitution of India was filed by the writ petitioner challenging termination of his membership from Air Force Sports Complex. The question which arose for consideration in the said writ petition was as to whether the dismissal of the writ petition by the learned Single Judge was sustainable. Th....
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.... the case before the Delhi High Court the issue was as to whether Air Force Sports Complex is performing any public function or discharging any public duties or not so as to hold the Writ Petition under Article 226 maintainable. The said question does not arise for consideration in the present appeals. The question in the present case is as to whether the affairs of the Company are being conducted in a manner prejudicial to the public interest which is a entirely different expression and concept. 52. Another judgment which has been relied by the learned counsel for the appellants is in the case of Secretary Madras Gymkhana Club Emloyees Union vs. Management of the Gynkhana Club reported in AIR 1968 SC 554. The above was a case where appeal was filed by the Employee Union challenging the order of the Industrial Tribunal which held that Madras Gymkhana Club is not an industry. In paragraph 2 of the said judgment facts have been noticed, which is as under:- "2. The Madras Gymkhana Club is admittedly a members' club and not a proprietary club, On December 31, 1962 its membership was about 1200 with 800 active members. The object of the club is to provide a venue for spo....
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....ittee. The only question is, is it an undertaking? 30. Here the appearances are somewhat against the club. It is not of any consequence that there is no profit motive because that is considered immaterial. It is also true that the affairs of the club are organised in the way business is organised, and that there is production of material and other services and in a limited way production of material goods mainly in the catering department. But these circumstances are not truly representative in the case of the club because the services are to the members themselves for their own pleasure and amusement and the material goods are for their consumption. In other words, the club exists for its members. No doubt occasionally strangers also take benefit from its services but they can only do so on invitation of members. No one outside the list of members has the advantage of these services as of right. Nor can these privileges be bought. In fact they are available only to members or through members. 32. It is contended that, although there is no incorporation as such, the club has attained an existence distinct from its members. It may be said that members come and memb....
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....on 49-A of the Madras City Police Act, 1888 (the Police Act) and Section 11 of the Madras Gaming Act, 1930 (the Gaming Act)? 3. Whether the running of horse-races by the Club is a game of 'chance' or a game of "mere skill"? 4. Whether 'wagering' or 'betting' on horse-races is 'gaming' as defined by the Police Act and the Gaming Act? 5. Whether the horse-racing - even if it is a game of "mere skill" - is still prohibited under Section 49-A of the Police Act and Section 4 of the Gaming Act? 6. Whether the Madras Race Club (Acquisition and Transfer of Undertaking) Act, 1986 (the 1986 Act) gives effect to the policy under Article 39(b) and (c) of the Constitution of India (the Constitution) and as such is protected under Article 31- C of the Constitution. If not, whether the 1986 Act is liable to be struck down as violative of Articles 14 and 19(1)(g) of the Constitution." 57. The Hon'ble Supreme Court held that horse racing is a game of skill where the winning depends substantially and preponderantly on skill. In paragraphs 47 and 49 of the judgment, following observations have been made: "47. There is no material on the record to show t....
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...., which have been made in the above paragraphs, were made in the context of challenge to 1986 Act and the Court held that provisions of enactment are arbitrary and discriminatory. The Hon'ble Supreme Court further observed that elaborate machinery and well- established procedural safeguards have been provided under the Companies Act for dealing with the mismanagement companies registered under the Companies Act. The Hon'ble Supreme Court also noted in the said judgment that no material on the record shows that any inquiry or investigation was held by the State Government in the affairs of the Club. The said findings in no manner support the submissions of the Appellant, rather, the Hon'ble Supreme Court's categorical observation that Companies Act provides for elaborate machinery for dealing with the mismanagement companies registered under the Companies Act. 59. The next judgment relied by learned Counsel for the Appellant is (1970) 1 SCC 462 - The Joint Commercial Tax officer, Harbour Division, II-Madras vs. The Young Men's Indian Association (Regd.), Madras and Ors. The above was a case where proceedings under Madras General Sales Tax Act, 1959 were questioned by the Club by ....
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....ngs for consumption of the principal, and later recouping himself for the expenses incurred. Once this conclusion on the facts relating to each club was reached it was unnecessary for the High Court to have expressed any view with regard to the vires of the Explanations to Sections 2(g) and 2(n) of the Act. As no transaction of sale was involved there could be no levy of tax under the provisions of the Act on the supply of refreshments and preparation by each one of the clubs to its members." 61. The above case was considering the issue as to whether sale of goods to its Members attracts the Madras General Sales Tax Act, 1959 and answer was given in negative. The said judgment has no bearing in the issues, which are involved in the present Appeal and does not render any help to the Appellant. 62. Another judgment, which has been relied by the Appellant is (2019) 19 SCC 107 - State of West Bengal vs. Calcutta Club Ltd. The question involved in the above case was eligibility to sales tax/ VAT for supply of food and drinks to Members of the Club and the doctrine of mutuality. The Hon'ble Supreme Court in the above case has quoted with approval of earlier judgment of the Supreme ....
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....the order of the Tribunal expressing its agreement with the said view. The view taken in paragraph 14 of the judgment is as follows: "14. At this stage, we would also like to extract below the relevant discussion contained in the order of the Tribunal with which we are in agreement:- "We have considered the rival contentions carefully gone through the order of the authorities below and also perused the memorandum and article of association of the assessee club. As per clause-9 of the articles of association, the club was entitled to admit various classes of persons which also included casual members in addition to permanent and tenure members. The casual members were also using the Golf Course in the same manner as permanent and tenure members were using. The AO has declined fees received from the casual members as income u/s 12A merely because assessee club was not maintaining separate books of accounts regarding this business activity. As per AO it was a business income and not income from the mutual interest that was not liable for exemption u/s 11. There is no merit in the AOs' action for treating the fees received from the casual members as business incom....
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....ion of the public as individual should be clearly spelled out. 6. The question whether promotion of sports and games can be considered as being charitable has been examined. The Board is advised that the advancement of any object beneficial to the public or a section of the public as distinguished from an individual or group of individuals would be an object of general public utility. In view thereof, promotion of sports and games is considered to be a charitable activity within the meaning of Section 2 (15) of the I.T. Act, 1961. Therefore, an association or institution engaged in the promotion of sports and games can claim exemption under section 10 (23) of the Act relating to exemption from tax of sports associations and institutions having their object the promotion control regulation and encouragement of specified sports and games." 64. The judgment of the Delhi High Court, which concurred with the opinion of the Tribunal that advancement of any object beneficial to the public or a section of the public as distinguished from an individual or group of individual would be an object of general public utility and in view thereof, promotion of sports and games was consi....
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....blic interest or the public cause there appears to be no problem with the Govt. A few members as recorded in the inspection report have flagged the improper working of the club in question forcing the govt. to order inspection. In the course of inspection, several issues came out in the fore front and those issues of mismanagement, irregularities of grave nature and conduct of the affairs contrary to Memorandum of Association, AOA and the Companies Act, 2013 became evident in detail in the inspection report. Statements of General Council members of the club justified most of the issues identified in the course of inspection. The facts and figures stated in the inspection report highlighted gross irregularities committed by the company and the persons who are conducting the affairs of the company. The Govt. initially thought it fit to go into the allegations and in the course of inspection various acts of mismanagement were unearthed. What has been unearthed in the course of inspection is that for the period beginning from 2014-15 onwards the club adopted the method of increasing the registration fee, additional registration fee, application processing fee etc. and invested....
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....rds and UCPs with an intention to collect the registration fee and penalty and also collect funds from outside persons who do not become a member for long number of years. The conduct of the general council to device methods to collect more amounts in the name of registration fee and penalty clearly establishes a case of conduct prejudicial to interest of the company and against public interest. The further act of investing the amounts in mutual funds and taking the benefit for the use of the company also does not augur well for a club of this nature. Assuming that this amount was kept as liability in respect of new entrants because it is taken as interest free deposit, the club while returning the same cannot justify in retaining the interest components. This will amount to unjust enrichment for no justifiable reason. We are compelled to state so because this company as per the MOU is non-profit company and its primary objective of sports and sports related activities which is nothing but a public interest. We are therefore of the definite opinion that the affairs of the company are being conducted in a manner prejudicial to the public interest as also in the manner preju....
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....rs. No such grounds have been made out of the possibility of prejudice to the applicants or supporting members." In the course of inspection and the resultant reports the petitioners have highlighted serious infractions of the provisions of the Companies Act, the MOA and AOA. They are set out in Para 9.14, 9.16, 9.18 and 9.21 of this order. The Senior Counsel for respondents tried his best explaining that the report and inferences are misconceived. We do not subscribe to the said plea, as we find the infractions highlighted in the report are not only based on records but also on the basis of reply of the GC members in response to the queries raised at the time of inspection. They have admitted the infraction. Money has been refunded based on decision of the GC meetings, this speaks for itself. The Central Govt. in this case has not only established by various acts of mismanagement and financial arbitrariness in collecting various amounts which are contrary to the Articles of Association to enrich the club and its members at the cost of third parties which we have very clearly held is not only violations of the provisions of the Companies Act but against public int....
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....ompanies Act, 2013." 66. We may also notice two more judgments in the present context. A Division Bench of Madhya Pradesh High Court in the case of Madanlal Juharmal vs. Union of India and others reported in 2024 SCC Online MP 2881 had occasion to consider the challenge to a sanction order passed under Section 212 (1)(c) of the 2013 Act directing for investigation. The order under Section 2012 (1)(c) can be passed where the Government is of the opinion to investigate into the affairs of a company. The facts and grounds of challenge have been noticed in paragraph 3 of the said judgment, which is as follows:- "3. The learned counsel for the petitioners submits that the primary contention of the Petitioners is based on the settled position that an order directing investigation under Section 212(1)(c) of the Companies Act, 2013 ("Companies Act") should stand on its own feet and must be able to demonstrate that there exist material/circumstances which warrant investigation and that such material/circumstances have been been considered and an opinion is formed by the government to investigate into the affairs of the company on the basis such of material/circumstances. This op....
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....on formed by the Central Government and to not substitute the opinion of the Central Government but restrict to examination of existence of circumstances and material facts to grant the impugned sanction." 68. The Division Bench of the Madhya Pradesh High Court allowed the writ petition holding that the impugned order has been passed without applying its mind and in the opinion so formed the satisfaction of pre- conditions under Section 212(1)(c) was lacking. In paragraph 42 of the judgment following was held:- "42. In light of the aforementioned judgments, we are of the opinion that an order of sanction under Section 212 of the Companies Act, 2013 needs to be a reasoned order, there needs to be existence of opinion formed by the Central Government on the basis of material facts and circumstances warranting such investigation and in compliance with principles of natural justice. In our opinion the impugned sanction dated 30.11.021 fails on all counts for reasons stated hereinabove. On a perusal of the impugned order it is evident that the Impugned Order is solely based on the suspicion raised by the Liquidator and Transaction Audit Report. On a bare perusal of the Trans....
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....between family members and the litigation, they are unable to do so. The petitioners also forwarded alongwith their replies, copies of the relevant orders passed by the High Court of Calcutta. They also gave a detailed explanation as sought by the Registrar when he invoked section 234(1) of the Indian Companies Act, 1956." 71. There can be no quarrel to the proposition laid down in the above case. The question to be answered is as to whether there were sufficient materials before the Central Government to form an opinion that affairs of the Company are being conducted in a manner prejudicial to the public interest. The materials which were before the Central Government, as noticed above, contained inspection report and the supplementary inspection report pointing out various violations of the 2013 Act as well as violation of the Articles of Association. The inspection report reported that only 3% of the entire expenditure by the Company is devoted towards sports. The findings returned by the NCLT on the materials before it that the Company has not been able to follow-up its main object and the affairs of the Company are being mismanaged which is prejudicial to the public interes....
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....tted that in the final order, which was required to be passed, the NCLT ought to have identified the matters complained of for remedial action thereon. Further limb of argument is that NCLT by its impugned order has delegated its powers and jurisdiction to Fifteen Members' Committee ("Committee"), which ought to have exercised by the NCLT, which was not permissible. The impugned order dated 01.04.2022, directed the Committee to submit Report once in three months or whenever required. Further submission is that the General Council of the Club has been superseded for an indefinite period, the impugned order ought to have provided a course of action and a timeline for taking corrective measures. The impugned order passed by the NCLT in exercise of jurisdiction under Section 241 and 242 of the Companies Act, 2013 cannot supersede the General Council of the Club indefinitely. The Fifteen Members Committee have been appointed by the impugned order for perpetuity, which is not in the domain of NCLT while exercising power under Section 241 and 242. The learned Counsel for the Appellant has also relied on judgment and order of the Hon'ble Supreme Court dated 30.09.2021 passed in Civil Appea....
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.... Final Reliefs d) That the Central Government be allowed to nominate 15 (fifteen) persons, to be appointed as directors on the General Committee of the Respondent No. 1 company to manage the affairs of the company and such directors may report to this Hon'ble Tribunal on such matters as it may direct, including restructuring of the Respondent No. 1 company in order for it to function as per the terms of its Memorandum and Articles of Association. e) Pass any other order(s) as deemed fit and proper, under the circumstances, by this Hon'ble Tribunal." 78. In the Company Petition No.71 of 2020, interim orders were passed on 26.06.2020. Paragraphs 75 and 76 of the order dated 26.06.2020 are as follows: "75. For the reasons aforementioned, I have found prima facie case demonstrating that the affairs of the Club are being conducted in a manner prejudicial to the public interest therefore I hereby direct Union of India to appoint two of its nominees of its choice as Members in the General Committee to monitor the affairs of the Club along with other GC Members and give suggestions to the GC, and direct the Union of India to constitute a Special Commit....
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....lief as granted would become meaningless. The interim relief, to which the Union of India is found entitled to on the strength of a prima facie case demonstrated by it, has to be effective and adequate enough to ensure that the affairs of the Club are conducted in accordance with law and the charter of the Club. The interim relief must prove to be result oriented. We accordingly modify the interim relief by directing suspension of the GC and appointment of an Administrator to be nominated by the Union of India to manage the affairs of the Club and also direct that acceptance of new membership or fee or any enhancement thereof till disposal of wait list applications be kept on hold till disposal of the Company Petition. The interim directions are accordingly modified and be carried into effect within two weeks. The observations made hereinabove are limited to grant of interim relief. The same shall not be construed as an expression of opinion on the merits of the case. We will be failing in our duty if we do not express our gratitude to Mr. K.M. Natraja, learned ASG representing the Union of India and Mr. S.N. Mookherjee, Senior Advocate representing the Respondent....
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....learned Counsel for the Appellant that order dated 01.04.2022 is not a final order. The order dated 01.04.2022 has to be held to be a final order passed in Company Petition under Section 241 and 242 filed by the Union of India. 83. Another question which need to be answered is as to whether the impugned order does not record any finding for exercising jurisdiction under Section 242 of the Companies Act, 2013? 84. We have already noticed above that inspection was directed by the Government of India and elaborate Inspection Report dated 31.07.2019 was submitted. Thereafter, a Supplementary Inspection Report dated 03.03.2020 was also submitted, highlighting numerous violations by the Club, which Supplementary Inspection Report was forwarded to the Ministry of Corporate Affairs by letter dated 04.03.2020 as noted above. Inspection Report dated 31.07.2019 as well as Supplementary Inspection Report dated 03.03.2020 have been brought on record as Annexure R-3 and R-6. Inspection Report dated 31.07.2019 runs into 41 pages, whereas Supplementary Inspection Report runs into about 4000 pages, which Reports elaborately considered various aspects regarding affairs of the Club. Company Pet....
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....he company and for which lease of public land was granted by the Ministry of Urban Affairs in the year 1928 on perpetual lease on a meagre rent. The expenses of the company was Rs. 46.42 crores, Rs. 50.84 crores, Rs. 49.26 crores, Rs. 55.63 crores and Rs. 70.16 crores from 2015-16 to 2018-19 respectively. The expenditure towards sport during this period was Rs. 1.40 crores, Rs. 1.53 crores, Rs. 1.48 crores, Rs. 1.56 crores and Rs. 1.84 crores whereas extraordinary higher sum was spent on catering, wine, beverages and cigarettes etc. So, the total expenditure for the said period 2.77% alone has been expended towards sports. In order to supplement the enormous expenditure, the company realizing that the number of Permanent Members has to be restricted to 5600 and there is no restriction in so far as Garrison Members, Temporary, Casual and Special category Members and in order to overcome the limit prescribed by Article 13(1) of AoA which prescribes the entrance fee at permanent (non-govt.) Rs. 25,000/-, permanent (govt. officers) Rs. 10,000/-, use of club premises pending election (UCPs) Rs. 10,000/- and Special category Members(i.e. corporate members) Rs. 15,00,000/- with additional....
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....cision without proper mandate as required under the Companies Act as indicated in Para 9.14 of this Order." 86. It has been noticed by the NCLT in the above paragraph that expenditure towards sports is only 2.77%. It was further noticed that sport is the primary objective of the Club for which lease of public land was granted by the Ministry of Urban Affairs in the year 1928. We have already referred to the Supplementary Inspection Report dated 03.03.2020. The Inspection Report as well as the Supplementary Inspection Report have been brought on record in the reply filed by the Union of India. In the Supplementary Inspection Report under the heading "Profile of the Company" and at Item No.11 following has been noticed: "11. First and major objective of the Company: To promote various sports and pastimes and the other objectives." 87. After noticing the nature of Company, which is incorporated under Section 26 of the Companies Act, 1913, the Report makes following observations with regard to main object of the Company: "Observation on facts: Section 26 under Companies Act, 1913 or section 25 under Companies Act, 1913 and section 8 under Companies Act,....
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....res and Rs. 30.62 crores respectively (iii) and on catering, wine and beverages and cigarettes (i.e. consumables) was Rs. 14.32 crores, Rs. 15.46 crores, Rs. 15.26 crores, Rs. 16:80 crores and Rs. 20.14 crores respectively So the total expenditure during the said period (i.e. 2014-15 to 2018-19) of the company is Rs. 272.31 crores, of which only 2.77% (Le: less than 3%) of expenditure is towards sports and towards employee benefit is 38.78% and towards consumables is 30.11%. Thus, an admitted picture of Income & Expenditure a/c indicates that the company has a minimal income and expenditure on promotion of sports activities which is not in tune with the object clause of the MoA of the company. Thus, the member of the General Committee during the last 5 financial years have consistently failed to carry out the object of the company. Further, 30.34% of the total expenditure by the company is in the form of catering consumables, wine and beverages, and cigarettes." 89. When a Company fails to carry out its affairs for promotion of its main objective, the affairs of the Company definitely are being conducted in a manner prejudicial to the public interest. ....
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.... deal with 'Application for admission'; 'Candidates' Book' and 'Procedure for election of membership'. Clause 8(7) and 8(8), which are also relevant, are as follows: "8.(7) With a view to maintaining the distinctive character of the Club, the General Committee shall regulate the balloting of candidate for membership of the Club in such a manner that the proportion of members who are officers of the Armed Forces of India or Civil officers of Government continues to be about half the total active membership, and also in order to facilitate the early admission of members of the Diplomatic Corps 8.(8) The General Committee shall regulate the admission of Special category members so that at no time shall the number of such members exceed a total of one hundred and fifty Company and Corporate Bodies, Nor shall more than fifteen Companies and Corporate Bodies be admitted as Special Category members in any one year." 91. Clause 12, which deals with 'Use of premises Pending Election', is as follows: "Use of permises Pending Election 12. A candidate, whose name is up for election as a permanent, garrison of temporary member, may, provided that his propo....
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....ated user in addition to the charges leviable under sub-paragraph 5 of this Article. In case of married members the monthly subscription includes their wives. 13. (3a) Members whose sons and daughters, between the age of 13 and 21 are permitted to use the Club as dependents, shall pay an additional monthly subscription of Rs. 40/- p.m. for each child using the Club. However, for absentee dependent children, a member shall pay Rs. 20/- p.m. for each child. 13.(3b) On reaching the age of 21, the son of a member having previously used the Club under Article 13 (3a) must apply to become a full member, should he wish to continue to use the Club. 13. (3c) On reaching the age of the 21, the unmarried daughter of a member may use the Club under Article 13 (3a) during such time as she lives with her parents. 13. (4) . Children of members under the age 13 are permitted use of the Club amenities free of charge subject to such restrictions as regards hours and times as the bye-laws may impose from time to time, but they shall not be permitted to appear in the main Club House (except by prior invitation of the General Committee) or to live in the Club quarter....
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.... The practice of GC going beyond its vested powers as per Articles of Association is still continuing as the present GC also invites registration fees from new applicants, makes Green Card Holders, lady subscribers and UCPs as members etc. which is ultra vires to the AoA. These are quite visible in the minutes of the company from June, 2019 to January, 2020. The AoA of the company does not contain any concept of Green Card Holders. The said category has been perfidiously created by the General Committee to accommodate, out of line, the dependent family members of the permanent members of the DGC. This in effect is a way to bypass the existing, long and self- created waiting-list of the general applicants, by the GC. It is to be noted that the Green Card Holders have been enjoying preference in grant of permanent memberships of the Club. These so-called Green Card Holders, more or less, consist of the dependents (who have crossed the age of 21 years) of the permanent members, but who have been summarily chosen for enjoyment of the Club. As such, the grant of privileges to use of the Club premises by arbitrarily chosen individuals (Green Card Holders) has become a norm, ....
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....ions for restructuring the Respondent No.1-Company in terms of memorandum and Articles of Association and take corrective measures which are in violations of the memorandum and Articles of Association and the Companies Act, 2013." 96. The task, which was entrusted to Fifteen Members Committee has been outlined in the order from the above two directions are clearly decipherable, i.e. (i) take all actions for restructuring Respondent No.1 Company in terms of Memorandum and Article of Association; and (ii) take corrective measures which are in violation of the Memorandum and Article of Association and the Companies Act, 2013. We, thus, are unable to accept the submission of the Appellant that the NCLT has delegated its jurisdiction to the Fifteen Members Committee. The Fifteen Members Committee, which was to replace all the General Council was entrusted with the task as noted above. Hence, the Fifteen Members Committee has to take its action as per the directions and it cannot be said that the NCLT has delegated its jurisdiction to the Fifteen Members Committee. It goes without saying that Fifteen Members Committee has to act in accordance with the NCLT's order, after taking into c....
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....rom passing of the order and Fifteen Members Committee (at present only eight Members are functioning) has acted in pursuance of the impugned order and has taken certain steps. It is not necessary for us to enter into details and the steps taken by Fifteen Members Committee, since the challenge in the present case is basically to the order impugned dated 01.04.2022. We have also referred to order of the Hon'ble Supreme Court dated 30.09.2021 passed in Civil Appeal(s) before the Hon'ble Supreme Court by the Rajeev Sabharwal (Member of the Club), who is also one of the Appellant before us and challenged the order dated 15.02.2021 passed by this Tribunal, appointing an Administrator after superseding the General Council of the Club. The submission, which was advanced on behalf of the Appellant in Civil Appeal is that in event the NCLT was not in position to dispose of the main proceedings in the timeline specified in the order, the Administrator be directed to take necessary steps for installing the duly elected committee by conducting elections after four months. The Hon'ble Supreme Court noticed the aforesaid prayer of the Appellant and accepted the said request. Relevant part of th....
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.... and a half years have already elapsed, during which the Fifteen Members Committee appointed by Central Government has been conducting the affairs of Club and certain remedial action as per the submission of learned Senior Counsel for Union of India has already been taken. 102. As noted above, in pursuance of the directions of the NCLT dated 01.04.2022, several remedial actions have been taken by the Committee nominated by the Central Government. However, as noted above, the object of an order under Section 241 and 242 has to be with a view to bringing to an end the matters complained of. As noted above, two and a half years have elapsed from passing of the order dated 01.04.2022. The Committee nominated by the Central Government has to take remedial actions as indicted in the order dated 01.04.2022, with a view to bringing to an end the matter complained of. Completion of process of remedial actions have to be taken within a time frame. Taking all remedial actions by the Committee to end the matter complained of is both in the public interest and in the interest of the Club. We, thus, are of the view that the Committee nominated by the Central Government has to complete the pro....
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....tee shall, notwithstanding that it be afterwards discovered that there was some defect in their appointment or procedure, be as valid as if the Committee or subcommittee or sub-committees had been duly constituted and the correct procedure had been observed. (7) Article 20(7) : Any member may be elected to serve on the General Committee for a maximum of three years in the first instance. Thereafter with a break of 2 years, he/she would be eligible for a election again for not more than 2 further years Le., a total of 5 years during the tenure of his/her membership" 103. We, thus, are of the view that the Committee, which is functioning in pursuance of the impugned order may take steps and conclude the remedial action and hold election as as per Clause 20 of the Article of Association to elect the President and other Members of the Committee. 104. We also need to notice the submissions advanced by Col. Ashish Khanna, Respondent No.18 in the Appeal. Col. Ashish Khanna was the serving Secretary at the time when Petition under Section 241 and 242 was filed by the Union of India. Hence, he was impleaded as Respondent No.18. Col. Ashish Khanna during his submission has rai....
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....nt No.1 company, till the time the pending/ waitlisted applications are disposed of as per the order of this Hon'ble Tribunal. c) That the Petitioner be permitted to serve the Respondents through post, publication in newspapers, email, whatsapp messaging, wherever required, in order to ensure due service of notice to all Respondents, present in India or overseas. Final Reliefs. d) That the Central Government be allowed to nominate 15 (fifteen) persons.to be appointed as directors on the General Committee of the Respondent No.1 company to manage the affairs of the company and such directors may report to this Hon'ble Tribunal on such matters as it may direct, including restructuring of the Respondent No.1 company in order for it to function as per the terms of its Memorandum and Articles of Association. e) Pass any other order(s) as deemed fit and proper, under the circumstances, by this Hon'ble Tribunal." 107. The scope of the present Appeal is to examine the correctness of the order dated 01.04.2022 passed NCLT on an Application filed by Union of India. No directions have been passed by the NCLT in the impugned order with regard to pr....
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....stands disposed-of in the aforesaid term." 109. With regard to witness protection, liberty having been granted to approach the Witness Protection Cell, New Delhi District for dealing with the aspect of protection. Both, Col. Ashish Khanna and Niji Sapra can take recourse to the liberty given by Metropolitan Magistrate in the above order dated 29.05.2024. Hence, no directions are required in the present Appeal with regard to witness protection with respect to Complaint Case No.959/2021 in the Court of Metropolitan Magistrate. Question Nos.IX & X 110. Now we come to the reliefs, which the Appellant(s) may be entitled. 111. In view of the foregoing discussions, we have already held that Application filed by Union of India under Sections 241 and 242 of the Companies Act, 2013, the Union of India was fully maintainable and NCLT has rightly exercised its jurisdiction under Sections 241 and 242 on the basis of materials on record. We have also upheld the order dated 01.04.2022 appointing the Fifteen Members Committee in place of the General Counsel of the Club. As noted above, the Committee, which is appointed by the Central Government having already taken various steps ....