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2020 (8) TMI 429 - AT - Companies LawHolding of AGM - Club Membership - members not paid membership fees - It was stated by the appellant that Madras Race Club (‘for short MRC’) has two set of members Club Members and Stand Members. Only Club Members have the right to vote at AGM and the present appeal relates to rights of the Club Members - HELD THAT:- It is pertinent to mention that Madras Race Club was incorporated as a “not for profit company” under Section 26 of the Companies Act, 2013 and as per its objects contained in its Memorandum and Article of Associations, Madras Race Club (MRC) has to utilitise its profit and other incomes for promoting its objects. The affairs of MRC is managed by Management committee comprising of 12 members and they are liable to retire by rotation. However, to serve the public interest the Govt. of Tamil Nadu had appointed 4 Management Committee Members who shall not retire by rotation. The MRC had commissioned a special investigation audit by an Independent Auditor viz. Brahmayya & Company Chartered Accountant in the year 2016; this was done in order to recover the dues and large number of irregularities observed in MRC. Thereafter, the NCLT Chennai directed that notices issued to the person who were identified as being in default in Chartered Accountant report and also appointed Hon’ble Justice K.P.Siva Subramaniyan a retired Judge of the Hon’ble Madras High Court to conduct a further independent enquiry to determine the genuineness of the members of the MRC - It is also observed that out of total membership of 1245, 924 members were allegedly admitted during this period from the audit report and from the enquiry conducted by Hon’ble Justice K.P.Siva Subramaniyan a retired Judge of the Hon’ble Madras High Court. It is very clear that these 635 have not paid the entrance fee. On the intervention of NCLAT, MRC was agreeable to offer the appellants in both the Company Appeals as Stand Member but they refused. The order of NCLT Chennai with an amendment that let the AGM 2018-19 to additionally consider also inter alia the issue of paying entrance fees along with interest at State Bank of India fixed deposit rate for the years of delay in payment, is upheld.
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