TMI Blog2021 (2) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... te Tribunal would be acting within its jurisdiction to consider whether the finding or conclusion in regard to existence of prima facie case has been reached on consideration of relevant material and if it is so, whether such finding is justified. The impugned order cannot be set aside without examining the material on record and recording a contrary finding qua the existence of a prima facie case. Examination of material relied upon for grant of interim relief being inevitable in the instant case, it has to be borne in mind that this Appellate Tribunal would be loath in interfering with the finding unless it is demonstrated that the view taken by the Tribunal is capricious or unreasonable and not merely because other view is possible. On a plain reading of the provisions engrafted in Section 241, it comes to fore that while any member of a Company complaining of affairs of company being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company is entitled to apply to the Tribunal for relief, subject to its entitlement under Section 244, the Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the aspiring candidates whose funds were allegedly utilized for the benefit of few chosen members, albeit with the blessings of the GC. Existence of a prima facie case - HELD THAT:- It is abundantly clear that misuse of the Club meant for pastime and sports activities and denying access of membership even after accepting the enhanced membership fee and putting them in queue for decades together with utilization of the component of interest admissible on their invested membership fee for the benefit of permanent members and users seriously jeopardized interest of such prospective members and involved public interest. That apart, the interests of general public seeking membership but being made to wait for decades together with membership fee being held up and its interest component being utilized for the recreational and pleasurable activities of permanent members and users of the Club despite the Club being aware of the limited number of vacancies in membership occurring every year would be a predominant consideration concerning the rights of general public to gain access and seek membership of the Club, thus involving public interest - Therefore, the Club would not be ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company Appeal (AT) No. 95 of 2020 - - - Dated:- 15-2-2021 - [Justice Bansi Lal Bhat] Acting Chairperson , [Justice Anant Bijay Singh] Member (Judicial) And [Dr. Ashok Kumar Mishra] Member (Technical) For the Appellant : Mr. K. M. Nataraja, ASG with Mr. Vatsal Joshi, Advocate and Dr. Raj Singh, Director RD NR, Mr. Sanjay Shorey, Director Legal, Ms. Seema Rath, Mr. Parvez Naikwadi, Mr. Shailesh Madiyal, Mr. Nagachandran Easwaran, Ms. Kusum Yadav, Mr. Sughosh SN and Mr. Sudhanshu Prakash. For the Respondents : Mr. S. N. Mookherjee, Sr. Advocate Mr. Arun Kathpalia, Sr. Advocate Mr. Gaurav M. Liberhan, Sr. Advocate and Mr. Ash Khanna, Advocate for R-1. Ms. Rohini Musa, Mr. Pulkit Deora, Ms. Garima Prashad and Mr. Sylvine Sarmah, Advocates for R-18. Col. Ashish Khanna, Secretary, Gymkhana Club JUDGEMENT BANSI LAL BHAT, J. Pending consideration of CP No. 71/2020, National Company Law Tribunal ( Tribunal , for short), New Delhi, Principal Bench, being of the view that a prima facie case demonstrating that the affairs of the Gymkhana Club ( Club , for short) are being conducted in a manner prejudicial to the public interest, passed interim order dated 26th June ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal need to be noticed insofar as they are relevant. The Club came to be incorporated on 14th July, 1913 as a Company (limited by guarantee) under Section 26 of the Companies Act, 1913 (corresponding to Section 25 of the Companies Act, 1956/ Section 8 of the Companies Act, 2013) under the name and style Imperial Delhi Gymkhana Club Ltd. with its Registered Office presently situated at 2nd, Safdarjung Road, New Delhi as a non-profit company, inter alia, with objective to promote sports and pastimes under licence from the Central Government to carry out its functions subject to the conditions and regulations binding on the Club. The Club has been operating for more than a century in 27 acres of land leased out by the then Government. Respondent Nos. 2 to 17 before the Tribunal were the General Committee Members for the year 2019- 2020 out of whom Respondent No.2 was acting as President of the GC while Respondent No.18 was working as Secretary/ CEO of the Club. Respondent No.19- the Ministry of Housing and Urban Affairs is the lessor of 27.03 acres of land given on perpetual lease to the Club in 1928 under a lease deed executed inter se the Secretary of State for India in Council ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and limited number of non-government people virtually barred entry of many people who applied for membership to seek membership even after waiting for decades as the children of permanent members managed to sneak in under the garb of being dependents of permanent members, thereafter as green card holders and finally as UCPs holders frustrating the desire of people on the wait list. According to Union of India, the money taken from the waitlisted applicants was being utilized for the usage of the Club by persons coming through various channels which was alleged to be unfair and prejudicial to public interest. The stand taken by the Club, on the contrary, is that the Club is entitled and empowered to decide the membership issue in accordance with the Articles of Association and its action cannot be called in question by the Government on the ground of being prejudicial to public interest. The Club further pleaded that the premises housing the Club has been leased out to it in perpetuity and the Club has been paying the rent regularly. It is denied that the Club was being used for purposes other than the objects mentioned in the Articles of Association. It was further pleaded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite approvals or with approvals, suggestions for changes in Articles and Memorandum of Association, membership issues including waitlist and bout accelerated membership, adherence of the Club to the Rules governed by Section 8 of the Companies Act, 2013 and other miscellaneous issues if any and file report of recommendations suggesting for better use of the Club premises for the larger good in a transparent manner on equity basis within two months hereof. 76. This Bench further directs the general committee that it shall not proceed with construction of further construction on the site, it shall not make any policy decisions and it shall not make any changes to the Memorandum of Association or Articles of Association and it shall not deal with the funds received for admission of Members and it shall not conduct balloting until further orders. The GC is given liberty to carry day to day functions of the Club by using funds of it other than fee collected from applicants. All these directions shall remain in force until further orders . 7. As noticed at the very outset, while the Company Appeal (AT) No. 95 preferred by the Club assails the finding recorded by the Tribunal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egional Director asserting that he was duly authorized to file the petition vide sanction dated 18th March, 2020 which does not constitute an opinion within the meaning of Section 241(2) of the Act, 2013. It is submitted that the Tribunal has casually dealt with the second limb of the issue relating to maintainability of the petition for want of any valid opinion while failing to deal with the first limb of the issue pertaining to want of formation of opinion by the Central Government. It is submitted that there is complete non-application of mind by the Union of India and the formation of opinion on the basis of reiteration of comments of the Inspecting Officer renders it non-est. It is submitted that the Tribunal has glossed over the matter by ignoring the judgments of Hon ble Apex Court. Thus, it is submitted that error is obvious as the letter of 18th March, 2020 is not an opinion and makes no reference to an opinion. Besides it does not reflect any application of mind. It is submitted that for formation of an opinion there must be sufficient evidence to arrive at satisfaction. The standard of proof would ordinarily be such that would satisfy an unprejudiced mind beyond reasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... times, kitchens, refreshment rooms, use of the Club property by its members, hosting dinners, balls, concerts and other entertainment incidental and conducive to the attainment to its objects are the objects of the Club. The perpetual leasehold rights have been granted for the exclusive use of the Club and its members and creates no public interest in the affairs of the Club for the purposes of Section 241(1) of the Act, 2013. It is submitted that mere violations of law do not constitute public interest. It is submitted that the finding of the Tribunal is flawed inasmuch as mere allotment of lease land does not make the Club amenable to public interest. The fact that Government has leased land to the Club cannot be construed as public interest in the affairs of the Appellant. It is submitted that there is no allegation of any violation of the lease deed. It is submitted that the Club has been or is being used for the very same purpose for which lease was granted in favour of the Club in 1928. Taking strong exception to the observations of the Tribunal that the perpetual lease granted to the Club was a State largesse , it is submitted that the grant of perpetual lease can under no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest, but private matters and issues of internal management only. It is pointed out that UCP s, Green Cards and eminent persons are not permanent members but are members who have been given the privilege to use the Club. A usage card, being either a Green Card or User of Club Premises termed as UCP card is issued to such members. Dwelling upon various classes of members and users of Club, it is submitted that there are permanent members, garrison members, temporary members, casual members, special category members, lady subscribers besides users of Club like candidates pending election, children of members upon attaining age of 21 years and dependent children of members below 21 years of age as provided in the Articles of Association. It is further submitted that under Articles of Association there is a cap on permanent membership with voting rights restricting it to 5600. GC regulates the balloting of a candidate for membership of the Club in a manner that ensures maintaining the proportion of members belonging to Armed Forces of India or Civil Officers of Government at about half of the total active membership. This is besides facilitating the early admission of members of the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Club and its members reflecting a predetermined and personal, prejudice and bias. Reference is made to observations made by the Tribunal in paras 14, 17, 18, 20, 21, 32 33 of the impugned order in this regard. It is submitted that the Tribunal has allowed its socio economic inclinations dictate the tenor, contents and findings of the impugned order. Furthermore, it is submitted that the Tribunal has made generalizations and comments unconnected to the issues arising in the petition. 15. It is further submitted that the Tribunal, while exercising jurisdiction under Section 241(2) of the Act, 2013 cannot rewrite the Constitution or expand the scope of Section 241 to conform to its personal socio-economic prejudices and thereby destroy the basic structure of the Club. It is submitted that grant or non-grant of such membership can never be the subject matter of a petition under Section 241(2) of the Act, 2013 as no element of public interest was involved therein. It is submitted that the Tribunal is supposed to exercise jurisdiction to protect the entity viz. the Club and not destroy it. It is submitted that the Tribunal was not justified in invoking Article 14 of the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtually decided the fate of the Company Petition. It is submitted that the impugned order is beyond the scope of the pleadings and grants relief not even prayed for. Nothing remains for adjudication in the Company Petition as Tribunal has granted more than final relief. Powers have been delegated to the five members of the sub-committee which is an abdication of jurisdiction. It is further submitted that there was no urgency in the matter as the Club had been shut since 24th March, 2020 on account of COVID-19 Pandemic and subsequent lockdowns and there was no urgency for seeking ex-parte hearing. It is submitted that the petition was filed on the basis of complaints by disgruntled members who lost in election and had various other motives. Union of India should not espouse the cause of disgruntled members. It is lastly submitted that the Company Petition itself has been filed by way of proxy on behalf of such disgruntled members of the Club, who had an independent right to complain. It is submitted that the Central Government is not a competent authority to entertain complaint from members of the company. The Central Government exceeded its jurisdiction by entertaining complaints f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption of useful purpose . It is submitted that the activities of the Club in serving of wine, beverages and cigarettes and catering to the elite sections are not useful purpose and cannot be said to be in accordance with the provisions of Section 8. It is further submitted that Section 8 (1) (c) of the Act prohibits paying of dividend to its members but the Club has been indirectly paying dividend to the members in kind. The charging of discriminatory fees, in a way provides dividend indirectly to some of its members in violation of the provisions of the Act. Learned counsel, while referring to the objects of the Club in its MOA, submits that promoting sports and pastimes being the first objective or the purpose, it has to be read disjunctively. Therefore, any activities undertaken by the Club for pastime should also be related to promotion of sports only. Moreover, such objects being final, if there is something ultravires in the object clause of the Club, same would be a good ground to hold that the Club has declared that it will conduct the affairs in a manner prejudicial to the public interest. Mr. K.M Natraja, would submit that the Club, initially registered as a Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned order is not adversely impacted insofar as the existence of prima facie case is concerned. It is submitted that the allegations of malafides are unfounded and no specific allegation against any officer dealing with the matter has been made. It is further submitted that the question of direct exercise of power attributed to Central Government is out of context as the Central Government has formed opinion and taken action directly in exercise of its power and not indirectly for any prohibition on its direct action. It is submitted that the license under Section 8 of the Act restricts the object in MOA into promotion of sports and pastimes which cannot be read severally. It is, with reference to inspection reports which pointed out that majority has been obtained by dubious means and it has remained confined to few families with majority used to violate MOA and AOA by acts of continuous sabotage bringing in numbers of their choice by misusing the provision for voting on addition of new members. The management has failed to protect the distinctive character of the Club which stands converted into recreational Club only. As regards violation of lease deed, it is pointed out that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interest of its members as also prejudicial to the interests of the company. Reference in this regard is made to application filed by Respondent No.18 alleging gross nature of the illegalities in conducting the affairs of the Club. Union of India, thus defends the impugned order while demonstrating that the interim relief is inadequate and prays for appointment of Administrator. 19. Heard learned counsel for the parties at great length and accorded consideration to the submissions made at the Bar. The two appeals, one preferred by the Union of India assailing the impugned order only to the extent of relief granted as being inadequate and the other appeal preferred by the Club assailing legality and correctness of the impugned order, common to both appeals, were heard together. Before dealing with the issues raised in these appeals, it would be appropriate to have a conspectus of the provision governing grant of interim relief under Section 242(4) of the Act, 2013 and the scope of appeal preferred against an order passed in exercise of powers under Section 242(4) of the Act, 2013. This Appellate Tribunal, while dealing with the issue in Smt. Smruti Shreyans Shah vs. The Lok P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a Company alleging oppression or mismanagement, the Tribunal is vested with wide discretion to make any interim order on the application of any party to the proceedings, which it thinks fit for regulating the conduct of company s affairs. Such interim order can be subjected to terms and conditions which appear to the Tribunal to be just and equitable. The nature of interim order would depend upon the nature of complaint alleging oppression or mismanagement and the relief claimed therein. A member alleging that the affairs of the company have been or are being conducted in a manner prejudicial or oppressive to him or any other member or prejudicial to the interests of the company must come up with specific allegations of oppression and mismanagement and demonstrate that the affairs of the company have been or are being run in a manner which jeopardizes his interests or interests of other members or the interests of the company. Passing of interim order necessarily correlates to regulating the conduct of company s affairs. It is therefore imperative that the member complaining of oppression or mismanagement makes out a prima facie case warranting grant of relief in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: 241. Application to Tribunal for relief in cases of oppression, etc.- .(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. 21. On a plain reading of the provisions engrafted in Section 241, it comes to fore that while any member of a Company complaining of affairs of company being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company is entitled to apply to the Tribunal for relief, subject to its entitlement under Section 244, the Central Government is empowered to apply to the Tribunal for relief in case of mismanagement only if the affairs of the company are being conducted in a manner prejudicial to public interest. The Central Government is required to record its opinion as regards affairs of the company being conducted in a manner prejudicial to public interest. Recording of such opinion is a sine qua non for applying to the Tribunal under Section 241(2). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal was in regard to formation of opinion by the Central Government which admittedly is a sine qua non for grant of interim relief in a petition filed by the Central Government alleging affairs of the Club being conducted in a manner prejudicial to public interest. 23. According to learned counsel representing the Club, there is complete non-application of mind by the Central Government in filing the petition, it being submitted that no material has been produced to establish that the Central Government have formed a valid opinion under Section 241(2) of the Act, 2013. As regards letter dated 18th March, 2020, it is submitted that the same is not an opinion and same does not reflect any application of mind. It is contended on behalf of the Club that the standard of proof on the basis of which satisfaction has been arrived at by the Central Government must be such that would ordinarily satisfy an unprejudiced mind objectively and not subjectively. The Club would further argue that the opinion has to be formed on the basis of material as the validity and existence of opinion is not excluded from judicial review. The opinion has to pass the muster of judicial scrutiny. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on supplementary report is of only 100 pages, upon which the Central government along with the assistance of its team, formed an opinion, which cannot be denied. The bottom line is whether material is there or not. Here the material is very much present to the satisfaction of the authority, it is a subjective satisfaction based on the material available, if opinion is based on the material, as to sufficiency, it is not in the realm of the court. But in this case, material available is clearly indicating mess is created in the club affairs causing prejudice to the public interest, therefore there is no merit in saying that filing is not based an opinion demonstrating reasons. 25. In the instant case, it is not in controversy that the order dated 16th March, 2016 came to be passed by the Ministry of Corporate Affairs for inspection of the Club in terms of powers conferred under Section 206(5) of the Act, 2013. This order came to be passed upon receipt of complaints against the Club which, inter alia alleged ineligibility of M/s. S.N. Dhawan and Company for appointment as Statutory Auditors of Club, irregularities in the management of the Club, demand by the Club for revisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 226 of the Companies Act, 1956; (xiv) Violation of Section 129 of the Companies Act, 2013; (xv) Financial irregularities, liable for violation of Section 134(3) (i) of the Companies Act, 2013; (xvi) Violation of provisions of Section 134 of the Companies Act, 2013; (xvii) Violation of Sections 128, 129 read with AS-10 of the Companies Act, 2013; (xviii) Violation of provisions of Section 217(3) of the Companies Act, 1956; (xix) Violation of provisions of Section 209(1) of the Companies Act, 1956; and (xx) Revocation of license under Section 8(6) of the Companies Act, 2013. 26. The Ministry of Corporate Affairs, on consideration of the Inspection Report directed taking of penal action against the Club management, Auditors of the Club which included removal of management and appointment of Government directors with further provision for supplementary inspection for dealing with the issues pertaining to allotment of membership, funds raised from new aspirants as registration fees for membership, accounting treatment of the amount received from such funds, investments made by the Club out of such amount as also processing charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be taken on the basis of same after having taken notice of it. The penultimate action manifesting in filing of Company Petition under Section 241(2) of the Act, 2013 as a sequel to the action taken on the basis of the Inspection Reports and conclusion of the probe would not permit of any hypothesis other than the one compatible only with application of mind by the authority in regard to formation of opinion on the basis of material placed before it which comprised of the Inspection Reports and the conclusion of probe establishing gross violations and brazen exercise of authority by GC members to the detriment of general public interest. The forming of an opinion in regard to affairs of the Club being conducted in a manner prejudicial to public interest would not be based on satisfaction as contended on behalf of the Club. Such formation of opinion cannot be called in question. The Tribunal would not be acting within its province to evaluate or sift the material placed before the Central Government and arrive at a different conclusion. Such an exercise would be impermissible as the task of formation of an opinion in regard to the conduct of affairs of company being prejudicial to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of a prima facie case 31. Coming to the vital aspect of existence of a prima facie case warranting grant of interim relief be it seen that for demonstrating that a fair question has been agitated by Union of India involving public interest reference to the factual aspects would be inevitable. The chronology of dates and events from inception of the Club with its incorporation in 1913 as a Company limited by guarantee under the Companies Act, 1913 with nomenclature of Imperial Delhi Gymkhana Club Ltd. and the legacy that followed landing the Club in a situation where its functioning in conformity with law and the Articles of Association was questioned by alleging gross abuse of powers and mismanagement has been detailed in the impugned order and we don t intend to burden this judgment by reiterating the same except to the extent of demonstrating of existence of prima facie case for interim relief claimed by the Union of India. Land admeasuring slightly above 27 acres situated on Safdarjung Road came to be allotted to the Club in the nature of perpetual lease by the Government. It happened in 1928. The main objective of the club, as envisaged in its MOA and AOA was to promo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f existing members. The selection process was alleged to be dubious and shrouded in mystery. The petition would further allege violations and nonadherence to the statutory and AOA provisions primarily in two areas; (i) differential treatment in allotment of memberships; and (ii) lack of transparency in annual financial statements. 32. The spat of allegations are manifold but it would be appropriate to quote a few instances in this regard. It is alleged that the GC induced the prospective members/applicants to pay higher membership fees which was enhanced from time to time despite the GC members being aware of the fact that the average vacancy rate of the Club membership per annum ranged between 120 to 135 and from 1972 onwards there was a long waiting list. Further that the Club had a waiting list for the non-government category for a period of about 37 years. It is alleged that the action of culling out and giving the proportion meant for non-government category to the category of UCPs (use of club premises) in the new category of wait list thus, ex facie and unlawful way of inducting permanent members. The petition further alleged that the Club was manipulating the creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the Lutyen s Delhi adjacent to Prime Minister residence worth of thousands of crores on minimal annual rent of ₹ 1000 annual rent for lazing around in the evening for drinking amounts to prejudice to the public interest, all these are born out from the records, of course any interpretation could be given, but they cannot deny the fact that the club is basically for pastimes, in fact it is the case of the Respondent Club and its GC. To say public interest is involved, whole country public is not required to be effected; public interest is involved where actions of somebody will prejudice the public of that vicinity or a class of people. The members remain waiting years together for membership is nothing but causing prejudice to the public, when some are in waiting, some getting entry prior to others in waiting is prejudice to the public, some persons alone enjoying the state property is also prejudice to the public. 63. With regard to formation of opinion, in Governments, one person can t do everything right from inspection to formation of opinion, it goes from one table to another in step wise functioning, when it comes to the highest official, he will examine summ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Club along with other GC Members and give suggestions to the GC, and direct the Union of India to constitute a Special Committee with five Members of its choice to enquire into the affairs of the Club, utility of the land leased out by the State, with regard to constructions in progress without requisite approvals or with approvals, suggestions for changes in Articles and Memorandum of Association, membership issues including waitlist and about accelerated membership, adherence of the Club to the Rules governed by Section 8 of the Companies Act 2013 and other miscellaneous issues if any and file report of recommendations suggesting for better use of the club premises for the larger good in a transparent manner on equity basis within two months hereof. 34. The finding recorded by the Tribunal has been seriously questioned, contending that no element of public interest was made out in the petition. Learned counsel for the Club submitted that the petition does not concern the welfare of public as a whole, affairs of the Club do not concern citizens generally, the public as a whole does not have any peculiar interest affecting their legal rights nor is economic welfare of the pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Haryana Ors.-(2011) 10 SCC 529 as under: 28. If a chunk of a Government stadium, being prime land in the heart of the city meant for developing sports and athletics is misused or illegally allowed to go into private hands, it cannot be said that no public interest is involved. While the High Courts are not expected to take policy decisions in regard to sports administration and infrastructure, nor expected to supervise the running of the sports stadia, they are bound to interfere and protect public interest when blatant misuse is brought to their notice. The High Court should direct the concerned authorities to perform their duties and take action in regard to the irregularities, omissions and negligence, so that the interest of the public, particularly human resources development, could be protected. 37. It is abundantly clear that misuse of the Club meant for pastime and sports activities and denying access of membership even after accepting the enhanced membership fee and putting them in queue for decades together with utilization of the component of interest admissible on their invested membership fee for the benefit of permanent members and users seriously ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that barely 3% of total expenditure was being incurred by the Club towards sports activity and more than 60% was being spent on maintaining the recreational Club. He has also referred to the Inspection Report which unfolds specific acts of omission and commission attributed to the Club and would submit that the violation of the restrictions imposed by law, in the context of enjoyment of lease hold rights by the Club, are palpably injurious to public interest. 40. We now proceed to examine how public interest has been interpreted judicially. Learned counsel for Union of India relied upon J.S. Luthra Academy v. State of Jammu and Kashmir- (2018) 18 SCC 65 which clearly lays down that the State has no authority to grant a largesse with the object of sub-serving private interests or recreational purposes of a private group of individuals. The Honble Apex Court observed that when violation by the grantee is noticed, it would be lawful for the Government to initiate such legal process as may be prescribed to gain control over such resources with a view to reform them, as institutions, rather than do a patch-work on piecemeal basis. With reference to Krishan Lal Gera v. State of Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have no bearing on the outcome of the application before the Tribunal and the Tribunal has stated in the impugned order that these considerations have not influenced its findings and the directions passed in the impugned order. It is irrelevant whether such observations depicting the personal philosophy and thought process of the Hon ble Members comprising the Bench came as a rebuff to the argument advanced by the Club on the aspect of public interest or were simply reflection of the mind of Court in regard to the goal of social and economic justice sought to be achieved as set out in the Preamble of the Constitution. Be that as it may, such observations have not been allowed to influence the decision and in appeal we have not at all taken into consideration such observations to ensure that the finding in regard to existence of prima facie case for grant of relief remains purely within the realm of legal considerations. 43. As regards the plea of colorable exercise of power raised against Union of India, be it seen that there is no specific allegation against any officer and the question is irrelevant as Central Government would be acting within its province to apply to the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in by the Club. However, that would be the subject of probe during inquiry and this is not the stage to record any finding on that aspect. The stand taken by Respondent No.18 would corroborate some of the allegations in the Company Petition. The considerations which must be present to the mind of Tribunal at the conclusion of the Inquiry while recording the finding that the acts of oppression and mismanagement complained of are of a degree warranting winding up of the Company but that it would be unfair to any class of stakeholders to wind up the company and therefore, would justify only passing of suitable direction, would not weigh at the stage of grant of interim relief when only Interlocutory order may be required to be passed for regulating the conduct of the Company s affairs. At this stage, interim relief can be granted on the basis of legal considerations justifying such grant to prevent continuance of or further prejudice to public interest in the affairs of the company. Having regard to the nature of allegations and the proof sought to be adduced in support of the same as coming to fore from the Inspection Reports, it can be stated without any fear of contradiction tha ..... 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