TMI Blog2020 (6) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. This Bench further directs the general committee that it shall not proceed with construction or 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ints, one formation of opinion is not supported by grounds, and cognizance has not been taken into at the time of forming opinion, two lack of public interest. I must make it clear that this Bench has not said anywhere separate hearing would be given on interim reliefs. It is open to this Bench to decide interim relief if this Bench is satisfied formation of opinion is valid and public interest is involved. Of course, the Respondents made their oral submissions on interim reliefs also saying that since interim relief and main relief are of the same, no interim relief shall be granted, and they argued on membership issues as well. 3. This petition was filed on 22.04.2020, notice was given to the Respondents on 22.04.2020, and in second hearing time was given to the Respondents to file reply. On filing reply, this matter was heard for long hours on 13.05.2020, 14.05.2020 and 18.05.2020 and then posted to 26.05.2020 for filing written submissions, then orders reserved. 4. Before getting into details, I must say in two lines what this petition is and what the defence is the case of the State is this Club was registered as Section 8 Company and continuing for more than hundr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y/CEO of the Club and is one of the Key Managerial of the Club u/s 2 (51) (v) of the Act and has been appointed on 12.04.2018 to the services of DGC. R19 is the Ministry of Housing and Urban Affairs, Government of India lessor to the land of 27.03 acres situated at 2nd, Safdarjung Road, New Delhi given on perpetual lease in the year 1928. This lease deed was executed on 28.02.1928 between the Secretary of State for India in Council (British India) and the Club in its earlier name i.e. Imperial Delhi Gymkhana Club limited. This Club has been registered as non-profit company with a license from the Central Government (referred as State also) u/s 26 of the Act, 1913 on its earlier name Imperial Delhi Gymkhana Club Limited, from this name, the word Imperial was dropped in the year 1959. The main objective of the Club is to promote various sports and pastimes and other objectives, as per the Memorandum of Association. 7. It is a club with limited members as on date with 5600 permanent members, but the users of the Club today is two times to the permanent membership, therefore to know who they are, how the users of Club are double to its permanent members and how it has become pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014; (ii) Violation of provisions of Section 5, 166 and 179 of the Companies Act, 2013 and mismanagement of funds received by way of registration fee from the applicants; (iii) Violation of provisions of Section 129, 166 and 179 of the Companies Act, 2013 due to mismanagement of company s funds as per qualified opinion of Auditor s Report for the financial year 2017-18; (iv) Violation of provisions of Section 209 and 211 of the Companies Act, 1956 along with violation of Section 128 and 129 of the Companies Act, 2013 and mismanagement of funds received by way of registration fee from the applicants; (v) Violation of Section 141 of the Companies Act, 2013; (vi) Misstatement in the e-forms-action under Section 628 of the Companies Act, 1956; (vii) Violation of Section 129 read with Schedule-III and Section 448 of the Companies Act, 2013; (viii) Anomaly in the number of members of the company, liable for action under section 628 of the Companies Act, 1956; (ix) False statement in the balance sheet as at 31.03.2013, liable for action under section 628 of the Companies Act, 1956; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e received was treated as revenue before instead of showing it as long term liabilities as it is a refundable item); over the investments made by the Club from the amounts received from new applicants; and with regard to the processing charges received from new applicants. 11. The violations reported in the inspection report dated 31.07.2019 were referred to Ministry of Housing and Urban Affairs by the Regional Director for necessary action against the R-1, and on the direction given for preparing supplementary inspection report, the inspectors filed the supplementary inspection report dated 03.03.2020 to the Regional director which was forwarded to the Ministry of Corporate Affairs on 04.03.2020. 12. It is further submitted that the supplementary inspection report dated 03.03.2020 has detailed the numerous violations and the mismanagement of the affairs of the Club reflecting the committee acting ultra vires to the Articles of Association and the provisions of the Companies Act, 1956/2013 which is detrimental to the public interest because the violations are extreme in nature reflecting that the General Committee members acting autocratically to benefit chosen members of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed in the span of 10 years as mentioned in article 10(5) of AoA). (b) As per Article 13(1) of the AoA, the company is only entitled to charge entrance fee for memberships on the following basis, which is to be paid in lump sum: S. No. Particulars of members Entrance Fee (Amt. in Rs.) 1 Permanent (non-govt.) 25,000 2 Permanent (government officers) 10,000 3 Use of Club Premises pending election (UCPs) 10,000 4 Special category members (i.e. corporate members) (membership for a period of ten years to the corporate subject to the condition mentioned in AoA) ₹ 15,00,000 (up to two designated users and additional ₹ 7,50,000 for third user) ( (c) Furthermore, the Articles of the company prescribe that the entrance fee is one-time fees payable in lump s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, article 13(3b) prescribes that on becoming 21 years of age, the son of a permanent member to apply for full membership i.e. they have to apply afresh and stand in the existing waiting list of members. (iv) GC has also issued Green Card apart from dependents of permanent member to children of Lady subscribers, UCPs and to dependents beyond the age of 21- 22 years for reasons irrespective of their age on charging penalty amount from them at the discretion of the GC. (v) Green Card has been given to daughters of permanent member, Lady subscribers, UCPs etc. which is not allowed as per AoA. (vi) These are those members who have simultaneously applied for permanent membership and are in queue but have been given the rights to use all the benefits and privileges of the Club at subsidized rates except voting rights. AoA 13(3c) prescribes that on reaching the age of 21, the unmarried daughter of a member may use the Club as a dependent till the time she stays with her parents i.e. unmarried daughters till they stay with paren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence of two successive General Committees only. The period of granting UCP should not be the difference between two successive General Committees. On examination of records and by record of statement of Col. Ashish Khanna, Club Secretary, it is found that the UCPs Holders are given non-voting membership culling out 25% of the proportion of the non govt. permanent members (having voting rights) which is 50% of total active members as per AoA. These UCPs are in queue for permanent membership through their UCP membership which may take 6 to 7 years to become a permanent member. The GC is well aware that there is a waiting list for the non-govt. category for a period of almost 37 years. Culling out the proportion from non-govt. category and giving it to a new category of waiting list i.e. UCPs, is an illegal way of inducting people for permanent membership. Further to say that UCPs include those members coming from another self-created category i.e. Green Card Holders who were dependents of the permanent members. To conclude, the company maintains different lists of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.08 10 Eminent 1.89 11 Foreign national (in absolute terms) $12980 12 Diplomats (in absolute terms) $2360 13 Special Category (Corporates) (for one nominee) 39.90 (for two nominees) 56.10 (for three nominees) 84.15 (for each change of nominee) 5.90 Plus exorbitant amount of processing fee Table H S. No. Class Particulars 1 Permanent Members Maximum limit up to 5600 2 Garrison Members Only officers in units in Delhi garrison may become Garrison Members (no limit) 3 Temporary Members Temporary residents of Delhi may become Temporary Members (no limit). 4 Casual Members Only persons ordinarily resident out of Delhi may become casual members (no limit). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 12 Lady Subscriber (NV) 13 Lady Subscriber Government Category (NV) 1525 1567 1606 1635 1663 14 Lady Subscriber Non- Government Category (NV) 15 Life Member (V) 29 29 29 29 29 16 UCP (NV) 2332 2423 2616 2807 2878 17 UCP to Permanent - - - - - 18 Divorcee - - - - - 19 Foreign National - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kly ordered and put up well in time before the Viceroy Lord Willingdon and Lady Willingdon would visit the Gymkhana Club for their farewell on 16 March 1936. 17. On reading the above, anybody can infer the club has come into existence for the then ICS officers. That time it was mostly for English to chill out in the evenings. Obviously, it is their culture; therefore they cherished their culture wherever they ruled. That s why bar and ball rooms have come up, of course Indian kings had it in a different way. Of course, King is King, whichever country it is. After English left this country, this ruling elite culture has seeped into independent India through usage of this club, once get into, it is always relishing. It is hardly possible to come out of this kind of culture. It could be that this Club must have come into the hands of Indian Officers after English left this Country. After Independence, democracy governed by Constitution has set in. Since the democracy has become reality, this club should have left its doors azar for many if not all, because not only has it bar and ball room and swimming pool with roof, but has wonderful library and many other sports facilities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Given the scenario, the reason for this undying urge to become members and remaining in wait list for decades, to my reason is, this unbuilt wall erected is multiplying the urge to become members. It is like grass is always greener on the other side of the fence. It is a psychological game making rounds and rounds around this Club. 20. There are many allegations and indeed statements of the Club, reflecting it has violated many provisions of the Companies Act 2013, primarily changing Articles for opening of new windows to the children of the permanent members and their children to using the benefits of the Club through green card, then UCP, and finally membership. The children of members, whether they are alive or late, their children will fit in one or other slot, but whereas persons deposited lacs and lacs of rupees dozing at the entry gate for decades hoping entry gate will open to them one day. For decades this money has been lying in the company, not as liability but as income and users enjoying. The state case is, it is a club built on the land of the State, it is a club registered under section- 8 with an avowed object for promoting sports and other activities includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest also. State priorities are the needs of the people, what becomes public interest, when that becomes public interest, are decided by time and growing needs. Accordingly, State acts. 23. Another important aspect is, to understand grievance under section 241 of the Act, many a times the court deals with a case under this section has to necessarily run through the historical facts, and the reason is, it is the conduct that decides existence of prejudice. Not one action like in a civil case. The reason for travel-back is one episode of the club cannot be torn out of its robust life to decide a case u/s 241 to know whether actions of the club are equitable or inequitable. Because in chain of actions, every link is as important as every other link, nothing could be missed out. If any link is seemingly missing, then it is the duty of the judge to search for the misplaced link to link the chain. If it is a civil case no links it is limited to a point, whether a specified action is in violation of law or not, no matter whether it is equitable or not. Here converse situation, no matter whether actions are lawful or unlawful, if the actions lead to inequity causing prejudice, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tus of the complainant, it is a case against the company, and it is also not in dispute that issues are in relation to the affairs of the company. Now the issues before this Bench are as to whether the Central Government formed an opinion that the conduct of the affairs of the company is prejudicial to the public interest. 27. If we see the dictionary meaning of the word conduct , if it is taken as a noun, it is defined as general behaviour in actions, reactions or inactions of an entity or the manner in which an organization or an activity is managed or directed, if it is taken as a verb, it is defined as to organize or carry out the duties. So actions over a period of time reveals what the conduct is, it says whether such conduct is for equity or against equity. Behavioural line can only be ascertained when we know the facts in totality. In Section 397, 398/241-242, it is not important who has done it, important is, whether affairs conducted are prejudicial or not, it could be by the erstwhile management or by the present management or by successive managements. 28. If prejudice is against Members of the company, for they are notified about the actions of the company on an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the Government become members. As I said above, this club has been enjoying 27 acres of the land of the State which costs around thousands of crores. All this shows imperial behaviour and insensitiveness of the Club against the tenets of democracy. It may be said I am speaking of about fundamental rights in section 241 242 case, it is not so, the whole discussion is about inequity and prejudice. 32. Prejudice under section 241 (2) may not be violation of something from law book, the relief under this rule has a little more, it is a section deals with something that is unfair, may be it is seemingly right, but at the bottom of it manifesting prejudice to the public at large or a member or company, in this case it is public. It could be said that how does it matter to the public when members of the Club makes rules to themselves notifying everything to the Regulating Agency and when no member complained about the affairs of the Club. It could be right from the perspective of the Club and its members to the extent to say that neither oppression nor prejudice to the members or to the company. But if you see the other side of the coin, the club is sitting on the monies of the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh section 241 (2) (3) of the Act. To take this into cognizance, State need not remain waiting for any compliant from public, for which the mandate is, facts shall be in existence and the state shall form an opinion to take action, nothing more nothing less. One more fact I shall say that use of the state land through lease for about hundred years will not make any difference, because lease will not make lessee owner of the leased land over efflux of time. 34. The Respondent Club has argued that it is a Malafide Petition. The club has taken a stand that this hearing through video conferencing is a closed hearing which is against the long established principle of open justice because justice should not only done but also seen to be done, therefore to maintain public confidence in the administration of justice, this hearing shall be taken up as soon as physical hearing has been reinstated. It has further been stated that since the club is shut due to lockdown owing to Corona Virus, especially when enormous issues at hand arising from pandemic, including the helpless migrants, the economic fallouts, the Club says, the State has no business in the Club, therefore the State ought no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matters hoping lockdown would end, but thereafter lockdown has become lockdown -1, 2, 3, 4 and so on. This was not known to NCLT or for that matter to anybody that lockdown would bring lifetime changes which we are now passing through. Moreover, this case was filed during the period of lockdown-2.0, by that time we have already started hearing matters as they come before us. This matter was heard during lockdowns- 3.0 4.0. But these lockdowns have not halted hearing of matters. 37. As to Mr Swapnil writ, it is only a suggestive writ for access to viewing, in the writ also, it was not for viewing physical hearing only for public viewing, to which Apex Court held that it would make arrangements to provide access for public viewing by giving several directions to install infrastructural arrangements. In any event, about physical viewing to the court hearings is not the subject matter in the writ nor the mandate of honourable Apex Court, therefore this argument has no basis from the citation supra. 38. Another point intriguing is, the Club stated that during COVID time, when helpless migrants undergoing lifetime pain and some losing their lives in the journey of their destin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of its people. Wherever state has interest, public has interest over there. Whether club figures are intact or not is secondary, the point here is, having this club for the purpose above is whether essential for larger good of the public or not. May be it is there for a century, it does not matter because it does not have free hold right over that land. Now it is worth of thousands of crores. As time goes by, something that was not prejudicial to the public interest in the past would become prejudicial in the present. All that is said in these two paras may not have direct bearing over the merit of this case, it has been said because the Club itself has mentioned about migrant labour. What is public interest is lucidly explained in the judgement below: 41. In one case (N.R. Murty vs Industrial Development Bank of India and Others- (1977) Vol. 47 Comp Cas 389), Honourable High Court of Orissa has held as follows: 27. The words in a manner prejudicial to public interest were added to the statute by Central Act 53 of 1963 by way of amendment. The expression is an elusive abstraction meaning general social welfare or regard for social good and predicating interest of the ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wide and amorphous and takes colour from the context in which it is used. We cannot keep it within four walls either by giving a definition or by taking an illustration from a case law. 43. The Club has raised two preliminary issues, one saying that the Central Government of India (Regional Director) has not applied its mind in forming an opinion that the affairs of the Club conducted prejudicial to the public interest, the reason cited for raising this issue is, the Regional Director, upon receipt of inspection Report, prepared the report within 24 hours looking at 4000 pages report, which is humanly impossible within 24 hours to form an opinion and recommend MCA to proceed against the Club u/s 241 (2 3) of the Act. The Club and its Committee members submit that since the material not being specifically asserted as pleading and there being no answer to their reply flagging this issue, this Company Petition shall be dismissed without going into merit of the case for want of opinion as illustrated by the Constitutional Courts on forming opinion before initiating proceedings. The Club counsel relied upon N, Sampath Ganesh vs Union of India Ors (Bombay High Court Paras 85, 204 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies Act, 2013 much less under Section 241 (2) of the Companies Act, 2013. Yes, he is right to the extent mentioned. But I must add that violation or no violation of any provision of law will not make any difference to a case filed u/s 241 of the Companies Act, 2013, the only point to be seen is as to whether the action is prejudicial against a Member or Company or to the public interest. Therefore if anywhere it is said that violation of law will not tantamount to making a case u/s 241 of the Companies Act, 2013, it does not mean that where violation of law comes in, there case u/s 241 of the Act is not made out. It all depends upon the factual situation existing in a case. There is a chance for unfairness or prejudice is laced in it, nobody knows, it will open out only when facts are examined. 48. He then relied upon Union of India Ors. v. Modiluft Ltd., (2013) 6 SCC 65 Raja Khan v. Uttar Pradesh Sunni Central Waqf Board Anr., (2011) SCC 741 to say that if interim relief is same as that of permanent relief, then it is not permissible because no case would be left for adjudication at the time of final hearing, in such a situation, the court shall not grant any interim rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication, after expiry appeal period by the aggrieved members or the creditors as the case may be, copy of the order shall be laid before both Houses of Parliament. 52. Under section 396, government will not apply to any court of law for an order, the Central Government itself will prepare scheme of amalgamation when it is of the opinion that it is essential in the public interest that two or more companies shall amalgamate. It is nowhere required to put it to the scrutiny of a court of law. If a procedure is carved out mandating the Government to seek relief through court of law, it will initiate a proceeding against wronging party to discharge its fiduciary duty on behalf of the public. And initiation of court action cannot be seen on par with an order of the Government, therefore incisive scrutiny of the opinion is not essential in the cases where it is only to initiate action like any other private person. This indeed will frustrate the State proceeding against wronging party. 53. The club counsel has relied upon The Joint Commissioner, Commercial Tax Officer, Harbour Division, II-Madras v. The Young Man Indian Association (Registered) (1970) 1 SCC 462, Madras and Ors., S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat is right to life covered by Article 21 of the Constitution of India. If such right is interfered with inflecting the procedure laid down, it is obvious that effect of the order shall be invalidated, but in the present case it is only about an opinion to file a case against a company like any other person, these two situations are not comparable, therefore the observations made in preventive detention cannot be applicable to a case like this. 57. On the same point of formation of opinion, the club counsel relied upon Bhikhubhai Vithlabhai Patel and Ors. v. State of Gujrat and Ors. (2008) 4 SCC 144 to say that formation of opinion is a condition precedent and it shall be based on facts but not on imaginary grounds. 58. It s an issue decided on the action of State Government in making substantial modification falling under Gujrat Town Planning and Urban Development Act, 1967, as per this Act, the Development Authority designated a parcel of lands of the appellants as part of the residential zone in the draft development plan prepared by it and submitted the same to the State Government for sanction. The State Government by exercising its powers u/s 17(1)(A) (II) proviso of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst which the Apex Court held that necessity shall be demonstrated by forming an opinion stating that modification is required for the said purpose. 59. In the present case no such stringent law has been set out to form an opinion, it has only been stated that if the Central Govt. is of the opinion actions of the company are prejudicial to the public interest, the Central Govt. at best can ask relief from a Court of law unlike in the case supra where State Government modified the draft plan in deprivation of the right of land owners. In the case above, the right of the people is directly affected by an order of the Government but in this case it is only an opinion to file a case therefore the ratio held in the case above is not applicable to the opinion falling under Section 241 (2) of the Act, 2013. However, in this case, a load of 5000 thousand pages material is there, out of which, two three points demonstrating prejudice to the public interest are highlighted, therefore the ratio decided in the case above is not applicable to this case. 60. At last icing on the cake with regard to formation of opinion and public interest, the Club counsel referred is the judgment in 63 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in the order and these inferences do not need to be stated in the draft order. We are afraid that this argument is incorrect inasmuch as grounds contained in reasons (a) and (b) are important grounds which have a vital bearing on the amalgamation in question. If these grounds were contained in the draft order, there is no doubt that the shareholders and creditors of FTIL, and FTIL itself would have had an opportunity to comment on the same. For example, the business realities of the case are facts known to FTIL; and NSEL, being FTIL s alter ego, is the subject matter of dispute in various suits that have been filed and are pending adjudication. FTIL could have responded giving reasons as to why NSEL is not its alter ego. Also, whether the amalgamation is, in fact, to restore or safeguard public confidence in forward contracts and exchanges is a subject matter on which FTIL, its shareholders and creditors, could have commented. Equally, whether NSEL s exchange was an essential and integral part of the Indian economy and financial system, and whether this defunct business could be consolidated so as to impact the economy are all matters for comment by FTIL and its shareholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order. First and foremost, restoring public confidence is no part of the order. What is mentioned is only the fact that public confidence has been shattered, as is reflected by the FMC order dated 17.12.2013. Secondly, the entire expression, which are an integral and essential part of Indian economy and financial system, by consolidating the businesses of NSEL and FTIL is no part even of this answer given, but a gloss given by the High Court itself relatable to this answer. Similarly, when it comes to reason (b), giving effect to business realities of the case contained in the answer to objections does not contain by consolidating the businesses of FTIL and NSEL , nor does it contain and preventing FTIL from distancing itself from NSEL, which is, even otherwise, its alter ego . On the contrary, the High Court itself mentions, in paragraph 355, that this is also not a case where the Central Government has, in fact, lifted the corporate veil, despite the alleged non-existence of the circumstances justifying lifting of such corporate veil , and further, this is not a case where the Central Government has lifted the corporate veil and sought to apportion any liability upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it is not like an order passed under 396 of the Act 1956. When order is passed by the Government, it will have direct effect upon the parties, but an opinion to file a case, it is a kind of right to bring forth inequities in the company to the notice of this Bench for appropriate orders so as to arrest the prejudice to the public interest. The respondent club shall not try to thwart the Central Government exercising its legal right given in the Act, it is something preposterous. In almost all cases relied upon by the Respondent Club, all of them are orders passed by the Government, but here it is an opinion to file a case against the Respondent club based on the inspection report and on the opinion based on facts, rather on the facts provided by the Club during inspection. Therefore, I hold that the ratio decided in the above case is not applicable to this case, indeed in a way it makes it clear that if opinion is based on facts, then it is a valid opinion. Demonstration of all facts in the opinion will not make any sense when annexures disclosing what all said in the opinion is present before the Court. Grounds in the order of Preventive detention, order affecting the rights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to proceed further. In this case, no doubt supplementary report dated 03.03.2020 runs into 5000 pages, but whereas main report prepared basing 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. 64. The Petitioner Counsel relied upon Zenit Metaplast Private Limited v. State of Maharashtra, (2009) 10 SCC 388 to say that at the stage of interim relief prima facie case, probabilities and irreparable loss and injury to the petitioner is to be seen, not other aspects. 65. He further relied upon Anns v. Merton London Borough Council, 1978 A.C. 728 P.L. Lakhan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loping sports and sports persons. But slowly and steadily these are ignored by stating that the funds are not available for maintenance or people are not coming to use the facilities. The standard refrain is that a part of the stadia or sports facility can be used for non77 sports activities generating funds for the upkeep of the stadium. In no time, an exclusive recreational club is established for those in power, those who have access to power and those who can afford to pay hefty sums to access the facilities by way of membership. Thus valuable state resources meant for the general public, for the poor and the needy who require the facilities to improve themselves, are denied access and the entire facility becomes the domain of a chosen few. What started as a multipurpose stadium for the benefit of citizens become partly a private recreational club and partly a neglected unused stadium. What started as a club then goes into private hands for commercial exploitation for a hotel or for conducting marriages and other functions. The only sports activity regularly held is in the card room. Unfortunately, all this is done under the nose of the District Administration, in a centrally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssues afflicting the Club. 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 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. 76. This Bench further directs the general committee that it shall not procee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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