‘Grant civil, criminal immunity for directors of Delhi Gymkhana Club’, Centre to NCLT

New Delhi, July 31 (SocialNews.XYZ) The Central government has moved the National Company Law Tribunal seeking civil and criminal immunity for all six directors, appointed by it in April to manage the affairs of the Delhi Gymkhana Club (DGC).

The ministry of corporate affairs, in an application, said, "The newly appointed directors are under the threat of being exposed to past liabilities incurred by the Respondent No. I Company (DGC) owing to actions taken/ not taken by the erstwhile management."

It added that the directors may become subject to disability or disqualification under law, including but not limited to Sections 164 and 167 of the Companies Act. "Moreover, various procedures under the Companies Act, 2013 or rules made there under may be required to be complied with which would invariably delay and defeat the swift action that is required to be taken by the said directors," added the application.

The government urged the tribunal to declare that the newly appointed directors "should not in discharge of their collective or individual responsibilities, be made subject to any civil and/criminal and /or punitive action, direct or vicarious or of any nature whatsoever, by the state or Central government agencies whether in exercise of their statutory, quasi-judicial, or regulatory powers or otherwise without the prior leave of this tribunal or Central government."

Citing orders of the tribunal on the embattled Infrastructure Leasing & Financial Services Ltd (IL&FS), the government called for immunity of the six directors for the "past wrongs" allegedly committed by previous committees. The application contended the tribunal had shielded new board members of IL&FS against criminal and civil action.

Speaking with IANS, Atul Dev, member of the last elected general committee of DGC, said: "The government has cited IL&FS order seeking immunity, but IL&FS and the club are distinct matters. They can't be compared."

The government urged the tribunal to pass a direction that the newly appointed directors "will not be subject to any disability or disqualification under any law, regulations or guideline (including Sections 164 and 167 of the Companies Act, 2013) or from any liability, financial or otherwise arising out of or in connection with their directorship in the Respondent No. 1 Company".

Against the backdrop of immunity from the past liabilities of the DGC, the government contended that it would help the directors in taking corrective measures in good faith and bona fide basis for the purpose of effective independent functioning, individually and collectively, and for the effective implementation of the tribunal's order.

The directors were tasked to manage the affairs of the company in accordance with the memorandum and Articles of Association and the Companies Act, 2013. In the April 1 order, the tribunal had noted that there were allegations of financial irregularities as well as violation of membership rules at the prestigious club.

The government said the directors are discharging a crucial public duty by providing proper management and guidance to navigate the club. "The said directors are persons of great eminence having a sterling reputation in their respective fields. The said directors will bring to the Respondent No. 1 Company the necessary discipline and skills that would be necessary to make amends in the management of the respondent No. 1 Company," said the application.

Dev added, "There was never a specific charge against the club. In fact, only vague statements of 'parivarvaad' were made against the club. Seeking immunity, are the new directors worried about their own actions or past actions of the administrators".

The corporate affairs ministry first appointed M.M. Juneja, an officer on special duty at the ministry, as an administrator of the club in early 2021. Soon, Juneja was replaced by V.K. Yadav from the railways, who in turn gave way to Om Pathak in May 2021. Last year in December, the club members alleged Pathak was changing the distinctive character of the over hundred-year-old club, and also stone-walled the objections to the policy changes made by him . On April 3 this year, Pathak was replaced by the six directors.

Six directors are: lawyer and BJP spokesperson Nalin Kohli, former secretary government of India Malay Kumar Sinha, BJP member Kuljeet Singh Chahal, former secretary of the ministry of electronics and information technology Ajay Sawhney, former director general of the Sashastra Seema Bal (SSB) Kumar Rajesh Chandra, and former Indian Revenue Officer Ashish Verma.

Source: IANS