Delhi Gymkhana subsidised enjoyment of permanent members, collected money illegally

New Delhi, April 26 (IANS) An inspection report of the Ministry of Company Affairs has found that the Delhi Gymkhana Club has been using registration fees for working capital, subsidizing the enjoyment of permanent members, illegally collecting public money and indulging in “parivarwaad”.

The inspection report found that there has been brazen disregard for the rule of law, the laid down procedures in AoA, illegal and unethical collection of public money in exceptionally huge quantum in the name of membership applications and other related practices.

It pointed out that the registration fees received from the new applicants has been used for the working capital of the company and for investment and reinvestment over the years.

The report found that the charging of exorbitant amounts for pending membership applications by the GC in a situation where there is a moratorium in granting of new membership for more than three decades.

It definitely raises a red flag as to which consideration such an exorbitant amount has been received by the company from the applicants/general public with no guarantee or time frame to allot the membership of the company.

“This money amounting to crores of rupees are lying into the company account and the interest from them goes onto subsidise the enjoyment of the permanent club members, which not only violates the Depositor Rules under the Companies Act 1956 as well as the Companies Act 2013, but also goes against all kinds of democratic norms,” the report said.

The MCA found a violation as the collection of various amounts for admitting members over and above the prescribed fee in the Articles of Association, clearly indicates that the actions of the company are fraudulent in nature and therefore the provisions of the Section 447 of the Companies Act, 2013 are attracted here.

“In short, the wrongdoings of the previous GC members have been taken as precedent for granting different types of memberships and demanding different rates of membership fees, at their own prerogative without amending the Articles of Association,” it said.

The irregularities done in the previous years have now turned into massive violations of laws. Article 23 and 22 of the AoA have been misused continuously by the GC members year after year basically to induct their own members in a short notice for memberships of the Club and to mint money from the new applicants and other members by levying penalty.

“The grant of privileges to the use of club premises by arbitrarily chosen individuals (Green Card holders) has become a norm, which is nothing short of hereditary succession or ‘parivarwaad’,” the report said.

Similar modus operandi is being used for accommodating superannuated government officers who are members of the club in the category of government members.