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2024 Supreme(Online)(NCLT) 3935

NATIONAL COMPANY LAW TRIBUNAL
Smt. Bidisha Banerjee, Member (Judicial), Shri Balraj Joshi, Member (Technical)
Mr. Karan Singh Grewal – Appellant
Versus
The Calcutta Cricket & Football Club – Respondent
CP No. 287/KB/2023



Advocates:
For the Petitioners: Mr. Joy Saha, Sr. Adv., Mr. Krishnaraj Thakar, Sr. Adv., Mr. Soumya Roy Chowdhury, Adv., Mr. Sanjay Ginodia, Adv., Ms. Purba Sinha Chowdhury, Adv.
For Respondent No. 1: Mr. Aditya Kanodia, Adv., Mr. Zeeshan Haque, Adv., Ms. Suparna Sardar, Adv., Ms. Susrea Mitra, Adv., Mr. Ratnanko Banerji, Sr. Adv.
For Respondent Nos. 2,3,4,7,8,9,10 &11: Mr. Rishav Banerjee, Adv., Ms. Shristhi Burman Ray, Adv., Ms. Rishika Goyal, Adv., Mrs. Manju Bhuteria, Adv.
For Respondent No. 12: Ms. Meenakshi Manot, Adv., Ms. Shreya Chaudhary, Adv., Ms. Urmila Chakraborty, Adv.
For Respondent No. 14: Mr. Abhrajit Mitra, Sr. Adv., Mr. D.N. Sharma, Adv., Mr. Shaunak Mitra, Adv.

The tribunal mandates strict adherence to internal procedural rules in disciplinary actions to ensure fair governance while maintaining limited judicial oversight on internal club matters.

Headnote:(A) Companies Act, 2013 - Sections 97, 213, 241, 242, 244 - Application by members of a company seeking injunctive reliefs against alleged improper disciplinary proceedings and forensic audit findings - Court refrains from interfering in internal club procedures but mandates adherence to Articles of Association. (Paras 1 to 30)

(B) Judicial Oversight - Limited to adherence to rules of internal governance - Disciplinary actions must comply with the organization’s bylaws to avoid pre-judgment of hearings. (Paras 24 to 32)

Facts of the case:
Application involves members of a cricket and football club challenging the legality of disciplinary actions based on financial audits initiated improperly beyond the scope of proper procedure.

Findings of Court:
Injunctive reliefs against disciplinary actions and a directive for adherence to Articles of Association were issued, ensuring procedural integrity in internal club matters.

Issues: Whether disciplinary actions taken were within the confines of the Articles of Association and whether the tribunal should intervene in internal club proceedings.

Ratio Decidendi: The court emphasized the necessity of following prescribed procedures as per the Articles of Association while holding that judicial intervention in internal club proceedings is limited.

Result: The applications were disposed of with directions.

Table of Content
1. petitioners challenge the annual general meeting's legality. (Para 4 , 5)
2. court assesses procedural adherence in disciplinary actions. (Para 11 , 30)
3. limited judicial oversight emphasized in club governance. (Para 24 , 26)
4. directive issued to ensure compliance with articles of association. (Para 32)

ORDER

Per Bidisha Banerjee, Member (Judicial):

1. The Court convened through hybrid mode.

2. Ld. Counsel for the parties were heard at length.

3. This IA No. 123/kb/2024 has been preferred by the Applicant seeking the following reliefs:

i. Injunction restraining the Respondent nos. 2 to 13 and each one of them and/or their men, agents, servants or anyone acting on their behalf from giving any effect or further effect to the Minutes of the meeting dated May 4, 2024 passed by the illegally constituted General Committee of the Respondent no. 1 Club including constitution of the Standing Inquiry Committee;

ii. Injunction restraining the Respondent nos. 2 to 13 and each one of them and/or their men, agents, servants or anyone acting on their behalf from acting on the basis of or giving effect to any suggestion, finding, decision or Report of the Standing Inquiry Committee;

iii. Injunction restraining the Respondent nos. 2 to 13 and each of them and/or their men, agents, servants or anyone acting on their behalf from taking any coercive steps against the Applicants on the basis of any purported suggestion, finding decision or Report of the Standing Inquiry Committee or otherwise;

iv. Injunction restraining the Standing Inquiry Committee constituted by the Respondent nos. 2 to 13 and each member of such Committee from taking any step and/or further steps in any manner whatsoever;

v. Direction upon the Respondent nos. 2 to 13 and each of them to forthwith direct the Standing Inquiry Committee to stop exercising any power or authority and to stop all its activities and proceedings and not to take any steps and/or any further steps under and/or in terms of the Minutes of the meeting dated May 4, 2024;

vi. Pass necessary Orders upon the Respondent nos. 2 to 13 directing them to furnish all the relevant documents and records relating to the specific activities/events finding place in the project Goal Report of Ernst & Young;

vii.The Project Goal Report dated April 01st, 2024 issued by Ernst & Young be set aside;

viii. The Respondent nos. 2 to 13 be restrained from using and /or relying upon the said Project Goal Report dated April 01st 2024 issued by Ernst & Young in any manner whatsoever;

ix. Costs of and incidental to this Application be paid by the Respondent nos. 2 to 13 to the Applicants; and

x. Pass such other and / or further orders affording complete relief to the Petitioners as this Tribunal may deem fit and proper.

4. The Company petition, being C.P. No. 287 of 2023, has been filed by 4 members of the General Committee of the Respondent no. 1 i.e. The Calcutta Cricket and Football Club. The petitioners were the member of the General Committee for the year 2022-2023 and the Annual General Meeting was held on September 11, 2023 in which 936 out of 1850 members of the Club have participated and voted. The petitioners since then have ceased to be members of the General Committee of the Respondent No. 1. The petitioners have also participated in the election held on September 11, 2023.

5. The petitioners in the company petition have urged that the Annual General Meeting of the Respondent no. 1 Club has not been properly convened. The reliefs as prayed for by the petitioners in the company Petition inter alia are as follows:

i. The requirement and/or criteria as required by section 244 of the Companies Act, 2013 be waived thereby allowing the petitioners to institute the Company Petition;

ii. Pass appropriate order/s, relief, directions under Sections 241 and 242 of the Companies Act, 2013 to bring to an end the aforesaid acts of mismanagement and oppression perpetrated by the Respondents and to regulate the affairs of the Respo

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