MR. SIDDHAANT MOHTA & ORS. vs DELHI GYMKAHANA CLUB LTD. & ORS.

* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 23rd July, 2024
Pronounced on: 18th October, 2024

+ CS(OS) 224/2022 & CRL.M.A. 15396/2024, I.A. 15514/2022, I.A. 29675/2024

MR. SIDDHAANT MOHTA & ORS. ….. Plaintiffs
Through: Mr. Amir Singh Pasrich, Ms. Mohana
Malhotra, Mr. Karan Bahmani, Advocates.
versus

DELHI GYMKAHANA CLUB LTD. & ORS. ….. Defendants

Through: Mr. Prateek Kumar and Ms. Raveena
Rai, Advocates for D-1.
Ms. Shivani Gupta and Mr. Kartik Dabas, Advocate with complainant,
Col. A. Khanna in Crl. M.A. 15396/2024.

+ CS(OS) 458/2022 & I.A. 18790/2022, I.A. 9767/2023
PREM SHANKAR JHA & ANR. ….. Plaintiffs
Through: Mr. Dinesh Dwivedi, Senior Advocate with Mr. Ashish Mohan, Mr. Prateek Dwivedi, Mr. Krishnam Mishra, Mr. Nishant Singh and Ms. Sagrika Tanwar, Advocates.
versus
DELHI GYMKHANA CLUB LTD & ORS. ….. Defendants
Through: Mr. Prateek Kumar and Ms. Raveena Rai, Advocates for D-1.

+ CS(OS) 523/2022 & I.A. 18791/2022
PRANATI CHESTHA KOHLI ….. Plaintiff
Through: Mr. Ashish Mohan, Ms. Sagrika Tanwar and Mr. Anmol Chawla, Advocates.
versus
DELHI GYMKHANA CLUB LTD & ANR. ….. Defendants
Through: Mr. Prateek Kumar and Ms. Raveena Rai, Advocates for D-1.

CORAM:
HON’BLE MR. JUSTICE SANJEEV NARULA
JUDGMENT

SANJEEV NARULA, J.
LA. 6198/2022 in CS(OS) 224/2022. I.A. 12402/2022 in CS(OS) 458/2022 and I.A. 14158/2022 in CS(OS) 523/2022 (for interim relief)

1. The Plaintiffs through the above captioned interlocutory applications under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure, 1908,1 seek a stay on the operation of the notice and letter dated 8th March, 20222 and the order dated 31st March, 20223 issued by Defendant No. 1—Delhi Gymkhana Club Limited. By these communications, the Plaintiffs’ Green-Card user rights have been suspended and subsequently terminated.
2. The factual background in all these suits is nearly identical with the Plaintiffs raising similar legal grounds of challenge. Given the substantial overlap in both facts and legal submissions, it is appropriate to address the applications collectively through a common order. However, certain nuanced arguments, specific to individual Plaintiffs, will be examined separately within this order to ensure a tailored consideration of those distinct claims.
3. To provide a comprehensive understanding of the dispute, the factual details from CS(OS) 224/2022 will be discussed in depth, as they are representative of the controversy at hand.
Factual Background
4. The Plaintiffs comprise a group of aggrieved individuals from a larger pool of 125 persons who were granted Green Card user rights in the Delhi Gymkhana Club Limited (Defendant No.1).4 They assert that their suit has been instituted in a representative capacity, as many others have similarly suffered due to the actions of the Club.
5. The controversy originated when the Plaintiffs applied for membership with the Club, a process that began sometime before 2019. For instance, Plaintiff No. 1 (Mr. Siddhant Mohta) in CS(OS) 224/2022 applied for membership on 11th August, 2016, at the age of 25, paying a registration fee of Rs. 1,50,000/-. This application came after his mother, an Indian Foreign Service (IFS) Ambassador, returned to India following her posting in Warsaw, Poland. Plaintiff No. 1 contends that due to his mother’s diplomatic posting, he was unable to apply earlier for the status of “Green Card Holder.” By the time he returned to India, he had already crossed the age limit of 22 years, the threshold by which children of members usually apply for membership under Article 13(3)(b) of the Articles of Association5 of the Club. Pertinently, Plaintiff No. 1’s mother holds a permanent membership with the Club. Following several representations to the Club, a Green Card was issued to him on 7th August, 2019, upon verification of his records. He subsequently paid dues totalling Rs. 5,31,000/- as required by the relevant Sub-Committee and General Committee of Defendant No. 1.
6. Similarly, Plaintiff No. 2, the sister of Plaintiff No. 1 and daughter of the former Ambassador who is a permanent member, was also impacted. Due to their mother’s overseas posting in Warsaw, Plaintiff No. 2 had likewise crossed the age of 22 by the time she could apply for membership under Article 13(b) of the AoA. Upon her return to India, and after making representations to the Club, she too was granted Green Card status upon payment of the requisite fees.
7. In a similar vein, the other Plaintiffs also provide various reasons for their delayed applications, having crossed the prescribed age limit of 22 years. Some attribute their delay to personal or professional commitments abroad, while others cite extenuating family circumstances. Despite these diverse situations, it is their collective case that each Plaintiff6 applied for Green Card holder rights only after turning 22. They argue that these delays were beyond their control and were not intended to circumvent the rules established by the Club.
8. The Plaintiffs assert that Green Card holder rights and membership are integral aspects established through the minutes of the Annual General Meeting7 and Extraordinary General Meeting.8 They further contend that these rights are recognized under sub-articles 13(3a) and 13(3b) of the AoA and bye-laws of the Club.
Plaintiffs’ Contentions
9. Mr. Amir Singh Pasrich, counsel for the Plaintiffs in CS(OS) 224/2024, raises several contentions which are summarised herein below:
9.1 The Plaintiffs could not apply for membership immediately upon turning 21, as required by the AoA of the Club, primarily because their parents were posted abroad. Nonetheless, the AoA does not prescribe a strict deadline for submitting membership applications. Therefore, denying them the benefit of Green Card holder status merely due to timing issues would be unreasonable.
9.2 The Green Card benefits have been granted by the Committees of the Club to the progeny of its members. The Club has routinely granted Green Card user rights to maintain the “Family” since the Memorandum of Articles9 contemplates membership of the sons/daughters of permanent members. Reliance in this regard is placed on Articles 13(3b), 13 (3c) and also Articles 13 (4) of the AoA. In the past, several General Committees have eased the requirement that applications must be submitted within one year of turning 21, because no cap is provided for in the application made after reaching the age of 21. Such applications have been accepted routinely in the past commencing from 1950s. An artificial cap was apparently decided upon by the previous General Committees. Upon receiving appropriate applications, the General Committee considered the same and granted user rights (Green-Card Holder Rights) which are like a license to use the Club on such terms as the relevant General Committee may think fit. The concerned applicant would then be granted the “Green Card” and membership rights or rights of user though they were not members of the company within the meaning of the words in the Companies Act, 2013. Cardholders paid the amount determined by the General Committee, along with a monthly or annual subscription fee, even if they were not using the Club, in order to preserve their rights, which are akin to a contractual obligation.
9.3 The Membership and Disciplinary Sub-committee10 of the Club reviewed the cases of the Plaintiffs and others in similar situations in 2019, including those who had pursued Green Card applications for years, alleging delays due to the Club’s lack of records. After deliberation, the General Committee issued a notice on 17th May, 2019, offering Green Card rights upon payment of a fee based on age-related delays. The penalty structure was as follows:
“Under 25 years: ?2 lakhs + ?1.50 lakhs + GST
26-35 years: ?3 lakhs + ?1.50 lakhs + GST
36-45 years: ?5 lakhs + ?1.50 lakhs + GST
46-55 years: ?6 lakhs + ?1.50 lakhs + GST
56 years and above: ?7 lakhs + ?1.50 lakhs + GST”

9.4 The notice issued by the duly elected General Committee was transparent and targeted a specific category—those who had missed earlier opportunities and had been unable to use the Club’s facilities for years. A total of 125 individuals paid an aggregate amount of approximately ?4.50 crores (excluding GST), contributing to the Club’s funds. This arrangement was based on mutual agreement, with clear terms and conditions, as detailed in paragraph 17.13 of the plaint. Notably, there have been no complaints of fraud or misrepresentation from any of these 125 individuals.
9.5 The Club came under investigation by the Ministry of Corporate Affairs11 starting on 16th March, 2016, regarding its membership procedures and alleged legal violations. This led to the MCA filing a petition under Sections 241 and 242 of the Companies Act, 2013 (CP No. 71/2020) in April 2020. An interim order on 26th June, 2020 found a prima facie case that the Club’s affairs were being conducted prejudicially to the public interest. On appeal (Company Appeal No. 94/2020), the NCLAT, through its order dated 15th February, 2021, upheld this finding, suspended the then-General Committee, and directed the appointment of an Administrator by the Union of India. It also prohibited the acceptance of new memberships or enhancements until the company petition’s disposal and placed wait-list applications on hold.
9.6 Following the NCLAT’s order, an interim Administrator was appointed in early 2021. Subsequently, on 30th July, 2021, Defendant No. 2 was appointed as the interim Administrator by the MCA. Defendant No. 2 appears to have been influenced by an audit objection, which claimed that the receipt of ?4.50 crores violated the provisions of the Companies Act, 2013.
9.7 Defendant No. 2, without granting a hearing or considering alternative views, directed the Club’s Secretary to issue the impugned notice dated 8th March, 2022, suspending all 125 Green Card holders, including the Plaintiffs. On 22nd March, 2022, Defendant No. 2 announced that the matter was assigned to a one-member inquiry committee led by a former judge of High Court of Bombay – Hon’ble Mr. Justice Dama Seshadri Naidu. The notice stated that the first phase of the report was submitted on 28th January, 2022, with the second part pending and to be published on the Club’s website upon receipt.
9.8 Consequently, the Green cards of all 125 individuals were suspended unilaterally, without any notice or hearing.
9.9 The Plaintiffs’ rights were subsequently suspended on 8th March, 2022 and terminated on 31st March, 2022, by an order from the Club’s Administrator. The Plaintiffs argue that both the suspension and termination are untenable, as they had lawfully acquired their Green Card rights in accordance with the Club’s articles, paying substantial fees determined by the Membership and Disciplinary Sub-committee and later approved by the General Committee in 2019. These payments were made through normal banking channels, with some individuals not even residing in India at the time.
9.10 No illegality or violation warranted such drastic action of termination of Green cards. Defendant No. 2 acted overzealously, taking precipitous action based solely on an interim report by the retired Judge, without referring to past agreements and without proper legal authority or a court order.
9.11 The Defendants have conveniently ignored the fact that Green Card holders are consistently recognized in the Club’s in the AoA, particularly Articles 13(3a), 13(3b), and 13(3c) as well as the Club’s bye-laws, specifically Bye-laws 10, 23(d)(iii), and 54(c)(i) as well as in several AGMs and EGMs. Given this recognition and the fact that the Green Card category, encompassing over 5,000 members, remains in place, undermines the Defendants’ claim that the issuance of Green Cards is “illegal and outside the scope of the AoA”.
9.12 The Defendants argue that the actions taken by Defendant No. 2 and subsequently confirmed by Defendant No. 4 (the new General Committee) were based on the findings of the Naidu Committee Report12 and the NCLT’s final judgment dated 1st April, 2022. However, that decision could not have been based on the final judgment of the NCLT since it was issued a day before that judgment, rendering the Defendants’ reliance on the Naidu Report and NCLT both premature and unsubstantiated.
9.13 The Plaintiffs are not shareholders of Defendant No. 1. Section 244 of the Companies Act, 2013 requires at least 10% of a company’s shareholders to initiate proceedings before the NCLT. In contrast, the Plaintiffs’ rights stem from an offer, their acceptance through payment, and the continued payment of subscriptions, creating an implied contract based on the AoA and the parties’ conduct. The NCLT did not consider these aspects, nor were the Plaintiffs made parties to that proceeding.
9.14 The Defendants targeted only 125 Green Card holders alleging illegality without any evidence. The Naidu Committee’s reports lack reasoning to demonstrate any violation of law, AoA provisions, bye-laws, resolutions, sections of the Companies Act or any other law. References to “cheating” in the report are vague and unsupported, failing to specify the nature, extent, or means of alleged deception. These allegations lack the particularity required under Order 6 Rule 4 of the CPC which mandates detailed pleading when alleging “misrepresentation” or “fraud.”
9.15. At this interim stage under Order 39 Rules 1 and 2 of the CPC, the Plaintiffs seek restoration of the status quo before the termination of their Green Card rights. There is no legal basis for the termination under any law. The Defendants did not terminate membership under Article 19 of the AoA. No breach of contract by the Plaintiffs was cited as a reason for termination of the contract. No provisions of Chapter II of the Indian Contract Act, 187213 covering coercion, lack of free consent, fraud, or misrepresentation, were invoked. The rescission under Section 27 of the Specific Relief Act, 1963,14 has not been relied upon. Cancellation under Section 31 of the Specific Relief Act was not sought through a court declaration.
9.16 Terminating a contract outside the law and without reliance upon Article 19 of the AoA in the present case is a violation of law. The AoA refers to members loosely to cover all types of members including permanent members, dependent members, UCPs, green card holders, foreign diplomats, etc. If that be the case, only Article 19 of the AoA relating to Termination of ‘membership’ can be applicable in this case. Article 19 of the AoA is reproduced below for convenience:
“Termination of membership
19. In addition to the case provided for in Article 17 a member shall cease to be a member of the Club in any of the following ways: –
(1) By his being adjudicated insolvent.
(2) By his being dismissed from Government Service.
(3) By his being found guilty by a competent tribunal of an offence involving, in the opinion of the Committee, gross misconduct.
(4) By his not paying his Club bills after the warning as provided in Article 28 for default in payment of Club bills.
(5) By decision of a majority vote of not less than two thirds of the members present at a General Committee Meeting especially convened for the purpose, and at which not less than twelve members shall be present.”

None of the 5 cases from the AoA [Article 19 (1) to (5)] was invoked by the Defendants.
9.17 The Defendants argue that the contract is determinable. However, once the plaintiff payments were accepted, that contract could not be ‘determinable’ under any theory of law without recourse to a Court. The defendants did not rely upon Section 27 or 31 of the Specific Relief Act or seek a declaration of illegality by a court of law. Without such declaration vis-à-vis the Plaintiffs termination could not have been effected except under Article 19 of the AoA, and there is no reliance upon that.
10. Additional Submissions by Mr. Dinesh Dwivedi, Senior Counsel for the Plaintiffs in CS(OS) 458/2022, are as follows:
10.1 The present suit is a declaratory suit under Sections 34 and 35 of the Specific Relief Act, which allows for the filing of a suit when there is a denial of “any right as to any property.” In such cases, both temporary and permanent injunctions can be granted as per Sections 34, 35, 38(1), 38(3)(b)-(c), 40(1)-(2), and 41(h) of the Specific Relief Act. The Green Card represents their entitlement to use and enjoy the Club facilities. The denial of this right, which is based on the AoA, Club Rules, and General Committee policies, justifies the suit. Furthermore, neither Section 38, nor Sections 40 and 41 of the Specific Relief Act, bar the granting of relief. Since the Club has breached its obligations under its own rules, the suit is maintainable.
10.2 The Club’s affidavit dated 18th May, 2024 refers to policy decisions by the General Committee on 24th March, 2007, and 27th March, 2019, which explicitly acknowledge the issuance of Green Cards. The only issue, therefore, is whether these cards can be legitimately issued.
10.3 The validity of the order must be assessed based solely on the reasons stated within it. The order provides only one reason: that the issuance of Green Cards is “outside the AoA.”
10.4 The Impugned order does not differentiate between applicants who applied within one year, two years, five years, or even later; it groups them all together. This indicates that the decision rests on a singular issue.
10.5 Attempting to distinguish applicants based on delays—whether one, two, or five years—is futile, as Articles 13(3)(a-c) of the AoA does not set any such limitation.
10.6 There is no objective basis for determining what constitutes a reasonable delay. How can the Court impose a cutoff period—whether one, two, or five years—when neither the Club nor the AoA provides such guidance? Doing so would mean adding reasons to the order that do not exist. Imposing a limitation period would amount to overstepping into the Club’s management domain, especially since the Club itself does not distinguish applications based on delay. Articles 13(3)(b) and 13(3)(c) do not prescribe a time limit for applying for membership, and therefore, the Court need not do so either. The history of Green Cards, as shown in the documents annexed, demonstrates that the Club and its General Committee have consistently interpreted the AoA to permit the issuance of Green Cards.
10.7 The Club cannot prevent dependents from applying for membership, as Clause 13(3)(b) and (c) explicitly allow dependents to apply upon reaching adulthood. Preventing such applications would constitute a breach of these clauses.
10.8 The Club is a members’ club, not a separate legal entity distinct from its members. It serves as a self-governing institution designed to provide services to its members, governed by AOA framed for their benefit. Therefore, those managing the Club best understand the intent behind Clauses 13(3)(b) and (c).
10.9 Past practice is a reliable indicator of the framers’ intent regarding the AoA. Consistent interpretation and application by the Club’s management provide weight to this understanding.
10.10 The framers of the AoA intentionally left room by not imposing a limitation period for membership applications after turning 21. It would be unreasonable to impose such a limitation now on the grounds of “reasonableness.” Additionally, it is uncontested that the Club does not qualify as a State under Article 12.
10.11 The ‘White Paper on membership issues’ released in October, 201415 acknowledges that the Club can set a time limit for membership applications under Clause 13(3)(b), but it has chosen not to do so. The term “Green Card” simply refers to dependents who turn 21.
10.12 The General Committee has broad powers under Clause 22 of the AoA to pass resolutions in the members’ interest. Additionally, the bye-laws recognize Green Card holders as members, indicating the Club’s acceptance of dependents becoming Green Card holders upon reaching 21.
10.13 In this context, singling out 125 individuals for removal solely because they are Green Card holders is unjustifiable. The retention of thousands of other Green Card holders undermines the claim of their supposed invalidity.
11. Mr. Ashish Mohan, counsel for Plaintiff in CS(0S)-523-2022, contends as follows:
11.1 The Plaintiff, a dependent member since birth due to her father’s membership (No. U-1133), turned 21 in 2017 while studying in the United States. Upon returning to India in December 2017, she approached the Club to apply for a Green Card but was informed that the process was temporarily suspended. She reapplied in December 2018, and the Membership & Discipline Sub-committee accepted her application on 4th February 2019, as communicated via email.
11.2 The Plaintiff was deemed “overage” by just 5 months, due to the Club’s suspension of the Green Card process. Despite this, the Club accepted INR 62,040/- as penalty charges plus GST, along with ?1,77,000/- as registration fees, and the Plaintiff has been paying her annual subscription fees ever since.
11.3 The Plaintiff was issued a Green Card in line with Club policy after meeting all the conditions set by the Club.
11.4 On 8th March, 2022, the Plaintiff’s Green Card was suspended without prior notice. She learned of the suspension through a notice circulating on WhatsApp and displayed on the Club’s notice board, listing her among 125 individuals whose user rights were arbitrarily revoked.
11.5 On 22nd March, 2022, the third Administrator, Mr. Om Pathak, issued a circular alleging “misconduct and mischief” by the 125 Green Card holders, including the Plaintiff. This circular was also issued without giving the Plaintiff an opportunity to present her case.
11.6 In July 2022, the Plaintiff received a letter dated 14th July, 2022, from the Club stating that her Green Card had been terminated by an order dated 31st March, 2022. This termination was executed without giving her an opportunity to present her case or providing a copy of the said order, highlighting the arbitrary nature of the Club’s actions.
11.7 It is undisputed that: (i) the Plaintiff was never notified of any doubts regarding her Green Card; (ii) no allegations or charges were communicated to her; (iii) she was not informed of any proposed actions; and (iv) she was not granted a hearing to respond. The decision is therefore illegal, having been made in complete disregard of the principles of natural justice. The Plaintiff relies on the judgment in Siddharth Gupta v. The Delhi Golf Club Limited & Anr.,16 which emphasized the need for natural justice in membership termination. Similarly, the judgments in Charles Mantosh & Ors. v. Dalhousie Institute & Ors.17 and Jagdish Chander Sachdeva v. Royal Bombay Yacht Club & Ors.,18 reinforce that failure to provide a hearing in such cases renders the action null and void.
11.8 The Third Administrator, Mr. Om Pathak, was appointed solely to manage the Club’s affairs until the final disposal of the Company Petition before the NCLT. His mandate did not extend to adjudicating on Green Card issues, making his actions in suspending and terminating the Plaintiff’s Green Card beyond his authority.
11.9 In 2019, the Club invited the Plaintiff to complete the formalities for Green Card issuance. She complied, and her application was accepted unconditionally, forming a concluded contract upon payment of the required fees. Since then, the Plaintiff has fulfilled her obligations by paying the annual subscription fees. Thus, the Club became contractually bound to the Plaintiff through its conduct, acceptance of payment, and AOA. Based on this contractual relationship and legitimate expectation, the Plaintiff is entitled to all user rights and privileges recognized under the Club’s Articles, bye-laws, and established practices.
12. Mr. Prateek Kumar and Ms. Raveena Rai, Counsel, raise the following contentions for the Club:
12.1 The suit is misconceived, false, and fundamentally unmaintainable. Issuing Green Cards to the Plaintiffs was illegal and beyond the scope of the Club’s AoA. Green Card holders do not qualify as members of the Club. The AoA explicitly states that a dependent ceases to be a member upon turning 21, at which point they must formally apply for membership if they wish to continue using the Club’s facilities. There is no provision within the AoA that allows dependents to retain Club privileges simply by paying a penalty or delay fee if they miss this age requirement. Therefore, the Plaintiffs’ claims have no legal basis.
12.2 The Club is currently scrutinizing the legality of all membership categories in accordance with both the AoA and the MoA. As per the AoA, any dependent son of a permanent member must apply for membership immediately upon reaching the age of 21. There is no mechanism for a delayed application accompanied by the payment of a penalty. The NCLT, in its final judgment dated 1st April, 2022,19 acknowledged that the issuance of Green Cards was a strategy to supplement the Club’s considerable expenses. This approach, while initially devised to include children of permanent members and UCP members, inadvertently increased the Club’s membership count. However, Green Cards were intended for individuals between 21 and 62 years of age, often with the collection of a penalty fee. This practice clearly demonstrates that the Club was not indulging in unjust enrichment, but rather collecting funds from non-members who sought prolonged access to Club facilities.
12.3 In light of the recommendations made by the Naidu Committee in Report issued in two parts, first on 28th January, 2022 and 30th march, 2022, an order dated 31st March, 2022, was issued under the authority of the Administrator appointed by the Union of India. This order declared the 2019 issuance of Green Cards to the Plaintiffs as illegal, void ab initio, and in direct violation of the AoA. Consequently, the Plaintiffs’ memberships were terminated with immediate effect. Additionally, the Administrator directed that the amounts collected as penalties be refunded to the affected individuals.
Analysis and Findings
13. The contentions advanced by the Plaintiffs’ counsel distil into several key issues that require this Court’s careful consideration in determining the grant of interim relief. These issues are deliberated upon and addressed as follows:
Was the issuance of Green Cards to the Plaintiffs in 2019 in contravention of the Articles of Association (AoA) of the Club?

14. Article 13(3a) of the AoA permits the children of Club members between the age of 13 to 21 years to use the Club as ‘Dependants’. Article 13(3b) of the AOA requires such dependants to apply to become a full member upon reaching the age of 21 years, should they wish to continue to use the Club. The said Articles read as follows:
“ 13 (3a) Members whose sons and daughters, between the age of 13 and 21 are permitted to use the Club as dependents, shall pay an additional monthly subscription of Rs. 40/- p.m. for each child using the Club. However, for absentee dependent children, a member shall pay Rs. 20/- p.m. for each child.

13(3b) On reaching the age of 21, the son of a member having previously used the Club under Article 13(3a) must apply to become a full member, should he wish to continue to use the club”

15. A plain reading of Articles 13(3a) and 13(3b) of the AoA reveals that these provisions serve a limited purpose: they establish the age limit up to which the children of Club members may use the Club’s facilities as dependents. This privilege does not confer any rights upon the dependents themselves but is, in fact, an ancillary benefit extended indirectly to the members. In other words, it is a courtesy extended to members, not an independent claim available to their children. This provision allows their children temporary access to the Club, contingent upon payment of nominal monthly charges. The privilege is inherently transient, expiring when the dependent turns 21. It carries no expectation of permanence, no entitlement to preferential treatment, and no guarantee of continued access. These provisions, therefore, ensures that access to the Club is subject to clear boundaries, reinforcing that any child of a member wishing to continue using the facilities must initiate the formal membership process to acquire full membership. The absence of any vested rights for dependents highlights the temporary nature of the arrangement. This guards against the creation of parallel or informal categories of access that might undermine the structured membership framework envisioned by the AoA. As such, the dependent’s enjoyment of Club privileges is, by design, ephemeral and terminates by default unless formal membership is sought through application and approval. Furthermore, the term “apply” implies that there is no guaranteed or automatic right to access the club until dependents achieve full membership thus, negating the idea of a Green Card. The Green Card system creates an alternative method that bypasses this restriction imposed by the AOA, making it prima facie in violation of Article 13(3b) of the AoA.
16. The AoA of Defendant No. 1 make no provision for a distinct membership category termed ‘Green Card’ holders. This concept appears to have originated informally, without any legal provision in the Club’s governing documents. Records indicate that the idea of Green Cards was first introduced in 1981, as evidenced by the Club’s newsletter from 9th January, 1982. However, there is no record of any corresponding approval or discussion in the minutes of the General Committee, the AGM, or any EGM. The absence of such formal recognition prima facie raises serious questions about the legitimacy of the Green Card system. A perusal of the White Paper, 2014 would reveal that Green Cards were a means to allow overage dependents to continue using the Club’s facilities. This directly contradicts Article 13(3a and b) of the AoA which strictly limits the use of Club facilities by dependents to the ages of 13 to 21. Therefore, prima facie the Green Card system itself operates outside the legal framework of the Club and creates an unauthorized class of users that undermines the structured membership principles outlined in the AoA. Pertinently, the key issue here pertains specifically to the issuance of Green Cards to overage dependents. The Naidu Committee Report, commissioned by the Club’s Administrator, clearly held that no policy existed under which Green Cards could lawfully be issued to dependents who had crossed the age limit. Consequently, the issuance of the 125 Green Cards to these “overage” dependents was found to be illegal and void ab initio. Moreover, the statutory auditors of Defendant No. 1 had raised concerns in the financial statements for the years ending 31st March, 2020, and 31st March, 2021, explicitly stating that the issuance of Green Cards was not in accordance with Articles 13(3a), 13(3b), and 13(3c) of the AoA.
17. Following these observations, the Administrator, upon reviewing the Naidu Committee Report’s findings, took action to suspend and subsequently terminate the Green Cards, as reflected in the order dated 31st March, 2022. Moreover, the NCLT’s final judgment dated 1st April, 2022, further observed that the issuance of Green Cards was an unauthorized method devised to unjustly enrich the Club by circumventing the AoA’s provisions. The judgment highlighted that the increase in members through Green Cards was solely a way to enhance revenue in breach of both the AoA and the MoA. The Green Cards were issued for individuals aged 21 to 56 upon collecting a penalty, establishing a clear deviation from the Club’s rules.
18. In addition, the Plaintiffs contend that Green Card holders are repeatedly recognized in the Club’s bye-laws—specifically in Rule 10, 23(d), and 54(c)—as well as in various AGM and EGM resolutions. They argue that this recognition in the admitted bye-laws negates the assertion that the issuance of Green Cards to the Plaintiffs is illegal or outside the scope of the AoA of Defendant No. 1. According to the Plaintiffs, if the Club’s bye-laws explicitly acknowledge the status of Green Card holders, the practice can hardly be deemed unlawful.
19. However, this argument fails to withstand scrutiny. While it is true that certain bye-laws reference Green Card holders, these bye-laws were introduced by the General Committee through Resolution 3(a) dated 3rd August, 2016. The mere fact that the bye-laws acknowledge the existence of Green Card holders does not, by itself, legitimize the practice of issuing Green Cards, particularly where such issuance is in clear violation of the Club’s foundational document, the Articles of Association. It is crucial to recognize that the AoA is the superior governing instrument, and any bye-laws or resolutions adopted by the General Committee cannot operate outside or override the express provisions of the AoA. The Plaintiffs’ reliance on the bye-laws does not address the central issue: issuance of Green Cards to overage dependents in violation of the AoA, which strictly limits dependent access to the Club to those between the ages of 13 and 21. Therefore, while the General Committee may have introduced bye-laws acknowledging existence of Green Card holders, this in no way confers a special status or cures the illegality of the practice under the AoA. The bye-laws merely reflect the General Committee’s recognition of an informal practice that was already in place; they do not, and cannot, elevate that practice to one in conformity with the Club’s constitutional framework. It is not in dispute that the General Committee had been issuing Green Cards for some time; and the introduction of bye-laws by the same body does little to validate the practice when it was never within the scope of the AoA to begin with. In essence, the Plaintiffs’ argument overlooks the fact that internal resolutions and bye-laws cannot substitute or bypass the need for formal compliance with the AoA. Therefore, issuance of Green Cards was illegal and outside the scope of the AoA.
20. Given this, the Court, on a prima facie basis, concludes that the issuance of Green Cards to individuals who had crossed the age of 21 was without legal basis, falling outside the scope of the AoA. Consequently, the issuance of Green Cards in 2019 was ultra vires and void ab initio, as corroborated by the Naidu Committee Report and affirmed by the NCLT. Further, it has also observed from the observations made in the White Paper 2014 that the Green Cards were also issued to 353 persons similarly placed with the Plaintiffs. Accordingly, General Committee20 (Defendant No.4 in CS(OS) 224/2022) has further directed that such Green Card holders be also identified and upon identification the GC shall take appropriate action.
21. Therefore, since the exercise of issuing Green Cards to overage children of members itself has been deemed illegal and violative of AoA, the same cannot be restored and privileges given to erstwhile Green Card holders, including the Plaintiffs herein, prima facie cannot be continued in light of observations made in various inspection reports.

Can historical practices or internal club policies have the authority to override the express provisions of the AoA? Can such practices confer enforceable legal rights on the Plaintiffs?
22. The Plaintiffs argue that since the 1950s, multiple General Committees have routinely relaxed the requirement for dependents to apply for membership within one year of turning 21, creating a practice of granting Green Cards even to those who applied much later. They maintain that this routine practice essentially established a policy, whereby user rights were conferred through the Green Card system on terms the General Committee deemed fit. This practice involved the payment of fees and subscriptions, which the Plaintiffs argue functioned as a contractual arrangement, even though Green Card holders were not considered ‘members’ within the meaning of the Companies Act, 2013. The Plaintiffs also argue that their induction, as Green Card holders, occurred under a scheme developed by the General Committee, whereby penalties were levied and they were granted user rights while continuing to wait for regular membership in the queue.
23. However, in the Court’s opinion, while the General Committee may have devised a scheme to grant user rights, such a scheme cannot contravene the explicit requirements of the AoA. Article 13(3b) of the AoA mandates that dependents apply for full membership upon reaching the age of 21 “should he wish to continue to use the club”. The Plaintiffs’ assertion that the issuance of Green Cards does not affect their place in the membership queue does not negate the requirement to acquire full membership in order to retain user rights beyond the age of 21. Their reliance on historical practices does not change the legal standing of the AoA as the Club’s constitution. Moreover, Company Law principles dictate that a company’s AoA is binding, and any deviations or alterations to its provisions must be implemented through formal amendments, not through informal practices or customs. The absence of any formal documentation amending the AoA to recognize a “Green Card” category of user rights invalidates the Plaintiffs’ claim that such rights were legitimized through long-standing practice. The Naidu Committee Report and NCLT findings highlight that the Green Card system was inconsistent with the AoA. The argument that past General Committees routinely relaxed the rules fails to establish a legal basis when such practices conflict with the governing rules.
24. Additionally, the General Committee’s powers under the AoA do not extend to creating new categories of user rights that contradict the AoA’s express provisions. The imposition of terms, penalties, and minimum spend requirements on Green Card holders does not legitimize these rights if their very existence contravenes the AoA. The Plaintiffs’ continued payment of subscriptions and penalties, while framed as adherence to a scheme devised by the General Committee, does not confer any legal right to the user privileges they seek. The AoA provides a clear structure for membership, and the Plaintiffs’ induction as Green Card holders was outside that structure. The mere fact that they remain in the queue for membership does not entitle them to user rights that are not recognized by the AoA. Grant of such interim user rights would, in effect, be akin to conferring membership without voting rights, but with full privileges—a status that the AoA does not contemplate. Such an arrangement would undermine the structured membership process and would, in essence, provide the Plaintiffs with benefits similar to those of full members without requiring them to meet the criteria set out by the AoA.
25. To conclude, the argument that the scheme of Green Card user rights was within the General Committee’s powers and recognized since 1958 holds no legal ground when set against the binding nature of the AoA. The past practices of the General Committees, even if routinely followed, cannot override the explicit requirements of the AoA. Without a formal amendment to the AoA to incorporate the Green Card system, prima facie the issuance of Green Cards, including to the Plaintiffs, was not only unauthorized but also void ab initio.
26. As to the second question outlined above, the Plaintiffs argue that the issuance of Green Cards to them in 2019 is consistent with past Club practices, where overage dependents were granted user rights upon payment of a penalty. They contend that previous policies, particularly the one introduced in 2007, set a precedent that should apply equally to them. In essence, they seek parity with prior exceptions made by the Club. However, this argument fails to acknowledge a critical legal principle: mere past practices or exceptions do not establish a vested legal right, especially, as already noted above, when such practices contradict the governing documents of the Club. The AoA serve as the constitution of the Club, and any policy, historical or otherwise, that conflicts with the AoA lacks legal validity.
27. Additionally, the Plaintiffs’ attempt to draw parallels with past practices fails in light of the specific findings of the Naidu Committee and the Club’s auditors. Both identified the 125 individuals granted Green Cards under the 2019 policy as a distinct and separate category whose rights were terminated in accordance with the AoA. The auditors flagged this group in the Club’s annual reports for the financial years ending 31st March, 2020, and 31st March, 2021, indicating the legal and financial irregularities associated with this category. This clear demarcation further emphasizes that the Plaintiffs’ claim to parity with past practices does not stand on strong legal footing.
28. In J Daulat Singh v. Delhi Golf Club Limited,21 this Court categorically held that even if certain individuals were granted membership “out of turn,” it does not create a legal right for others to claim the same treatment. The Court observed:

“Even if it is presumed that the defendant club has wrongly conferred full membership on certain persons on an out-of-turn basis, no legal right thereby would accrue in favour of the plaintiff to get the membership.”

29. This principle squarely applies to the present case. The fact that the Club may have previously granted Green Cards to other overage dependents does not confer a legally enforceable right upon the Plaintiffs to receive similar treatment. The provisions of Article 14 of the Indian Constitution, which enshrine the right to equality, are not applicable to private clubs because the said provision is directed against “the State” and entities that perform public functions or exercise significant governmental control. Moreover, the equality clause itself is a positive concept that does not grant rights based solely on the assertion that a wrong was committed in other instances. Therefore, the Plaintiffs’ claim for parity based on historical policies or customs must be rejected. The 2019 policy was neither in accordance with the AoA nor approved through the proper channels. Historical practices, even if routine, do not create legal rights that override the clear provisions of the Club’s constitutional documents. The Plaintiffs’ reliance on past customary practices does not establish an entitlement to the user rights they seek.
30. Upon a specific query from this Court, the Club, through an affidavit, furnished data regarding applications from dependents who had crossed the age of 22 (overage dependents) and sought the issuance of Green Cards during the period between the suspension of the 2007 policy and the commencement of the 2019 policy. According to the affidavit, the Club received 31 such applications during this intervening period, of which 30 were ultimately included among the 125 individuals whose Green Cards were granted under the 2019 policy and subsequently terminated. Furthermore, after the 2019 policy took effect, 76 overage dependents applied for Green Cards and were granted the same, but all of these, too, have been terminated. Additionally, the affidavit reveals that 19 overage dependents applied before the suspension of the 2007 policy and were later granted Green Cards under the 2019 policy, which have also been terminated. This leaves only one instance where a Green Card issued during the intervening period has not yet been cancelled. The Plaintiffs cannot derive any legal claim to parity or establish any valid custom or practice based on such isolated and inconsistent instances. A solitary surviving Green Card issued during the transition period is insufficient to create a legal precedent, custom, or enforceable right for the Plaintiffs. Moreover, the practice in question lacks the consistency and formal acknowledgment required to transform it into a binding custom.
31. Even if the Plaintiffs were attempting to draw parity with the Green Cards issued under the 2007 policy, their claims would remain equally untenable. The 2007 policy was not a perpetual entitlement; it was a discretionary policy framework that the Club chose to suspend in 2013. A policy that has been expressly discontinued cannot serve as a legal basis to claim parity. From the moment of suspension, any expectation of continued issuance of Green Cards became unfounded. Pertinently while discontinuing the earlier policy of 2007, the earlier GC of the Club had noted that such a policy required new rules which were to be approved in an EGM. It is relevant to point out that the Naidu Committee Report has noted that after discontinuation of the earlier policy no approval from the EGM of the Club was taken to promulgate the 2019 Policy. It has also been noted that without carrying out amendments to the AoA of the Club no policy such as the 2019 Policy could have been given effect to. The Plaintiffs’ Green Cards, however, were issued under the 2019 policy, which lacked both the necessary procedural approval from an EGM and any basis within the AoA. The issuance of Green Cards under the 2019 policy, which has now been declared void ab initio, cannot be validated by referencing a separate and discontinued policy framework. As such, the Plaintiffs cannot invoke the 2007 policy to justify the continuation of privileges that were granted improperly under an invalid 2019 policy. Further, irregular or discretionary grants made under a defunct policy do not create enforceable legal rights for others in similar circumstances.
32. It is also crucial to note that the ongoing review and restructuring of memberships, as directed by the NCLT, includes examining the legality of all such memberships. The termination of the Plaintiffs’ rights was a corrective action aligned with the NCLT’s mandate to restore lawful governance, and it does not preclude future action against others similarly situated. The Plaintiffs cannot, therefore, claim immunity based solely on the fact that other Green Card holders have not yet been subjected to the same scrutiny.
32. In conclusion, the Plaintiffs’ argument on parity fails to recognize that only those policies and practices which align with the AoA can be legally upheld. The argument of discrimination or parity, therefore, stands on no better footing and must be dismissed.
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Contractual Rights and Company Law: Do the Plaintiffs have enforceable rights as Green Card holders?

34. Mr. Dinesh Dwivedi, Senior Advocate, appearing on behalf of the Plaintiffs in CS (OS) No. 458 of 2022, does not assert any contractual rights. Instead, his claims are based on the AoA, the Club’s rules, and policy decisions made by the Club. In contrast, Mr. Amir Singh Pasrich, representing the Plaintiffs in CS (OS) Nos. 224/2022 and Mr. Ashish Mohan representing the Plaintiff in 523/2022, asserts that their rights arise both from a contractual foundation and under Company Law.
35. However, this argument overlooks several critical aspects. Firstly, the beneficiaries of the 2019 policy, which granted Green Card rights, do not qualify as “members” under the AoA. The AoA clearly define membership and the accompanying rights, including voting rights as shareholders. The Green Card holders, however, represent a separate, novel category that falls outside this definition. While the AoA forms a binding contract between the members and the Club, as established in Naresh Chandra Sanyal v. Calcutta Stock Exchange Association Ltd.,22 this contractual relationship extends only to members who have completed the requisite process for membership. Green Card holders, however, are not recognized as members within the meaning of the AoA and, as such, do not share the same contractual relationship with the Club. The privileges afforded to Green Card holders, including the use of Club facilities, are informal and discretionary, not founded in the AoA. Since Green Card holders do not meet the criteria for membership, they cannot claim the protections or rights that flow from the contractual obligations of the AoA.
36. Furthermore, even if we assume, for the sake of argument, that a contract of grant of privilege of use of the club under the concept of ‘Green card holder rights’ exists between the Plaintiffs and the Club, this contract is terminable in nature and cannot be specifically enforced. According to Section 14(d) of the Specific Relief Act contracts of a determinable nature cannot be specifically enforced. Additionally, Section 41(e) of the Specific Relief Act prohibits the granting of an injunction to prevent the termination of such contracts. This legal principle has been reaffirmed in cases like Ramswaroop Sunderlal Goyal v. North India Association,23 where it was held that the conduct of private contracts, such as club memberships, cannot be supervised by civil courts on a day-to-day basis, and thus cannot be enforced through injunctive relief. In light of the above, the Plaintiffs cannot claim enforceable membership rights under the AoA or Company Law. Additionally, the Club, as a private entity, retains the prerogative to regulate admission and usage of its facilities, limiting membership as it deems fit. Membership or usage of the Club’s facilities cannot be claimed as a matter of right. In fact, the Green Card arrangement was a discretionary policy of the General Committee, not a legally binding contract that guaranteed membership or permanent usage rights.
37. Moreover, the AoA forms the bedrock of the Club’s constitution and serves as the definitive guide for membership criteria and rights. Article 13(3a) of the AoA specifically limits the use of Club facilities to dependents up to the age of 21. It provides a clear directive that any dependent wishing to continue using the Club beyond this age must apply for full membership. While the Plaintiffs emphasize that no explicit “disqualification” clause exists post-21, the requirement to apply for full membership upon turning 21 inherently sets a boundary. The AoA does not vest the General Committee with the power to create alternative categories of user rights or to circumvent this provision at their discretion. The Plaintiffs’ assertion that their situation should be viewed as contractual rights under the AoA overlooks the fundamental principle that contractual rights in a company context are subject to the company’s constitutional documents. The General Committee, while empowered to make policy decisions, cannot contravene the explicit provisions of the AoA. The Plaintiffs’ suggestion that the Committee acted within its discretion to grant them Green Card user rights ignores the fact that any such decision contradicts the AoA, rendering it legally untenable.
38. The Plaintiffs’ reliance on past practices as a basis for asserting contractual rights is also conceptually misplaced. The AoA serves as a binding contract among the members of the Club, regulating their rights and obligations. As such, any practices that contradict or deviate from the express terms of the AoA are ultra vires—beyond the powers granted under the Club’s constitution. While the Indian Contract Act recognizes the principle of implied contracts formed through conduct (such as long-standing practices), these practices must be within the with lawful obligations of the Club and cannot contravene an existing framework—here, the AoA of the Club. In this case, the continued grant of user rights to dependents over the age of 21 without requiring formal membership, as mandated by Article 13(3b), was not merely an informal accommodation. The reliance on such practices to claim rights overlooks the fundamental legal principle that implied contracts cannot override express contracts. Where the AoA prescribes specific rules governing access and membership, no custom, however longstanding, can be invoked to defeat or bypass those terms. The Plaintiffs’ argument that past practices confer enforceable legal rights fails under the Indian Contract Act. For such practices to create an implied contractual obligation, they must be lawful and consistent with the express terms of the governing contract—in this case, the AoA.
39. The Naidu Committee Report and the NCLT’s final judgment further reinforce this position. The Committee identified the practice of granting Green Card rights as an unlawful extension of privileges, in breach of the Club’s constitution. The NCLT supported this finding, mandating a restructuring to ensure compliance with the AoA and MoA. Thus, the 2019 General Committee’s actions, while potentially consistent with past practices, do not acquire legitimacy simply by virtue of repetition. A series of actions contrary to the AoA cannot give rise to a legally enforceable right.
40. In conclusion, the Plaintiffs’ invocation of contractual and Company Law rights, founded on past practices and General Committee discretion, fails to acknowledge that any such rights must operate within the framework of the AoA. The AoA’s clear requirements for dependents turning 21, coupled with the findings of the Naidu Committee and the NCLT’s directives, render the Plaintiffs’ claims legally unsustainable. The Club’s governing documents, not historical practices, define the bounds of members’ rights.
Did the Administrator (Defendant No. 2) act within the scope of his authority in suspending and terminating the Plaintiffs’ Green Card rights?

41. The Plaintiffs argue that the Administrator exceeded his mandate by unilaterally terminating their Green Card rights. However, it is essential to examine the scope of the Administrator’s authority as granted by the NCLAT. The NCLT, in its order dated 26th June, 2020, formed a prima facie view that the affairs of Defendant No. 1 were being conducted in a manner prejudicial to the public interest and authorized the Central Government to appoint nominees to the Club’s General Committee. This led to a direction for appointment of Defendant No. 2 (the Administrator) by the NCLAT on 15th February, 2021 which modified the order dated 26th June, 2020, with a clear mandate to rectify the Club’s management.
42. Upon taking charge, the Administrator noted concerns raised by the statutory auditors in the financial statements for the years ending 31st March, 2020, and 31st March, 2021. The auditors observed:

“During the previous years, 125 children of Club members who were beyond 21 years of age, were issued green cards. In our opinion, the issue of green cards to the dependents was not in accordance with articles 13(3a), 13(3b) and 13(3c) of the Articles of Association of the club and some of the conditions mentioned in the notice including nonavailability of dependent cards were not complied by some of the candidates.”

43. To investigate further, the Administrator constituted an inquiry committee headed by Hon’ble Justice Dama Seshadri Naidu. The Naidu Committee Report, submitted in two parts (on 28th January, 2022, and 30th March, 2022), concluded that the issuance of Green Cards was “a sham” and had been done in “clear violation of the AoA.” Acting on this report, the Administrator issued a notice on 8th March, 2022, suspending the Green Cards and later issued an order on 31st March, 2022, terminating these cards as illegal and void ab initio. The order further directed that any penalties collected be refunded.
44. The NCLT’s final judgment of 1st April, 2022, supported the Administrator’s actions, directing the restructuring of the Club to conform with its AoA and MoA. Following this, the newly appointed General Committee (Defendant No. 4) reviewed and ratified the Administrator’s decision on 11th July, 2022, opting not to interfere with the termination of the Green Cards and ordering a refund of penalties to the affected individuals.
45. The Court finds that these actions were not only within the Administrator’s scope but also necessary to enforce the NCLT’s directive to rectify the Club’s management. The subsequent ratification by the General Committee establishes the legitimacy of the Administrator’s actions, confirming that the termination was part of a broader corrective process.

Were the principles of natural justice breached by the suspension and termination of the Plaintiffs’ Green Card rights without prior notice or a hearing?

46. The Plaintiffs assert that the suspension and termination of their Green Card rights occurred without notice or an opportunity to be heard, thus breaching the principles of natural justice. However, it is crucial to consider the context within which these actions were taken. The Administrator’s actions were based on the findings of the Naidu Committee Report, which was conducted as part of a larger mandate from the NCLT to rectify the Club’s management. The NCLT’s involvement stemmed from a petition filed by the Ministry of Corporate Affairs, which flagged mismanagement within the Club. The Administrator was appointed specifically to address these governance issues, including the improper issuance of Green Cards. The NCLT, in its final judgment, directed the restructuring of the Club in accordance with its AoA and MoA, implying a need for systemic corrective measures.
47. In this broader context, the decision to terminate the Green Cards was not an individual action but part of an effort to bring the Club into compliance with its own governing rules. While the Plaintiffs were not individually heard, the Naidu Committee’s inquiry provided a comprehensive review, and the subsequent decisions by the Administrator and the General Committee were rooted in this inquiry’s findings. Therefore, any alleged procedural lapse must be viewed in the light of the NCLT’s mandate for restructuring and compliance. The Court thus finds that the principles of natural justice, were not substantially violated given the corrective nature of the actions taken.
48. The Plaintiffs have also relied on the judgement of this court in Siddharth Gupta v. The Delhi Golf Club Limited & Anr.,24 on this issue. However, this case is clearly distinguishable. In the Siddarth Gupta case, the plaintiff was already granted formal membership by the Delhi Golf Club through a clear and documented nomination process. His challenge arose when his membership was revoked unilaterally without following the procedure outlined in the Articles of Association. In contrast, the Plaintiffs in the present case were not full members of the Club but held Green Cards—a category not recognized under the AoA. Green Card holders were, at best, users with temporary privileges, pending formal membership. Therefore, the Plaintiffs cannot claim the same rights as formal members, nor can they equate the termination of their Green Card privileges with the revocation of formal membership, as was the case in Siddarth Gupta which emphasized the need for natural justice in membership termination. Moreover, in Siddarth Gupta, the plaintiff sought to preserve his existing formal membership until a final determination was made. In the present case, the Plaintiffs seek to maintain privileges granted under a policy that has been invalidated. Similarly, the judgments in Charles Mantosh & Ors. v. Dalhousie Institute & Ors.,25 and Jagdish Chander Sachdeva v. Royal Bombay Yacht Club & Ors.,26 has also been relied upon by the Plaintiffs. However, the facts of these cases are distinguishable and do not apply to the present situation. In Jagdish Chander Sachdeva, the Appellant, a permanent club member, was expelled for failing to move to alternate accommodations while his original premises were under repair, without being given a hearing, as per Rule 43(vii) of the Club Rules. Similarly, in the Charles Mantosh case, the Appellant’s membership was terminated due to alleged misconduct. However, it is important to note that the Plaintiffs in the current case had no rights/contract to begin with to claim violation of natural justice principles. The contract concerning the Green Card is prima facie void ab initio. Therefore, the Plaintiffs’ membership has not been ‘terminated’ in the conventional sense; rather, it has been declared invalid from the outset and thus no rights including those under principles of natural justice can flow from there.
Have the Plaintiffs established a prima facie case to warrant the grant of an interim injunction?

49. In light of the above discussion, the Plaintiffs have failed to establish a prima facie case for interim relief. Their Green Card rights, as issued in 2019, were found to be outside the scope of the AoA and void ab initio. The NCLT’s findings and the Administrator’s actions further erode the Plaintiffs’ claims. In light of the NCLT’s final judgment, which identified and sought to correct the Club’s mismanagement, the Plaintiffs lack legal entitlement to the interim relief they seek. The Administrator’s actions were in line with the NCLT’s directives and aimed at restoring the Club’s governance. Hence, the Plaintiffs’ claims for interim relief do not have a sufficient legal foundation.
Balance of Convenience and Irreparable Harm: Does the Plaintiffs’ Potential Loss of Green Card Privileges and Access to Club Facilities Constitute Irreparable Harm?

50. The Plaintiffs contend that the suspension and termination of their Green Card privileges will cause them irreparable harm, as they will lose access to the Club facilities they have enjoyed and paid for over the years. Furthermore, the Plaintiffs point out that the Defendants have acknowledged that those who did not seek refunds would remain in the queue for regular membership and this arrangement does not interfere with the normal process of admission as full ‘members’ under Section 2(55) of the Companies Act, 2013. The balance of convenience lies in their favour. However, these arguments require closer examination against the factual background and legal context of the situation.
51. Firstly, it is an admitted fact that most Plaintiffs failed to apply for full membership upon turning 21, as required by Article 13(3b) of AoA. Many of them had not utilized Club facilities for extended periods due to the expiration of their dependent cards and did not seek membership thereafter. For instance, Plaintiff No. 1 (Siddhant Mohta) applied for Green Card privileges at the age of 28, Plaintiff No. 3 was 28 years old in 2019 when they applied, and Plaintiff No. 5 was 37 years old.27 Notably, the oldest individual who sought Green Card privileges under the 2019 policy was 69 years old. These facts reveal a considerable gap between when the Plaintiffs became ineligible for dependent status and when they attempted to regain access to the Club, raising questions about the urgency and nature of their alleged harm.
52. Secondly, the Club has taken steps to mitigate any potential harm to the Plaintiffs. The Ministry of Corporate Affairs (MCA)-appointed General Committee directed the refund of penalties paid by the Plaintiffs under the 2019 policy and offered to refund the registration fees should the individuals choose not to remain on the membership waitlist. The Plaintiffs (in CS(OS) 224/2022) themselves have filed an application (I.A. No. 15514 of 2022) before this Court, requesting that Defendant No. 1 not refund the penalty amounts, indicating their intent to continue pursuing membership. Consequently, this Court issued an order dated 21st September, 2022, instructing the Club not to refund the penalties to the Plaintiffs, though this direction was made without prejudice to the Club’s rights and contentions.
53. Given these circumstances, it becomes apparent that the Plaintiffs’ potential loss of Green Card privileges does not constitute irreparable harm. The Club’s willingness to refund penalties and registration fees demonstrates an effort to address any financial detriment the Plaintiffs might face. Additionally, the Plaintiffs’ current status in the membership queue remains unaffected, as they can still pursue regular membership if they so choose.
54. The public interest aspect further tips the balance away from the Plaintiffs. This Court, in Prem Nath Vasistha v. Union of India,28 recognized that granting preferential membership to dependents of existing members is a discriminatory practice that runs counter to the principles of equal opportunity, especially when the Club operates on government-leased land at nominal rates. The Plaintiffs’ claims, if upheld at this stage, would perpetuate this preferential treatment, thereby contravening broader public interest considerations.
55. Thus, the balance of convenience does not favour the Plaintiffs. Thei