HC to monitor liquidation of Breach Candy Club’s holdingsUpdated: Oct 22, 2019 01:53 IST
The Bombay high court (HC) last week decided to monitor liquidation of Breach Candy Club’s holdings, noting that the very survival of the club was at stake. The court on Tuesday directed the Bhulabhai Desai Road branch of Bank of India to transfer all the club’s holdings, worth ₹73.47 crore, to the Prothonotary and Senior Master, a senior high court official.
The division bench of justices SC Dharmadhikair and GS Patel was hearing a plea filed by the club’s management, led by Vikram Malik, seeking the court’s permission to liquidate bonds worth ₹4.12 crore to deal with an acute cash crunch. The plea was filed in an appeal pending before the bench.
However, the bench noticed some discrepancies in claims made by the management. In the plea, the current management claimed that it had cleared all arrears of staff salaries, apart from clearing recurring monthly outgoings of ₹8 lakh – ₹1 lakh towards water charges and ₹7 lakh towards electricity charges. “We do not understand how this can be, because for nearly two months we have been told that the club has only ₹3 lakh in its accounts,” said the bench.
The judges suspected that they were not being told complete truth and said the affidavit filed by the management failed to clear their doubts. “This affidavit does not satisfactorily allay our doubts, ease our mind or fully answer our queries. We are, therefore, not convinced that the proposal to liquidate financial assets should be allowed, so that those assets are in the hands of the persons currently managing the club for future deployment,” it said.
The bench further said it was not inclined to allow redemption of the bonds without supervision. “We believe this will only lead to further controversies that are best avoided. The matter is already complicated enough as it is, and now the survival and continuance of the club is at stake, with mounting demands including income tax,” the bench said. “We would, therefore, prefer that these bonds be first brought into the court and be released or liquidated under the directions of this court, with the proceeds held by a designated court officer.” The bench was referring to the “complications” created by three rival factions wanting to take control of the club and the I-T department’s demand of ₹21 crore. It is the first time that the club is facing such a huge tax liability.
The high-end members-only facility at Warden Road is south Mumbai’s most sought-after facility. It is operated by Breach Candy Swimming Bath Trust and has two swimming pools – one indoor and one outdoor, tennis courts, other sports facilities, a restaurant and a bar. The club started in 1878, but its membership was restricted to Europeans for a considerable period of time. Its membership opened to Indians only in 1960.