The National Company Law Tribunal (NCLT) held the executive committee meeting of hotel and
restaurant body FHRAI on October 30, 2018 as “null and void” and ordered the election of its new
president after conducting the annual general meeting.
The bench has directed all four regions of the Federation of Hotel & Restaurant Associations of India
(FHRAI) to nominate their members for the Executive Committee (EC) afresh within seven days from
the pronouncement of its order.
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“The AGM of Respondent 1 (FHRAI) will thereafter be held within 30 days of this order and the EC
meeting will take place on the same day after AGM to elect the President from among the members
of eastern region and other office bearers as per AOA,” said the NCLT order passed on August 30.
Members of the eastern region will give their nomination for the post of president of FHRAI for
election, in accordance with the past established practices and with the AOA of FHRAI.
NCLT also observed that the objective of FHRAI was to promote the interest of hotels of various
regions by encouraging and protecting the hospitality industry in India and it has been defeated due
to petty squabbles.
“This has to be curbed. Certain members of the various regions of the FHRAI are breeding litigation
for personal reasons and we strongly disapprove of it,” said NCLT order, adding “the ministry of
corporate affairs is directed to look into the affairs of FHRAI if it is conducted in a manner compliant
with the provisions of Companies Act.”
NCLT order came over a petition filed by some members of FHRAI. According to them, FHRAI, which
comprises 3,890 members, is the union of four associations from the eastern, western, northern and
southern regions of the country.
As per the Articles of Association (AoA) of FHRAI, EC members are elected at every AGM of the
company. The EC members are then enjoined to elect office bearers such as president, vice
president, secretary and other key positions.
Regional association is given an opportunity to elect the president of FHRAI for one term on a
rotation basis. According to the petitioner in FY18, the president was from the northern region and
as per the rotation, it was the turn of the Hotel & Restaurant Associations of Eastern India (HRAEI) in
FY20.
HRAEI has already nominated six members for elections at EC and a nominee for the post of
president. However, the erstwhile president, who had retired, in a meeting of FHRAI held on
October 30, 2018, proposed random names, which were challenged before NCLT.
