Centre directed Delhi Gymkhana Club to hand over its 27.3-acre premises by June 5.
Government said the land is needed for defence infrastructure and public security purposes.
Club members called the move shocking and said the order could be challenged in court.
The Delhi Gymkhana Club, where the city's powerful and elite have rubbed shoulders for nearly a century, faced possible closure on Saturday, with the Centre asking it to return its expansive 27.3 acres by June 5 on the grounds of "securing defence infrastructure".
The Imperial Delhi Gymkhana Club Ltd (now known as Delhi Gymkhana Club Ltd) leased the expansive space at 2, Safdarjung Road, in the centre of lush Lutyens' Delhi, to run a social and athletic club.
It is located on one of the most valuable and strategically significant land parcels in the city, next to the prime minister's residence on Lok Kalyan Marg. It is part of the high-security administrative zone, which also includes other vital central government and defence establishments.
According to an order released on Friday by the Union Housing and Urban Affairs Ministry's Land and Development Office (L&DO), the property is essential for securing and bolstering defence infrastructure as well as other crucial public security objectives.
The Gymkhana Club said on Saturday night that it would write to the L&DO to request clarification on several matters about the handover order.
In an official communication to its members, the club said, "Pursuant to the sudden development, the Gymkhana Club met today on an urgent basis and after detailed deliberation decided to file an immediate response to the L&DO requesting clarity on several issues in the interest of the members and employees of the club." The club also said that it has sought an urgent appointment with the officials of the housing and urban affairs ministry.
“The immediate priority of the club is to ensure that its operations continue without dislocation,” the communication said, adding that further developments would be shared once it receives a response from the government.
The Centre's move drew criticism from various quarters.
"Till now, it was the poor who were being affected, so the rich were not too bothered. Then came the turn of shopkeepers, so salaried professionals did not feel affected. Now it is the turn of senior officers and professionals who visit clubs. Everyone's turn will come eventually," AAP leader Saurabh Bharadwaj said.
Madras Gymkhana Club president Capt S Seshadri said that it was a sad thing to happen to an institution of such stature.
"I am not going to say it's fair or not fair. It's beyond my capacity to say that. But I feel sad," he said.
Many members of the Delhi Gymkhana Club said that the order came as a "shock" to them, and they would challenge it in court.
A member, on condition of anonymity, said that a government-appointed committee has been running the club for the last few years, and the current management is not expected to challenge the eviction order in the court of law.
"How can we expect the current club management to challenge the order since it is currently being run by the government-appointed committee? Members will have to file an application on their own to challenge the government's order," he said.
In its letter to the club's secretary, the L&DO said the leased land is essential to fulfil urgent institutional needs, governance infrastructure and public-interest projects, integrated with the resumption of adjoining government lands.
"In exercise of the powers conferred under Clause 4 of the Lease Deed, the President of India, through the Land & Development Office, hereby determines the lease and orders re-entry of the aforesaid premises with immediate effect," it stated.
"Upon such re-entry, the entire plot of land measuring 27.3 acres, along with all buildings, standing erections, structures, lawns, and fittings thereon, shall vest absolutely in the lessor, i.e., the President of India, through the Land & Development Office." According to the order, the premises will be taken over by the Land & Development Office on June 5.
"You are directed to hand over peaceful possession of the premises to the representatives of this office on the aforesaid date. In the event of non-compliance, possession shall be taken in accordance with law," it stated.
According to a senior official in the Union Housing and Urban Affairs Ministry, the Government of India owns the majority of the land leased to different institutions in Lutyens' Delhi. The government may use its "power" to reclaim its land, citing security and other national interests.
The recent elimination of slums from the neighbouring Race Course Road is the context for the most recent action.
The Delhi Race Club at Kamal Ataturk Marg and the Jaipur Polo Ground in the Race Course vicinity received eviction notices, which the Delhi High Court halted in March of this year.
The court said that the Union Housing and Urban Affairs Ministry cannot take "forcible possession" of these iconic premises.
