SC delivers its judgment on BCCI-IPL, Constitutes 3-member panel to decide on punishment, and disqualifies persons having stakes in IPL teams to contest BCCI

The Supreme Court of India today delivered a verdict that is going to have a huge impact on administration of cricket in India. The 138-page judgment delivered by a two-judge Bench consisting of Justices TS Thakur and Fakkir Mohamed Ibrahim Kalifulla brings an end to the proceedings that were going on for the last 17 months in the highest court of the country. It also replaced the question mark regarding Mr. Srinivasan fighting the BCCI elections with a full stop.

The Supreme Court ordered that Amendment to Rule 6.2.4, i.e. BCCI amendment that allowed the BCCI officials to have commercial interest in the teams in the IPL, is void and defective. The Supreme Court also ordered the formation of a Committee, having former Chief Justice of India RM Lodha as its Chairman, and also having Justice Ashok Bhan and Justice R.V. Raveendran, both former Supreme Court judges to decide on the quantum of punishment to be imposed on Mr. Gurunath Meiyappan and Mr. Raj Kundra as also their respective franchisees/teams/owners. The Apex Court judgment also noted, "The order passed by the Committee shall be final and binding upon BCCI and the parties concerned subject to the right of the aggrieved party seeking redress in appropriate judicial proceedings in accordance with law." The Committee has also been empowered to "examine the role of Mr. Sundar Raman with or without further investigation, into his activities, and if found guilty, impose a suitable punishment upon him on behalf of BCCI."

Regarding the BCCI elections that have been pending, the Apex Court said that BCCI should hold elections within 6 weeks and that "no one who has any commercial interest in the BCCI events (including Mr. N.Srinivasan) shall be eligible for contesting the elections for any post whatsoever." The Court went on to say, "We make it clear that the disqualification for contesting elections applicable to those who are holding any commercial interest in BCCI events shall hold good and continue till such time the person concerned holds such commercial interest or till the Committee considers and awards suitable punishment to those liable for the same; whichever is later."

In addition, it is the BCCI that will be paying the fees to the three member Committee, which has been allowed to fix its own fees. The Court also asked the Committee to deal with the matter expeditiously and if possible, finish it within six months.The Supreme Court in its judgment also praised the Probe Committee headed by Justice Mukul Mudgal.

The Supreme Court in the opening paragraphs of the judgment acknowledged the value of cricket to its fans and observed, "Allegations of sporting frauds like match fixing and betting have for the past few years cast a cloud over the working of the Board of Cricket Control in India (BCCI). Cricket being more than just a sport for millions in this part of the world, accusations of malpractices  and conflict of interests against those who not only hold positions of influence in the BCCI but also own franchises and teams competing in the IPL format have left many a cricketing enthusiasts and followers of the game worried and deeply suspicious about what goes on in the name of the game. There is no denying the fact that lower the threshold of tolerance for any wrong doing higher is the expectation of the people, from the system. And cricket being  not only a passion but a great unifying force in this country, a zero tolerance approach towards any wrong doing alone can satisfy the cry for cleansing."

The Court covered the events that led to the spot-fixing scandal in details. It noted that on "27th September, 2008 Mr. N.Srinivasan was elected as the Secretary of the BCCI in a General Body Meeting. In the same meeting Regulation 6.2.4 of the IPL Regulations was amended to exclude from its operation events like IPL and Champions' League twenty-20." Also "in April 2013, Special Cell, Delhi Police, Lodhi Colony, New Delhi, is said to have received secret information that certain members of the underworld were involved in fixing of matches in the recently concluded edition of the IPL."

Thereafter, as multiple arrests were made in relation to spot fixing, including arrest of GurunathMeiyappan, "Mr. N.Srinivasan announced that he was stepping aside from the post of President of the BCCI until the probe was completed ostensibly because of the alleged involvement of his son-in-law in the betting and spot fixing racket."

BCCI had then set up a three member panel, consisting of two former High Court judges and Mr. Sanjay Jagdale, who had later resigned but the panel continued to work on, as asked by BCCI.

The Cricket Association of Bihar had then filed a petition before the Bombay High Court, asking it to declare "appointment of the two-member Probe Commission was ultra vires of the Rules and Regulations of the BCCI" and asked it to constitute a panel "comprising retired Judges to hold an enquiry against among others Mr. Gurunath Meiyappan for his involvement in betting and spot fixing."It had also prayed, "For termination of the franchise agreement entered into between the BCCI, on the one hand, and Chennai Super Kings and Rajasthan Royals on the other" alongwith disciplinary proceedings against Mr. Srinivasan.

The Supreme Court judgment notes the order given by Bombay High Court as, "By its order dated 30th July, 2013, a Division Bench of the High Court of Bombay declared that the Probe Commission set up by the BCCI was not validly constituted being in violation of the provisions of Rules 2.2 and 3 of Section 6 of the IPL Operational Rules. The High Court, however, declined to grant any further relief by way of constituting a panel to conduct an enquiry under the supervision of the High Court. The High Court was of the view that constitution of a Probe Committee under Section 6 of the IPL Operational Rules was the prerogative of the BCCI."

Thereafter, the Cricket Association of Bihar filed an appeal in the Supreme Court, to the extent reliefs it had prayed for denied by the High Court. An appeal against the High Court order was also filed by the BCCI.

The Court in its judgment also notes the observations made by the Mudgal Committee, including, "The Committee also held that franchisee owner CSK was responsible for its failure to ensure that Mr. Gurunath Meiyappan complied with BCCI Anti-Corruption Code, IPL Operational Rules and IPL Regulations" and "against Mr. Raj Kundra, the Committee opined that further and serious investigation was required to be conducted into the said allegations for the allegations of betting if proved against Mr. Kundra and his wife Ms. Shilpa Shetty, would constitute a serious infraction of the provisions of IPL Operational Rules, the Anti-Corruption Code and the Code of Conduct for Players and Team Officials."

Interestingly, "The Committee was, however, of the view that the disciplinary action taken by BCCI against the delinquent players was adequate and satisfactory." The Mudgal Panel had also found that "N.Srinivasan was not involved in match fixing activity nor was he involved in preventing investigation into match fixing."

The Court thereafter went on to form seven questions that were going to be adjudged by it. The questions included, "Whether the respondent-Board of Cricket Control of India is 'State' within the meaning of Article 12 and ifit is not, whether it is amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution of India?" It also had to decide if Mr. Meyippan and Kundra were "team officials" and if the answer to the question came out be in affirmative, the Apex Court would have been required to answer naturally arising questions regarding punishment, which it did.

Going through the plethora of case laws that had been put before the Bench, the Court observed, "The functions of the Board are clearly public functions, which, till such time the State intervenes to takeover the same, remain in the nature of public functions, no matter discharged by a society registered under the Registration of Societies Act."

Regarding the question of BCCI coming under the ambit of Article 12, The Court finally observed, "BCCI may not be State under Article 12 of the Constitution but is certainly amenable to writ jurisdiction under Article 226 of the Constitution of India."

In addition, regarding the role of Mr. Meyiappan in Chennai Super Kings, Senior Advocate SiddharthLuthra "claimed the right to remainsilent as his client was being prosecuted in a Court at Mumbai for betting." However, the Court went on to say, "we find that the Probe Committee has correctly appreciated the facts as emerging from the documents and the depositions of witnesses recorded by it and rightly come to the conclusion that Gurunath Meiyappan was a team official of CSK." Indeed, it did make it clear that its observations were for this proceeding only and were not to affect the case pending against Mr. Meyiappan in Mumbai.

The Court also noted, "The Probe Committee has on the basis of the material available to it further held that Gurunath Meiyappan was indulging in betting." Regarding Rajasthan Royals and Raj Kundra, the Court noted the Mudgal Committee as saying, "the Probe Committee opined that the allegations levelled against Mr. Raj Kundra and his wife Ms. Shilpa Shetty required to be investigated further. The Committee held that if the allegations of betting were found proved against Mr. Raj Kundra and his wife Shilpa Shetty the same would constitute serious infraction of the IPL Operational Rules, the IPLAnti Corruption Code and the IPL Code of Conduct for Players and Team Official."Also, "The Committee has on the basis of the said further investigation and enquiry come to the conclusion that Mr. Raj Kundra was a 'team official', a 'player support personnel' and 'participant' within the meaning of the relevant rules and that he had indulged in betting."

Senior Advocate ShakherNaphade appeared for Mr. Kundra in the matter, he submitted to the Court that, "the report submitted by the Probe Committee could at best be taken as a preliminary report. A proper enquiry into the allegations made against Mr. Raj Kundra shall have to be separately conducted in terms of the relevant rules and regulations."

Senior AdvoateAshok Desai appeared for Jaipur IPL Cricket Private Ltd and argued that there was no direct allegation against the said company and that the findings recorded by the Probe Committee that Mr. Raj Kundra was the owner of Rajasthan Royals was not wholly correct inasmuch as Raj Kundra and his family own just about 11% equity in the holding company."

He also submitted that "Mr. Raj Kundra was never a part of the management directly or indirectly and had never participated in the management decisions including decisions regarding the purchase of players or the strategy adopted by the franchisee or its team."

However, the Supreme Court refused to accept the contentions put forward and observed, "The whole purpose behind setting up of the Probe Committee was to make the entire process of investigation and enquiry into the allegations credible. The Probe Committee headed by a former Chief Justice of the High Court of Punjab and Haryana was never intended to conduct a preliminary investigation as was suggested by M/s Naphade and Desai. It was on the contrary understood by all concerned to be a substitute for the Disciplinary Procedure Commission under the Rules empowered to examine the allegations and record findings. It is wholly wrong to suggest that the report of such a High Powered Probe Committee could be trivialised by treating it as a preliminary investigation that could lead to no more than initiation of proceedings before the Disciplinary Procedure Commission envisaged by Rule 6.2.2 of the Rules mentioned above."

Importantly, the Court said, "Wehave in that view no hesitation in rejecting the contentionurged by M/s. Naphade and Desai that the procedureprescribed by the IPL Operational Rules must be followeddespite all that has transpired till now or that the reportsubmitted by Justice Mudgal Committee was of no valueexcept that it could provided a basis for setting theDisciplinary Procedure into motion. We need to rememberthat the direction for appointment of a Probe Committee wasissued in exercise of appellate powers vested in this Court inproceedings arising out of Article 226 of the Constitution asalso those vested in this Court under Article 142 thereof. We also need to remember that the directions came in a public interest petition with a view to finding out whether there was any truth in the allegations that owners of IPL teams and franchisees were in a big way indulging in sporting frauds thereby discrediting the game and cheating the public of their confidence in its purity. That being the object, it is futile to set up the "disciplinary procedure" under the Rules against the exercise of such plenary powers as are vested in this Court under the constitutional provisions mentioned above."

Regarding the aspect of principle of natural justice, the Court observed that every person who was questioned by the Mudgal Committee was given a full and fair opportunity to put forward his case.

Having found that Mr. Meyippan and Kundra were officials in their respective teams, the Supreme Court discussed the Permissible action in terms of the IPL Operational Rules and observed, "that once Mr. Gurunath Meiyappan and Mr. Raj Kundra are accepted as team officials, their misconduct which has adversely affected the image of the BCCI and the league as also the game and brought each one of them to disrepute can result in imposition of one or more of the sanctions stipulated under Rule 6.4 (supra). It is noteworthy that those sanctions are not limited to Gurunath Meiyappan and Raj Kundra alone but may extend to suspension of the team or the franchisee from the league also."

The Apex Court also discussed the Permissible action under the Anti-Corruption Code for participants, and observed that, "BCCI-IPL is in situations stipulated under Clause 11.3 competent to direct the termination of the agreement. What would constitute "material adverse effect" upon reputation or standing of the league or BCCI-IPL, BCCI, the franchisee, the team or game of cricket shall, however, depend upon the facts and circumstances of each case. What cannot be disputed is that the right to terminate the agreement is available to the BCCI-IPL even in accordance with the provisions of the franchise agreements themselves"

Regarding the question, "Whether allegations of cover up, levelled against Mr. N. Srinivasan stand proved. If so, to what effect?" the Court answered in the negative. It said, "We cannot, therefore, with any amount of certainty, say that the charge of attempted cover up leveled against Mr. Srinivasan stands proved."

Regarding the case of conflict of interest, the Court recounted instances wherein Mr. Srinivasan commercial interest came in direct conflict with his duty as President of BCCI. Not accepting the defence put forward by Senior Advocate KapilSibal, the Court observed, "BCCI is a very important institution that discharges important public functions. Demands of institutional integrity are, therefore, heavy and need to be met suitably in larger public interest. Individuals are birds of passage while institutions are forever. The expectations of the millions of cricket lovers in particular and public at large in general, have lowered considerably the threshold of tolerance for any mischief, wrongdoing or corrupt practices which ought to be weeded out of the system. Conflict of interest is one area which appears to have led to the current confusion and serious misgivings in the public mind as to the manner in which BCCI is managing its affairs."

Accordingly, the Court found "Amendment to Rule 6.2.4 permitting Administrators of BCCI to acquire or hold commercial interests in BCCI like IPL, champions league and T-20 held to be bad."

The Court also asked the proposed Committee, to examine and make suitable recommendations regarding various aspects relating to functioning of BCCI, including amendments to its Memorandum of Association.

However, it is not the end of the matter as the newly proposed Committee will take over and decide on various aspects, as mandated by the Supreme Court of India. Meanwhile, Mr. N. Srinivasan, who is now eligible to contest the BCCI elections, is the chairperson of International Cricket Council.

You may read more of Live Law's extensive coverage of the case here.

Read the Judgment here