IPL Controversy and the Legal Developments

Cricket is not a passion but a great unifying force in the country, therefore a zero tolerance approach towards any wrongdoing

Supreme Court of India in BCCI vs. Cricket Association of Bihar

A. Background of the IPL Controversy

The Indian Premier League (“IPL”) is a professional Twenty20 format cricket league in India and contested for nominating players during the month of April and May of every year by franchise teams representing different Indian cities. The Board of Control for Cricket in India (“BCCI”), a society registered under the Tamil Nadu Societies Registration Act, 1975 founded the IPL in the year 2007. IPL was to be run by a committee to be constituted by a general body of BCCI and the governing body to be called IPL Governing Council.

In December 2007, the IPL Governing Council invited tenders for grant of IPL franchises on an open competitive bidding basis, in which only corporate bodies were allowed to participate. India Cements Ltd. was one of those who participated in the auction for the Chennai franchise and emerged successful in the same. Franchise Agreements were, pursuant to the auction, signed by BCCI with the franchisees concerned.

The IPL came into legal attention from April 2013 when issues relating to spot-fixing and betting case arose based on secret information received by Delhi Police about the involvement of underworld and this led to the arrest of three cricketers, S Sreesanth, Ajit Chandila and Ankeet Chavan on the charges of spot-fixing. Mumbai Police arrested film actor Vindu Dara Singh and BCCI Chief’s son-in-law and CSK’s former team principal Gurunath Meiyappan for alleged betting and having links with bookies. Others included in dispute was Raj Kundra. On 26 May 2013 BCCI announced that a three-member Commission who would investigate the role of G. Meiyappan in the spot-fixing and betting scandal.

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Image Source: http://cricket-cup.blogspot.com

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BCCI constituted a three-member commission consisting of two members of BCCI and one Independent Member. This was followed by formation of Probe Commission consisting of two former Judges of Madras High Court and Shri Sanjay Jagdale. N. Srinivasan resigned till the probe was going on. It was in the backdrop of developments taking place, the Cricket Association of Bihar had filed a PIL in the High Court at Bombay for issuance of writ of mandamus[1] to recall BCCI order constituting a probe panel comprising of two retired Judges of the Madras High Court to enquire into the allegations of betting and spot-fixing in the IPL made among others and against one Gurunath Meiyappan who was also arrested by Mumbai Police. Additionally, the PIL had petition prayed for suspension of N. Srinivasan pending probe and other proceedings.

The Mumbai High Court by its order dated July 30, 2013, granted relief but declined a possible reconstitution of the panel. Aggrieved, BCCI has assailed the order passed by the High Court in a Civil Appeal. In the connected Civil Appeal, Cricket Association of Bihar has prayed for further and consequential orders which according to the appellant could and indeed ought to have been passed by the High Court, inter alia, for removal of respondent from the post of President of BCCI and cancellation of the franchise agreement favouring Chennai Super Kings and Rajasthan Royals for the IPL matches to be conducted in future.  The Division Bench of the Mumbai High Court held that Probe Commission set up by BCCI is not validly constituted and is in violation of the aforesaid IPL Operational Rules. However, the Court declined to constitute the panel to conduct an enquiry under the supervision of the high court, as the same was the prerogative of BCCI. This order of the Division Bench was assailed by both the BCCI and Cricket Association of Bihar to the extent that the Probe Commission ultra vires and no consequential relief respectively.

Finally, the aggrieved parties approached the Supreme Court in BCCI vs. Cricket Association of Bihar and Cricket Association of Bihar vs. BCCI [SLP 4235 and 4236 of 2014] and in another connected matter in which the apex court issued a notice to Srinivasan, in regards to the public interest litigation (PIL) filed by the Cricket Association of Bihar, in regards to the formation of a new probe panel into illegal activities in the IPL. While the hearing was going on N. Srinivasan was elected as the President of BCCI on September 29, 2013. The Hon’ble court vide orders dated October 8, 2013 constituted a three-member Probe Committee, headed by former Chief Justice of High Court of Punjab and Haryana, Judge Mukul Mudgal (Chairman) and Additional Solicitor General, L Nageswara Rao (Member) and Senior Advocate, Nilay Dutta (Member), Guwahati High Court (hereinafter referred to as the “Mudgal Committee”) to conduct an independent inquiry into the allegations of corruption against Meiyappan, India Cements, and Rajasthan Royals team owner Jaipur IPL Cricket Private Ltd, as well as with the larger mandate of allegations around betting and spot-fixing in IPL matches and the involvement of players.

The direction to constitute Probe Committee was done by this Court in the exercise of appellate powers vested with this court under Article 226 and also under Article 142 of the Constitution.

The article focusses on the outcome of the litigation before Supreme Court.

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A. Issues Decided by Court

1. BCCI is ‘State’ or not within the meaning of the Article 12 of the Indian Constitution

Article 12[2] of the Constitution of India gives an inclusive definition of ‘State’. The law as to what constitutes a ‘State’ is fairly well settled with regard to this due to the decision of the Constitution bench in this regard. The apex court observed to decide the present issue observed that the BCCI is involved in certain public functions discharged by the BCCI and therefore are under scanner, which makes it amenable to the writ jurisdiction of the Court. The following precedents were cited:

  • In Sukhdev and Ors. vs. Bhagat Ram Sardar Singh Raghuvanshi (1975) 1 SCC 421 the Constitution bench in their concurring judgment referred to Marsh vs. Alabama Case (3) 326 US 501 case to hold that even where Corporation is private performing a public function it is bound by Constitutional standards applicable to all State actions.
  • In Ramana Dayaram Shetty vs. International Airport Authority of India (1979), 3 SCC 489 the apex court held that one issue that should be kept in mind is whether the operation of cooperation is an important public function.
  • In Ajay Hasia vs. Khalid Mujib Sehravadi (1981), 1 SCC 722 this Court enunciated certain test applicable for determining whether the entity is an instrumentality of a State or not. However, in Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology (2002) 5 SCC 111 a Seven judge bench of the Court decided by 5:2 ratio that tests provided in Ajay Hasia Case (Supra) were not a rigid set of principles which may be used to decide the body falls within definition of State. On the contrary, be considered to be a ‘State’. The question in each individual case, declared this Court, would be whether on facts the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive to make any such body State within the meaning of Article 12. Mere regulatory control whether under statute or otherwise would not be sufficient. Overruling an earlier decision of this Court in Sabhajit Tewary v. Union of India and Ors. (1975) 1 SCC 485, this Court held that Council of Scientific and Industrial Research even when registered as Society was ‘State’ within the meaning of Article 12.
  • In BCCI vs. Netaji Cricket Club and Ors. (2005) 4 SCC 741 Supreme Court considered the role and function of the discharged by the BCCI. The Board control over the sports of cricket was deep and pervasive and it exercised enormous public functions, which made it obligatory to follow the doctrine of fairness and good faith.

The question whether BCCI is a State or not arose in Zee Telefilms vs. Union of India and Ors. (2005) 4 SCC 649 the apex court held that BCCI is not State within the meaning of Article 12 as the same was not created by the Statute nor the share was held by Government. The Court observed that the government was not giving any financial assistance to the BCCI. Therefore, there was no deep and pervasive State control and whatever was there was of regulatory nature as applicable to similar bodies. So it was on the basis of Pradeep Kumar’s Biswas Case that the Hon’ble Court held that BCCI was not functionally, financially and administratively dominated by the Government. The apex court repelled the contention that Board being of nature, where the public function was being discharged by it was of public nature does not tantamount to be a State within the meaning of Article. The Court recognised that the BCCI is discharging certain public functions so it comes under the scanner of writ jurisdiction in the case of any violations. The Government of India has allowed the BCCI to select the national team and those do well are duly awarded by government and the role of Board has never being diluted. So, BCCI is not a State within the meaning of Article 12 of the Constitution but within the purview of writ jurisdiction due to the public functions performed by it.

2. Whether Gurunath Meyiappan and Raj Kundra falls within the bracket of Team Officials?

  • The Probe Committee found the liability of Gurunath Meiyappan is fastened irrespective of the fact, that he is team official or owner of CSK, under the present rules, the consequences of betting would therefore flow. The fact that Mr Gurunath was a team official was an admitted position. Contrary to the claim of Mr Meiyappan, the Court held that the opinion of this court was not binding upon the criminal court and it can arrive at its own findings. For the purpose of this matter, he was held liable for betting.
  • The allegations against Raj Kundra and his wife Shilpa Shetty needs further investigations, which if proved would be liable under IPL Operational Rules, IPL Anti-Corruption Code, IPL Code of Conduct for Players and Team Officials. Mr Nilay Gupta, the third member of the Probe Commission also arrived at the similar observations.
  • The Court observed that the IPL Operational Rules requires the formation of ‘Disciplinary Procedure Commission’ for hearing and deciding such matters. The procedure to be followed includes proving by way of admission and strict proof. The BCCI did not adhere to the prescribed procedure and instead of forming this Commission formed two-member judges and Mr Jagdale. Later Mr Jagdale resigned still the constituted committee was asked to go ahead and complete the probe with reduced strength under the instructions of the Board. This was the complete departure from IPL Operational Rules. The Committee submitted its inability to probe in the absence of necessary evidence, which BCCI took as conclusive, prove and thus took a quietus approach.
  • The imputation against Gurunath Meiyappan and Raj Kundra under the terms under Rule 6.4 of the IPL Operational Rules. The quantum of punishment need to be imposed on Gurunath and Raj Kundra would be done by the Committee Justice R.M.Lodha, Former Chief Justice of India (Chairman); Justice Ashok Bhan, Former Judge Supreme Court of India (Member); Justice R.V. Raveendran, Former Judge Supreme Court of India (Member) [Committee for Imposition of Punishment and for other Mandate of this Judgment].

3. Permissible Action under the IPL Operational Rules and Anti-Corruption Code against Wrong Doer

  • The IPL Operational Rules is set of Rules that provides for punishment for misconduct along with Anti-Corruption Code. In terms of Section 6 of the IPL Operational Code, upon consideration of relevant factors, the Disciplinary Committee of the BCCI, is empowered to impose an appropriate sanction upon the delinquent having regard to the provisions of Article 6.2 and the Table appearing thereunder. There is, therefore, no manner of doubt that even under the Anti-Corruption Code for participants any act like betting can attract sanctions not only for the person who indulges in such conduct but also for all those who authorise, cause, knowingly assist, encourage, aid, abet, cover up or are otherwise complicit in any act of omission or commission relating to such activity.
  • IPL Operational Rules Applicable on Whom: A careful reading of the Operational Rules extracted above would show that every franchise, player, team official and/or match official is subject to the said rules. In terms of Rule 2.1 of the IPL Operational Rules participation or other involvement with the league is deemed to constitute an acceptance by each person subject to these operational rules of an agreement with an obligation owed to BCCI to be bound by the regulations, the laws of cricket, the terms of the player contract and the jurisdiction of the BCCI in connection therewith.

  • Appendix I of the Anti-Corruption Code of the Participants: The BCCI claims to have adopted the Anti-Corruption Code for achieving, what it describes as certain “fundamental sporting imperatives”. It has given the definition of for different terms appearing in the said Code including a definition for expressions like a bet, Corrupt Conduct, domestic match, event, ineligibility, inside information, match, participant, player, player support personnel etc. Sanctions prescribed under Article 6 of the Code include suspension ranging from six months to a lifetime depending upon the nature and gravity of offence/misconduct proved against the person concerned.
  • Betting as an Actionable Wrong under Anti-Corruption Code: It is manifest that Article 2.2.1 treats betting as one of the actionable wrongs under the Code. In terms of Article 2.5.2 the participant who authorises, causes, knowingly assists, encourages, aids, abets, covers up or is otherwise complicit in any act or omission of the types described in Articles 2.1. to 2.4 committed by his/her coach, trainer, manager, agent, family member, guest or another associate shall be treated as having committed such an act or omission himself and shall be liable accordingly under the Anti-Corruption Code. The expression ‘participant’ has been defined to include any player, player support personnel, Umpire, match Referee or Umpire Support Personnel. What is important is that apart from Gurunath Meiyappan in his capacity as the team official if any participant connected with CSK, authorises, causes, knowingly assists, encourages, aids, abets, covers up or is otherwise complicit in any act or omission he/she will also be liable to action under the Anti-Corruption Code as if he/she had himself/herself committed the act of misconduct.

  • Mr Gurunath Meiyappan having been found to be a team official of Chennai Super Kings is a “player support personnel” hence a participant within the meaning of the Anti- Corruption Code.
  • Franchise Agreement: question, refer to the Franchise Agreement executed between BCCI on the one hand and the franchisees on the other. Clause 11.3 of the said agreement reads:

    “11.3 BCCI-IPL may terminate this Agreement with immediate effect by written notice if:

    (a) there is a Change of Control of the Franchise (whether direct or indirect) and/or a Listing which in each case does not occur strictly in accordance with Clause 10;

    (b) the Franchisee transfers any material part of its business or assets to any other person other than in accordance with Clause 10;

    (c) the Franchisee, any Franchisee Group Company and/or any Owner acts in any way which has a material adverse effect upon the reputation or standing of the League, BCCI-IPL, BCCI, the Franchisee, the Team (or any other team in the League) and/or the game of cricket.”

    In terms of Clause 11.3 (c) (supra) if the franchisee, any franchisee group company and/or any owner acts in a manner that has a material adverse effect upon the reputation or standing of the league, BCCI-IPL, BCCI, the franchisee, the team or any other team and/or the game of cricket, the BCCI-IPL is empowered to terminate the agreement. The expression ‘owner’ has been defined in Clause 1.1 as under: “Owner shall mean any person who is the ultimate Controller of the Franchisee;”

    It is evident from the above provisions that the BCCIIPL 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?

The Court held that 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.

4. Allegations against N. Srinivasan

The appointment of a Probe Committee comprising former Judges of the High Court cannot be seen as an attempt to cover up nor can Mr. Srinivasan be accused of withholding any incriminating material from the Probe Committee especially when there is nothing to show that Mr Srinivasan was indeed in possession of any incriminating material that was withheld from him. Mr Srinivasan had in fact stepped aside while the probe was on to avoid any accusation being made against him. Similarly, the allegation that an effort was made to suppress facts before the Mudgal Committee or that Mr Gurunath was shown only as a cricket enthusiast whereas he was a team official, may, at best, raise a suspicion against Mr Srinivasan but suspicion can hardly be taken as proof to hold him guilty of the alleged cover up. We cannot, therefore, with any amount of certainty, say that the charge of attempted cover up levelled against Mr Srinivasan stands proved.

5. Impugned Amendment in light of the ‘Public Policy’

(a) The Ground of Challenge: The third ground on which the amendment came under challenge was that the same is opposed to public policy and good conscience.  The court has while dealing with issues held that BCCI is amenable to writ jurisdiction under Article 226 of the Constitution as it discharges “Public Functions”. The natural corollary flowing from that finding is that all actions which BCCI takes while discharging such public functions are open to scrutiny by the Courts in an exercise of their powers under Article 226 of the Constitution. It also implies that such actions shall when that govern similar actions when taken by the State or its instrumentalities. The approach which a Court exercising powers of judicial review of administrative action adopts will remain the same irrespective of whether the action under review is taken by the State or its instrumentality or by any non-statutory non-government organisation like the BCCI in the case at hand. It follows that Rule 6.2.4 will be subject to the same tests and standards as would apply to any similar provision emanating from a statute or the general executive power of the State.

(b) Legislative Competence of Body bringing Amendment: Seen in the light of the Articles of Association, the court found no infirmity in the amendment to Rule 6.2.4 in so far as the legislative competence of the authority that brought about the amendment is concerned. It is nobody’s case that the amendment was beyond the competence of the authority that made it. So also, there is in our opinion no merit in the argument that the amendment should fall because the same did not figure as an item on the agenda for the meeting in which the same was passed. The Contention that the amendment came as a side wind on the basis of a report of a Committee that was supposed to examine issues touching anti-racism also does not carry any conviction. It is true that the circumstances, in which the amendment came about, may create a suspicion as to the bona fides of the exercise but a mere suspicion may not be enough to strike the same down. So long as the forum where the matter was taken up, discussed and a resolution passed was competent to deal with the subject, procedural deficiencies which do not affect the competence of the authority do not matter much. The court rejected the submission that the amendment is bad because the same came up all too suddenly for discussion, without any real research or other work to support it and without adequate notice to the members to think about and usefully contribute to the deliberations.

6. Amendment Violates the Principle of Natural Justice

What is contended is that inasmuch as the amendment permits commercial interest to be held by administrators in the events organised by BCCI it violates a fundamental tenet of law that no one can be a judge in his own cause, recognized universally as an essential facet of the principles of natural justice which must permeate every action that BCCI takes in the discharge of its public functions. That contention is not without merit and needs to be carefully explored from different angles. But before we do so we may usefully refer to the decision of this Court in A.K. Kraipak & Ors. v. Union of India & Ors. (1969) 2 SCC 262where a Constitution bench of this Court was examining whether Principles of Natural Justice have any application to purely administrative actions as distinguished from those described as quasi-judicial in nature. The following precedents were relied upon:

  • Mathew J. speaking for the Court in Murlidhar Aggarwal and Anr. v. State of U.P. & Ors. (1974) 2 SCC 472 referred to Winfield’s definition in Public Policy in English Common Law 42 Harvard Law Review 76 to declare that:

31. Public policy does not remain static in any given community. It may vary from generation to generation and even in the same generation. Public policy would be almost useless if it were to remain in fixed moulds for all time.”

“..……However, there is no alternative under our system but to vest this power with Judges. The difficulty of discovering what public policy is at any given moment certainly does not absolve the Judges from the duty of doing so. In conducting an enquiry, as already stated Judges are not hidebound by precedent. The Judges must look beyond the narrow field of past precedents, though this still leaves open the question, in which direction they must cast their gaze. The Judges are to base their decisions on the opinions of men of the world, as distinguished from opinions based on legal learning. In other words, the Judges will have to look beyond the jurisprudence and that in so doing, they must consult not their own personal standards or predilections but those of the dominant opinion at a given moment, or what has been termed customary morality. The Judges must consider the social consequences of the rule propounded, especially in the light of the factual evidence available as to its probable results. Of course, it is not to be expected that men of the world are to be subpoenaed as expert witnesses in the trial of every action raising a question of public policy. It is not open to the Judges to make a sort of referendum or hear evidence or conduct an inquiry as to the prevailing moral concept. Such an extended extra-judicial enquiry is wholly outside the tradition of courts where the tendency is to “trust the Judge to be a typical representative of his day and generation”. Our law relies, on the implied insight of the Judge on such matters. It is the Judges themselves, assisted by the bar, who here represent the highest common factor of public sentiment and intelligence. No doubt, there is no assurance that Judges will interpret the mores of their day more wisely and truly than other men. But this is beside the point. The point is rather that this power must be lodged somewhere and under our Constitution and laws, it has been lodged in the Judges and if they have to fulfil their function as Judges, it could hardly be lodged elsewhere.”

  • What is meant by “Public Policy” as it is understood in legal parlance? The expression has been used in Section 23 of the Indian Contract Act, 1872 and in Section 34 of the Arbitration and Conciliation Act, 1996 and a host of other statutes but has not been given any precise definition primarily because the expression represents a dynamic concept and is, therefore, incapable of any strait-jacket definition, meaning or explanation.

  • There is no gainsaying that in the ever-expanding horizons of the principles of natural justice, it makes little or practically no difference whether the action or the nature of the proceedings being tested are administrative or quasi-judicial. The principles apply to either more or less uniformly.

  • The above position was reiterated in Central Inland Water Transport Corporation Limited and Anr. v. Brojo Nath Ganguly and Anr. etc. (1986) 3 SCC 156. This Court observed as under:

    “95. The principles of natural justice have thus come to be recognised as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation are given by this Court to the concept of equality which is the subject-matter of that article. Shortly put, the syllogism runs thus: violation of a rule of natural justice results arbitrariness which is the same as discrimination;where discrimination is the result of State action, it is a violation of Article 14: therefore, a violation of a principle of natural justice by a State action is a violation of Article 14. Article 14, however, is not the sole repository of the principles of natural justice. What it does is to guarantee that any law or State action violating them will be struck down. The principles of natural justice, however, apply not only to legislation and State action but also where any tribunal, authority or body of men, not coming within the definition of State in Article 12, is charged with the duty of deciding a matter. In such a case, the principles of natural justice require that it must decide such matter fairly and impartially.”

    (emphasis supplied)

  • The significance of the principles of natural justice vis-a-vis Article 14 of the Constitution is no longer res Integra. The principles have been held to be a part and parcel of the guarantee contained in Article 14. The court briefly referred in this regard to the decision of this Court in Union of India and Ors. etc. v. Tulsiram Patel etc. (1985) 3 SCC 398 where this Court declared that Principles of natural justice have now come to be recognised as being a part of the constitutional guarantee contained in Article 14 of the Constitution.

  • Repelling the contention that BCCI was not amenable to principles of natural justice while discharging public function, this Court held that horizons of natural justice were constantly expanding and that the principles apply only in areas not covered by any law validly made.

  • In Central Inland Water Transport Corporation (supra) this Court was also considering the import of the expression ‘Public Policy’ in the context of the service conditions of an employee empowering the employer to terminate his service at his sweet will upon service of three months notice or payment of salary in lieu thereof. Explaining the dynamic nature of the concept of public policy this Court observed:

Public policy, however, is not the policy of a particular government. It connotes some matter which concerns the public good and the public interest. The concept of what is for the public good or in the public interest or what would be injurious or harmful to the public good or the public interest has varied from time to time. As new concepts take the place of old, transactions which were once considered against public policy are now being upheld by the courts and similarly where there has been a well-recognized head of public policy, the courts have not shirked from extending it to new transactions and changed circumstances and have at times not even flinched from inventing a new head of public policy.

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“……..It is thus clear that the principles governing public policy must be and are capable, on a proper occasion, of expansion or modification. Practices which were considered perfectly normal at one time have today become obnoxious and oppressive to the public conscience. If there is no head of public policy which covers a case, then the court must in consonance with a public conscience and in keeping with the public good and public interest declare such practice to be opposed to public policy. Above all, in deciding any case which may not be covered by authority our courts have before them the beacon light of the Preamble to the Constitution. Lacking precedent, the court can always be guided by that light and the principles underlying the Fundamental Rights and the Directive Principles enshrined in our Constitution.”

  • We may also refer to the decision of this Court in Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705, where this Court was considering the meaning and import of the expression “Public Policy of India” as a ground for setting aside an arbitral award.

31. Therefore, in our view, the phrase “public policy of India” used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for the public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term “public policy” in Renusagar case, it is required to be held that the award could be set aside if it is patently illegal. The result would be — award could be set aside if it is contrary to:

(a) the fundamental policy of Indian law; or

(b) the interest of India; or

(c) justice or morality, or

(d) in addition, if it is patently illegal.

Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. The award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void.”

  • In Oil and Natural Gas Corporation Ltd. v. Western GECO International Ltd. (2014) 9 SCC 263, this Court was examining the meaning of ‘Fundamental Policy of Indian Law’ an expression used by this Court in Saw Pipes’ case (supra). Extending the frontiers of what will constitute ‘Public Policy of India’ this Court observed:

“35. What then would constitute the “fundamental policy of Indian law” is the question. The decision in ONGC does not elaborate that aspect. Even so, the expression must, in our opinion, include all such fundamental principles as provide a basis for administration of justice and enforcement of the law in this country. Without meaning to exhaustively enumerate the purport of the expression “fundamental policy of Indian law”, we may refer to three distinct and fundamental juristic principles that must necessarily be understood as a part and parcel of the fundamental policy of Indian law. The first and foremost is the principle that in every determination whether by a court or other authority that affects the rights of a citizen or leads to any civil consequences, the court or authority concerned is bound to adopt what is in legal parlance called a “judicial approach” in the matter. The duty to adopt a judicial approach arises from the very nature of the power exercised by the court or the authority does not have to be separately or additionally enjoined upon the fora concerned. What must be remembered is that the importance of a judicial approach in judicial and quasi-judicial determination lies in the fact that so long as the court, tribunal or the authority exercising powers that affect the rights or obligations of the parties before them shows fidelity to judicial The approach, they cannot act in an arbitrary, capricious whimsical manner. The judicial approach ensures that the authority acts bona fide and deals with the subject in a fair, reasonable and objective manner and that its decision is not actuated by any extraneous consideration. The judicial approach in that sense acts as a check against flaws and faults that can render the decision of a court, tribunal or authority vulnerable to challenge.

” 38. Equally important and indeed fundamental to the policy of Indian law is the principle that a court and so also a quasi-judicial authority must, while determining the rights and obligations of parties before it, do so in accordance with the principles of natural justice. Besides the celebrated audi alteram partem rule one of the facets of the principles of natural justice is that the court/authority deciding the matter must apply its mind to the attendant facts and circumstances while taking a view one way or the other. Non-application of mind is a defect that is fatal to any adjudication. Application of mind is best demonstrated by disclosure of the mind and disclosure of mind is best done by recording reasons in support of the decision which the court or authority is taking. The requirement that the adjudicatory authority must apply its mind is, in that view, so deeply embedded in our jurisprudence that it can be described as a fundamental policy of Indian law.

“39. No less important is the principle now recognised as a salutary juristic fundamental in administrative law that a decision which is perverse or so irrational that no reasonable person would have arrived at the same will not be sustained in a court of law. Perversity or irrationality of decisions is tested on the touchstone of Wednesbury principle of reasonableness. Decisions that fall short of the standards of reasonableness are open to challenge in a court of law often in writ jurisdiction of the superior courts but no less in statutory processes wherever the same are available.”

The Court ruled that the:

(a) Public Policy is not a static concept. It varies with times and from generation to generation. But what is in public good and public interest cannot be opposed to public policy and vice-versa. Fundamental Policy of Law would also constitute a facet of public policy. This would imply that all those principles of law that ensure justice, fair play and bring transparency and objectivity and promote probity in the discharge of public functions would also constitute public policy. Conversely, any deviation, abrogation, frustration or negation of the salutary principles of justice, fairness, good conscience, equity and objectivity will be opposed to public policy.

(b) Any rule, contract or arrangement that actually defeats or tends to defeat the high ideals of fairness and objectivity in the discharge of public functions no matter by a private nongovernmental body will be opposed to public policy.

(c) Applied to the case at hand Rule 6.2.4 to the extent, it permits, protects and even perpetuates situations where the Administrators can have commercial interests in breach or conflict with the duty they owe to the BCCI or to the people at large must be held to be against public policy, hence, illegal. That is particularly so when BCCI has in the Anti-Corruption Code adopted by it recognised public confidence in the authenticity and integrity of the sporting contest as a fundamental imperative. It has accepted and, in our opinion rightly so, that all cricket matches must be contested on a level playing field with the outcome to be determined solely by the respective merits of the competing teams. The Anti-Corruption Code of the BCCI does not mince words in accepting the stark reality that if the confidence of the public in the purity of the game is undermined then the very essence of the game of cricket shall be shaken. The BCCI has in no uncertain terms declared its resolve to protect the fundamental imperatives constituting the essence of the game of cricket and its determination to take every step in its power to prevent corrupt betting practices undermining the integrity of the sport including any effort to influence the outcome of any match. However, the amendment to Rule 6.2.4 clearly negates the declarations and resolves of the BCCI by permitting situations in which conflict of interest would grossly erode the confidence of the people in the authenticity, purity and integrity of the game. An amendment which strikes at the very essence of the game as stated in the Anti-Corruption Code cannot obviously co-exist with the fundamental imperatives.

6. Argument of Conflict of Interest raised by Sr. Adv. Kapil Sibal for Impugned Amendment

(a) BCCI is an important institution that discharging public functions. Demands of institutional integrity are, therefore, heavy and need to be met suitably in larger public interest.

(b)The expression ‘Administrator’ appearing in Rule 6.2.4 has been defined to mean and include present and past Presidents, Honorary Secretaries, Honorary Treasures, Honorary Joint Secretaries of the BCCI. Presidents and Secretaries present or past of members affiliated to BCCI are also treated as administrator along with the representative of a member or an associate member or affiliate member of the Board. That apart, any person connected with any of the committees appointed by the Board are also treated as administrator; none of whom could have any commercial interest in any BCCI event but for the impugned amendment to Rule 6.2.4. What is important, however, is that the challenge in the present proceedings arises in the context of Mr Srinivasan, President of BCCI having a commercial interest in the IPL by reason of the company promoted by him owning Chennai Super Kings. It is common ground that the owner of a team buys the franchise in an open auction. India Cements Ltd. owner of CSK has also bought the Chennai franchise in an open auction held by BCCI. This sale and purchase of the franchises is a purely commercial/business venture for India Cements Ltd. involving an investment of hundreds of crores. The franchise can grow as a ‘brand’ and in terms of franchise agreement executed between them.

It is common ground that the owner of a team buys the franchise in an open auction. India Cements Ltd. owner of CSK has also bought the Chennai franchise in an open auction held by the BCCI. This sale and purchase of the franchises is a purely commercial/business venture for India Cements Ltd. involving an investment of hundreds of crores. The franchise can grow as a ‘brand’ and in terms of franchise agreement executed between franchises and the BCCI be sold for a price subject to the conditions stipulated in the agreement. There is, therefore, no manner of doubt that the investment made by India Cements Ltd. is a business investment no matter in a sporting activity. To the extent, the business investment has come from India Cements Ltd. promoted by Mr Srinivisan and his family, India Cements and everyone connected with it as shareholders acquire a business/commercial interest in the IPL events organised by BCCI. The association of India Cements Ltd. and Mr Srinivasan with IPL is being faulted on account of this commercial interest which India Cements Ltd. has acquired for itself. Whether or not players engaged as mentors, coaches, managers or commentators in connection with the events for remuneration payable to them will also be ineligible for any such assignment does not directly fall for our consideration in these proceedings. That apart, it may well be argued that there is a difference between commercial interest referred to in Rule 6.2.4 and ‘professional engagement’ of a player on account of his proficiency in the game. It may be logically contended that the engagement of a player even though made on a remuneration remains a professional engagement because of his professional skill in the game of cricket and not because he has made any investment in India Cements Ltd.

It has done in acquiring a franchise or in any other form. Be that as it may, we do not consider it necessary or even proper to authoritatively pronounce upon the question whether such engagement of players, as are mentioned above, would fall foul of the prohibition contained in Rule 6.2.4 as it stood before the amendment. The issue may be examined as and when the same arises directly for consideration.

(c) All that we need to say at this stage is that whether or not a player who is an ‘administrator’ by reason of an existing or earlier assignment held by him can acquire or hold a commercial interest in any BCCI event, will depend upon the nature of the interest that such person has acquired and whether the same is purely professional or has any commercial element to it. 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 for the reasons we have set out in the foregoing paras.

Conclusions

  • Gurunath Meiyappan and Raj Kundra were held guilty of betting, so misconduct against these two individuals was actionable as per relevant rules. The quantum of punishment to be decided by the new Committee mentioned below.
  • The Court held that the action against the franchise can be taken as well.
  • The Probe Committee has recorded a specific finding that the allegations of Match fixing, spot fixing or betting were not proved against Mr Srinivasan in the course of the enquiry.
  • The Hon’ble Court on the issue of quantum of punishment held that BCCI or the court could either do the same. However, the power to punish for misconduct vest with BCCI and it would be inappropriate to clutch that power.
  • The New Committee to decide the quantum of punishment instead of the Mudgal Committee, to whom matter can also be sent for the purpose, would examine the role played by Sunder Raman.
  • The constitution of the New Committee or its deliberations shall not affect the ensuing elections which the BCCI shall hold within six weeks from the date of this order in accordance with the prevalent rules and regulations subject to the condition 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.
  • It is the amendment of Regulation 6.2.4 “excluding events like IPL or Champions League Twenty 20.” was declared void and ineffective.
  • The mandate of the New Committee formed to which Shri B.B. Mishra (Investigating Team) shall for that purpose be available to the newly constituted Committee to carry out all such investigations as may be considered necessary, with all such powers as were vested in it in terms of our order dated 16th May 2014.

(i) Amendments considered necessary to the memorandum of association of the BCCI and the prevalent rules and regulations for streamlining the conduct of elections to different posts/officers in the BCCI including conditions of eligibility and disqualifications, if any, for candidates wanting to contest the election for such posts including the office of the president of the BCCI.

(ii) Amendments to the memorandum of association, and rules and regulation considered necessary to provide a mechanism for resolving conflict of interest should such a conflict arise despite Rule 6.2.4 prohibiting creation or holding of any commercial interest by the administrators, with particular reference to persons, who by virtue of their proficiency in the game of Cricket, were to necessarily play some role as Coaches, Managers, Commentators etc.

(iii) An amendment, if any, to the Memorandum of Association and the Rules and Regulations of BCCI to carry out the recommendations of the Probe Committee headed by Justice Mudgal, subject to such recommendations being found acceptable by the newly appointed Committee.

(iv) Any other recommendation with or without suitable amendment of the relevant Rules and Regulations, which the Committee may consider necessary to make with a view to preventing sporting frauds, conflict of interests, streamlining the working of BCCI to make it more responsive to the expectations of the public at large and to bring transparency in practices and procedures followed by BCCI.

(v)  The three-member Committee shall also 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.

(vi)The three-member Committee is also requested to examine and make suitable recommendations to the BCCI for such reforms in its practices and procedures and such amendments in the Memorandum of Association, Rules and Regulations as may be considered necessary and proper on matters set out by us in Para number 109 of this order.


References

[1] Mandamus is a Latin word, which means “We Command”. Mandamus is an order from the Supreme Court or High Court to a lower court or tribunal or public authority to perform a public or statutory duty. This writ of command is issued by the Supreme Court or High court when any government, court, corporation or any public authority has to do a public duty but fails to do so.

[2] 12. Definition In this part, unless the context otherwise requires, the State includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.

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