The Supreme Court has come down heavily on the way the Board of Control for Cricket in India (B CCI) functions. It has especially been critical of the amendment to clause 6.2.4 in the BCCI constitution with the sole intention of allowing N Srinivasan to remain the owner of an IPL franchisee while being an official of the body. It has cited “conflict of interest” which it said went against principles of natural justice.It has refused to take cognisance of the many subterfuges Srinivasan&’s lawyers tried by saying that he or his family did not fully control India Cements Limited (ICL), the company that owns Chennai Super Kings.

This article will be limited to examining what the SC had to say about the BCCI,its constitution and the manner in which its officials tried to treat it as a personal fiefdom without regard to the public good. It will not go into the other aspects of the judgment, which involved betting by owners of IPL franchisees and the alleged involvement of BCCI officials.

At the outset, the Court opined that “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 enthusiast 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.”

Two questions

Under what is being examined in this article, the Court put two questions before itself:

(1) Whether the respondentBoard of Cricket Control of India is ‘State’within the meaning of Article 12 and if it is not, whether it is amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution of India?

(2) Whether Regulation 6.2.4 to the extent it permits administrators to have commercial interest in the IPL, Champions League and Twenty-20 events is legally bad?

In answering the first question, the Court adopted a two pronged strategy. It first went on to cite several cases to establish that the BCCI was not a ‘State’ within the meaning of Article 12 of the Constitution of India.But the Court was categorical in saying that “Article 12 of the Constitution of India gives an inclusive definition to the expression ‘State’, and says that for purposes of Part III of the Constitution the expression ‘State’includes the Parliament of India, the Government and the Legislature of each of the States and Local or other authorities within the territory of India or under the control of the Government of India. A long line of decisions of this Court have examined and interpreted the expression appearing in Article 12 with a view to determining whether or not a given entity is ‘State’ within the meaning of Article 12. It is unnecessary to refer to all such decisions pronounced over the past few decades not only because the law is by now fairly well settled by Constitution Bench decisions of this Court but also because the question whether or not BCCI is ‘State’ within the meaning of Article 12 may not make any material difference to the case at hand in view of the admitted position that respondent-BCCI does discharge several important public functions which make it amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution of India.”

The Court cited Sukhdev & Ors etc. vs Bhagatram Sardar Singh Raghuvanshi & Anr. Etc. (1975) where Mathew J referred to Marsh v. Alabama to hold that even where a corporation is privately performing a public function it is bound by the constitutional standard applicable to all State actions.

The Court then cited Ramana Dayaram Shetty v International Airport Authority of India & Ors. to establish that although an entity might be created by a statute or incorporated or registered under Companies Act, 1956 or Societies Registration Act, 1860, the question often arises of when it becomes an “instrumentality or agency” of the government. It said that in the above case, the Court had cited Evans v. Newton and New York v. United States to declare that if the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of the State.

The Court then said that in BCCI & Anr. v. Netaji Cricket Club & Ors, the role and nature of functions discharged by the BCCI were considered by the SC. It was then held “that the Board&’s control over the sport of cricket was deep and pervasive and that it exercised enormous public functions, which made it obligatory for the Board to follow the doctrine of ‘fairness and good faith’.”

Further, the Court said that the same question of whether the BCCI was a ‘state’ came directly before it in the case Zee Telefilms Ltd. and Anr v.Union of India and Ors.Then the Court had, by a majority of 3:2, had ruled that the BCCI was not a ‘state’ within the meaning of Article 12. In doing so, it observed that the BCCI was not created by a statute and was not a part of the share capital held by the government. It did not receive any financial assistance from the government. Although it enjoyed monopoly in regulating the game of cricket, this was not conferred by the state and was not even protected by it. The Court relied on the tests prescribed in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology to arrive at the conclusion that since the BCCI was not “financially, functionally or administratively dominated by or under the control of the government” it could not be held to be a ‘state’ within the meaning of Article 12.

Court&’s view

The Court then went on to answer the question it had put before itself. It needs quoting in full to give an understanding of how and why the Court declined to hold BCCI to be a ‘state’while at the same time brought it under the ambit of writ jurisdiction of Article 226 of the Constitution of India. The Court said:“The majority view thus favours the view that BCCI is amenable to the writ jurisdiction of the High Court under Article 226 even when it is not ‘State’ within the meaning of Article 12. The rationale underlying that view if we may say with utmost respect lies in the “nature of duties and functions” which the BCCI performs. It is common ground that the respondent-Board has a complete sway over the game of cricket in this country. It regulates and controls the game to the exclusion of all others. It formulates rules, regulations norms and standards covering all aspects of the game. It enjoys the power of choosing the members of the national team and the umpires. It exercises the power of disqualifying players which may at times put an end to the sporting career of a person. It spends crores of rupees on building and maintaining infrastructure like stadia, running of cricket academies and supporting State Associations.It frames pension schemes and incurs expenditure on coaches, trainers etc. It sells broadcast and telecast rights and collects admission fee to venues where the matches are played.

All these activities are undertaken with the tacit concurrence of the State Government and the Government of India who are not only fully aware but supportive of the activities of the Board. The State has not chosen to bring any law or taken any other step that would either deprive or dilute the Board&’s monopoly in the field of cricket. On the contrary, the Government of India have allowed the Board to select the national team which is then recognised by all concerned and applauded by the entire nation including at times by the highest of the dignitaries when they win tournaments and bring laurels home. Those distinguishing themselves in the international arena are conferred highest civilian awards like the Bharat Ratna, Padma Vibhushan, Padma Bhushan and Padma Shri apart from sporting awards instituted by the Government. Such is the passion for this game in this country that cricketers are seen as icons by youngsters,middle aged and the old alike.

Any organisation or entity that has such pervasive control over the game and its affairs and such powers as can make dreams end up in smoke or come true cannot be said to be undertaking any private activity. The functions of the Board are clearly public functions, which, till such time the State intervenes to take over the same, remain in the nature of public functions, no matter discharged by a society registered under the Registration of Societies Act. Suffice it to say that if the Government not only allows an autonomous/private body to discharge functions which it could in law take over or regulate but even lends its assistance to such a nongovernment body to undertake such functions which by their very nature are public functions, it cannot be said that the functions are not public functions or that the entity discharging the same is not answerable on the standards generally applicable to judicial review of State action. Our answer to question No. 1, therefore, is in the negative,qua,the first part and affirmative qua the second. 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.”

The second question before the Court was tricky as the amendment to rule no 6.2.4 had been challenged before the Bombay High Court previously for three principal reasons:- 1.It was said to be done with mala fide intentions for regularising the ownership of Chennai Super Kings by N Srinivasan who was then the BCCI treasurer. 2. It was said to have been brought hurriedly without the recommendation of any committee or without it being on the agenda of the meeting in which it was amended.

3.It was said to be opposed to public policy and good conscience. Although the Bombay High Court had repelled the challenge and upheld the amendment in the Civil Appeal arising out of SLP (Civil) No 34228 of 2014, the apex Court said that since it had held that the BCCI was amenable to writ jurisdiction under Article 226 as it discharges ‘public functions’ all actions of the BCCI in discharge of such public functions were open to scrutiny by C ourts in exercise of their powers under the Article. The Court held that, “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.”

The rule 6.2.4 before amendment read as “no Administrators shall have,directly or indirectly,any commercial interest in the matches or events conducted by the Board.” On amendment, the following was added at the end “excluding events like IPL or Champions League Twenty20.” The Court said that in judging the validity of the rule, it would see “(i) whether the amendment is made by the authority competent to do so; (ii) whether the authority competent to bring about an amendment has followed the procedure prescribed for the same; and (iii) whether the amendment falls foul of any statute or principle of law, violation whereof cannot be countenanced.”

The Court was of the opinion that the rule was amended by the competent authority.That it was brought in hurriedly without going through the paces in a designated committee was also not a big enough deficiency in the Court&’s opinion. The Court also did not find any merit in the contention that it was not on the agenda of the meeting. It said that “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. We have, therefore, no hesitation in rejecting the contention that the amendment is bad because the same came up all too suddenl y 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.”

Third reason

That left the Court with only the third reason to examine it under. The Court was of the opinion that the rule was not challenged as it was in breach of the Tamil Nadu Registration of Societies Act or any other statute governing such societies.But as the rule permitted commercial interests to be held by administrators, it violates “a fundamental tenet of law that no one can be a judge in his own cause,” which the Court said was a “essential facet of the principles of natural justice which must permeate every action that BCCI takes in the discharge of its public functions.” The Court cited the case AK Kraipak and Ors. v. Union of India & Ors. where a Constitutional bench had upheld that Principles of Natural Justice also applied to purely administrative actions as distinguished from those described as quasi judicial in nature.

The Court then cited the case Union of India and Ors. v. Tulsiram Patel etc. where it was held that Principles of Natural Justice were an integral part of the constitutional guarantee contained in Article 14 of the Constitution. The Court said the same was reiterated in Central Inland Water Transport Corporation Limited and Anr. v. Brojo Nath Ganguly and Anr. etc. Having established this, the Court wanted to examine whether the rule violated the principles of natural justice.

The appellant contended that contrary to principles of natural justice,the amendment authorised the creation and continuation of a conflict of interest situation. It was further contended that the amendment would bring about a serious conflict of interest between the duties of the administrators and their commercial interest. The respondents argued that conflict of interest is a reality of life and exists in any number of situations which are sometimes unavoidable. It was also contended that unless the conflict of interest was so palpable that there was no room for resolution, the rule could not be struck down just because such conflict may arise in future.

The Court judiciously said that while it recognised that conflict of interest may arise in any number of situations, no rule can by “a positive and enabling provision permit acts and transactions which would by their very nature bring about a conflict of interest.” It went on to distinguish between a conflict of interest situation arising without any rule specifying so and a rule which creates such a situation per se. It said that “Rule 6.2.4 after amendment, permits creation of commercial interest in the events organised by BCCI by its Administrators. This enabling provision disregards the potential conflict of interest which will arise between an administrator&’s duty as a functionary of the BCCI on the one hand and his interest as the holder of any such commercial interest on the other.”

The Court said that the respondents had argued that the commercial interest by India Cements Ltd (ICL) in the IPL did not fall foul of the “touchstone of fairness, reasonableness and probity in the discharge of public functions by the BCCI.” But the Court rejected the contention as specious due to the three real life situations that had arisen after the amendment and the commercial interest of ICL and N Srinivasan in the IPL and Champions Trophy T20.

The first situation was when Rs 10.40 crore was awarded as compensation to ICL on cancellation of the finals of the Champions Trophy in 2008, a decision which was made with N Srinivasan as party to it. The fact that others also participated in the decision or that a similar amount was paid to Rajasthan Royals, the other finalist did not, in the opinion of the Court, “cure the legal flaw that the benefactor was also the beneficiary of the decision.”

The Court cited Kraipak (supra) to say that in that case even though the beneficiary had recused himself when his own case was taken up for consideration,the Court had then held that it did not make any material difference as bias in such cases operated in a subtle manner. The second situation was when a similar award was made in 2009, this time amounting to 13.10 crore, to ICL. That this award was subsequently returned under public criticism makes no difference to the fact that it created a conflict of interest between N Srinivasan&’s duty as an administrator and his commercial interests as team owner.The Court was also of the opinion that the third conflict of interest came when betting charges were levelled against Gurunath Meiyappan, who happens to be the son-in-law of Srinivasan.

The Court then examined the rule under provisions of public policy. It cited ONGC Ltd. v. Saw Pipes Ltd. (2003) where the Court had held that what went against public good and public interest cannot be held to be consistent with public policy. It said “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.It follows that 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. 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.”

Finally, the Court found the rule 6.2.4 bad in law and struck it down accordingly.It also set aside the judgment order of the Bombay High Court in IPL no. 107 of 2013.

Closed club

The BCCI has for long operated as a privileged and closed club. By involving leaders from most political parties, it has ensured that it did not fall foul of the administration. A closed set of people have been taking decisions which smack of arbitrariness without actually breaching any law. It has resisted attempts to bring it under the Right to Information Act. Despite collecting huge revenue, it has never been answerable to anyone expect itself. Its clout has increased all over the world only because of the frenzied support cricket enjoys in India. This public support gives the financial muscle to the BCCI with which it seeks to crush all opposition, in India and abroad.

The Supreme Court has done a singular service to the game of cricket by making BCCI amenable to writ jurisdiction under Article 226 and by striking down the patently unfair and ill-conceived amendment to Rule 6.2.4. It has also done well to appoint a committee under exChief Justice of India, RM Lodha, to examine and make suitable recommendations to the BCCI regarding the amendments to be made in its Memorandum of Association and Rules and Regulations. It is hoped that the Lodha Committee will take this opportunity to clean up the game of cricket and prevent BCCI mandarins from becoming czars.

The writer is a freelance contributor.