The Bombay High Court recently dismissed a plea filed by former Indian Premier League (IPL) commissioner Lalit Modi, deeming it “wholly misconceived.” The case revolved around allegations of FEMA violations concerning a ₹243 crore transfer of funds during IPL 2009. The court imposed a ₹1 lakh cost on Modi, payable to Tata Memorial Hospital, emphasizing the need to deter baseless litigation.
What Were the Allegations?
In May 2018, the ED accused Modi and others of violating the Foreign Exchange Management Act (FEMA) while transferring ₹243 crore for hosting IPL’s 2009 edition in South Africa. Penalties included ₹121.56 crore, with ₹10.65 crore attributed directly to Modi. The remaining liabilities were distributed among the BCCI and former president N Srinivasan.
Lalit Modi: Once the face of the IPL, Lalit Modi’s name has become synonymous with controversies. His role in facilitating the ₹243 crore fund transfer under scrutiny has brought him into conflict with legal authorities.
BCCI: The governing body of Indian cricket played a central role in the plea, as Modi sought indemnification under its by-laws.
Enforcement Directorate (ED): Tasked with investigating the fund transfer, the ED imposed penalties on multiple parties, including Modi and the BCCI.
What Was Modi’s Plea About?
Modi’s legal team filed a petition seeking ex-parte directions for the BCCI to pay the ₹10.65 crore penalty on his behalf. The argument was based on indemnification clauses allegedly outlined in the BCCI’s by-laws.
A bench of Justices Mahesh S Sonak and Jitendra S Jain dismissed the petition, describing it as “frivolous.” They noted that the plea lacked substantive legal grounds and failed to establish why the BCCI was liable to cover Modi’s penalties.
Why the Plea Was Deemed Misconceived
The court cited the Supreme Court’s Zee Telefilms judgment (2005), clarifying that BCCI is not a ‘state’ under Article 12 of the Constitution. Consequently, writ jurisdiction under Article 226 could not compel the BCCI in this context. Furthermore, the court emphasized that indemnification for penalties imposed by the ED was beyond the purview of BCCI’s obligations.
“Though the above decision was delivered in 2005, this petition was instituted in 2018, pleading that the Supreme Court and this Court have consistently held that the BCCI is amenable to writ jurisdiction under Article 226 of the Constitution of India. In matters of alleged indemnification of the petitioner in the context of penalties imposed upon the petitioner by the ED, there is no question of discharge of any public function, and therefore, for this purpose, no writ could be issued to the BCCI,” the high court observed while dismissing the present plea.
The High Court imposed a ₹1 lakh cost on Lalit Modi, directing that the amount be donated to Tata Memorial Hospital. This decision aimed to discourage misuse of the judicial system through baseless petitions.
“In any event, the reliefs are wholly misconceived. This petition is frivolous, and accordingly, we dismiss this petition,” the court said and directed Modi to pay a sum of Rs 1 lakh to Tata Memorial Hospital within four weeks.
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