HC tells DCHL to furnish bank guarantee of Rs 100 cr to BCCI
Mumbai: The Bombay High Court today asked Deccan Chronicles Holdings Ltd to give an irrevocable and unconditional bank guarantee of Rs 100 crore to the BCCI on or before October 9 while observing that the Cricket Board has acted in haste to terminate IPL franchise Deccan Chargers.
The bank guarantee would be in force for a period of one year, said Justice S J Kathawala who heard a petition filed by DCHL challenging the BCCI`s decision to terminate the contract of the cash-strapped Hyderabad franchise.
The Board of Control for Cricket in India had taken the decision last month at its emergency IPL Governing Council meeting in Chennai.
The court further observed that DCHL shall bear all expenses for IPL series-6 like making payments to BCCI towards franchise, players and support team costs. Besides, DCHL shall also bear the costs of conducting matches and other expenses, the judge ruled.
In the event of any default on part of DCHL, BCCI shall be entitled to invoke the bank guarantee to the extent necessary, Justice Kathawala said.
The court, on September 26, had appointed retired Supreme Court judge C K Thakkar as arbitrator to resolve within three months the dispute between BCCI and DCHL over the termination of Deccan Chargers franchise.
However, pending arbitration proceedings and making up of an award by the arbitrator, the judge today asked the BCCI not to act on the termination of the franchise agreement for a period of seven days, if the award is in their favour.
The judge clarified that this order would immediately cease to be in effect if DCHL fails to furnish the bank guarantee.
The court ruled that DCHL shall pay the undisputed outstanding dues of hotels, transportation etc as regards IPL-5 on or before October 31. "However, this order shall not preclude BCCI from adding one more franchise for IPL series-6 or thereafter".
"I am of the view that BCCI has at all stages acted in some haste in terminating the franchise agreement with DCHL," the judge remarked.
"Though BCCI had, after issuing termination notice, granted time to DCHL to clear the defects by the next day, it would have been prudent on the part of BCCI to take a decision on confirmation of termination after considering all letters received from DCHL and their bankers on September 15," Justice Kathawala observed.
He, however, said, "I do not attribute any motive to BCCI for the hasty termination".
"I am proceeding on the basis that the haste on the part of BCCI is due to fear and anxiety that failure on the part of DCHL to fulfil their contractual commitment may tarnish their (Cricket Board`s) image in international cricketing circles," the judge noted.
"However, such hasty termination, if later adjudication by the arbitrator is found to be incorrect, it will cause grave loss and prejudice to DCHL. It will result in complete destruction of DCHL which cannot be compensated in terms of money," Justice Kathawala observed.
"At the same time, the court, while granting protective relief to DCHL, will also have to keep in mind the interests of BCCI".
DCHL Counsel Zal Andyarajuna had argued that Deccan Chargers had achieved substantial compliance regarding its debt obligations. Since DCHL and BCCI could not agree on names of arbitrators, he left it to the court to decide who should mediate in the dispute.
The court had appointed retired Supreme Court judge C K Thakkar as the arbitrator to settle the dispute. It had earlier ordered status quo to be maintained regarding the termination of the franchise by BCCI.
The Cricket Board had filed an affidavit listing a series of alleged breaches committed by Deccan Chargers.
Arguing that the players had not been paid, BCCI said around 20 banks had lent money to DCHL with dues to the tune of Rs 4,000 crore pending against the group.