IPL: Debt-ridden Deccan Chargers termination stands

Last Updated: Saturday, October 13, 2012 - 16:49

Mumbai: After a month long legal battle, the cash-strapped Deccan Chargers on Saturday lost its status as an IPL team after the Bombay High Court stayed the order of Arbitrator for maintaining status quo on the matter till further hearing.

The beleaguered owners of Deccan Chargers had on Friday failed to produce a Rs 100-crore bank guarantee before the Bombay High Court, a condition that had been set for the struggling team`s survival in the league. They later approached the Court-appointed Arbitrator who had passed the order of status quo.

"BCCI moved an appeal against the Order of Arbitrator and the same was heard today morning. The Hon’ble High Court was pleased to stay the Order of Arbitrator after hearing both the parties", the BCCI said in a statement.

"Thus, the termination of Deccan Chargers franchise stands", the BCCI said, ending the uncertainty on the fate of the team which has run into huge financial problems.

Deccan Chronicle Holdings Limited`s failure to furnish the guarantee money before the 5pm deadline yesterday effectively meant that the BCCI`s termination of the team stood and the Board was free to float the tender for a new franchise. But the Arbitrator`s order prevented BCCI from going ahead with its termination process.

"The termination of Deccan Chargers franchise was challenged in the Hon?ble Bombay High Court by the DCHL pending the arbitration. A Conditional Order of stay was granted by the Hon?ble High Court pending arbitration on 1st October 2012".

"The condition to give BCCI a Bank Guarantee of a Nationalized Bank for ` 100 Crores by 5.00 p.m. On 12.10.2012 to cover expenses of IPL 6, was breached by DCHL", the BCCI statement said.

DCHL, the owner of the franchise, had yesterday sought an extension to the deadline until October 15 to submit an "irrevocable and unconditional" bank guarantee but the High Court refused to grant further time.

Justice S J Kathawala had declined to give them more time, saying the earlier deadline of October 9 had been extended by three days to accommodate them.

The court had on October 1 asked DCHL to give the bank guarantee which would be in force for a period of one year.

The BCCI had last month taken the decision to terminate the contract after an emergency IPL Governing Council meeting in Chennai. The DCHL had moved the Bombay High Court challenging the termination.

The court had at an earlier hearing ordered DCHL to bear all expenses for IPL 6 including making payments to BCCI towards franchise, players and support staff. Besides, it was asked to bear the costs of conducting matches and other expenses.

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 had said.

The court had on September 26 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.

DCHL had yesterday informed the Bombay Stock Exchange about its decision to sell the IPL franchise to a Mumbai-based real estate firm Kamla Landmarc Real Estate Holdings Ltd for an undisclosed sum. The fate of the deal remained uncertain now.

Deccan Chargers was hoping to resolve its financial problems by selling the team but it rejected the sole bid it received at the auction in Chennai on September 13.

PVP Ventures Limited, the Hyderabad-based urban infrastructure and film production company, had offered Rs 900 crores but Deccan rejected it finding the terms of payment and the amount unacceptable. DCHL purchased the Hyderabad franchise for Rs 428 crore in 2008.

PTI



First Published: Saturday, October 13, 2012 - 17:22

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