The Supreme Court
has recently decided the case pertaining to the former BCCI Chairman, who is also
the owner of one of the teams in the Indian Premier League (IPL). The case also
pertained to the allegations of betting and spot fixing against one Guruappa (being
de facto the controller of the team
Chennai Super Kings) and Raj Kundra (being the owner of the team of Rajasthan
Royals).
While the judgment
pertaining to match fixing and betting is purely factual and based on the
findings of a 3- member Committee formed to investigate into the allegations, the
part where the Supreme Court dwells into the jurisdiction over BCCI on the
pretext of performing a public function and secondly
the part where it deals with the Conflict of Interest contention against
Srinivasan and strikes down an amendment into the IPL Regulations that had
allowed for commercial interests in events of IPL, Champions League to even those
who were members of the BCCI, constitute important legal positions in the area
of Constitutional and Administrative Law.
The present post
deals with the first issue, i.e. Issue 1- Exercising Jurisdiction over BCCI
The Court refused to dwell
into the discussion as to whether BCCI is an instrumentality of state as per Article
12 and consequently could be made amenable to Writ Jurisdiction of the Supreme
Court under Article 32, in lieu of the settled position of law in the case of Zee Telefilms Ltd. and Anr. v. Union of
India and Ors.[1]
The Court reiterated the conclusion (reached in the same case by a larger bench)
that since BCCI performs a public function (despite not receiving any
financial, …assistance from the government), therefore it is amenable to Writ
Jurisdiction of the High Court under Article 226.
This approach of holding
BCCI to be amenable to the Article 226 jurisdiction can be termed as ‘functional approach’, where the function
of the BCCI is similar to that of a State. Interestingly, this approach was
rejected by the Supreme Court in the Zee
Telefilms case in exchange for approving the Legal Approach (i.e. ‘other authorities’ in Article 12 are those
which are made by Statutes)
Parts of the Judgment Muddling
the already Fuzzy Jurisprudence on Article 12
Before proceeding
with the issue it must be commended that the Court had taken care of dividing the
judgment in 7 parts and clearly demarcated every issue to be decided. (and yes,
this rarely happens in our judgments)
There have been various tests
laid down for determining “other authorities” for the purposes of Article 12. Broadly:
§ The functional
test (whether the function performed by the corporation is a public
function), or
§
the control test/ legal approach (whether
there is deep pervasive control of the Government as in financially, administratively
or functionally, and whether the Board was created by a Statute or autonomous approved
in Pradeep Kumar Biswas v. Indian
Institute of Chemical Biology and Ors.[2] and Zee
Telefilms cases).
The Court, in the present
case, quoted from the cases of Sukhdev v.
Bhagatram Sardar Singh Raghuvanshi[3]
and RD Shetty v. IAAI and Ors.[4]
those parts of the precedents which highlight the functional approach taken
towards determining whether a Corporation can be termed as ‘State’ or not. For
illustrations, it cited paras from the Sukhdev
and RD Shetty cases stating:
“23.
Borrowing support from the above decision and several others this Court in
Sukhdev’s case (supra) held:
“97.
Another factor which might be considered is whether the operation is an
important public function. The combination of State aid and the furnishing
of an important public service may result in a conclusion that the operation
should be classified as a State agency. If a given function is of such
public importance and so closely related to governmental functions as to be
classified as a governmental agency, then even the presence or absence of State
financial aid might be irrelevant in making a finding of State action…”…
24. In
Ramana Dayaram Shetty v. International Airport Authority of India and Ors…this
Court referred to American decisions…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. This Court said:
“16. There
is also another factor which may be regarded as having a bearing on this issue
and it is whether the operation of the corporation is an important public
function. It has been held in the United States in a number of cases that
the concept of private action must yield to a concept of State action where
public functions are being performed.”” [Emphasis Added]
Then, the Court referred to
the judgment in the case Board of Control
for Cricket in India & Anr. v. Netaji Cricket Club and Ors.,[5]
where the Court had held that the Boards control over the sport of cricket was
deep and pervasive and that it exercised enormous public functions.
It is also apposite to refer
to the reasoning of the Court in holding that there is a pervasive control of the
BCCI over Competitive cricket in India.
Rejection of the Functional Approach in Zee Telefilms case
This reasoning of Netaji case was found by a Constitution Bench in the case of Zee
Telefilms Ltd. to be insufficient for fulfilling Article 12 threshold since the State/ Union has not chosen the Board
to perform these duties or functions. The absence of any authorization was
the pivotal in holding that BCCI is not a State. In other words, functional aspect has to be coupled with authorization from
the State to a Corporation to undertake such public activities, otherwise
merely performance of public functions is not enough.
Present
Case impliedly Contravening Zee Telefilms’ Reasoning.
Now contrast this
reasoning with what the Court in the present case had stated, while holding
that BCCI is amenable to Article 226 jurisdiction.
“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 aspect 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…It sells broadcast and telecast
rights and collects admission fee…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.” [Emphasis Added]
Further
the Court observed:
“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…Government of
India have allowed the Board to select the national team which is
then recognized by all concerned and applauded by the entire nation including
at times by the highest of the dignitaries...” [Emphasis Added]
The employing of
phrases ‘tacit concurrence’ and ‘allowed the Board to select the national team’
clearly indicate that (a) the functional approach is important and (b) there is State/Union's tacit/ implied approval of BCCI's actions and thus the twin requirements of an authorization by the State/Union along with the performance
of public functions (as held in the Zee
Telefilms case), is being clearly (and I think, inadvertently) addressed by the Court in the present case. While an
argument can be made that there is no express authorization, the presence of aspects
of ‘state choosing to not bring the BCCI’s activities within a legal enactment’
and ‘BCCI’s power of selecting players to represent the Indian Nation at an
International level’, clearly indicate implied authorization by the State/Union.
Conclusion
While the Court
in the present case has categorically stated that it would not address the
issue of BCCI’s amenability to Writ Jurisdiction u/Article 32 on the basis of
Article 12, nevertheless, the reasoning employed to justify interference of
High Court under Article 226 certainly hits the reasoning of Zee Telefilms
case.
No doubt, the Zee Telefilms case has duly noted that there
is no de jure authorization by the
State/Union. But the Court’s rejection of the aspect of de facto authorization of the State/Union appears to be somewhat confusing
when it states:
“The Union of India has tried to make out a
case that the Board discharges these functions because of the de facto recognition
granted by it to the Board under the guidelines framed by it, but the Board
has denied the same. In this regard we must hold that the Union of India
has failed to prove that there is any recognition by the Union of India under
the guidelines framed by it and that the Board is discharging these
functions on its own as an autonomous body.”
Clearly defacto recognition cannot be proven by production
of any guidelines or rules/ regulations, since the very nature of such
recognition is that such cases can be proven only by factual understanding,
i.e., proving the existence of tacit or implied understanding. The observations
in the present case that “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” and ‘allowing the Board to select the national
team’ do indicate the
presence of State’s approval of the actions of the BCCI and there being a defacto recognition of BCCI representing
India.
Whatever may be
the long term implications of such statements, but clearly these observations do
make a lot of sense in recognizing BCCI’s role as performing public functions
and Article 12 understanding.
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