A significant legal development has brought relief to the Board of Control for Cricket in India (BCCI) and several of its former office-bearers regarding a 2009 Foreign Exchange Management Act (FEMA) violation case. The investigation stemmed from the BCCI’s decision to relocate the second season of the Indian Premier League (IPL) from India to South Africa to avoid scheduling conflicts with the country’s general elections.
On July 16, the Appellate Tribunal under SAFEMA delivered a verdict that either quashed or reduced the penalties previously imposed by the Enforcement Directorate. The most substantial relief was granted to Lalit Modi, who served as the IPL chairman and BCCI vice-president at the time. The tribunal described Modi as the "chief architect" of the IPL, explicitly rejecting the Enforcement Directorate's central premise. The judgment noted that the penalty imposed on Modi was "wholly erroneous," stating that he was not in charge of the board's statutory FEMA compliance and was framed without material evidence of responsibility.
Modi welcomed the decision, emphasizing that the tribunal recognized the foreign remittances for the 2009 tournament as current account transactions rather than capital account transactions. He maintained that he had consistently acted in good faith for the benefit of Indian cricket. The tribunal’s decision effectively addresses the penalties from six show-cause notices issued on May 31, 2018, which had previously aggregated to INR 10.65 crore.
The tribunal also addressed penalties involving former BCCI secretary N Srinivasan and treasurer MP Pandove. In one instance, the penalty for Srinivasan was reduced from INR 1 crore to INR 10 lakh, while Pandove’s penalty was lowered from INR 50 lakh to INR 5 lakh. The overall penalty against the BCCI was reduced from INR 4 crore to INR 1 crore. However, the tribunal upheld separate penalties of INR 50 lakh each against Srinivasan and Pandove in a different case, noting they were responsible for the board's business operations at that time. While the transfer of funds was held to be in contravention of the 1999 Act, the officials argued that any lapses were the result of a misunderstanding of regulatory requirements rather than malicious intent.
