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 secondlythe 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.
Obiter Dictum 