# 8 S.C.R. 445 A.C. MUTHIAH v. BOARD OF CONTROL FOR CRICKET IN INDIA AND ANR

- **Citation:** [2011] 8 S.C.R. 445
- **Court:** Supreme Court of India
- **Decided:** 2008-09-27
- **Case number:** Civil Appeal No. 3753 of 2011
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/8-s-c-r-445-a-c-muthiah-v-board-of-control-for-cricket-in-india-and-anr-27844
- **Pages:** 41

## Headnote

(2011] 8 S.C.R. 445
A.C. MUTHIAH
v.
BOARD OF CONTROL FOR CRICKET IN INDIA AND
ANR.
(Civil Appeal No. 3753 of 2011)
APRIL 28, 20·11
[J.M. PANCHAL AND GYAN SUDHA MISRA, JJ.]*
A
B
Memorandum and Rules and Regulations of BCCI,
2008: Clauses 1(n), 6.2.4- Complaints filed by appellant-past
C
president of BCCI before the BCCI President alleging that
second respondent being the office bearer·of BCCI and also
the Chairman and M.D. of India Cements Limited was
disqualified to participate in the auction held for owning Indian
· Premier League (IPL) in which he was declared sucdessful D
bidder and thus came to own Chennai Super King ..;.. No
response to the complaint - Suit filed by appellant - Just a
few days after filing of the said suit, the BCCI on 27.9.2008
introduced an amendment to Clause 6.2.4 carving out an
Exception - After the amendment, the said clause read "No
E
Administrator shall have directly or indirectly any commercial
interest in any of the events of the BCCI excluding IPL,
Champions League and Twenty 20." - The amendment to
Clause 6.2.4 was challenged by the appellant by filing a
second suit wherein the appellant also filed two applications
F
seeking temporary injunction restraining the BCCI from
permitting the second respondent to participate in the General
. Body Meeting and injunction against the amendment
introduced by pleading to put it under suspension - High
Court dismissed the applications on the ground that appellant G
had no locus standi to question the Regulations and the court
•
There being difference of opinion, the matter has been referred to larger
bench and the dissenting opinion of Hon'ble Mrs. Justice Gyan Sudha Misra
is reported herein.
445
H
446
SUPREME COURT REPORTS
[2011] 8 S.C.R.
A also cannot interfere with the internal management of the
society - On appeal, Held: Per Gyan Sudha Misra, J. - Past
President of BCCI is also an Administrator and has locus
standi to file suit challenging amendment to the Memorandum
- Plea that the past President has to be nominated on any of
B the sub-committees of BCCI to be treated as an Administrator
is not tenable - In order to decide whether the plaintiff has a
right to file a civil suit or not, locus standi or competence of
the plaintiff alone is to be established and not the question
whether the BCCI is a State within the meaning of Article 12
c of the Constitution which is a condition to be fulfilled for
invoking the jurisdiction u/Articles 226 and/or 227 of the
Constitution as also Article 32 of the Constitution but surely
not for filing a civil suit or injunction application - Once, it is
held that the plaintiff/appellant was also an Administrator of
0 the BCCI in view of the definition of Administrator, his
competence to challenge the amendment introduced in the
regulation of BCCI cannot be held as not maintainable on the
ground that BCCI is not a 'State' within the meaning of Article
12 of the Constitution - Conflict of interest does not require
actual proof of any actual pecuniary gain or pecuniary loss -
E Second respondent necessarily was privy to highly sensitive
information about the bidding process, the design of the
tender, the rules of the game, the future plans of BCCI in
respect of IPL and, therefore, it was inconceivable that such
insider information to which any major office bearer of BCCI
F would necessarily be privy, would not have used and misused
both potential and actual materials in the capacity of a bidder
- Appellant fully succeeded in making out a prima facie case
that this amendment smacked of arbitrariness and bias in
favour of the second respondent and hence it was a fit case
G for grant of injunction keeping the impugned amendment
under suspension or abeyance - However, since second
respondent has already participated and succeeded in the bid,
and is also owning Chennai Super King, it is left open to him
to exercise his option whether he wishes to continue as an
H office bearer of the BCCI or own IPL Chennai Super King -
A.C. MUTH

## Text

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(2011] 8 S.C.R. 445
A.C. MUTHIAH
v.
BOARD OF CONTROL FOR CRICKET IN INDIA AND
ANR.
(Civil Appeal No. 3753 of 2011)
APRIL 28, 20·11
[J.M. PANCHAL AND GYAN SUDHA MISRA, JJ.]*
A
B
Memorandum and Rules and Regulations of BCCI,
2008: Clauses 1(n), 6.2.4- Complaints filed by appellant-past
C
president of BCCI before the BCCI President alleging that
second respondent being the office bearer·of BCCI and also
the Chairman and M.D. of India Cements Limited was
disqualified to participate in the auction held for owning Indian
· Premier League (IPL) in which he was declared sucdessful D
bidder and thus came to own Chennai Super King ..;.. No
response to the complaint - Suit filed by appellant - Just a
few days after filing of the said suit, the BCCI on 27.9.2008
introduced an amendment to Clause 6.2.4 carving out an
Exception - After the amendment, the said clause read "No
E
Administrator shall have directly or indirectly any commercial
interest in any of the events of the BCCI excluding IPL,
Champions League and Twenty 20." - The amendment to
Clause 6.2.4 was challenged by the appellant by filing a
second suit wherein the appellant also filed two applications
F
seeking temporary injunction restraining the BCCI from
permitting the second respondent to participate in the General
. Body Meeting and injunction against the amendment
introduced by pleading to put it under suspension - High
Court dismissed the applications on the ground that appellant G
had no locus standi to question the Regulations and the court
•
There being difference of opinion, the matter has been referred to larger
bench and the dissenting opinion of Hon'ble Mrs. Justice Gyan Sudha Misra
is reported herein.
445
H
446
SUPREME COURT REPORTS
[2011] 8 S.C.R.
A also cannot interfere with the internal management of the
society - On appeal, Held: Per Gyan Sudha Misra, J. - Past
President of BCCI is also an Administrator and has locus
standi to file suit challenging amendment to the Memorandum
- Plea that the past President has to be nominated on any of
B the sub-committees of BCCI to be treated as an Administrator
is not tenable - In order to decide whether the plaintiff has a
right to file a civil suit or not, locus standi or competence of
the plaintiff alone is to be established and not the question
whether the BCCI is a State within the meaning of Article 12
c of the Constitution which is a condition to be fulfilled for
invoking the jurisdiction u/Articles 226 and/or 227 of the
Constitution as also Article 32 of the Constitution but surely
not for filing a civil suit or injunction application - Once, it is
held that the plaintiff/appellant was also an Administrator of
0 the BCCI in view of the definition of Administrator, his
competence to challenge the amendment introduced in the
regulation of BCCI cannot be held as not maintainable on the
ground that BCCI is not a 'State' within the meaning of Article
12 of the Constitution - Conflict of interest does not require
actual proof of any actual pecuniary gain or pecuniary loss -
E Second respondent necessarily was privy to highly sensitive
information about the bidding process, the design of the
tender, the rules of the game, the future plans of BCCI in
respect of IPL and, therefore, it was inconceivable that such
insider information to which any major office bearer of BCCI
F would necessarily be privy, would not have used and misused
both potential and actual materials in the capacity of a bidder
- Appellant fully succeeded in making out a prima facie case
that this amendment smacked of arbitrariness and bias in
favour of the second respondent and hence it was a fit case
G for grant of injunction keeping the impugned amendment
under suspension or abeyance - However, since second
respondent has already participated and succeeded in the bid,
and is also owning Chennai Super King, it is left open to him
to exercise his option whether he wishes to continue as an
H office bearer of the BCCI or own IPL Chennai Super King -
A.C. MUTHIAH v. BOARD OF CONTROL FOR
447
CRICKET IN INDIA
High Court was not justified in not granting the temporary A
injunction claimed by appellant - Per Panchal, J: High Court
was justified in not granting the temporary injunction claimed
by appellant ..:. In view of difference of opinion, matter
referred to larger bench - Reference to larger bench -
Constitution of India, 1950 - Articles 12, 32, 226, 227.
B
The first respondent, the Board of Control for Cricket
in India (BCCI) is a society registered under the Societies
Registration Act which has its own Memorandum of
Association, Rules and Regulations. The Regulations of
the BCCI incorporated rules for Players, Team Officials,
C
Managers, Umpires and Administrators. In the
Regulation, Clause 6.2.4 stated "No Administrator shall
have directly or indirectly any commercial interest in any
events of the BCCI." The Regulation further stated that
an office bearer of BCCI is an Administrator.
D .
The appellant who was the past President of the
BCCI filed two complaints before the President of the
BCCI in his capacity as past President alleging
disqualification suffered by the second respondent on
E
the ground that he being the office bearer of BCCI and
also the Chairman and M.D. of India Cements Limited
should not have been allowed to participate in the auction
held for owning Indian Premier League (IPL) in which he
was declared a successful bidder and thus owned
F
Chennai Super King. The appellant's complaints did not
receive any response which prompted him to file a suit
before the High Court. The appellant sought to enforce
Clause 6.2.4 against the second respondent. Just after a
few days of filing of the said suit, the BCCI on 27 .9.2008
G
introduced an amendment to Clause 6.2.4 carving out an
Exception. After the amendment, the said clause read
"No Administrator shall have directly or indirectly any
commercial interest in any of the events of the BCCI
excluding IPL, Champions League and Twenty 20." The
H
448
SUPREME COURT REPORTS
;
[2011] 8 S.C.R.
A said amendment was challenged by the appellant by
filing a second suit wherein the appellant also filed two
applications for injunction. In the first application, he
sought a temporary injunction restraining the BCCI from
permitting the second respondent to participate in the
8 General Body Meeting but in the second application, he
sought injunction against the amendment introduced by
pleading to put it under suspension.
The Single Judge of the High Court dismissed the
interim applications on the ground that no outsider can
C question the regulations of the society and the courts
also cannot interfere in the internal management of the
society. The Single Judge, however, did not consider the
main issue and the amendment introduced in Clause
6.2.4. The Division Bench upheld the order of the Single
D Judge.
The question which arose for consideration in the
instant appeal was whether the appellant had locus
standi to file a civil suit challenging the amendment
E · introduced by the BCCI in Clause 6.2.4 of the Regulations
as he is merely the past president of the BCCI and
whether the same can confer any right on him as an
Administrator so as to challenge the amendment
introduced by the BCCI diluting the bar of commercial
F interest of the Administrator in the activities of the BCCI
thus generating 'conflict of interest', and in case the
answers were in the affirmative, then whether the
amendment introduced by the BCCI in Clause 6.2.4 was
fit to be injuncted by keeping the same in abeyance/
suspension as it clearly gave rise to conflict of interest
G between the BCCI and the second respondent since he
indulged in promoting his commercial interest while
functioning as an office bearer/Administrator of the BCCI
who participated and succeeded in the auction for
owning IPL Chennai Super King.
H
A.C. MUTHIAH v. BOARD OF CONTROL FOR
. 449
CRICKET IN INDIA
Referring the matter to larger bench (in view of A
difference of opinion), the Court
Per J.M. Panchal, J: [Judgment made non-reportable]
Per Gyan Sudha Misra, J (Dissenting)
B
HELD: 1.1. Clause 1 (n) of the Memorandum and
Rules & Regulations of BCCI, 2008 defines the term
'Administrator' to mean and inciude present and former
Presidents, Vice Presidents, Hony. Secretaries, Hony.
Treasurers, Hony. Jt. Secretaries of the Board of Control
C
for Cricket in India (BCCI), past and pres~nt Presidents
and Secretaries of Members affiliated to BCCI and any
person nominated in any of the sub committee appointed
by the BCCI as defined in the Memorandum and Rules
and Regulations of the ·eccl. The appellant was D
admittedly a past President of the BCCI and, therefore,
in view of the unambiguous definition of the
'Administrator' which includes past and present
Presidents and Secretaries. and Members affiliated to the
BCCI, it is difficult to accept the positio·n that the appellant
E
had no locus standi to file a civil suit challenging the
amendment introduced by the BCCI. [Para 12) (468-H;
469-A-B)
1.2. The view taken by Justice Panchal that only if a
past President is nominated on any of the subF
committees of the BCCI, he would be deemed to be an
'Administrator' and not otherwise is not approved. This
view is clearly contrary to the express definition of an
'Administrator' given out in the Regulations of the BCCI
2008. Clause 32 of the Regulation, no doubt, deals with
G
misconduct and procedure required to deal wi.th
complaint received from any quarter or based on any
report published or circulated or on its own motion in the
subject matter of indiscipline or misconduct. Clause 32(v)
of the Regulation also deals with a provision regarding
H
450
SUPREME COURT REPORTS
[2011] 8 S.C.R.
A expulsion of any Member, Associate Member,
Administrator, Player, Umpire, Team Official, Referee or
the Selector, as the case may be, and in case any of them
is found guilty and expelled by the BCCI, he shall not in
future be entitled to hold any position or office or be
B admitted in any Committee or any Member or Associate
Member of the Board. Clause 32 thus clearly deals with
the misconduct and procedure to deal with office bearers
including all its constituents of the BCCI and for this
purpose it also lays down as to who will be the competent
c persons as member of the sub committee to deal with
misconduct. But to hold that in spite of the definition of
an 'Administrator' given out in Clause 1 (n) of the
Regulation which specifically includes President and past
President of the BCCI, the same would not include an
0 Administrator unless he is a member of the sub committee
of the disciplinary committee which is constituted for
dealing with the misconduct of any office bearer
including all its constituents as envisaged under Clause
32, would be a far fetched interpretation. The appellant
in the capacity of past president of the BCCI was,
E therefore, an Administrator within the meaning of the said
definition enumerated in Clause 1 (n) of the Regulation
and as such, he was competent to institute a suit in his
individual capacity. Clause 1 (n) of the Regulation cannot
be allowed to result into a provision rendering it nugatory
F by overlooking the express provision of the definition of
Administrator which unambiguously includes past
President, by extracting or attributing interpretation to it
with the aid of Clause 32 of the Regulation, which is not
even remotely connected with the definition and meaning
G of the expression 'past -President' but is a separate and
specific provision to deal with merely the consequence
of misconduct and its procedure to deal with the cases
of alleged misconduct which does not envisage dealing
with cases wherein the legality and efficacy of any
H
A.C. MUTHIAH v. BOARD OF CONTROL FOR
451
CRICKET IN INDIA
amendment to the Regulation of the BCCI is under A
challenge. [Paras 12, 13] [469-A-G; 470-B-E]
1.3. In the instant matter while dealing with the
question of 'locus standi' as to whether the appellant was
legally entitled to institute a suit for challenging the
B
amendment or not, Clause 1(n) of the Regulation which
includes 'past President' within the definition of
'Administrator' is the only relevant provision and to dilute
its effect, reliance cannot be placed on Clause 32 of the
Regulation. When Clause 1 (n) clearly and explicitly
defines the term "Administrator' and declares expressly C
that an 'Administrator' shall mean and include present
and former Presidents, Vice Presidents, Hony.
Secretaries, Hony. Treasurers, Hony. Jt. Secretaries of the
BCCI, and includes even past and present Presidents and
Secretaries of Members affiliated to BCCI i:;o much so that D
even a representative of Member or an Associate Member
of Affiliated Member of the BCCI and any person
connected with any of the sub committee appointed by
the Board defined in the Regulation of the BCCI has been
included within the definition of Administrator, it would
E
be difficult to hold that such Administrator also has to be
a member of a sub committee which is constituted for
dealing with misconduct in order to challenge the
amendment introduced in the Regulation completely
missing that the power to challenge amendment of BCCI
F
is altogether different from dealing with cases of
misconduct against players, umpires or administrator. A
plain and literal interpretation of the Rule clearly indicates
that the past presidents also have been unequivocally
included within the meaning of 'Administrator' and while
G
an Administrator can also be included as a member of
the sub-committee for the Disciplinary Committee, it
cannot be interpreted so as to infer thatformer president
stands excluded from the definition of Administrator until
and unless he is a member of the Sub-Corri~ittee for
H
452
SUPREME COURT REPORTS
[2011] 8 S.C.R.
A disciplinary proceedings. It is difficult to accept that this
would be so in order to give it a purposive Interpretation
as no purpose can possibly be inferred from his, on the
contrary, the purpose is writ large that it amounts to grant
exemption to the second respondent from getting
8 trapped into the bar imposed by Clause 6.2.4 of the
Regulation of the BCCI. It is explicitly clear and not even
remotely ambiguous that the object and purpose of
Clause 32 is merely to lay down the procedure for dealing
with misconduct of any player, umpire, administrator etc.
C and it is not even vaguely connected with the procedure,
object or efficacy of the amendment in the Regulation nor
the mode and manner of introducing amendment in the
Regulation so as to infer that unless an Administrator
whether past or present is member of the disciplinary
committee or sub-committee, he cannot be held
D competent to initiate action against any illegality of the
BCCI introduced by way of amendment into the
Regulation or otherwise, is clearly an argument which is
out of context and has absolutely no relevance to the
question of locus standi of an administrator to challenge
E an amendment introduced in the Regulation. [Paras 1416] [470-E-H; 471-A-F; 472-B-D]
1.4. The instant matter is not even remotely
connected with any disciplinary action to be taken against
F any member, as the specific issue in the suit is whether
the amendment could have been introduced by the BCCI
in Clause 6.2.4 ignoring and overlooking the fact that the
existing office bearer of the BCCI cannot be allowed to
participate in the auction for owning IPL or Twenty 20
G matches as it would clash and conflict with the interest
of the BCCI. It is well-settled principle of interpretation
that when the language in a statute is plain and admits
of one meaning, the task of interpretation can hardly be
said to arise, as in the instant matter, where the definition
H of 'Administrator' has been clearly given out in the
A.C. MUTHIAH v. BOARD OF CONTROL FOR
453
CRICKET IN INDIA
Regulation of the BCCI. But in order to oust the past A
President and his competence to challenge the action of
BCCI from questioning the speedy and hurried
amendment introduced by the BCCI in order to assist the
second respondent from participating in the bidding
process for owning Chennai Super King and then to
B
interpret the definition of 'Administrator' so as to hold that
he was not competent to file a suit, can hardly be held to
be giving effect to a purposive and meaningful
interpretation to the expression 'Administrator' as the
purpose or object to serve some just cause is totally c
missing. The safer and more correct course of dealing
with a question of construction is to take the words
themselves and again if possible at their meaning without
any first instance reference to cases. Literal construction
·Of a provision cannot be allowed to assume a restrictive
0
•construction without considering its effect or
1consequence which would result from it for they often
rpoint out the real meaning of the words. It is no doubt true
that if the application of the words literally would defeat
.;he obvious intention of the legislation and produced a
wholly unreasonable result, some violence may be done
E
~o achieve that obvious intention and produce a rational
-:onstruction. But the question of inconvenience and
-.1nreasonableness must be looked at in the light of
11pecific events. It would also be difficult to overlook the
well settled position that if a particular construction does
not give rise to anomalies and the words used are plain,
.,rguments regarding inconvenience is of little weight. It
F
B also equally well settled rule of construction of statutes
lhat in the first instance the grammatical sense of the
r1ords is to be adhered to and the words of statute must G
•rima facie be given their ordinary meaning. Where the
rammatical construction of a statute is clear and
rianifest, that construction ought to prevail unless there
•e strong and obvious reason to the contrary but when
r;ere is no ambiguity in the words, there is no room for
H
454
SUPREME COURT REPORTS
(2011] 8 S.C.R.
A construction. If the language of a statute is clear and
unambiguous, the court must give effect to it and it has
no right to extend its operation in order to carry out the
real or supposed intention of the Legislature/Law maker.
When the language is not only plain but admits of just
B one meaning, the task of interpretation can hardly be said
to arise; What is not included by the Legislature (law
maker), the same cannot be undone by the court by
principle of purposive interpretation. Taking into
consideration the said salutary principles ·of
c interpretation, the definition of the term 'Administrator'
does not exclude the past president from the meaning of
Administrator so as to hold that the action taken by the
Administrator by filing a civil suit and questioning the
amendment introduced by the BCCI in Clause 6.2.4 was
0 not fit to be entertained on the ground that the appellant
had no locus standi to challenge the amendment on the
ground of his competence or locus standi. [Paras 18-22]
[472-G-H; 473-A-D; F-H; 474-A-B-C-G; 475-A-C]
Dental Council of India and Anr. v. Hari Parkash and Ors . .
E (2001) 8SCC 61: 2001 (2) Suppl. SCR 310 - referred to.
The Attorney General v. The Mutual Tontine West
Minster Chambers Association, Limited (1876) 1 Ex.>O. 469;
Charles Bradlaugh v. Henry Lewis Clarke, (1883) VIII A.C.
F . ·354; Attorney General v. Prince Ernest Augustus of Hanover
(1957) A.C. 436 - referred to.
1.5. As the BCCI discharges important public
functions such as the selection of Indian Team and the
control on the players and has to discharge important
G public function, it cannot be expected to act arbitrarily
whimsically and capriciously so as to hold that the two •
suits are not maintainable at the instance of the appellant
who although, admittedly, is the past president of the
BCCI and hence an Administrator, had no locus standi to
H file even a civil suit and seek order of injunction for
A.C. MUTHIAH v. BOARD OF CONTROL FOR
455
CRICKET IN INDIA
suspending the effect of amendment on the plea that as
A
he was not a member of the sub-committee, he was not
competent to challenge the amendment introduced in the
BCCI Regulation. [Paras 22, 23] [475-D-F]
Mis. Zee Tele Films Ltd. and Anr. v. Union of India and 8
Ors. (2005) 1 SCR 913 - held inapplicable
2.1. The appellant had not moved the High Court
under its writ jurisdiction under Article 226 or Article 32
of the Constitution before this Court so as to offer a plank
to the respondents to contend that as the BCCI is not a c
'State' within the meaning of Article 12, an Administrator
under the Regulation cannot file even a civil suit in the
capacity as former past President and hence as an
'Administrator' so as to challenge an unconstitutional
amendment in the Regulation of the BCCI. This is an o
appeal under Article 136 of the Constitution arising out
of an order passed in a civil suit refusing to grant
injunction which was filed in two regular civil suits.
Therefore, it is difficult to accept the contention for the
respondents and as accepted by Justice Panchal that
E
merely because th.e BCCI cannot be regarded as an
instrumentality of the State, it will have to be held that the
two suits filed by the appellant are not maintainable. In
order to decide whether the plaintiff has a. right to file a
civil suit or not, locus standi or competence of the plaintiff
F
alone is to be established and not the question whether
the BCCI is a State within the meaning of Article 12 of the
Constitution which is a condition to be fulfilled for
invoking the jurisdiction under Article 226 and/or 227 of
the Constitution as also Article 32 of the Constitution but
surely not for filing a civil suit or injunction application.
G
[Paras 24, 25] [476-A-C-F-H; 477-A-B]
2.2. When a civil suit is filed, the question as to
whether a party comes under the purview of
instrumentality of a State does not arise at all and the
H
.
456
SUPREME COURT REPORTS
[2011] 8 S.C.R.
A whole and sole consideration would be as to whether the
plaintiff had a cause of action to file a civil suit, whether
he is competent to file a suit and whether the-suit is
maintainable at his instance. If the civil suit is
maintainable on the basis of existence of a cause of
B action, there is no room for assailing it by raising a
constitutional issue that the suit is not maintainable since
the BCCI is not an instrumentality of the State, as the said
question is not relevant for adjudication of a civil suit
under the provisions of the Code of Civil Procedure nor
c the civil courts are the Constitutional Courts to enter into
that question. Once, it is held that the plaintiff/appellant
is also an Administrator of the BCCI in view of the
definition of Administrator, his competence to challenge
the amendment introduced in the regulation of BCCI
0 cannot be held as not maintainable on the ground that
BCCI is not a 'State' within the meaning of Article 12 of
the Constitution as civil suits can surely be filed and can
be held maintainable if the plaintiff is able to make out a
case that cause of action has arisen for filing a suit and
if he is able to sustain the cause of action and he also is
E able to establish that he is the proper party to the suit,
the same will have to be tried by the Court and cannot
be dismissed on the ground of its maintainability. In fact,
when a civil suit is filed for seeking civil remedy, the
question whether the contesting party satisfies the
F condition that it is an instrumentality of the State is of no
relevance as the civil courts do not have to discharge
constitutional function so as to enter into this question.
---
If it does, it woul~ be traversing beyond the boundaries
of its jurisdiction. Hence, this question is clearly
G irrelevant for the purpose of the controversy raised in this
petition. [Paras 25, 27] [477-0-G; 479-A-D]
T.C. Mathew vs. K. Balaji Iyengar and Ors. SLP(Crl.)
No.10107 of 2010 - referred to.
H
3.1. Conflict of interest does not require actual proof
(l
AC. MUTHIAH v. BOARD OF CONTROL FOR
457
CRICKET IN INDIA
of any actuaJ pecuniary gain or pecuniary loss as the
A
principle of 'conflict of interest' is a much wider,
equitable, legal· and moral principle which seeks to
prevent even the coming into existence of a future and/
or potential situation which would inhibit benefit or
promise through any commercial interest in which the
B
principal actors are involved. The entire purpose of
'conflict of interest' rule is to prevent and not merely to
cure situations where the fair and valid discharge of one's
duty can be affected by commercial interests which do
not allow the fair and fearless discharge of such duties. c
On this aspect, it has been substantiated that the second
respondent necessarily was privy to highly sensitive
information about the bidding process, the design of the
tender, the rules of the game, the future plans of BCCI in
respect of IPL and so on and so forth. It is inconceivable
0
that such in.sider information to which any major office
bearer of BCCI would necessarily be privy, would not
have used and misused both potential and actual
materials by the second respondent in the capacity of a
bidder through his company India Cements Ltd. Thus, no
artificial Chinese walls can be assumed to exist between
E
•the multiple personalities and activities of respondent
INo.2 both as tender issuer and as a bidder. It is for this
ireason that courts have levied and lined the principle of
"conflict of interest' both with the fiduciary character of a
->erson who should not put himself in a conflict situation
and with the principles of a trustee dealing with a cesfui
..:tue trust. [Para 28.1] [480..C-H; 481-A]
F
Pierce Leslie Peter & Co. Ltd. v. Violet Ouchterlony
lflapshare & Ors. (1969) 3 SCR 203 - referred to.
G
3.2. Although anyone might not have indulged in
reating actual loss to the BCCI by any of his actions, the
act would remain that by virtue of his position as a
:hairman of a company who participated in the bid to
-wn IPL tournament and at the same time holdin9 the
H
458
SUPREME COURT REPORTS
[2011) 8 S.C.R.
A position of an office bearer of the BCCI, is clearly bound
to result into conflict of interest of the BCCI. The fact
remains that the second respondent by virtue of his
position as Vice-Chairman and Managing Director of India
Cements Ltd. and ex-officio Member of the Governing
B Council of IPL clearly came in his way to participate in
the auction held by the BCCI for IPL matches and it is for
this very purpose that the amendment was hurriedly
introduced so that the second respondent may not be
held disqualified from owning IPL Chennai Super King.
c In fact, the concept of 'conflict of interest management'
has increasingly drawn the attention of governments and
citizens alike in all advanced countries including United
States of America over the last several years as has been
the case in much of the rest of the world. [Para 28.2) [481D C-D-E-H]
Bray v. Bradford (1896) A.G. 44 - referred to.
3.3. It is an inflexible rule of a court of equity that a
person in a fiduciary position is not, unless otherwise
E expressly provided, entitled to make a profit; he is not
allowed to put himself in a position where his interest
and duty conflict. The BCCI itself took care to ensure this
principle by incorporating clause 6.2.4. But thereafter, the
BCCI without any deliberation and discussion introduced
F an amendment into this clause by making Twenty -20 IPL
or Champions League Matches an exception to this rule
for which the respondent could not come out with any
plausible explanation. Thus the appellant clearly came
out with a strong prima facie case that the amendment
was introduced with an oblique motive to benefit the
G second respondent so that he could not be held
disqualified from participating in the auction and own
Chennai Super King while continuing as Treasurer and
thereafter as Secretary of the BCCI and hence an
Administrator and thus the appellant succeeded in
H establishing his plea that the amendment introduced by
A.C. MUTHIAH v. BOARD OF CONTROL FOR
459
CRICKET IN INDIA
the BCCI in Clause 6.2.4 was an abuse of the amending
A
power exercised by the BCCI in so far as the power of
amendment was introduced not to promote the game of
cricket but to promote the interest of the second
respondent as it is more than clear that without the
amendment, he would not have been entitled to
B
participate in the bid as he was a Treasurer of the BCCI
and hence without the amendment he was not eligible
even to participate in the bid and enjoy dual status of that
of an office bearer of the BCCI as Treasurer and also own
Chennai Super King. [Paras 28, 29] [482-C-D-E-H; 483-A- c
C]
3.4. The appellant and the perception based on
consideration of the concept of conflict of interest and its
implication surely succeeded in making out a prima facie
case that this resulted in serving commercial interest of D
the second respondent which gave rise to conflict of
interest with the activities of the BCCI since he as
Administrator/office bearer was able to influence the
decision of the BCCI by being a treasurer and
simultaneously also participated in the IPL auction,
E
clearly giving rise to commercial interest which is barred
if the amendment had not been introduced. If the
Administrator is clearly barred as per Regulation from
having any commercial interest in the events of BCCI, it
is beyond comprehension as to how only one class of F
matches which was IPL, Twenty-20 and Champions
League could be treated an exception by allowing an
office bearer to participate in the bid but preventing him
from other matches including Test Matches. The appellant
thus, fully succeeded in making out a prima facie case
G
that this amendment smacks of arbitrariness and bias in
favour of the second Respondent and hence it was a fit
case for grant of injunction keeping the impugned
amendment introduced in Clause 6.2.4 of the BCCI
Regulation under suspension or abeyance. However,
H
460
SUPREME COURT REPORTS
(2011] 8 S.C.R.
A since the second Respondent has already participated
and succeeded in the bid and is also owning the Chennai
Super King, it may be appropriate to leave it open to him
to exercise his option whether he wishes to continue as
an office bearer of the BCCI or own IPL Chennai Super
B King. The appellant succeeded in making out his case to
the extent that the amendment was fit to be kept under
suspension by granting an injunction against the
amendment at least until the suit was finally decided. The
courts below while considering the application for
_ c injunction was fully competent to mould the relief in a
given circumstance or situation which they have
miserably failed to do. Hence, the impugned amendment
dated 27.9.2008 was fit to be suspended by granting
injunction against the same. This is clearly so as it would
0 be difficult to overlook that multiple loyalties can create
commercial interest with the activities of BCCI thus
resulting in conflict of interest since the financial or
personal interest of the Board would clearly be
inconsistent with the commercial and personal interest
of the Administrator of the Board. In addition, the rule of
E equity and fairness provides that no one who stands in
a position of trust towards another can in matters
affected by that position, advance his own interests for
example, by trading and making a profit at that other's
expense as the rule of legal prudence mandates that
F once a fiduciary is shown to be in breach of his duty of
loyalty, he must disgorge any benefit gained even though
he might have acted honestly and in his principal's best
interest. In the instant matter, when the BCCI held
auction for owning IPL Team and an Administrator the
G second respondent participated in the bid, variety of real
and/or perceived conflict of interest cannot be ruled out.
These included access to insider information, poi;sible
undue influence on the decision makers who held the
auction and the like. The injunction is granted by
H directing suspension of operation of the impugned
A.C. MUTHIAH v. BOARD OF CONTROL FOR
461
CRICKET IN INDIA
amendment dated 27.9.2008 introduced in Regulation
A
6.2.4 of the BCCI. In case, the second Respondent opts
to continue owning and operating IPL Chennai Super
King, he shall be at liberty to do so but in that event he
shall be restrained from holding any office in the BCCI
in any capacity. [Paras 30-32] [483-D-F-G-H; 484-A-B-DB
E; 485-A-F]
Case Law Reference:
Per Gyan Sudha Misra, J
(1876) 1 Ex.D. 469
referred to
Para 20
c
(1883) VIII A.C. 354
referred to
Para 20
(1957) A.C. 436
referred to
Para 20
2001 (2) S':fppl. SCR 310
referred to
Para 21
D
(2005) 1 SCR 913
held inapplicable Para 24
(1969) 3 SCR 203
referred to
Para 28.1
(1896) A.C. 44
referred to
Para 28.2
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3753 of 2011.
From the Judgment & Order dated 24.03.201 O of the High
Court of Judicature at Madras in OSA Nos. 227 to 229 of 2009.
WITH
C.A. No. 3754-3756 of 2011.
F
Dr. Abhishek Manu Singhvi, Nalini Chidambaram, Rohit
Bhat, Vikas Mehta, Amit Bhandari, Narhari Singh for the
Appellant.
G
G.E. Vahanvati, AG, R.F. Nariman, P.R. Raman, Radha
Rangaswamy, Akhila Kaushik, A Poorv Kurup, Amit Sibal, Mihir
Chatterjee, Hari Shankar K., K. Harishankar, Vikas Singh
Jangra for the Respondents.
l-:
462
SUPREME COURT REPORTS
[2011] 8 S.C.R.
A
The Judgment of the Court was delivered by
GYAN SUDHA MISRA, J. 1. Leave granted.
When the world at large is endeavouring to eradicate
conflict of interest in public life as also in private venture and
B the respondent - Board of Control for Cricket in India (shortly
referred to as the 'BCCI'), which enjoys monopoly status as
regards regulation of the sport of Cricket in India, and is
perceived to follow the doctrine of "fairness" and "good faith"
in all its activities, has itself recognized its value and importance
C by incorporating in its Regulation that
"No administrator shall have directly or indirectly any
commercial interest in any events of the BCCI,"
then whether any exception diluting its effect could be carved
D out of that without any just cause by introducing an amendment
into the same, is the question which essentially falls for
consideration in these appeals. Consequently, the question
also arises whether the amendment was fit to be kept under
suspension by grant of an order of injunction against the same
E as a result of which the respondent No. 2 would be restrained
from functioning as an office bearer of the BCCI in any capacity
as his commercial interest comes in conf!ict with the activities
of the BCCI. In this context the question of locus .standi and
legal competence of an 'Administrator' of the BCCI to file a suit
F for assailing the amendment introduced in the BCCI Regulation,
also arose for determination in the event of which only, the
challenge could be sustained at his instance. While the suits
are still pending in the High Court of Madras, the applications
for injunction have been rejected against which these appeals
G arise wherein extensive arguments have been advanced by
learned counsel for the contesting parties in support of their
respective pleas.
2. Having deliberated and meticulously considered the
H
i
A.C. MUTHIAH v. BOARD OF CONTROL FOR
463
CRICKET IN INDIA [GYAN SUDHA MISRA, J.]
same in the light of the background, facts and circumstances A
giving rise to these appeals as also having the benefit of the
views expressed in the judgment and order of my learned
Brother Panchal, J., I find it hard to subscribe to the view
expressed therein and hence record reasons respectfully
dissenting from the view on the issues raised in these appeals.
B
For this purpose as also to test the relative strength and
weaknesses of the arguments advanced and to have an overall
view of the controversy involved, I deem it essential to relate
the genesis and background of the matter under which these
appeals arise.
cl
3. The 1st respondent in these appeals which is the Board
of Control for Cricket in India (for short 'BCCI') is a society
registered under the Societies Registration Act which has its
own Memorandum of Association, Rules and Regulations.
Apart from these, BCCI also has regulations for Players, Team
D
Officials, Managers, Umpires and Administrators which controls
· the game of Cricket in India and discharges public functions
which enjoys monopoly status as regards regulation of the sport
of Cricket. It thus earns huge revenues and is perceived to
follow the doctrine of "fairness" and "good faith" in all its
Ft
activities. Fortunately, the Regulations of the BCCI which
incorporates rules for Players, Team Officials, Managers.-
Umpires and Administrators itself has incorporated a clause
which is Clause 6.2.4 stating that
"No Administrator shall have directly or indirectly any
commercial interest in any events of the BCCI",
thus prohibiting conflict of interest of an Administrator with that
F
of the BCCI. The Regulation further incorporates the definition
which states that an office bearer of BCCI is an administrator
G
and Regulation of the BCCI also elaborately defines as to who
is an 'Administrator'.
4. However, putting laws and regulations on paper, does
not mark the end of fight against 'conflict of interest' in public
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464
SUPREME COURT REPORTS
[2011] 8 S.C.R.
A service and more so in private venture. More appropriately, this
step has to be viewed as a beginning. Effective implementation
and execution is absolutely crucial if these laws and regulations
are to be meaningful. Managing 'conflict of interest' is a relatively
young system, but these young systAms require maturing in the
B form of sincerity, will and dedication and they must be effective
in all spheres if they are to survive and become engrained in
the institutional structures of governance by public as well as
private bodies. In absence of this, even better established
programmes for conflict of interest management could wither
c quickly, if ignored.
5. Bearing the aforesaid principle in mind, it may be
relevant to record the essential details and background of the
matter which indicate that the appellant herein - Sri Muthiah who
is the past president of the BCCI initially filed two complaints
D on 5.9.2008 and 19.9.2008 before the President of the BCCI
in his capacity as past President and hence an Administrator
alleging disqualification suffered by the second respondent Sri
N. Srinivasan who being the Chairman and M.D. of India
Cements Umited should not have been allowed to participate
E in the auction held for owning Indian Premier League ('IPL' for
short - a separate sub-committee unit of BC.Cl) in which he was
declared a successful bidder and thus owned Chennai Super
1
King. The Complainant/Appellant therefore sought action ·
against him as he brought to the notice of the BCCl-President :
F that the second respondent - Sri N. Srinivasan being an office
bearer of the BCCI who is also heading a company named
'India Cements' had commercial interest giving rise to a
"conflict of interest" with the Indian Premier League (for short
'IPL') Tournament for which an auction was conducted by the
G BCCI, in so far as he was in substantial control of the India
Cements Ltd. which became the successful franchisee of the
Chennai Super King and at the same time is also in the
governing council of the IPL Tournament which disqualified him
to participate in the bid for owning Chennai Super King.
~
6. The appellant's complaint did not meet with anv
A.C. MUTHIAH v. BOARD OF CONTROL FOR
465
CRICKET IN INDIA [GYAN SUDHA MISRA, J.]
· response whatsoever from the BCCI which prompted him to file
A
a suit in the Madras High Court on 24.9.2008 bearing
C.S.No.No.930/2008 wherein the plaintiff-appellant herein
sought to enforce Clause 6.2.4 against the second respondent
- Sri N. Srinivasan as in the year 2008, respondent No.2 - Sri
N. Srinivasan who is the Managing Director of India Cements
B
Ltd.