In a case concerning a Rs 10.65 crore fine levied against him by the Directorate of Enforcement (ED), the Supreme Court of India on Monday gave Lalit Modi the right to petition a civil court for relief. The fine was imposed in relation to financial transactions that took place during the 2009 Indian Premier League (IPL), when Modi was the league's chairman, and violations of the Foreign Exchange Management Act (FEMA).
Modi had petitioned the Supreme Court to order that the Board of Control for Cricket in India (BCCI) be held accountable for the fine instead of him. But after his lawyer decided to withdraw the plea and asked for authorisation to seek civil remedies, the bench made up of Justices PS Narasimha and R Mahadevan dismissed the case. This action came after the Bombay High Court previously dismissed Modi's petition and fined him Rs 1 lakh. Based on prior court decisions, Modi's attorney contended during the Supreme Court hearing that the case was within the High Court's writ jurisdiction under Article 226 of the Constitution.
However, the court pointed out that the BCCI is not a "State" as defined by the Constitution, which restricts the range of judicial remedies that can be obtained under Article 226. The bench made it clear that the BCCI should not be regarded as a state authority and that state liability cannot be equated with the process for collecting fines from it. In light of this finding, the bench dismissed the case and allowed Modi to pursue legal action through the civil court system.
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This case stems from a larger FEMA investigation that was conducted in May 2018 by the Enforcement Directorate. During the 2009 IPL season, which was moved to South Africa, penalties were levied against a number of people and organisations for alleged regulatory infractions. The ED discovered that significant amounts of foreign currency, totalling approximately Rs 243.45 crore, were sent to Cricket South Africa without first obtaining Reserve Bank of India approval.
To bring the total fine in the case to Rs 121.66 crore, the ED also fined the State Bank of Travancore Rs 7 crore, former BCCI treasurer MP Pandove Rs 9.72 crore, former board secretary N Srinivasan Rs 11.53 crore, and the BCCI Rs 82.66 crore in addition to Modi. The Bombay High Court later allowed the ED to call former BCCI officials, such as Shashank Manohar and N Srinivasan, as witnesses after show cause notices were sent to Modi and the BCCI on July 20, 2011, as part of the investigation.
Lalit Modi's most recent legal action is part of his ongoing attempt to deny his financial responsibility in the case and place the blame on the BCCI. But the Supreme Court's position on the BCCI's legal standing has restricted his constitutional options, so his only remaining option is to go to the civil courts.
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