Delhi High Court
Delhi & District Cricket ... vs Municipal Corporation Of Delhi ... on 30 January, 2017
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 27.09.2016
Pronounced on: 30.01.2017
+ W.P.(C) 7215/2011, C.M. APPL.16416/2011, 1125/2013,
27732/2016 & 32226/2016
DELHI & DISTRICT CRICKET ASSOCIATION THROUGH ITS
HONORARY GENERAL SECRETARY ..... Petitioner
Through : Sh. Aman Lekhi, Sr. Advocate with Sh.
Gautam Dutta, Standing Counsel and Sh. Sanjay
Dhawan,
versus
MUNICIPAL CORPORATION OF DELHI & ORS...... Respondents
Through : Sh. Rahul Mehra, Sr. Standing Counsel,
for GNCTD.
Sh. Harish Malhotra, Sr. Advocate with Sh. Tanuj
Khurana and Sh. P. Chaitanyashil, Advocates, for
Sh. Dinesh Saini, Joint Secretary, Company
Affairs, DDCA.
Sh. Rohit Gandhi, Advocate, for applicant in C.M.
Appl.32226/2016.
Sh. Manish Tewari, Sh. Amit. A. Pai and Sh. Rahat
Bansal, Advocates, for Intervener/Sh. Kirti Azad.
Sh. Ajjay Aroraa with Sh. D.K. Puchnanda,
Advocates, for SDMC.
Sh. Nitin Mishra, Ms. Akanksha Rastogi and Ms.
Arunabha Ganguli, Advocates, for Justice Mukul
Mudgal (Retd).
Sh. Rahul Mehra, Senior Standing Counsel (Civil)
with Sh. Tushar Sannu and Sh. Jamal Akhtar,
Advocates.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MS. JUSTICE DEEPA SHARMA
MR. JUSTICE S. RAVINDRA BHAT
W.P.(C) 7215/2011 Page 1
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1. The petitioner (hereafter referred to as "the DDCA") is a company
incorporated under the provisions of Section 25 of the Companies Act, 1956
(hereafter "the 1956 Act"). It questions the vires of the first proviso to
Section 169 and other provisions, i.e. Section 123B(8) and Section 153 of the
Delhi Municipal Corporation Act, 1957 as amended in 2003 (hereafter "the
DMC Act") as well as Section 170(b) of the DMC Act. It also impugns an
order dated 05.08.2011 assessing its premises and a demand made by the
first respondent Municipal Corporation (hereafter "the MCD") on
19.08.2011. The DDCA mentions about directions contained in this Court's
order dated 10.11.2003 whereby the MCD was required to conclude the
assessment proceedings in time-bound manner after having regard to the
contentions of the DDCA.
2. The impugned order computes the annual value of the property based
upon the provisions of the Act, after the MCD invoked its powers to employ
a valuer. The valuer's report determined the total covered area, the covered
built-up area in the various wings (A, B, C), club-house etc. The DDCA's
claim for exemption under Section 119 was rejected and the annual value
was determined at ` 6,41,13,700/- with effect from 01.04.2004. Based upon
this, the demand made was for ` 4,61,61,936/-. A rebate was offered at `
76,93,656/- and the impugned demand was for ` 5,38,95,598/-.
3. During the pendency of these proceedings, various interim orders were
made from time to time by which the Court recorded the sums of money
deposited by the DDCA with the MCD, further to which No Objection letters
were issued by the latter. The Court also monitored the response of other
state agencies such as the Health Department, the Fire Department etc. in
W.P.(C) 7215/2011 Page 2
regard to the various cricket matches - both in the domestic circuit as well as
in the international leagues, including IPL and the test matches, held in the
Feroze Shah Kotla stadium. In one such proceedings, on 18 th November,
2015, when the Division Bench had to consider an application, C.M.
No.27246/2015, for directions in regard to the issuance of provisional
occupancy certificate by the SDMC, the Court heard submissions on behalf
of various parties; the Govt. of NCT of Delhi was permitted to intervene and
make submissions; it expressed misgivings and concerns with respect to the
functioning of the petitioner DDCA. The Court directed the issuance of
provisional occupancy certificate for 10 days in December 2015. At the same
time, the Court nominated Justice Mukul Mudgal (Retd), former Chief
Justice, Punjab and Haryana High Court, to oversee the ensuing test match,
"as also to ensure that the DDCA takes earnest steps towards obtaining
requisite clearance/compliance". The Court directed as follows:
"We have also heard the submissions made by Mr Dayan
Krishnan, the learned senior counsel who appeared on behalf of
the Government of NCT of Delhi. Although they were not a
party to these proceedings, but they have interjected and
expressed their concerns over the functioning of the DDCA. Mr
Kirti Azad, a known cricketer, has also expressed his views with
regard to the functioning of the DDCA. Without going into the
merits of the matter, we feel that it would be appropriate that
somebody is appointed to oversee the forthcoming test match as
also to ensure that the DDCA takes earnest steps towards
obtaining requisite clearances/compliances. All the parties
agree that a former Judge of this Court may be nominated for
this purpose. We feel that Justice Mukul Mudgal would be an
appropriate person. This is accepted by all the parties.
Consequently, through this order, we request Justice
Mudgal to accept this assignment. The remuneration for this
W.P.(C) 7215/2011 Page 3
assignment shall be decided by Justice Mudgal himself. The
learned counsel for the DDCA, who is also instructed by the
working President and the Treasurer of the DDCA, has assured
that they shall make the payments for remuneration, as directed
by Justice Mukul Mudgal. Justice Mudgal may also take the
assistance of an account knowing person or any other person to
assist him in this endeavour. The remuneration for such persons
shall be paid by the DDCA.
The petitioner shall also deposit a sum of Rs 50 lakhs
within two weeks from today with the South Delhi Municipal
Corporation towards alleged property tax dues. This amount
will be without prejudice to the rights and contentions of the
parties.
In view of the foregoing, we direct the South Delhi
Municipal Corporation to issue a provisional occupancy
certificate by tomorrow for the period commencing from
01.12.2015 to 10.12.2015. This will, however, be subject to a
"No Objection Certificate" to be obtained from the Delhi Fire
Services as well as no objection from the concerned Electrical
Inspector as also an undertaking to be furnished by the
petitioner that the DDCA will be held responsible for any
consequences on account of non-compliance of any statutory
norms including those of the Delhi Disaster Management
Authority and the Delhi Jal Board. This is also without
prejudice to the petition for entertainment tax, which has
reportedly been filed and is said to be listed before another
Bench of this Court. We are also making it clear that this is the
last occasion on which we are acceding to the request of the
DDCA for issuance of the provisional occupancy certificate and
that they should have all the requisite compliances in place on
or before 31.03.2016."
4. On 18.12.2015, the Court issued certain further directions in aid of its
previous order. The relevant part of that order is extracted below:
"There is only the issue of the remuneration to be paid to
Justice Mukul Mudgal. In the order dated 18.11.2015, we had
W.P.(C) 7215/2011 Page 4
directed that the remuneration would be decided by Justice
Mudgal himself. But, he has expressed his view that the
question of remuneration would be left to the Court. The
learned counsel for the applicant has drawn our attention to a
Supreme Court order in the case of Cricket Association of Bihar
v. BCCI and Others: SLP (Civil) 26633/2013 dated 08.10.2013,
wherein a Probe Committee had been appointed and Justice
Mudgal had been appointed as the Chairman of the said
Committee. In that order, it is apparent that the Chairman and
Members of the Committee were entitled to a fee of Rs 1 lac per
working day from the BCCI. The request made by the learned
counsel for the applicant is that a similar arrangement be made
in this case. Consequently, we direct that Justice Mudgal be
paid a remuneration of Rs 1 lac per working day by the DDCA
in terms of the said order of the Supreme Court. We may point
out that in our order dated 18.11.2015 we had indicated that the
appointment of Justice Mudgal would be not only to oversee the
then forthcoming test match but also to ensure that the DDCA
took earnest steps towards obtaining the requisite clearances/
compliances. The test match has been completed and was
overseen by Justice Mudgal. The overseeing by Justice Mudgal
was not only for the test match but also to ensure that the
DDCA took earnest steps towards obtaining the requisite
clearances/ compliances. We are reiterating the remainder of
the order dated 18.11.2015."
5. On 22.02.2016, a further order was made inter alia in the following
terms:
"2. From the report, it appears that No Objection Certificates
(NOC) have been issued by the Delhi Fire Services, the
Electrical Inspector and the Land and Development Office. The
Structural Engineering Design Certificate has been issued by
Kothari Associates Private Limited. It is stated that the Delhi
Urban Arts Commission (DUAC) will issue an NOC as soon as
the DDCA intimates to the DUAC that the art work has been
completed.
W.P.(C) 7215/2011 Page 5
3. From the side of the SDMC, it is seen that out of the 60
deviations pointed out, a major portion has been rectified. The
DDCA has given an assurance that the Occupancy Certificate
from SDMC will be obtained in a week. Counsel for the SDMC
confirms that as and when the DDCA informs it of the
rectification of the defects, the SDMC will, after verification,
grant the Occupancy Certificate without unnecessary delay,
since without such certificate the matches cannot be held.
4. While recording its appreciation of the time and effort taken
by Justice Mukul Mudgal to ensure that the DDCA fulfils the
statutory requirements and streamlines its functioning, the
Court acknowledges that but for his supervision the desired
progress in the matter may not have been possible.
5. Considering that at least 10 T-20 matches are to be held as
part of the World Cup, both for men and women, at the
Ferozeshah Kotla, the Court requests Justice Mukul Mudgal to
once again oversee the conduct of the said matches on the same
terms as stated in the orders dated 18th November, 2015 and
18th December, 2015.
6. The DDCA will extend its full cooperation to Justice Mudgal
in ensuring that the recommendations made by him in his
reports to this Court, copies of which have been made available
to all the parties, are implemented to his satisfaction. The Court
requests Justice Mudgal to submit a further report after the
conclusion of the ten matches."
6. On 03.03.2016, the Court noticed that a further status report was filed
by Justice Mukul Mudgal (Retd) which was taken on the record. It was also
recorded that the DMC was examining compliance with regard to deviations
pointed out by it. On 08.03.2016, the Court further observed and directed as
follows:
"2. Justice Mukul Mudgal has made a request that the DDCA
should be directed to comply with all the recommendations and
suggestions given in the two reports already submitted by him
W.P.(C) 7215/2011 Page 6
to this Court on 18th January, 2016 and 2nd February, 2016
and submit a compliance report to him within a fortnight of the
conclusion of the World T-20 matches. It is ordered
accordingly. It is reiterated that the directions issued by Justice
Mudgal in connection with the World T20 matches taking place
under his supervision should be strictly complied with by the
DDCA. It will be open to Justice Mudgal to remain present at
the Ferozeshah Kotla only during the match days and seek
progress reports from the DDCA on the other days.
3. It is clarified that it is not for this Court to grant or refuse
permission to hold matches and nothing stated in this order
shall be construed as the Court having given permission for the
holding of the World T-20 matches or any other match at the
Ferozeshah Kotla. That aspect is entirely within the domain of
the concerned authorities."
7. On 07.04.2016, the Court was informed about impending IPL (Season
6) matches proposed to be held in Delhi in the Feroze Shah Kotla Stadium
from 15.04.2016. The Court requested Justice Mukul Mudgal (Retd) to
oversee the conduct of these matches in terms of the previous order dated
18.11.2015 and 18.12.2015 and further required DDCA to extend its fullest
cooperation to him. On 11.07.2016, the Court recorded that Justice Mukul
Mudgal (Retd) had tendered its final report on World T20 and IPL matches
held in March-May 2016 and appreciated his efforts. The copies of the final
report were furnished to learned counsel for DDCA as well as the SDMC.
The Court noticed that the report contained several useful suggestions and
furthermore significantly the DDCA was able to save ` 7 crores
approximately from World T20 matches. The DDCA's counsel assured the
Court that all that amount would be spent and used strictly in accordance
with the BCCI guidelines and would be fully accounted for by the DDCA. In
these circumstances, the Court observed that it would consider the response
W.P.(C) 7215/2011 Page 7
of all the parties to the report on the subsequent dates of hearing. The Court
lastly directed DDCA to pay within one week the
amount/honorarium/remuneration due to Justice Mukul Mudgal (Retd) for
supervision of IPL matches held in April-May, 2016.
8. On 22.08.2016, the present Bench made the following order:
"Sh. Gautam Dutta, learned counsel for the petitioner states
that four weeks' time would be necessary to file copy of the
accounts.
It is brought to the notice of the Court by Sh. Nitin
Mishra, learned counsel that the Administrator appointed by the
Court - Justice Mukul Mudgal (Retd) - has pressing
engagements and would not be in a position to discharge his
responsibility hereafter.
The Court is of the opinion that till suitable arrangements
are made - possibly within a month - Justice Mukul Mudgal
(Retd) should continue in the position that he presently holds.
In the circumstances, a request is made that to assist him,
he may be given authority to seek assistance of 3-4 individuals
to supervise the day-to-day activities, to the extent essential, for
discharging his mandate.
The Court hereby permits Justice Mukul Mudgal (Retd)
to seek the assistance of such of the individuals whom he deems
fit to appoint for the purpose.
The parties shall file synopsis not exceeding five pages
each. It is clarified that all counsel who represent parties that
seek either to support or oppose the report of the Mudgal
Committee should file one comprehensive synopsis each. In
other words, all counsel appearing on behalf of the parties who
submit the report should file a consolidated written synopsis.
Likewise, those opposing the report should file one consolidated
written synopsis."
W.P.(C) 7215/2011 Page 8
9. Acting on C.M. 32226/2016, the Court - based upon a letter dated
04.09.2016 issued notice of contempt to the President of the DDCA as well
as Gaurav Dutta, Advocate as to why contempt proceedings should not be
initiated. Pursuant to this notice, the individuals, i.e. Sh. Bansal and Sh.
Gaurav Dutta filed affidavits expressing unconditional apology. It is in these
circumstances that the parties were heard at length with respect to the merits
of the report of Justice Mukul Mudgal (Retd) and the suggestions contained
therein. The Court is also in receipt of status report by Justice Mukul Mudgal
(Retd) pursuant to the order dated 27.09.2016 and another report filed on
27.10.2016. These reports sought a narrative of action undertaken by Justice
Mukul Mudgal (Retd) in the context of the previous order, especially the
orders of 22.08.2016 and 05.09.2016. These two status reports narrate all the
inter se correspondence through e-mails between Justice Mukul Mudgal
(Retd) and other functionaries of the DDCA. They also contain report of
official supervision undertaken during this period.
Arguments of the parties
10. Mr. Aman Lekhi, learned senior counsel appeared on behalf of some
office bearers of the DDCA. He argued that the Mudgal Committee had
limited jurisdiction as circumscribed by the Court's order dated 18.11.2015
and approved and reiterated on orders According to him, the Committee,
therefore, could not have ventured into areas outside those specified in the
aforesaid orders which constituted the terms of reference for the Committee.
After having obtained the requisite permissions from MCD, L&DO, DUAC
and other government agencies and on the conduct of the matches, the
mandate of the Committee ended. He relies on the decision reported as
W.P.(C) 7215/2011 Page 9
Bhogpur Co-operative Sugar Mills Ltd v Harmesh Kumar (2006) 13 SCC
28 and S. Harcharan Singh v Union of India 1990 (4) SCC 647. It is next
urged that the Mudgal committee was constituted under an interlocutory
order, which is primarily in aid of the final relief. The recommendations of
the Committee, however, are independent of the final relief and render the
interlocutory proceedings not only substantive but wholly independent of the
parent proceedings. Mr. Lekhi argues that the ambit of the interlocutory
order is consequently expanded to issues of public interest raised by third
parties and the character of the proceedings are transformed into proceedings
of public interest which are entirely different from the parent proceedings
under which they arise. Besides, the reliefs cannot be granted with the parent
proceedings under the roster of judicial business of the Court.
11. Mr. Lekhi submits that even otherwise, exercise of discretion in
proceedings in judicial review cannot discard or disregard statutory mandate
or statutory machinery. Two of the recommendations listed below, fall foul
of the statutory mandate. In this regard, he argues that the Mudgal committee
recommendation for (a)Abolition of Sports Working Committee (SWC) and
(b) Abolition of "proxy system of voting in AGM" cannot be done
without following the proper procedure. Articles 23 (i) and (ii) and Article
37 of the Articles of Association deal with SWC and the proxy system of
voting; any modification or alternation of those provisions in the articles has
to comply with the specific mandate of Section 8(4)(i) of the Companies Act,
2013 ("the Act") which requires prior approval of the Central Government
and the prescribed procedure to be followed as contemplated under Section
14 and Section 114 of the Act. The deletion, therefore, cannot be
W.P.(C) 7215/2011 Page 10
implemented in terms of the recommendations of the Committee simply
upon the approval of the Court. He argues that the other recommendation,
which is incapable of implementation, is that only clubs registered as
societies or as companies can be affiliated by DDCA. This recommendation
would fall foul of the judgment of this Court in Vinod Tihara v. DDCA
(decided on 20.04.2012 in FAO 481-482/2011) where the Court rejected the
proposition that only clubs registered under the Societies Registration Act
shall be entitled for affiliation with the DDCA. That judgment is final to this
day.
12. It is argued that the next recommendation, i.e. that DDCA should
grant affiliation to the Clubs for the next season only after being satisfied
that the monetary grant has been properly utilized for the promotion of
cricket cannot similarly be accepted. Mr. Lekhi argues that the grant
referred to in the recommendation is given by BCCI and not by DDCA
which is merely a facilitator in distribution. So far as "Club Affiliation" is
concerned, by judgment dated 28.11.2013 in Suit No.251/2013 titled K.N.
Colts, Krishna Nagar Colts Society (Regd) v. DDCA, it was held that "once
the club is affiliated with the DDCA then to continue with the affiliation the
concerned club has to pay annual fees only, which has to be paid on annual
basis as prescribed by the defendant from year to year basis". The DDCA
has confirmed the judgment by giving an undertaking in the Court vide
statement of counsel recorded on 28.07.2014. No higher Court has set the
judgment aside.
13. Mr. Lekhi urges that DDCA is not averse to change suggested in the
Mudgal Committee report and does not state its position as a rigid one with
W.P.(C) 7215/2011 Page 11
respect to any practice. It is stated that on four counts, (a) Tendering (Page
17 of the report); (b) Accounts & Finance (Page 18 of the report); (c)
Administration (Page 19 of the report) and (d)Ticketing And Accreditation
(Page 21 of the report) it is willing to implement them as they do not entail
approval of any statutory authority or permission in any manner. Likewise,
as far the recommendation in respect of ticketing is concerned, the DDCA
agrees to adopt a scheme similar to that followed by the Committee during
its supervision of the matches regarding the distribution of complimentary
passes, subject to the overall control and supervision of the Board of
Directors of the DDCA to overcome any contingency, situation and
circumstances. He submits that with regard to other recommendations
concerning the promotion of cricket and selection of players, DDCA is
agreeable to implement them on the following terms:
(i) The correspondence with the existing Affiliated Clubs to be addressed
to the registered office of the Club by DDCA, as also at the correspondence
address, if any.
(ii) Selection Process must be fair and transparent.
(iii) The said disclosures must be made public.
(iv) The Selection Committee of all age groups (men and women) must
comprise of one retired international player.
(v) The remuneration for the Coaches or any other person sought to be
appointed by DDCA must be fixed prior to appointment by DDCA and
formal contract must be entered before appointment.
W.P.(C) 7215/2011 Page 12
14. It is urged that the report deals with the individuals, officials and
members who are not parties to the proceedings on page 14-16 (paras A, C,
D, E, H, I, J, K, L). No proceedings could be held or concluded behind the
back of those with regard to whom statements were made. Furthermore
exception is taken to the report, as it mentions persons and complaints
regarding which no details have been provided as to enable DDCA to
identify the alleged wrongdoer or to the context, the allegations made
thereabout. Page 14-16 (para A,C,D,E,H,I, J, K,L). In any case, by the very
nature of things these are disputed facts concerning civil rights which would
require examination of documents and adducing of evidence which cannot
be done in a summary proceeding. The most appropriate forum to decide
these questions would be the civil court. Reliance is placed on P.R.
Muralitharan v Swami Dharmananda Teertha Padar 2006 (4) SCC 501.
15. Mr. Rahul Mehra, learned Standing Counsel for the NCT of Delhi,
argued that this Court should reject the DDCA's submissions. It was
submitted that for the first time, DDCA has been able to post a surplus after
defraying expenses for the matches held under the aegies and supervision of
the Mudgal Committee and that the management, which had held sway, was
run by oligarchies. It was submitted that there was complete opacity in
regard to the appointment of selectors, the tenure and terms and conditions
applicable to them. Even the remuneration payable to them was decided in
secrecy. There were serious irregularities in regard to maintenance of
accounts, and all these reflected in the DDCA's functioning to such effect
that match clearance became uncertain. This was a completely unacceptable
W.P.(C) 7215/2011 Page 13
situation given the international facilities, which the DDCA had on offer and
the nature of fixtures which were held in the past.
16. It was argued that the structural changes, which the Mudgal
Committee has recommended, are salutary as well as necessary for a smooth
and healthy functioning of DDCA. Mr. Mehra argued that the larger public
interest lies in issuing appropriate directions in line with the Mudgal
Committee's recommendations. He stated that the DDCA obtains and
collects a colossal amount of ` 20-40 crores annually; yet it has not cared to
set up a state academy to train emerging and budding young cricketers.
Furthermore, barely 5% of its 4600 members are cricketers, majority of
whom are not interested in the game; there is overwhelming public interest
in ensuring that the body functions in a transparent manner, accountable to
the people at large and especially to the cricketing public.
17. Mr. Mehra urged that the Mudgal Committee recommendations with
respect to abolition of proxy voting and all other recommendations that have
been endorsed by the Supreme Court in the Board of Control for Cricket v
Cricket Association of Bihar 2016 (8) SCC 535 to say that tenure
restrictions, abolition of proxy voting and the abolition of affiliated clubs as
well as the restructuring of the Sports Working Committee in DDCA is
essential in the light of the declaration of law in that judgment. It was
submitted that the tenure of the office bearers expires on 30.09.2016 and
consequently this Court should not close these proceedings without making
directions in respect of implementation of the Mudgal Committee report and
appointing an Administrator till the necessary changes in the DDCA's
W.P.(C) 7215/2011 Page 14
management structure is made and elections are held in accordance with
such change.
18. It was argued that the recommendations, particularly those contained
in the judgment are binding and have to be implemented. The following
recommendations, according to Mr. Mehra, had to be implemented as a
matter of law:
"1. Membership
'One State, One Vote'
Only cricket Associations representing the States would have
voting rights as Full Members of the Board, thereby ensuring
equality among the territorial divisions. Any other existing
members would be Associate Members.
2. Zones
'Zones for Tournaments alone'
The Zones would be relevant only for the purpose of the
tournaments conducted amongst themselves, but
not for nomination to the governance of the Board or to the
various Standing Committees.
3. State Associations
'State Associations-Uniformity in Structure'
The Associations that are the Members would necessarily have
to restrict the tenures of office bearers and prescribe
disqualifications, do away with proxy voting, provide
transparency in functioning, be open to scrutiny and audit by
the BCCI and include players in membership and management.
They would also have to abide by the conflict of interest policy
prescribed by the Board and divorce the Association from the
social club, if any.
4. Office Bearer
'Limited Tenures & Cooling Off'
While all the existing office bearers (President, Vice-President,
Secretary, Treasurer and Joint Secretary) are retained in
honorary positions, the number of Vice Presidents is pruned
from five to one. Their duties have been realigned. The
W.P.(C) 7215/2011 Page 15
President is shorn of his say in selections. The additional vote
for the President at meetings is deleted. The terms of these
Office Bearers continue to be of 3 years, but with a maximum of
3 such terms regardless of the post held, with a cooling off
period after each such term.
5. Governance
'Governance separated from management'
The 14 member Working Committee is replaced by a 9 member
Apex Council (with one-third independent members) consisting
of the Office Bearers of the BCCI, an elected representative of
the General Body, two representatives of the Players
Association (one man and one woman) and one nominee from
the C&AG's office. Terms of eligibility and disqualification are
specified with a bar on Ministers and government servants.
6. Management
'Professionalism in management'
Professionalism is brought in by introducing a CEO with strong
credentials assisted by a team of managers to handle non-
cricketing affairs. The large number of Standing Committees
and Sub-Committees created by the BCCI has been reduced to
two essential ones that would advice the CEO with reference to
tours, technical aspects and tournaments.
The selection, coaching, performance evaluation and umpiring
are to be handled by Cricket Committees manned only by
former professionals. Specific provisions have been made to
encourage cricket for women and the differently-abled.
7. The IPL
'Limited Autonomy for IPL'
The Governing Council of the IPL is reduced to 9, but includes
2 representatives of the Franchisees and nominees of the
Players' Association and the C&AG's office.
*********************
************************
10. Conflict of Interest
'Avoidance of conflicts'
Detailed norms have been laid down to ensure there is no direct
or indirect, pecuniary or other conflict or appearance thereof
in the discharge of the functions of those persons associated or
W.P.(C) 7215/2011 Page 16
employed by the BCCI, its Committees, its Members or the IPL
Franchisees. These norms shall be administered by an Ethics
Officer.
11. The Ombudsman and the Electoral Officer
'Independent monitors'
Provision has been made to have an independent ombudsman
to resolve grievances of Members, Administrators, Players and
even members of the public as per the procedures laid down.
Similarly, an independent Electoral Officer to oversee the
entire electoral process is also mandated.
12. Functioning
'Transparency'
The BCCI must provide the relevant information in discharge of
its public functions. All Rules and Regulations, norms, details
of meetings, expenditures, balance sheets, reports and orders of
authorities are to be uploaded on the website as well.
13. Oversight
'Accountability'
An independent auditor to verify how the Full Members have
expended the grants given to them by the BCCI, to record their
targets and milestones, and to submit a separate compliance
report in this regard."
19. The Supreme Court in Board of Cricket Control (supra)
also concluded as follows:
"69. Mr. Venugopal, learned Counsel appearing for BCCI and
counsel for some of the interveners opposing the
recommendations of the Committee also assailed the
Committee's recommendation that Ministers and Government
Officials should be ineligible for any post in State Associations
or in the BCCI. It was contended that the restrictions sought to
be placed on the Ministers and Government Servants are
unreasonable. It was contended that past experience of the
BCCI has shown that Government Servants and Ministers are
able Administrators whose association with BCCI and the
Associations has resulted in substantial benefit to BCCI in the
W.P.(C) 7215/2011 Page 17
management of its affairs. It was contended that office bearers
in BCCI serve in an honorary capacity and without any
remuneration for their services, except that travel, lodging and
boarding arrangements are taken care of by the BCCI. It was
also contended that the Government of India has been, as a
matter of policy, encouraging formation of Sporting
Associations so that its employees are attracted towards
sporting activities and promotion of sports and development of
sports related infrastructure. Also under challenge is the
recommendation made by the Committee that those holding
office in the State Associations shall not be eligible for holding
any office in BCCI and vice versa. It was contended that
administrative experience acquired by anyone in the State
Associations is useful to the BCCI which need not be lost by
stipulating a disqualification recommended by the Committee.
70. Learned Counsel for the interveners supporting the
recommendations, on the other hand, argued that the
recommendations were well considered and meaningful and in
the interest of the game of cricket in this country. It was
contended that political bigwigs need to be kept away from the
sporting arena not only because the presence of Ministers and
Civil Servants brings several considerations not conducive to
the promotion of the game, but, at times, results in creation of
vested interests, groupism and rivalries that harm the game far
more than helping it. The fact that the Ministers and Civil
Servants have been helpful in promoting the game in the past
does not mean that the game would cease to get their patronage
if they are disqualified from holding any office in the State
Associations or the BCCI. Whatever the legitimate sporting
patronage is required for the game would certainly come from
the concerned supporters regardless whether they are
Ministers, Civil Servants or office bearers. The contention
urged on behalf of the BCCI that the restriction placed on the
Ministers and Public Servants holding office would, in any
manner, damage the cause of the game is, therefore, without
any basis.
W.P.(C) 7215/2011 Page 18
71. The Lodha Committee has, in its meetings, held extensive
interactive sessions and deliberations with a cross section of
stakeholders. The recommendations made by the Committee are
based on the impressions which the Committee has gathered
from such interactions and deliberations. In the ordinary
course and in the absence of any patent perversity in what has
been recommended by the Committee, this Court would be slow
in interfering, especially when the Committee has
recommended comprehensive restructuring of the management
at different levels by proposing modification of the relevant
Rules and Regulations. The Committee has in its wisdom found
that the holding of office by the Ministers and Civil Servants in
the State Associations or in the BCCI is not conducive to the
health and promotion of the game. The Committee has taken the
view that the game would be better managed, promoted and
developed if politicians and civil servants who otherwise
occupy positions of responsibility in the Government that
call for their complete and unstinted attention and commitment
are made ineligible from holding any post in the State
associations or the BCCI. The Committee has while making
that recommendation observed:
"... ... ... Any elected Councillor shall stand automatically
disqualified after nine years as an office bearer, and shall also
be disqualified from contesting or holding the post if he has
completed the age of 70 years, is charged under the penal law,
is declared to be of unsound mind, is a Minister or government
servant or holds any post of another sports body in the
country."
Xxxxxxxxxxxxxxxxxxxxxxxx
b. Posts & Tenures
... ... ...The lack of any qualifications or disqualifications also
ensures that those with full time occupations superficially
involve themselves, thereby compromising their commitment to
the association and the game of cricket. Several public
servants hold lead positions in State Associations which take a
W.P.(C) 7215/2011 Page 19
substantial toll on both sets of their respective obligations to
the public.
72. In light of the above we see no compelling reason for us to
reject the recommendation which disqualifies Ministers and
Public Servants from holding offices in the State Associations
or BCCI. The argument that since ministerial and bureaucratic
support and patronage has helped the BCCI in running its
affairs in the past they should be allowed to continue, lest the
game suffers, has not impressed us. We do not think that the
game flourishes in this country because any minister or civil
servant holds office in the State Associations or BCCI. We also
do not find any basis for the argument that unless the ministers
and civil servants are allowed to hold office in the State
Association or in the BCCI they will refuse to do what is
legitimately due to the game for its development and promotion.
Nothing which is not due to the game or is not legitimate need
be done by any Minister or Civil Servant. But we have no
manner of doubt that what is legitimately due to the game will
not be denied to the game merely because Ministers or Civil
Servants do not happen to be office bearers for ought we know
that there may be an overwhelming number of Ministers and
Bureaucrats who are passionate about the game and would like
to do everything that is legally permissible and reasonably
possible within the four corners of the law even without holding
any office in the BCCI or the State Associations. The contention
that favours which the BCCI receives will disappear just
because a Minister or Civil Servant is not an office bearer in
the State Association or BCCI has no real basis to commend
itself to us. So also, the contention that it should be permissible
to hold office simultaneously in BCCI and the State Association
has not commended itself to us. The Committee has while
recommending abolition of dual posts observed:
"g. Dual posts
Strangely, while conflict of interest issues have been at the
heart of recent controversies, virtually all office bearers of the
BCCI continue to be office bearers in their respective State
W.P.(C) 7215/2011 Page 20
Associations at the same time. Presidents and Secretaries of
State Associations are to discharge functions with the primary
interest of the State in mind, but as BCCI office bearers, these
interests would have to be subordinated to that of national
interest. Often, with powers centred on an office bearer, that
individual has been found to appoint his State associates to
critical posts in the BCCI, thereby creating an imbalance."
73. There is nothing irrational about the view taken by the
Committee. The argument that individuals should be eligible to
hold two posts one each in the State Association and the BCCI
does not stand scrutiny in the light of the reasons given by the
Committee which do not, in our opinion, suffer from any
perversity to call for our interference.
74. It was next contended on behalf of the BCCI that the
recommendations made by the Committee for inclusion of a
nominee of the Accountant General of the State in the
Governing Body of the State Associations and a nominee of the
Comptroller & Auditor General of India (C&AG) as Member of
the Apex Council in BCCI were both unacceptable to BCCI
being unnecessary inflictions that were likely to result in the
derecognition of the BCCI by the ICC. It was submitted that in
terms of Article 2.9(b) of the Memorandum of Association and
Articles of Association of the ICC any interference by the
Government in the administration of the Cricket by a member
would render the latter liable to be suspended and
derecognized. Induction of the nominee of the Accountant
General in the State Association and nominee of a C&AG in the
Apex Council of the BCCI brings in an element of interference
by the Government which would according to the counsel
for BCCI lead to suspension/derecognition of the BCCI. Any
such induction was, therefore, not in the interest of the game of
cricket or otherwise desirable keeping in view the fact that the
BCCI cannot afford to run the risk of being derecognized or
suspended by the ICC.
W.P.(C) 7215/2011 Page 21
75. The Lodha Committee has, while dealing with the
need for transparency and oversight, referred to the grievance
made by the stakeholders that the BCCI was neither fair nor
transparent and those who seek greater information are either
rebuffed by the Board or won over by enticements. The
Committee has noticed that the state of affairs prevailing in
BCCI and the expenses incurred by it call for better financial
management and financial prudence. The Committee has
observed:
"In the light of all this, the Committee proposes that clear
principles of transparency be laid down, and the BCCI website
and office will carry all rules, Regulations and office orders of
the BCCI, the constitution of the various committees, their
resolutions, the expenditures under various heads, the reports
of the Ombudsman/Auditor/Electoral Officer/Ethics Officer and
the annual reports and balance sheets. In addition, norms and
procedures shall be laid down for the engagement of service
professionals and contractors, and there shall be full
transparency of all tenders floated and bids invited by or on
behalf of the BCCI. The website shall also have links to the
various stadia with seating capacities and transparent direct
ticketing facilities.
xxxxxxxxx xxx xxxxxx
The Committee also believes that the Auditor be tasked not only
with a financial analysis, but also specifically carry out a
performance audit (Compliance Report) to determine whether
the State associations have actually expended their grants
towards the development of the game and mark them on a
report card which will be utilized to determine the due they
deserve the following year. This oversight also needs to
consider the high and unreasonable expenditures by the
Boardon various heads, which would have to be limited and
streamlined.
76. While dealing with the question of governance in Chapter
Two of the Report the Committee has recommended a Nine-
W.P.(C) 7215/2011 Page 22
Member Body as the Apex Council out of whom five shall be
elected office bearers of the BCCI while four shall be
Councillors one of them to be nominated by the C&AG. The
nominee of C&AG, shall, in the opinion of the Committee bring
transparency and oversight in monitoring the finances of the
BCCI. It is in that background that the Committee has
recommended in the draft Rules and Regulations/Memorandum
of Association the composition of the State Associations and the
BCCI to include a nominee of the Accountant General of the
State in the case of State Associations and nominee of C&AG as
Member of the Apex Council in the case of the BCCI. It is
evident from a careful reading of the Report that the object
underlying the induction of the nominees of the Accountant
General of the State and the C&AG is to bring transparency
and financial oversight into the affairs of the State Associations
and the BCCI. No one can possibly argue that the object sought
to be achieved by the proposed nominations is not laudable or
at least desirable. Transparency and financial discipline and
accountability are fundamental values to which any authority
discharging public functions must be committed to. To that
extent the BCCI has not faulted the report made by the
Committee. What is all the same contended is that the
recommendation if accepted may result in the suspension of the
recognition of the BCCI as it will be seen by the ICC as
Government interference contrary to Article 2.9(B) of the ICC
Rules, which reads as under:
Where a government interferes in the administration of
cricket by a Member, including but not limited to interference
in operational matters, the selection and management of teams,
the appointment of coaches or support personnel or the
activities of a Member, the Executive Board shall have the
power to suspend or refuse to recognize that Member, subject
to the provisions of Article 2.7.
77. There is, in our view, no basis for the argument that any
measure taken by the BCCI on its own or under the direction of
a competent court specially when aimed at streamlining its
working and ensuring financial discipline, transparency and
W.P.(C) 7215/2011 Page 23
accountability expected of an organization discharging public
functions such as BCCI may be seen as governmental
interference calling for suspension/derecognition of the BCCI.
Far from finding fault with presence of a nominee of the
Accountant General of the State and C&AG, the ICC would in
our opinion appreciate any such step for the same would
prevent misgivings about the working of the BCCI especially in
relation to management of its funds and bring transparency and
objectivity necessary to inspire public confidence in the fairness
and the effective management of the affairs of the BCCI and the
State Associations. The nominees recommended by the
Committee would act as conscience keepers of the State
Association and BCCI in financial matters and matters related
or incidental thereto which will in no way adversely impact the
performance or working of the BCCI for the promotion and
development of the game of cricket. The criticism leveled
against the recommendations of the Committee is, therefore,
unfounded and accordingly rejected."
20. Lastly, it is submitted by Mr. Mehra on the DDCA's submissions with
respect to the directions of the Mudgal Committee being contrary to law as
they cannot be implemented without approval of the Registrar of Companies,
that the changes required of in the Memorandum of Articles have to be first
approved by the DDCA members, after which the approval of the Registrar
can be obtained.
21. Shri Manish Tewari, appearing on behalf Mr. Kirti Azad, argued that
several statutory as well as internal committees of the DDCA have found
several irregularities and illegalities in its functioning and its office bearers.
It is submitted that these irregularities/illegalities show the current state of
affairs. The findings of financial discrepancies, of the Internal Fact Finding
and Internal Audit Committee were relied on. Mr. Tewari submitted that
large sums of money were transferred without the prior knowledge or
W.P.(C) 7215/2011 Page 24
approval of the Executive Committee. Large sums of money were paid as
professional charges to personal firms for the same work, without any
authorization or approval to the tune of ` 4.8 crores in FY 2013-14.Payments
of ` 4.37 crores were made without the approval of the Internal Auditor from
June 2014 to 17th September 2014. Likewise advance payments were made
to several companies months before the receipt of the bills. There was bogus
expenditure on various counts, such as daily rent for hire of computers,
printers etc. and also for flex, photographers, diesel etc. Also, huge sums of
money were "round tripped" by some of DDCA's office bearers The round
tripping of ` 1.55 crores was confirmed by an Inquiry Report of former
District and Sessions Judge, Ms. Ina Malhotra, in which the President of the
DDCA has been hauled up. Also, outstanding prize money was to the tune of
` 60.80 lakhs. Mr. Tewari stated that a glaring irregularity was that no fixed
asset register has been maintained by the DDCA; also there were
discrepancies in the amounts recoverable from the BCCI for the year 2013-
14, to the tune of `3 crores. The purchase expense for the bar was ` 75.25
lakhs but sales was only `35.96 lakhs leading to a loss of `39.28 lakhs in bar
sales for FY 2013-14.
22. It was submitted that there is no Company Secretary since end 2014
and there are several adverse findings in the order of the CIC and
observations touching on the functioning of the DDCA executive office
bearers. DDCA has a weak internal control system, non-maintenance of
fixed assets registers and has major transactions in cash and payments to
directors/members without approval of the Board or Central Government.
Further, the DDCA is in non-compliance of Schedule VI read with Section
W.P.(C) 7215/2011 Page 25
221 of the Act and the Accounting Standards. Besides, in the report of the
SFIO, out of the 24 directors, 16 have already completed their terms, and the
remaining 8 will complete their terms on 30.09.2016. There has been no
AGM held for the last 3 years, which is in clear violation of the law. 62 cases
of violation of the Companies Act were made out against the DDCA, and
some have been compounded by the Company Law Board as well as the Lok
Adalat of the CLB, by which the directors have been let off with meager
fines. However, this Court has stayed some of the cases. It was submitted
that having regard to the magnitude of the irregularities and the DDCA's
obligation to implement the Justice Lodha Committee report by virtue of the
Supreme Court's judgment, pronounced on 18.07.2016 in the Board of
Cricket (supra) and its direction to the BCCI and its constituents to
implement the recommendations within a period of 6 months, DDCA has to
implement the recommendations and amend its constitution, and also
conduct fresh elections by 18.01.2017. Lastly it was urged that since the term
of 16 Directors of 24 have already completed, and the remaining 8 Directors
would have completed their terms on 30th September, 2016 this Court
should direct Justice Mukul Mudgal (Retd) or any other individual instead of
Justice Mudgal, to act as the Administrator of the DDCA, and take over its
day-to-day functioning.
Analysis and Conclusions
23. The present writ petition was instituted in the context of claims of
arrears of municipal tax in relation to the open and built up areas- including
the stadium belonging to and within the control of DDCA. It also had to
approach the Court because of frequent problems faced by it on account of
W.P.(C) 7215/2011 Page 26
pendency of various issues with different agencies, such as fire department,
health department, etc. The order sheet in this case reveals that but for Court
intervention, a large number of events, including international cricketing
fixtures and test matches, would not have been held. In the course of one
such proceeding, which was preceded by one of the endless applications
moved for directions in the context of the then cricketing season, the Court
had heard submissions of the parties and made orders for the appointment of
the Mudgal Committee. The Court directed the constitution of the Mudgal
committee; on 18.11.2015. The order pertinently noted that" we feel that it
would be appropriate that somebody is appointed to oversee the forthcoming
test match as also to ensure that the DDCA takes earnest steps towards
obtaining requisite clearances/compliances. All the parties agree that a
former Judge of this Court may be nominated for this purpose. We feel that
Justice Mukul Mudgal would be an appropriate person. This is accepted by
all the parties". The order of 18.12.2015 clarified the earlier order, stating
that " The DDCA will extend its full cooperation to Justice Mudgal in
ensuring that the recommendations made by him in his reports to this Court,
copies of which have been made available to all the parties, are implemented
to his satisfaction. The Court requests Justice Mudgal to submit a further
report after the conclusion of the ten matches.." The tenor of the orders dated
22.02.2016, 03.03.2016 and 07.04.2016 uniformly reveal that the Court had
tasked the Justice Mudgal committee with the job of conducting matches
smoothly and importantly suggesting best practices and other
recommendations for the better and more efficient management of the sport
and smooth functioning of cricket.
W.P.(C) 7215/2011 Page 27
24. In discharge of the mandate given to him, Justice Mudgal oversaw
several matches; both domestic and international. He also furnished several
reports and supplementary reports. The report dated 11.07.2016 contains
several recommendations for the structural overhaul of DDCA and some of
its constituents, besides suggesting changes in matters such as ban on proxy
voting, abolition of affiliate clubs, etc. Other recommendations include
reforms such as conditions to be followed in tendering, financial and audit
controls, payments, ticketing, etc. The DDCA has reservations in respect of
some of these recommendations; it has no objections in principle in respect
of others.
25. DDCA's first objection is that the Court is now asked to traverse far
beyond the original scope of its jurisdiction having regard to the limited
claim made by it, in the writ petition; it was only for directions to issue
clearances for matches, protection from coercive action in relation to any
municipal property tax demand, etc. That DDCA did not voice any
reservations at the time Justice Mudgal was appointed does not in any
manner preclude it from doing so now, given that the original mandate i.e
holding of matches has been complied with. Therefore, the Court should not
expand the scope of these proceedings as it would be contrary even to what
is sought; besides it would violate the roster conditions that preclude
Benches from hearing public interest litigation to the extent that the
directions now claimed fall in that category.
26. This Court is of opinion that the DDCA's arguments are unmerited.
Firstly, a bare glance at the order sheet in this case is replete with instances
where the Court was asked to proceed beyond confines of the relief claimed;
W.P.(C) 7215/2011 Page 28
the Court stepped in to aid DDCA having regard to the larger interests of the
viewing public and those of the cricket-loving people and viewers. Even
before the orders constituting the Mudgal Committee were issued, the Court
had stepped in to rescue the DDCA from dire straits, at the last moment, to
ensure clearances from authorities were obtained. In all those instances, the
DDCA had no objection, despite the relief claimed being restricted to the
issue of recovery of property tax demands. None of the orders, constituting
the committee, or recording the tasks performed by the committee, under its
supervision, such as the holding of cricket series, including international
matches, was taken umbrage to; in fact, no exception was taken to the
revenues and surplus generated by the supervision of the committee. Having
thus taken the benefit of such orders, the DDCA cannot now say that this
Court has either lost its mandate, or is exceeding its jurisdiction.
Furthermore, the Court, acting under Article 226 of the Constitution, cannot
be asked that it could proceed up to a point and no further. In such cases,
when the Court discerns an issue of public concern or importance, it acts
within its powers to issue continuing mandamus, or make such directions as
the circumstances warrant, in oversight of its orders and judgments (Re
Vineet Narain v Union of India 1998 (1) SCC 226).
27. So far as amenability to writ jurisdiction and the Court's power to
issue directions that concern governance and affairs of the DDCA go, what is
immediately noticeable is the familiar ring of this argument, which was
decisively rejected in the Board of Control for Cricket (supra) judgment,
where the Supreme Court held that the BCCI
W.P.(C) 7215/2011 Page 29
"does discharge some duties like the selection of an Indian
cricket team, controlling the activities of the players and others
involved in the game of cricket. These activities can be said to
be akin to public duties or State functions and if there is any
violation of any constitutional or statutory obligation or rights
of other citizens, the aggrieved party may not have a relief by
way of a petition under Article 32. But that does not mean that
the violator of such right would go scot-free merely because it
or he is not a State. Under the Indian jurisprudence there is
always a just remedy for violation of a right of a citizen.
Though the remedy under Article 32 is not available, an
aggrieved party can always seek a remedy under the ordinary
course of law or by way of a writ petition under Article 226 of
the Constitution which is much wider than Article 32."
Identical logic applies to the DDCA, which seeks to reflect the game of
cricket in the Delhi team; it represents the NCT of Delhi in the BCCI; its
cricketers are picked up by the selectors to represent India, in international
matches and in short, it is the official face of cricket in Delhi. Like in the
Board of Control for Cricket (supra) judgment which rejected BCCI's
arguments that its rights under Article 19 (1) (c) would be affected, here too,
objections to the reforms in its governance and various aspects of
functioning cannot be countenanced.
28. As far as the other objection by counsel that this Bench should not
hear the matter, because according to roster, this case ought to be listed
before some other Division Bench, or a learned single judge, is concerned,
the dictates of roster allocation were discussed by the Supreme Court in State
of Rajasthan v Prakash Chand 1998 (1) SCC 1 where it was held that:
"Therefore, from a review of the statutory provisions and the
cases on the subject as rightly decided by various High Courts,
to which reference has been made by us, it follows that no judge
W.P.(C) 7215/2011 Page 30
or a Bench of judges can assume jurisdiction in a case pending
in the High Court unless the case is allotted to him or them by
the Chief Justice. Strict adherence of this procedure is essential
for maintaining judicial discipline and proper functioning of
the Court. No departure from it can be permitted. If every judge
of a High Court starts picking and choosing cases for disposal
by him, the discipline in the High Court would be the casualty
and the administration of Justice would suffer. No legal system
can permit machinery of the court to collapse."
No doubt, the dictates of the roster system of a High Court's functioning
tethers a particular judge to a specific category or class of cases, or cases
assigned by the Chief Justice. In this instance, this petition was specially
marked to the present Bench. Therefore, the submissions of DDCA cannot
be countenanced; they are hereby rejected.
29. As far as the recommendations go, it hardly needs to be emphasized
that reforms are badly needed; there appears to be no stability in certain key
governance issues or even discernable norms in regard to activities such as
accounts and finance, procurement through tendering, a stable selection
policy for selectors and players, the terms and conditions applicable to them,
etc. Therefore, DDCA itself conceded during the hearing that the Mudgal
Committee recommendations with regard to the following can be adopted:
(a)Tendering (Page 17 of the report)
(b) Accounts & Finance (Page 18 of the report)
(c) Administration (Page 19 of the report)
(d)Ticketing And Accreditation (Page 21of the report)
W.P.(C) 7215/2011 Page 31
Similarly, regarding the recommendation for ticketing the DDCA agrees to
adopt a scheme similar to that followed by the Committee during its
supervision of the matches regarding the distribution of complimentary
passes, subject to the overall control and supervision of its Board of
Directors to overcome any contingencies. DDCA is also agreeable to
implement them on the following terms:
(i) The correspondence with the existing Affiliated Clubs to be addressed
to the registered office of the Club by DDCA, as also at the correspondence
address, if any.
(ii) Selection process must be fair and transparent.
(iii) The said disclosures must be made public.
(iv) The Selection Committee of all age groups (men and women) must
comprise of one retired international player.
(v) The remuneration for coaches or any other person sought to be
appointed by DDCA must be fixed prior to appointment by DDCA and
formal contracts must be entered before appointment.
30. The Justice Lodha Committee recommendations for ending proxy
voting are forthright. The DDCA had argued that such reform - as well as the
recommendation with respect to abolition of the sports committees and
affiliation only of registered clubs cannot be the subject of a judicial diktat.
This Court, however, is of the opinion that since ending proxy voting is no
longer a matter of debate a direction to that effect is to be made.
Accordingly, it is hereby directed that proxy voting is impermissible and the
W.P.(C) 7215/2011 Page 32
DDCA shall not resort to it, in future elections. An appropriate amendment
shall be carried out to Article 37 of the DDCA's Articles of Association.
With respect to other recommendations, i.e mandatory condition that club
affiliations are permissible only if such bodies/clubs are registered under
Societies Registration Act there is nothing in law which supports the
DDCA's objections. The Mudgal Committee had recommended that the
sports committee shall comprise of 10 members, i.e the following:
1. 5 retired men or women international or national cricketers
of credible repute (the names proposed should be approved by
the BCCI)
2. 2 members elected by Affiliated Clubs
3. 2 members of Institutional Clubs
4. 1 senior coach (the name proposed should be approved by
the BCCI)
Accordingly, it is hereby directed that the commendations with respect to
sports committee shall be accepted. There shall accordingly, be an
appropriate amendment to Article 23 of the DDCA's Articles of Association
to bring it in line with the above recommendation. The present Article 23
shall be deleted and substituted by the following, as sub-article (a) to Article
23:
"No club or Association shall be affiliation, or its affiliation
continued, unless it is registered as a society or as a not for
profit company, and which has submitted its duly audited
reports, especially about the amounts received from DDCA or
other bodies for the promotion and development of the game.
This condition shall be complied within 3 months of the coming
into force of the amendment, in respect of all existing affilliated
members; failure to comply would result in loss of affiliation."
W.P.(C) 7215/2011 Page 33
Article 23 (b) shall read as follows:
(b) The executive committee will form a sports working
committee consisting of 10 members from amongst the
following:
1. 5 retired men or women international or national cricketers
of credible repute (the names proposed should be approved by
the BCCI)
2. 2 members elected by Affiliated Clubs
3. 2 members of Institutional Clubs
4. 1 senior coach (the name proposed should be approved by
the BCCI)"
31. The Supreme Court judgment, in relation to BCCI, had accepted the
Lodha Committee recommendations with respect to streamlining or pruning
of that body; the committee had also recommended that all State associations
(such as DDCA) should adopt a uniform pattern. This Court notices that at
present the governance structure of DDCA is "top heavy". Its Executive
committee comprises of 27 members (one President, three Vice Presidents,
one Hony. Secretary, one Sports Secretary, one Club Secretary, one
Treasurer, eight Joint Secretaries and 11 Members). There is hardly any
cooling off period and no tenure or age restrictions. The Justice Lodha
Committee recommendations vis-à-vis the governance structure of BCCI are
as follows:
"4. Office Bearer
'Limited Tenures & Cooling Off'
While all the existing office bearers (President, Vice-President,
Secretary, Treasurer and Joint Secretary) are retained in
honorary positions, the number of Vice Presidents is pruned
from five to one. Their duties have been realigned. The
President is shorn of his say in selections. The additional vote
W.P.(C) 7215/2011 Page 34
for the President at meetings is deleted. The terms of these
Office Bearers continue to be of 3 years, but with a maximum of
3 such terms regardless of the post held, with a cooling off
period after each such term."
This Court hereby directs appropriate amendments to bring in line the above
recommendations, with respect to the membership of the executive
committee as well as the tenure restrictions and cooling off periods.
Furthermore, the following direction has acquired the force of law, due to
Article 141 of the Constitution in relation to BCCI:
"... ... ... Any elected Councillor shall stand automatically
disqualified after nine years as an office bearer, and shall also
be disqualified from contesting or holding the post if he has
completed the age of 70 years, is charged under the penal law,
is declared to be of unsound mind, is a Minister or government
servant or holds any post of another sports body in the
country."
Like in its case, there is no compelling reason to depart from it in the case of
DDCA. The above condition shall be read as part of Article 40 of the
DDCA's Articles of Association, specifically as Article 40(c), which shall
read as follows:
"... ... ... Notwithstanding anything contained in any provision
of these articles, any elected executive committee member
amongst those described in Article 38, shall stand
automatically disqualified after nine years as an office bearer
(i.e member of executive committee), and shall also be
disqualified from contesting or holding the post if he has
completed the age of 70 years, is charged under the penal law,
is declared to be of unsound mind, is a Minister or government
servant or holds any post of another sports body in the
country."
W.P.(C) 7215/2011 Page 35
32. The extracts of the judgment in the Board of Control for Cricket
(supra) had accepted the Justice Lodha Committee recommendations with
respect to co-opting a nominee of the CAG/Accountant General in the BCCI
and every state association, respectively:
"the composition of the State Associations and the BCCI to
include a nominee of the Accountant General of the State in the
case of State Associations and nominee of C&AG as Member of
the Apex Council in the case of the BCCI."
The DDCA is directed, therefore, to appropriately amend Article 38 of its
Articles of Association, to include the nominee of the Chief Controller of
Accounts for the NCT of Delhi. The DDCA shall also ensure that a full time
CEO is appointed to carry out day to day administration, with his powers
clearly demarcated.
33. The DDCA had argued that acceptance of the recommendations is not
permissible, because regulatory approval of the Registrar of Companies
under the Companies Act is essential. This Court is of the opinion that the
submission is baseless. There is no provision in the Companies Act, which
impedes an incorporated company from proposing and carrying out
amendments to its Memorandum and Articles of Association and then, once
the company (in this case, the DDCA, a not for profit company) carries out
the proposals, submit the amendments for due acceptance. The same
approach shall be adopted in the present case.
34. As far as other issues are concerned, this Court extracts, for facility of
reference, the deficiencies and recommendations of the Mudgal Committee,
in the report dated 11.07.2016:
W.P.(C) 7215/2011 Page 36
"VI. DEFICIENCIES & RECOMMENATIONS :
TENDERING
1. DDCA does not follow a proper procurement and
tendering policy for placing orders on the Vendors. We,
however, came across handful of proper and public Tenders
pertaining to providing Catering & Restaurant Services at
DDCA (2014), Security Services (2014) and Housekeeping
Services (2014) which were issued. For proper checks and
records, where orders are placed without calling quotations,
the reasons for not inviting quotations must be recorded. In
addition, they must mention how the vendor/contractor has
been selected, how it was ensured that rates quoted are
reasonable and competitive. DDCA must follow a proper
procedure for issuing and accepting Tenders/ Quotations.
2. DDCA does not issue formal directions for laying down
the system and procedures for tendering like issuing short
notice Tenders, inviting Local quotations, issuing of work/
purchase orders, signing of agreements with Vendors within
time resulting in losses. Formal directions must be given and
Written Agreement must be entered with each vendor.
3. DDCA does not issue formal Work/Purchase orders. In
some cases, the approval is given on a single quotation itself
and approved quotation is treated as a work order which leads
to confusion and infact is deliberately done by some senior
office bearers for reasons best known to them. In some cases
the work orders are drafted as a formality after the work had
been executed. There should be a standard format to place
Work/Purchase order.
4. There was no proper verification of work done, certification
and payment of bills. The checking by the Working Committee
members of works awarded during the World T20 matches was
also lacking in some cases like Housekeeping, Security,
Catering in Corporate Boxes, Hiring of Equipment. This led to
inferior services. At DDCA, Vendors have to run after the
W.P.(C) 7215/2011 Page 37
concerned Members to get their bills certified, which leads to
nepotism and avoidable practices. Despite giving various
directions, the members of the various Committees did not
submit any report on the quality and quantity of work done
immediately after each match. The hills must he cleared
expeditiously after proper certification through a transparent
and fair process.
5. It has also been observed that some of the
Vendors/Contractors were Members of DDCA or close
relatives of the Members of the Executive/Working Committees.
This fact is neither disclosed by the Vendors/Contractors to
whom the work is awarded nor by the Members of the
Working/Executive Committees. This can results in conflict of
interest. DDCA must issue clear directions/guidelines in this
regard. A register of interests must be maintained so that the
office hearers disclose their interests so as to avoid any conflict
of interest.
6. In order to bring the Ferozshah Kotla Stadium to its
erstwhile International standards a permanent maintenance
committee also comprising of an independent professional
person should function regularly.
ACCOUNTS & FINANCE
1. Accounts wing needs to be strengthened. Internal Audit has
pointed out various deficiencies in maintenance of Accounts,
Record keeping, systems and procedures, internal controls,
information system and also payments made to various parties
which are not in compliance with financial manual.
2. There is no information system relating to pending bills.
Some of the pending bills are almost 3 years old. These hills
have not been approved by the Executive Committee, hence
these are not being shown as outstanding in Accounts.
According to last internal audit report, there are pending bills
of Rs. 3.63 crores as on 31 December 2015. Some of these bills
are reimbursable by BCCI.
W.P.(C) 7215/2011 Page 38
3. No input or advice is taken from Accounts and Finance wing
when the proposals which have financial implications are
approved. Accounts come in the picture only when bills are to
be passed/paid. At this stage, even if Accounts wing points out
shortcomings, it is too late as the work has already been
executed.
4. DDCA does not have adequate MIS system for example on
Debtors and Creditors, bills pending for approval of
Management, outstanding statutory dues like TDS, Service Tax,
Employees Provident Fund; Cash Flow, Advances pending
adjustment.
5. Since DDCA has not prepared its Annual Budget, at least in
the last 3 years, there is no variance analysis of Actual verses
Budget. Budget is an important control document. They must
prepare Budget for each Match in addition to Annual Budget of
DDCA.
ADMINISTRATION
1. The duties, responsibilities, powers of the Administration
department have not been clearly defined. For World T20
Matches, the Tendering Committee itself had to ascertain the
items for which tenders were to be invited, work out the
requirements to be projected, draft the tenders and give
advertisement in the Newspapers about the tenders floated on
Website of DDCA. There was no administrative support in the
Tendering process, due to some senior office bearers.
2. It was extremely disheartening to know that the
Administration department of DDCA did not even have the
proper records of the players representing Delhi. The lists of
woman players were made for the first time in the history of
DDCA during World T20 matches. There are no proper and
updated records maintained of the members of DDCA.
3. The Administration departments need to be strengthened and
should be directed to ensure that proper records are
maintained by them.
W.P.(C) 7215/2011 Page 39
4. Even though the employees of DDCA are committed to their
work, but to check any irregularity and misuse of the employees
by the office bearers, it is advisable that an Administrative
officer (preferably an ex-servicemen) is appointed to ensure
that the workforce of DDCA is able to work to their maximum
potential and the workforce should only be deployed at
Ferozshah Kotla and not anywhere else.
PROMOTION OF CRICKET & SELECTION OF PLAYERS
Due to several complaints received during my tenure, the
following measures are proposed for betterment of Cricket and
selection procedure:
i. The existing Clubs which are registered with the Registrar of
Societies/Registrar of Companies and fulfill all statutory
compliances must only be given affiliation by DDCA alongwith
institutional clubs.
ii. The correspondence with the existing Affiliated Clubs must
only be addressedto the registered office of the Clubs by
DDCA.
iii. The office bearers of DDCA must ensure that the existing
Affiliated Clubs provide the details of the disbursement of
finances, which are provided by DDCA for the promotion of
Cricket to the Affiliated Clubs to maintain accountability and
transparency. The accounts pertaining to the grant provided by
DDCA to the Affiliated Clubs must be submitted to DDCA.
DDCA must check that the grant has been utilized for the
promotion of cricket and should grant affiliation to the Clubs
for the next cricketing season only after being satisfied that the
grant has been properly utilized for the promotion of Cricket.
iv. The Sports Working Committee which is apparently
responsible for running the cricketing affairs in the city of
Delhi and only comprises of the 10 members selected by
Affiliated Clubs of DDCA should either be abolished or the
constitution must he changed to comprise the following-
1. 5 retired men or women international or national cricketers
of credible repute (the names proposed should be approved by
the BCCI)
2. 2 members elected by Affiliated Clubs
3. 2 members of Institutional Clubs
W.P.(C) 7215/2011 Page 40
4. 1 senior coach (the name proposed should be approved by
the BCCI)
v. The Selection Process must be fair and transparent. All
selected candidates must fill a detailed form which must also
specify their relation, if any, with the office bearers, Executive
Committee Members and Sports Working Committee members
or with any person concerned with DDCA.
vi. The said disclosure must be made public and the list of
selected candidates must also be made public on the website.
vii. The Selection Committee for all age groups (men and
women) must comprise of one retired international players. The
names of the Selectors must be approved by BCCI and no
selection panel should exceed more than 3members.
viii. The remuneration for the Coaches or any other person
sought to be appointedby DDCA must be fixed prior to
appointment by DDCA and formal contracts must be entered
before their appointment.
TICKETING & ACCREDITATION
1. The complimentary passes and issuance of accreditation
cards are the bone of contention between the office bearers of
DDCA and even the variousauthorities. The senior office
bearers eye maximum complimentary tickets to serve the
interest of their proxies who cater to their vote bank
requirements during elections.
2. It is necessary to curb this practice of complimentary passes
which are given to various persons and proxies all over Delhi
only for personal gains and for strengthening their vote bank
for elections of DDCA.
3. The following recommendations in relation to Ticketing &
Accreditation are required to be implemented in a sacrosanct
manner to curb this malpractices.The maximum number of
tickets ought to be put on sale for the benefitof the spectators
and DDCA's finances.
ii. Every ticket should have a seat number assigned to ensure
comfort andan assured seat for the spectators.
W.P.(C) 7215/2011 Page 41
iii. The complimentary passes for the Office Bearers, Executive
Committee Members, SWC, Women Committee Members,
Various Authorities, Players, Coaches and Affiliated Clubs and
Passes for theMembers should only be assigned in West Stand
Fourth Floor, Hill Band West Stand Ground Floor of the
Stadium,
iv. The number of complimentary passes issued must not exceed
the following limit-
1. Executive Committee Members - 10 per match
2. SWC- 4 per match
3. Patrons- 4 per match
4. Women Committee Members- 4 per match
5. Various Authorities- Must not exceed 1000 per match
6. Current & Former International Players (Men &Women) - 2
per match
7. Current& Former National Players (Ranji Men &Women) -
1 per match
8. Present Players (Men &Women of all age categories) - 1 per
match
9. Senior Coaches (List to be approved by a committee
consisting of 3 international players from Delhi) - 2 per match
10. Affiliated Clubs-1 per match
V. One pass (Members Pass) should be issued to each member
of DDCA.
vi. The complimentary passes of the authorities should only be
handed over to the nodal officer appointed by that particular
authority.
vii. The Executive Committee Members, Sports Working
committee members, patrons and employees should be issued
only one Accreditation Card for themselves only as
Accreditation Cards are many times misused for enjoying the
hospitality causing immense losses to DDCA. No request for
any additional Accreditation Card must be entertained.
viii. People involved in cricket operations should only be given
Accreditation Cards after getting prior approval of BCCI, as
they get access to various sensitive areas which are restricted
by BCCI.
W.P.(C) 7215/2011 Page 42
ix. The various authorities must have a proper system of
issuance and verification of Accreditation Cards to avoid
misuse of the generic Accreditation Cards issued to the various
authorities.
X. The office bearers of DDCA must not promote the culture of
watching the match at Ferozshah Kotla Ground or any other
ground with complimentary passes and completely stop
entertaining the requests for any complimentary passes,
xi. During the World T20 and IPL-9 matches, discretionary
quota of complimentary passes was given to the Head of Event.
However, the details of distribution of discretionary quota have
not been furnished till date. At the instance of the senior office
hearers, 80 corporate box tickets were purchased by DDCA.
However, the final details of distribution have not been
provided.
xii. All records of distribution of Complimentary Passes and
Accreditation Cards must he maintained by DDCA and posted
on the website of DDCA after every match. All information
pertaining to Tendering, issuance of Contracts/ Work Orders
must also be made public and posted on the website of DDCA.
xiii. All financial and other documents relating to the matches,
selection and the functioning of DDCA (Minutes of Meetings)
must he posted on the Website by DDCA, since it performs
public functions and such disclosure will not only ensure
transparency but also enhance the reputation of DDCA and its
office bearers in the eyes of its members and general public.
VIII. FINANCIAL IMPLICATIONS:
With various checks and balances implemented during my
tenure, DDCA has been able to save approximately Rupees
7.00 crores (as per provisional Income and Expenditure
accounts) from the World T20 matches. This expenditure also
includes Rs. 45.00 lakhs contributed to Delhi Police Martyr
Fund. The surplus of Rupees 7.00 crores will further go up as
some of the expenses incurred during these matches are
reimbursable by BCCI (like hospitality to ICC guests). Further
Rupees 1.85 crores paid as Advance Tax to Delhi
Entertainment Tax Department has been totally booked as
expenditure while a good amount out of it is likely to be
W.P.(C) 7215/2011 Page 43
refunded when final assessment is done by the concerned
Department, as the number of tickets sold in many matches was
much less to the total capacity. However, this large profit has
generated a spate of resolutions seeking to change the entire
financial structure of approval. This Hon'ble Court may issue
directions for ensuring that this large profit is properly utilized
and not frittered away.
It is advisable that the said amount is utilized for improving the
stadium facilities and cricket facilities under the supervision of
an independent financial expert of credible reputation with the
assistance of a specialized team of dedicated DDCA officials
constituted by BCCI. This will help in Ferozshah Kotla
regaining the international standards it had.
IX. OBSERVATIONS:
The recommendations made in the present Report and all my
earlier Reports are not exhaustive for improving the state of
affairs at DDCA. The current state of affairs in DDCA requires
the scrutiny of BCCI. Several complaints were received
regarding the selection process of players during my tenure at
DDCA, which requires a thorough investigation by an
independent person or body. The proxy system is the bane of
Delhi Cricket and subject to other legal requirements deserves
to be jettisoned. Some of the office bearers and the Executive
Committee Members of DDCA only act for their own personal
gains and for maintaining their relationships at the expense of
DDCA. It is a pity that the coaches, players, vendors and
employees of DDCA are not paid on time. The Office Bearers,
Executive Committee Members and the Sports Working
Committee members of DDCA should be concerned for
improving the cricket facilities in the city of Delhi. It is
advisable that DDCA has a full time CEO who independently
looks after the administration and financial aspects of DDCA to
ensure continuity and smooth functioning of DDCA. BCCI as
the parent body must ensure that DDCA is transparent in its
functioning as it is a public body responsible for promoting
cricket in the city of Delhi.
W.P.(C) 7215/2011 Page 44
It is for BCCI to decide whether to constitute a specialized ad-
hoc body or a committee to take over and manage the affairs of
DDCA to improve the situation in DDCA in the interest of
Cricket so that Ferozshah Kotla again becomes a venue which
has international standards of upkeep."
35. The Court also hereby directs that since the tenure of the Executive
committee ended in October, and having regard to the fact that Justice Mukul
Mudgal had expressed his inability to continue as Administrator, to ensure
continuity, till the above changes are made to the DDCA's Articles of
Association, and for also ensuring that matches - both domestic fixtures and
international events are held smoothly, a replacement is needed. Mr. Justice
Vikramajit Sen, retired judge of the Supreme Court, is hereby appointed to
act as Administrator in place of Justice Mudgal to oversee the affairs of
DDCA - including its day-to-day functioning and ensure that cricket
matches are conducted smoothly till such time the directions given in this
judgment are implemented and charge is handed over to the newly elected
executive committee of the DDCA. Justice Mukul Mudgal is requested to
hand over charge in two weeks from the date of this judgment.
36. The following directions are issued:
(1) The DDCA is directed to forthwith adopt all the recommendations
discussed in para 28 of this judgment relating to tendering, accounts and
finance, administration, ticketing and accreditation. The other directions
contained in paras (i) to (v) of Para 28 shall also be implemented by the
DDCA forthwith. At the same time, it is clarified that all contracts and
processes adopted during the interregnum, i.e. after the appointment of the
Justice Mudgal Committee and till the directions of the Court are finally
W.P.(C) 7215/2011 Page 45
implemented and the administration handed over to the duly elected body in
accordance with this judgment, shall not be disturbed. In other words, upto
the date of this judgment, the contracts entered into as well as the selections
of the selectors and the teams shall not be disturbed in any manner
whatsoever. Likewise, the expenses undertaken and the binding contracts
entered into, under the authority of the Justice Mudgal Committee, are
hereby ratified and cannot be called into question by the virtue of this
judgment. The Administrator hereafter shall also continue with the same
policies but wherever changes are necessary, follow the directions in this
judgment.
(2) The terms and conditions of the Administrator shall be the same, i.e `
1 lakh per working day, as in the case of the Justice Mudgal Committee. The
Administrator is to settle the terms and conditions of the individuals and
officials who are to assist him for the tasks assigned to him.
(3) The Administrator shall call for a meeting of the members of the
DDCA in accordance with its Articles of Association, to ensure the
implementation of the directions in para 29, i.e. concerning the policy of
proxy voting (amendment to Article 37), substitution of Article 23, i.e. a
change in the sports committee, change in the conditions of affiliation of
clubs and change in composition of the sports committee, the changes spelt
out in para 30 of this judgment with respect to tenure, restrictions of office
bearers, number of office bearers, i.e. Vice President, President, Secretary
etc., cap on the age limit and amendment to Article 38 to include a nominee
of the Chief Controller of Accounts of the GNCTD. This meeting of the
W.P.(C) 7215/2011 Page 46
General Body to amend the Articles of Association shall be taken at the
earliest expedient time, i.e. preferably before the end of March 2017.
(4) The Administrator is required to, thereafter, approach the concerned
government/regulatory authorities, such as the Registrar of Companies and
after obtaining requisite approval in accordance with law, ensure that the
amendments are incorporated in the Articles of Association.
(5) After the amendments are so carried out in accordance with the
directions above, the Administrator shall ensure that an Annual General
Meeting is held, for the purpose of electing the Executive and Office Bearers
of the DDCA in accordance with the amendment articles. The Administrator
shall ensure that an impartial individual acts as the Election
Officer/Chairperson and if required, also nominate members for such
purpose, including members of the DDCA. It is open to the Administrator to
seek the assistance of the individuals who have helped in the running of the
affairs of the DDCA for the past one year, including those employed under
the Justice Mudgal Committee and/or any individual for any specific purpose
in this regard. While doing so, the Administrator shall ensure that an expert
in finance and auditing of accounts and overseeing tender/contractual
specifications etc. is also included. The Administrator is free to associate any
member of the DDCA in whom he reposes confidence and for that purpose
consult such past office bearers as he may deem essential.
(6) The Administrator shall appoint an external auditor who shall audit
DDCA's accounts for the period 2012-13; 2013-14 and 2014-15 and submit
a report within three months after such appointment. The administrator shall
W.P.(C) 7215/2011 Page 47
fix the fee to be paid to the auditor having regard to the prevailing fee for
such services; it shall be borne by the DDCA.
(7) In line with the previous order of this Court in the present petition,
dated 18.12.2015, a direction is issued that the new Administrator, Justice
Vikramajit Sen shall be paid ` 1 lakh per working day by the DDCA. The
remuneration which the other officers or individuals received as per
recommendations of Justice Mukul Mudgal shall be paid to them and for
periods thereafter till the election and handing-over of the administration to
the DDCA, the remuneration and terms and conditions of such individuals
shall be the same.
(8) All reports filed by Justice Mudgal Committee and the contract
entered into by it, including the contracts with selectors as well as tender
contracts and other contracts in connection with the matches till the date of
judgment are hereby accepted and ratified.It is at the same time, clarified that
the tenure of the contract is in no manner prejudiced and if it is beyond the
judgment, the same shall continue during the period the Administrator
appointed by the Court is in control.
(9) The Court hereby records its gratitude and appreciation to Justice
Mukul Mudgal (Retd) for the role he played in steering DDCA during its
troubled days. In keeping with his request- conveyed during the hearing of
this case, the fee/honorarium payable to him is directed to be deposited by
the DDCA in the Delhi Police Martyrs' Fund. Proof of deposit shall be filed
by the DDCA in this Court, together with an affidavit in two weeks.
W.P.(C) 7215/2011 Page 48
(10) The petition is directed to be listed before this Bench to monitor and
supervise the progress of the directions; in the meanwhile, it is open to the
Administrator to file periodic reports or seek such directions as are necessary
having regard to various exigencies of the situation that may arise.
The contempt proceedings initiated in respect of Mr. Gautam Dutta
and Sh. Bansal are hereby discharged, in view of the apology tendered by
them.
List for further orders/proceedings on 21st April, 2017.
S. RAVINDRA BHAT
(JUDGE)
DEEPA SHARMA
(JUDGE)
JANUARY 30, 2017
W.P.(C) 7215/2011 Page 49
