A review of the IPL and BCCI spot-fixing scandal – governance, corruption and reform
Published 02 December 2015 By: Shivam Singh
The Indian Premier League (IPL) spot fixing scandal of 2013 marked a new low for trust in Indian cricket. The protracted legal battle that followed has struck to the very heart of Indian Cricket, exposing weaknesses in the governance and credibility of the Board of Control for Cricket in India (BCCI). Pepsi, the lead sponsor of the event, has recently expressed its displeasure at the state of affairs and sought to terminate its title sponsorship of the IPL.1
This article seeks to give an overview of events by explaining the:
- Background to the IPL and the causes of the spot-fixing;
- Police’s criminal investigations;
- BCCI’s internal inquiry;
- Indian Supreme Court’s involvement, including the findings of the Justice Mudgal Committee and the Justice Lodha Committee; and
- Ramifications and what (if anything) has changed.
Particular focus is paid to the conflict of interest clauses contained in the BCCI’s Constitution, and the structural reforms that the Supreme Court has proposed in the aftermath of the scandal.
The background causes of the spot fixing
The Indian Cricket League
The Indian Premier League (IPL) was launched in 2007 by the BCCI as a competitior to the Indian Cricket League (ICL). The ICL was a purely private cricket league founded by Zee Entertainment’s Subhash Chandra that operated between 2007 – 2009and included tournaments in 20/20 format between four international teams (World XI, India, Pakistan and Bangladesh) and nine domestic teams.
The league was always treated as a pariah event by the BCCI, and they decised to ban from international cricket any criceter who participated in it. They also encouraged other international cricket boards to do the same - for example, both New Zealand’s Shane Bond and Pakistan’s Abdur Razzaq became ineligible for national duty. Players were only allowed to be considered for international cricket once they severed their ties with the ICL,2 and as a result many dropped out of the league. This together with persistant match fixing allegations (one of which has culminated into the Chris Cairns perjury trial3) ultimately sealed the ICL’s fate in 2009.
Establishment of the IPL
In its place grew the BCCI’s IPL. The BCCI created an IPL Governing Council and granted it powers to run the new tournament. The BCCI’s concept was for a inter-city franchise based competition with tenders invited from corporate bodies only on open competitive bidding basis.
Conflicts of interest and the amendment to BCCI regulation 6.2.4
On 27 September 2008 when N. Srinivasan was appointed as Secretary of BCCI. At the same time as the appointment of N.Srinivasan, a critical amendment was made to a provison of the BCCI’s Constitution dealing with conflicts of interest. Specifically, ‘Regulation 6.2.4’ was amended as follows:
From: "No administrator shall have, directly or indirectly, any commercial interest in the matches and events conducted by the board."
To: "No administrator shall have directly or indirectly any commercial interest in any of the events of the BCCI, excluding IPL, Champions League and Twenty20."4
The exclusion of the IPL and Champions League T20 from the scope of the regulation effectively permitted BCCI officials to administer the league as well as own stakes in participating teams (via a corpoate entity).5 N. Srinivasan was one of the biggest beneficiaries of the rule change, as it permitted him to be the de facto owner of Chennai Super Kings via his controlling stake in India Cements (who bought the franchise), while also continuing to be a BCCI office-bearer.6
Rajeev Dhawan, counsel appearing for former BCCI president Inderjit Singh Bindrain, in the Supreme Court, commented that the amendment to clause 6.2.4 was "responsible for the mess we [referring to Indian cricket] are in since 2008."7
The start of the spot fixing and the initial police investigation
Spot-fixing is the micro-manipulation of events within a sporting match for the purpose of making illegal gains on the global betting markets.
During the IPL 2013 season (IPL 6), Delhi police received a tip-off about the occurence of alleged spot-fixing incidents. Acting on these tip-offs, they conducted investigations and arrested three players from the Rajasthan Royals franchise, S Sreesanth, Ankit Chavan and Ajit Chandila, on fraud charges for alleged promises made to bookmakers.8
The main allegation against players was that in return for bribes, they conspired with bookmakers to manipulate certain outcomes such as conceding a set number of runs in a given over, or bowling illegal deliveries at pre-determined times.9 During the course of police investigations, the alleged involvement of Raj Kundra, co-owner of Rajasthan Royals, and Gurunath Meiyappan, the son-in-law of N. Srinivasan, also came to the fore. They were suspected to be closely involved with persons (bookmakers) who were placing illegal bets on IPL games.10 Throughout this time, N. Srinivasan remained both a director of India Cements as well as a BCCI official.11
On the basis of the police evidence, criminal proceedings were brought against the three cricketers and several other persons for alleged corruption offences. On 25 July 2015, a trial court in New Delhi acquitted all individuals, ruling that there was insufficient evidence to prove beyond reasonable doubt any criminal behavior. Feeling aggrieved, the Delhi Police lodged an appeal before the Delhi High Court which is presently awaiting judgement.12, 13
The BCCI’s inquiry
Seperately, the BCCI also conducted its own internal inquiry, setting up a three man commission comprising of the then BCCI Secretary, Sanjay Jagdale, and two retired judges of Madras High Court.14 However Sanjay Jagdale soon resigned citing personal reasons.15 and thereafter the inquiry was conducted by two retired judges alone.16
The outcome of the inquiry saw it fit to ban the three cricketers named in the criminal proceedings for indulging in spot fixing activities (including a life ban for Sreesanth),17 but found no wrong-doing on part of either Gurunath Meiyappan or Raj Kundra. Despite Srinivasan promising to deliver a fair investigation,18 this findings were controversial.
Public interest litgation to the Bombay High Court
The Cricket Association of Bihar (CAB) (among others) were not convinced of the findings and alleged that the entire process was an attempt to mask illegalities committed by Gurunath Meiyappan because of his family connection to N. Srinivasan. The CAB approached the Bombay High Court via a public interest litigation and sought for a quashing of the BCCI order that constituted this internal probe panel, removal of N. Srinivasan as BCCI president as well as termination of franchise agreements for Chennai Super Kings and Rajasthan Royals.19
The Bombay High Court, in an order dated 30 July 2013, upheld the CAB’s plea and held that the BCCI probe panel was not duly constituted, as it was contrary to Provisions 2.2 and 6 of the IPL’s Operational Rules.20
Appeal to the Supreme Court
Aggrieved by the decision of the High Court, the BCCI appealed the decision to India’s Supreme Court.
While the appeal was waiting to be heard by the Supreme Court, N. Srinivasan was elected president of BCCI. Given Srinivasan’s connection to Chennai Super Kings, the Supreme Court felt that a truly independent internal probe was not possible while he remained president.
Accordingly, on 8 December 2013, they constituted an Independent Committee tasked with examining the entire spot fixing scandal under the supervision of Justice Mukul Mudgal.21
The Justice Mudgal Committee
On 10 February 2014, after a thorough and exhaustive probe, the Mudgal Committee submitted a report to the Supreme Court (the Mudgal Report)22 highlighting numerous rule violations that had been committed by various participants within the IPL that had, they concluded, compromised both the integrity of the competition and the integrity of India cricket.23
Key findings of the Mudgal Report
The key findings detailed in the Mudgal Report were as follows:
- Gurunath Meiyappan was a Chennai Super Kings team official and was also complicit in passing on confidential information about team composition. Further investigations were required to ascertain his complicity in illegal betting.
- Shilpa Shetty and Raj Kundra were part owners of IPL franchise Rajasthan Royals and it appeared on the face of it that they had indulged in illegal betting. It was necessary to ascertain whether such actions by team owners also could result in Rajasthan Royals being liable for their actions.
The sealed envelope
In an interesting twist, the Mudgal Committee also produced a second, separate investigative report, which it submitted to the Supreme Court in a sealed envelope.24
The sealed report contained the names of players who had allegedly indulged in corrupt conduct. It was submitted to the court this way because the BCCI opposed the wider disclosure of the names, arguing that the allegations were not verified, the affected players had not been given the opportunity to challenge the findings, and a premature disclosure would immediately prejudice the game’s reputations.
The four key questions for the Supreme Court
Out of the Mudgal Report’s findings, four key questions were identified for further consideration by the Supreme Court:
- Does BCCI constitute a “State” actor under Article 1225 of the Indian Constitution and if not, is it amenable to the writ jurisdiction of the High Court under Article 22626 of the Constitution of India? To date in India, the BCCI has not been treated as a “State” actor (or an intrument/agency of the State), meaning that writs against it have not been maintainable. This is an important categorisation, as it means that the BCCI has been held accountable at a far lower standard than is expected of any State actor. The question arose in the context of these proceedings because, in the event that they were held to be a State actor, then they would be subject to greater public scrutiny and more stringent obligations to disclose information.
- Were Raj Kundra and Gurunath Meiyappan “team officials” of Rajasthan Royals and Chennai Super Kings respectively for the purpose of disciplinary proceedings? If yes, what should be the nature of their consequential punishment?
- Given that Gurunath Meiyappan was the son-in-law of BCCI President and Chennai Super Kings team owner, N. Srinivasan, could it be said that N. Srinivasan has tried to undermine the BCCI’s initial probe?
- Was the amendment to Rule 6.2.4 of IPL Constitution (see above) illegal to the extent that it permitted administrators to have commercial interest in the IPL, Champions League and Twenty-20 competition?27
Findings of the Supreme Court
A full copy of the judgement is avalible here.28
In relation to the first issue, after relying upon its decisions in R.D. Shetty v The International Airport Authority of India29 and Ajay Hasia v Khalid Mujib30 the Supreme Court ruled that BCCI was not a ‘state’ actor within the ambit of Article 12 of the Constitution of India. This effectively re-affirmed their prior decision in Zee Telefilms v Union of India,31 wherein the Court had declared BCCI to be a non-state entity, as the control of the state was neither deep nor pervasive.
Rather the BCCI had only regulatory control, in common with other organizations of a similar nature, amenable under the writ jurisdiction of the High Court under Article 226. The Supreme Court reasoned that whilst the BBCI could not be said to be a “State” entity, it did regulates and control the game of cricket in India to the complete exclusion of all other entities. As such the BCCI did discharge several public functions and therefore the public could still seek judicial redress through writ proceedings under Article 226 and could be subject to judicial review.32
In relation to the second issue, the Supreme Court considered the Mudgal Committee report in order to decide that Raj Kundra and Gurunath Meiyappan were “team officials” for purpose of disciplinary matters, as they were accredited locally or centrally by the BCCI for matters pertaining to the IPL and hence they were to be considered as “team officials” subject to the terms and conditions of the IPL Operational Rules.
In relation to the third issue, the Supreme Court refused to castigate N. Srinivasan for an alleged cover-up as it felt that the allegations against him were only in the nature of mere suspicion and that they did not rise to the level of holding him guilty for misuse of power.33
In relation to the fourth issue, the Supreme Court had strong words to say about the conflict of interest issue arising from the amendment of Regulation of 6.2.4. It held that the amendment was contrary to principles of good sports governance. The lack of transparency in BCCI’s administration had allowed the BCCI to masequarade its administrator’s interests as those of the game itself.34 Stopping just short of likening the conflict of interest provisions to a sporting fraud being perpetuated on the Indian cricket lovers, The Supreme Court struck down the amended regulation 6.2.4 by holding that.
“All told whatever be the format of the game and whatever be the commercial angles to it, the game is what it is, only if it is played in its pristine form free from any sporting fraud.”35
The Justice Lodha Panel
In the aftermath of this decision, the Supreme Court appointed a judicial panel to be headed by former Chief Justice of India, Justice Lodha, to adjudicate on the quantum of punishments for the errant teams and officials.
This panel suspended the Chennai Super Kings and the Rajasthan Royals from participating in the IPL for 2 years each; and banned Gurunath Meiyappan and Raj Kundra from the IPL for life for their involvement in betting on IPL 2013 matches.
The panel was scathing in its assessment of both Gurunath Meiyappan as and Raj Kundra. It refused to accept that Meiyappan was only acting in his capacity as a sports enthusiast but felt that he was an integral part of the Chennai Super Kings setup. His involvement in betting was contrary to the rules governing IPL and he was therefore given a life ban from all cricket related activities.
On Meiyappan’s status as a team official, the Supreme Court in Para 32 of its judgment held that:
“Having said that we find that the Probe Committee has correctly appreciated the facts as emerging from the documents and the depositions of witnesses recorded by it and rightly come to the conclusion that Gurunath Meiyappan was a team official of CSK. That is so especially when India Cements Ltd. who owns the team made a candid admission before us that Gurunath Meiyappan was indeed a team official within the meaning of that expression under the rules. We, therefore, see no real, much less compelling reason, for us to disagree or reverse the finding recorded by the Probe Committee on that aspect.”
Similar was its reasoning for Raj Kundra, who being a registered team owner had an even greater responsibility to ensure that his conduct remained above board. Therefore his involvement in betting was detrimental to the game’s reputation and he was also given a life ban.
Appeal by Chennai Super Kings
The Chennai Super Kings have challenged their two year ban in writ proceedings before the Madras High Court.36 The two grounds of appeal are:
- the violation of principles of natural justice in terms of disciplinary proceedings; and
- a transgression of judicial reference by the panel in arriving at the sentence.
The Madras High Court has issued notice to the concerned parties but has refused to stay the suspension order.37
While this appeal matter is pending determination, it is the author’s opinion that the Madras High Court may not intervene in the present matter since the Lodha Commission was appointed as per the orders of the Supreme Court and that it was specifically conferred powers of punishment through a judicial order itself.
This approach would be consistent with the Supreme Court’s decision in the BCCI appeal in which the Supreme Court refused to interfere with the Justice Mudgal Committee panel’s findings by ruling that the Supreme Court was not sitting in appeal to re-appraise the material which the committee had assembled and relied upon to support its conclusions.38
In the author’s opinion, the present decisions that have emanated from the spot-fixing scandal are a necessary but insufficient at ensuring greater transparency in cricket administration in India.
The Supreme Court arguably missed an opportunity to cover BCCI under Article 12 by not regarding it as an agency (or instrumentality) of “state” in relation to cricketing operations.
It however struck a compromise by relying upon its earlier decision in Zee Telefilms Ltd & Anr v. Union of India (2005) 4 SCC 649, and holding that given that despite the BCCI not receiving any financial aid from the government and that it was not administratively dominated by the government, it could not be said to be “State” but the discharge of several public functions (team selection and administrative running of sport) meant that the public could still seek judicial redress through writ proceedings under Article 226.
This means that the judgment is only a stop-gap measure that addresses the specific trust deficit in the sport of cricket at the present instance, but fails to provide a roadmap for future sports governance in India.
Remedial steps by the BCCI
The BCCI has begun taking steps to reform in the right earnest such as:39
- Instituting an independent ombudsman under the stewardship of a retired High Court Chief Justice (Justice AP Shah) to probe all complaints relating to malfeasance in the BCCI;
- Relieving people of BCCI responsibilities especially if they face conflicts of interest. Ravi Shastri was dropped from the IPL Governing Council since he is currently working as Team Director (Coach) for the Indian Cricket Team and Roger Binny was not given a fresh tenure as BCCI selector since his son Stuart Binny is a current player in the Indian Cricket team.
- Sundar Raman, IPL Chief Operations Officer has tendered his resignation from the post since the present dispensation had made it clear that his role in the entire IPL spot fixing scandal had left much to be desired.
It remains to be seen whether this is the beginning of major structural reforms in the BCCI setup or whether this is a false dawn and that these steps have only been put in place before the Supreme Court appointed Justice Lodha Commission reconvenes to suggest measures to overhaul the BCCI’s functioning.
This work was written for and first published on LawInSport.com (unless otherwise stated) and the copyright is owned by LawInSport Ltd. Permission is granted to make digital or hard copies of this work (or part, or abstracts, of it) for personal use provided copies are not made or distributed for profit or commercial advantage, and provided that all copies bear this notice and full citation on the first page (which should include the URL, company name (LawInSport), article title, author name, date of the publication and date of use) of any copies made. Copyright for components of this work owned by parties other than LawInSport must be honoured.
- Tags: Anti-Corruption | BCCI Constitution | Board of Control for Cricket in India (BCCI) | Cricket | Gambling | Governance | India | Indian Cricket League (ICL) | Indian Premier League | IPL Operational Rules | Reform | Regulation | Spot-Fixing
- IPL 6 hearings continue with allegations against Srinivasan
- Srinivasan appointed new ICC Chairman as India’s Supreme Court declines to interfere despite IPL investigation
- Governance, integrity and perception in Indian cricket: IPL and ICC developments
- Integrity in sports update: Pepsico drops IPL sponsorship after spot-fixing scandal
Shivam is a Sports Law and Dispute Resolution Attorney currently practicing in the Delhi High Court and Supreme Court of India. He has represented athletes, sports associations and sports broadcasters before multiple dispute resolution forums in India.