IPL verdict: Three instances that demonstrate N Srinivasan's conflict of interest

In a landmark judgement, the Supreme Court has ruled that the BCCI is amenable to writ jurisdiction and struck down the BCCI rule that allowed N Srinivasan to own Chennai Super Kings.

Conflict of interest, the Court said, has no place in cricket. Srinivasan must choose between the BCCI and CSK. In their order, the two Justices provided detailed reasoning to support their conclusion, listing three instances that demonstrated how Srinivasan could use his position to his own benefit.

Those instances are quoted from the order below:

 IPL verdict: Three instances that demonstrate N Srinivasans conflict of interest

File picture of N Srinivasan. AP

Three real life situations that have arisen in the past, qua India Cements owned by Mr. Srinivasan’s family and captained by him, simply demonstrate how such conflicts have arisen between the duty which Mr. Srinivasan owes to BCCI and through the BCCI to the cricketing world at large and his commercial if not personal interest in the events which BCCI organizes.

The first instance arose when the BCCI awarded compensation of a sum of Rs.10.40 crores to Chennai Super Kings – on account of the cancellation of the Champions League Tournament 2008. It is not in dispute that Mr. Srinivasan was one of those who contributed to the taking of the decision to award that amount towards
compensation to his own team.

True it is that a similar amount was awarded to Rajasthan Royals the other finalist also, but that does not, mean that to the extent Mr. Srinivasan, participated and deliberated in the proceedings leading to the award of a hefty amount of compensation, he was not privy to a self-serving decision that benefited India Cements Ltd. a company promoted by Mr. Srinivasan. The fact that some others also participated in the decision-making process as members of IPL Governing Council does not cure the legal flaw arising out of the benefactor also being the beneficiary of the decision.

The situation is analogous to Naqishbund participating in the selection proceedings even when he was himself a candidate for selection as in Kraipak’s case (supra). As a matter of fact, Naqishbund had recused himself from the proceedings when his own case was taken up for consideration.

But this Court remained unimpressed and took the view that any such recusal did not make any material difference, as bias in such like situations operates in a subtle manner. In the case at hand Mr. Srinivasan had not even done that much no matter it would have made little or no difference even if he had done so. At any rate, the test is not whether bias was actually at work when the decision was taken. It is the reasonable likelihood of bias that determines whether the action can be faulted.

A reasonable likelihood of bias is what can be seen even in the case at hand when the decision to award compensation was taken by the governing council of IPL with Mr. Srinivasan, present and participating as a member.

82. A similar award of a sum of rupees 13.10 crores came in the year 2009 which too fell foul of his duty on the one hand and interest on the other. Mr. Sibal, no doubt, argued
that this amount was returned by ICL subsequently, but such return, does not improve the matters. The decision to award an amount higher than the one awarded earlier appears to have led to public criticism raising the pitch further for Mr. Srinivasan’s removal from the BCCI on the principles of conflict of interest.

Return of the amount because of a public outcry may no doubt mean that Mr. Srinivasan tried to come clean on the subject even when his company may have suffered a loss, but it may as well mean that the return of the amount came only under public pressure and in recognition of the fact that the amount was not actually due and payable and yet was paid to the detriment of BCCI who is a trustee of general public interest in the sport of cricket and everything that goes with it.

83. The third instance where Mr. Srinivasan’s commercial interest came in direct conflict with his duty as President of BCCI is when allegations of betting were leveled against his son-in-law Mr. Gurunath Meiyappan. Even ignoring for a moment the argument that Mr. Srinivasan had made a deliberate attempt to cover up the betting racket that came to light, facts now prove that Mr. Gurunath Meiyappan was involved in betting in IPL matches even when he was a team official of CSK. We have, while dealing with question No.3, held that the misconduct of Mr. Gurunath Meiyappan and Raj Kundra can result in award of punishment not only to the said two persons but even to the franchisees themselves.

That being so, a clear conflict of interest has arisen between what is Mr. Srinivasan’s duty as President of BCCI on the one hand and his interest as father-in-law of Mr. Gurunath Meiyappan and owner of team CSK on the other. The argument that Mr. Srinivasan owns only 0.14% equity in ICL is of no avail if not totally misleading when we find from the record that his family directly and/or indirectly holds 29.23% of the equity in the ICL with Mr. Srinivasan his wife and daughter as directors on the Board of that company.

Updated Date: Jan 23, 2015 08:11:18 IST