2009 IPL FEMA Case: Tribunal gives major relief to BCCI, Lalit Modi

The Appellate Tribunal under SAFEMA has set aside most ED penalties against BCCI and Lalit Modi in the 2009 IPL South Africa FEMA case. The tribunal quashed most findings but upheld two minor penalties on BCCI for excess remittance and delayed repatriation.

The Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators - Forfeiture of Property - Act (SAFEMA) has given major relief to the Board of Control for Cricket in India (BCCI), former IPL chairman Lalit Modi and other appellants by setting aside most of the Enforcement Directorate's (ED) findings and penalties in the 2009 IPL South Africa FEMA case.

Background of the FEMA Case

A bench of Chairman Justice Munishwar Nath Bhandari and Member Rajesh Malhotra partly allowed the appeals against the ED's order dated May 31, 2018, which had imposed penalties on BCCI, Lalit Modi, N Srinivasan, M P Pandove, the State Bank of India and its former Chief Manager A K Nazeer Khan for alleged violations of the Foreign Exchange Management Act (FEMA). The case relates to the 2009 IPL season, which was shifted from India to South Africa due to the General Elections to the Lok Sabha.

The ED had alleged that BCCI violated FEMA rules while sending money abroad for organising the tournament and had imposed penalties running into several crores on BCCI and its office-bearers.

The Tribunal also cleared the authorised dealer bank and its officer of liability, holding that the foreign remittances were processed in the normal course and could not be treated as FEMA violations on their part.

Tribunal's Final Rulings

However, the Tribunal upheld the ED's findings on two limited issues. It upheld the penalty of Rs 4 crore on BCCI for remitting an amount higher than what was reflected in its books of accounts. It also agreed that there was a delay in bringing ticket sale money back to India but reduced BCCI's penalty on this issue from Rs 4 crore to Rs 1 crore, noting that the money was eventually repatriated.

Relief for Lalit Modi

The Tribunal, however, set aside the penalty imposed on Lalit Modi on the issue of delayed repatriation, observing that he had already been suspended and was no longer in charge when the money was brought back to India. It also quashed the findings relating to the alleged failure to repatriate "pouring rights" revenue, holding that the ED had overlooked the terms of the agreement between BCCI and Cricket South Africa.

The Tribunal ultimately held that, except for the two limited issues of excess remittance and delayed repatriation of ticket sale proceeds, the ED's findings and penalties in the case could not be sustained. (ANI)

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