2018 (7) TMI 1976 - HC - FEMA

Status of BCCI as a company - Application of Section 42 of the Foreign Exchange Management Act for the alleged violations during the conduct of IPL-2 in South Africa - whether BCCI is a society registered under the provisions of the Tamil Nadu Societies Registration Act, 1975 and as such it is an unincorporated body of associations not falling under the definition of 'company' used in Section 42 of the Foreign Exchange Management Act and that it does not extend to all persons covered by the definition of the 'person' used by Section 2(u) of the Foreign Exchange Management Act? - invocation of the vicarious liability clause framed against the noticees under Section 42(1) and (2) - HELD THAT - As the issue raised in the present writ petition is no longer res integra, as it has been already settled by the Division Bench of the Bombay High Court in Shashank Vyankatesah Manohar v. Union of India and another 2013 (8) TMI 435 - BOMBAY HIGH COURT holding that the definition of 'person' in Section 2(u) of the Foreign Exchange Management Act, 1999 is inclusive one and therefore the BCCI as well as the Governing Council of IPL are the persons within the definition of Section 2(u) of the Act, which judgment has also been confirmed by the Supreme Court, the petitioner, who was the Secretary of BCCI during the relevant period, cannot once again agitate the same issue before this Court. Therefore, this Court, being bound by the judgments, finding no merits whatsoever in the writ petition, is not inclined to interfere with the impugned proceedings. Accordingly, this writ petition stands dismissed.

Summary

Issues:
Challenging impugned proceedings under Rule 4(3) of Foreign Exchange Management Rules, 2000. Applicability of Section 42 of Foreign Exchange Management Act to BCCI. Jurisdictional issue regarding show cause notice to petitioner.

Analysis:
The petitioner filed a writ petition to quash proceedings issued by the Special Director, Enforcement Directorate, concerning a jurisdictional objection under Rule 4(3) of the Foreign Exchange Management Rules, 2000. The petitioner, as the Honorary Secretary of the BCCI, highlighted the BCCI's role in promoting cricket in India and organizing events like the IPL. The issue arose from transactions related to IPL-2 held in South Africa, leading to a complaint under the Foreign Exchange Management Act. The petitioner argued that BCCI, being a society registered under Tamil Nadu Societies Registration Act, is not a body corporate and thus not covered under Section 42 of the Act. However, the second respondent rejected these contentions, citing a Bombay High Court judgment affirming BCCI's status as a company for the Act's purposes.

Regarding the applicability of Section 42 of the Foreign Exchange Management Act to BCCI, the petitioner contended that being a registered society, BCCI does not qualify as a company under the Act. The petitioner relied on legal precedents to support this argument. However, the court was not persuaded by these arguments, noting that a similar issue was raised and decided against the BCCI President in a previous Bombay High Court judgment upheld by the Supreme Court. The court emphasized that the definition of 'person' in the Act is inclusive, encompassing entities like BCCI and the IPL Governing Council. As the issue was settled by previous judgments, the court declined to interfere with the impugned proceedings, dismissing the writ petition.

In conclusion, the court upheld the impugned proceedings, emphasizing the settled nature of the jurisdictional issue regarding the application of Section 42 of the Foreign Exchange Management Act to the BCCI. The court found no merit in the petitioner's arguments, given the previous judgments affirming BCCI's status as falling under the Act's definition of 'person.' Consequently, the writ petition was dismissed, with no costs imposed on either party.