Full Text
HIGH COURT OF DELHI
Date of Decision: 31st May, 2024
BASKETBALL FEDERATION OF INDIA ..... Plaintiff
Through: Mr. Rajiv Nayar Sr. Adv, Mr. Sandeep Sethi Sr. Adv, Mr. Dayan Krishnan Sr. Adv., Mr. Rishi Agrawala, Mr. Anirudh Bakhru, Mr. Eklavya Dwivedi, Mr. Ankit Banati, Mr. Shravan Niranjan, Mr. Prabhav Bahuguna, Mr. Vikram Choudhary, Mr. T. Mahendhran, Ms. Tarini Khurana, Mr. Raghunatha Sethupathy, Mr. Saurabh Seth, Mr
Sukrit Seth, Mr. Naman Agrawal, Ms. Shreya Sethi, Advs.
(M: 9711813562)
LTD. & ANR. ..... Defendants
Through: Mr. Abhimanyu Bhandari, Mr. Rahul Dhawan, Mr. Vishesh Issar, Ms. Nattasha Garg, Ms. Krishna Parkhani, Mr. Apoorv Bansal, Advs.
(M: 8744910722)
JUDGMENT
1. This hearing has been done through hybrid mode. I.A. 31526/2024 (for exemption)
2. This is an application seeking exemption from filing Signing Date:03.06.2024 17:38 certified/cleared/typed or translated copies of documents, left side margins, electronic documents, etc.
3. Original documents shall be produced/filed at the time of Admission/Denial, if sought, strictly as per the provisions of the Delhi High Court (Original Side) Rules, 2018.
4. Allowed, subject to all just exceptions. I.A. 31513/2024 & I.A. 31525/2024
5. These are two applications one under Order XXXIX Rule 2A CPC i.e.,I.A.-31513/2024 and another under Order XXXIX Rule 1 & 2 CPC i.e., I.A.-31525/2024 filed by the Plaintiff. The two applications reveal an unfortunate turn of events in this matter.
6. As can be seen from the previous orders which have been passed by the Court dated 9th May, 2024, 10th May, 2024, 17th May, 2024 and 29th May, 2024, there are two competing entities. The Plaintiff is the Basketball Federation of India, which is a National Sports Federation recognised by the Ministry of Sports, Government of India. It has filed the present suit against the two entities namely Captains Professional Basketball League Pvt. Ltd., Fatehgarh Sahib, Punjab and Headstart Arena (India) Pvt. Ltd., Fatehgarh Sahib, Punjab.
7. The suit was initially filed by the Plaintiff challenging the Defendants’ launch of a league called the INBL Pro which was to hold an exhibition match on 10th May, 2024, at 4:00 pm at Thyagaraj Stadium Complex, Delhi. An injunction was sought against the said exhibition/match which application was considered by the Court on 9th May, 2024. Detailed submissions were heard on behalf of the Plaintiff and the Court had directed as under:
8. One of the submissions recorded in this order by the Plaintiff is that the Plaintiff is launching its own League and a retired Judge of the Supreme Court – Justice Ravindra Bhat (Retd) has been appointed to oversee the tender process of the launch of the said league. Paragraph 21 of the said order categorically record this position and the same is set out as under:
9. On the date when the exhibition match was to be held an application bearing no. I.A. 10836/2024 under Order XXXIX Rule 4 CPC was considered by the Court which was listed upon urgent mentioning, seeking vacation of the order dated 9th May, 2024. On 10th May, 2024, the Court after hearing the matter passed the following order:
today. The submission by Mr. Bhandari, ld. Counsel appearing for the Defendants is that the Defendants are duly authorised under the MRA issued to them by the Plaintiff itself, to conduct the league which is being launched today. According to ld. Counsel, the impression which was portrayed by the BFI yesterday that the agreement was not duly authorised is incorrect inasmuch as the expression of interest for the said agreement for running a league was issued on 26th December, 2022. The bids were submitted by Defendant No. 1 and the bid of the Defendant No. 1, which was to the tune of Rs. 16 crores per year for a five-year term was the successful bid in response to the expression of interest.
4. It is submitted that pursuant to the said agreement, a bank guarantee for sum of Rs.82,50,000/was also given to the Plaintiff. Ld. Counsel contends that this is acknowledged in the agreement at Clause 5.[3] of the MRA as well. Further, according to ld. Counsel, the termination of this agreement can be done only with one month’s notice, which is clearly specified in the agreement. As per Clause 11, the agreement also has an Arbitration Clause. Schedule 1 of the agreement has also provided the consideration required to be given by the Defendants, for conducting the league, which was an annual fee of Rs. 16.50 crore and the payments schedule was that 95% of the amount was to be paid to the Basketball Federation of India and 5% was to be paid to M/s Murali and Co., Mr. Bhandari, ld. Counsel has shown the Court copies of cheques issued to BFI and M/s Murali and Co., in terms of the said agreement.
5. It is the submission of ld. Counsel that the decision of this Court in Writ Petition (Civil) 1731/2023 dated 2nd May, 2023 itself recognizes that no policy decision could have been taken only after 18th February, 2023. However, the agreement has been signed on 15th February, 2023.
6. On the other hand, Mr. Sandeep Sethi ld. Sr. Counsel submits on behalf of the Plaintiff that the entire agreement, itself, is void. It is his submission that in January/February, 2023 preparations were made for the elections to the positions of office bearers of BFI. On 28th January, 2023, the agenda was finalised both in respect of discussion for a league and for the election. Thus, from January, 2023 itself all the concerned stakeholders were aware of the elections being announced. The returning officer was also appointed on 30th January, 2023. As per the schedule of elections, the nominations were to be filed and a scrutiny was to take place on 10th February, 2023.
7. Thus, once the election process was underway, the signing of this agreement which was not duly authorised by the BFI could not have been done. He further points out that the Writ Petition 1731/2023 which finally came to be decided on 2nd May, 20z23 was, in fact, filed on 10th February, 2023. An order was passed on that very day by the Court and the Court had indicated that an observer would be appointed for running the BFI and for the conduct of elections. Thus, when the election process was already underway, the agreement with the Defendants was through a completely unrecognised and devious process.
8. The Court has put a query to the ld. Counsel for the Defendant as to whether the sum of Rs.16.[5] crores was actually paid to the BFI. Mr. Bhandari, ld. Counsel fairly concedes that two cheques were issued in the name of Basketball Federation of India and were received by one Mr. Ankur Singh, who claimed to be the Operations Manager. However, it is admitted that only one of the two cheques in the name of M/s. Murali and Co., has been encashed.
9. Thus, as on today, except the performance bank guarantee of sum of Rs.82,50,000/-, no money has been paid for more than one year by the Defendants to the Basketball Federation of India. Secondly, this Court has also noticed that the official league of Basketball Federation of India was announced on 6th February, 2024 and as recorded yesterday, a retired Supreme Court Judge has been appointed as an overseer for the purposes of calling the tenders and to streamline the process for establishment of the league. Admittedly, the league of the Defendants has been announced for the first time on 6th May, 2024 and the first match is fixed today i.e. 10th May, 2024 from 4.00pm onwards.
10. The grievance of the Plaintiff Federation clearly is that the Defendants are giving an impression that they are the recognised league and that the INBL PRP league is being organised with the under the approval of the BFI which is clearly not. Ld. Counsel for the Defendants has, however, submitted that there are Indian players, 13 Australian players and three US players, who are playing in the exhibition match today of the INBL PRO league. The announcement of the league by the Defendants was made on the 6th May, 2024 post which the agreement has been specifically terminated vide letter dated 8th May, 2024 by the BFI.
11. The arrival of the international players today presents the Court with a fait accompli, inasmuch as the internal dispute between the BFI and the Defendants should not obviously affect a match that is scheduled for today. Especially if international players are participating, the Court is of the opinion that the spirit of the game ought not to be adversely affected. In view of these circumstances, while the matter requires further hearing as to the status of the Defendants, the Court is inclined to put in place an interim arrangement to the following effect:i) that the Defendants shall by 15th May, 2024 deposit a sum of Rs. 5 crores with the Basketball Federation of India. ii) It shall be declared before commencement of the match that the Defendants’ match which is scheduled for today under the banner INBL PRO is a match being organised by the Defendants without any recognition by the Basketball Federation of India. It shall also be made clear that the INBL Pro match is not for selection of the Indian team. iii) The above fact shall be clarified in all online media messaging, fliers, pamphlets etc.,
(iv) In addition, a specific circular shall be given to all the players who are playing today that the INBL PRO match is not in association with the Basketball Federation of India and is being held purely under the orders passed by this Court in this suit.
(v) If any telecast is happening of INBL Pro match, during the telecast of the match, a scroll shall be run within every 15 minutes to the following effect:- “Not in association with Basketball Federation of India”
(vi) The Defendants shall also ensure that no further matches of INBL PRO league are conducted after today’s match.
12. The players currently training under the Basketball Federation of India, who may participate in INBL Pro match, shall not be prevented from returning to the Federation and the training camp. The said arrangement is being put in place to ensure that the remaining tournaments, be it national or international can be attended and that the Basketball Federation of India, along with Team India, is duly represented in international tournaments as the official team of India. Further, it is directed that none of the players shall be penalised for participating in today’s match being organised by the Defendants.
13. The above shall be without prejudice to the rights and contentions of all the parties and shall be subject to further orders of this Court. The above modification shall be carried out in the electronic/digital platforms and on the online media.
14. It is made clear that the above interim arrangement has been put in place only to balance equities as also ensure that any players, coaching staff etc. who have specially travelled for this exhibition match are not adversely affected. The interim arrangement after today’s match shall not be continuing.” Thus, the Defendants were permitted to go ahead and hold the Exhibition Match subject to certain conditions.
10. Thereafter an application under Order XXXIX Rule 2A CPC being I.A 29573/2024 was filed by the Plaintiff alleging non-compliance of the directions contained in order dated 10th May, 2024 by the Defendants. The allegations made by the Plaintiff were as under:
broadcast by the broadcast production agency. A letter of the broadcast production agency has been placed on record, which apologizes for the same.
(ii) The issuance of the said circulars is confirmed by the Defendants vide email and WhatsApp.
(iii) It is submitted that the press release of the INBL
11. This Court after hearing the ld. Counsel for the parties, also heard the CEO of the Defendants- Mr. Praveen Batish, who gave an undertaking and then recorded as under:
12. A clear undertaking was therefore given by the CEO of the Defendants that no match in respect of the INBL Pro League would either be announced or proceeded with, or played without further orders of this Court.
13. Thereafter, a Section 8 application was filed by the Defendants being I.A No.30956/2024. In the said application the stand of the Defendants was that the Master Rights Agreement dated 15th February, 2023 consisted of an arbitration clause and therefore the prayer was that the disputes ought to be referred to arbitration. The said application was listed on 29th May, 2024 and notice was given in this application on the same day itself, i.e., 29th May, 2024. The stand of the Plaintiff in opposition of this application was that the scope of the suit was much larger than what was contemplated in the Master Rights Agreement.
14. Interestingly, in the said application there is no mention of any Section 9 petition having been filed on the basis of the arbitration clause contained in the Master Rights Agreement.
15. Today, there are two applications filed by the plaintiff under Order XXXIX Rule 1 & 2 CPC I.A.-31525/2024 and under Order XXXIX Rule 2A CPC i.e.,I.A.-31513/2024.
16. The facts disclosed in these applications, reveal that Captains Professional Basketball League Pvt. Ltd. i.e., Defendant No.1 herein, approached the Additional City Civil Court at Bengaluru and filed Section 9 petition seeking reliefs against the Plaintiff’s league. In the said application under Section 9 filed before the Additional City Civil Court at Bengaluru, there is a mention of the present suit, however, the order passed on 28th May, 2024 by the said Court, reads as under: “Although at this stage various ad-interim reliefs have been sought essentially the challenge in the petition being to the said termination notice dated 08.05.2024 the ad-interim relief which is sought for and pressed at this stage is to restrain respondent no.1 from creating 3rd party rights pursuant to tender notification dated 27.05.2024 and to restrain respondents from appointing any other person or organization in place of petitioner. At this stage, considering the contentions raised in the present petition and also considering that the validity of termination notice is subject matter of arbitration since, the Master Rights Agreement contains arbitration clause I am of the view that till the said question is decided by the learned arbitrator it is learned arbitrator it is necessary to protect the rights of the petitioner and therefore, considering that respondent no.1 has already commenced tender process for appointing the replacement to the petitioner in my view case is made out for grant of ad-interim order restraining respondent no.1 from opening the bids pursuant to tender notice dated 27.05.2024 which is at page no.284 of the petition making it clear that the respondent no.1 can receive the bids, but is only restrained from opening the bids. Accordingly, I proceed to pass following - ORDER Ad-interim order is granted restraining the respondents from opening bids pursuant to tender notice dated 27.05.2024 which is at page no.284 of the petition and doing any other act pursuant to the tender notice, till next date of hearing. Petitioner to comply with Rule 9 of arbitration rules by sending copy of the entire petition with annexures to the respondents within one working day and file compliance affidavit. Issue notice of main petition and I.A.Nos.[1] to 7 to respondents no.1 to 3 through court and RPAD, if steps taken. Returnable by 10.06.2024.”
17. The objection by the ld. Senior Counsels for the Plaintiff is that the Defendant No.1 is in contempt of the order passed by this Court inasmuch as when this Court was seized of the entire matter, to file a petition under Section 9, without disclosing this Court’s orders and proceedings would constitute contempt. It is also alleged that the Defendants have failed to disclose the filing of the Section 9 petition in the Section 8 application or during the hearing on 29th May 2024 and have grossly abused the process.
18. In response it is submitted by the ld. Counsel appearing for the Defendants that Section 9 petition was served upon the Plaintiff and the Plaintiffs themselves were aware of the Section 9 petition on the hearing of 29th May, 2024. It is further urged that since the agreement has an arbitration clause, the Defendant no.1 is entitled to file a Section 9 petition.
19. Heard. The e-mail which is purported to be relied upon as notice of the filing of the Section 9 petition, sent by the Defendant to the Plaintiff, has been handed over in Court. The Court has perused the same. The said email reads as under: “Dear Sir, We appear on behalf of the Applicant, M/s Captain Professional Basketball League (CPBL) in the captioned matter, before the LXXXIII Addl. City Civil and Sessions Judge, Commercial Court, Bengaluru [CCH-84] [“Commercial Court”]. An ad-interim order dated 28/05/2024 is passed by the Commercial Court, restraining you from opening bids pursuant to your ‘Tender’ dated 27/05/2024 (For specific reference to ‘Tender’, please see Page 284 of the attached Petition), and doing any other acts pursuant to the Tender Notice, till the next date of hearing. Please find attached herein the true copy of the Petition binder, filed under Section 9 of the A&C Act, along with all documents in support, as well as the Interlocutory Applications. The interim order dated 28/05/2024 (as uploaded on the ecourts Services portal), passed by the Hon’ble Commercial Court is also attached. You are called upon to act in strict compliance of the interim order dated 28/05/2024, which is now in force. The physical sets of the Petition, along with documents and Interlocutory Applications will also be sent out to your address through Speed Post service, at the opening hours tomorrow, i.e., 29/005/2024. You are called upon to acknowledge receipt of this email and contents attached herein. Regards, Harish Jayakumar Best Regards, Harish Jayakumar Advocate”
20. A perusal of the e-mail would show it is purported to have been sent on 29th May, 2024 at 9:03:56 p.m. Clearly, the manner in which the Defendants have sought to approach parallelly under Section 9, another Court when admittedly the entire dispute between the Plaintiff and the Defendants was before this Court, as part of the present suit prima facie, constitutes overreaching of this Court.
21. On 29th May, 2024, when the Section 8 application was taken up by the Court, apart from the litigants themselves, the ld. Counsel for the Defendants also owed a duty to the Court to inform the Court that a Section 9 petition has been filed and an order has been passed by Bengaluru City Civil Court one day before. Such tactics adopted by the litigants cannot be condoned or overlooked. The Defendant CEO who gave an undertaking before this Court and was present before this Court on 17th May,2024, knew very well that the issue in respect of the Plaintiff’s league was being considered and was in fact one of the prime reasons why the Defendants league was injuncted. The fact that the tender process was being overseen by a Retd. Supreme Court Judge, Justice Ravindra Bhat, finds a mention in the suit as also in the initial orders dated 9th May, 2024 and 10th May, 2024. The Defendants, who were represented on 10th May, 2024, 17th May, 2024 and 29th May, 2024, have strategically chosen to file a Section 9 petition before the City Civil Court, Bengaluru and Section 8 application before this Court, parallelly.
22. A perusal of the order passed by the learned City Civil Court in Bengluru would also reveal that there is no mention in the order or proceedings pending before this Court. Obviously, the same appears to have not been highlighted by the counsel who appeared before the Bengluru City Civil Court. The non-disclosure of the filing Section 9 petition in Section 8 application filed before this Court is again an abuse of process.
23. There are doubts raised in respect of the manner in which the Master Rights Agreement itself was executed, as the consideration of Rs. 16.[5] crores, under the said Agreement was not paid to the Basketball Federation of India which has been recorded clearly in the order dated 10th May, 2024. It is only the amount of Rs.82,00,000/- which has been paid to a law firm namely M/s. Murli & Company based out of Bangalore. A sum of Rs.16.[5] crores which was the license fee was only handed over as a cheque but was never encashed by the then Management of the Plaintiff Federation, – the reasons for which are unknown. Therefore, the consideration under the Master Rights Agreement has not been paid by the Defendants. The circumstances surrounding the execution of the said Master Rights Agreement are clearly suspicious.
24. Prima facie, in the opinion of this Court therefore, the Defendants cannot be seeking to enforce any right under the Master Rights Agreement. It is ordered accordingly.
25. In addition, for overreaching the proceedings before this Court, prima facie this Court is of the opinion that Mr. Batish who has given an undertaking before this Court and has also signed the petition under Section 9 before the Bengaluru Civil Court is in contempt. This Court also notices that Counsel for the Defendants who were aware of the filing of Section 9 petition failed to disclose the same on 29th May, 2024, before this Court. Accordingly, issue show cause as to why action for contempt ought not be issued against Mr. Praveen Batish. Reply to the show cause notice be filed within four weeks. Rejoinder thereto be filed within four weeks thereafter.
26. Mr. Praveen Batish shall remain present in Court on the next date.
27. List on the date fixed i.e., 29th July, 2024.
PRATHIBA M. SINGH JUDGE MAY 31, 2024 Ns/ks