BASKETBALL FEDERATION OF INDIA vs CAPTAINS PROFESSIONAL BASKETBALL LEAGUE PVT. LTD. & ANR.
$~39
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision:-10th May, 2024.
+ CS(OS) 385/2024 and I.A. 10736/2024, I.A. 10836/2024
BASKETBALL FEDERATION OF INDIA ….. Plaintiff
Through: Mr. Sandeep Sethi Sr. Adv., Mr. Rajiv Nayar Sr. Adv, Mr. Dayan Krishnan Sr. Adv., with Mr. Rishi Agrawala, Mr. Anirudh Bakhru, Mr. Eklavya Dwivedi, Mr. Ankit Banati, Mr. Shravan Niranjan, Mr. Prabhav Bahuguna, Mr. Vikram Choudhary, Mr. T. Mahendhran, Mr. Raghunatha Sethupathy, Mr. Shreedhar Kale, Mr Sukrit Seth, Mr. Naman Agrawal and Mr. Sumer Seth, Ms. Sanya Sethi Advs. (M: 9711813562).
versus
CAPTAINS PROFESSIONAL BASKETBALL LEAGUE PVT. LTD & ANR. ….. Defendants
Through: Mr. Abhimanyu Bhandari, Advocate with Mr. Apoorv Bansal, Mr. Vishesh Issar , Mr. Rahul Dhawan, Mr. Randeep Sachdeva and Mr. Krishna Parkhani, Advocates (M: 8744910722).
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
I.A. 10836/2024 (u/O XXXIX Rule 4 CPC)
1. Vide order dated 9th May, 2024, this Court had granted an interim injunction on specific terms, in respect of the usage of the phrases India. Indian Team, Select Indian Team and any other expression that would give the impression that the Defendants are the officially recognised national body for the sport of basketball or are holding their Exhibition Match and also the league in association with the BFI. The relevant extract of the said order is set out below:
22. The Court has heard ld. Sr. Counsel for the Plaintiff and perused the record. Advance copies of this suit are stated to have been served today at 10:30 a.m. on the Defendants at various email addresses including rupinderbrar@yahoo.com and cs.mahindru@gmail.com. It is submitted that these two individuals are running the Defendant companies and there are no other employees. Considering the overall facts and keeping the interest of the sport of Basketball in India, there being no doubt that the Plaintiff being the recognised federation in India, the use of the word India, Select Indian or Indian or even poaching Indian basketball players would prima facie be contrary to the Sports Code as also the applicable regulations.
23. Under such circumstances, a prima facie case is made out to issue an ex-parte ad-interim injunction to restrain the Defendants. In the present factual matrix, the balance of convenience also clearly lies in favor of the Plaintiff, as allowing the Defendants to proceed with its Exhibition Match with the team name Select Indian Team would cause confusion and mislead the players as also the public, undermining the authority of the BFI as the apex body for basketball in India and giving an impression to the public that an official. Indian team is playing the said Exhibition Match. In
addition, irreparable harm would be caused to the Plaintiff associations credibility, and preparation for the upcoming international tournament if the Defendants are not restrained from using misleading the public and enticing players away from the national camp.
24. Accordingly, the Defendants shall stand restrained from using the word India or Select Indian Team or India any other expression that would give the impression that the Defendants are the officially recognised national body for the sport of basketball or are holding their Exhibition Match and also the league in association with the BFI. Ordered accordingly.
25. The Defendants shall also be restrained in any manner enticing or poaching any of the national basketball players to play in a Select Indian Team in the INBL PRO League which is supposed to commence tomorrow i.e., 10th May, 2024.
26. Issue notice in the interim injunction application. Let reply be filed within four weeks. Rejoinder, thereto, be filed within two weeks.
27. Compliance of Order XXXIX Rule 3 CPC,1908 be done by 10:00 a.m. tomorrow i.e., 10th May, 2024.
28. List before Court on 29th July, 2024.
29. Copy of this order be given dasti under signatures of Court Master
2. Further to yesterdays order, an application has been filed on behalf of the Defendants under Order XXXIX Rule 4 CPC seeking vacation of the order which was passed yesterday i.e. on 9th May, 2024. The application has been filed by both the Defendants and is supported by an affidavit of by Mr. Praveen Batish, the CEO of INBL. The application was mentioned in the morning at 10.30 am and in view of the urgency of the application, taken up for hearing at 1.00 pm. Submissions have been made in the present application after lunch from 2:15 pm onwards for more than half an hour as well.
3. The tournament is scheduled for 4.00 pm 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 months 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 todays 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 todays 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 todays match shall not be continuing.
15. Reply to the present application as also to the injunction application be filed within two weeks. Rejoinder, if any, be filed within two weeks thereafter. List on 29th July, 2024.
CS(OS) 385/2024
16. The Court has noticed Schedule 1 to the agreement which reads as under:-
SCHEDULE 1
Consideration
The Company shall pay the following Fees and Consideration to BFI:
1. Annual License Fees: Subject to escalation, the Company shall pay BFI annual license fees of Rs. 16,50,00,000/- (Rupees Sixteen Crores and Fifty Lakhs only) inclusive of the fee towards legal services (“Annual License Fees”) on a half yearly basis. The Annual License Fees shall be subject to an yearly escalation at the rate of five percent (5%) of the last Annual License Fees paid. The first escalation shall be applicable at the end of twelve (12) months from the Effective Date and thereafter shall be applicable every (12) months.
2. Payment Schedule
For the First year of the term the company shall, issue and submit, in the name and favor of BFI and M/s Murali & Co., post dated cheques (PDCs), dated 31″ July and 31″ January respectively, towards the Annual License Fees, in the following manner:
i) 95% of the Annual License Fees to BFI
i) 5% of the Annual License Fees to M/s Murali & Co.
Post the first financial year i.e. 1″ April 2024, subject to BFI sending a written note (mail permitted) to the company detailing the revised escalated Annual License Fees for that relevant year of the term, company shall within 40 working days from the date of receipt of such note from BFI for such relevant year of the term, issue and submit in the name and favor of BFI and M/s Murali & Co., post dated cheques (PDCs), dated 31st July and 31st January respectively, towards the Annual License Fees.
17. As can be seen from the above 5% of the annual license fee has been paid to a Law Firm by the name M/s Murali and Company and the cheque was issued to the said Firm by Defendant no.1, drawn on the SBI Fatehgarh Sahib, Punjab bearing No. 263048 for Rs. 41,25,000/-. A copy of the said cheque has also been placed on record.
18. In view of part of the amount which was to be paid to the BFI has been paid to a law firm, that too when the substantial consideration amount of over Rs. 16 crores has not been paid to the BFI but the law firms cheque is stated to have been encashed, the Court directs that M/s Murali and Company be impleaded as Defendant No. 3 in the present suit, as they would be a necessary party to the suit.
19. Accordingly, M/s Murali and Company is impleaded as Defendant No. 3. Let summons be issued to the said firm at the following contact details:
Address:- Murali and Co., No. 102, Haudin House No. 5, Haudin Road Bangalore 560042
Email:- manjunath@muraliandco.com
Mob:- 8041515161
20. Let Amended Memo of Parties be filed by the Plaintiff within two weeks. Defendant no.3 shall be served by the Registry by email at the above mentioned contact details.
21. The said law firm, now impleaded in the suit shall file an affidavit on record stating as to whether the cheque received by them for 5% of the consideration was encashed.
22. In addition, Defendant No. 1 and 2 shall place on record their bank statements for the calendar year from 1st January, 2023 to 31st December, 2023 in order to enable the Court to assess whether the cheques issued by them on 31st January, 2023, and 31st July, 2023, totalling Rs. 16.5 crores, reflect their financial capacity to pay this amount.
23. List before the Joint Registrar on 10th July, 2024 for completion of pleadings.
24. List before the Court on 29th July, 2024.
25. Order dasti.
PRATHIBA M. SINGH
JUDGE
MAY 10, 2024
mr/am
CS(OS) 385/2024 Page 1 of 7