SC Allows Lalit Modi To Seek Civil Remedy In Plea Against Rs 10 Crores Fine Imposed By ED

Supreme Court

The Supreme Court on Monday granted liberty to former IPL chairman Lalit Modi to approach a civil court to challenge the ₹10.65 crore penalty imposed on him by the Enforcement Directorate in connection with alleged FEMA violations during the 2009 IPL season.

A bench comprising Justices P.S. Narasimha and R. Mahadevan disposed of Modi’s plea after his counsel sought to withdraw it, seeking permission to pursue civil remedies instead.

Modi Sought Fine Recovery from BCCI

In his petition, Modi had requested that the penalty imposed by the ED be recovered from the Board of Control for Cricket in India (BCCI), rather than him personally. However, the Supreme Court clarified that the BCCI does not qualify as a “State” under constitutional provisions, making such a recovery unfeasible through a writ petition.

“BCCI is to be held to be ‘not a State.’ Recovery can’t be equivalent to State,” the bench observed.

During the hearing, Modi’s counsel argued that based on previous judicial decisions, the matter could fall under the Writ jurisdiction provided in Article 226 of the Constitution.

Nonetheless, the court held that the petition was not maintainable on those grounds and allowed Modi to withdraw it to seek relief through a civil court instead.

Background

The ED had imposed penalties in May 2018 on the BCCI and several former top officials, including Modi, over alleged violations of the Foreign Exchange Management Act (FEMA) linked to the 2009 IPL edition held in South Africa.

The penalties includes-

₹82.66 crore on BCCI
₹11.53 crore on former BCCI chief N. Srinivasan
₹10.65 crore on Lalit Modi
₹9.72 crore on ex-BCCI treasurer M.P. Pandove
₹7 crore on State Bank of Travancore

These fines cumulatively amounted to ₹121.66 crore.

The case stems from alleged unauthorized transfers of ₹243.45 crore from India to Cricket South Africa before the tournament, without prior approval from the Reserve Bank of India. The ED had issued show cause notices to Modi and the BCCI in July 2011.

Later, the Bombay High Court had permitted the ED to summon several former BCCI officials, including then-secretary N. Srinivasan and former president Shashank Manohar, as witnesses in the matter.

HC Dismissed Modi’s Earlier Plea With Cost

Modi initially challenged the ED’s order in the Bombay High Court, but the court dismissed his plea and imposed a cost of ₹1 lakh. He then approached the Supreme Court, which has now permitted him to pursue civil litigation for relief.