SAFEMA Tribunal Gives Major Relief to BCCI, Lalit Modi in IPL 2009 FEMA Case

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) and former IPL chairman Lalit Modi in the long-running IPL 2009 FEMA case. The tribunal delivered its judgment on July 16, bringing a significant legal development in a matter linked to the tournament’s move to South Africa.

The case dates back to 2009 when the IPL was shifted from India to South Africa because of the Indian general elections. The Enforcement Directorate (ED) had alleged violations of the Foreign Exchange Management Act (FEMA) over foreign exchange remittances made to conduct the tournament overseas.

The tribunal completely set aside the penalty imposed on Lalit Modi. It ruled that he could not be held responsible for BCCI’s statutory FEMA compliance and found no material to show that he had the financial authority alleged by the ED.

The order stated, “The penalty has been imposed even on Shri Lalit Kumar Modi in ignorance of his position and even suspension. He was not in-charge of the affairs and otherwise he has been framed in the case without any material showing his responsibility. The penalty imposed on Shri Lalit Kumar Modi is wholly erroneous and thus interfered.”

The tribunal also observed, “It is an admitted position that the very concept of the Indian Premier League was the brainchild of the Appellant.”

The judgment further held that the key foreign remittances related to IPL 2009 were current account transactions, not capital account transactions. This weakened the main basis of the Enforcement Directorate’s case.

The BCCI also received partial relief. Its penalty was reduced from ₹4 crore to ₹1 crore. Former BCCI president N. Srinivasan’s penalty was cut from ₹1 crore to ₹10 lakh, while M.P. Pandove’s penalty was reduced from ₹50 lakh to ₹5 lakh in one of the cases. However, another ₹50 lakh penalty each on Srinivasan and Pandove remained unchanged.

Reacting to the verdict, Lalit Modi said, “The Tribunal has rejected the central premise on which the Enforcement Directorate’s case against me had been built. It held that the principal foreign remittances relating to the staging of IPL 2009 in South Africa were current account transactions, not capital account transactions, thereby overturning the foundation of the earlier findings.”

He added, “The Tribunal also found that I was neither responsible for BCCI’s statutory FEMA compliance nor vested with the financial authority alleged by the Enforcement Directorate, and it has set aside the penalties imposed on me in the principal proceedings. This marks the conclusion of what has been the single most significant legal matter arising from the 2009 South Africa IPL.”

Modi also said, “For over sixteen years I have consistently maintained one simple position: I acted in good faith, in the best interests of Indian cricket and the IPL, and committed no personal wrongdoing.”

Speaking about the circumstances behind the move to South Africa, he said, “The decision to move the tournament to South Africa in 2009 was taken under extraordinary circumstances when India’s general elections made it impossible to host the tournament at home. The successful staging of that season ensured that the IPL survived and ultimately became one of the world’s most valuable sporting properties.”