Zee Telefilms Ltd. v. Union of India

B.C.C.I. is a private body registered as a society under the Tamil Nadu Societies Registration Act. It regulates cricket in India. It selects teams, organises tournaments and manages international matches.

B.C.C.I. floated a tender for the broadcasting rights of cricket matches for four years. Zee Telefilms and E.S.P.N. Star Sports both placed bids. After negotiation, B.C.C.I. decided to award the contract to Zee. Zee agreed to pay a very large amount and deposited Rs. 92.5 crore.

E.S.P.N. then filed a case in the Bombay High Court. After that, B.C.C.I. cancelled the entire tender process, terminated Zee's contract and returned the deposit.

Zee felt the decision was arbitrary and unfair. It went straight to the Supreme Court under Article 32. It claimed that its fundamental rights under Article 14 and Article 19(1)(g) had been violated.

1. Is B.C.C.I. a 'State' within the meaning of Article 12?

2. Was the cancellation of Zee's contract arbitrary and a violation of Article 14?

3. Is a writ petition directly maintainable against B.C.C.I. under Article 32?

The first question was the key to the other two. If B.C.C.I. was not a State, fundamental rights could not be enforced against it under Article 32 at all.

For Zee Telefilms (petitioner):

B.C.C.I. has complete control, a monopoly, over cricket in India. Everything from domestic tournaments like the Ranji Trophy to the selection of the national team is in its hands.

It receives support and recognition from the government, such as nominal rent on stadiums. The team it selects represents India as the national team.

Organising cricket and selecting the national team is a public function.

Zee relied on Sukhdev Singh v. Bhagatram (1975), where public corporations were held to be a State. It also relied on Ajay Hasia v. Khalid Mujib (1980), where a society registered under the Societies Registration Act was held capable of being a State.

The Union of India also filed an affidavit saying that B.C.C.I. was a State.

For B.C.C.I. and E.S.P.N. (respondents):

B.C.C.I. is a private body. It was not created by any statute and receives no government funding.

Its monopoly was not granted by the government. It arose from a first-mover advantage, that is, the benefit of being the first to enter the field.

If B.C.C.I. were held to be a State, all sports federations (hockey, football, kabaddi and others) would also have to be treated as States. That would be a dangerous precedent.

Under the Pradeep Kumar Biswas (2002) test of financial, functional and administrative control, B.C.C.I. fails. So the Supreme Court's jurisdiction under Article 32 does not arise.

The Supreme Court held, by a 3:2 majority, that B.C.C.I. is not a 'State' under Article 12. Therefore a writ petition cannot be filed directly against B.C.C.I. in the Supreme Court under Article 32.

The majority opinion was written by Justice N. Santosh Hegde, joined by Justice B. P. Singh and Justice H. K. Sema.

Reasoning of the majority (based on the Pradeep Kumar Biswas test):
(a) B.C.C.I. was not created by any statute.
(b) Its share capital is not held by the government.
(c) The government does not bear its expenditure.
(d) The government has no financial, functional or administrative control over it.
(e) Some government support, or de facto recognition (recognition in practice), does not make a body a State.
(f) Popularity or public opinion cannot decide whether a body is a State. The fact that cricket is like a religion in India does not make B.C.C.I. a State.
(g) Treating B.C.C.I. as a State would mean treating all private sports federations the same way. That would open the floodgates to unlimited Article 32 litigation.

Remedy under Article 226: The Court accepted that B.C.C.I. performs public functions. So High Courts can issue writs against it under Article 226. Article 32 is only for enforcing fundamental rights, which are generally enforceable against the State. Article 226 is broader: a High Court can issue a writ to any person or authority, and not only for fundamental rights but for any other purpose too.

Dissent: Justice S. B. Sinha, with Justice S. N. Variava, dissented. They held that B.C.C.I. should be treated as a State under Article 12. Their reasons were its complete control over cricket, its selection of the national team and its government recognition, which together make its functions State-like.

Article 12, Constitution of India; Article 14, Constitution of India; Article 19(1)(g), Constitution of India; Article 32, Constitution of India; Article 226, Constitution of India; Tamil Nadu Societies Registration Act

This is a core case in the Article 12 line of cases, following Sukhdev Singh, Ajay Hasia and Pradeep Kumar Biswas. It shows how the Pradeep Kumar Biswas test is applied to a powerful private body.

It draws a clear line between Article 32 and Article 226. A writ against a private body performing public functions is not maintainable in the Supreme Court under Article 32, but is maintainable in a High Court under Article 226.

It shows that private organisations can indirectly come within constitutional accountability. It also warned B.C.C.I. that it must act fairly and transparently in its public duties.

Later, in B.C.C.I. v. Cricket Association of Bihar (2015), a case about conflict of interest in the I.P.L., the Supreme Court held that B.C.C.I. performs public functions and is subject to judicial review under Article 226. In that judgment the Court set up the Justice R. M. Lodha Committee, whose recommendations brought major reforms to B.C.C.I.

The 3:2 split, the majority by Justice Santosh Hegde and the dissent by Justice S. B. Sinha are common exam points.

Hypothetical: Prince runs a sports channel. He wins a broadcasting tender from a private national sports federation. The federation is registered as a society and is not funded or controlled by the government. The federation suddenly cancels Prince's contract without giving any reason. Prince's lawyer, Zoya, advises him that a writ petition under Article 32 in the Supreme Court will not be maintainable, because, applying Zee Telefilms, the federation is not a 'State' under Article 12. However, the federation selects the national team and performs public functions. So Zoya files a writ petition in the High Court under Article 226, challenging the action as unfair in the discharge of a public function.