The Supreme Court on Monday ordered three banks, which had given a guarantee on behalf of Nimbus Communications Ltd. to the Board of Cricket Control in India (BCCI) to deposit Rs 400 crore with the Bombay High Court within 15 days in the Media Rights License Agreement case.
Nimbus, which in 2009 won the global media rights for broadcasting international cricket for the 2010-2014 period for around Rs 2,000 crore, had submitted to the BCCI unconditional bank guarantees from Punjab National Bank, Indian Bank and Union Bank of India. According to BCCI records, Nimbus had submitted 28 bank guarantees.
But when the BCCI in December 2011 terminated Nimbus' agreement for regularly defaulting on payment and sought to encash the bank guarantees in its possession the banks refused to pay the monies to the tune of Rs 1,600 crore.
Nimbus was granted media rights for the period April 1, 2010 - March 31, 2014 for all international matches to be played in India. It was to pay Rs 31.25 crore per international match, be it a Test, ODI, or Twenty20 International.
"BCCI was compelled to file summary suits against the three nationalised banks in the Hon'ble Bombay High Court.
The court granted the three banks leave to defend the suits on a condition that the banks deposit a sum totalling Rs 400 crores with the Prothonotary and Master of the Hon'ble Bombay High Court," BCCI said in a statement on Monday.
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"Aggrieved by this order", BCCI filed a special leave petition before the Supreme Court. Earlier, the Bombay High Court had directed Nimbus to secure the dues of BCCI by way of the bank guarantee.
"The order has not been complied by them and the company faces contempt proceedings," claimed BCCI. The Supreme Court on Monday passed the order.
"A final order has been passed directing the three banks to deposit within 15 days the sum of Rs 400 crores with the Prothonotary and Master of Hon'ble Bombay High Court, who would then remit the money to the bank account of BCCI," BCCI said. It also said that it had undertaken that if the suit failed, the said sum would be returned along with interest.
The N. Srinivasan headed BCCI welcomed the Supreme Court decision. "It's a good conclusion; it's welcome. At long last, the BCCI has succeeded," a top BCCI official told Mail Today. Nimbus chief Harish Thawani didn't take calls and didn't reply to text messages.
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BCCI's working committee on December 12, 2011, decided to terminate the contract. After sending many reminders to Nimbus, the BCCI sent a legal notice to Nimbus on November 16, 2010, asking it to make the payment within five days, failing which the bank guarantee would be revoked.