MUMBAI: The Bombay High Court has asked three public sector banks Punjab National BankBSE 0.17 % (PNB), Indian Bank and Union Bank of IndiaBSE 0.32 % (UBI) to collectively deposit around Rs 400 crore in the court to secure the claim of cricket governing body Board for Control of Cricket in India (BCCI).
The order was pronounced last Thursday by justice SJ Kathawala on an appeal filed by the BCCI regarding the guarantee given by the three PSBs in favour of Nimbus Communication. However, the PSBs have decided to challenge the order of the single bench court. Punjab National Bank and Indian Bank have been asked to deposit Rs 150 crore each while Union Bank of India has been asked to fork out Rs 100 crore.
BCCI has filed a suit against three public sector banks after the banks refused to encash the guarantees worth Rs 1,600 crore in 2011. The banks argued that "once the contract is terminated by BCCI the liability of the banks under the act come to an end. Also, as per the demands made by BCCI, their claim over Nimbus was not more than Rs 63 crore and, therefore, the invocation for Rs 1,600 crore was unjustified."
The bank guarantees were issued by the banks in consideration towards the contract executed in consideration of the Master Rights Licensing Agreement (MRLA), between BCCI and Nimbus broadcasting the cricket matches. MRLA is a kind of agreement which gives broadcaster rights to telecast the matches exclusively. The case goes back in December 2011, when BCCI cancelled the domestic broadcasting rights given to Nimbus Communication after it defaulted on the payment of Rs 63 crore towards BCCI, which was part of the six-year contract for broadcasting of all matches between two.
Nimbus Communication had signed a deal with BCCI to broadcast all its matches from 2009 to 2014. Also, Nimbus had got the stay order on the encashment of the guarantee against BCCI. As per the 2009 media rights licence agreements (MRLA) between BCCI and the broadcasting company, Nimbus was supposed to pay 50% fees in advance and the remaining 50% after the telecast of every match. BCCI is being represented by Amarchand Mangaldas. While, the PSBs are represented by MDP & Partners along with its managing partner Nishit Dhruva.
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