IPL-2 FEMA Case; Most Penalties Against BCCI, Lalit Modi & SBI Set Aside

By CA Vijayakumar Shetty Fema / RBI Judiciary , Trending July 30, 2026

TaxGuru Citation: 2026 taxguru.in 9748
Case Name: Lalit Kumar Modi Vs Directorate of Enforcement (Appellate Tribunal Under SAFEMA Delhi)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: Appellate Authority, SAFEMA

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Lalit Kumar Modi Vs Directorate of Enforcement (Appellate Tribunal Under SAFEMA Delhi)

SAFEMA Tribunal Grants Major Relief in IPL-2 FEMA Case; Most Penalties Against BCCI, Lalit Modi & SBI Set Aside

The Appellate Tribunal under SAFEMA, New Delhi, decided a batch of appeals arising from penalties imposed by the Enforcement Directorate against BCCI, Lalit Modi, N. Srinivasan, M.P. Pandove, State Bank of India (formerly State Bank of Travancore), and others over alleged FEMA violations relating to the conduct of IPL-2 in South Africa in 2009. The ED had alleged unauthorized foreign remittances, operation of overseas bank accounts, borrowing/lending transactions, delayed repatriation of foreign exchange, and violations by the authorised dealer bank while remitting approximately USD 49.86 million (₹243.45 crore) to Cricket South Africa (CSA).

The Tribunal examined the Heads of Agreement between BCCI and CSA, the nature of the remittances, FEMA provisions governing current and capital account transactions, the role of the authorised dealer bank, and the responsibilities of individual office-bearers. It held that the remittances made for organizing IPL-2 were predominantly in the nature of current account transactions connected with hosting a sporting event and not capital account transactions merely because expenditure was to be settled subsequently. The Tribunal also found that vicarious liability under Section 42 of FEMA could not automatically be fastened on office-bearers without establishing that they were in charge of and responsible for the conduct of the relevant business. It further accepted that the authorised dealer bank had processed remittances based on prescribed documentation, including Form A-2 and Chartered Accountant certificates, while observing that procedural lapses alone could not justify the penalties imposed in several cases.

Consequently, the Tribunal allowed the appeals to a substantial extent, setting aside most of the FEMA penalties imposed on BCCI, Lalit Modi, State Bank of India and other appellants. However, it upheld the penalty relating to one specific remittance exceeding the amount reflected as the accrued liability in BCCI’s books, and also sustained the corresponding penalties imposed on the concerned office-bearers for that limited contravention.

Cases Discussed

Susela Padmavathy Amma v. Bharti Airtel Ltd. (SC), (2024) 12 SCC 1
Godrej Industries Ltd. v. CCE, (2008) 17 SCC 471
K. Ahuja v. V.K. Vora (SC), (2009) 10 SCC 48
National Small Industries Corpn. Ltd. v. Harmeet Singh (SC), (2010) 3 SCC 330
M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (SC), (2005) 8 SCC 89
Bharat Earth Movers v. CIT (SC), 2000 (6) SCC 645
Shashank Manohar v. Union of India and Anr. (Bombay HC), Writ Petition No. 5305 of 2013

FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

The batch of appeals have been filed to challenge the order dated 31.05.2018 passed by the Special Director of Enforcement imposing penalty on the appellants for contravention of different provisions of the Foreign Exchange Management Act (FEMA), 1999 (in short “the Act of 1999) and the Rules and Regulations made thereunder. The respondent issued 12 Show Cause Notices in reference to different contraventions and for ready reference, the statements of Show Cause Notices and the contraventions involved therein are given hereunder:

Sections contravened

SCN I – Section 3(b) of FEMA, 1999 r/w Section 42(1) & (2) of FEMA, 1999.