Zee Telefilms Ltd v Union of India (2005) 4 SCC 649

The case of Zee Telefilms Ltd. v Union of India is a landmark judgement in Indian constitutional law that dealt with the question of whether the Board of Control for Cricket in India (BCCI) is a “State” within the meaning of Article 12 of the Constitution of India, 1950. The Supreme Court, in its decision, held that BCCI is not a State under Article 12 and, therefore, not subject to writ jurisdiction under Article 32. However, it acknowledged that BCCI performs public functions, which makes it amenable to Article 226 writ jurisdiction by the High Courts. This case set a precedent in determining the applicability of constitutional remedies against private bodies performing public functions.

Case Details

• Case Name: Zee Telefilms Ltd. & Anr. v. Union of India & Others
• Case Number: Writ Petition (Civil) 541 of 2004
• Type of Case: Civil
• Court: Supreme Court of India
• Bench: N. Santosh Hegde, S. N. Variava, B. P. Singh, H. K. Sema, S. B. Sinha
• Date of Judgement: 2 February 2005
• Equivalent Citation: (2005) 4 SCC 649
• Parties Involved:
  • Petitioner: Zee Telefilms Ltd. & Anr.
  • Respondents: Union of India, Board of Control for Cricket in India (BCCI), ESPN
• Laws Involved:
  • Article 12 – Definition of State
  • Article 14 – Right to Equality
  • Article 19(1)(g) – Right to Practice Any Profession or Business
  • Article 32 – Constitutional Remedies
  • Article 226 – High Court Writ Jurisdiction

Background & Facts of Zee Telefilms Ltd v Union of India

BCCI, a private entity registered under the Tamil Nadu Societies Registration Act, 1975, is the governing body of cricket in India. It regulates and controls domestic and international cricket affairs, including team selections, tournament organisation, and player contracts.

The dispute arose when BCCI invited tenders for the exclusive telecast rights of cricket matches for four years. Two major sports channels, Zee Telefilms Ltd. and ESPN, submitted bids. After negotiations, BCCI awarded the contract to Zee Telefilms, which agreed to pay $260,756,756.76 (INR 12.06 billion) and deposited $20 million (INR 92.50 crores) as security in the State Bank of Travancore.

However, following a legal dispute initiated by ESPN in the Bombay High Court, BCCI terminated Zee’s contract and refunded its security deposit. Zee, aggrieved by this arbitrary cancellation, approached the Supreme Court, alleging that:

• BCCI’s decision violated Article 14 (Right to Equality)
• BCCI functions as a State authority and should be subject to constitutional scrutiny

The key legal question before the Supreme Court was whether BCCI qualifies as a “State” under Article 12, and if so, whether Zee Telefilms could seek relief under Article 32 of the Constitution.

Legal Issues

The legal issues raised in Zee Telefilms Ltd v Union of India were:

• Is BCCI a “State” under Article 12 of the Constitution of India?
• Does the arbitrary cancellation of Zee Telefilms’ contract violate fundamental rights?
• Is a writ petition under Article 32 against BCCI maintainable?

Petitioner’s Arguments (Zee Telefilms Ltd.)

Advocate: Harish Salve

• BCCI exercises complete control over cricket in India: It holds an exclusive monopoly on the regulation of domestic and international cricket, including tournaments such as the IPL, Ranji Trophy, and Duleep Trophy.
• BCCI enjoys governmental support and recognition: The selection of players for international matches requires government clearance, and the government provides security and logistical support for BCCI events.
• BCCI is performing a “public function”: As cricket is an essential public activity, BCCI should be considered as an “instrumentality” of the State.
• Precedents supporting the case:
  • Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi (1975): Public corporations performing public duties can be considered “State.”
  • Ajay Hasia v. Khalid Mujib Sehravadi (1980): Societies created under the Societies Registration Act can be considered State entities if they perform essential functions.
• BCCI’s actions violate fundamental rights under Articles 14 and 19(1)(g).

Respondent’s Arguments (BCCI & Union of India)

Advocate: KK Venugopal

• BCCI is a private entity: It is not established by a statute, does not receive government funding, and does not function under government control.
• BCCI’s monopoly is not government-granted: It enjoys its position due to a first-mover advantage, not because of any state-sanctioned protection.
• Recognising BCCI as a State would create a dangerous precedent: Other sports federations, such as hockey and football federations, would then also have to be considered State entities.
• Precedents supporting the case:
  • Sabhajit Tewary v. Union of India (1975): Only entities controlled by the government are “State.”
  • Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002): Established a six-test criteria for determining if an entity is a State. BCCI did not meet these tests.

Zee Telefilms Ltd v Union of India Judgement of the Supreme Court

BCCI and Article 12 of the Constitution

The Supreme Court in Zee Telefilms Ltd v Union of India ruled that BCCI does not qualify as a “State” under Article 12 of the Constitution of India. The Court referred to the six legal tests established in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and concluded that BCCI does not meet these criteria. These tests help determine whether an entity qualifies as “State” for constitutional purposes.

The Court noted that BCCI is neither created by statute nor financially, functionally, or administratively controlled by the government. If BCCI were considered a “State,” then all sports federations that represent India internationally, including those in art, music, and dance, would also need to be included under Article 12. This would lead to an uncontrolled surge in litigation under Article 32, which the Court found impractical.

Additionally, popularity, finances, or public opinion cannot determine whether an entity is a State. Simply because cricket is widely followed in India does not make BCCI any different from other private federations. The Court explicitly stated that no private sports federation, including BCCI, shall be classified as a State under Article 12.

BCCI’s Monopoly and Market Dominance

The Court in Zee Telefilms Ltd versus Union of India acknowledged that BCCI has a dominant position in Indian cricket—it controls player selections, organises tournaments, and governs international participation. However, this dominance does not stem from any statute or government action. Instead, BCCI gained first-mover advantage, making it the primary governing body for cricket in India.

The Court clarified that there is no legal restriction on any other organisation forming a cricket body in India. A prime example is Subhash Chandra’s Indian Cricket League (ICL), which attempted to challenge BCCI’s monopoly. However, ICL failed due to multiple reasons:

1. BCCI labeled its players as rebels, discouraging participation.
2. ICL struggled to attract major Indian cricketers.
3. Logistical and venue-related challenges hindered its success.

The Court emphasised that BCCI’s dominance is not absolute and that other well-structured organisations could challenge it in the future. This serves as a reminder for BCCI to maintain high standards in cricket management.

Violation of Article 19(1)(g) – Right to Profession

The petitioner argued that BCCI’s monopoly infringes upon Article 19(1)(g), which guarantees the right to practice any profession, trade, or business. They claimed that BCCI’s control over a cricketer’s career gives it absolute power over participation and contracts, making it an instrument of the State.

However, the Court rejected this argument, stating that if BCCI were considered a State for governing cricket, then every employer regulating employees would also qualify as State. BCCI does restrict players from participating in unauthorised leagues, but it allows them to play List A and first-class matches internationally. The Court found no violation of fundamental rights and held that BCCI’s monopoly does not infringe on Article 19(1)(g).

Conclusion

The Supreme Court in Zee Telefilms Ltd v Union of India ruled that BCCI is not a “State” under Article 12 and cannot be subjected to Article 32 writ jurisdiction. However, High Courts can issue writs under Article 226 if BCCI’s actions affect public rights. The ruling clarified the role of private entities in Indian constitutional law and set a precedent for determining the applicability of fundamental rights to non-governmental organisations.