The debt-ridden Deccan Chargers can no longer be a part of the IPL after its beleaguered owners failed to produce a Rs 100-crore bank guarantee before the Bombay High Court, a condition that had been set for the struggling team's survival in the league.
Deccan Chargers' failure to furnish the guarantee money before the 5pm deadline effectively means that the BCCI's termination of the team stands and the Board was now free to float the tender for a new franchise.
Deccan Chronicle Holdings Limited, the owner of the franchise, had sought an extension to today's deadline until October 15 to submit an "irrevocable and unconditional" bank guarantee but the High Court refused to grant further time.
Justice S J Kathawala declined to give them more time, saying the earlier deadline of October 9 had been extended by three days to accommodate them.
A top BCCI official said that the IPL Governing Council had earlier decided to terminate Deccan Chargers' contract with IPL and that decision stands.
"We had decided to terminate the contract of Deccan Chargers. It was a decision taken by the IPL Governing Council and only that body can change it. So as things stand, their contract is terminated," the official said.
The court had on October 1 asked DCHL to give the bank guarantee which would be in force for a period of one year.
The BCCI had last month taken the decision to terminate the contract after an emergency IPL Governing Council meeting in Chennai. The DCHL had moved the Bombay High Court challenging the termination.
The court had at an earlier hearing ordered DCHL to bear all expenses for IPL 6 including making payments to BCCI towards franchise, players and support team costs. Besides, it was asked to bear the costs of conducting matches and other expenses.
In the event of any default on part of DCHL, BCCI shall be entitled to invoke the bank guarantee to the extent necessary, Justice Kathawala had said.
The court had on September 26 appointed retired Supreme Court judge C K Thakkar as arbitrator to resolve within three months the dispute between BCCI and DCHL over the termination of Deccan Chargers franchise.
However, pending arbitration proceedings and making up of an award by the arbitrator, the judge asked the BCCI not to act on the termination of the franchise agreement for a period of seven days, if the award is in their favour.
The judge had, however, clarified that the September 26 order would immediately cease to be in force if DCHL fails to furnish the bank guarantee.
The development comes on a day when the DCHL informed the Bombay Stock Exchange about its decision to sell the IPL franchise to a Mumbai-based real estate firm Kamla Landmarc Real Estate Holdings Ltd for an undisclosed sum.
"Pursuant to its meeting of the board of directors held on October 11, it was resolved to authorise the board of directors to sell, transfer or dispose of the Deccan Chargers Franchise business undertaking, business division of the company to Kamla Landmarc Real Estate Holdings Private Limited," DCHL said in a filing to the BSE.
Now that the Cricket Board is free to go ahead with the termination of the franchise, the fate of the proposed sale is uncertain. It is also unclear how the players of the Deccan Chargers would get their payments.
Deccan Chargers was hoping to resolve its financial problems by selling the team but it rejected the sole bid it received at the auction in Chennai on September 13.
PVP Ventures Limited, the Hyderabad-based urban infrastructure and film production company, had offered Rs 900 crores but Deccan rejected it finding the terms of payment and the amount unacceptable.
DCHL purchased the Hyderabad franchise for Rs 428 crore in 2008. At the auction, the base price was said to be around Rs750 crore. The winning bidder had to meet BCCI's eligibility criteria and other requirements.