Lalit Modi gets relief as tribunal quashes ED penalty in 2009 IPL South Africa FEMA case

Former Indian Premier League (IPL) chairman Lalit Modi has received a major legal reprieve after an appellate tribunal set aside a penalty imposed by the Enforcement Directorate (ED) in a 15-year-old Foreign Exchange Management Act (FEMA) case linked to the 2009 IPL season held in South Africa.

The tribunal ruled that the ED had failed to establish Lalit Modi’s responsibility in the alleged foreign exchange violations, overturning the penalty order that had been issued against him and several others.

The 2009 IPL was shifted from India to South Africa after security concerns arose due to the country’s general elections. To organise the tournament overseas, the Board of Control for Cricket in India (BCCI) transferred funds abroad, which later became the subject of an ED investigation.

The agency alleged that foreign exchange amounting to USD 49.86 million (now valued at more than ₹243 crore) was transferred to an overseas entity without obtaining prior approval from the Reserve Bank of India, constituting a violation of FEMA.

The ED issued show-cause notices in 2011 before passing penalty orders in 2018 against Modi, several former BCCI officials and other individuals. The accused subsequently challenged those orders before the Appellate Tribunal constituted under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act (SAFEMA).

In its 105-page judgment dated July 16, a division bench comprising Chairman Justice Munishwar Nath Bhandari and Member Rajesh Malhotra held that there was no material to show Lalit Modi was responsible for the alleged violations.

The tribunal observed that Modi was not in charge of the affairs and had been implicated without evidence demonstrating his responsibility. It consequently held that the penalty imposed on him was wholly erroneous and set it aside.

Welcoming the verdict, Modi, who is currently based overseas, said that the ruling vindicated his long-held position that he had acted in the interests of Indian cricket and had committed no personal wrongdoing.

“For over sixteen years I have consistently maintained one simple position: I acted in good faith, in the best interests of Indian cricket and the IPL, and committed no personal wrongdoing,” Modi said in a statement released through his lawyer, Mehmood Abdi.

He added that the judgment was significant beyond his own case.

“This judgment is not simply personal vindication. It reaffirms the importance of due process, objective legal analysis and the principle that allegations must ultimately be tested against evidence and law.”