DCHL gets 3 more days to give bank guarantee

MUMBAI: The Bombay High Court Tuesday gave the owners of Deccan Chargers three more days to furnish an unconditional and irrevocable bank guarantee of Rs 1 billion in order to secure a place in the season 6 of the Indian Premier League (IPL).

The high court accepted DCHL‘s application seeking extension of time to submit the bank guarantee. IPL team Deccan Chargers? owner Deccan Chronicle Holdings Ltd (DCHL) will now have to furnish the bank guarantee by Friday for its continuation as an IPL franchise.

The court had on 1 October directed Deccan Chronicle Holdings Limited to furnish Rs 1 billion bank guarantee by 9 October. However, the court had also stated that the order will cease to be in effect in the event DCHL fails to furnish a bank guarantee.

The court had directed DCHL to furnish a bank guarantee to allay the fears of the Indian cricket board that the company‘s financial health was not in good shape to run the team, which in turn would have an adverse impact on the IPL.

In response, the BCCI was told that it will be entitled to invoke the bank guarantee in the event of any default on the part of DCHL but only to the extent necessary.

The court had also appointed retired Supreme Court judge C K Thakkar as an arbitrator and had said that the arbitration process be completed within three months.

The court also told the BCCI that it will not act on the termination of franchise agreement pending the arbitration proceedings and making of an award by the arbitrator.

The BCCI had on 14 September terminated the franchise agreement of Deccan Chargers for breach of contract. The contract was terminated after DCHL rejected the lone Rs 9 billion bid of PVP Ventures despite the bidder meeting the eligibility criteria of the BCCI.

The cricket board had along with DCHL called for bids to sell the Hyderabad-based franchise in order to help the financially distressed company to find a buyer. The sale of Deccan Chargers is critical for DCHL to cut down its debt which is pegged at Rs 42 billion.