Hyderabad Cricket Association wasn’t fined for renaming a stadium after Rajiv Gandhi

By: Rohith Gutta
May 30 2023

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HCA Vs VIL

Context
Twitter user Rishi Bagree, who has been called out for sharing misinformation on several occasions, shared a post on May 17, 2023, claiming that the Hyderabad Cricket Association (HCA) had to pay ₹55 crores and an additional penalty of “six times” this amount because the name of the cricket stadium in the state was changed to Rajiv Gandhi International Stadium in 2004 by the then Congress government.

He further states in the tweet that the Andhra government decided to build a stadium with the help of the corporate sector in 2003, and Visakha Industries Ltd (VIL) emerged as the highest bidder to sponsor the stadium and name it after VIL. According to Bagree’s tweet, VIL was paid an amount of ₹55 crores, and in 2004, when the Congress government came to power, it renamed the stadium after Rajiv Gandhi and the HCA had to pay six times the contract amount (₹330 crores) for the change in name.

“Following this decision HCA was required to pay Visaka Industries six times the contract price,” he wrote, adding “Price nation pays for the maintaining Gandhi family name.” This tweet has more than 242,000 views, more than 2,800 likes, and over 800 retweets. He also attached a judgment delivered by the Andhra Pradesh High Court in 2011 as a reply to his tweet.

However, Bagree’s tweet is replete with factual errors.

In Fact
Hyderabad Cricket Association (HCA) is a registered society and an affiliate member of the Board of Control for Cricket in India (BCCI). It organizes BCCI-authorized cricketing tournaments in Hyderabad and elsewhere in Telangana. It also works for the development of cricketing sport in Hyderabad and Telangana.

Visaka Industries Limited (VIL) is an industrial conglomerate that has an interest in various fields such as cement roofing, yarn, solar roofs, and others.

Logically Facts went through the details of the judgment that Bagree shared in a subsequent tweet. The judgment detailed the contract between HCA and VIL. On October 16, 2004, the HCA entered into a 25-year contract with VIL to sponsor the construction of an international cricket stadium in Uppal in Hyderabad, Telangana. According to the agreement, VIL agreed to pay ₹6.5 crores to have the right to name the stadium ‘Visaka International Cricket Stadium’ and gain other advertising rights and privileges.  

Subsequently, both parties negotiated to rename the stadium as ‘Rajiv Gandhi International Cricket Stadium’ after the former Prime Minister in view of a proposal from the Congress-led government in Andhra Pradesh. This renegotiation was reflected in the letter that HCA wrote to VIL on 10 November 2005. According to the changed contract, dated 25 April 2006, while the stadium would be named ‘Rajiv Gandhi International Cricket Stadium’, the playing ground would be named ‘Visaka Cricket Grounds’. The sponsorship money was reduced from₹6.5 crores to ₹4.32 crores. The other rights and privileges accorded to VIL were to remain the same.

The conflict between HCA and VIL started with the onset of the Indian Premier League (IPL) in India in 2008. The HCA asked the VIL to forgo rights and privileges available to them, saying that the agreement signed included only Test and ODI format cricket, and the IPL format wasn’t included. On the other side, VIL argued that the agreement signed was irrevocable and covered all formats of cricket. VIL argued that they are entitled to damages equal to six times the consideration paid by the company and the penalty. This would make the damages claimed by VIL ₹25.92 crores, excluding the penalty. The above information is gleaned from the High Court of Andhra Pradesh judgment in Civil Miscellaneous Appeal No. 1025/2011 between Hyderabad Cricket Association and Visaka Industries Limited. 

Logically Facts also spoke to Rajinikanth, General Manager (Legal), Visaka Industries Limited to confirm the facts of the case. He explained that the conflict went through various levels of the judiciary and finally ended with an arbitration panel. According to the 2015-16 annual report of the HCA, the arbitration panel awarded compensation of ₹25.92 crores to VIL on March 15, 2006, which is precisely six times the amount that VIL paid to HCA at the beginning, minus penalties sought by VIL. The Indian newspaper, Deccan Chronicle, too, reported the same amount in a news report dated May 15, 2016.

Rajinikanth also confirmed to us that the renaming of the stadium to Rajiv Gandhi International Cricket Stadium was based on a mutual agreement, where HCA approached them for the change of the name, and they agreed to it in lieu of reducing the sponsorship amount to ₹4.32 crores from the initially accepted amount of Rs. 6.5 crores. He explained that the entire legal conflict between HCA and VIL had to do with the breaching of rights and privileges as agreed upon in the initial contract, especially concerning the inclusion of IPL format cricket within the ambit of the agreement and not the renaming of the stadium. He also confirmed that the arbitration panel awarded ₹25.92 crores to VIL and that HCA is yet to pay the amount.

This shows that the claim that the Andhra government has to pay ₹55 crores and a significant penalty to VIL for renaming the stadium after Rajiv Gandhi is misleading.

The Verdict
HCA and VIL mutually agreed to rename the stadium ‘Rajiv Gandhi International Cricket Stadium’. The damages HCA was ordered to pay VIL by an arbitration panel were about terminating the agreement that accorded certain rights and various privileges to VIL by HCA. The compensation amount is ₹25. 92 crores, and not Rs 55 crores plus penalty. Therefore, we mark this claim as misleading.