MUMBAI: The Bombay High Court Monday has ruled that the Board of Control for Cricket in India (BCCI) has acted in haste by terminating the franchise agreement of crisis-ridden IPL franchise Deccan Chargers.

However, the HC also gave a green signal to the BCCI to add a tenth new team to the cash rich league.

The court had on 17 September directed BCCI to maintain status quo by not invite bids for a new franchise on a petition filed by DCHL seeking to restrain BCCI to add a new team.

Reiterating what it said on 26 September, the court passed an order directing the franchise to furnish an irrevocable and unconditional bank guarantee of Rs 1 billion on or before 9 October which would be in force for one year.

If DCHL manages to furnish the bank guarantee before the deadline, it will be allowed to participate in the season 6 of the IPL and also renew contracts with players. All the franchises are expected to renew contracts with players before 31 October.

However, the court clarified that the order will cease to be in effect in the event DCHL fails to furnish a bank guarantee of Rs 1 billion.

While delivering the order, Justice SJ Kathawala said: "Though I find that the balance of convenience is more in favour of DCHL, I am of the view that the following protective orders will take care of the interest of both the parties."

The BCCI will be entitled to invoke bank guarantee only in the event of any default on the part of DCHL and only to the extent necessary, the court said.

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.

It also told the BCCI that it will not act on the termination for a period of seven days if the award is in their favour.

The court had earlier appointed retired Supreme Court judge CK Thakkar as the sole arbitrator for the dispute between BCCI and DCHL.

The court disposed of the arbitration petition with a clarification that all the observations are prima facie and the arbitrator shall make his award without being influenced by any of the observations made in the order.

While directing DCHL to clear all outstanding dues includes players fee, the court told the BCCI to deposit the amount payable by the board to DCHL and payable in future to DCHL with the Prothonotary and Senior Master of the court which the Prothonotary and Senior Master shall invest in a fixed deposit of a nationalised bank from time to time until further orders of the court.

It needs to be noted that Yes Bank had filed a plea in the Bombay High Court that the receivables due to DCHL from BCCI be deposited in the media company‘s Yes Bank account. DCHL had also told the court that the money from central pool be paid to its Yes Bank account. The BCCI, however, contended that it can‘t do so since other lending banks are making similar claims.

The BCCI had on 15 September terminated the franchise agreement with Deccan Chargers for breach of contract terms. The cricket board had along with DCHL, the owner of Deccan Chargers team, called for bids to sell the Hyderabad-based franchise.

DCHL had rejected the lone Rs 9 billion bid of PVP Ventures despite the bidder meeting the eligibility criteria of the BCCI.

MUMBAI: Shemaroo Entertainment, the integrated media content firm with activities across content acquisition, value addition and content distribution, is planning to raise Rs 1.15 billion via an initial public offering (IPO).

Shemaroo has filed its draft red herring prospectus (DRHP) with the Securities & Exchange Board of India (Sebi).

At present, of a total of 19.85 million equity shares, promoters hold 90.14 per cent stake while the remaining 9.86 per cent is with other corporate bodies.

Out of Rs 1.15 billion, the company intends to use Rs 1.05 billion for working capital requirements while remaining will be used for other general corporate purposes.

For the year ended 31 March 2011, Shemaroo Entertainment reported a net profit of Rs 136.2 million on a total income of Rs 1.60 billion. The company has a debt of Rs 1.28 billion.

Yes Bank and ICICI Securities are the book running lead managers while Link Intime India is registrar to the issue.

Set up in 1962, Shemaroo has a content library featuring more than 2,500 titles, including regional language movies.