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BTC: Legal opinion supports higher representation

  September 10 , 2019

The Bangalore Turf Club perhaps has denied the race owning members of the club their entitled seats in the Managing Committee by restricting it to just two possibly due to a wrong reading of the License Condition. The License Condition puts a restriction that not more than 50 per cent of the composition of the Managing Committee could be from racehorse owning members.

Following the amendment to the Articles of the Association in 1985, racehorse owning members were stopped from becoming Stewards, the representation for them became negligible. The BTC interpretation was that since 50 per cent of representation was for horse-owning members and since they were ineligible to become Stewards, out of the four vacancies that were to be contested for the Managing Committee members other than Stewards, only two could go to horse-owning members under the 50 per cent condition.

The convention got established and nobody even bothered to ask whether, in the altered circumstances, all the four committee posts going to racehorse owning members breached the 50 per cent limit in any way. This blatantly unfair interpretation resulted in club members stop owning horses if they harboured the intention of being part of the managing committee as Stewards. The turf club is in the business of conducting horse racing and owners are the biggest stakeholders. But they were kept out perhaps due to incorrect interpretation of the License Condition.

One of the members of the club Ashok Raghavan had all along maintained that in the light of the race horse-owning members not being eligible to become Stewards, all the four posts of committee members could be given to racehorse owning members as it did not conflict the License Condition which stated that the representation for owners in the Managing Committee should not exceed 50 per cent. The turf club had sought an opinion from the Finance Secretary who while confirming that there was confusion regarding the License Condition and the provision made for the racehorse owning members said that status quo could be maintained.

The turf club mandarins after being convinced of the arguments put forward by Ashok Raghavan sought a legal opinion which clearly said that in the light of the License Condition and the fact that race horse-owning members had become ineligible to become Stewards because of the Amendment to the Articles of the Association and not due to change in License Condition, the racehorse owners could be given the opportunity to get all the four posts if they got elected as it did not conflict with the 2 A of the License Condition imposed by the government. It remains to be seen whether the mandarins of the club act in the best interests of racing and its stake holders. Right now, it is a case of the race club being run by non-stake holders. It is like asking a cricket association not to have any cricketers in the managing committee to take decisions on matters concerning cricket.

Importantly, the present Articles of the Association of the club puts a restriction only on racehorse owners becoming stewards and does not in any way prohibit racehorse owners from occupying all the four vacancies for the post of the managing committee members.

The Article 32(a) of the Articles of Association of the Club defines the composition of the Committee which shall comprise of 14 (fourteen) members out of whom 9 (nine) shall be Stewards and 5 (five) shall be the Committee Members. Out of the above, 10 (ten) members are elected to the Committee by the Members of the Club and the remaining 4 (four) members are nominated by the Government of Karnataka. Article 32(b) of the Articles specifically provides that a Racehorse Owner is not eligible to be a Steward in the Managing Committee, while Article 32(c) defines a "Racehorse Owner" for the purpose of the said Article.

The Government of Karnataka had issued a license to the Club under the provisions of the Mysore Race Course Licensing Act, 1952 and the rules made thereunder, and a specific reference to Para 2A of the Conditions of License is relevant and required to be evaluated for the opinion. The Government of Karnataka had entered a Memorandum of Understanding (`MOU`) with the Bangalore Turf Club on 5.5.1978 regarding the composition of the Managing Committee and the restrictions placed on the eligibility of the persons to be inducted to the Managing Committee. Further to the MOU as stated above, the Deputy Secretary to Government, Finance Department (Personnel) had issued a letter No. FD 47 CRC 85 dated 11.10.1985 and a follow-up letter (undated) as a clarification to the letter (undated) by the Club dated 11.10.1985. A document titled "Form amended to letter No. FD 41 CRC 84 dated 1.9.1984 issued by the Deputy Secretary to Government, Finance Department (Personnel) is also on record. In the said document, certain amendments were suggested to the Articles, including 32 (b) which remains unamended till date.

The questions that the club put before the legal counsel were as follows:

1. Whether all the four vacancies to the Managing Committee to be filled by election can be contested by Racehorse Owners or only two out of four are eligible as per the convention being following by BTC?

2. Whether the Articles of Association of BTC which have not carried out the amendments proposed by the Government with specific reference to Articles 32(b) will prevail and will be binding on members or whether the suggestion made by the Government of Karnataka for substitution of Articles and the intention of the Government manifested through its letter dated 11.10.1985, restricting the number of Race Horse Owners to control the Managing Committee to 2 out of 4 will prevail?

3. Whether there would be a violation of the licensing conditions as prevalent as on date in the event of the Club deciding to permit all four vacancies for the post of the Managing Committee Members to be contested by Racehorse Owners?

The government of Karnataka had asked for the Articles of the Association to be amended following several complaints of decisions being taken to suit the interests of owners much to the detriment of fairness of racing. The exclusion of owners in racing decisions was to ensure that there was no conflict of interest when attending to all matters relating to the conduct of races, the results thereof etc., were done in a fair and impartial manner. In so far as the Managing Committee members (Board of Directors) are concerned, it is immaterial whether they are Race Horse Owners or not, since they ate only concerned with the general administration of the company by attending the meetings of the Managing Committee as any director of a company would do.

The legal opinion states as follows: ``It would appear the AOA was specifically amended by including a new Article 60 as proposed/recommended by the Deputy Secretary to Government, Finance Department, Government of Karnataka. However, the suggested amendments to Article 32 were not carried out, in as much as Article 32 remains as it is. The omission to carry out amendments to Article 32 appear to be conscious since only Article 60 as recommended has been included by a specific amendment. Thus on a harmonious reading of Article 3 of the AOA, clauses (a) and (b) of the MOU and Clause 2A of the Conditions of Licensing as applicable to BTC, it would appear that 4 (four) Race Horse Owners can form part of the Managing Committee and particularly n the category of "elected members".

``The practice followed by the Club all these years of having only two Race Horse Owners in the elected category of members appears to be only a convention, and not due to any restriction contained in the AOA or Conditions of License, unless the Club has in response to the letter dated 11.10.1985 of the Deputy Secretary, Finance Department has expressly conveyed to the Government that the recommendations/suggestions contained therein regarding the composition of the Managing Committee will be adhered to. In such an event, it could be an implied condition of licence.

``On the basis of the discussions and analysis given we have answered the queries in seriatim as under. All four vacancies to the Managing Committee falling under the category of "elected members" can be contested by Racehorse Owners. Article 32(b) as it stands will prevail, since the same is consistent with Clause 2A of the Conditions of Licensing and Clauses (a) and (b) as per the MOU. The recommendation contained in the letter dated 11.10.1985 have only been partially implemented in as much as the suggested new Article 60 was specifically incorporated in the AOA while the suggested changes to Article 32 were not carried out by way of specific amendment. This appears to be a conscious decision on the part of the Club, and the Government not having thereafter brought up this issue, it can be concluded that it was only a suggestion or recommendation and not part of the terms and conditions of license.

It is time that the turf club corrected a historical wrong by changing the convention mistakenly followed since 1985 which has done grave injustice to horse-owning club members.

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Total Comments : 1
Posted by Chandrakant Deodhar, Pune. on ( September 9 , 2019 )
Dear Sharan ji, you are always writing regarding activities in BTC & you are very clear on your views. I request you to please meet CM of Karnataka & put your views in front of him. I am sure he will take necessary action after your discussion with him & it will definitely help to run the club very smoothly, that is what everybody want. Thank you.--Chandrakant Deodhar, PUNE.
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