Following an emergency meeting of the Indian Premier League's Governing Council, the Board of Control for Cricket in India on Sunday dropped Rajasthan Royals and Kings XI Punjab from the Twenty20 tournament.
The BCCI sent out a statement stating that contracts were terminated with KPH Dream Cricket Private Ltd, who own Kings XI Punjab, and Jaipur IPL Cricket Pvt. Ltd, the owners of Rajasthan Royals.
"It was unanimously decided that the Franchise agreements with KPH Dream Cricket Pvt. Ltd. and Jaipur IPL Cricket Pvt. Ltd. be terminated forthwith, based on the legal opinions obtained by BCCI in the matters," read the statement from BCCI secretary N Srinivasan.
The two franchises were alleged to have committed irregularities during the period of their contract and a showcause notice was served to them after the BCCI's Annual General Meeting in Mumbai on September 29.
'There are several irregularities and breach of terms and conditions of the (IPL) franchise agreement. All the three errant franchises need to get their houses in order before the next player auctions are held in November,' BCCI president Shashank Manohar had said after the AGM.
The Kochi IPL team was also issued a notice, asking them to resolve their dispute at the earliest if they want to take part in IPL-4.
"It was further unanimously decided to issue a notice to the Unincorporated Joint Venture holding the Kochi franchise calling upon them to resolve all their disputes and form a joint venture company which will hold the IPL franchise rights," the BCCI said.
After the AGM in Mumbai, Manohar had given details on the disputes within the owners of the Kochi franchise and made it clear that if the situation does not improve their contract would be cancelled.
"As far as Kochi franchise is concerned, when the bid was given, the bid was given by individuals who came together and formed a consortium. Now there is no legal entity as such which is incorporated. So we asked them to incorporate a company, a joint venture company and then come to the Board.
"They haven't incorporated a company and they have a recent dispute between the five persons who are there in the consortium with regards to the shares, sweat equity and other things.
"Therefore, they are not able to resolve those issues. Both the groups have sent letters to the Board saying not to recognise the other group and you recognise only me. Therefore, in such a scenario, the Board cannot work with such a franchise.
"We will issue them a notice and give them a time frame that you have to incorporate your company with this time frame otherwise we are going to cancel this franchise because we can't work with groups within a franchise.?We might play with nine teams or eight teams, we don't know," Manohar added.
Accordingly, P R Raman, Advocate for BCCI has been given instructions to issue all the three notices.