With this decision, the BCCI auction of the franchise slot will go as scheduled on October 25.
A bench headed by Chief Justice Altamas Kabir, while dismissing the appeal of the team's owner Deccan Chronicle Holdings, said BCCI cannot be forced to continue with the arrangement.
It also refused to grant an extension till October 22 to furnish a R100-crore bank guarantee to keep the IPL team alive.
The position today stands that the agreement between Deccan Chargers and BCCI is terminated and the effect of extension of time to deposit the bank guarantee will amount to forcing the contract, the bench said.
Seeking stay of termination of its IPL team's termination, senior advocate Mukul Rohatgi said that since DCHL was in financial difficulty it could not furnish the bank guarantee of R100 crore by October 12.
He argued that the cricket board's termination notice of September 14 was arbitrary.
Even the Bombay High Court on October 1 had found the termination as hasty.
The franchise had claimed that it had a bank guarantee of R100 crore ready with it and there were fresh developments and changed circumstances, including a new buyer (Mumbai-based Landmarc Developers) for R1,250 crore, which could help undo its financial crisis.
BCCI senior counsel CA Sundaram argued that the next IPL season was to begin in April 2013 and many Deccan Chargers players could suffer if they were not included in the auction.
BCCI had decided to terminate the franchisee as it had doubts about the ability of the Hyderabad-based media company to finance the team in the sixth edition of IPL as it had failed to pay its players' dues for the fifth season. Besides, it had not even settled the claims of its suppliers and the banks, which is around R4,500 crore.