Smith, who represented Rajasthan Royals in the last season and could make just 311 runs at an average 25.91, was released by the Jaipur franchise.
Lyon also said that he ranks current skipper Tim Paine among the best he has played under and thinks the wicketkeeper-batsman is not going anywhere.
The board of Cricket Australia will determine whether Smith can return to captaincy at its next meeting.
CA banned Smith, 31, from playing international cricket for 12 months and was also barred from a leadership position with the national team for two years following the Cape Town scandal
The Rajasthan Royals had released Steve Smith ahead of the IPL 2021 auction, and Delhi Capitals eventually bought him for INR 2.2 crore.
The clip was shown by the broadcasters ahead of the start of the third Test, which is a day-night affair, a second of its kind on Indian soil, and the video immediately went viral all over social media.
The 31-year-old, who was released by Rajasthan Royals, was acquired by Delhi Capitals for Rs 2.2 crore at the IPL auctions last week.
Delhi Capitals began their IPL 2021 Auction with an impressive Rs. 2.2 crore steal of Australia’s Steve Smith. However, they now face a happy headache on his batting position, as the side’s top-4 includes Indian batsmen Prithvi Shaw, Shikhar Dhawan, captain Shreyas Iyer and wicketkeeper-batsman Rishabh Pant/all-rounder Marcus Stoinis.
Delhi Capitals bought 8 players in the IPL 2021 Auction, spending the most on England all-rounder Tom Curran (Rs 5.25 crore).
Smith had entered the 2021 IPL auction with a base price of Rs 2 crore.
The Delhi franchise bought Australia's Steve Smith for INR 2.2 crore in the IPL 2021 Auction.
This is the third time he is winning the prestigious medal. He was pipped by David Warner by one vote last year.
Recalling series win against Australia, Coach Ravi Shastri and Indian skipper Virat Kohli sounded bullish as the coach reminded that a depleted India won the series against a full strength Australia.
Paine's performance behind the wicket and his tactics as captain in the just-concluded Test series against India which Australia lost 1-2 were severely criticised by former players.
Rajasthan Royals named Sanju Samson as their new skipper for the impending IPL 2021 season, after parting ways with Steve Smith.
Smith finished IPL 2020 with 311 runs in the 14 matches he played, at a strike rate of 131, including three half-centuries. Rajasthan Royals finished bottom of the table with six wins in 14 games.
Smith and vice-captain David Warner had resigned in the aftermath of the scandal during the Cape Town Test against South Africa in March 2018 and since then Tim Paine has been at the helm of the Test team.
Steve Smith reckons that with the Gabba track starting to play a few tricks, staying patient would be imperative for his team's bowlers when they defend an imposing 328 against a determined India.
Rohit appears to imitate Steve Smith on the crease after the star Aussie batsman stirred controversy by allegedly scuffing off Rishabh Pant's crease while shadow batting in Sydney Test.
A new and longer video of Steve Smith scuffing off crease during the third Test suggests the Oz star batsman did the act after the groundstaff draw fresh crease during drinks' break.
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