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2010 DIGILAW 928 (CAL)

Rose Valley Chain Marketing Systems Ltd. v. Subal Chandra Dey

2010-08-04

SANJIB BANERJEE

body2010
JUDGMENT 1. An Appellate Court order of July 26, 2010 was brought to the notice of this Court on August 3, 2010 when the matters were mentioned for being taken up on urgent basis. The matters have appeared today and have been heard out pursuant to the direction of the Appellate Court. 2. G.A. No. 2867 of 2009 is the plaintiffs’ principal interlocutory application in this suit complaining of defamation. G.A. No. 3390 of 2009 is the first defendant’s application for revocation of the leave granted under Clause 12 of the Letters Patent. G.A. No. 1367 of 2010 is the plaintiffs’ application under Order XXXIX Rule 2A of the Code of Civil Procedure. 3. Since the authority of the Court to receive the action has been questioned, such matter has to be addressed first. 4. The cause title shows that the first and second defendants carry on business both within and outside the jurisdiction. It is, in a sense, an unusual cause title since once it is stated that a defendant carries on business or works for gain or resides within jurisdiction, as to whether the defendant also carries on business outside jurisdiction may not be relevant. The third defendant is not said to carry on business within jurisdiction. On the basis of the cause title alone, leave under Clause 12 of the Letters Patent was necessary only in so far as the third defendant was concerned. 5. In the first defendant’s application for revocation of leave, it has been stated that the third defendant is not a juristic entity. The first defendant says that no part of the plaintiffs’ alleged cause of action arose within jurisdiction for leave under Clause 12 of the Letters Patent to be granted. To begin with, such point may not be available to the first defendant since the first defendant has been sued in this Court on the basis of the first defendant carrying on business within jurisdiction. It is also significant that the second defendant has not applied to Court challenging the jurisdiction of the Court to receive the action. To begin with, such point may not be available to the first defendant since the first defendant has been sued in this Court on the basis of the first defendant carrying on business within jurisdiction. It is also significant that the second defendant has not applied to Court challenging the jurisdiction of the Court to receive the action. There is a serious doubt as to whether the first defendant, who has been sued on the allegation that he carries on business within jurisdiction, could have applied for revocation of leave granted under Clause 12 of the Letters Patent since such leave was unnecessary in respect of the first two defendants and was only needed qua the third defendant. But it is not necessary to engage any more on such issue since the plaint does not specify that the leave was confined to the third defendant and since the challenge would otherwise fail on merits. 6. The plaintiffs have relied on a document which has been appended to the first defendant’s affidavit in the injunction application. The plaintiffs say that the letterhead of the first defendant would indicate that the defendants had a business office in Calcutta. The plaintiffs say that it is the Lenin Sarani office which is the business office of the first two defendants in Calcutta. 7. Though the first defendant says that the Lenin Sarani office is merely an advertisement office and not an office through which the first or the second defendant carries on business, that is a question of fact which has to be assessed at a later stage. 8. Clause 12 of the Letters Patent is in three parts. The one part, which is completely irrelevant for the present purpose, covers suits for land or other immovable property where the situs of the land or immovable property is of paramount importance. The other two limbs of Clause 12 of the Letters Patent relate to situs of the cause of action and the situs of the defendant at the time of the commencement of the action. In a sense, the three limbs of Clause 12 are mutually exclusive. The other two limbs of Clause 12 of the Letters Patent relate to situs of the cause of action and the situs of the defendant at the time of the commencement of the action. In a sense, the three limbs of Clause 12 are mutually exclusive. In a suit other than a suit for land (or other immovable property), the plaintiff may invoke the territorial jurisdiction of this Court on the basis of a part of the plaintiff’s cause of action having arisen within jurisdiction – in which case previous leave of Court has to be obtained – or on the basis of the defendant dwelling or carrying on business or personally working for gain at any place within jurisdiction at the time of the commencement of the suit. It is evident from the cause title that the first defendant has been described to carry on business within jurisdiction. The plaint as against the first defendant, in that sense, need not rest on the situs of the cause of action or the consequencial need to have obtained leave under Clause 12 of the Letters Patent. 9. Disregarding such aspect of the matter for the moment, the substance of the first defendant’s objection may be taken up. The first defendant shows that the plaintiffs have invoked the jurisdiction of this Court on the basis of the averments contained in paragraphs 14, 22, 26, 27 and 29 of the plaint. At paragraph 14 of the plaint it has been averred that the first defendant circulates its newspaper in Calcutta from its regional office in Lenin Sarani within jurisdiction. More importantly, it has been averred in such paragraph that the newspaper articles complained of had been circulated and read both within and outside jurisdiction. That, certainly, would constitute a part of the plaintiffs’ cause of action in a defamation action. 10. Even if the address of the first defendant was not indicated to be any place within the original jurisdiction of this Court, on the basis of the averments in paragraph 14 of the plaint, this Court would have authority to receive the action and, on a challenge as a demurer, such statements have to be accepted as true and correct and leave under Clause 12 of the Letters Patent is liable not to be revoked. 11. 11. The statements contained in the other paragraphs which have been cited by the plaintiffs for invoking the territorial jurisdiction of this Court may or may not form part of the cause of action. Some of the statements are vague. However, since on the basis of the statements contained in paragraph 14 of the plaint it is evident, this Court had the jurisdiction to receive the action, it is not necessary to go into the other statements on which the jurisdiction of this Court has been founded. 12. Apart from the first defendant alleging that no part of the plaintiffs’ cause of action had or could have arisen within the jurisdiction of this Court, there is a case of balance of convenience which has been made out. Though such aspect of the matter on facts has not been pressed to the extent necessary, it has been suggested at the hearing that it would be inconvenient for the first defendant to bring witnesses from Tripura to justify the first defendant’s publication of the articles complained of. Nothing more has been urged. The names or particulars of the probable witnesses have not been disclosed. 13. The first defendant has referred to two judgments delivered in proceedings under Article 226 of the Constitution of India. From the judgment reported at AIR 2003 Cal 80 (IFB Automotive Seating and System Ltd. v. Union of India), paragraphs 35 and 37 of the report have been placed. In that case, the writ petitioner had complained of a decision that had been taken by an authority in Delhi. The Court noticed that it was not the writ petitioner’s case that a copy of the decision had been made over to the writ petitioner at any place within the bounds of the writ jurisdiction of this Court. The Court also noticed that the effect of the order was in Delhi and a subsequent representation, for the purpose of reversing the order, issued from Calcutta would be a far-fetched averment for invoking the territorial jurisdiction of this Court. 14. The Court also noticed that the effect of the order was in Delhi and a subsequent representation, for the purpose of reversing the order, issued from Calcutta would be a far-fetched averment for invoking the territorial jurisdiction of this Court. 14. In the second case of Oil and Natural Gas Commission v. Utpal Kumar Basu reported at 1994 (4) SCC 711 , a notice inviting tender was issued outside the State and the writ petitioner made an offer pursuant thereto and founded a writ petition on the basis of the writ petitioner having responded to the notice inviting tender from a place within jurisdiction. The Supreme Court found that such fact was not integral to the writ petitioner’s cause of action. Even in criticizing the Calcutta High Court for having entertained the writ petition, the Supreme Court observed at paragraph 6 of the report that for the purpose of assessing whether a Court had the authority to receive the action, the correctness of the statements cannot be adjudicated upon at the preliminary stage. 15. Even though under Article 226 (2) of the Constitution of India, which was introduced in 1963 by way of the Fifteenth Amendment and remembered by the Forty-Second Amendment in 1976, refers to the expression “cause of action”, there is a fundamental distinction between the writ court’s discretion in entertaining a matter and the civil court’s obligation in receiving an action. A writ court has the discretion to decline a relief or to decline to entertain a matter. If the conditions as to jurisdiction are fulfilled, a Civil Court is obliged to continue with the matter and, ordinarily, has no discretion to not accept the action. 16. In this case, since the action against the complaining first defendant was instituted in this Court on the basis of the first defendant carrying on business within jurisdiction, the other averments in the plaint were irrelevant. In any event, if paragraph 14 of the plaint is seen, there is substantial basis to the plaintiffs having invoked the territorial jurisdiction of this Court on the ground of a part of the plaintiffs’ cause of action having arisen within jurisdiction. 17. Two other judgments have been referred to by the first defendant on the aspect of balance of convenience. 17. Two other judgments have been referred to by the first defendant on the aspect of balance of convenience. In the judgment reported at AIR 1980 Cal 159 (Ultra Engineering Industries Pvt. Ltd. v. Spintex Industries Pvt. Ltd.) leave was revoked on the ground that the defendant would face hardship in defending the action here. Similarly, in the judgment reported at AIR 1981 Cal 192 (Jyoti Bhusan Mukherjee v. Eastern Tea Company Ltd.) leave granted under Clause 12 of the Letters Patent was revoked, both as no part of the cause of action was found to have arisen within jurisdiction and on the ground of inconvenience to the defendant. In the second case, a decision of the company under Section 372 of the Companies Act had been challenged where, admittedly, the registered office of the company was not within the original jurisdiction of this Court. 18. A plaintiff as dominus litus has the choice of forum. If an action is brought to this Court and it appears that this Court has the authority to receive it, only an overwhelming case of inconvenience would prompt this Court to require the plaintiff to carry the action to a forum of convenience. The grounds indicated in support of the argument of forum non conveniens do not meet such high test. 19. The final judgment brought by the first defendant is one reported at 2010 (2) WBLR 148 (Assam Co. Ltd. v. The State of Andhra Pradesh). In that case, the plaintiff had sought to invoke the jurisdiction of this Court on the basis of the office of the plaintiff and allegations as to what transpired in the plaintiff’s office. It was in such context that it was observed that simply because the plaintiff had an office within jurisdiction would not entitle the plaintiff to invoke the territorial jurisdiction of this Court unless a part of the plaintiff’s cause of action had arisen within. 20. The first defendant’s application for revocation of leave granted under Clause 12 of the Letters Patent, G.A.No.3390 of 2009, fails. There will be no order as to costs. 21. On the principal interlocutory application, the plaintiffs obtained an ex parte order on November 16, 2009 in terms of prayers (a) and (b) of the petition. The prayers are couched in the widest terms. 22. There will be no order as to costs. 21. On the principal interlocutory application, the plaintiffs obtained an ex parte order on November 16, 2009 in terms of prayers (a) and (b) of the petition. The prayers are couched in the widest terms. 22. The plaintiffs refer to several articles published by the defendants in their “SYANDAN PATRIKA” newspaper which is published in Tripura. The plaintiffs say that the plaintiff company is a reputed organization having divers business interests. The plaintiffs first refer to an article published in the defendants’ newspaper on August 13, 2009. Such article refers to a criminal case having been lodged against the plaintiff company’s chairman and two other officials. The plaintiffs say that the allegations contained in the article of August 13, 2009 defamed the plaintiff and have been maliciously published. The plaintiffs contend that such article is the first in series of articles where scandalous statements were made against the plaintiffs without any basis. According to the plaintiffs, none of the articles complained of should be seen in isolation. 23. The second article that the plaintiffs complain of was published on October 25, 2009. The article, which is the lead on the front page of the newspaper, carries a photograph spread over three columns and a headline of two lines where the plaintiff company has been described as a concern engaged in chit fund business. The grievance of the plaintiffs in respect of such second article is that in the body of the article it has been alleged that a case of cheating had been instituted against the plaintiff company and its office bearers. The plaintiffs say that no case under Section 420 of the Indian Penal Code has been instituted against the plaintiff company or its office bearers. The plaintiffs assert that the insinuation in the second article was malicious in that it made out as if the plaintiff company’s chairman was in the habit of bribing police officials and obtaining undue favours from them. The plaintiffs say that the caption below the photograph was outrageous and defamatory of the plaintiffs. 24. The third article complained of is one published on October 30, 2009. This article was disclosed by way of a supplementary affidavit which was filed on November 16, 2009. The plaintiffs say that the caption below the photograph was outrageous and defamatory of the plaintiffs. 24. The third article complained of is one published on October 30, 2009. This article was disclosed by way of a supplementary affidavit which was filed on November 16, 2009. The plaintiffs say that even after the plaint had been prepared and filed, the scandalous allegations against the plaintiffs continued unabated in the defendants’ publication. In this third article, the defendants alleged that depositors should “beware” since matured amount due to depositors had not been paid by the plaintiff company. The first paragraph of the article, which is spread over four columns and carries the photograph of a share certificate of the plaintiff company, in no uncertain terms alleges that the plaintiff company is engaged in fraudulent business and the plaintiff company and its office bearers indulge in cheating others. 25. The fourth article that has been referred to at the hearing on behalf of the plaintiffs is one which was published on October 31, 2009. A copy of such article was also included in the plaintiffs’ supplementary affidavit. The plaintiffs are particularly aggrieved by the allegation therein that the plaintiff company is engaged in chit fund business and that the plaintiff company carries on business without obtaining approval from the Securities and Exchange Board of India. The plaintiffs say that several notorious vanishing companies have been referred to in the article and the plaintiff company has been compared to such other infamous companies. 26. Following the publication of the first two articles that the plaintiffs have relied on at the hearing, the plaintiffs issued a rejoinder by way of an advertisement in a newspaper on August 27, 2009. The plaintiffs alleged in such advertisement that a malicious campaign against the plaintiff company and its officers had been launched by the defendants. The plaintiffs alleged in the advertisement that the daughter- in-law of the first defendant was employed by the plaintiff company and had apparently been transferred whereupon the first defendant had requested the management of the plaintiff company to reconsider the decision. The advertisement insinuated that following the plaintiff company’s refusal to reconsider its decision, the scurrilous attack had been commenced against the plaintiff company and its officers. 27. The substance of the advertisement has been repeated in the body of the plaintiffs’ first petition. 28. The advertisement insinuated that following the plaintiff company’s refusal to reconsider its decision, the scurrilous attack had been commenced against the plaintiff company and its officers. 27. The substance of the advertisement has been repeated in the body of the plaintiffs’ first petition. 28. The first defendant has used an affidavit to the plaintiffs’ principal interlocutory application. Apart from the first defendant questioning the propriety of this Court in receiving the action, the only matter of substance which is indicated in such affidavit is that the defendants were justified in publishing the articles complained of. 29. Classically, a defence to a libel action is by way of justification in so far as there are statements of fact; and, by way of fair comment in respect of the views expressed in the impugned writing. For a considerable period, it is the rolled-up plea of justification and fair comment which has found favour in courts. A rolled-up plea goes on these lines: that to the extent the statements complained of are statements of fact, they are true in substance and in fact; and to the extent the statements complained of are views expressed, they are fair comment based on the facts which a prudent person would hold on such state of facts. 30. In an interlocutory application in a libel suit, the innuendo pleaded by the plaintiff needs to be countered by giving a preview of the basis on which such a defence of justification would rest at the trial. Some material must be shown that a plea of justification is likely to succeed. 31. Notwithstanding the particulars of innuendo furnished in the plaint and in the plaintiffs’ principal application, the defendants have not attempted to indicate how the statements complained of in the articles were justified. The defendants have pleaded justification. However, for resisting an interlocutory order in a defamation action the plea of justification that would ultimately be taken at the trial must be indicated and the basis for justification must, prima facie, be demonstrated. Apart from denying the allegations in the petition, the first defendant has not brought any material in support of its plea of justification or attempted to demonstrate that the statements complained of could have been justifiably published by the defendants. 32. The first defendant has also indicated in its affidavit that the plaintiff company indulges in illegal activities. Apart from denying the allegations in the petition, the first defendant has not brought any material in support of its plea of justification or attempted to demonstrate that the statements complained of could have been justifiably published by the defendants. 32. The first defendant has also indicated in its affidavit that the plaintiff company indulges in illegal activities. According to the first defendant, the plaintiff company has set up a resort at Mandarmani near Digha and such resort has been set up in violation of subsisting orders of this Court. These are irrelevant matters so far as the present proceedings are concerned. The conduct of the plaintiffs may have been relevant upon some basis for the plea of justification being indicated. The first defendant was required to disclose on what basis it published the articles so that the plea of justification could, prima facie, be accepted. 33. As far as the first article is concerned there appears to be no more than a few words here and there which may have been offensive but in substance the defendants had only reported an incident of criminal proceedings being brought against the plaintiff company and some of its office-bearers. The second article, however, imputed improper motive not only on the part of the chairman of the plaintiff company but also on the general activities of the plaintiff company. The plaintiffs say that following an enquiry conducted by a higher police official a press release was contemporaneously issued. A copy of the relevant press release has been appended to the plaintiffs’ principal application. The matters contained in the second article lend credence to the plaintiffs’ assertion that the defendants had embarked on a vicious scheme to malign the plaintiffs and the plaintiff company. However, the matters contained in the second article relate to a particular incident on a particular day. 34. The matters referred to in the third article relating to the alleged failure of the plaintiff company to honour its payment commitments to its depositors are, ex facie, defamatory since the defendants have not disclosed any basis in arriving at such conclusion. Despite a copy of the supplementary affidavit being made over to the defendants and despite the defendants having an opportunity to deal with the contents of the supplementary affidavit, the third article published on October 30, 2009 has been completely glossed over in the first defendant’s affidavit. Despite a copy of the supplementary affidavit being made over to the defendants and despite the defendants having an opportunity to deal with the contents of the supplementary affidavit, the third article published on October 30, 2009 has been completely glossed over in the first defendant’s affidavit. Similarly, the article published on October 31, 2009 where the plaintiff company has been clubbed with other fraudulent business organizations also appears to be without basis and there is no element of justification which is indicated in respect thereof by the first defendant in his affidavit. 35. A prima facie case has been made out by the plaintiffs. Yet, an order as wide as prayers (a) and (b) of the petition may not be granted. The first reason for declining a blanket order of injunction is that the before coming to Court, the plaintiffs had issued an advertisement and had attempted to deal with the defendants in the same manner that the defendants had dealt with them. Secondly, notwithstanding Article 19 of the Constitution not carving out any special privilege for the media in India, a blanket gagging order would not be in public interest. The defendants claim to run a newspaper. The defendants owe a duty of care to whoever is referred to in the defendants’ publication that the reputation of such person is not taken lightly. The right to one’s reputation also inheres in every person. In the defendants continuing the series of articles culminating in those published on October 30 and October 31, 2009, there appears to be a pattern and an attempt to cause prejudice to the plaintiff company’s business. 36. G.A.No.2867 of 2009 is disposed of by restraining the defendants whether by themselves or by their servants or agents or assigns or otherwise howsoever from publishing any comments in the defendants’ newspaper imputing improper motive to the plaintiffs or any of them. There will also be an order of injunction restraining the defendants from describing the plaintiffs or any of them as cheats or using like per se defamatory words of the plaintiffs or any of them. This order will, however, not prevent the defendants from publishing news concerning the plaintiff company, subject to the article justifying the basis for the news. There will also be an order of injunction restraining the defendants from describing the plaintiffs or any of them as cheats or using like per se defamatory words of the plaintiffs or any of them. This order will, however, not prevent the defendants from publishing news concerning the plaintiff company, subject to the article justifying the basis for the news. The defendants should also be reminded that journalistic morality and ordinary propriety demand that if allegations are made against a person, then the article should make it clear that they are allegations and not established facts; and, canons of decency demand that a person against whom allegations are made is afforded an opportunity to present his version of things in the same article. 37. The first defendant will pay costs assessed at 1000 GM to the plaintiff company in respect of G.A.No.2867 of 2009. 38. In the plaintiffs’ second application under Order XXXIX Rule 2A of the Code, no affidavit-in-opposition has been filed despite directions for filing affidavits having been given by an order dated April 26, 2010. On May 17, 2010 the time to file the affidavit-in-opposition was extended till a week after the summer vacation. No affidavit has been used by the defendants or any of them. The plaintiffs say that despite the defendants being aware of an order in terms of prayers (a) and (b) having been passed on November 16, 2009, the publication of the malicious articles against the plaintiffs continued unabated in the defendants’ newspaper. The plaintiffs have referred to several articles in their subsequent application, the publication whereof amount to disobedience and breach of the order dated November 16, 2009. 39. The plaintiffs say that they have instituted contempt proceedings against the defendants and that a Rule has been issued in the contempt proceedings. The plaintiffs claim that notwithstanding the contempt proceedings, they are entitled to an immediate order of attachment against the defendants and for the first and second defendants to be detained in civil prison because of the continued disobedience and breach of the subsisting order. 40. Since no affidavit has been filed and since it appears that the publication of the subsequent articles referred to in G.A.No.1367 of 2010 amounted to a breach and disobedience of the then subsisting order, there will be an order of attachment in respect of the Lenin Sarani property of the defendants. 40. Since no affidavit has been filed and since it appears that the publication of the subsequent articles referred to in G.A.No.1367 of 2010 amounted to a breach and disobedience of the then subsisting order, there will be an order of attachment in respect of the Lenin Sarani property of the defendants. There will be an order of injunction restraining the defendants from dealing with or disposing of or otherwise alienating or encumbering any of the assets at the office at room no.F/F-2, 79 Lenin Sarani, Calcutta-700013, including the office itself, without previous leave of court. Such injunction will remain in force for a period of a year from date. Such order is made without prejudice to the plaintiffs’ rights in the contempt proceedings. 41. Though the plaintiffs insist that they are entitled to an order for the detention of the first and the second defendants in civil prison, no order to such effect is made immediately in view of the pendency of the contempt proceedings, but the plaintiffs are given liberty to apply in the event there is any breach of the order now made. 42. G.A.No.1367 of 2010 is disposed of accordingly. The first plaintiff will pay costs of this application assessed at a further 1000 GM. 43. Urgent certified photocopies of this order, if applied for, be given to the parties subject to compliance with all requisite formalities.