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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

APPELLATE SIDE

CRIMINAL APPLICATION NO.3049 OF 2009

National Stock Exchange of India Ltd. & Ors. : Applicants

V/s.
Dr.A. Sabastin & Anr. : Respondents
....

Mr.Shirish Gupte, Senior Advocate, with Mr.Subodh Desai for the

applicants.

Mr.Amit Desai i/b. Mr.V.N. Shingnapurkar for respondent no.1.

Mr.S.A.Shaikh, Addl. Public Prosecutor for the State.

...
CORAM : B.R. GAVAI, J.

DATE : MARCH 25, 2010.

P.C.:

By way of the present application, the applicants pray for

quashing and setting aside proceedings in C.C. 6424/SS/2009 pending

before the learned Metropolitan Magistrate’s 16th Court, Ballard Pier,

Mumbai, along with the order issuing process dated 8.5.2009.

2. The facts in a nutshell giving rise to the present application are as

under:-

The respondent no.1 was employed with the applicant no.1. The

respondent no.1 was initially joined as Asstt. Manager (Operation) with

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effect from 1.8.1990. The respondent no.1 on the basis of his merit

received several promotions and had reached the position of Vice

President of the applicant no.1. It appears that on account of better career

prospects, the respondent no.1 resigned from the services of the applicant

no.1. After the termination of the respondent no.1, an advertisement came

to be widely published by the applicant no.1 under the signature of Head

Human Resources of the applicant no.1 in newspapers, viz., Economic

Times, Business Standard, Business Line and Financial Express. After

publication of the said advertisement, a complaint came to be filed by the

respondent no.1 herein for the offences punishable under sections 499 and

500 read with 34 of the Indian Penal Code against the present applicants.

The accused no.1 is the National Stock Exchange of India Ltd., the

accused no.2 is the Managing Director, the accused no.3 is the Deputy

Managing Director and the accused no.4 is the Manager, Human

Resource Dept. In the said complaint, the process came to be issued.

Being aggrieved by the filing of the complaint by the respondent no.1 and

the issuance of process by the learned Magistrate, the applicants have

approached this Court.

3. Mr.Gupte, the learned senior counsel appearing on behalf of the

applicants, submits that the present complaint is an abuse of the process

of law. He further submits that in the complaint which is at page 35,

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nothing about the character or competence of the complainant has been

stated. He submits that the said complaint was only required to be filed

since the relations between the applicant no.1 and the respondent no.1

complainant were not properly severed. It is submitted that only to

caution the clients of the applicant no.1 that they should not deal with the

complainant, the said notice came to be issued.

4. The learned counsel appearing on behalf of the applicants submits

that the present case is squarely covered by the first and ninth exceptions

of section 499. The learned counsel relied on the judgement of the apex

Court in the case of Rajendra Kumar Sitaram Pande v. Uttam [(1999) 3

SCC 134] and the judgement of the learned single Judge of this Court in

the case of Valmiki Faleiro v. Mrs.Lauriana Fernandes (2005 Cri.L.J.

2498).

5. Mr.Desai, the learned counsel appearing on behalf of the

respondent no.1, submits that a perusal of the complaint would reveal that

the ingredients to constitute an offence under section 500 has been made

out in in the complaint and, therefore, no interference is warranted.

6. Since this Court, after hearing the learned counsel for the

applicants was prima facie of the view that the complaint prima facie
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discloses an offence punishable under section 500, suggested to the

parties that since the matter appears to be nothing but the result of an ego

clash between the applicants and the respondent no.1, if an apology is

published in the same newspapers in the same manner, it will give an end

to the criminal litigation. On 10.3.2010 itself, the learned counsel

appearing for the respondent no.1 agreed to this suggestion of the Court.

However, Mr.Gupte, the learned counsel appearing on behalf of the

applicants, sought time to seek instructions on the ground that the

applicant no.2, who is the Managing Director of the applicant no.1, was

not in India and, therefore, he was not in a position to make a statement in

that regard. In that view of the matter, the matter was adjourned so as to

enable the learned counsel for the applicants to take instructions and make

a statement in that regard.

7. Today, an affidavit has been filed on behalf of the applicant no.1

stating therein that it is not possible for the applicants to publish a fresh

apology. It is submitted that, however, the applicants are willing to

publish a clarification to the effect that the caution administered in the

public notice is for the purpose of advising all concerned that any

dealings with the respondent no.1 purporting to be on behalf of the

applicants may result in legal liabilities which may entail civil and

criminal action. In a nutshell, the applicants only want to reiterate what

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was published by them earlier which is the subject-matter of the

complaint. Justification is sought to be given in the affidavit that since

the respondent no.1 was working with the applicant no.1 and ceased to

work with the applicant no.1 with effect from 3.4.2009, it was necessary

to warn third parties that they should not have any dealings with the

respondent no.1 on behalf of the applicant no.1 and if any one deals with

the respondent no.1, then he does so at his own risk and the applicants

would not be liable for such dealings.

8. In the interest of justice, Mr.Gupte was again heard today. He

reiterated the contentions which were made on the earlier occasion and

added that the clarification at page 35A itself would reveal that the

applicants had no intention to make any imputations on the character or

efficiency of the complainant.

9. It is well-settled law that while considering an application for

quashing of the proceedings, the Court would be examining the

allegations made in the complaint to find out as to whether prima facie the

ingredients of the offence complained of have been made out or not. In

the complaint, it has been specifically stated that though all the applicants

were knowing very well that the complainant had joined the services of

Multi Commodity Exchange of India Limited, which is admittedly the

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rival of the applicant no.1, an advertisement was published in various

newspapers having a very wide circulation. It has been stated in the

complaint that due to the said advertisement, the image of the respondent

no.1 amongst his colleagues, family members and friends has been

tarnished. Specific allegation has been made against the accused nos.2, 3

and 4 in paragraph 12 of the complaint as under:-

“The Accused No.4 also threatened the general

public that they shall be liable for legal action as the

Accused no.1 may deem fit, if they deal with the

Complainant. The Complainant further states that

the Accused, under the instructions of Accused no.2

and Accused no.3, who is also in-charge of HR

Department of Accused no.1, had embarked on a

malicious campaign against the Complainant as

evidenced by the public notice.”

10. A perusal of the advertisement which is published in the four

widely circulated newspapers in the business community would reveal

that a public notice is prominently published in the aforesaid newspapers

exhibiting therein the photograph of the complainant. The first

impression that a layman would get upon seeing the said advertisement
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would be that the complainant is shown as some person who has done

something wrong to the applicant no.1. In the said notice, it has been

stated that in any manner whatsoever if any one deals with the said Mr.A.

Sebastin, then he does so at his own risk and the company is not liable for

the same. The very fact that a clarification was required to be issued by

the applicants would show that the said public notice has given a wrong

message regarding the reputation and character of the complainant. It has

been specifically stated in the clarification which was issued by the

applicants that there have been some queries in the context of the public

notice issued with respect to one of their ex-employees. It has been stated

in the said clarification that:

“This is to clarify that the concerned employee had

not met the company’s requirements and

consequently his services were terminated.”

It has been specifically stated that:

“This is entirely an employer-employee issue and

has nothing to do with an employee’s subsequent

career moves.”
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11. A specific query was put to the applicants as to whether this

clarification is also published by way of an advertisement as was done

with the notice, which is the subject-matter of the complaint. It has been

stated that only a press clarification has been issued. A query was also

made to the learned counsel for the applicants as to whether such a

prominent notice along with the photograph has also been published in

case of other employees who have either resigned or who are terminated

from the service of the applicant no.1. Answer to this query was also

`no’. At least prima facie, the very fact that the complainant has been

singled out for issuing such an advertisement along with a photograph and

further the fact that the applicants themselves received various queries

with respect to the said advertisement would prima facie establish that the

said advertisement has adversely affected the reputation of the present

complainant.

12. The question as to whether the applicants did have an intention to

harm or had reason to believe that the imputation will harm the reputation

of the respondent no.1 is a matter of defence which can be considered

only after both the parties lead their evidence.

13. Insofar as the judgement of the apex Court in the case of Rajendra

Kumar Sitaram Pande (supra) is concerned, in the said case, a complaint

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was made by the superiors of the complainant therein that the

complainant had come to office in a drunken state and abused the

Treasury Officer. It was, therefore, alleged by the complainant that such a

conduct could amount to criminal offence under section 500 read with

section 34 of the I.P.C. In the said case, after the receipt of the complaint,

the learned Magistrate postponed the question of issuance of process and

directed an inquiry under section 202 and report was called for from the

District Treasury Officer. In the said report, it was found that the

complaint, in fact, was received by the superiors and after finding that a

prima facie case exists in the said complaint, departmental proceedings

were initiated against the complainant therein. In this factual background,

the apex Court found that the case was clearly covered by exception eight

to section 499 and, therefore, pendency of the proceedings would serve no

purpose. Exception eight to section 499 reads thus:-

“Eight Exception-- Accusation preferred in good

faith to authorised person.-- It is not defamation

to prefer in good faith an accusation against any

person to any of those who have lawful authority

over that person with respect to the subject-matter

of accusation.”
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14. It can thus be seen that in the said case, the apex Court was

concerned with accusation against a complainant pertaining to whom a

person making accusation has a lawful authority with respect to the

subject-matter of accusation. It can clearly be seen that in the said case,

the accusation that a complaint was made by the superiors of the

complainant therein was found to be correct. Same is not the case here.

15. Insofar as the judgement of the learned single Judge of this Court

in the case of Valmiki Faleiro (supra) is concerned, the notice in question

was regarding the owners of the property informing the public at large

that the complainant therein was not the owner of the land in question and

that the lands belong to the accused persons. The public at large were,

therefore, warned not to enter into any transaction with the said

complainant and further that if any such transaction was entered into, it

shall be at their own risk as to costs and consequences. It was not the

case wherein an advertisement in prominent newspapers was published

exhibiting a photograph of an employee who had resigned from the

services and joined the business competitor. At the cost of repetition, it

can be seen from the document which is annexed by the applicants

themselves at exh.`J’ to the application that due to the said advertisement,

they had received queries with respect to one of their ex-employees and,

therefore, a clarification was required to be issued by a press release.

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Insofar as the contention of the learned counsel for the applicants that the

case is covered by the first exception and ninth exception is concerned, a

perusal of the first exception would reveal that it states that “whether or

not it is for the public good is a question of fact”. It is, therefore, only at

the conclusion of the trial that it can be found as to the conduct was in

good faith or not. Insofar as the ninth exception is concerned, it will also

be for the applicants to establish that whatever they had done was in good

faith for the protection of their own interest or protection of the interest of

any other person or in the public good. This can only be done after

evidence is led on behalf of the parties.

16. As already discussed hereinabove, from a bare perusal of the

complaint and from the documents placed on record by the applicants

themselves, I am of view that the ingredients so as to constitute an offence

under section 500 are prima facie made out in the present case and, as

such, no case is made out for interference in the extraordinary jurisdiction

of this Court under section 482 of the Cr.P.C.

17. Accordingly, the Criminal Application is dismissed.

18. At this stage, the learned counsel for the applicants requests for

continuation of the ad-interim relief granted to the applicants for a further

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period of four weeks from today. The said prayer is vehemently opposed

by the learned counsel for the respondent no.1. However, since the

interim relief has been operating for a considerable period of time, the

same shall continue to operate for a period of four weeks from today.

B. R. GAVAI, J.