Madras High Court: G.K. Ilathiraiyan, J., observed that, Section 500 of the Penal Code, 1860 cannot be attracted wherein an advocate acts professionally on the instructions of his or her client.
The reason for present criminal original petitions was to quash the proceedings of Metropolitan Magistrate having been taken cognizance for the offences under Sections 500, 192 read with 34 of the Penal Code, 1860.
Five accused persons are there in the present petition, in which the petitioners are arrayed as A1 to A5. The second accused is an Advocate who appeared on behalf of other accused persons.
A1 to A5 are members of the Committee of Creditors. Respondent was initially appointed as the Insolvency Resolution Professional of Oceanic Edibles International Limited which is undergoing Corporate Insolvency Resolution Process by the National Company Law Tribunal, Chennai.
In light of several allegations against the respondent, accused persons filed an application seeking appointment of another Resolution Professional, after which the respondent was removed and another person was appointed as Resolution Professional.
Respondent stated that petitioners made statements which were defamatory in nature resulting in defaming his reputation.
Statements like:
a) Resolution Professional “is not up to the expected standard” (para 21)
b) “He is only keen on entering into the brawl with everyone, thus undermining the judicial process, if he is allowed to continue the interest of COC will be jeopardized”(para 21)
c) COC had already lost precious 50 days from the date of his appointment, no effective business has been conducted to evolve the resolution process in a forward-moving directions (para 22)
d) Resolution professional has misrepresented to media violating the code of conduct (para 23)
e) seeking amendments in IBC is beyond the Rps scope(para 18)
f) resolution professional again sent mails to the top executives wherein he had made statements to the top executives in a very unethical manner and uncalled for (para 19)
Petitioner Counsel submitted that the petitioners were members of COC vested with statutory powers under the IBC to replace the Resolution Professional in the manner provided under IBC. Accordingly, they instructed their counsel namely the second accused to filed an application before the NCLT.
In view of the above, Court stated that it would not attract offence under Section 499 IPC.
Defamation.—Whoever, by words either spoken or intended to be read, or by signs or by visible representations, makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm, the reputation of such person, is said, except in the cases hereinafter expected, to defame that person.
Bench stated that the statements of the petitioners do not attract Section 499 of IPC. A2 was an advocate for other accused persons and filed an application on the instruction of COC before the NCLT to remove the respondent.
Petitioners Counsel relied on the decision in Ayeasha Bi v. Peerkhan Sahib,1953 SCC OnLine Mad 3, wherein it was held that,
“…a lawyer is an advocate, one who speaks for another.Naturally beyond what his client tells him the lawyer has no opportunity to test the truth or falsity of the story put forward by the client.”
Kerala High Court in K. Daniel v. T. Hymavathy Amma, 1985 SCC OnLine Ker 110, held that the English Courts have reiterated the view during last four hundred years that the statements made by Judges, Juries, counsel, parties and witnesses in the course of judicial proceedings are not actionable in civil law for defamation as the occasion is absolutely privileged.
Supreme Court along with various High Courts repeatedly held that,
an advocate who acted professionally as per the instruction of his or her client cannot be made criminally liable for offence of defamation under Section 500 unless contrary is alleged and established.
Hence, the Court allowed the criminal original petitions and the entire proceedings on the file of the Metropolitan Magistrate Court, Chennai. [M.L. Ganesh v. CA V. Venkata Siva Kumar, 2020 SCC OnLine Mad 2732, decided on 30-09-2020]
Honble judge ,of MHC is one of the best in criminal law, from NSLU.
If one reads the order in detail..realise it’s a non speaking order
The power to remove an RP without giving any reasons just by voting 66% under sec 27 of IBC code is well settled .. Whether you do your work or not..
that doesn’t call for making allegations not once but in three hearings by the advocate even after AA appreciating the work.of RP . It’s on record..
Nclt proceedings are summary in nature and no enquiry will be done to establish facts
.. Which was also mentioned in the nclt order itself .but ignored
, when an advocate acts professionally he enjoys the immunity.. Whether he acted professionally or not is a matter of fact.. Sec 482 doesn’t apply.
The fact of the matter, is the advocate, proactively made sweeping allegations, not once in three hearings even after bringing to his notice that they were false, which he never denied , that was ignored
. SC, gave five tests for establishing the guilt or other wise in chaman lal vs state of Punjab
made it clear counsel enjoys only qualified privilege not absolute because IPC is a complete code and there is no place for English common law..
Further the order says the COC is exercising statutory power so they can make allegations on RPs professional capabilty, accuse him of character assassination..
The order ignores, appreciation of Honble Division Bench of madras HC,in WA 1232/18 for the work done
The order ignored the fact that even , RP is also exercising statutory power..
499 (1) or( 9) can be established only in trail..
I’m sure this case will be a land mark one on defamation law before SC..
:
: Ninth Exception.
—Imputation made in good faith by person for protection of his or other’s interests.—It is not defamation to make an imputation on the character of another provided that the imputation be made in good faith for the protection of the interest of the person
making it, or of any other person, or for the public good.”
In order to attract the Ninth Exception to Section 499 of the IPC, the imputation must be shown to have been made (i) in good faith; and
(ii) for the protection of person making it or for any other person or for public good.
In a Supreme Court Judgement held in Chaman Lal v. State of Punjab, it stated thatin order to establish good faith and bona fide
, it has to been seen first the circumstances under which the letter was written or words were uttered;
secondly, whether there was any malice;
thirdly, whether the accused made any enquiry before he made the allegations;
fourthly, whether there are reasons to accept the version that he acted with care and caution and finally, whether there is preponderance of probability that the accused acted in good faith.
Venkata Siva Kumar, B.Sc, FCA, LLM (Constitutional Law), RP. RVO, DISA (ICAI)