Court overturns denial of interim relief, restrains defamatory statements to safeguard credibility.

The appeal was allowed as the court found that the Bombay City Civil Court misapplied the law by denying interim relief. The respondents were restrained from making defamatory statements against the appellant Company, particularly those imputing financial irregularity or dishonesty. The court emphasized the importance of verifying the truth before publication to protect the credibility and reputation of the appellant and the public interest in the Maheshwar Hydro-Electric Project.

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Issues Involved:
1. Challenge to the interim relief denial by the Bombay City Civil Court.
2. Defamatory statements in the Press-Note.
3. Plea of justification in defamation cases.
4. Public interest and bona fide statements.
5. Applicability of Article 19(1)(a) of the Constitution of India.
6. Conduct of the appellant and respondents.

Issue-wise Detailed Analysis:

1. Challenge to the interim relief denial by the Bombay City Civil Court:
The appellant Company challenged the order dated 29th March 2003 by the Bombay City Civil Court, which dismissed the Notice of Motion and declined to grant interim relief. The ad-interim relief in terms of prayer Clauses (a) and (b) of the Notice of Motion No. 4541 of 2001 was initially granted on 23rd October 2001 but was later dismissed.

2. Defamatory statements in the Press-Note:
The appellant Company, Shree Maheshwar Hydel Power Corporation Limited, was aggrieved by a Press-Note issued by "Narmada Yuva Shakti" on 2nd October 2001, which contained highly defamatory statements. The main offending part of the Press-Note included expressions such as "connived," "conspiracy," "siphon off," "loot," and "unleashing senseless terror." The appellant sought an injunction to restrain the respondents from making such defamatory statements.

3. Plea of justification in defamation cases:
The appellant's counsel argued that the Bombay City Civil Court wrongly applied English principles of law pertaining to Libel. In India, a mere plea of justification is not sufficient; the defendants must also establish that the statements were made in public interest, were bona fide, and substantiated by sufficient material. This principle was supported by various judgments, including Dr. Yashwant Trivedi v. Indian Express Newspapers and Purshottam Odhnvji Solanki v. Sheela Bhatta.

4. Public interest and bona fide statements:
The appellant's counsel contended that the respondents' statements were not made in public interest or bona fide. The material provided by the respondents did not justify the defamatory expressions used. The court emphasized that defamatory statements must be scrutinized for veracity and should be based on sufficient material.

5. Applicability of Article 19(1)(a) of the Constitution of India:
The respondents argued that their statements were protected under Article 19(1)(a) of the Constitution, which guarantees freedom of speech and expression. However, the court held that Article 19 primarily protects citizens against state action and does not grant unfettered rights to make defamatory statements against private parties. The court cited the judgment in P. D. Shamdasani v. Central Bank of India Ltd., which clarified that Article 19 protections are against state actions.

6. Conduct of the appellant and respondents:
The court found that the respondents did not take reasonable precautions to ascertain the truth before publication. The defamatory expressions used in the Press-Note could seriously damage the credibility and reputation of the appellant Company and jeopardize the Maheshwar Hydro-Electric Project, which is against public interest.

Conclusion:
The court concluded that the Bombay City Civil Court misapplied the principles of law and acted arbitrarily by denying the interim relief. The appeal was allowed, and the respondents were restrained from making defamatory statements against the appellants, specifically imputing financial irregularity or dishonesty, including allegations of connivance, conspiracy, siphoning of funds, loot, and unleashing terror.

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