Court rules absolute privilege protects statements in quasi-judicial proceedings; no defamation found. Malicious implication tort not recognized.

The court rejected the Plaintiff's suit for damages against the Defendant company, ruling that statements made in quasi-judicial proceedings are protected by absolute privilege and do not amount to defamation. The court held that the tort of malicious implication is not recognized in India, leading to the dismissal of the Plaintiff's claim. The Defendant's application for dismissal under Order VII Rule 11 CPC was upheld, and all pending applications were disposed of accordingly.

---

---

Issues Involved:
1. Alleged evasion of customs duty by the Defendant company.
2. Statements made by Mr. Oike implicating the Plaintiff.
3. Penalties imposed by the Commissioner of Customs.
4. CESTAT's decision on penalties.
5. Plaintiff's claim for damages against the Defendant company.
6. Defendant's application for dismissal of the suit under Order VII Rule 11 CPC.
7. Legal principles related to malicious implication and defamation.

Detailed Analysis:

1. Alleged Evasion of Customs Duty:
The Defendant company, a joint venture between Yakult Honsha Company Ltd., Japan, and Danone Probiotics, Singapore, imported machinery in 2007-08. The Directorate of Revenue Intelligence (DRI) issued a show cause notice on 25th April 2012, alleging customs duty evasion of Rs. 4,22,58,706/-. During the investigation, the Defendant's Managing Director, Mr. Kiyoshi Oike, implicated the Plaintiff, who was the CFO and Company Secretary, stating that the Plaintiff advised classifying the machinery as dairy machinery to save customs duty.

2. Statements Made by Mr. Oike:
In statements recorded under Section 108 of the Customs Act, 1962, Mr. Oike claimed that the Plaintiff advised classifying the machinery as dairy machinery, which resulted in significant customs duty savings. Mr. Oike's statements were later retracted, but the Plaintiff was already implicated.

3. Penalties Imposed by the Commissioner of Customs:
The Commissioner of Customs, in an order dated 31st December 2013, held that the goods were liable to confiscation and imposed penalties. The Commissioner noted that Mr. Oike pre-planned the conspiracy and that the Plaintiff was aware of the customs duty evasion but did not inform the authorities, making him equally responsible.

4. CESTAT's Decision on Penalties:
The CESTAT, in an order dated 24th October 2016, upheld the penalty on the Defendant company but set aside the penalties on Mr. Oike and the Plaintiff, stating that the Plaintiff acted on the company's directions and had no personal involvement.

5. Plaintiff's Claim for Damages:
The Plaintiff filed a suit claiming Rs. 5 crores in damages, alleging that Mr. Oike maliciously implicated him, causing immense suffering, including job loss. The Plaintiff argued that he had no role in the document manipulation and that Mr. Oike's false statements led to his distress.

6. Defendant's Application for Dismissal:
The Defendant sought dismissal of the suit under Order VII Rule 11 CPC, arguing that the suit was barred by limitation and that the tort of malicious implication is not recognized in India. The court held that the suit was not barred by limitation as the Plaintiff could not have filed it before the CESTAT's order.

7. Legal Principles Related to Malicious Implication and Defamation:
The court examined whether the Plaintiff's allegations constituted a tort of malicious implication. It noted that the statements made by Mr. Oike were recorded under Section 108 of the Customs Act, 1962, which are quasi-judicial in nature. The court referred to precedents establishing that statements made in judicial or quasi-judicial proceedings are protected by absolute privilege and cannot form the basis for defamation claims. The court concluded that the Plaintiff's allegations amounted to defamation, for which no separate tort of malicious implication exists.

Conclusion:
The court rejected the Plaintiff's suit, holding that statements made in quasi-judicial proceedings before Customs Authorities are protected by absolute privilege and do not constitute defamation. The suit for compensation was deemed not maintainable, and the plaint was accordingly rejected. All pending applications were disposed of.

---