2024 (3) TMI 750 - HC - Indian Laws

Media company cannot appeal ex-parte injunction in defamation case under Order XXXIX Rule 3 CPC

Delhi HC dismissed appeal against ex-parte ad-interim injunction granted in defamation suit. Media company and journalists challenged injunction ... Ex-parte ad-interim injunction against the appellants - Defamatory Article authored by Defendant Nos. 3-5 and published by Defendant Nos. 1 and 2 as stated in the present Suit are defamatory to the Plaintiff - Article titled as “India Regulator Uncovers $241 Million Accounting Issue at Zee” was published on the website about the status of the Zee-Sony merger as well as an ongoing investigation carried out by the the Securities and Exchange Board of India qua the Respondent. Appellants’ contend that appellant nos. 1 & 2 are companies incorporated under the Companies Act, 1956 and operate and function as a media publication under the name of “Bloomberg”. The appellant no. 3 is the Editor, South Asia and Middle East, of the appellant no. 1 company and the appellants’ no. 4 & 5 are journalists of the appellant no. 1 company. The respondent is a company incorporated under the Companies Act and is engaged inter alia in the business of media and entertainment. As submitted Article in question is not only ex-facie defamatory but also suffers from inherent contradictions. The headline of the said Article is deceptive which in no manner is in consonance with the contents mentioned in the body of the Article. The headline is an eyecatcher and the Article is against the spirit of journalistic conduct. SEBI has not released any so called finding, which bear any connection to the purported $ 241 million diversion of funds. The Article has not only implicated the respondents as being guilty of the diversion of illegal funds but has also taken the liberty to fix the quantum of such a fictitious amount. It was submitted that a malicious story has been cooked to intentionally tarnish the reputation & public image of the respondent and there is 15% drop in the share price of the respondent. HELD THAT:- The position of law is well settled with respect to the scope of interference by an appellate Court in an interlocutory injunction granted by the Court of first instance while exercising its discretion and substituting its own discretion. It is settled law that unless there is a grave urgency shown as to entertain an appeal against an ex-parte ad-interim order, an appeal is not maintainable either under Order XLI Rule 1 of the Code of Civil Procedure or under Section 10 of the Delhi High Court Act against an ex-parte ad-interim order. Order XXXIX Rule 3 read with Order XLIII Rule 1 of the Code of Civil Procedure shows that in fact no appeal lies against an order passed under Order XXXIX Rule 3 of the Code of Civil Procedure. It is also settled law as laid down by the Hon’ble Supreme Court in the case of Wander Ltd & Anr vs Antox India Pvt. Ltd.[1990 (4) TMI 280 - SUPREME COURT] that it will not be appropriate for the Appellate Court to substitute its own discretion differently from the discretion exercised by the Court of first jurisdiction. As would be evident from the impugned order, the learned ADJ has clearly taken into consideration relevant factors for the purpose of grant of ex-parte ad-interim injunction. Further, there is no final adjudication on the subject matter of the suit which is at the very threshold. The learned ADJ is yet to hear the Appellants and dispose of the interim application. Insofar as the other submissions of the Appellants on their defence and the documents placed with their written submissions are concerned, these issues were not placed before the learned ADJ. The appellants have rushed to this Court without exploring the option of filing their reply to the application under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure and/ or application under Order XXXIX Rule 4 of the Code of Civil Procedure for modification of the ex-parte ad-interim order. A reading of the impugned order suggests that the learned ADJ applied his mind to the facts of this case and satisfied himself that prima facie there was enough material to come to the conclusion for the purpose of granting an ex-parte ad-interim injunction, otherwise the entire purpose of filing the application would have been rendered infructuous. Being conscious of the provisions of Order XXXIX Rule 3A of the Code of Civil Procedure, the learned ADJ has fixed the next date of hearing as 26.03.2024 for deciding the application under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure. I, thus, do not find any ground to interfere with the order impugned herein. Consequently, the appeal along with pending applications, stands dismissed. However, in case of any kind of urgency, the parties are at liberty to approach the Court of learned ADJ for an early hearing. It is clarified that the appellants to comply with the directions of learned ADJ vide order dated 01.03.2024 within three days from today. Issues Involved:1. Legality of the ex-parte ad-interim injunction granted by the Additional District Judge (ADJ).2. Prima facie case for defamation and balance of convenience.3. Compliance with procedural requirements under Order XXXIX Rule 3 of the Code of Civil Procedure (CPC).4. Appellate court's discretion to interfere with the trial court's interlocutory orders.Summary:1. Legality of the Ex-Parte Ad-Interim Injunction:The appellants challenged the ex-parte ad-interim injunction issued by the ADJ on 01.03.2024, which directed them to take down an article titled 'India Regulator Uncovers $241 Million Accounting Issue at Zee' from their website. The ADJ's order was based on the respondent's claim that the article was defamatory and published with mala fide intentions to malign the respondent's reputation.2. Prima Facie Case for Defamation and Balance of Convenience:The ADJ found that the respondent had made out a prima facie case for defamation, noting that the article directly pertained to corporate governance and business operations of the respondent, speculated as truth, and caused economic harm by affecting the stock price. The ADJ concluded that the 'Triple Test' for granting an injunction'prima facie case, balance of convenience, and irreparable harm'was satisfied.3. Compliance with Procedural Requirements:The appellants argued that the ADJ did not comply with procedural requirements under Order XXXIX Rule 3 of the CPC, which mandates recording reasons for granting an ex-parte injunction. The appellants also contended that they were not given an opportunity to rebut the respondent's claims, thus denying them a fair hearing.4. Appellate Court's Discretion:The High Court emphasized that appellate courts should not interfere with the trial court's discretionary orders unless they are arbitrary, capricious, or perverse. Citing 'Wander Ltd & Anr vs Antox India Pvt. Ltd.' and other precedents, the court noted that it would not reassess the material to reach a different conclusion if the trial court's decision was reasonably possible.Conclusion:The High Court dismissed the appeal, holding that the ADJ had applied his mind and satisfied himself prima facie that there was enough material to grant an ex-parte ad-interim injunction. The court found no procedural irregularities or arbitrary exercise of discretion by the ADJ. The appellants were directed to comply with the ADJ's order within three days, and the matter was left to be decided on merits by the ADJ. The High Court clarified that it had not expressed any opinion on the merits of the case, leaving all rights and contentions intact.