*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 11th November, 2014.
+ CS(OS) No.103/2013, Counter Claim No. 29/2013 & IAs
No.14636/2013 (u/O XXXIX R-1&2 CPC) & 16579/2013 (u/O XI
R-1 CPC)
HARVEST SECURITIES PVT. LTD. & ANR. .... Plaintiffs
Through: Mr. Avi Singh and Mr. Subhiksh, Adv.
Versus
BP SINGAPORE PVT. LTD & ANR. ..... Defendants
Through: Mr. Sandeep Sethi, Sr. Adv. with Mr.
Ananya Kumar & Ms. Pragya Chauhan,
Advs.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.
The two plaintiffs have instituted this suit pleading:-
(i) that the plaintiff no.2 Shri Rohit Vedhara was posted in the India-based office of the defendant no.1 i.e. with the defendant no.2 BP India Services Private Limited and the plaintiff no.2 himself is the Managing Director of the plaintiff no.1 which, relying on the experience and goodwill of the plaintiff no.2, is carrying on business of providing consulting services for oil and gas industry;
CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 1 of 30
(ii) that the defendant no.1 is a company incorporated under the laws of Singapore and is engaged in the business of global oil integrated supply and trading for the Asian region including India; the defendant no.2 is a company incorporated in India and hosts those employees of the defendant no.1 who are involved in the global oil trading work of the defendant no.1 and who are deputed in India to manage and carry out the India related work of the defendant no.1;
(iii) that the plaintiff no.2 was working for the defendant no.1 and providing his services in managing the defendants no.1‟s India- based oil trading and marketing business; however for tax saving purposes, the plaintiff no.2 was deputed to the defendant no.2 from whose offices he performed his work, almost exclusively on behalf of the defendant no.1;
(iv) that the plaintiff no.2 for 12 years prior to 2001 was working for British Petroleum in Europe though his employment was with a group company „BP International Services Company, USA‟; with effect from the year 2003, the employment of the plaintiff was shown with the defendant no.2 while still working CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 2 of 30 for the defendant no.1 in Singapore, but technically on a BP International employee contract, the plaintiff no.2 was managing the India-based team of the defendant no.1 from the last quarter of the year 2006, as a „UK expatriate‟ (sic) ; in 2007, the plaintiff no.2 was relocated / transferred to India by the defendant no.2, without any change in his contract or scope of work; however the defendant no.1 continued to pay part of the plaintiff no.2‟s compensation directly in a bank account in Singapore and / or in United Kingdom at his discretion and remaining part of compensation was paid by the defendant no.2; the plaintiff no.2 however was working exclusively for the defendant no.1 and exclusively on the directions of the defendant no.1;
(v) on 5th May, 2009 the defendant no.1 (and not the plaintiff‟s formal employer, defendant no.2) issued a notice for compliance inquiry into alleged violations of travel policy and offensive or insulting behavior by the plaintiff no.2; however no allegations of insider trading or conflict of interest were made in the said notice to the plaintiff no.2;
CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 3 of 30
(vi) the plaintiff no.2 submitted a reply;
(vii) one Mr. Raymond Hoefer, an employee of the defendant no.1 who co-ordinated the disciplinary proceedings pursuant to the above said notice dated 5th May, 2009 issued a Report dated 15th May, 2009; a notice was again issued to the plaintiff no.2 by the defendant no.2 on 12th August, 2009 reiterating the same charges as in the notice dated 5th May, 2009 and additionally accusing the plaintiff no.2 of insider trading and conflict of interest;
(viii) though hearings were held in Singapore on 21 st August, 2009 and 15th September, 2009 but in violation of the principles of natural justice and due process and in a pre-determined fashion and which led to suspension and subsequently the termination (vide letter dated 18th September, 2009) of the plaintiff no.2;
(ix) the plaintiff no.2 protested against the said termination;
(x) that from the year 2010 till the institution of the suit on 16 th January, 2013, the defendant no.2, without any basis had sought to recover "dues" from the plaintiff no.2; and, CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 4 of 30
(xi) "it has come to the knowledge of the plaintiff no.2 in talks with others in the industry, and on one occasion when he was interviewing for another position; that the defendants themselves, and through their agents, have been publishing slanderous and / or libellous statements in regard to the plaintiff no.2; these slanderous and / or libellous statements have resulted in the plaintiff no.2‟s reputation and goodwill being tarnished and caused economic loss to both the plaintiffs".
The plaintiffs have accordingly instituted this suit for the reliefs of:-
A. declaration that the allegations "concluded" qua the plaintiff no.2 in the letter of termination dated 18th September, 2009 and 9th January, 2010 which was issued by the defendant no.2 to plaintiff no.1 are wrong, illegal, without any basis and incorrect;
B. declaration that the two defendants are jointly and severally liable for breach of employment contract and tortuous liability in the inquiry and termination and defamation;
C. for permanent injunction and mandatory injunction restraining the defendants from causing any defamation and damage to the reputation and goodwill of the plaintiffs including by publishing derogatory, libellous and defamatory remarks or content about the plaintiffs in print, electronic or CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 5 of 30 other media and from passing slanderous statements against the plaintiffs thereby causing injury and irreparable loss to the plaintiffs; and, D. for recovery of Rs.20 lacs jointly and severally from the defendants on account of plaintiff‟s damages, losses, expenses, consequential damages, loss of goodwill etc. arising out of the defendants no.1 & 2‟s breach of contract, negligence, tortuous conduct including negligence and recklessness, that resulted in loss / damages.
2. Summons of the suit were issued. The two defendants have filed their separate written statements and the defendant no.2 has also filed a counter claim for permanent injunction, restraining the plaintiffs from disclosing any confidential information, documents, communications, data belonging to the defendant no.2 to any third party and for mandatory injunction directing the plaintiff no.2 to return all such confidential information, e-mails, data, hard- drive, documents etc. Replications to the written statement, written statement to the counter claim and replication to the written statement to the counter claim have also been filed but for the present purposes need is not felt to advert thereto.
3. Vide order dated 13th September, 2013 in the suit, the alleged confidential documents referred to in Annexure-A to the counter claim of the defendant no.2 were ordered to be placed in a sealed cover. Vide order dated CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 6 of 30 8th October, 2013 the application of the plaintiffs for interim relief restraining the defendants from publishing, printing any material against the plaintiffs was disposed of on statement of the counsel for the defendants that the defendants had not defamed the plaintiffs and have no intentions to do so in future as well. The plaintiffs along with the suit filed an application seeking permission to deposit in this Court in a sealed cover a hard-drive which the plaintiff no.2 was allowed to keep by his immediate supervisor at the defendant no.1 and stated to be part of the computer system on which the plaintiff no.2 used to work and operate while working at the office of the defendant no.1. Vide order dated 8th October, 2013 it was directed that the said hard-drive placed in this court in a sealed cover shall be de-sealed and two copies thereof shall be made with one copy to be provided to the plaintiffs and the other to the defendants. Though the plaintiffs had also filed an application for appointment of a Local Commissioner to inspect the e-mails, communications, employee database and other information stored on hard-drive of computer systems maintained by the defendant no.2 at its office at New Delhi but withdrew the said application on 8 th October, 2013. The defendant no.2 has filed IA No.14636/2013 for interim injunction restraining the plaintiffs from disclosing the confidential information. The CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 7 of 30 plaintiffs have filed IA No.16579/2013 under Order 11 Rule 1 of the CPC for leave to deliver interrogatories to the defendants with direction to the defendants to reply the same.
4. The aforesaid application of the plaintiffs for interrogatories was listed before this Court for hearing on 10th March, 2014 when the following order was passed:-
"1. During the hearing of this application, it has transpired that the claim of the plaintiffs inter alia is for compensation for slander. A perusal of the plaint shows that the plaintiffs in para No.35 of the plaint have pleaded that the defendants have published slanderous and / or libellous statements in regard to the plaintiff No.2 and which have resulted in the plaintiff‟s No.2 reputation and goodwill being tarnished and caused economic loss to both the plaintiffs. None of the other paragraphs of the plaint also plead as to what was the slanderous / libellous statement.
2. Upon the same being put to the counsel for the plaintiffs, he has drawn attention to the documents at pages No.127 to 130 which are the communications of non-parties to the suit to the plaintiffs to the effect that the defendants and their officials had made slanderous statements about the plaintiffs. The counsel for the plaintiffs on the basis thereof states that the plaintiffs were in the plaint not required to disclose what was the slanderous / libellous statement for which compensation is claimed.
3. It is also stated that one of the interrogatories sought to be served by the plaintiffs on the defendants is as to what slanderous / libellous statements, the defendants / their officials made qua the plaintiffs to the persons who had sent the communications aforesaid to the plaintiffs.CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 8 of 30
4. I am unable to agree. As far as my understanding goes, without the plaintiffs in the plaint pleading the slanderous / libellous statement for which compensation is claimed, the defendants have no opportunity to respond thereto. The defendants are required to file the written statement to the pleas in the plaint and not qua the documents even if served on the defendants along with the plaint. I am also of the prima facie view that such pleas would be a material fact within the meaning of Order 6 Rule 2 of the CPC and which are necessarily required to be as per Rule 4 of Order 6 of the CPC. The same would also be a fact constituting a cause of action within the meaning of Order 7 Rule 1 of the CPC.
5. As far back as in Nannu Mal Vs. Ram Prasad AIR 1926 Allahabad 622 it was held that a plaint in a case of defamation ought to allege not only the publication, or set out not only the words, but that they were published or spoken to, at any rate, some named individuals at a particular time and place specified in the plaint and in the absence thereof is vague and liable to be struck out. Similarly, in Brijlal Prasad Ramcharan Sharma Vs. Mahant Laldas Guru Gautamdas Bairagee AIR 1940 Nagpur 125 it was held that without pleading the names of persons to whom or in whose hearing slanderous statements were made and setting out the words which were spoken, no case for compensation for defamation can be said to have been made out. Else, for general principles in this regard, reference can be made to Ram Sarup Gupta Vs. Bishun Narain Inter College (1987) 2 SCC 555 and Kalyan Singh Chouhan Vs. C.P. Joshi (2011) 11 SCC 786.
6. As far as the argument of the counsel for the plaintiffs, of the plaintiffs serving interrogatories in this respect on the defendants is concerned, it has been put to the counsel for the plaintiffs whether in the event of the defendants taking a stand that they had not made any slanderous / libellous statement qua the plaintiffs, the plaintiffs would be willing to withdraw the said claim.CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 9 of 30
7. The counsel for the plaintiffs states that he will not and would produce the witnesses to whom such slanderous / libellous statements were made by the defendants / their officials.
8. I am prima facie of the view that aforesaid amounts to the plaintiffs, after institution of the suit, conducting a roving and fishing inquiry and which is not the scope of interrogatories, the purport whereof is to limit the trial.
9. This Court in Tarun Kumar Vs. Ajay Kumar 61 (1996) DLT 174 held that interrogatories cannot be allowed to be delivered in case they are in the nature of making fishing inquiries from the adversary; interrogatories must be confined to facts which are relevant to the matters in question in the suit.
10.It has also been asked from the counsel for the plaintiffs as to how, in the absence of any material plea qua the claim of compensation for defamation, an issue within the meaning of Order 14 Rule 1 of the CPC on the said aspect can be said to arise.
11.It is deemed appropriate to given an opportunity to the counsel for the plaintiffs to address on the said aspect.
12.List on 12th March, 2014, as sought."
5. The counsels have been heard further.
6. Though I have, as is customary, observed hereinabove that the counsels have been heard but the counsel for the plaintiffs had little to say to controvert the aforesaid prima facie opinion expressed in the order dated 10th March, 2014 except for stating, (i) that during trial, the witnesses of the plaintiffs would depose as to what slanderous / libellous statements were CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 10 of 30 made by the defendants against the plaintiff no.2; (ii) that the plaintiffs have claimed compensation of Rs.20 lacs not only for such slanderous / libellous statements but also for breach of contract by the defendants by terminating the employment of the plaintiff no.2; (iii) that the plaintiffs have also sought the relief of declaration that the reasons for which the defendants have terminated the services of the plaintiffs are wrong, illegal, without any basis and incorrect; and, (iv) that the plaintiffs have also sued for permanent injunction, and thus the suit cannot be dismissed at this stage without trial.
7. Per contra, the senior counsel for the defendants placed reliance on R. Rajagopal Vs. J. Jayalalitha AIR 2006 Madras 312 (DB) where, while dealing with an application for interim injunction in a suit for recovery of damages for defamation and for injunction it was held that in a libel action defamatory words must be set out in the plaint where the words are per se or prima facie defamatory, and where the defamatory sense is not apparent on the face of the words, the defamatory meaning i.e. the innuendo, must also be set out in clear and specific terms and that in the absence of these necessary averments, the plaint would be liable to be rejected on the ground that it does not disclose any cause of action.
CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 11 of 30
8. I have already hereinabove in paragraph 1(xi) reproduced the only paragraph in the plaint i.e. paragraph no.35 in which the plea of the defendants having published slanderous and /or libelous statements in regard to the plaintiff no.2 has been taken.
9. The plaintiffs, in the plaint, apart from stating that the defendants have made slanderous and libelous statements qua the plaintiff no.2, have not stated anything more. The question posed to the plaintiffs was whether without the plaintiffs pleading what are the slanderous and / or libellous statements on which the suit is based, the suit can be entertained and whether such slanderous and libellous statements can be permitted to be disclosed by the witnesses to be examined by the plaintiffs. No reply to the said question has been given by the counsel.
10. I may in this regard elaborate on the documents at pages 127 to 130 of the Volume-I of the documents file to which reference was made by the counsel for the plaintiffs during the hearing on 10 th March, 2014 and as recorded in the order of that date.
10A. The document at page 127 is an e-mail dated 21st February, 2012 of one Mr. Peter Henry to the plaintiffs to the effect that he in the capacity of a CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 12 of 30 recruitment consultant had introduced the plaintiff no.2 to a leading global commodity trading group on 23rd September, 2009 and though the prospective employer had shown interest in employing the plaintiff no.2 but after making inquiries from the defendants, in specific relation to the manner in which the plaintiff no.2 left the defendants, and the negative comments from the people of the defendants, changed its mind and withdrew interest in recruiting the plaintiff no.2.
10B. The document at page 128 is an e-mail dated 6th February, 2012 of one Shri Srikanth Venkatraman earlier working with British Petroleum and to the effect that all the employees of British Petroleum were aware of the situation with regard to the departure of the plaintiff no.2 and what he was accused of.
10C. The document at page 129 is an e-mail dated 19th October, 2011 of one Shri Trishul Seth, also an ex-employee of British Petroleum, to the effect that others then still working in British Petroleum had informed him of the departure of the plaintiff no.2 from British Petroleum as a result of plaintiff no.2 engaging in non-compliant behavior.
CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 13 of 30 10D. The document at page 130 is an e-mail dated 9th September, 2009 of the plaintiff no.2 to one Mr. Moutrie Andrew G asking him to give reference of someone in Reuters India who can deny the rumour prevalent in that organization of the plaintiff no.2 having been suspended.
11. As would be obvious from the above, the said documents also, even if allowed to take the place of pleadings, do not advance the case of the plaintiffs any further save for showing that the other employees of the defendants were in the know of the reason for termination of employment of plaintiff No.2 and that the defendants, when approached by the prospective employers of the plaintiff No. 2 also were disclosing the said reasons; the said documents also do not contain the allegedly slanderous and libelous statements attributed to the defendants and on which the case of the plaintiffs is premised.
12. I am therefore of the view that the principles as enunciated in the judgments (supra) and with which I respectfully concur, apply and the plaint so far as premised on the cause of action, of the defendants having defamed the Plaintiff No.2, does not disclose any cause of action and is liable to be rejected. Evidence, to be led, cannot be a substitute for pleadings. Rejection CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 14 of 30 of plaint, on the ground of not disclosing cause of action, cannot be saved by contending that it will be disclosed in evidence.
13. I add, that Plaintiff No.1 is merely stated to be a company of which Plaintiff No.2 is the managing director; even if it were to be held that plaintiff No.1 is a closely held company of plaintiff No.2, the plaintiff No.1 being a juristic person and having a identity distinct from plaintiff No.2, cannot possibly have any cause of action from the defamation even if pleaded of the plaintiff No.2 and no reason whatsoever for the plaintiff No.1 joining in the suit, claiming reliefs with respect to termination of employment and defamation of the plaintiff No.2 has been given / pleaded.
14. I further add that though the other documents filed by the plaintiffs are voluminous but they concern the activities of the defendants and the record of the disciplinary proceedings held prior to the termination of the plaintiff no.2.
15. I have also wondered whether the action of the defendants of disclosing to the other employees and prospective employers of the plaintiff No.2 the reasons for termination of employment of the plaintiff No.2 can be said to be per se defamatory of the plaintiff No.2. The consequential CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 15 of 30 question is whether the defendants were required to or owed a duty to the other employees and prospective employers of the plaintiff No.2 to make such disclosure and if so to what effect, i.e. whether then such disclosure was a privileged communication and which constitutes a defence to a claim based on defamation.
16. Let us first see the reasons for termination of employment of the plaintiff No.2. The letter dated 18th September, 2009 of the defendant no.2, of termination of employment of the plaintiff no.2, is titled "Private & Confidential" and informs the plaintiff no.2 that the disciplinary proceedings panel had found all four charges against the plaintiff no.2 satisfied, namely, that the plaintiff no.2:-
"1. breached duly notified rules or instructions in that you have either abused or willfully disregarded the BP Travel Expenses Policy and code of Conduct with regard to personal travel expenses;
2. profited, or attempted to profit, from dealing in shares in CALS Refineries Limited (CALS) on the basis of „inside information‟ (information that was not publically known and would affect the price of those securities if made public);
3. otherwise failed to avoid a conflict of interest in the negotiations with CALS by using for your own profit confidential and sensitive information obtained directly through acting in commercial negotiations for BP; and CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 16 of 30
4. acted unlawfully with regard to use of the inside information described above."
and accordingly dismisses the plaintiff no.2 from employment.
17. It is not the plea of the plaintiffs that the defendants had leaked the letter dated 18th September, 2009 (supra) of termination of employment of the plaintiff no.2 and which is marked "Private & Confidential" and which is addressed only to the plaintiff no.2, to any other person and thereby defamed or maligned the plaintiff no.2. The only case as aforesaid is, that other employees of the defendants are aware of the reasons for which the employment of the plaintiff no.2 was terminated and that the defendants when contacted by a prospective employer of the plaintiff no.2 to check the credentials of the plaintiff no.2, have given a negative report of the plaintiff no.2. What we have to determine is whether the same can constitute the defamation, for the suit to be put to trial.
18. I am of the view that the mere fact that other employees of the defendants are aware of the reason for termination of employment of the plaintiff no.2 cannot per se constitute defamation, without the plaintiffs specifically averring that the defendants, without being required to make the other employees aware, have, with an intent to malign and defame, CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 17 of 30 published the details of the reasons for which the plaintiff no.2 has been removed from employment. No such pleas also exist in the plaint. In the normal course of human behavior and conduct, when one of several employees of an organization suddenly leaves, the others are bound to get curious and merely because they, out of such curiosity, learn or assume the reasons for their colleague leaving, cannot make the employer liable for compensation for defamation. Rather, in my opinion, the employer is bound to inform them of such reasons, to avoid speculation and resultant unrest in the organization affecting its business and to inculcate faith in the employer.
19. As far as the other aspect, of the defendants when contacted by the prospective employers of the plaintiff no.2 to check the antecedents / credentials of the plaintiff no.2 giving a negative report of the plaintiff no.2, I am of the view that such inquiries, made by prospective employers from the earlier employer, of the person whom they are considering to employ, and honest response thereto are essential / necessary for trade and business to flourish, specially for professionally managed organizations, the very functioning whereof is dependent on each of their officials on his / her own, without being under the watch of any owner / proprietor of the organization, conducting the affairs of the organization diligently and honestly. If it were CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 18 of 30 to be held that the ex-employer is barred, when approached by prospective employers, from expressing its opinion of the merits / de-merits / character / acumen of an ex-employee and / or that a prospective employer is not entitled to so enquire from the ex-employer, the same would be against the public policy and against the larger interest of such professionally managed organizations. I see no harm in such enquiries being made and which remain largely confidential in nature.
20. It cannot be lost sight of that the plaintiff no.2 had not challenged the order of his termination and which had attained finality. It is also not as if the termination of employment of plaintiff No.2 was per se illegal. Though such contract of employment being a contract of private employment was by its very nature terminable at any time but since the defendants / defendant No.2 were / was terminating the employment of plaintiff No.2 on ground of misconduct, procedure prescribed in law therefor, of conducting an internal departmental enquiry, was followed and only upon such enquiry finding the plaintiff No.2 guilty, was the letter of stigmatic termination of employment issued. The plaintiff No.2 was satisfied therewith and did not challenge the same, neither on the ground that the enquiry held was not in accordance with principles of natural justice or procedure prescribed therefor nor on any CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 19 of 30 other ground. The grounds on which the defendants / defendant no.2 had terminated the employment of the plaintiff no.2 thus remained unchallenged.
21. The defendants / defendant no.2, in my opinion as an ex-employer of the plaintiff no.2 were entitled to, when contacted by the prospective employers of the plaintiff no.2 to check the antecedents of the plaintiff no.2, in a bona fide and honest manner express their opinion of the plaintiff no.2. Such opinions held and formed by persons who have occasion to form such opinions and which facilitate the forging / non-forging of new alliances / partnerships are an integral part of our society and human relations and to say that a person is not entitled, when owes a duty to express his opinion about another, would be a grave infringement on the fundamental right of the freedom of speech and expression. Such a view cannot be accepted. This Court in V.K. Bagga Vs. O.P. Arora MANU/DE/9845/2006 held that if a particular person has committed a misconduct, even a public notice published thereof may not be defamatory as public good requires that such imputation be made and published. Of course if the ex-employer indulges in rumour mongering or acts mala fide and instead of bona fide and honestly expressing opinion when approached by a prospective employer to check the antecedents of an ex-employee, starts publically maligning the ex-employee CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 20 of 30 to one and all, the same would no doubt furnish a cause of action to the ex- employee. I may notice that Section 499 of the Indian Penal Code, 1860, while constituting defamation as an offence, also carves out exception with respect to (i) imputation of truth which public good requires to be made or published; (ii) expression in good faith of opinion respecting the conduct of any person touching any public question and respecting his character; (iii) censure passed in good faith by person having lawful authority over another;
(iv) preferring in good faith, accusation against any person by one having lawful authority over that person; (v) imputation made in good faith by person for protection of his or other‟s interest; and, (vi) caution intended for good of person to whom conveyed or for public good. I find, the High Court of Gauhati in Dr. Govind Ballav Goswami Vs. Meena Sharma MANU/GH/0112/1997 to have held that employer‟s words of warning if administered to an employee do not come within purview of defamation, in whatever manner those words have been said until it is done in bad faith.
22. In Salmond and Heuston on the Law of Torts (20th edition), it is explained while dealing with the section on qualified privilege under the chapter on Defamation that on an occasion of qualified privilege a person is entitled to make defamatory statements about another provided he is not CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 21 of 30 actuated by malice. The authors have further opined that the right of freedom of speech prevails over the right of reputation but only to a limited extent. Statements made in the performance of a duty or in the protection of an interest, fairly made are described as occasions of qualified privilege. In my opinion an ex employer owes a duty, to make a statement of his opinion of the character, honesty and acumen of an ex employee to a prospective employer. Similarly, an employer owes a duty to his other employees and it is in the interest of other employees to inform them the reasons for the termination of employment of another employee so that the other employees are not unnerved from such termination, presuming it to be arbitrary and whimsical.
23. Winfield & Jolowicz on Tort (17th Edition) in the section dealing with defences to defamation and under the head "Qualified Privilege at Common Law" have authored that the common law confers qualified privilege upon statements by A to B about C which A is under a legal and moral or social duty to communicate to B and which B has a corresponding interest in receiving. A classic example given of duty and interest, is of the situation where a former employer gives a reference on a former employee. Similarly while explaining "what is an interest" it is mentioned that it is the CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 22 of 30 employer‟s interest to inform the workers about the reason for the dismissal of a fellow worker.
24. Reference in this regard may also be made to Hunt Vs. Great Northern Railway Company [1891] 2 Q.B. 189. The plaintiff therein was in the service of the defendant and was dismissed on the ground of gross neglect of duty. The defendant published the name of the plaintiff in a printed monthly circular addressed to the other employees stating that he had been dismissed and the nature of the offence for which he was dismissed. It was held that the employer if of the opinion that an employee has done things which if done by other employees also, would seriously damage the business, has an interest in stating it to the other employees. It was further held that the other employees to whom the statement was made also had an interest in knowing that certain things were being treated by the employer as misconduct and that if any of them should be guilty of such misconduct, the consequence would be dismissal from service. It was yet further held that where the defendant in an action for libel has an interest in the subject matter of the communication and the person to whom the communication is made has a corresponding interest, the occasion is privileged. CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 23 of 30
25. The House of Lords of United Kingdom in Spring Vs. Guardian Assurance [1994] 3 All ER 129 (MANU/UKHL/0009/1994) was concerned with the question whether one who supplies a defamatory reference about a person in response to a request from a concern with which that person is seeking employment, is liable in negligence to the subject of reference if it has been complied with without reasonable care. It was inter alia held that an employer possesses special knowledge derived from his experience from the employee‟s character, skill and diligence in the performance of his duties while working for his employer, and while providing a reference to a third party in respect of the employee, does so not only for the assistance of the third party but also for the assistance of the employee who necessarily has to rely on the employer to exercise due skill and care in the preparation of the reference. It was held that such an employer owes a duty to avoid making untrue statements negligently or expressing unfounded opinions even if honestly believed to be true or if honestly held; however there can be no action for negligence if the statement is true.
26. In the facts of the present case the termination by the defendants / defendant no.2 of the employment of the plaintiff no.2 on the ground on misconduct had attained finality as aforesaid and had been accepted by the CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 24 of 30 plaintiff no.2. I do not see as to how the defendants can be said to have defamed the plaintiff no.2 in communicating the said facts to the prospective employers of the plaintiff no.2.
27. I find the view taken by the American Courts also to be the same. The Court of Appeals for the 5th Circuit in Lawrence Frakes Vs. Crete Carrier Corporation MANU/FEFT/0568/2009 held that a qualified privilege extends to any communication by an employer about an employee made to a person having a corresponding interest or duty in the subject matter of communication and such qualified privilege acts as a complete defence to a claim for defamation unless the employer‟s statement is made with actual malice or the privilege is abused. It was yet further held that a statement is made with actual malice when the statement is made with knowledge of its falsity or with reckless disregard as to its truth. To the same effect are the observations in Jonathon C. Mc. Intosh, DDS Vs. David Partridge, M.D. Individually and In His Official Capacity MANU/FEFT/0606/2008, also of the Court of Appeals for the 5th Circuit, where the disclosure by the employer of the misconduct of the employee was to an association of which the employee was a member. The Court of Appeals for the 7 th Circuit also in Richard C. Delloma Vs. Consolidation Coal Company, and Bobby Brown, CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 25 of 30 Individually and as President of Consolidation Coal Company MANU/FEVT/0441/1993 held that an employer may invoke a conditional privilege to respond to direct queries by prospective employers. Similarly the Court of Appeals for the 8th Circuit, in Jeffrey Scott Sherman Vs. Rinchem Company, Inc., MANU/FEET/0175/2012 held that statements made in the course of investigating or punishing employee misconduct are privileged, based on the employer‟s interest in protecting against harmful employees and being comunication made on a proper occasion and for proper purpose as the employer has an important interest in protecting itself and the public against dishonest or otherwise harmful employees. It was further held that in context of employment recommendations, the law recognizes a qualified privilege between former and prospective employers as long as the statements are made in good faith and for legitimate purpose.
28. I reiterate that in the plaint in the present case there is no plea of the defendants having disclosed to others anything other than what the plaintiff no.2 in the departmental enquiry had been found guilty of.
29. Thus, on a reading of the plaint in the light of the aforesaid law I am of the opinion that no case for recovery of any compensation for slander or CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 26 of 30 libel has been pleaded for the suit to be put to trial, at the cost of delaying other deserving cases requiring trial.
30. The matter can be looked from another perspective. The limitation provided in the Schedule to the Limitation Act, 1963, in Article 75, for institution of a suit for compensation for libel is one year, commencing from the date when the libel is published and in Article 76, for a suit for compensation for slander, is one year commencing from the date when the words are spoken or, if the words are not actionable in themselves, when the special damage complained of results. The present suit as aforesaid was instituted on 16th January, 2013. The letter dated 18th September, 2009 of termination of employment of the plaintiff no.2, even if were to be said to be libelous, is of much more than one year prior thereto and no action for compensation on the basis thereof can be maintained. Similarly, the reference in the documents (supra) at pages 127 to 130 is also to slanderous statements made in the year 2009 and 2011 which again are more than one year prior to the institution of the suit. The plaintiffs, in the cause of action paragraph of the plaint state the cause of action to have accrued first on 18 th September, 2009 and lastly in January / March, 2010 when the appeal stated to have been preferred by the plaintiffs pursuant to the policy / code of CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 27 of 30 conduct was rejected. The claim for compensation for slanderous / libelous termination appears to have been made without regard to the aspect of limitation and is clearly barred by time.
31. As far as the other reliefs claimed by the plaintiffs are concerned, the same also are premised on the termination of service and which is of a date prior to three years from the institution of the suit. The plaintiffs have in the plaint also claimed the suit to be for breach of contract of employment and for declaration of the reasons for termination of employment to be bad. The suit again has been filed without regard to the law of limitation. The counsel during the hearing also could not point out which Article of the Schedule to the Limitation Act would apply. The limitation provided in Article 55 for a suit for compensation for breach of any contract is three years commencing from the date when the contract is broken. According to the plaintiffs the contract was broken on 18th September, 2009. The suit filed on 16th January, 2013 is beyond the said period of three years. The limitation provided in Article 58 for a suit for declaration also is of three years commencing from the date when the right to sue first accrues. The same again occurs on 18 th September, 2009 when the employment of the petitioner no.2 was terminated for the said reasons. Though the plaintiffs in paragraph 44 of the CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 28 of 30 plaint as aforesaid have stated that the cause of action arose in January / March, 2010 when the appeal pursuant to the policy / code of conduct was rejected but elsewhere in the plaint there is no reference to any appeal against the termination of employment having been preferred by the plaintiffs or the rejection thereof. The plaintiffs in the documents filed with the plaint also have not filed copy of any such appeal or the order if any of rejection thereof. The date even of the order of rejection of the appeal has not been stated. The plaint otherwise proceeds on the premise of cause of action having accrued on 18th December, 2009 and which would not have been the case if the letter dated 18th September, 2009 of termination of employment had not attained finality till the decision on the appeal. The plaintiffs, by making a vague allegation in the plaint filed on 16 th January, 2013 of the cause of action having accrued in January / March, 2010 cannot be permitted to have the suit put to trial. Thus the remaining claims in the plaint are also palpably barred by time.
32. As far as the claim of the plaintiffs for restraining the defendants from defaming the plaintiffs is concerned, the defendants having already given a statement as aforesaid that they have not defamed the plaintiff no.2 and have no intention in future also to defame him and with which statement they CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 29 of 30 have already been ordered to be bound. The defendants are hereby ordered to be continued to be bound by the said statement notwithstanding the disposal of this suit. There is thus no need to put the suit to trial for the relief also.
33. As far as the counter claim of the defendant no.2 is concerned, the senior counsel for the defendants has not raised any argument thereon. Even otherwise it appears to have been filed as a counter blast to the suit. Had the defendant no.2 had any bona fide apprehension against the plaintiff, the defendants, immediately after the termination of the employment of the plaintiff no.2 on 18th September, 2009 would have taken such an action. No such action was taken till the written statement in the suit was being filed. I therefore do not see any reason to keep the said counter claim also pending; the same is dismissed.
34. Resultantly, both, the suit as well as Counterclaim are dismissed, save that the defendants will remain bound as aforesaid.
No order as to costs.
Decree sheet be prepared.
RAJIV SAHAI ENDLAW, J.
NOVEMBER 11, 2014./„pp‟ CS(OS) No.103/2013 & Counter Claim No. 29/2013 Page 30 of 30