Standard Chartered Bank vs Vinay Kumar Sood & Ors.
2009 Latest Caselaw 408 Del

                   "REPORTABLE"
*            HIGH COURT OF DELHI AT NEW DELHI

+      Crl.M.C.3828/2007 and CMA 14040/2007

                         Pronounced on: February 06, 2009

#     STANDARD CHARTERED BANK ..... PETITIONER
!         Through :  Mr. Sanjay Gupta, Advocate
                     Mr. Ajay Monga, Advocate
                     Mr. Manish Paliwal, Advocate

                            Versus

$     VINAY KUMAR SOOD & ORS. ....RESPONDENTS
^         Through :   Mr. Sidhartha Yadav, Adv. for
                      R-1.
                      Mr. O.P. Saxena, APP.

%
      CORAM:
      HON'BLE MS. JUSTICE ARUNA SURESH

     (1) Whether reporters of local paper may be
         allowed to see the judgment?

     (2) To be referred to the reporter or not?          Yes

     (3) Whether the judgment should be reported
         in the Digest ?                                 Yes

ARUNA SURESH, J.

1. Respondent Vinay Kumar Sood filed a complaint

against the petitioner, Standard Chartered Bank as

well as four others being its employees before the

Metropolitan Magistrate alleging that the

petitioner Bank had been repeatedly corresponding

with him and demanding a sum of Rs.3,62,373.01,

being the outstanding balance amount in his credit

account which he never had with the petitioner

bank. During the course of correspondence

petitioner sent a telegram dated 17.9.2002;

contents therein were allegedly defamatory in

nature. One of the official of the bank i.e. Mr.

Jishant Narang (accused No.4) had telephoned his

wife on 21.9.2002 intimating her that the

complainant had an account with the petitioner

bank (accused No.1) in which there were no

outstanding dues to be claimed from the petitioner

and the bank‟s letters if any be ignored. On receipt

of this telephone call wife of the complainant made

an inquiry from friends and employees in the office

of the complainant. The complainant also received

telephone call at his office and business place from

accused No.4 and 5, namely, Mr. Jishant Narang

and Mr. Sudhanshu Gupta. Complainant found

credit card statement dated 28.7.2002 and

correspondence dated 19.8.2002, 17.9.2002,

21.9.2002, 4.10.2002, 7.10.2002 and other written

and oral communications as defamatory and

maliciously made with a view to tarnish his image,

integrity, respect and reputation amongst his

family, social circle, friends, his colleagues and

other business circle. Complainant alleged that an

offence under Section 499/500 Indian Penal Code

(hereinafter referred to as „IPC‟) was made out

against the accused persons and they should be

accordingly summoned and convicted.

2. After appreciating the deposition of the witnesses

and the relevant documents available on record,

the court found sufficient material to proceed

against the accused persons for the offence

punishable under Section 500 IPC and accordingly

issued summons for appearance of the accused

persons in the court.

3. Aggrieved by the said order of summoning dated

20.12.2006, the present petition has been filed by

the petitioner Bank. It is made clear that other

accused persons who happen to be the employees

of the bank are not a party to this petition and have

not challenged the impugned summoning order qua

them.

4. Complainant had earlier filed a suit for damages

against the petitioner bank on 13.11.2002 alleging

that the bank had wrongly demanded payment of

credit card dues from him thereby causing him

mental harassment as well as the said demand

lowered his image and prestige in the eyes of

others including his family members. The present

complaint was filed on 4.2.2003. The civil suit filed

by the complainant (respondent herein) has been

decreed by the Civil Judge whereby a sum of

Rs.2,50,000/- with costs besides future interest @

8% per annum was awarded to the complainant.

The said amount admittedly has been paid by the

petitioner bank in full and final settlement of the

decretal amount.

5. Mr. Sanjay Gupta, learned counsel for the

petitioner has submitted that perusal of

letters/correspondences addressed by the bank to

the complainant would only indicate that demand

was made bonafidely and the ingredients of Section

499 IPC which defines "defamation" are not made

out as per averments contained in the complaint.

He further argued that the letters were written by

the bank bonafidely. The criminal intention i.e.

malice on the part of the petitioner bank to harm

the reputation of the complainant which is pre-

requisite of Section 499 IPC is missing in the

complaint. Bank had no intention to harm the

reputation of the complainant when it

corresponded with him with a view to get cleared

the due amount of Credit Card as per their own

records. He has further submitted that the conduct

of the petitioner bank falls in the 9th exception of

Section 499 IPC and, therefore, the Magistrate

without appreciating the facts and circumstances

of the case erroneously took cognizance of the

offence and summoned the petitioner for offence

punishable under Section 500 IPC. He has prayed

that complaint, therefore, be quashed.

6. Mr. Sidharth Yadav, learned counsel for the

complainant (respondent No.1 herein) while

refuting the submission of the learned counsel for

the petitioner has argued that the correspondence

of the bank received by the petitioner, especially

the credit card statement and the telegram dated

17.9.2002 contain defamatory words and these

documents were seen by his family members and

also that Mr. Jishant Narang, accused No.4, also

talked to the wife of the complainant on telephone

and intimated her that the account of the

complainant was cleared and there were no dues to

be claimed from him and that complainant should

ignore any letter which might be received from the

petitioner bank in future. He has, therefore,

emphasized that defamation within the meaning of

Section 499 IPC is made out against the petitioner

bank and the court has rightly taken the

cognizance of the offence and issued summons for

appearance against the bank and other accused

persons.

7. For an offence of defamation as defined under

Section 499 IPC, three essential ingredients are

required to be fulfilled:-

(i) Making or publishing any imputation

concerning any person;

(ii) Such imputation must have been made by

words either spoken or intended to be read

or by signs or by visible representations.

      (iii)     The said imputation must have been made

                with     the    intention   to   harm    or   with

knowledge or having reason to believe that

it will harm the reputation of the person

concerned.

8. Thus, it is clear that intention to cause harm is the

most essential sine qua non for an offence under

Section 499 IPC. An offence punishable under

Section 500 IPC requires blameworthy mind and is

not a statutory offence requiring no mens rea.

9. 9th Exception of the Section takes away the

imputation made in good faith by a person for

protection of his or other‟s interest or for public

good from the purview of defamation as defined in

the Section. This exception relates to private

communication which a person makes in good faith

for the protection of his own interest. This

exception covers not only such allegations of facts

as can be proved true but also expression of

opinions and personal inferences.

10. 9th exception has been incorporated to protect the

interests of the parties in their business transaction

which are generally done bonafidely and, therefore,

the rule of public good on which this principle is

based is, that honest transaction of business and

social intercourse would otherwise be deprived of

the protection which they should enjoy.

11. Whether any imputation made is with a motive or

malafide intention to lower the reputation or is

made in good faith is to be determined from the

facts and circumstances of the case. Undisputedly,

the requirement of good faith and public good,

both, are to be satisfied and the failure to prove

good faith would exclude the application of 9th

exception in favour of the accused even if the

requirement of public good is satisfied. The words

„good faith‟ as appearing in exception 9th not only

require logical infallibility but also due care and

attention.

12. The court has to consider as to how far erroneous

actions or statements are to be imputed for want of

due care and caution in a case in reference to the

general circumstances, the capacity and

intelligence of the person whose conduct is in

question. It is difficult to lay down any hard and

fast rule for deciding whether an accused acted in

good faith within the meaning of 9th exception, as it

is an issue to be considered on the facts and

circumstances of each case, nature of imputation

made, the circumstances under which it was made,

the status of the person who made it, and if there

was a malice in his mind when he made such

imputation, whether he made any inquiry before

any such imputation was made and if there were

reasons to accept his story, that he acted with due

care and attention and was satisfied that

imputation was true.

13. In "Harbhajan Singh v. State of Punjab, (1965)

2 SCR 235", Exception 9 of Section 499 IPC has

been interpreted in para 20 and 21 as follows:-

             "20. Another       aspect    of     this
             requirement      has    been     pithily
             expressed by the Bombay High
             Court in the case of Emperor v.
             Abdool Wadood Ahmed.             "Good

faith," it was observed "requires not indeed logical infallibility, but due care and attention. But how far erroneous actions or statements are to be imputed to want of due care and caution must, in each case, be considered with reference to the general circumstances and the capacity and intelligence of the person whose conduct is in question". "it is only to be expected", says the judgment, "that the honest conclusions of a calm and philosophical mind may differ very largely from the honest conclusions of a person excited by sectarian zeal and untrained to habits of precise reasoning. At the same time, it must be borne in mind that good faith in the formation or expression of an opinion, can afford no protection to an imputation which does not purport to be based on that which is the legitimate subject of public comment."

21. Thus, it would be clear that in deciding whether an accused person acted in good faith under the Ninth Exception, it is not possible to lay down any rigid rule or test. It would be a question to be considered on the facts and circumstances of each case - what is the nature of the

imputation made; under what circumstances did it come to be made; what is the status of the person who makes the imputation;

was there any malice in his mind when he made the said imputation;

did he make any enquiry before he made it; are there reasons to accept his story that he acted with due care and attention and was satisfied that the imputation was true? These and other considerations would be relevant in deciding the plea of good faith made by an accused person who claims the benefit of the Ninth Exception..................."

14. Telegram dated 17.9.2002 received by the

complainant at his house and allegedly read by his

family members i.e. his wife reads as below:-

                   "CARD     NO.5404     6112   0055


                   TOTAL              AMOUNT
                   OUTSTANDING             IS
                   RS.362373.01 AAA DESPITE
                   AMPTEEN       EFFORTS  TO
                   CONTACT YOU AT YOUR
                   OFFICE     AS    WELL  AS
                   RESIDENCE NUMBER AAA WE
                   HAVE NOT HEARD FROM YOU
                   SO FAR AAA YOUR CARD
                   ACCOUNT IS IN A SERIOUS
                   STAGE OR DELIQUENCY AND
                   ANY FUTHER DELAY ON
                   YOUR PART TO ADDRESS THE
                   MATTER MAY PROOF COSTLY
                   IN TERMS OF MONEY AS
                   WELL AS LITIGATION/BOTH


                    CIVIL  AND    CRIMINAL/IN
                   YOUR NAME CALL BANK
                   RIGHT AWAY AT 3705254."

15. According to the complainant the imputation on his

character in this telegram were " and any further

delay on your part to address the matter may prove

costly in terms of money as well as litigation/both

civil and criminal/in your name". This telegram in

no manner can be considered as defamatory in

nature. This telegram only expressed the concern

of the bank/petitioner to get the dues of the credit

card cleared well in time and in case there was

default, it would invite criminal as well as civil

liability.

16. Mens Rea; a mandatory pre-requisite of an offence

of defamation is clearly missing in the said

communication. This communication made

bonafidely by the petitioner bank upon the subject

matter contained therein, in which the petitioner

had an interest or it had the duty to correspond

with the complainant asking him to clear the dues

under the circumstances would be privileged and

would attract exception 9th. Petitioner bank had no

reason to lower the dignity and character of the

complainant in the eyes of anyone. The bank was

not reckless in sending this telegram to the

complainant. The complainant upon responding to

the correspondence though denied his liability to

pay the amount having no concern with the card in

question as he never held the said card in his

name. Action of the bank was in good faith as also

in public good as the entire process of

correspondence with the complainant was with a

view to protect the public money safely invested

with the bank and found due from the complainant

(as per the bank‟s record) was repaid.

17. Besides, requirement of publishing any imputation

concerning the complainant is also missing in this

case. This telegram was sent to the complainant

only. The alleged information by accused No.4 to

the wife of the complainant cannot in any manner

be considered as defamatory. The intimation

communicated to the wife of the complainant was

that there were no dues left to be claimed in the

account of the complainant and in case any

communication was received from the bank in

future, the same should be ignored.

18. This information in no manner lowered the dignity

of the complainant in the eyes of his wife. This

intimation was bonafidely made with a view to save

the complainant from future harassment at the

hands of the petitioner and other accused persons.

The wife of the complainant on receipt of the

information on telephone from accused No.4 of her

own motion made inquiries from friends of the

complainant about the alleged account without any

realm or reason and, therefore, such inquiries

made by her from the friends of the complainant do

not invite the provisions of Section 499/500 IPC.

19. The Civil Court in a suit for mandatory injunction

and for damages decreed the suit of the

complainant awarding damages to him against the

bank. The observations of the Civil Court in the

said suit that the persistent acts of the bank

without any ground was defamatory in nature and

harmed the reputation of the complainant might be

relevant, however, they are not conclusive and

binding on the Magistrate to be followed and

accepted. The reason being the Civil Court has to

appreciate the evidence of the plaintiff in a suit for

damages based on defamation with a different

yardstick and is not required to assess the evidence

with a view to find out if any criminality was

involved. In other words, the Civil Court is not

concerned whether such acts of defamation were

malafidely done with an intention to lower and

harm the reputation of the plaintiff in the eyes of

his family members and others. For inviting the

provisions contained in Section 499/500 IPC which

are penal in nature, a Magistrate has to consider if

the requirement of mens rea which is a mandate

for a criminal defamation punishable under Section

500 IPC was fulfilled. If mens rea or criminal

intention is lacking or is missing in the act of the

accused, he cannot be held guilty for an offence of

defamation within the meaning of Section 499 IPC.

In this case the image or reputation of the

complainant was not tarnished in any manner by

the petitioner bank. None of the correspondence

were ever published or sent to any other person

other than the complainant himself. Besides, none

of these correspondence indicate that the bank

used such language in the letters sent to the

complaint which could be termed as defamatory,

especially the telegram dated 17.9.2002 or the

telephone call received by his wife. Therefore,

prima facie, the complaint did not disclose any

offence of defamation made out against the

petitioner bank.

20. Undisputedly, the petitioner is a bank incorporated

in England with limited liability by Royal Charter,

1853 and, therefore, is a corporation/company. A

company cannot be in any case held to have

committed an offence under Section 500 IPC

because, most essential ingredient of the said

offence i.e. „mens rea‟ would be missing as a

company is a juristic entity or an artificial person,

whereas a Director is not a company. The company

may be made liable for offences, however, if there

is anything in the definition or context of a

particular Section of a particular statute which

would prevent the application of the said section to

a limited company, the limited company cannot be

proceeded against. There are number of provisions

of law in which it would be physically impossible by

a limited company to commit the offence. A limited

company, therefore, cannot generally be tried for

offences where mens rea is essential. Similarly, a

company cannot face the punishment of

imprisonment for obvious reasons that company

cannot be sent to prison by way of a sentence.

21. Under these circumstances, petitioner being a

company cannot be held to have committed an

offence under Section 500 IPC.

22. Under the circumstances of the case, the trial court

did not appreciate the contents of the complaint

and the material placed on record by the

complainant along with complaint in the right

perspective while taking cognizance of offence

under Section 500 IPC and consequent summoning

of the petitioner bank.

23. Hence, petition is allowed. Complaint

No.144/1/2003 and the impugned order dated

20.12.2006 passed therein are hereby quashed qua

the petitioner/bank only. The trial court is within

its rights to proceed against the other accused

persons as per the provisions of law.

Attested copy of the order be sent to the trial court.

(ARUNA SURESH) JUDGE February 06, 2009 vk