In the latest Judgment of Madras High Court, Hon’ble Justice G. K Kilanthiraiyan of the Madras High Court ruled that a defamation case cannot be filed against an advocate based on arguments made in court on behalf of his client.
Brief Facts of the Case M.L.Ganesh Vs. CA V.Venkata Siva Kumar
In the instant case the petitioners have alleged that the Petitioners in the instant case were well within their rights to remove the respondendent from his appointment as a Resolution Professional by the powers vested into them by the Insolvency and Bankruptcy Code.
It was also mentioned that as the decision to remove the Respondent as Resolution Professional was taken by the Committee of Creditors(COC) in the interest of creditors and stakeholders cannot be termed as defamatory and the proceeding initiated against them under Sections 500, 192 r/w 34 of IPC should be quashed.
Arguments of the Petitioners
The counsel for the petitioners stated that there were many reasons for the removal of the respondent from his appointment as R.P.
- It was stated that the respondent had published an invitation for expression of Interest (EOI) on 23.01.2018 without the approval of COC.
- Many unsigned letters were sent by the respondents to Chairman of IOB, CBI and SBI where he made defamatory allegations.
- The respondent had also proposed an appointment of forensic auditor without consulting the COC.
- He discussed details of the COC meeting on a whatsapp group.
- The respondent had also threatened the petitioners that he will file a defamation suit against them.
- The counsel for the petitioner further argued that he represented his clients before the Court and his arguments on behalf of his clients cannot be termed as defamation.
Arguments of respondent
- It was argued by the respondent that he was just doing his duty as a RP
- During the course of his duties as a resolution professional in the Insolvency resolution process of M/s.Oceanic Edibles Private Limited, he noticed that stocks of prawns worth 32o crores were thrown in the sea and that is why he ordered an audit.
- The respondent stated that instead of cooperating with him, the audit was objected to by the COC.
- The respondent claimed that the accused no.1 was already annoyed with him as he had taken action against them in a fraud case.
- It was also alleged that the petitioners had made many defamatory remarks against him and have also called him in in competent.
- The respondent further submitted that accused no.2 who is an advocate, has made baseless action against him and the learned Magistrate was correct in taking cognizance for offence under Section 499 of IPC against the accused.
Issues Before the Court
The first issue was if the the statements of the petitioners that he was ‘not up to the mark’,
He wants to enter into a brawl with everyone’, COC lost 50 days due to the RP’ and many others can be termed defamatory and if his removal was unwarranted.
The second issue is if the statements of the petitioner no.2 who is advocate can be termed defamatory even though he was just representing his clients in the court.
Reasoning of the Court
The Court observed that the order(removal of respondent as RP) passed by the NCLT was challenged by the respondent in front of this very Court. Madras High Court has dismissed his petition as not maintainable. His appeal was dismissed again and he was given liberty to approach the appropriate forum. His appeal before the NCLAT was also dismissed as withdrawn.
The court agreed with the statement of the petitioner’s counsel that members of the COC had powers vested in them as per IBC to remove the RP. The application for removal was filed by the counsel on the instruction of members of COC and they have not committed any deed to attract offence under Section 499 of IPC.
On the issue whether the advocate can be held for defamation the court went through judgements of various courts.
The court opined that a lawyer cannot be held for defamation if he was only trying to defend his client in open court. It was further observed that the lawyer only conveys what his client has informed him. .
The court also observed that if the precedent of suing a lawyer for defamation based on statements made during a hearing is set then the lawyers will be hard pressed to dispense their duties because of fear of facing litigation from the opposite party.
The decision of the Court
The court held that the instant complaint was a clear case of abuse of process of the court and quashed the proceedings that were initiated against the petitioners.
Title:- M.L.Ganesh Vs. CA V.Venkata Siva Kumar
Case No. Crl.OP.Nos.4669 & 5115 of 2020
Date of Order:30.09.2020
Coram: Hon’ble Justice G. K Kilanthiraiyan
Advocates: For Petitioner : Mr.S.Arunkumar For Respondent : Mr.V.Venkata Sivakumar, Party in person