Question
Whether a Director has locus standi to file a defamation case against a publisher for and behalf of company.
Answer
Let's answer above question through a case of Mr. John Thomas Vs. Dr.K.Jagdeesan [Appeal No. 688 of 2001 SCC (Crl) 974].
BRIEF FACTS
1. A renowned hospital in the Metropolis of Madras (Chennai) has been caricatured in a newspaper as the abattoir of human kidneys for trafficking purposes.
2. When the Director of the Hospital complained of defamation, the publisher of the newspaper sought shelter under the umbrage that the libel is not against the Director personally, but against the hospital only and hence he cannot feel aggrieved.
3. The accused/publisher, who raised the objection before the trial court, on being summoned by the court to appear before it, succeeded in stalling the progress of the trial by clinging to the said contention which the trial magistrate has upheld.
4. But the High Court of Madras disapproved the action of the magistrate and directed the trial to proceed. Hence the accused has come up to this Court by filing the special leave petition.
OBSERVATIONS & DECISION OF APEX COURT
5. The appellant contended that the imputations contained in the publication complained of are not per se defamatory.
6. After reading the imputations we have no doubt that they are prima facie libellous. The only effect of an imputation being per se defamatory is that it would relieve the complainant of the burden to establish that the publication of such imputations has lowered him in the estimation of the right thinking members of the public. However, even if the imputation is not per se defamatory, that by itself would not go to the advantage of the publisher, for, the complaining person can establish on evidence that the publication has in fact amounted to defamation even in spite of the apparent deficiency. So the appellant cannot contend, at this stage, that he is entitled to discharge on the ground that the imputations in the extracted publication were not per se defamatory.
7. The contention focussed by the learned senior counsel is that the respondent, who filed the complaint, has no locus standi to complain because he is only a Director of K.J. Hospital about which the publication was made and that the publication did not contain any libel against the complainant personally.
8. It is not disputed that the complainant is the Director of K.J. Hospital.
Explanation 2 in Section 499 of the IPC reads thus
"Explanation 2. - It may amount to defamation to make an imputation concerning a company or an association or collection of persons as such."
In view of the said Explanation, it cannot be disputed that a publication containing defamatory imputations asagainst a company would escape from the purview of the offence of defamation.
9. If the defamation pertains to an association of persons or a body corporate, who could be the complainant?
This can be answered by reference to Section 199 of the Code. The first subsection of that section alone is relevant, in this context. It reads thus: "199. Prosecution for defamation. - (1) No court shall take cognizance of an offence under Chapter XXI of the Indian Penal Code (45 of 1860) except upon a complaint made by some person aggrieved by the offence." The collocation of the words "by some persons aggrieved" definitely indicates that the complainant need not necessarily be the defamed person himself.
Whether the complainant has reason to feel hurt on account of the publication is a matter to be determined by the court depending upon the facts of each case.
10. If a company is described as engaging itself in nefarious activities its impact would certainly fall on every Director of the company and hence he can legitimately feel the pinch of it. Similarly, if a firm is described in a publication as carrying on offensive trade, every working partner of the firm can reasonably be expected to feel aggrieved by it.
11. If K.J. Hospital is a private limited company, it is too farfetched to rule out any one of its Directors, feeling aggrieved on account of pejoratives hurled at the company.
12. Hence the appellant cannot justifiably contend that the Director of the K.J. Hospital would not fall within the wide purview of "some person aggrieved" as envisaged in Section 199(1) of the Code.
13. The learned senior counsel made a last attempt to save the appellant from prosecution on the strength of the decision of this Court in K.M. Mathew v. State of Kerala {1992 (1) SCC 217}. In that case prosecution against Chief Editor was quashed for want of necessary averments in the complaint regarding his role in the publication. That part of the decision rests entirely on the facts of that case and it cannot be imported to this case.
14. It is pertinent to point out, in this context, that the appellant did not have any such point either when he first moved the High Court for quashing the proceedings or when he moved the trial court for discharge. Hence it is too late in the day for raising any such point, even apart from non-availability of that defence to the appellant on merits.
15. We, therefore, dismiss this appeal.
CONCLUSION
It is well settled fact that a company is a legal entity driven by humans. A director is appointed by owners of the company to look after affairs and they are the concise keeper of company. They are in fiduciary duty and protect interest of company. They have locus standi to file a suit or defend a suit of defamation against company.
DISCLAIMER: The case law presented here is only for sharing knowledge and information with readers. The views are personal. In case of necessity do consult with professionals for better understanding and clarity on subject matter.
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