9911796707
TMI Blog2009 (4) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... is not maintainable. Neither is the plaintiff a person, entitled to the right to life and concomitant attributes of that right which includes the right to privacy nor is such right, assuming it to be applicable to companies and corporations, available against non-state individuals, or "actors". This issue is, accordingly ans-wered against the plaintiff. It is held that the defendants publications cannot be termed as unprotected speech, qualifying for restraint through injunction; the plaintiff is, therefore, not entitled to the injunctions sought for in the present suit. The suit cannot succeed; it is, accordingly, dismissed. - CS(OS) NO. 1102 OF 2006 - - - Dated:- 13-4-2009 - S. RAVINDRA BHAT, J. Valmiki Mehta, Dhananjay Shahi and N.L. Ganapathi for the Plaintiff. D. Moitra and Shantanu Saikia for the Defendant. JUDGMENT 1. The plaintiff seeks permanent injunction restraining the defendants, their successors, assigns, etc. or anybody claiming through them, from publishing confidential and/or misleading information relating to the plaintiff s negotiations and contracts, in the form of articles or news items or in any other form, in the website www. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... news items or articles involving it, which are already in the public domain. It is, however, averred that unauthorized publishing of sensitive information shared between the plaintiff and international LNG sellers, present and/or prospective, or publishing of half-baked or misleading reports about the plaintiff or its commercial transactions, as it is bound to have serious repercussions on the plaintiff, cannot be permitted. This is in view of facts relating to the terms of LNG sale and purchase, particularly terms like price and quantity are negotiated separately for each transaction, if published have impact on potential agreements, which could lead to failure of negotiations. The adverse impact on publication could also be existing Sale and Purchase agreements getting breached/terminated (if there are disclosures about that agreement), the plaintiff facing claims for damages, and even on adverse impact on the plaintiff in the stock market. It is contended that any adverse impact on the plaintiff s transactions or potential transactions would have an adverse chain reaction on other stakeholders in the petroleum sector. 5. It is alleged that the defendants, despite being aware ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (PLL) will be a co-developer of the Kochi Special Economic Zone (SEZ) along with Cochin Port Trust (CPT) which will be the developer. Besides, PLL will also share the cost of development of Kochi SEZ. On account of being a co-developer, PLL would get fiscal incentives as per the SEZ Act, 2005. These would include waiver of customs duty on capital imports, waiver of taxes and levies including VAT for procurement of capital goods within India to SEZ, income has holiday for 10 years and waiver of stamp duty and service tax. Besides, it would be exempted from taxes and other levies of local bodies such as Panchayat and Municipalities. Though ensuring export earnings by the units situated in SEZ does not fall in the ambit of the co-developer s duty, it is expected to develop infrastructure in SEZ. Thus, of the Rs. 20 crore expected to be spent on providing common internal roads, security, boundary wall, drains, street lights and gate office for SEZ, PLL will foot one-fourth of the bill. PLL will also bear half the expense of the Rs. 18 crore expected to be spent on a direct road connectivity to Puthuvypeen." ( ii ) "LNG sourcing for Kochi terminal - PLL, Exxon Mobil and offtakers ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is proposed that PLL would hold 49 per cent equity in the company, (Click on details for a full analysis of the selection process)." B. The offending news item published on 28th April, 2006; "April 27. PLL resists PMO directive that bulk of Kochi LNG should go to NTPC. Petronet LNG Ltd., (PLL) has sought the approval of its board to limit the supply of LNG from its Kochi terminal to NTPC s Kayamkulam power project at 0.3 MMTPA, which would meet the requirements of the power plaint s existing capacity of 350 MW. This is despite a specific directive form PMO - issued by Principal Secretary T.K.A Nair that the Kayamkulam project should get 2.1 MMTPA of LNG, out of PLL s total terminal capacity of 2.5 MMTPA, to help meet the power plaint s requirements when its capacity is enhanced to 2,340 MW. PMO had also directed that the 0.4 MMTPA is to go to BPCL for captive use at Kochi Refinery Ltd., (KRL), Clearly, LNG offtakers - GAIL, IOC and BPCL - are unhappy about the fact that the entire LNG quota would get earmarked to only two consumers. The trio had plans to market the gas to a clutch of industries - including fertilizer companies - which are currently using naphtha as fuel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption or conversion may be enforced till the market price of the stock does not exceed 130 per cent of the converted price plus cumulative YTM, -The transaction can be completed within a period of 4 to 6 weeks. -FCCBs could be denominated in either Dollar or Yen. However, Yen-denominated FCCBs would be expensive considering the fully hedged cost. Therefore, Dollar denominated FCCBs would be the right way to go, -By law, FCCBs are required to be listed at least one stock exchange abroad. Singapore stock exchange is the preferred stock exchange in view of the low cost of listing and easy procedures involved in the stock exchange; and -Promoters can buy recover the 3.25 per cent dilution in their holding through creeping acquisition route. This route has two advantages- cash outlay being spread over five years and low average cost of acquisition of shares on account of lower cost of shares in the initial years." 7. The plaintiff says that it would be seriously prejudiced and would suffer irreparable injury if the offending news items are allowed to remain in the suit website. It is claimed that the information contained in the news item reproduced in paragraph A ( i ) ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orized publication of this offending news item by the defendants has the potential of being treated by the other parties to the confidentiality Agreement as a material breach committed by the plaintiff resulting in the other party s potential suspending on going negotiations or altogether walking out of the negotiations. The consequence of this would be disastrous for the plaintiff both in terms of loss of business and loss of reputation. The plaintiff claims to have suffered embarrassment and the threat of potential default due to the unauthorized publication of the offending news items. It is alleged that Exxon Mobil companies have viewed it as a breach of the confidentiality agreement by the plaintiff and sought its explanation, which has been given. However, such embarrassment could have been well avoided if the defendants had acted with some sense of responsibility. The plaintiff is not in a position to give the details or produce documents in this regard as it claims to be bound by the confidentiality clauses; it undertakes to produce it for the perusal of this Court if and when directed to do so. It is contended that there are media reports that for a significant amount of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue was not finally decided; the plaintiff had not yet taken a definite stance on the matter. The said report also affected the plaintiff adversely as it conveyed the impression that the plaintiff did not respect the PMO, which is malicious. 11. It is claimed that information contained in the news item reproduced in paragraph 5-C and D above are also incorrect and misleading and were published with the sole intention of causing sensation by reporting confidential internal discussions of the plaintiff involving its fund and cash flows. The defendants have twisted internal discussions as conflicting views portraying that there is in-fighting within the plaintiff Company. As the defendants could not have published such confidential issues, even if the information published was accurate, till they had been made available in the public domain, it goes without saying publishing of inaccurate information cannot be permitted at any cost. Further, this is also price sensitive information and therefore there is an obligation on the plaintiff to ensure that it is not leaked to the general public, before formal decisions were taken in this regard. 12. The plaintiff, in view of their all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em in a limited subscriber website such as that belonging to Defendant No. 2. 15. The defendants allege that the plaintiff seems to have made a habit of quoting Confidentiality Agreements with LNG suppliers and greater interest of the consumer and public good served by keeping commercial negotiations for procurement of LNG under wraps-ostensibly on the ground that shrouding such negotiations in total secrecy would lead to either an LNG contract being inked or a lower price of LNG - as reason for seeking a permanent injunction against the Defendants from publishing any information without its written consent. It is pertinent to note that an unfettered commercial transaction on import of LNG may not always be in the consumer s interest. Even though the plaintiff is a Public company with public and Government shareholding, it is still a commercial entity and not a trust or a Government department. By definition, a commercial entity - however public it may be or however much it is committed to public good- is governed by commercial principles of profit maximization. This is the raison d etre of a commercial entity. The interest of its shareholders comes first and then comes the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... described in Para 5A( iii ) above, LNG transportation : PLL shortlists ship-owners, moots special purpose company" that a similar news item was published in Business Line and media on 25-5-2006 but the plaintiff did not take any action against the publications. In fact, in the 21-6-2006 issue of the Hindustan Times a news item pertaining to shipping of LNG by the plaintiff was published but the plaintiff did not initiate any legal proceedings against the newspaper. This news item was published after the filing of the present suit. 20. The defendants say that the content in news item in Para 5B, viz., of 28-4-2006, "PLL resists PMO directive bulk of Kochi LNG should go to NTPC" (Under the heading "Petronet LNG resists PMO directive") also appeared in a newspaper by the name of Project monitor on 22-5-2006. Again no legal action of any kind was taken against the newspaper by the plaintiff. The publication of this news item in Project monitor shows that there was nothing confidential about the information. As regards the news item in Para 5C, dated 3-5-2006 viz., "PLL plans $100 million FCCB: ADB bailout in case of redemption pressure" the defendants deny that it is sensation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some public sector shareholding, the plaintiff has the necessary right to assert that in all its internal matters and affairs, control of information is vested in it. The right to such information, and grant or withhold it from prying eyes, which could seriously jeapardize its functioning and viability, cannot be undermined. In such circumstances, the plaintiff can maintain the present suit, and obtain permanent injunction. 25. The plaintiff relies on the judgments of the Supreme Court, reported as Kharak Singh v. State of U.P. AIR 1963 SC 1295, Gobind v. State of M.P. [1975] 2 SCC 148; R. Rajagopal v. State of T.N. [1994] 6 SCC 632; and District Registrar Collector v. Canara Bank [2005] 1 SCC 496, to say that as against the defendants, who are either individuals or private concerns, the right to maintain the present suit, for asserting privacy rights cannot be denied; such action is the most efficacious remedy, seeking injunction. 26. The defendants say that the plaintiff cannot assert any so-called right to privacy to stifle their right to comment about public matters. According to them, the question of how the plaintiff functions and conducts its affair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 306) In Kharak Singh s case ( supra ) the majority judgment of the Supreme Court said that "personal liberty" in article 21 includes all varieties of rights which go to make up the personal liberty of a man other than those dealt with in article 19(1)( d ). According to the Court, while article 19(1)( d ) deals with the particular types of personal freedom, Article 21 takes in and deals with the residue. The Court said : "17. We have already extracted a passage from the judgment of Field, J. in Munn v. Illinois [1876] 94 US 113 at p. 142, where the learned Judge pointed out that life in the 5th and 14th Amendments of the U.S. Constitution corresponding to article 21, means not merely the right to the continuance of a person s animal existence, but a right to the possession of each of his organs his arms and legs etc. We do not entertain any doubt that the word life in article 21 bears the same signification. Is then the word personal liberty to be construed as excluding from its purview an invasion on the part of the police of the sanctity of a man s home and an intrusion into his personal security and his right to sleep which is the normal comfort and a dire nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulations, that empowered the police to keep an obtrusive surveillance on individuals suspected of perpetrating crime. The court held that : "20. There can be no doubt that the makers of our Constitution wanted to ensure conditions favourable to the pursuit of happiness. They certainly realized as Brandeis, J. said in his dissent in Olmstead v. United States 277 US 438, 471 the significance of man s spiritual nature, of his feelings and of his intellect and that only a part of the pain, pleasure, satisfaction of life can be found in material things and therefore they must be deemed to have conferred upon the individual as against the Government a sphere where he should be let alone. 21. "The liberal individualist tradition has stressed, in particular, three personal ideals, to each of which corresponds a range of private affairs . The first is the ideal of personal relations; the second, the Lockean ideal of the politically free man in a minimally regulated society; the third, the Kantian ideal of the morally autonomous man, acting on principles that he accepts as rational." 22. There can be no doubt that privacy-dignity claims deserve to be examined with care and to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordered liberty. 25. Rights and freedoms of citizens are set forth in the Constitution in order to guarantee that the individual, his personality, and those things stamped with his personality shall be free from official interference except where a reasonable basis for intrusion exists. Liberty against Government a phrase coined by Professor Corwin expresses this idea forcefully. In this sense, many of the fundamental rights of citizens can be described as contributing to the right to privacy. 26. As Ely says : "There is nothing to prevent one from using the word privacy to mean the freedom to live one s life without governmental interference. But the Court obviously does not so use the term. Nor could it, for such a right is at stake in every case." 27. There are two possible theories for protecting privacy of home. The first is that activities in the home harm others only to the extent that they cause offence resulting from the mere thought that individuals might be engaging in such activities and that such "harm" is not constitutionally protectible by the State. The second is that individuals need a place of sanctuary where they can be free from societal control. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged autobiography of Auto Shankar. The remedy of public officials/public figures, if any, will arise only after the publication and will be governed by the principles indicated herein. ****** 26. We may now summarise the broad principles flowing from the above discussion : (1)The right to privacy is implicit in the right to life and liberty guaranteed to the citizens of this country by article 21. It is a right to be let alone . A citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, child-bearing and education among other matters. None can publish anything concerning the above matters without his consent whether truthful or otherwise and whether laudatory or critical. If he does so, he would be violating the right to privacy of the person concerned and would be liable in an action for damages. Position may, however, be different, if a person voluntarily thrusts himself into controversy or voluntarily invites or raises a controversy. (2)The rule aforesaid is subject to the exception, that any publication concerning the aforesaid aspects becomes unobjectionable if such publication is based upon public records including cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rior restraint upon the press/media." (p. 648) 31. The latest in the series of judgments of the Supreme Court was Collector v. Canara Bank s case ( supra ). Recollecting the opinions in its previous judgments, the court applied the right of privacy, in considering search and seizure provisions. The Andhra Pradesh amendment to the Stamp Act, 1899 was assailed inter alia as permitting any person to "enter upon any premises", public or private, and seize and impound documents. The Supreme Court declared that state action - either executive policy or legislative enactments had to be reasonable. "Unless there is some probable or reasonable cause or reasonable basis or material before the Collector for reaching an opinion that the documents in the possession of the bank tend to secure any duty or to prove or to lead to the discovery of any fraud or omission in relation to any duty, the search or taking notes or extracts therefore, cannot be valid. The above safeguards must necessarily be read into the provision relating to search and inspection and seizure so as to save it from any unconstitutionality." 32. What is immediately apparent to the court is that the right to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable; shareholders or directors can approach the court for relief, if they can establish that the impugned action impairs their rights ( See R.C. Cooper v. Union of India 1970 (2) SCC 248; Bennett Coleman Co. v. Union of India [1972] 2 SCC 788. In this background, what has to be seen is whether a juristic, or artificial entity such as a corporation or company, can assert right to privacy, which intrinsically has been seen as an essential trait of human personhood. The position in Australia 35. There are no Indian cases on the subject. However, a 2001 decision of the Australian High Court is illuminative on the question. Thus, in Australian Broadcasting Corpn. v. Lenah Game Meats Pty Ltd. 2001 HCA 63, the respondent, Lenah Game Meat, an incorporated company, sought a restraint against the Australian Broadcasting Corporation from distributing, publishing, copying or broadcasting a video tape or video tapes filmed by a trespasser or trespassers showing [Lenah s] brush tail possum processing facility at Tasmania. The main ground urged for the action was that Lenah s right to privacy would be breached. The full court of the Supreme Court of Tasmania, granted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to exclusive possession of the premises, the respondent had the capacity (subject to the possibility of trespass or other surveillance) to grant or refuse permission to anyone who wanted to observe, and record, its operations. The same can be said of any landowner, but it does not make everything that the owner does on the land a private act. Nor does an act become private simply because the owner of land would prefer that it were unobserved. The reasons for such preference might be personal, or financial. They might be good or bad. An owner of land does not have to justify refusal of entry to a member of the public, or of the press. The right to choose who may enter, and who will be excluded, is an aspect of ownership. It may mean that a person who enters without permission is a trespasser; but that does not mean that every activity observed by the trespasser is private." Gummow, J. rested his conclusions on the following reasoning: "Nothing in Douglas suggests that the right to privacy which their Lordships contemplate is enjoyed other than by natural persons. Further, the necessarily tentative consideration of the topic in that case assumes rather than explains what "priv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising of success than the present. It appears artificial to describe the affront to the respondent as an invasion of its privacy." The position in the United States 36. In what may be termed as prescient foresight, the US Supreme Court rejected a claim for right to privacy, made by a corporation, complaining unlawful entry, in search of its premises by a Federal Commission, during the course of its investigation. The court said, in United States v. Morton Salt , 338 U.S. 632 (1950) that "The Commission s order is criticized upon grounds that the order transgresses the Fourth Amendment s proscription of unreasonable searches and seizures and the Fifth Amendment s due process of law clause. It is unnecessary here to examine the question of whether a corporation is entitled to the protection of the Fourth Amendment. Cf. Oklahoma Press Publishing Co. v. Walling , 327 U.S. 186. Although the "right to be let alone the most comprehensive of rights and the right most valued by civilized men," Brandeis, J., dissenting in Olmstead v. United States, 277 U.S. 438, 277 U.S. 471 at 277 U.S. 478, is not confined literally to searches and seizures as such, but extends as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes of that right which includes the right to privacy nor is such right, assuming it to be applicable to companies and corporations, available against non-state individuals, or "actors". This issue is, accordingly ans-wered against the plaintiff. Issue No. 2 - Whether the plaintiff proves that it can maintain the Suit on ground of entitlement to confidentiality of information; 39. The plaintiff argues that the information published by the defendants is "Price Sensitive Information" under the SEBI regulations quoted in an earlier part of the judgment. It is argued more importantly that confidentiality negotiations between the plaintiff and Exxon Mobil Company entities are covered by confidentiality agreement under which parties cannot make disclosures to the media in regard to discussions or nego-tiations without prior agreement in writing, to others. Such disclosure cannot even be permitted by third parties after advertisements. It is claimed that such unauthorized publication of offending news items have the "potential of being treated to the other parties" to the confidentiality agreement. The plaintiff argues having suffered embarrassment and threat of default due to una ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Schedule-I to the Regulations casts an obligation only on the employees and the Directors to maintain confidentiality of price-sensitive information. Similarly, the Regulations restrict flow of information within certain zones, of the corporate structure, to prevent insider trading. There is nothing, contend the defendants, to prevent the press from exercising its right and duty to publish information relating to performance and functioning of institutions that have a wide ranging repercussions on members of the public. 43. It would therefore, be necessary to explore if there are implied obligations arising in law, on persons or individuals who come across information or news that is inherently sensitive and confidential, not to disclose, and which lead to corresponding right to those entitled to guard or protect such information, to maintain civil actions for that purpose. Before a discussion of the rival contentions on the question of confidentiality, it would be essential to set-out the relevant provisions; they are section 9 of CPC, which reads as follows : "9. Courts to Try all Civil Suits Unless Barred. The Courts shall (subject to the provisions herein contained) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which would be breached in the event the defendant publishes it after having sourced it on its own initiative, cannot be accepted. 45. The second limb of confidentiality question is whether there is an implicit duty cast upon a person, who comes by confidential information, and wishes to disclose it. There cannot be any serious dispute that actions based on civil causes, not otherwise barred by statute-either expressly or by implication, can be brought by Courts in India. Under section 9 of CPC ( Dhulabhai v. State of M.P. AIR 1969 SC 78; Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke [1976] 1 SCC 496; Munshi Ram v. Municipal Committee, Chheharta [1979] 3 SCC 83; Raja Ram Kumar Bhargava v. Union of India [1988] 1 SCC 681. 46. Sections 38 and 39 of the Specific Relief Act empower the Civil Court, in exercise of its jurisdiction, to issue injunctions. Although, textually, section 39 talks of mandatory injunction and does not advert to statute based rights, it speaks of such remedy being available to "prevent the breach of an obligation" existing in favour of the claimant. The last two illustrations to the section 38 suggests that obligations not spelt-out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties, often a contract, in which event the duty may arise by reason of either an express or an implied term of that contract. It is in such cases as these that the expressions "confider" and "confidant" are perhaps most aptly employed. But it is well-settled that a duty of confidence may arise in equity independently of such cases; and I have expressed the circumstances in which the duty arises in broad terms, not merely to embrace those cases where a third party receives information from a person who is under a duty of confidence in respect of it, knowing that it has been disclosed by that person to him in breach of his duty of confidence, but also to include certain situations, beloved of law teachers, where an obviously confidential document is wafted by an electric fan out of a window into a crowded street, or where an obviously confidential document, such as a private diary, is dropped in a public place, and is then picked up by a passer-by. I also have in mind the situations where secrets of importance to national security come into possession of members of the public..." 48A. In Campbell s case ( supra ), the Court of Appeal in England had reversed the Trial Court s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er encapsulated now as misuse of private information. ****** 46. In recent years, however, there have been two developments of the law of confidence, typical of the capacity of the common law to adapt itself to the needs of contemporary life. One has been an acknowledgement of the artificiality of distinguishing between confidential information obtained through the violation of a confidential relationship and similar information obtained in some other way. The second has been the acceptance, under the influence of human rights instruments such as article 8 of the European Convention, of the privacy of personal information as something worthy of protection in its own right. 47. The first development is generally associated with the speech of Lord Goff of Chieveley in Attorney-General v. General Newspapers Ltd. (No. 2) [1990] 1 AC 109, 281, where he gave, as illustrations of cases in which it would be illogical to insist upon violation of a confidential relationship, the "obviously confidential document.... wafted by an electric fan out of a window into a crowded street" and the "private diary .... dropped in a public place." He therefore, formulated the principle as being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal information for which there is no justification. Nor, it appears, have any of the other judges who have considered the matter. 51. The result of these developments has been a shift in the centre of gravity of the action for breach of confidence when it is used as a remedy for the unjustified publication of personal information. It recognizes that the incremental changes to which I have referred do not merely extend the duties arising traditionally from a relationship of trust and confidence to a wider range of people. As Sedley LJ observed in a perceptive passage in his judgment in Douglas v. Hello Ltd. [2001] QB 967, 1001, the new approach takes a different view of the underlying value which the law protects. Instead of the cause of action being based upon the duty of good faith applicable to confidential personal information and trade secrets alike, it focuses upon the protection of human autonomy and dignity - the right to control the dissemination of information about one s private life and the right to the esteem and respect of other people. ****** 85. The questions that I have just described seem to me to be essentially questions of fact and degree and not to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual claiming confidentiality of such information, or privacy, the Court of Appeal in its recent judgment reported as HRH Prince of Wales v. Associated Newspapers Limited 2007 (2) All ER 139, states as follows : "(67) There is an important public interest in the observance of duties of confidence. Those who engage employees, or who enter into other relationships that carry with them a duty of confidence, ought to be able to be confident that they can disclose, without risk of wider publication, information that it is legitimate for them to wish to keep confidential. Before the 1998 Act came into force the circumstances in which the public interest in publication overrode a duty of confidence were very limited. The issue was whether exceptional circumstances justified disregarding the confidentiality that would otherwise prevail. Today the test is different. It is whether a fetter of the right of freedom of expression is, in the particular circumstances, necessary in a democratic society. It is a test of proportionality. But a significant element to be weighed in the balance is the importance in a democratic society of upholding duties of confidence that are created between i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was what the court had in mind, when the formulation of a broader duty to maintain confidentiality was declared. The stage, was therefore set, where ultimately, in Campbell s case ( supra ), these developments were noted, and the Court; best summarized the position in the passage (quoted earlier), which is as follows : "The result of these developments has been a shift in the centre of gravity of the action for breach of confidence when it is used as a remedy for the unjustified publication of personal information. It recognizes that the incremental changes to which I have referred do not merely extend the duties arising traditionally from a relationship of trust and confidence to a wider range of people. As Sedley LJ observed in a perceptive passage in his judgment in Douglas v. Hello Ltd. [2001] QB 967, 1001, the new approach takes a different view of the underlying value which the law protects." 50. Even while recognizing the wider nature of duty - in the light of the Human Rights Act, 1998, and articles 8 and 10 of the European Convention, it was cautioned that the court, in each case, where breach of confidentiality, is complained, and even found-has to engage in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intainable, as it can assert confidentiality in its information. Issue No. 3 - If the answer to Issue No. 2 is in the affirmative, does the plaintiff prove its entitlement to injunction sought for in this case. 52. As noted earlier, the plaintiff is aggrieved by the publication of three news items on 27-4-2006; one news item on 28-4-2006; one news item on 3-5-2006 and the last item on 5-5-2006. The plaintiff s concern in these is that the offending publications seriously prejudices it and that information would be construed as violating the mandate of SEBI regulations. The plaintiff contends next that the information is speculative as it concerns proposals at the "drawing-board stage" which may or may not mature. The third serious objection is that the plaintiff is engaged in sensitive negotiations with overseas gas suppliers and that the information is bound to seriously prejudice these negotiations, particularly, the confidentiality agreed by it. It is lastly contended that the news item alleging that the plaintiff resisted a PMO directive, depicted it in an unfavourable light even though in reality, the subject matter was at the discussion level. 53. The defendants, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Undertaking. It is virtually a monopoly engaged in importation of gas which is later distributed for various purposes. Its share-holding pattern also reflects this domination; 50 per cent stake is owned by the Central Government Public Sector Undertakings. It was argued that intentionally the share holding was not kept at 51 per cent so that the plaintiff could be beyond the pale of judicial review. It was argued that the processes by which the plaintiff engaged in its functions, had a vital impact on the consumers and the prices they would ultimately have to pay for the products imported. Therefore, there was a greater countervailing public interest in disclosure of the information regarding the plaintiff s business and functions. If injuncted, the publication, which has a legitimate right to scrutinize the plaintiff, (to assess its effectiveness), and disseminate its views to the public, would be deprived of its valuable rights, to do so. That would be subversive of the media s right to free speech. 56. In the previous section dealing with the right of an individual or a Corporation to maintain a civil action for breach of confidentiality, this Court had discerned the trend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich stated that media freedom to criticize and air views about public and local bodies is of great importance: "...of the highest public importance that a democratically elected Governmental body, or indeed any Governmental body, should be open to uninhibited public criticism. The threat of a civil action for defamation must inevitably have an inhibiting effect on freedom of speech..." And that, "quite often the facts which would justify the publication are known to be true, but admissible evidence capable of proving those facts is not available...". Because the result may be damaging self-censorship by the media to the impoverishment of political discourse - libel s so-called chilling effect - was deemed contrary to the public interest to continue to allow Government to sue in defamation. Nonetheless, defamation is now unavailable to such agencies, though they are free to sue for malicious falsehood. It was also held that given that plaintiffs must prove falsity, malice, and loss, actions in malicious falsehood are perhaps less likely to chill political speech. In Goldsmith v. Bhoyrul [1998] 2 WLR 435, a political party, allegedly libelled while campaigning for off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a step to a complete system of censorship. ... The preliminary freedom, by virtue of the very reason for its existence, does not depend, as this Court has said, on proof of truth. ( Patterson v. Colorado 205 U.S. 454, 462)". The Court in Near s case ( supra ) realized the possibility of "prior restraint" injunctions, in exceptional cases, like national security, etc. It held : "...the protection even as to previous restraint is not absolutely unlimited. But the limitation has been recognized only in exceptional cases. When a nation is at war many things that might be said in time of peace are such a hindrance to its effort that their utterance will not be endured so long as men fight and that no Court could regard them as protected by any constitutional right. ( Schenck v. United States, 249 U.S. 47, 52, 39 S. Ct. 247, 249). No one would question but that a Government might prevent actual obstruction to its recruiting service or the publication of the sailing dates of transports or the number and location of troops. On similar grounds, the primary requirements of decency may be enforced against obscene publications. The security of the community life may be protected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e held that such an action was maintainable but on appeal the Court of Appeal held to the contrary. When the matter reached the House of Lords, it affirmed the decision of the Court of Appeal but on a different ground. Lord Keith delivered the judgment agreed to by all other learned Law Lords. In his opinion, Lord Keith recalled that in Attorney General v. Guardian Newspapers Ltd. (No. 2) [(1990) 1 AC 109 : (1988) 3 All ER 545 : (1988) 3 WLR 776, HL] popularly known as "Spycatcher case", the House of Lords had opined that "there are rights available to private citizens which institutions of.....Government are not in a position to exercise unless they can show that it is in the public interest to do so". It was also held therein that not only was there no public interest in allowing governmental institutions to sue for libel, it was "contrary to the public interest because to admit such actions would place an undesirable fetter on freedom of speech" and further that action for defamation or threat of such action "inevitably have an inhibiting effect on freedom of speech". The learned Law Lord referred to the decision of the United States Supreme Court in New York v. Sullivan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly quashed. In the course of his speech, Lord Bridge of Harwich observed thus : In a free democratic society it is almost too obvious to need stating that those who hold office in Government and who are responsible for public administration must always be open to criticism. Any attempt to stifle or fetter criticism amounts to political censorship of the most insidious and objectionable kind. At the same time it is no less obvious that the very purpose of criticism levelled at those who have the conduct of public affairs by their political opponents is to undermine public confidence in their stewardship and to persuade the electorate that the opponents would make a better job of it than those presently holding office. In the light of these considerations their Lordships cannot help viewing a statutory provision which criminalises statements likely to undermine public confidence in the conduct of public affairs with the utmost suspicion. " 61. Earlier decisions of the Supreme Court too, had declared the valuable nature of the right to freedom of speech. In Virendra v. State of Punjab AIR 1957 SC 896 the Court held : "It is certainly a serious encroachment on the valuabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substance of decisions to be truly democratic, the process by which they are reached must give as much free play as possible for the transmutation of present minorities into future majorities by the unencumbered operation of freedom of thought, communication, and discussion. From this point of view, reasonably equal access to the political processes and reasonably uninhibited freedom to argue and discuss (limited only by imminently impending danger to the State itself) is in fact an integral part of, although antecedent to, the formal legislative processes of democracy. Hence, to uphold the restrictions on freedom of thought and communication and access to the political processes which may be placed in effect by a temporary majority would be actually to reduce the integrity of the processes of transforming that transient majority into a minority a process essential to the very concept of democracy...." (p. 752) 63. In the light of the above discussion, this Court has to now examine whether the plaintiff s claim for protective injunction of the kind sought in these proceedings can be granted, or whether defendant s claim for right to publish them, in furtherance of their Right t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d organizations has to be now discussed. It is contended here that the plaintiff had entered into confidential agreements with its potential suppliers which mandated secrecy; and disclosure of even seemingly innocuous information relating to negotiations would, it is argued amount to violation of such confidentiality agreements. It is also argued that disclosure of such sensitive information would spell potential doom because rivals and competitors would come to know about these developments that may completely change the nature of negotiations. It is also contended parallely, that the potential suppliers, (in advanced stage of negotiations) have taken unkindly to the press publication, and the plaintiff has been embarrassed, in that such suppliers have expressed these disclosures to be in breach of the confidentiality agreement. The defendant s arguments for these is that the disclosure or news reports regarding identity of one or the other suppliers is hardly confidential or in any event not of such sensitive nature as to entitle the plaintiff to a blanket injunction. It is argued that in such business, there are very few suppliers and buyers - all of them know each other. The de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a contract, could be construed as confidential, much less prejudicial. Similarly, description of six ship owning companies for transportation of LNG itself could not have resulted in breach of confidentiality. Even if the plaintiff were "in active negotiation", one fails to see, how a mention of those six companies without any further particulars could have prejudiced either them or the plaintiff or driven competitors to take precipitate action in scuttling the negotiations. Again, bulk transporters such as shipping companies, who engage in movement of special cargo, such as LNG, are known, in the trade, and are few and far between. The reason given that selection of the ship-owners is a closely guarded secret and forms "extremely confidential" information, which should not have been published till a decision was taken by the Board of Directors, is just an assertion. The plaintiff s contention that till formal approval of the Board was given, there was possibility of exclusion of some ship-owners and inclusion of other ship-owners leading to embarrassment, in the opinion of the Court, does not amount to overriding concern, or a compelling necessity, as to bar informing the public, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that the information could not have been disclosed at all even if it were accurate till it were made known in the public domain. The plaintiff contends that this news and information was also price-sensitive information. The defendants argue that the issuance of foreign currency convertible bonds was covered in three major business newspapers on 4-5-2006 which clearly disclosed that they were singled out and not bigger organizations. It is also asserted by its very nature, i.e. issuance of foreign currency convertible bonds, is a topic worthy of reporting as it is commercial news. 71. In the opinion of the Court, the plaintiff has been unable to substantiate how the news that foreign exchange bonds were under contemplation and that the presentation by the plaintiff to five merchant bankers is price-sensitive. The plaintiff does not anywhere deny that the Kochi Terminal was under contemplation - it was even known. The two news items of 3-5-2006 and 5-5-2006 spoke about a proposal and speculated about the possible terms of the debentures. No attempt has been made at all to say how such news would prejudice the plaintiff in any ongoing negotiation or commercially jeopardize i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s". Even more poignantly, one of the principal architects of the American Constitution, James Madison, (1751-1836) wisely stated that : "Nothing could be more irrational than to give the people power, and to withhold from them information without which power is abused. A people who mean to be their own Governors must arm themselves with power which knowledge gives. A popular Government without popular information or the means of acquiring it is but a prologue to a farce or a tragedy, or perhaps both." 74. Even though, on occasions, the press may be seen and may even be overstepping its limits, it functions as the eyes and ears for the people, throwing light into the unlit and unseen crabbed corners, of decisions and public policies which greatly want in public gaze, for the vibrancy as well as accountability of public institutions. Freedom of the press is not a privilege granted to the few controlling the press, or press institutions; it is "a right granted to the people for their protection against the vicissitudes of Government and all other sources of power and influence. ... The newsman is but the surrogate for the people in a never-ending search to uncover the truth." (S ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
