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TMI Blog2024 (3) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 1 & 2 of the Code of Civil Procedure was granted, resultantly directing appellants herein to take down from their website an Article dated 21.02.2024 within one week of the receipt of the impugned order. Factual Matrix 2. The appellants' contend that appellant nos. 1 & 2 are companies incorporated under the Companies Act, 1956 and operate and function as a media publication under the name of "Bloomberg". The appellant company enjoys an untarnished and unblemished reputation and goodwill in the eyes of public at large owing to their high standards of ethics, integrity and diligence in reporting. The appellant no. 3 is the Editor, South Asia and Middle East, of the appellant no. 1 company and the appellants' no. 4 & 5 are journalists of the appellant no. 1 company. The respondent is a company incorporated under the Companies Act and is engaged inter alia in the business of media and entertainment. 3. Insofar as the relevant facts pertaining to the present appeal are concerned, on 21.02.2024, an Article titled as "India Regulator Uncovers $241 Million Accounting Issue at Zee" was published on the website of the appellants' no. 1 & 2. It is contended by appellants that Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Defendant Nos. 1 to 5 to publish a written unconditional apology on their website as this Hon'ble Court may deem fit and proper;" 5. Along with the suit, the respondent also preferred an application under Order XXXIX Rule 1 & 2 of the Code of Civil Procedure, and on the first day of hearing of suit, respondent pressed for ex-parte ad-interim injunction against the appellants, praying for the following reliefs: "I. Pass an ex-parte ad-interim injunction restraining the Defendants and / or their associates, affiliates, servants, agents, directors, partners, employees, representatives, and all other persons acting for and on their behalf from uploading / distributing and / or circulating the Defamatory Article [as defined in the Suit] in any manner whatsoever; and II. Pass an ex-parte ad-interim injunction restraining the Defendants from making any further unverified, unsubstantiated, and defamatory statements concerning the Plaintiff or repeating and republishing the Defamatory Article [as defined in the Suit]; III. Pass an ex-parte ad-interim injunction directing the Defendant Nos. 1-2 to remove the Defamatory Article [as defined in the Suit] authored by the Defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her observed that: "9. In my view, the plaintiff has made out a prima facie case for passing ad interim ex-parte orders of injunction, balance of convenience is also in favor of plaintiff and against the defendant and irreparable loss and injury may be caused to the plaintiff, if the injunction as prayed for is not granted. In view thereof, defendant no. 1 and defendant no. 2 are directed to take down the article dated 21.02.2024 (page 84 to 86 of the plaintiff 's document) from online platform within one week of receipt of this order. The defendants are further restrained from posting, circulating or publishing the aforesaid article in respect of the plaintiff on any online or offline platform till the next date of hearing. 10. Compliance of Order 39 Rule 3 of CPC be made within 48 hours." 8. Apart from the aforesaid directions, the learned ADJ also issued summons on the suit and notice on the injunction application by all modes, dasti as well, on filing of PF/Speed Post/AD etc., returnable for 26.03.2024. 9. As would be manifest from a reading of the aforesaid findings, the learned ADJ had essentially found the "Triple Test" which is necessary for grant of 'injunctions' in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contents are a matter of fact and not opinion. Further, it is stated that the said Article cannot be taken down as the entity that controls the uploading of the Articles is based in New York and is not a party to the present suit. 14. The appellants at the outset contend that they have approached this Court under the provisions of Order XLIII Rule 1, as the learned ADJ has passed cryptic order without assigning any reason for forming the basis of a prima-facie case, however, it has merely reproduced the submissions of respondent while affirming its power to pass an ex-parte ad-interim injunction. Judicial discipline demands that an ex-parte order of the given nature must be accompanied by justifiable reasons. The Learned ADJ has not recorded his reason(s), let alone satisfaction, warranting the passing of an ex-parte restraint. Reliance is placed on the judgment of "B.L. And Co. And Others vs. Pfizer Products Incl" (2001) SCC OnLine Del 637 and "Shyam Sel & Power Limited & Anr. vs. Shyam Steel Industries Limited" 2023 (1) SCC 634. 15. Moreso, the impugned order does not contain any judicial thought as to how the Article is false and / or negligent and / or lowers the reputation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Article in question is not only ex-facie defamatory but also suffers from inherent contradictions. The headline of the said Article is deceptive which in no manner is in consonance with the contents mentioned in the body of the Article. The headline is an eyecatcher and the Article is against the spirit of journalistic conduct. SEBI has not released any so called finding, which bear any connection to the purported $ 241 million diversion of funds. The Article has not only implicated the respondents as being guilty of the diversion of illegal funds but has also taken the liberty to fix the quantum of such a fictitious amount. It was submitted that a malicious story has been cooked to intentionally tarnish the reputation & public image of the respondent and there is 15% drop in the share price of the respondent. 19. Further, the law in relation to the scope and nature of appeals as well as the limitations of the powers of the appellate court to substitute their own discretion in an appeal preferred against an interlocutory order is well settled. Strong reliance is placed on the case of "Wander Ltd & Anr vs Antox India Pvt. Ltd." 1990 Supp SCC 727 and it was submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in "Jindal Steel & Power Ltd. & Anr. Vs. Arun Kumar Jagatramka & Ors", the order dated 08.04.2019 in "Super Cassettes Private Limited Vs Felix Arvid Ulf Kjellberg & Ors", the order dated 27.08.2015 in "Tata Sky Ltd Vs Youtube LLC & Ors" and "Pepsico India Holdings Pvt. Ltd. Vs Facebook, Inc. and Others" 2018 SCC OnLine Del 13455. Analysis and conclusion 23. Before proceedings to the rival contentions advanced at the Bar, reference is made to Order XLIII Rule 1(r) of the Code of Civil Procedure which reads as under: "Order 43 Rule 1, An appeal shall lie from the following orders under the provisions of Section 104 namely; (r) An order under Rule 1, Rule 2, Rule 2A, Rule 4 or Rule 10 of Order 39. 24. It is also necessary to mention Order XXXIX Rule 1 Code of Civil Procedure, which provides: 1. Where in any suit it is proved by affidavit or otherwise - (a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree or (b) that the defendant threatens, or intends to remove or dispose of his property with a view to defrauding his creditors, (c) that the defendant threatens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nagerial position in any listed companies or their subsidiaries. However, the appellants no. 3 to 5 have intentionally omitted to mention that respondent / plaintiff is not even a noticee to the SEBI order. Further the KMP, an individual promoter appealed the SEBI order before the Securities Appellate Tribunal (hereinafter referred to as "SAT") where interim relief was granted to KMP on 30.10.2023. Further, SEBI has not issued any final order in the aforementioned matter yet. It is contended that the Article intentionally and insubstantially seeks to link the SEBI order with the respondent with sole intention of tarnishing the reputation and public image and create a false narrative about the respondent. 28. The learned ADJ upon noticing the submissions addressed on behalf of the respondent passed an ex-parte ad-interim injunction on 01.03.2024. 29. The position of law is well settled with respect to the scope of interference by an appellate Court in an interlocutory injunction granted by the Court of first instance while exercising its discretion and substituting its own discretion. The Hon'ble Supreme Court in the case of "Wander Ltd & Anr vs Antox India Pvt. Ltd." (supra) held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot seem to defer to this principle. 30. It is further to be noted that in the case of Babu Ram Dharam Prakash vs Izuk Chemical Works (Supra), the Apex Court referred to the judgment in Ramdev Food Products Pvt. Ltd. v. Arvindbhai Rambhai Patel, (2006) 8 SCC 726 and emphasised on the principles to be followed by the Appellate Court while considering the injunction order passed by Court in the first instance. The observations are as follows: "5. As has been mentioned above, the Appeal is against an interlocutory Order granting the Prayers contained in an Application under Order XXXIX Rules 1 and 2 of the CPC. The approach which must be adhered to by the Appellate Court in such matters is perspicuously enunciated in the decision of the Supreme Court in Ramdev Food Products Pvt. Ltd. v. Arvindbhai Rambhai Patel, (2006) 8 SCC 726 : AIR 2006 SC 3304, paragraphs 128 and 129 of which are topical:- 128. The grant of an interlocutory injunction is in exercise of discretionary power and hence, the appellate courts will usually not interfere with it. However, appellate courts will substitute their discretion if they find that discretion has been exercised arbitrarily, capriciously, perver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect or influence the passing of the final judgment of the case. However, based on Ramdev, even if we were of a different opinion, we would be loath to interfere in this Appeal since the view taken by the learned Single Judge is a plausible one and is not perverse or illegal." 31. The appellants being aggrieved with the ex-parte ad-interim injunction have submitted that the learned ADJ accepted the averments of the respondent as gospel truth without affording the appellants an opportunity to rebut the same and in doing so, the appellants have been found guilty and thence, the learned ADJ adjudicated the subject matter at the very threshold. In view of the above, it was submitted that the impugned order being without merit, be set aside. 32. Thus, it is relevant to note of the contents of impugned order. The learned ADJ, after considering the judgments in Dr. Abhishek Manu Singhvi v/s Sarosh Zaiwalla & ors (Supra), Chandra Kochar (Supra), Swami Ramdev (Supra) observed that an ex-parte ad-interim injunction was passed considering that contents of the material in question was per se defamatory. The learned ADJ has also considered the contentions of the respondent and perused the ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order, the learned ADJ has clearly taken into consideration relevant factors for the purpose of grant of ex-parte ad-interim injunction. Further, there is no final adjudication on the subject matter of the suit which is at the very threshold. The learned ADJ is yet to hear the Appellants and dispose of the interim application. 37. Insofar as the other submissions of the Appellants on their defence and the documents placed with their written submissions are concerned, these issues were not placed before the learned ADJ. The appellants have rushed to this Court without exploring the option of filing their reply to the application under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure and/ or application under Order XXXIX Rule 4 of the Code of Civil Procedure for modification of the ex-parte ad-interim order. 38. In this respect, it is pertinent to refer to the case of Venkatasubbiah Naidu vs S Chellapan (Supra), which is as follows: 2. When a plaintiff rushed to the civil court for an ex-parte interim order of injunction against some of the defendants and obtained it, those defendants rushed to the High Court to get that order quashed. Both parties succeeded in their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he party affected by the order should necessarily be the sole sufferer. 21. It is the acknowledged position of law that no party can be forced to suffer for the inaction of the court or its omissions to act according to the procedure established by law. Under the normal circumstances the aggrieved party can prefer an appeal only against an order passed under Rules 1, 2, 2-A, 4 or 10 of Order 39 of the Code in terms of Order 43 Rule 1 of the Code. He cannot approach the appellate or revisional court during the pendency of the application for grant or vacation of temporary injunction. In such circumstances the party which does not get justice due to the inaction of the court in following the mandate of law must have a remedy. So, we are of the view that in a case where the mandate of Order 39 Rule 3-A of the Code is flouted, the aggrieved party, shall be entitled to the right of appeal notwithstanding the pendency of the application for grant or vacation of a temporary injunction, against the order remaining in force. In such appeal, if preferred, the appellate court shall be obliged to entertain the appeal and further to take note of the omission of the subordinate court in comply ..... 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