GLENMARK PHARMACEUTICALS LIMITED THR ITS REPRESENTATIVE MR DINKAR NIGAMversusMAHALAKSHMI ENTERPRISES AND OTHERS

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                                             IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                                    CIVIL APPELLATE JURISDICTION

                                                 APPEAL ROM ORDER NO.930 OF 2026
                                                              WITH
                                            INTERIM APPLICATION (STAMP) NO.26392 OF 2026

                               Glenmark Pharmaceuticals Limited, B/2,
                               Mahalaxmi Chambers, 22, Bhulabhai Desai Road,
                               Mumbai-400026 through Authorized Representative
                               MrDinkar Nigam                                                 Appellant
                                             versus
                               1. Mahalakshmi Enterprises,
                               Survey No.351/1, Ground Floor, Corporation Door No.2
                               By-pass road, Avaniyapuram, Madurai-625012.
                               2. S.Arun Muhukumar,
                               partner of Mahalakshmi Enterprises,
                               2A, Bharat Villa, Jawahar 1st Street,
                               SS Colony, Madurai-625016.
                               3. S.Sairam, partner of Mahalakshmi Enterprises,
                               B4, Block-II, Leo Taurus,
                               33, Panchayat Main Road, Perungudi,
                               Chenni-600096.
                               4. S.Lakshmi, partner of Mahalakshmi Enterprises,
                               3/1, Navel Nagar, SS Colony, 3rd street,
                               Madurai-625010.                                                Respondents
                                                                     _______
                               Mr.Janak Dwarkadas, Senior Advocate, with Mr.Pradeep Sancheti, Senior
                               Advocate, with Mr.Vivek Kantawala, Mr.Ajit N.Makhijani, Ms.Namrata Vinod and
                               Mr.Rajat Jain i/by MM Legal Associates for Appellant.

                               Mr.Manoj Shirsat with Mr.Aayush Modi, Mr.Ashray Dave, Ms.Hritika Shroff,
                               Mr.Siddhant Trivedi for Respondent no.1.

                               Ms.Aayu Saxena for Respondent nos.2 to 4.
                                                                 _______

                                                          CORAM        :      AARTI SATHE, J.

                                                          DATE         :      11th September 2026

                               P.C.

MANISH
            Digitally signed
            by MANISH
                               1.           This Appeal from Order has been filed under Order XLIII Rule 1(r)
            SURESHRAO
SURESHRAO   THATTE
THATTE      Date: 2026.09.21
            10:34:17 +0530
                               read with Section 104 of the Code of Civil Procedure, 1908 (CPC) taking


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exception to the order dated 4th September 2026 passed by the learned Judge,

Bombay City Civil Court (hereinafter referred to as the “Trial Court”) in Notice of

Motion No. 2480 of 2026 in Suit No. 1090 of 2026 (hereinafter referred to as the

“impugned order”), inter-alia rejecting the aforesaid Notice of Motion filed by the

Appellants and rejecting the interim reliefs as sought by the Appellants in the said

Notice of Motion.

2.           Briefly, the facts are as follows:-

             i.     The Appellant is a limited company incorporated under the

provisions of the Companies Act 1956, engaged in the business of research and

development and in the manufacturing, marketing, sale and distribution of a wide

range of pharmaceutical formulations, medical preparations, nutraceuticals, and

cosmetic products (hereinafter referred to as the “said products”) in India and other

markets throughout the world. Respondent No. 1 is a partnership firm engaged in

the business of distribution and sale of pharmaceutical formulations, medicinal

preparations, nutraceuticals, and cosmetic products, and Respondent Nos. 2, 3,

and 4 are partners of Respondent No.1-Firm. It is the Appellant’s contention that

Respondent No.1-Firm was carrying on business with the Appellant for the past

15 years.

             ii.    On 27th December 2021, the Appellant and the Respondents

entered into a Distribution Agreement (DA) of even date, appointing Respondent

No.1-Firm as its distributor. By way of the aforesaid DA entered into between

both the parties, the Respondents were to distribute the products of the Appellant

in the territory as more particularly set out in the said DA.




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             iii.     On 8th November 2023, a sanction letter was issued in favour of the

Appellant of an amount of Rs. 200,00,00,000/- by the Union Bank of India

(hereinafter referred to as “UBI”). It was a channel finance-dealer finance facility.

On 4th              July 2024, the Appellant sent a recommendation letter to UBI,

recommending to grant to the Respondents a sanction limit of Rs. 15,00,00,000/-.

On 20th July 2024, net worth certificate was submitted by the Respondents.

Pursuant to the aforesaid recommendation, a sanction letter dated 24 th September

2024 was issued by UBI, granting the Respondents a credit limit of Rs.

15,00,00,000/-. It is the Respondents’ contention that the Appellant’s finance

team allegedly instructed UBI to project artificial growth in financial figures. It is

further the Respondents’ contention that the sanction loan funds were credited

directly into the Appellant’s Bank of India account instead of the Respondents’

account. It is therefore their contention that over the next three months, funds

were transferred to the Appellant’s account on its instructions rather than the UBI

loan accounts.

             iv.      It is the Respondents’ contention that, on 14th November 2024, the

Appellant emailed its distributors, including the Respondents, acknowledging that

the October 2024 invoices had been omitted inadvertently and instructing them

to insert the same into backdated purchase orders.

             v.       Thereafter, on 27th November 2024, due to irregularities in initial

repayment by the Respondents and the failure of the Respondents to make

subsequent payments to UBI, the Appellant issued a demand notice to the

Respondents, calling upon them to pay the outstanding amount and also




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suspending business with the Respondents and issuing a stock retrieval letter,

demanding the outstanding commercial dues.

             vi.     The Respondents on 7th December 2024 responded to the demand

notice issued by the Appellant through their authorised representative. It is the

Appellant’s contention that the Respondents in the said letter admitted that there

were outstanding dues payable to the Appellant, and further sought time to repay

the same.

             vii.    On 9th December 2024, UBI addressed a notice of even date to the

Appellant that the failure of the Respondents to repay their outstanding dues

would affect the creditworthiness, reputation, and the CIBIL score of the

Appellant. UBI also informed the Appellant that it would withdraw the Channel

Financing of Rs. 200,00,00,000/-.

             viii.   On 7th February 2025, on account of refusal of the Respondents for

inspection and audit of their records, the Appellant filed S.C. Suit No. 495 of

2025 before the Trial Court, seeking audit of the Respondents’ records, and

obtained an ex parte, ad-interim order under Order XXXIX Rules 1 and 2 of the

CPC against the Respondents.

             ix.     On 11th February 2025, the Trial Court passed an order of even date

directing audit of Respondents’ accounts and granting leave under Order II Rule 2

of the CPC.

             x.      Between 17th February 2025 and 5th March 2025, the Trial Court

ordered audit was conducted by Aneja Associates CA at Madurai and Chennai. In

the said audit, the parties contended that it was clear that the Respondents had




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paid Rs. 18,51,00,000/- to the Appellant, and further that the Appellant paid Rs.

15,18,50,297/- to UBI.

             xi.     Despite the credit facility sanctioned in favour of the Respondents

being structured as a “without recourse” facility, on 21 st February 2025 the

Appellant was compelled to discharge the outstanding liabilities of the

Respondents to UBI in order to safeguard its commercial standing and for

continuation of its financing arrangements. Thereafter, on 21 st May 2025, the

Appellant lodged a police complaint before the Andheri Police Station against the

Respondents, but the same was subsequently withdrawn due to the concerned

disputed amount being more than Rs. 10,00,00,000/-.

             xii.    On 9th May 2025 the Respondents filed their written statement in

Suit No. 495 of 2025, detailing financial manipulation and channel financing

diversion, and also filed Notice of Motion No. 4675 of 2025. The Trial Court

allowed Notice of Motion No. 4675 of 2025 and allowed the Appellant to

unconditionally withdraw Suit No. 495 of 2025, with liberty to approach a Court

of the competent pecuniary jurisdiction.

             xiii.   Between 1st December 2025 to 26th March 2026, pre-institution

mediation was initiated by the Appellant under the Commercial Courts Act, 2015,

wherein Respondent No.1-Firm declined participation for want of ledger

reconciliation.

             xiv.    Thereafter, on 6th January 2026, the Respondents addressed personal

WhatsApp messages to various personnel of the Senior Management of the

Appellant, attaching a file titled “Complaint under SEBI” (draft complaint to




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SEBI). It is the Appellant’s contention that at the end of these messages there was

a question that whether the Appellant wanted the Respondents to circulate the

aforesaid complaints.

             xv.     The Appellant thereafter addressed a legal notice dated 7 th January

2026 to the Respondents, calling upon them to cease and desist from circulating

the draft complaint to the Securities and Exchange Board of India (SEBI) and

making unsubstantiated allegations.

             xvi.    On 12th January 2026, the Respondents filed a complaint against the

Appellant before SEBI on its SCORES portal, reiterating the allegations levelled

against the Appellant in the draft complaint to SEBI.

             xvii.   On 16th January 2026, in response to the complaint before SEBI

dated 12th January 2026, the Appellant addressed a letter of even date to SEBI

contending that SEBI under the SCORES portal did not have the jurisdiction to

adjudicate upon the claims made in the complaint dated 12 th January 2026, as

there was suppression of information by the Respondents.

             xviii. On 1st February 2026, the Respondents sent a letter of even date to

the Appellant in response to the legal notice dated 7 th January 2026, along with an

Independent Forensic Analysis Report issued by Mr. P.S. Sivasankaran (Ex-IRS,

Senior Partner, Guardian Legal), confirming irregular transactions and diversion of

channel finance funds by the Appellant.

             xix.    Between 10th April 2026 and 21st April 2026, the Respondents

submitted detailed complaints to various statutory regulators, including the

Competition Commission of India (CCI) on 10 th April 2026, the Ministry of




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Corporate Affairs (MCA) on 15th April 2026, the Income Tax Department, and

the SEBI Market Intelligence Portal. The Respondents had further, on 18 th April

2026, emailed the statutory auditors of the Appellant for initiating action against

the Appellant.

             xx.     On 23rd April 2026, the Appellant instituted S.C. Suit No. 1090 of

2026 before the Trial Court, alleging defamation and commercial harm and

preferred Notice of Motion No. 2480 of 2026 therein for urgent injunction.

             xxi.    On 29th April 2026 the Trial Court passed an ex-parte ad-interim

order restraining the Respondents from filing “false complaints” and from

“defaming, harassing, and threatening” the Appellant, till they appeared before the

Trial Court and filed their reply.

             xxii.   The Respondents thereafter filed a detailed affidavit dated 15th June

2026 before the Trial Court in Notice of Motion No. 2480 of 2026, contending

qualified privilege and truth for bona fide complaints to statutory authorities, and

sought dismissal of Notice of Motion No. 2480 of 2026 and vacation of the ex

parte ad-interim order dated 29th April 2026.

             xxiii. The Trial Court by way of the impugned order dated 4 th September

2026 dismissed Notice of Motion No. 2480 of 2026, refusing to grant an

injunction to the Appellant and vacating the ex parte ad-interim order dated 29 th

April 2026.

             xxiv. It is being aggrieved by this impugned order that the Appellants

have filed the present Appeal from Order and Interim Application, seeking stay of

the impugned order dated 4th September 2026 and restoration of the ex parte ad-




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interim order dated 29th April 2026.

3.           Learned Senior counsel Mr. Janak Dwarkadas, along with Senior Counsel

Mr. Pradeep Sancheti, Mr. Vivek Kantawala, Mr. Ajit Makhijani, Ms. Namrata

Vinod, and Mr. Rajat Jain instructed by MM Legal Associates appeared on behalf

of the Appellant. Mr. Manoj Shirsat, Mr. Ayush Modi, Mr. Ashray Dave, Ms.

Hritika Shroff, and Mr. Siddhant Trivedi appeared on behalf of the Respondent

No. 1 and Ms. Aayu Saxena appeared on behalf of Respondents Nos. 2, 3, and 4.

4.           I have heard learned counsel for the parties, and I have perused the

impugned order and the proceedings with their assistance. I therefore proceed to

decide the present Appeal from Order.

5.           The primary contention of learned Senior Counsel Mr. Janak Dwarkadas

on behalf of the Appellant is that the impugned order is bad in law and has been

passed by the Trial Court without any application of mind and without taking

cognizance of the facts, pleadings, and the legal position regarding the law on

defamation. It is further his vehement submission that in the facts of the present

case, a contractual dispute which had arisen between the Appellant and the

Respondents has been used to primarily harass and defame the Appellant by

resorting to tactics which almost border on blackmail. He has further submitted

that the Trial Court failed to appreciate that the refusal of interim protection

would expose the Appellant to continuing injury, and further that the complaints

which were made to various regulatory bodies have caused irreparable injury to

the Appellant, considering that the Appellant is a listed company. The fact that the

Appellant is a listed company and that baseless complaints have been made to the




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regulatory authorities, including emails to the ex-auditors of the Appellant and

also to Senior Management of the Appellant, the same has definitely harmed the

reputation and business, insofar as, the Appellant is concerned. He has further

submitted that the repeated publication and dissemination of false information to

regulators, investors, bankers, and auditors may cause irreparable and reputational

harm, which cannot be suffered by a listed company like the Appellant.

6.           He further submitted that the Trial Court failed to appreciate that the

interim relief which was sought by the Appellant did not seek to interfere with the

complaints already filed by the Respondents with the adjudicatory/regulatory

authorities, but the real apprehension of the Appellant was that the non-grant of

injunction would give a handle to the Respondents to make further filings or

disseminate further false, frivolous, malicious, and defamatory allegations on the

same subject-matter before multiple authorities, forums, or third parties. He also

submitted that the Trial Court failed to appreciate that even on a prima facie

examination of the complaints which are sought to be made, there was no real

substance insofar as the allegations as made out by the Respondents were

concerned. He submitted that the only reason why the Respondents are seeking to

bring about these allegations is because of the fact that they are unable to fulfil and

honour their contractual obligations, and in fact, there are considerable amounts

of money which are due and payable by the Respondents to the Appellant.

7.           Learned counsel on behalf of the Appellant has further vehemently

submitted that the Respondents by no stretch of imagination can be

whistleblowers in the facts of the present case. As whistleblowers, there was




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nothing that the Respondents were doing in furtherance of bona fide public

interest, and in fact, this was only a tactic which was being employed by the

Respondents to settle scores with the Appellant on account of a contractual

relationship gone sour. He therefore submitted that the Respondents’ belated

claim of being whistleblowers cannot by itself legitimize their otherwise actionable

conduct, particularly when the Respondents raised no grievances during more

than 15 years of their commercial relationship with the Appellant and continued

to participate in and benefit from the various financial arrangements, which they

have subsequently sought to challenge. He submitted that the decisions which

were made to canvass the proposition, that to be considered a whistleblower, an

action in the bona fide public interest has to be established, have been completely

ignored by the Trial Court in the present case.

8.           He further submitted that the Respondents are in fact blowing hot and cold

at the same time inasmuch as, when the channel credit financing was made

available to them on the recommendation of the Appellant, the Respondents did

not cry foul and in fact availed of that credit facility. However, it was only when

the dispute arose between the Appellant and the Respondents regarding monetary

and commercial matters and the Appellant asserted its legitimate claims against the

Respondents that the Respondents as a counterblast sought to disguise themselves

as bona fide whistleblowers and thereafter raised the various allegations before

statutory and regulatory authorities.

9.           Learned Senior Counsel on behalf of the Appellant also submitted that the

Trial Court had failed to appreciate the true and correct ratio of the High Court of




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Telangana in the case of NSL Sugars Limited v. Bala Srinivasa Rao Namburi 1,

wherein the grant of injunction was not predicated upon the Respondent therein

being a former CFO or upon internal proceedings having been initiated against

him, and where those circumstances which were merely relevant to assessing

motive and bona fides. The decision recognized the right of a company to seek

protection against false, frivolous, defamatory and derogatory allegations where

the circumstances disclosed a real apprehension of reputation. The injunction was

granted therein was qualified so as to not prevent the Respondent from pursuing

legitimate criminal or statutory remedies or furnishing evidence before competent

authorities and thereby clearly distinguishing lawful recourse from false and

defamatory allegations. He submitted that the Trial Court by not applying the

decision of NSL Sugars Limited (supra) by only relying on factual differences

insofar as, that primarily in the case of NSL Sugars Limited (supra) dealt with an

employer-employee relationship, and the present one being a contractual dispute,

has completely erred in ignoring the aforesaid decision. He has also submitted that

Special Leave to Appeal (C) Nos. 16407-16408 of 2021 preferred against the

aforesaid decision has been rejected by the Supreme Court, thereby affirming that

a company can seek injunction against false and frivolous defamatory derogatory

allegations where circumstances disclose a real apprehension of repetition of the

same. In the facts of the present case, it is submitted by learned Senior Counsel on

behalf of the Appellant that considering that the Respondents have gone hammer

and tongs about the fact that there has been fraud, tax evasion, and other financial


1 CMA No. 141 of 2021



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irregularities which have allegedly been made by the Appellant, it is a real

apprehension on the part of the Appellant which drove them to seek the

injunction against the Respondents, which the Trial Court has erroneously

refused.

10.          He further submitted that the Trial Court failed also to take into

consideration that the Respondents themselves had admitted that they were to

make payment of certain dues of approximately of Rs. 15,00,00,000/- to the

Appellant. He submitted that the Respondent’s threatening WhatsApp messages

to the Appellant and successive complaints before SEBI, RBI, CCI and MCA

raising the same allegations arising from the same cause of action, and the

complaints and communication addressed to the Appellant’s past and present

auditors and bankers cumulatively demonstrated a continuing course of pressure

and harassment which ceased only upon the Appellant obtaining interim

injunctive relief. He further submitted that the Appellant, after considering these

multiple sequences, had approached the Trial Court and established the

Respondents’ malafide motives, and likelihood of repetition and threatened injury.

The Trial Court, without considering all these circumstances, and the overall

probabilities emerging from the record overlooked the distinction between a bona

fide exercise of liberty and a continuing course of conduct intended to pressurize

and prejudice the Appellant.

11.          Learned Senior Counsel on behalf of the Appellant also sought to place

reliance on the decision of this Court in Khanjan Jagdish Kumar Thakker vs.




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Vahid Ali Khan and Ors2 to contend that the law of granting injunction in

defamation proceedings differs in India as opposed to the United Kingdom. He

submitted that though justification by truth is a well-accepted defense and is an

answer which is available to an action against defamation, and also is a defense to

an action of libel/slander, it is important that the person making the defamatory

statements makes clear the particulars of justification and is also in a position to

justify the veracity of the allegations sought to be leveled against the person

defamed. He submitted that in the case of Khanjan Jagdishkumar Thakker (supra)

this Court has categorically taken a view that it is a trite position of law in India

that a mere plea of justification would not be sufficient for denial of interim relief,

and the Defendant therein apart from it will have to show that the statements were

made bona fide and in public interest, and that reasonable precaution was taken to

ascertain the truth, and that the statements were based on sufficient material which

could be tested for its veracity. In such circumstances, in India even at the

interlocutory stage, the Courts are entitled to look at the material which is alleged

to be defamatory in nature and grant injunctive relief. However, in the United

Kingdom this position is at variance with the Indian law, inasmuch as where once

a Defendant in a suit for defamation raises a plea for justification at the interim

stage, the Plaintiff in not entitled for an interlocutory injunction. It was therefore

his submission that the Trial Court has erred in not applying the aforesaid

principles on law of defamation in India in the facts of the present case and has

erroneously refused injunction against the Respondents. It was further his


2 2024 SCC OnLine Bom 1079



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submission that the Trial Court did not examine the contents of the

statements/complaints made to the regulatory authorities and also to the ex-

employees, bankers and statutory auditors of the Appellant before rejecting the

injunctive relief as sought for by the Appellant. It was therefore his vehement

submission that the Appellant had suffered considerable reputational harm which

affected the business of the Appellant, which is a listed company, and there was

real and perceived apprehension that the Respondents would disseminate false and

accusatory information against the Appellant, which the Trial Court had

completely failed to appreciate and passed the impugned order.

12.               Per contra, learned counsel on behalf of Respondent No.1-Firm submitted

that the impugned order was a well-reasoned order and the Trial Court had not

erred in refusing the grant of injunction against the Respondents. It was his

primary submission that the Appellant was trying to mislead this Court by

portraying the present dispute as a simple commercial dispute, and then went on

to make submissions that the Respondents were defaming the Appellant without

admitting that there were actual serious financial frauds and coercive practices

which the Appellant was indulging in. It was his submission that the Appellant

was indulging in the financial misreporting and corporate misconduct, which was

very serious in nature, and the same was being sought to be flagged by the

Respondents to the relevant regulatory authorities. The broad nature of

wrongdoings perpetrated by the Appellant as alleged by Respondents is as

follows–

             i.         Systematic channel stuffing of stock up to nine times the




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             Respondents' average sales volume;
             ii.     Coercive collection of quarterly advance payments escalating from
             Rs. 1 crore in 2018 to Rs. 7 crores in 2024, generating approximately Rs.
             450 crores per quarter from all distributors combined and misclassified as
             regular sales collections;
             iii.    Misclassification of interest reimbursements under the head "Special
             Distribution Charges" with incorrect HSN codes and wrongful 18% Goods
             and Services Tax (GST) without proper TDS;
             iv.       Circular "Bill-to/Ship-to" loops artificially resetting the 180-day
             GST payment cycle under Section 16(2) of the Central Goods and Services
             Tax Act, 2017;
             v.      Illegal inflation of sales to manipulate the financial records and
             deceive the Investors.
             vi.     Coercive Channel Financing Scheme compelling the Respondents to
             avail Rs. 15 crore facility from UBI;
             vii.    Instructions by senior officials to raise anti-dated and fabricated
             purchase orders; and
             viii.   Unlawful suspension of the Respondents' access to the Appellants'
             proprietary IBIS system on 27th November 2024.


13.            He therefore submitted that on account of these fraudulent financial

practices, misrepresentation of accounts, and coercive channel financing, the

Respondents being the distributors and whistleblowers sought to make the

regulatory authorities aware of the aforesaid irregularities of the Appellant. He

therefore submitted that the communications made to competent regulatory

authorities detailing financial irregularities and corporate misconduct are protected

as qualified privilege in law, and the Appellant cannot seek to restrain the

Respondents by way of the Trial Court’s injunction. He further submitted that the




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complaints made to the statutory authorities and the communications made to the

Appellant’s statutory auditors or even employees/senior management of the

Appellant cannot be termed as defamation, and hence the injunction was rightly

denied by the Trial Court. It was further his submission that all the financial

irregularities and the discrepancies in the account which were flagged by the

Respondents to the statutory authorities were backed by contemporaneous records

including emails from Appellant’s own senior officials, ledger extracts, debtor

confirmations, bank sanction letters, ante-dated purchase order instructions, and a

forensic analysis report prepared by a former Commissioner of Income Tax. He

therefore submitted that there was full credibility in the complaints made by the

Respondents to the statutory authorities, and the same did not amount to

dissemination of information to the public at large, inasmuch as, the Respondents

were aggrieved by the financial malpractices of the Appellant and hence in public

interest, they had bona fide complained of the same to the regulators. He also

sought to place reliance upon the decision of the Delhi High Court in the case of

Rohan Book Co. (P) Ltd. v. Sachin Tyagi 3 to contend that communications made

to lawful authorities in the course of raising grievances ordinarily fall within the

ambit of qualified privilege, unless specific malice was pleaded. The mere fact that

complaints were made to public authorities cannot by itself give rise to a cause of

action for defamation. It was therefore his submission that in the facts of the

present case, no malice was pleaded by the Appellant and considering that the

Respondents had raised lawful grievances to public authorities, the same would


3 2026 SCC OnLine Del 1225



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not amount to defamation.

                                      ANALYSIS AND FINDINGS

14.           I have heard learned counsel on behalf of the parties. I have given my

anxious consideration to the rival submissions, and I am of the view that

considering the present facts of the case it would be relevant to reproduce the

definition of defamation as given in Section 356 of Bharatiya Nyaya Sanction,

2023:

             356. (1) Whoever, by words either spoken or intended to be read, or by signs or by
             visible representations, makes or publishes in any manner, any imputation
             concerning any person intending to harm, or knowing or having reason to believe
             that such imputation will harm, the reputation of such person, is said, except in the
             cases hereinafter excepted, to defame that person.
             Explanation 1.—It may amount to defamation to impute anything to a deceased
             person, if the imputation would harm the reputation of that person if living, and is
             intended to be hurtful to the feelings of his family or other near relatives.
             Explanation 2.—It may amount to defamation to make an imputation concerning a
             company or an association or collection of persons as such.
             Explanation 3.—An imputation in the form of an alternative or expressed ironically,
             may amount to defamation.
             Explanation 4.—No imputation is said to harm a person’s reputation, unless that
             imputation directly or indirectly, in the estimation of others, lowers the moral or
             intellectual character of that person, or lowers the character of that person in respect
             of his caste or of his calling, or lowers the credit of that person, or causes it to be
             believed that the body of that person is in a loathsome state, or in a state generally
             considered as disgraceful.

             Exception 1.—It is not defamation to impute anything which is true concerning any
             person, if it be for the public good that the imputation should be made or published.
             Whether or not it is for the public good is a question of fact.
             Exception 2.—It is not defamation to express in good faith any opinion whatever
             respecting the conduct of a public servant in the discharge of his public functions, or
             respecting his character, so far as his character appears in that conduct, and no
             further.
             Exception 3.—It is not defamation to express in good faith any opinion whatever
             respecting the conduct of any person touching any public question, and respecting
             his character, so far as his character appears in that conduct, and no further.
             Exception 4.––It is not defamation to publish substantially true report of the
             proceedings of a Court, or of the result of any such proceedings.
             Explanation.—A Magistrate or other officer holding an inquiry in open Court
             preliminary to a trial in a Court, is a Court within the meaning of the above section.
             Exception 5.—It is not defamation to express in good faith any opinion whatever
             respecting the merits of any case, civil or criminal, which has been decided by a
             Court, or respecting the conduct of any person as a party, witness or agent, in any
             such case, or respecting the character of such person, as far as his character appears in
             that conduct, and no further.



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             Exception 6.—It is not defamation to express in good faith any opinion respecting
             the merits of any performance which its author has submitted to the judgment of the
             public, or respecting the character of the author so far as his character appears in
             such performance, and no further.
             Explanation.—A performance may be submitted to the judgment of the public
             expressly or by acts on the part of the author which imply such submission to the
             judgment of the public.
             Exception 7.—It is not defamation in a person having over another any authority,
             either conferred by law or arising out of a lawful contract made with that other, to
             pass in good faith any censure on the conduct of that other in matters to which such
             lawful authority relates.
             Exception 8.—It is not defamation to prefer in good faith an accusation against any
             person to any of those who have lawful authority over that person with respect to the
             subject-matter of accusation.
             Exception 9.— It is not defamation to make an imputation on the character of
             another provided that the imputation be made in good faith for the protection of the
             interests of the person making it, or of any other person, or for the public good.
             Exception 10.— It is not defamation to convey a caution, in good faith, to one
             person against another, provided that such caution be intended for the good of the
             person to whom it is conveyed, or of some person in whom that person is interested,
             or for the public good.
             (2) Whoever defames another shall be punished with simple imprisonment for a
             term which may extend to two years, or with fine, or with both, or with community
             service.
             (3) Whoever prints or engraves any matter, knowing or having good reason to
             believe that such matter is defamatory of any person, shall be punished with simple
             imprisonment for a term which may extend to two years, or with fine, or with both.
             (4) Whoever sells or offers for sale any printed or engraved substance containing
             defamatory matter, knowing that it contains such matter, shall be punished with
             simple imprisonment for a term which may extend to two years, or with fine, or with
             both.

15.           It is therefore clear on a plain reading of the aforesaid section that the

manner in which the words are either spoken, or intended to be read, or signs or

visible representations, or publications are in such a manner that they would harm

or knowingly harm a person’s reputation, except in the cases as given in

Exceptions 1 to 9 of the aforesaid section, would amount to defamation.

Explanation 2 to the section specifically specifies that a thing may amount to

defamation if an imputation is concerning a company or an association or

collections of persons. The real intent of the section therefore is that harm should

be caused to a person through defamation, and the said harm should be in such a

nature that it has a direct impact on the reputation of the said company or person.


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The section nowhere contemplates that if a person is aggrieved by certain

irregularities/decisions of a company, the said aggrieved person cannot make a

grievance to the authorities for the purpose of redressal of their grievance and that

such a grievance would harm the reputation of the Company. In the facts of the

present case the irregularities/allegations which the Respondents sought to flag,

and which are reproduced in paragraph no. 12 above, do not to my mind impute

any reputational harm to the Appellant, and are, however, more in the nature of

alleged financial irregularities or tax evasions, which are alleged to be made by the

Appellant. The allegations, though serious in nature, especially with regards to tax

evasion, etc., do not amount to defamation, and hence the Trial Court to my mind

has not erred in not granting injunction to the Appellant against the Respondents.

It is therefore not a case where any reputational harm has been caused to the

Appellant, and further the Appellant has not shown as to how their business has

got affected on account of the allegations that the Respondents have made against

the Appellant. The allegations at best could be construed as arm twisting tactics or

pressurizing tactics used by the Respondents to settle the contractual dispute

between the Appellant and the Respondents. In the facts of the present case, it is

an admitted position that the Appellant and Respondents had a long-standing

commercial relationship which had gone sour, and it is the Appellant’s contention

that the Respondents owed an amount in excess of approximately Rs.

15,00,00,000/- to the Appellant. It is also the Appellant’s contention that it is only

when the Appellant sought to recover this amount from the Respondents that the

Respondents resorted to the tactics of complaining to various statutory authorities.




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However, this to my mind would not still amount to defamation of the Appellant,

and it is well within the rights of the Respondents to raise their grievances with the

statutory authorities. It is further not the case of the Appellant that they have

sought injunction against the Respondents from making complaints to the

regulatory authorities, however, it is the apprehension of the Appellant that the

continuance of these complaints would have an adverse effect on the business of

the Appellant, and which the Appellant seek to injunct. In fact, the Appellant

themselves have has submitted that they do not seek to interfere with or restrain

the complaints filed by the Respondents with the statutory authorities, and the

same could be pursued and adjudicated in accordance with law.

16.          It is in these circumstances that I am of the view that the Trial Court has on

the basis of appreciation of facts and the evidence led before it come to the

conclusion that the injunction could not be granted to the Appellant. I however,

disagree with the view taken by the Trial Court that the Respondents’ legal right to

act as a whistleblower could not be decided at the prima facie stage, inasmuch as,

in the facts of the present case it is crystal clear that the Respondents were not

acting publicly in bona fide interest but were only trying to raise their grievances

with the statutory authorities. The Respondents to my mind are definitely not

whistleblowers, and therefore, this finding of the Trial Court is erroneous and

requires to be set aside. This however does not take away the fact that considering

that the ingredients of defamation have not been satisfied in the present case, the

Trial Court has rightly denied injunction to the Appellant, and to that extent no

fault can be found in the approach of the Trial Court. I am therefore in agreement




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with the submissions as made by learned counsel on behalf of the Respondents

that raising grievances before the statutory authorities and flagging certain

corporate governance issues/financial irregularities would not amount to

defamation warranting an injunction. I am also in agreement with the submission

made on behalf of learned counsel on behalf of the Respondents that in a suit for

defamation, publication is an essential ingredient. The statutory authorities before

which complaints have been lodged are independent quasi-judicial bodies, having

requisite jurisdiction to adjudicate the complaints without the intervention of a

civil court, and the complaints/grievances made by the Respondents to the

aforesaid authorities would be adjudicated by them independently, and the mere

pendency of the complaints could not therefore be construed as defamation. I am

therefore of the view that the reliance placed by learned counsel on behalf of the

Respondents on the decision of the Delhi High Court in Rohan Book Co. (P) Ltd

(supra) is apposite to the facts of the present case, wherein it has been held that the

communication made to lawful authorities in the course of raising grievances

ordinarily fall within the ambit of qualified privilege. The relevant paragraphs of

the aforesaid decision are reproduced below:

             49. The Appellant has relied upon the Legal Notice dated 5-12-2020, the Reply
             dated 14-12-2020, the email dated 2-12-2020 and the alleged Complaints addressed
             to public authorities. However, no specific statement, imputation, or words alleged
             to be defamatory have been set out or reproduced, either in the plaint or in any of
             the aforementioned documents.
             50. The Legal Notice dated 5-12-2020 sets out the allegations of the Appellant and
             cannot, by itself, establish any defamatory communication by the Respondent.
             51. Likewise, the alleged complaints addressed to the District Magistrate, Chief
             Judicial Magistrate and Labour Authorities, have neither been reproduced nor
             particularised in the plaint. The defendant/Respondent, on the other hand, has
             annexed the same, but they cannot be looked into at this stage in view of Order VII
             Rule 11 CPC In any event, communications made to lawful authorities in the course
             of raising grievances, ordinarily fall within the ambit of qualified privilege, unless
             specific malice is pleaded. The Plaint, however, does not contain any pleading of



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             malice nor does it disclose how such Complaints would per se, constitute defamatory
             imputations. The mere fact that Complaints were made to public authorities cannot,
             by itself, give rise to a cause of action for defamation.
             52. The Appellant alleges that the Respondent spoke to employees of the Company
             with the intent to mislead and influence them, approached certain clients and made
             complaints to authorities. Yet, the plaint does not reproduce the contents of any
             such email, complaint or communication . No specific clients are named and no date-
             wise defamatory statements, are extracted. In the absence of precise statements and
             particulars of their publication, the essential ingredients of defamation are not
             disclosed from the pleadings. Though certain individuals have been named, the
             plaint does not set out or reproduce what was allegedly communicated to them, nor
             are any such statements annexed. A bare assertion that “defamatory and derogatory
             statements” were made, without specifying the words used or showing how they
             were conveyed to a third party, is insufficient in law to sustain a cause of action for
             defamation.
             53. Furthermore, the reliance placed by the Appellant on Kamala (supra)
             and Liverpool & London S.P. (supra), does not advance its case. While those
             decisions reiterate that the averments in the plaint must be taken as correct at the
             stage of Order VII Rule 11 CPC, they equally require that the plaint must
             nonetheless, disclose a cause of action. In the present case, even assuming the
             averments in the Plaint to be true, the essential ingredients of defamation are not
             made out.
             54. The reliance placed by the Appellant on the order dated 2-3-2023 passed in CS
             (Comm.) No. 94/2021, is also misconceived. The said Order merely directed return
             of the Plaint on the ground that the Commercial Court lacked jurisdiction to
             entertain the Suit. Any observation made therein regarding the subsistence of a cause
             of action, was only incidental to the issue of jurisdiction and was not a conclusive
             determination that the Plaint disclosed a legally sustainable claim for defamation.
             The observations made vide order dated 2-3-2023, were neither final nor
             determinative of the existence of a legally sustainable cause of action, and were made
             only in the context of deciding the issue of jurisdiction.
             55. To sum up, apart from the bald assertion of reputational injury, no particulars are
             provided regarding loss of clients, cancellation of contracts, revenue decline, or any
             specific financial injury suffered by the Appellant. In cases alleging injury to
             corporate reputation, ordinarily at least some factual foundation demonstrating
             reputational or commercial harm, must be disclosed.
             56. Upon a meaningful reading of the plaint, along with the documents relied upon
             therein, this Court finds that the allegations are vague and general in nature and
             devoid of the necessary particulars required to constitute a cause of action for
             defamation. The plaint neither discloses the precise defamatory statements allegedly
             made by the Respondent, nor how such statements were allegedly published, or the
             manner in which the reputation of the Appellant was harmed.
             57. The pleadings oscillate between allegations of misconduct and assertions of
             defamation, but never descend into the concrete particulars required to sustain a
             cause of action in law.
                                                                                 (emphasis supplied)

17.           In the case of Govind Shantaram Walavalkar v. Pandharinath Shivram

Rege4, wherein this Court considered the defense of privilege in an action for



4 1984 SCC OnLine Bom 299



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defamation arising out of a report made to the police. This Court held that

privilege is not a universal defense in matters of defamation and that its availability

depends upon the nature of the occasion and the position of the person making

the communication. This Court further held that, while qualified privilege may

protect defamatory statements made on an occasion attracting such privilege, the

protection is lost where malice or an improper motive is established. In the facts of

the present case as held above there was no malice which was pleaded in the plaint

by the Appellant and further the complaints were made to statutory authorities

which were investigative bodies and hence the same could not be defamation in

the strict sense and would attract the benefit of qualified privilege. Though in the

case of Govind Shantaram Walavalkar (supra) this Court declined to extend

absolute privilege however it would be beneficial to reproduce certain

paragraphs which deal with the concept of qualified privilege :

             13. Conceptually; privilege is a matter of defence permitted on the ground of public
             policy and public convenience so as to assure everyone that he would be free from
             responsibility for the publication of defamatory words, provided there exists an
             occasion for making the same. Absolute privilege is restricted to certain recognised
             occasions. It is not generally available. Even with regard to qualified privilege,
             occasion does play an important part. The law with regard to absolute privilege
             extending to the enumeration of occasions is not covered by any strait-jacket
             formula, but is ever in the process of evolution. By reason of the necessity to protect
             persons from actions in tort, juridically such occasions have been identified for
             affording protection. These are classified in several ways, but can be broadly stated to
             be one concerning judicial proceedings, quasi-judicial proceedings, official
             communications by one officer of the state to another, proceedings of the legistative
             bodies, fair and accurate publication of reports of judicial and parliamentary
             proceedings, communications between persons concerned in judicial proceedings,
             like client and lawyer or client and solicitor. With regard to the extension of absolute
             privilege in these matters and upon these occasions, the underlying principle that
             attracts the privilege is the necessity on the ground of public policy and convenience
             to keep free the flow of information and assure and safeguard freedom of expression.

             14. The residuary field of privilege which has also the basis of public policy and
             public convenience is governed by qualified privilege. That too has clear relevance
             to the occasion and is not a mere matter of arbitrary whim or choice of the person
             making the allegations. Occasions should be such where such qualified privilege is




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             being claimed on the ground of public policy and convenience. Once the occasions
             are established, qualified privilege will extend to the statements which are per
             se defamatory and which are in fact untrue, but would be protected from the legal
             liability                  in                 torts.                 (See Watson v. M'
             Swan2 Beresford v. White,3 Watt v. Longsdon4 and Lincoln v. Daniels5.)            Upon
             such occasions, the person is permitted to state what he believes to be true, provided
             the statements are made honestly without any indirect or improper motive. The rule
             in this regard is based on general welfare of the society and is only available on the
             ground of public policy, provided the honesty of the maker of the defamatory
             statement is not in doubt. No doubt, reports of crime upon successful investigation
             lead to initiation judicial proceedings, but from that it cannot be said that in all
             matters, complaints lodged with the police are necessarily a step in an intended
             judicial proceeding. For it is equally possible that no judicial proceeding may ensue
             upon such a complaint to the police, the same being false and imaginary. Such a
             complaint is to the non-judicial authority and would rule out the extension of
             absolute privilege. The matter would fall in the arena of qualified privilege
             ordinarily, unless cognisance is taken by the Court of such report. However, in
             appropriate case, a question may arise when, after such a complaint, the same is
             lodged with the Court and did form part of judicial proceedings. But that would be
             governed by different considerations. For the purposes of the present appeal, it is
             enough to observe that the character of the statement made to the police, even
             under the Code of Criminal Procedure, is not the one to which privilege can be
             extended. The position of the police officer is not one of official confidence,
             (See Hittu Bansi v. Sheolal Dinaji6 Subbayya v. Sub-Judge, Vijayawada,7 and Haji
             Ahmad v. State,8), nor the inquiry is either quasi-judicial or judicial. It is for all
             purposes investigatory, by reason of the authority conferred by law upon the police
             to investigate into the same. Once that be the character of the police complaint, the
             matter is clear. Investigative proceedings do not furnish occasions for claiming
             absolute privilege. This position of law has been put beyond doubt even in England
             by the decision in Lincoln v. Daniels (Supra). There the Court was concerned with
             a defamatory statement contained in the complaint to the Bar Council which had
             no quasi-judicial or judicial authority and had at the most investigative authority. In
             that case, all the learned Lord Justices were of the view that only qualified privilege
             could be extended. Devli, L.J. after considering the decisions of the English Courts,
             has observed:
                 “The function of the Bar Council was to investigate the matter and take any
                 action that they thought proper. The same sort of description would apply to a
                 complaint made at a police station or to a letter addressed to the Director of
                 Public Prosecutions. Such ‘Statements in aid of justice’ are said, in Gatley on
                 Libel and Slander (5th ed., p. 210) to attract qualified privilege, and authority is
                 cited for the proposition, though it does not appear that the question whether the
                 privilege should be absolute or qualified has ever been specifically considered”.
             Thus, the distinction appears to have been made between the steps in the judicial
             proceedings and the statements given ‘in aid of justice’. Statements made to the
             investigative machinery established by law, like the police, would, ordinarily, be the
             statements in aid of justice and nothing more. They could not be elevated to the
             status of the statements made as a step in the administration of justice itself. In the
             holding of Danckwerts, L.J. in Daniels's case, the position is further made clear that
             since the Bar Council was no more than an investigating body, without any judicial
             or quasijudicial function or disciplinary powers, the statements contained in the
             complaint to the Bar Council would attract qualified privilege and not absolute
             privilege (p. 269, supra). The position of the police in India would be the same with
             regard to the complaint made and entertained for the offences having reference to
             the Prohibition Act.




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             15. The decision of the Rajasthan High Court in Lachhman v. Pyarchand, (Supra)
             which appears to take the view that the report made to the police officer is a
             preliminary step towards moving the proper Court of law and, therefore, protected
             by absolute privilege, with respect, does not appear to lay down correct position of
             law. The decision mainly follows the English case in Watt v. Longsdon (Supra)
             which has been considered in extenso in England in Lincoln v. Daniels (supra) by
             the Lord Justices, all of whom ruled that the statements contained in the
             communication to a body like Bar Council, having no judicial authority, could not
             be protected by absolute privilege.

             16. As far as this Court is concerned, in Maroti Sadashiv v. Godubai Narayanrao9,
             absolute privilege was not extended to the statements made before the police officer
             in the course of investigation, following the earlier decision of the Division Bench of
             this Court in Gangappagouda v. Basayya10. That also appears to be the position of
             the decision of the Patna High Court in Surendra Nath v. Bageshwari Pd.11, where
             to the statement contained in the complaint to the Superintendent of Police
             qualified privilege was extended, and the decision in T. Ayyangar v. K.S.
             Ayyangar12, which is the case concerning the petition to the Deputy Inspector
             General of Police, where the plea of absolute privilege was negatived. Further, as far
             as the cases of this court are concerned, the doctrine of absolute and qualified
             privilege has been considered in Keshavlal v. Bai Girja13, by observing that the same
             would be determined by the occasion, the relations and duty arising there from
             between the parties and the manner and circumstances under which the
             communication was made. In respect of qualified privilege, it is available when the
             occasion is lawful, and is limited by the necessities of the case, if good faith is
             proved, but not where the express malice or mala fides are established. Narasimha
             Shankar v. Balvant Lakshman14, is distinguishable as the case of privilege extended
             to a report by Government officer to the superior officer. Similary, qualified privilege
             was extended to the statements made to the superior officer, though those
             statements were such which were not intended to be made in a Court of justice nor
             made as any step or at any stage of the judicial proceedings, in the case of Jusab
             Tharia v. G.S. Morrison15. These decisions of this Court clearly go to show that
             absolute privilege is not available unless the occasion is clearly identified for
             extension of such absolute privilege. By reason of official duty or by reason of any
             other public duty if the occasion arises, then the matter may be governed by
             qualified privilege. Complaints or statements made to the police, which do not form
             part of any judicial proceedings and particularly when matters do not go to Court,
             would not thus be governed by absolute privilege. Maximum that can be made
             available is the qualified privilege.


18.           I am also of the view that the Appellant has not pleaded anywhere in the

pleadings that there was any malice, nor have they disclosed as to how those

complaints would constitute defamation, save and except repeatedly pleading that

the same were a method to coerce the Appellant into giving up their legal rights

and to intimidate them, and was more of a nature of settling scores as a fallout of




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the contractual dispute between the Appellant and the Respondents. It is therefore

my view that in absence of the aforesaid pleadings, the mere making of a

complaint before the statutory authorities without establishing any concrete

reputational/business harm, the Appellant was rightly denied the injunction by the

Trial Court.

19.          I am therefore of the view that the submission made by learned Senior

counsel on behalf of the Appellant that insofar as the law relating to defamation in

the Indian context is concerned, mere plea of justification would not be sufficient

for mere denial of interim relief, needs to be rejected in the present case, inasmuch

as the complaints per se to the statutory authorities were not defamatory, and they

were grievances which the statutory/quasi-judicial authorities would ultimately

adjudicate on the basis of the facts of the case. Therefore, the reliance of learned

Senior counsel on the case of Khanjan Jagdishkumar Thakker (supra) would not

help him advance his submission, as the facts of that case differ from the facts of

the present case, and the decision was rendered in a different fact pattern. In the

case of Khanjan Jagdishkumar Thakker (supra), the defamatory statement was

made by an investigative journalist and publications were made online as well as

through print media by the journalist, and there were articles/write ups which were

widely circulated with the specific intent of lowering the image of Plaintiff therein

in the estimation of public at large, and also in their social circle, and it is in that

context that this Court applied the principle that even at interlocutory stage, the

Court is very much entitled to look at the material which is defamatory in nature

and granted injunction against the defendant therein. The facts of the present case




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to my mind do not warrant this conclusion. However, I am in agreement with

learned Senior counsel on behalf of the Appellant that indiscriminately publishing

allegations to unrelated third-parties would have to be decided and considered

when the Appellant establishes a prima facie case concerning those publications.

However, that does not take the right from the Respondents to make their

grievances to the statutory authorities, and the findings in the present order are

only confined to the relief sought at the interlocutory stage, and particularly to

communications made to statutory authorities.

20.          It is clarified that nothing contained in this order shall be construed as a

finding that the allegations of fraud, tax evasion, or coercion made by the

Respondents are true, and equally there is no finding that the allegations are false.

Those questions are expressly kept open for determination in accordance with law.

21.          The Respondents shall also not construe this order as granting them

unrestricted right to disseminate allegations against the Appellant to persons

having no legitimate interest therein, and as held aforesaid, the present order is

only confined to the relief sought at interlocutory stage, particularly to

communications made to statutory authorities.

22.          In view of the aforesaid and considering the settled position of law in

Wander Ltd. v. Antox India (P) Ltd.5 that while considering an application under

Order XXXIX Rules 1 and 2 of the CPC, the Appellate Court would not

ordinarily interfere with the exercise of discretion by the Court of first instance or

substitute its own discretion, except where such discretion has been exercised or


5 1990 Supp SCC 727



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has been shown to have been exercised arbitrarily, or capriciously, or perversely, or

where the Court has ignored the settled principles of law regulating grant or

refusal of interlocutory injunctions, the facts of the present case do not warrant

any interference with the impugned order of the Trial Court, as the impugned

order is a well-reasoned and well-considered order, and this Appeal form Order

deserves to fail.

23.          The Respondents shall remain at liberty to pursue the complaints already

made before the statutory/regulatory/investigative authorities in accordance with

law.

24.          Nothing in this order shall prevent the Appellant from pursuing such

remedies as may be available to in in law in respect of any communication which is

ultimately established to be false, malicious and defamatory.

25.          In view thereof, the Appeal from Order fails and is accordingly dismissed.

The Trial Court is directed to dispose of suit expeditiously. There shall be no order

as to costs.

26.              In view of the dismissal of the Appeal from Order, pending Interim

Application(s), if any do not survive and are accordingly disposed of.




                                                      (AARTI SATHE, J.)




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