Communication Made In Good Faith To Protect Legitimate Interests Does Not Constitute Defamation: Delhi High Court

The Court was hearing a petition filed under Section 482 of the Code of Criminal Procedure, 1973, seeking the quashing of criminal proceedings arising out of a complaint filed for alleged defamatory statements made in a letter addressed to a lender by an interested party.

A Bench comprising Justice Neena Bansal Krishna, while deciding the matter, observed that “the impugned Letter, when viewed in its proper context, is found to be a communication made inter se the parties involved and concerned with the affairs of CCIL and was in good faith for the protection of the interests of the makers and the recipient, and is covered by Exception 9 to Section 499 of the IPC” and that therefore, “the essential ingredients of the offence of criminal defamation are not made out”.

Advocate Praveen Kumar appeared for the petitioners, while Senior Advocate Vaibhav Gaggar represented the respondents.

Background

The petitioners, founders and promoters of Calcom Cement India Ltd., a company later acquired by Dalmia Cement Bharat Ltd. (DCBL), which became its majority shareholder, with the Bawri Group retaining approximately 20% of the shares, wrote a letter to GuarantCo, a London-based lender to CCIL, outlining alleged instances of mismanagement, violation of CLB orders, and diversion of funds by DCBL. The letter was later forwarded by GuarantCo to Dalmia Cement Bharat Ltd., seeking clarification.

Alleging that the contents of the letter were defamatory, DCBL filed a criminal complaint before the Metropolitan Magistrate, New Delhi, under Sections 499 and 500 read with Sections 34 and 109 of the Indian Penal Code, 1860. The Magistrate took cognizance and issued summons.

Challenging this order, the petitioners approached the Delhi High Court under Section 482 CrPC to quash the complaint and the summoning order.

Court’s Observations

Law on Defamation and Reputation

The Delhi Court, while tracing the statutory framework under Section 499 IPC, which criminalises making or publishing any imputation concerning another person with intent or knowledge that it would harm their reputation, noted that the provision is qualified by ten exceptions, the ninth of which protects communications made in good faith for the protection of one’s own or another’s interest.

Citing Mohammed Abdulla Khan v. Prakash K., the High Court reiterated that to establish defamation, there must be an imputation concerning a person, made or published with intent or knowledge that it will harm their reputation.

The Court further referred to Halsbury’s Laws of England, Scott v. Sampson (1882 QBD 491), and Bata India Ltd. v. A.M. Turaz (2013) to define a defamatory statement as one that lowers a person’s reputation in the estimation of right-thinking members of society.

The right to reputation, the Court observed, has been recognised as part of the right to life under Article 21 of the Constitution, as held in Umesh Kumar v. State of Andhra Pradesh (2013) and reaffirmed in Subramanian Swamy v. Union of India (2016).

Good Faith and Legitimate Interest

In the case at hand, the High Court noted that the petitioners were minority shareholders and guarantors for loans exceeding ₹585 crores. The letter was addressed to GuarantCo, a lender, concerning the management and financial conduct of CCIL. The communication was not addressed to the public but confined to parties with a legitimate interest in the matter.

To establish defamation, the Court remarked, “there has to be loss of reputation and the contents of the letter, when read comprehensively, do not attack the reputation but were specific to the management of the affairs of CCIL.”

The Court observed that the letter largely contained extracts from pleadings already placed before judicial forums in pending company law proceedings and that any “such communication made in the backdrop of existing legal disputes and for the protection of financial interests, was made to GuarantCo, which prima facie falls within the protective ambit of Exception 9 to Section 499, IPC.”

The Bench further held that “to allow criminal prosecution to proceed in such circumstances, where the dispute is so evidently civil and commercial in nature would be to permit the use of criminal law as a tool for harassment and to settle corporate scores”. This precisely, the Bench noted is “the kind of abuse of process that Section 482 Cr.P.C. is designed to prevent.”

The Court also relied on the Supreme Court decision in Iveco Magirus Brandschutztechnik GMBH v. Nirmal Kishore Bhartiya (2024), in which it was held that if the material on record discloses a complete defence, “nothing prevents the Magistrate upon application of judicial mind to accord the benefit of such Exception to prevent a frivolous complaint from triggering an unnecessary trial.”

Applying these principles, the Court held that the letter in question was a bona fide communication aimed at safeguarding the petitioners’ financial and corporate interests, as well as those of the lender, and was therefore protected under the Ninth Exception.

Consequently, the Bench concluded that “the dispute between the parties is quintessentially a civil and corporate dispute, which is already being agitated before the appropriate forums” and that “the continuation of the criminal proceedings against the Petitioners would be an abuse of the process of the court.”

Conclusion

Accordingly, the High Court quashed the complaint and the summoning order passed by the Metropolitan Magistrate, holding that the letter was written in good faith, in protection of legitimate interests, and was confined to the parties concerned.

Cause Title: Ritesh Bawri & Ors. v. The State Govt. of NCT of Delhi & Anr. (Neutral Citation: 2025:DHC:8901)

Appearances:

Petitioners: Advocates Praveen Kumar, Vinayak Bhandari, Sarthak Gupta, Teesta Mishra, and Suman Raj

Respondents: Senior Advocate Vaibhav Gaggar with Shoaib Haider, APP and Advocates Viren Bansal, Adhirath Singh, Aman Kothari, and Ambikka Singh.

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