In a relief to former Prime Minister H D Deve Gowda, the Supreme Court on Friday refused to interfere with the Karnataka High Court order staying execution of a trial court decree asking him to pay Rs 2 crore in a defamation suit filed against him by a construction company.

The Apex Court, however, acknowledged statements made by influential public figures against corporate entities do affect their reputation, share prices and investments.

The trial court had, in an order on the defamation suit on June 17, 2021, directed Deve Gowda to pay Rs 2 crore as damages to the Nandi Infrastructure Corridor Enterprises (NICE) for his "defamatory statement" against the company in a television interview 10 years ago.

A Bench of Justice DY Chandrachud and Justice Hima Kohli, while hearing an appeal filed by NICE, noted the high court in its order of February 17, 2022 directed Deve Gowda not make any statement, which is defamatory, pending the disposal of the first appeal.

"Since the High Court has passed a discretionary order staying the execution of the decree passed by the trial court imposing compensation in a suit for defamation pending the first appeal, we are not inclined to entertain a petition under Article 136 of the Constitution", the Court said in its order.

"The High Court has also directed that the respondent shall not make any statement, which is defamatory, pending the disposal of the first appeal," the Bench said.

It told Senior Advocate Neeraj Kishan Kaul, appearing for NICE, that derogatory words like "loot" were used by Deve Gowda, which could affect the reputation of the company.

"We agree with you, statements made by influential public figures against the corporate entities do affect their reputations including the share prices and investments," the Bench orally remarked.

The Bench said if there is any breach of the direction of the High Court by the former prime minister, the company will be at liberty to move the High Court for vacating the interim order.

"We also clarify that the observations in the impugned order shall not weigh in the final disposal of the first appeal since it was confined to the question of interim stay of execution of the decree," it said and dismissed the appeal of the company.

At the fag end of the hearing, the Bench asked Kaul whether the statements by the former PM were made with respect to the Bengaluru-Mysuru Infrastructure Corridor (BMIC), which is a six lane expressway connecting the two cities, to which he replied in the affirmative.

"We also take into account the public confidence in the project," the bench then noted.

The trial court had on June 17 last year permanently restrained Deve Gowda from making any defamatory statement against NICE and directed him to pay Rs 2 crore as damages.

The project was cleared by Deve Gowda himself when he was the Karnataka chief minister in 1995 on Build-Own-Operate-Transfer (BOOT) basis.

The company had filed a defamation case against the Janata Dal (secular) leader seeking Rs. 10 crore as damages after he gave an interview to a local news channel on June 28, 2011 during which he called the project "loot".

The trial court had observed the project was upheld by the High Court of Karnataka and the Supreme Court in their judgments. The project undertaken by the company is a massive one which is in the larger interest of Karnataka, the trial court had said.

Hence, if defamatory statements like the present one are allowed to be made in future, definitely, implementation of such a massive project like the present one, which is undertaken in the larger public interest of the State of Karnataka, is going to be delayed, the trial court had said.

"Therefore, this Court feels that it is necessary to curb such statements by issuing permanent injunction against the defendant," the trial court had said in its order.

Cause Title: M/s. Nandi Infrastructure Corridor Enterprises v. H. D. Devegowda

Click here to read/download Order

With PTI inputs