HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY CRIMINAL PETITION No.1227 OF 2008 DATE:12-08-2011 BETWEEN: Mr. Russell A Stamets. - - - Petitioner/A-7. AND 1. M/s. Indo American Professional Educational Network Private Ltd., A company incorporated under the provisions of the Companies Act, 1956, Having its Registered Office at 603 Paigah Plaza, Basheerbagh, Hyderabad, Rep. by its Director Dr.F.Rai, S/o.D.J.Rai, Aged about 43 Years. 2. The State of A.P., Rep. by Public Prosecutor, High Court of A.P., Hyderabad. - - - Respondents This Court made the following : HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY CRIMINAL PETITION No.1227 OF 2008 ORDER: This Criminal Petition is filed under Section 482 Cr.P.C. seeking to quash proceedings in Calender Case No.774 of 2007 on the file of I Additional Chief Metropolitan Magistrate, Hyderabad, registered for offences punishable under Sections 499 and 500 of I.P.C. read with Section 120-B of I.P.C. insofar as the Petitioner/A-7 (for short, ‘A-7’) is concerned. 2. The complaint was filed by the first respondent before the said Court in which it is alleged as follows : The Complaint is carrying on the business of providing advance Medical Education to medical graduates who are appearing for United States Medical License Examination. A-1 in the case is a company incorporated in U.S.A. having its office at Los Angels, California, A-2 is a Private Limited Company having its office at New Delhi, A-9 and A- 10 are said to be the Chairman and Director and A-3 to A-8 are said to be the Directors and Executives of the A-1 company. Originally M/s. Indo American Inc., U.S.A., which was the principal company of the complainant company entered into an agreement with Compass Medical Education Network, U.S.A. for exclusive franchise in India and subsequently M/s. Compass Medical Education Network was taken over by A-1. The complainant having got educational centers at Hyderabad and other places was paying royalty fee to A-1 and in turn A-1 was sending necessary education material and study accessories in the form of cassettes and C.D.s. Further, on the ground that A-1 threatened to cut off the relationship with the complainant company and terminate the agreement in July 2003, the complainant filed O.S. No.245 of 2003 in the Court of Chief Judge, City Civil Court, Hyderabad for the relief of permanent injunction restraining A-1 from interfering with its right to carry on their business in India and obtained injunction, following which A-1 induced the complainant to enter into a compromise and settlement agreement and the same was entered into along with educational provider agreement on 06-10-2004. Further, thereafter, A-1 flooded the market with pirated material and never supplied current and latest study material and therefore finally the complainant gave a notice dated 15-06-2006 followed by the issuance of notice of termination dated 24-06-2006. Further, the complainant filed another suit i.e., O.S. No.515 of 2005 in the Court of II Additional Chief Judge, City Civil Court, Hyderabad for a declaration that the settlement agreement dated 06-10-2004 and agreement provider agreement dated 06-10-2006 were vitiated by fraud. Further, in order to defame the complainant, A-1 to A-8 conspired together and issued a public notice through their websites which reads “Delhi High Court” bars IAPEN (Complainant) from using Kaplan name. The ‘Chopras’ is the only employment Provider in India, the students were advised that IAPEN and all related organizations are no longer Kaplan Certified Educational Providers and are using unauthorized and out-dated material.” 3. Further on account of the publication, the reputation of the company as a quality provider of the education has gone. Further, though the High Court of Delhi Granted interim injunction, no finding was given against the complainant company. 4. A-7 claims that the petitioner who is the American Citizen is neither an employee nor a Director of A-1 Company and he is only an independent consultant having got office at Bangalore, being the American citizen and he got general power of attorney issued by A-1 Company to sign vakalaths, counters, written statements and appeals against the complainant company as an authorized signatory only as per relevant document dated 14-03-2007 and therefore he has got nothing to do with the publication in question. Further, there are only bald allegations against A-3 to A-8 who are the Directors and Executives of A-1 Company which are totally incorrect. Therefore, on this ground it is pleaded to quash the proceedings in the Calender case. 5. Therefore, it is necessary to examine as to whether : 1) Prima-facie case is not made out to prosecute A-7 for the alleged offences and as such taking cognizance of the matter by the Court below is good? 2) Whether the Calender Case is to be quashed in so far as A-7 is concerned? 6. In order to decide the matter, it is to be examined as to whether there is any thing which is defamatory in the alleged public notice issued through the internet, which reads as follows : “Delhi High Court bars IAPEN from using Kaplan name. ‘The Chopras’ is the only legal Kaplan Provider in India. New York, NY on the 24th of May 2007, the Delhi High Court issued an order enjoining IAPEN and its affiliates from using the KPALAN name, mark or brand in India including in advertisements, classes, or in connection with any other services. The injunction also prohibits IAPEN from committing any acts that would confuse, deceive, or manipulate consumers in India by using the KAPLAN name or Kaplan products or services, including the unauthorized use of the domain name www.kaplanindia.com. As Kaplan has repeatedly announced since October 6, 2006 “The Chopras” is the only legal provider of Kaplan Test Prep and Admissions materials in India, including Kaplan’s materials and programs that help students study for the USMLE, GMAT, GRE, SAT, NCLEX and NBDE standardized tests. The products and services offered through “The Chopras” mirror those services delivered in the United States with the latest books, library materials, and online components, including the new USMLE Personalized Learning System (PLS). Further, all medical students who wish to obtain an I-20 through Kaplan in the US will be administered directly through “The Chopras.” Any direct I-20 student inquires to Kaplan offices in the Unites States will be immediately reverted back to “The Chopras” for I-20 application submission. These efforts will ensure that students in India that choose to prepare with Kaplan programs are only delivered by “The Chopras”, currently Kaplan’s sole Certified Education Provider in India for these courses. Students are, again advised that IAPEN and all related organizations are no longer Kaplan Certified Education Providers and are using unauthorized and outdated materials. Kaplan’s agreement with IAPEN expired on October 6, 2006 and any enrollments with IAPEN after that date are not authorized by Kaplan. Students who enroll with IAPEN do so at their own risk and are not receiving any of the updated content or essential online components, and potentially risk visa denial with the U.S. Consulate officers. Students interested in authorized Kaplan programs in India should contact “The Chopras” online a t www.thechopras.com via email (theteam@choprasconsultants.com), or by telephone (011-41608466, 26280600, 26414164/5, 26478940). To obtain a listing of “The Chopras” center locations in India, students may visit Kaplan’s website at www.kaptest.com/india. Kaplan Test Prep and Admissions is a division of global educational services provider Kaplan, Inc., a subsidiary of the Washington Post Company”. 7. So, it is necessary to go through the order of publication granted by the Delhi High Court in C.S (O.S.) No.968 of 2007 on the file of that Court which provides that Kaplan, Inc. and another filed the suit against S. Naveed and others and they also filed I.A. No.6290 of 2007 against the Defendants/Respondents for temporary injunction in respect of the subject matter/matters and the High Court on the material available delivered the following order of interim injunction. “Accordingly, till the next date of hearing, the defendants, their directors, associates, affiliates, subsidiary companies, members, servants, agents, sub- agents, representatives and all other acting for and on their behalf are restrained from using the mark/name “KAPLAN’ or any other mark/name which may be identical and/or deceptively similar thereto in respect of or in relation to educational institutions/coaching classes and other related services/business, products or services or any other business or products or services as may be ancillary or related thereto amounting to passing off its business and/or services and/or products as and for the business and/or services and/or products of the plaintiffs and from committing any act or acts which are likely to cause confusion and/or deception in the normal course of trade, and from registering domain names incorporating the trademark/name ‘KAPLAN’ or any other deceptive variant thereof or using such names on the internet and as part of their email addresses, so as to lead to passing off the website, business and goods/services of the defendants as and for those of the plaintiffs; and from using, reproducing, printing, publishing or copying, selling, offering for sale, distributing, issuing to the public, the KAPLAN materials in any form whatsoever whether online or offline, unrevised or undated, and from copying the plaintiffs’ website content amounting to infringement of the plaintiffs’ copyright in the said material and content. The defendants shall also not do any promotional activity using the trademark “KAPLAN’ in any manner.” Admittedly, the injunction order passed was made absolute. 8. Learned counsel for A-7 submits that the Public Notice was issued in accordance with the injunction order delivered by the Delhi High Court and even supposing that there is some defamatory matter in the public notice, there is no basis to say that A-7 who is only a consultant of A-1 company and who is authorized to take care of its legal affairs in India consequent upon which only he resided in India has got concern with that and therefore it is a fit case to quash the proceedings in the Calender Case so far as A-7 is concerned. 9. On the other hand, it is the contention of learned counsel for the complainant that the public notice is not restricted to subjects covered by the interim injunction and it is significant that it also includes the allegations “Students are again advised that IAPEN and all related organizations are no longer Kaplan Certified Education Providers and are using unauthorized and outdated materials.” which is definitely defamatory in nature and however on behalf of A-1 company only A-7 is residing in India to take care of its affairs in India and therefore unless A-7 supplied necessary material, A-1 company and its office bearers could not have issued the public notice and therefore it cannot be said that A-7 got nothing to do with the defamatory publication and in fact there is specific allegation in the complaint to the effect that A-1 to A-8 in the case conspired together and got issued the impugned public notice and unless necessary evidence is recorded, it cannot be said that A-7 is innocent of the defamatory publication and hence there are no grounds to quash the proceedings and accordingly the petition is liable to be dismissed. 10. Emphatically, the words used or incorporated in the public notice “Students are again advised that IAPEN and all related organizations are no longer Kaplan Certified Education Providers and are using unauthorized and outdated materials.” are something which are beyond the scope or ambit of the injunction order. Particularly that which reads “IAPEN issuing unauthorized and outdated material” is definitely defamatory in nature within the meaning of Section 499 of I.P.C. Further so far as A-7 is concerned, significantly he has been living in India taking care of the legal affairs of A-1 company in India about which there is no dispute. It is also not in dispute that all or most of the office bearers of A-1 Company are residents of U.S.A. only. It is also significant to note that when the Delhi High Court passed the injunction order, it infers that it would have gone to the notice of A-7 one way or the other as he was taking care of the legal affairs of A-1 Company in India which prima-facie provides in the circumstances enumerated that probably A-7 is the person who gave necessary information to A-1 company which is situated in U.S.A. Further, unless relevant records are produced before the Court concerned with about the exact role of A-7 in the matter, his role therein cannot be determined. At this stage it is only to be seen as to whether there is prima-facie material against A-7 to prosecute him before the trial Court. Even supposing that he has been only a consultant of A-1 company and he got no employment therein but if he gave the said information to A-1 Company following which, the impugned public notice was issued he is liable for the alleged defamation prima-facie. 11. In order to ascertain what part he played exactly in the matter necessary evidence is to be recorded. Therefore, when there is prima- facie material against A-7, which is sufficient to prosecute him for the alleged offences, I am not inclined to quash the proceedings In the result, the Criminal Petition is dismissed. __________________________ G. KRISHNA MOHAN REDDY, J Dated: 12-08-2011. Dsh. THE HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY CRIMINAL PETITION No.1227 OF 2008 August, , 2011 DSH