Case: Ratan N. Tata and Others Vs. State of Maharashtra and Others

a different thing from initiation of proceedings; rather it is the condition precedent to the initiation of proceedings by the Magistrate or the Judge. Cognizance is taken of cases and not of persons. Under Section 190 of the Code, it is the application of judicial mind to the averments in the complaint that constitutes cognizance. At this stage, the Magistrate has to be satisfied whether there is sufficient ground for proceeding and not whether there is sufficient ground for conviction. Whether the evidence is adequate for supporting the conviction can be determined only at the trial and not at the stage of enquiry. If there is sufficient ground for proceeding then the Magistrate is empowered for issuance of process under Section 204 of the Code. 31. Under the amended sub-section (1) to Section 202 Cr.P.C., it is obligatory upon the Magistrate that before summoning the accused residing beyond its jurisdiction, he shall enquire into the case himself or direct the investigation to be made by a police officer or by such other person as he thinks fit for finding out whether or not there is sufficient ground for proceeding against the accused. 32. By Cr.P.C. (Amendment) Act, 2005, in Section 202 Cr.P.C. of the Principal Act with effect from 23.06.2006, in sub-section (1), the words and shall, in a case where accused is residing at a place beyond the area in which he exercises jurisdiction were inserted by Section 19 of the Criminal Procedure Code (Amendment) Act, 2005. In the opinion of the legislature, such amendment was necessary as false complaints are filed against persons residing at far off places in order to harass them. The object of the amendment is to ensure that persons residing at far off places are not harassed by filing false complaints making it obligatory for the Magistrate to enquire. Notes on Clause 19 reads as under:- False complaints are filed against persons residing at far off places simply to harass them. In order to see that the innocent persons are not harassed by unscrupulous persons, this clause seeks to amend subsection (1) of Section 202 to make it obligatory upon the Magistrate that before summoning the accused residing beyond his jurisdiction he shall enquire into the case himself or direct investigation to be made by a police officer or by such other person as he thinks fit, for finding out whether or not there was sufficient ground for proceeding against the accused. 34. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. The application of mind has to be indicated by disclosure of mind on the satisfaction. Considering the duties on the part of the Magistrate for issuance of summons to accused in a complaint case and that there must be sufficient indication as to the application of mind and observing that the Magistrate is not to act as a post office in taking cognizance of the complaint. 30. The Apex Court, therefore, held that since summoning of an accused is a serious matter affecting ones dignity and reputation in the Society, there has to be application of mind before proceeding against the accused persons and though it may not contemplate a detail order but the Magistrate has to be prima facie satisfied that there are sufficient grounds for proceeding against the accused. Shri Ponda has made a submission that the Code of Criminal Procedure do not specify any mode or manner of enquiry under Section 202 though the Apex Court in case of Birla Corporation Vs. Adventz (supra) has laid down the guidelines revolving around the exercise of the said power. He would rely upon the same judgment relied upon by the learned senior counsel for the petitioners and invite our attention to the specific paragraphs. He would canvass that the Magistrate had two options before considering the issuance of process and the Magistrate passed an order issuing of process instead of postponing the same. We do not find the said submission to be tenable since we have already held that there is no compliance of the provisions of Section 202 in letter and spirit and by this, we do not mean that it could have called for a detailed enquiry but we surely intend to convey that the Magistrate has failed to apply his mind before issuing the process against the accused. 31. Though Mr. Singhvi has observed that one of the aspect of non application of mind is the fact that the place of residence of the petitioner Nos. 5 to 11 is beyond the jurisdiction of the learned Magistrate, since, the process was issued, we would not deliberate on the said issue in detail as we are clearly of the view that the Magistrate has failed to take into consideration the very basis of exercise of his power and did not satisfy himself about the issuance of process. The Magistrate has in a mechanical manner referred to the list of documents and we really wonder whether these documents are really perused by the Magistrate before issuance of the process and before recording his satisfaction that the petitioners are guilty of offence of defamation. In any contingency, since, we have recorded that the petitioners cannot be held liable for defamation, and the Magistrate who has failed to conduct an inquiry, the impugned order cannot be sustained and deserves to be dismissed. 32. We are of the specific view that the impugned order passed by the Magistrate looked at from this angle also suffers from non-application of mind but we would not deliberate on the issue further since we have already formed an opinion that the Magistrate has failed to take into consideration the very genesis of exercise of his power about being satisfied that the allegations in the complaint constitute an offence of defamation and there is no indication in the impugned order demonstrating his satisfaction based on the material placed before him.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]It is trite position of law that the power conferred on this Court under Section 482 of the Cr.P.C. is the inherent power and the said power is to be exercised with great circumspection and in rarest of rare case where the complaint does not disclose any offence. It is settled position of law that if the complaint itself discloses an offences, then it is not permissible for this Court to embark upon an inquiry as to genuineness of the allegation made in the complaint or whether those allegations are likely to be established on evidence or not. It is not permissible for the Court to verify the authenticity or truthfulness of the allegations made in a complaint and if an offence prima facie falls under the provisions of the Penal Code, the launching of prosecution cannot be thwarted by the High Court under Section 482 of the Cr.P.C16. Since we have already averred to the necessary facts, we would straightway refer to the contents of the Special Notice which have been alleged to be defamatory. It is to be noted that the statements/imputations which are alleged to be defamatory are contained in a Special Notice/requisition by the promoter company, namely, the Tata Sons Ltd., for convening the Extraordinary General Meeting of the Shareholders of the Tata Chemicals, Tata Motors and Tata Steels and to issue Special Notices to propose resolution for removal of the respondent No. 2 as Director of the Relevant Tata companies19. We have already reproduced the statement which is referred to as defamatory as contained in the Special Notice dated 10.11.2016. We must make it clear that we are not here to judge the truthfulness of the said statement and to ascertain as to whether the statements were made after due verification or whether they are baseless, not being backed without any supporting material. The alleged statement is contained as an accompaniment giving the brief background of the subject to be discussed, namely, removal of Mr. Nusli Wadia as a Director by taking recourse to the provisions of Section 169 and other applicable provisions of the Companies Act, 201323. We have perused the imputations contained in the Special Notice. It undisputedly makes a reference to certain acts of the respondent No. 2 in reference to the erstwhile Chairman Mr. Cyrus Mistry. The Special Notices contain certain statement in respect of the respondent No. 2 and his conduct, but this imputation will have to be read in reference to the purpose for which it find place in the Special Notice. The Special Notice issued by the Tata Sons Ltd., as a promoter is in form of requisition to the holding companies to call for an Extraordinary General Meeting for removal of their independent Director in whom Principal shareholder (Tata Sons) have lost confidence. The Special Notice is thus issued for the purpose of seeking removal of an independent Director of the Company since the principal shareholders are of the opinion that the respondent No. 2 is acting in a manner that is designed to harm the Tata Group and his conduct reflect that he is not conducting himself independently and instead has been inter alia galvanizing independent Directors and acting prejudicial and as such, the Principal shareholder are apprehensive that in future his action may put the company and its future in great jeopardy and impact the overall morals of the works, employees and management who have joined Tata Company. The imputation contained forms part of the resolution passed by the Board of Directors of Tata Sons Ltd. i.e. the present petitioners and it is contained in a requisition/Special Notice proposing resolutions for removal of the respondent No. 2 as Director of the Relevant Tata Companies seeking vote in favour of such resolution. It is not to be construed as an independent statement but will have to be referred to in the background in which it is made, namely, an act or conduct of the independent Director who is sought to be removed by the Company who is empowered to remove its Director after following the procedure prescribed under Section 169 of the Companies Act, 2013It is not necessary for us to assess or judge the truthfulness of the imputation/allegation since ultimately the allegations levelled against the respondent No. 2 has caused his removal by the Board of Directors of the respective companies. The imputation contained in the Special Notice cannot be viewed independent of the purpose for which it is included in the Special Notice and if the petitioners have adopted a legal course permissible to be adopted under the frame work of the statute governing it, we do not think the allegations can be termed as per se defamatory. The Special Notices though categorically have mentioned that there was no legal requirement, legal or otherwise and is discretion of the Relevant Tata companies that the Special Notices were circulated to the shareholders of the Relevant Tata companies, they cannot be held liable since the statutory scheme itself contemplates that the notice should be accompanied by a brief statement of information and facts that would enable the members to understand the meaning, scope and implication of the items and business to be transacted in the meeting and to take decision thereof. If removal of the respondent No. 2 was one of the agenda of the notice and it is accompanied by a brief statement why such action of removal is initiated, we are not ready to accept the submission of Shri. Ponda and examine the bona fides or otherwise of the said action since, we are of the clear opinion that the imputations are contained in a Special Notice which is statutory in nature and it had ultimately resulted into removal of the respondent No. 2 as independent Director from the three Tata Companies by requisite majorityMoreover, we also do not agree with the submission of Mr. Ponda who has asseverated before us the mala fides and malice in the imputation. If the petitioners in exercise of the statutory obligation have included the statement, which is challenged to be defamatory, we do not perceive any mens rea to the petitioner which is a condition precedent to constitute a particular offence. The petitioners can, by no imagination said to have an intention to cause harm to the reputation of the respondent No. 2 but its action was only directed towards removal of the respondent No. 2 as an independent Director of the three holding companies and it succeeded in the said exercise. The Special Notices were prepared and submitted in the name of Tata Sons and the petitioners being the Directors/Officers of Tata Sons Ltd., cannot be held to be vicariously liable and no malice can be attributed to the petitioners, since the power under Section 169 has been exercised by the Tata Sons Ltd., a corporate entity. We therefore do not find any justification in the Metropolitan Magistrate issuing process to the present petitioners and holding that the imputation contained in the Special Notice is per se defamatory24. The facts placed before us do disclose that the requisition by the Tata Sons Ltd., to its three holding companies for convening Extraordinary General Meeting for removal of the respondent No. 2 was acted upon by the holding Companies and the holding companies have issued the notices of Extraordinary General Meeting to its shareholders and scheduled the holding of the meeting which was accompanied with the copy of Special Notice and also the explanatory statement. We do not intend to precipitate the issue as to whether the circulation was by the respondent No. 2s consent as the subsequent conduct of the respondent No. 2 reflect that he had submitted a detailed representation under Section 169(4) availing the opportunity to rebute the imputations and while addressing the representation to the respective companies, he has reminded the companies, that they are obliged to circulate the representation to shareholders so that they are able to take an informed decision. He also made it clear that company has reasonable time to circulate the representation to the shareholders in visible as well as electronic form. He also clarified that the documents referred to in the representation are also available for inspection/perusal and supplied his e-mail address from where this information can be sought. In the detailed representation, the respondent No. 2 himself has referred to the allegation and rebutted them one by one and offered his explanation. Not only this, he independently addressed a letter to the shareholders on 21.12.2016 and requested the shareholders to take conscious decision in the interest of the entire institution of independent Directors. In the backdrop of this fact, we express that the respondent No. 2 has also chosen to avail statutory right available to him under sub-Section (4) of Section 169 and has responded to the resolution of removal and availed the opportunity of appealing to the shareholder to take a conscious decision after going through the response submitted by him through his representation to the allegation/imputations levelled in the Special Notice. Therefore, it is not that the imputations have been first time contained in the Special Notice but in the representation, the respondent No. 2 repeated then and offered an explanation as to how they are not true and rather levelled allegation against the petitioner No. 1 as to how he has manipulated the action of his removal and therefore when the respondent No. 2 has also availed the statutory remedy and offered his explanation in form of a representation and addressed an independent letter to the shareholder, we fail to understand how the offence of defamation is made out and if it is not made out whether the Magistrate is justified in issuing process to the petitioners by the impugned order25. As far as the conduct of the respondent No. 2 in the meeting dated 10.11.2016 which forms the basis of Tata sons Ltd., losing their confidence in him as an independent Director, it is reflected in the affidavit of Mr. Rajiv Chandan, Company Secretary and General Counsel of Tata Chemicals as well as affidavit of Shri. R. Mukundan, Managing Director of Tata Chemicals and one Mr. Bhaskar Bhat, Director of Tata Chemicals. The said affidavits are subsequently filed in a Suit No. 50 of 2017 filed by few public shareholders in relation to the removal of the respondent No. 2. In any contingency, it is informed that the said suit came to be withdrawn unconditionally on 06.02.2019. We do not intend to go into the veracity or truthfulness of the alleged conduct of the respondent No. 2 in the meeting dated 10.11.2016 since we have already observed that the Tata Sons Ltd., was exercising its statutory power of removal of its Director in whom they had lost confidence and it is to be noted that respondent No. 2 has never challenged his removal before any Court of Law meaning hereby he has accepted his removal as an independent Director from the holding companies of Tata Group and do not question the power of Tata Sons Ltd., to remove himThe impugned order is a clear reflection of non application of mind on the part of the learned Additional Chief Metropolitan Magistrate apart from the fact that he only relied on the statement of the complainant whom he examined under Section 200 and failed to examine any other witness. The Magistrate has committed a haste in issuing the process without conducting an inquiry into the allegation of the complainant considering other relevant material to satisfy himself whether there was sufficient ground for initiating the proceedings against the accused as contemplated under Section 202 of Cr.P.C27. We are satisfied that there is no prima facie case of defamation in the present case as there was no intent on the part of the petitioners to cause harm to the reputation of the respondent as contemplated by Section 499 of the IPC nor can we discern any actual harm caused to his reputation, since the element of mens rea being absent and since the publication was only limited to the Board of Directors of the holding Company and the respective shareholders of these Companies, it could not be said that it was circulated widely over a section of general public. Publication of the news about a resolution being passed by a well acclaimed business house happened to be a business news for the media and both the petitioner no. 1 and respondent no. 2 being well-known business personalities, they drew the attention of the media and the allegations/imputations and the story of removal of the respondent no. 2, no wonder, happened to be a hot topic for media. However, it is not conclusively established as to it is the petitioners who have leaked the information to the media and particularly when we have noted that the respondent no. 2 himself had addressed the communication to the shareholders independent of his representation in terms of sub-section (4) of Section 169 and which he requested for being circulated to the shareholders. The allegations of the respondent no. 2 in respect of disparaging remarks/comments being widely circulated is also not correct since it was only circulated to the shareholders and they had a right to know the background of the resolution on which they were supposed to vote. In light of the decision of the Apex Court in case of S. Khushboo (supra), since there was no intention to malign the image of respondent no. 2 by making his conduct known to the public and particularly when the petitioners were exercising their statutory power, we record that there is no prima facie case of defamation in the present case which the Magistrate has failed to consider28. The Magistrate before issuing the process, has failed to take into consideration the conspectus of the matter and though it is the duty cast upon him to be satisfied before issuance of a process, he had concluded without any material being placed before him that the statement is defamatoryWe do not find the said submission to be tenable since we have already held that there is no compliance of the provisions of Section 202 in letter and spirit and by this, we do not mean that it could have called for a detailed enquiry but we surely intend to convey that the Magistrate has failed to apply his mind before issuing the process against the accused31. Though Mr. Singhvi has observed that one of the aspect of non application of mind is the fact that the place of residence of the petitioner Nos. 5 to 11 is beyond the jurisdiction of the learned Magistrate, since, the process was issued, we would not deliberate on the said issue in detail as we are clearly of the view that the Magistrate has failed to take into consideration the very basis of exercise of his power and did not satisfy himself about the issuance of process. The Magistrate has in a mechanical manner referred to the list of documents and we really wonder whether these documents are really perused by the Magistrate before issuance of the process and before recording his satisfaction that the petitioners are guilty of offence of defamation. In any contingency, since, we have recorded that the petitioners cannot be held liable for defamation, and the Magistrate who has failed to conduct an inquiry, the impugned order cannot be sustained and deserves to be dismissed32. We are of the specific view that the impugned order passed by the Magistrate looked at from this angle also suffers from non-application of mind but we would not deliberate on the issue further since we have already formed an opinion that the Magistrate has failed to take into consideration the very genesis of exercise of his power about being satisfied that the allegations in the complaint constitute an offence of defamation and there is no indication in the impugned order demonstrating his satisfaction based on the material placed before him.