Legal fraternity split over firms' right to file criminal defamation

The legal fraternity appears divided over whether a corporate entity can initiate a criminal defamation case against an individual.

The Supreme Court on Monday decided to examine this issue, following a petition by Greenpeace activist Priya Pillai. The broader question the petition asks is whether a company can claim a right flowing out of an individual's right to life and liberty, as enshrined under Article 21 of the Constitution. In other words, if a corporate entity has no 'right to life', can it claim a right to reputation, asked legal experts?

Pillai has been fighting a criminal defamation suit initiated by the Essar group in 2014, alleging a loss of reputation after her claims in a blog post that a power project in Madhya Pradesh was the cause of environment degradation.

Legal experts said in several defamation cases, the courts have held that an organisation, through its office-bearers, can file a complaint for criminal defamation. Activists said they have been at the receiving end of suits filed by companies to muzzle criticism.

Legal experts said the current challenge to the ability of companies to file a criminal complaint for defamation stems from a decision of the Supreme Court in the matter of Subramanian Swamy versus Union of India in May 2016, while upholding the constitutionality of criminal defamation. "In that decision, the Supreme Court observed that the right to reputation has been held to be a facet of Article 21 of the Constitution (being the right to life and personal liberty) together with the right to honour and dignity," noted Aakanksha Joshi, partner, Economic Laws Practice.

Alok Prasanna Kumar, senior resident fellow, Vidhi Centre for Legal Policy, said the apex court had tilted the balance between freedom of speech and reputation too far in favour of reputation in the Swamy case. "The Priya Pillai case is a great opportunity to redress the imbalance in law."

Joshi said he agreed with that view. "If the constitutionality of the law of criminal defamation is derived from the fundamental right to life under Article 21 of the Constitution, then the ability of a corporation, being an artificial person, to claim it appears questionable," she said.

However, many like Ajay Bhargava, partner, Khaitan & Co, have a different take on the issue. "If the law is settled on the point that a company can most certainly be criminally defamed, then I don't see a reason why a company should be left without a remedy under criminal law, against defamatory imputations, which tend to harm its reputation," he noted.

Legal experts said the term 'defamation' has been defined in Section 499 of the Indian Penal Code and the punishment for it has been set out in Section 500, which together contains the code for criminal defamation in the country. The definition of defamation set out in Section 499 provides that an imputation concerning a company, or an association or collection of persons as such may amount to defamation.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel