SC Urges Nulsi Wadia And Ratan Tata To Resolve Differences.

BY ; GEETA MONI

Background:

The SC on Monday asked Ratan Tata and NulsiWadia to resolve their differences over the case of defamation brought before it by Wadia. In SC Calling them ‘leaders in their own right’, Honourable Chief Justice SA Bobde called on both parties to settle the case beyond the sphere of the judiciary.

The Wadia family and the Tata family have had close relations – not only in the realm of business but as family friends. NulsiWadia is the godson of the late J.R.D Tata and named his son JehangirWadia after him. Wadia has been a supporter of the Tata group, to the extent that he stood up for the Tatas during the ‘Tata Tapes’ Controversy – a scandal where transmission between NulsiWadia, Ratan Tata and a few others regarding Tata Tea was leaked. Wadia has also been the independent director in some Tata Companies including Tata Chemicals and Tata Steels.

The events leading to the case unfolded from the attempted ousting of Cyrus Mistry as the Chairman of Tata Sons on 24th October 2016. On 10th November, NulsiWadia, along with a few other shareholders, expressed his confidence in Mistry’s chairmanship. The very next day, Tata Sons called for the removal of Wadia as the director of certain Tata Companies. They further made a requisition to convene an extraordinary general meeting of the shareholders on December 22nd with the ousting of Wadia and Mistry as a director of Tata Motors on the agenda.

It was in this light that NulsiWadia brought a suit of defamation against Tata Sons for Rs. 3,000 crore in the Bombay High Court. He contended that Tata had made allegations against him which were untrue, defamatory and published to the shareholders.

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CURRENT ISSUE:

The SC Order:

In the SC, through Senior Advocate CA Sundaram, Wadia claimed Tata’s letter to the shareholders was defamatory, insisting that the way the letter was framed was with the intent to bring down his goodwill in the eyes of the shareholders. He cited certain paragraphs of the letter which would have affected his stronghold and reputation.

In its hearing on the 6th of January, 2020, the Supreme Court was not satisfied with the claims brought forth. Honourable Chief Justice SA Bobde sitting alongside Honourable Justices BR Gavai and Surya Kant. The court said the petitioner failed to prove defamation by the respondent conclusively and gave the parties time until the 13th of January to gather further facts and evidence before bringing the case back to the court. However, the Chief Justice suggested the parties find alternate mechanisms to resolve the dispute and even offered the services of a highly reputed mediator. Stating that the parties were veterans in the business fields and capable of concluding on their own, he requested they opt for an alternate course of resolving their dispute. He gave the parties time till Monday to submit their responses on this ground as well.

This raises a legal question in our minds. What is the burden of proof on NulsiWadia to prove defamation?

QUESTION IN LAW:

Defamation and the Burden of Proof on the Plaintiff :

In Indian Civil Law Defamation comes under the scope of Law of Tort(s). The tort of defamation aims to protect the right to reputation and is defined in Indian law by judicial precedent.

The Plaintiff has the burden to prove three aspects to show that a statement made amounts to defamation.

Firstly that it lowered his reputation in the eyes of society. In Ramdhara v. Phulwatibai (1970 CriLJ 286) the court said that the right-thinking members of society would not believe mere abuse but would lower their opinion of the plaintiff if the statement was truly defamatory. This case stressed the necessity that the right-thinking members of society’s opinions are negatively affected by the statement.

Further, the plaintiff must show that the statement referred particularly to him. In the case of Newstead v. London express Newspapers Ltd. ((1940) 1 KB 377), the House of Lords held that the defamatory statement must be understood as referring to the plaintiff by the persons to whom it was published and the intent of the defendant in this respect is not material. This decision was cited and upheld by the Delhi High Court in the case of Harsh Mendiratta v. Maharaj Singh (95 (2002) DLT 78).

Finally, the Plaintiff must prove that the statement was published. This implies that the statement was specifically communicated to a third party by the defendant [Mahender Ram v. Harnandan Prasad (AIR 1958 Pat 445)].

If the Plaintiff is able to prove these three essentials, he would be entitled to compensation.

CONCLUSION:

Here, there is a clear distribution of the burden of proof on both Wadia and Tata Sons. On the petitioner, there are three things to prove as laid by SC . Firstly that the statement was defamatory. Wadia has attempted to prove this through the wording of the letter but the apex court is of the opinion that he requires further evidence. Secondly, the statement referred to him, which is quite clear given the letter was circulated regarding Wadia and his removal. Finally that the statement was published which is also clear. There exists a burden on Tata as well, either to disprove the evidence submitted by Wadia or to take relief of the defence of truth which seems to be a herculean task to prove.

However, on the contrary, if the parties resort to mediation because this burden of proof is completely removed. The question is only regarding the settlement of the parties. Thus the mechanism of mediation would offer both parties an opportunity to air their opinion in a confidential setting to reach a mutually amicable settlement. This would remove the hassle of legal procedures and evidence collection. However, this won’t give the structure and finality of the judicial setting.

In such cases, the willingness of the parties to enter into mediation is of primary importance which is seen from the fact that the Supreme Court has offered the parties a choice and ample time to make that decision.

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