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2024 Supreme(Jhk) 1057
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Gautam Kumar Choudhary, J.
Bank of India, Mumbai and ors. - Appellants
Versus
Pushpa Panikar and ors. - Respondents
F. A. No. 10 of 2010, F. A. No. 141 of 2010, C. O. No. 03 of 2012
Decided On : 21-03-2024
For the Appellant :Mr. A. Allam, Sr. Advocate
For the Respondent:M/s Indrajit Sinha & Ankit Vishal, Advocates, Mr. Rahul Kr. Gupta & Shishir Suman, Advocates
Compensation awarded for defamation requires adequate evidence linking defendants' actions to plaintiff's damages; mere allegations are insufficient for liability.
Headnote:(A) Code of Civil Procedure, 1908 - Sections 96 and 107 - Defamation - Compensation awarded against defendants for wrongful termination and illegal detention - Issues of maintainability, cause of action, mis-joinder of parties, and damages duly framed and considered - Evidence inadequate to support claims for damages; appellants not responsible for plaintiff's detention, nor for dealership termination, which was prior to false bank allegations; thus, the original decree was overturned. (Paras 19-34)
Facts of the case:
The plaintiff, running a business in gases, sued the defendants for defamation following the wrongful termination of dealership and subsequent detention by police due to false allegations made by the Bank of India. (Paras 4-16)
Findings of Court:
The trial court’s decree of compensation and finding of liability was based on conjectures without sufficient evidence connecting defendant actions to the plaintiff's damages, thus rendering the judgment unsustainable. (Paras 34)
Issues: Whether the plaintiff had a valid cause of action; whether the appellants were responsible for the plaintiff’s detention and the legality of the dealership termination; assessment of just compensation. (Paras 18-23)
Ratio Decidendi: The court ruled that there was a lack of evidence to support claims against the appellants regarding the plaintiff’s detention and dealership termination, leading to the conclusion that the compensation awarded was baseless and not accurately reflecting damages. (Paras 34)
Result: Appeals allowed and the trial court’s judgment is set aside.
| Table of Content |
|---|
| 1. overview of appeals and compensation awarded. (Para 1 , 2 , 3) |
| 2. plaintiff's claims regarding defamation and damages. (Para 4 , 5 , 6 , 7 , 8 , 9) |
| 3. defendants' responses to plaintiff's claims. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17) |
| 4. findings on issues surrounding detention and damages. (Para 19 , 20 , 21 , 22 , 23 , 24) |
| 5. court's analysis on the cause for termination of dealership. (Para 25 , 26 , 27 , 28 , 29 , 30) |
| 6. implications of private correspondence and evidence handling. (Para 31 , 32 , 33) |
| 7. final decision on the appeal. (Para 34) |
JUDGMENT :
Gautam Kumar Choudhary, J.
1. Both these first appeals along with the cross-objection arise out of the common judgment and decree dated 29.10.2009 passed by the Sub-Judge-VI, Ranchi in Title Suit No. 36 of 1999, therefore they have been heard together and shall be disposed of by common judgment.
2. Appellants are the Defendants and the suit has been decreed awarding compensation of Rs 15 lakhs each against both the Appellants.
3. The respondents are the substituted heirs and descendants of A.V. Panickar who was the Plaintiff in the suit brought for defamation against Bank of India and Bihar Air Products Ltd.
CASE OF THE PLAINTIFF
4. The plaintiff was running a business of gases in the name and style of M/s Oriental Gases. Plaintiff was the dealer of gases manufactured by M/s Bihar Air Products Ltd., Jamshedpur, which is a unit of Bihar State Industrial Development Corporation, Patna.
5. Plaintiff being sole proprietor of the firm, had been granted cash credit facility by the Bank of India (D-1 and D-2) for Rs. Two Lakh in the year 1995. The said loan was extended on hypothecation of stocks and against book debt to the Plaintiff for doing the said business sometimes in the month of February 1995.
6. Cause of action arose in the month of February, 1996 when Bihar Air Products Ltd. (D-3) terminated dealership of the plaintiff.
7. The immediate cause for termination of dealership was that the Bank of India (D-2) sent a letter dated 26.02.1996 to M/s Bihar Air Products Ltd. making false allegation that the bank had financed loan to the plaintiff against the hypothecation of cylinders, both filled and empty belonging to defendant no. 3. It is asserted that the said allegation was not true as the plaintiff had never hypothecated the gas cylinder to defendant nos. 1 and 2.
8. M/s Bihar Air Products Ltd. taking cognizance of false allegation, wrote letter to various authorities including Sr. Superintendent of Police, Ranchi, consequently petitioner was taken to Chutia police station on 04.04.1996 wherein he was detained for some time. It is asserted that there was no breach of any terms of agreement by the plaintiff and termination of dealership and wrongful detention of petitioner in the police station caused him irreparable loss and mental agony.
9. The suit was filed, inter alia, for the relief for compensation of Rs.32,91,000 against defendant Nos. 1 and 2 and a separate decree of Rs. 25,00,000 and for declaration that the termination of dealership was illegal and void ab initio. Further, damages for loss suffered by the plaintiff due to such termination.
CASE OF BANK OF INDIA (D-1 & D-2)
10. The main plea of the defence is that M/s Oriental Gases was the partnership firm of M/s Bhagirathi Panickar and M/s Sashi Kala Prasad. Later on, cash credit facility was allowed on hypothecation of gas cylinder, which logically included gas which is filled up in it.
11. Defendant no. 2 avers that the instant suit was filed to escape the rigors of the certificate case lodged by the Bank for realization of loan amount due to the bank.
12. The agency of the plaintiff was terminated much before the letter dated 26.02.1996 and, therefore, this was not the proximate cause for termination of dealership.
CASE OF M/S BIHAR AIR PRODUCTS LTD. DEFENDANT NO. 3
13. It is averred that the termination of dealership was as per clause of agreement for non-performance of business, non-compliance of the term
