IMPORTANT POINT
Statements made in civil proceedings that are relevant to the issues cannot be considered defamatory, and a private complaint for defamation cannot proceed if the statements are necessary for the resolution of the civil matter.

ORDER :

1. This is a petition filed by the petitioners seeking to quash the proceedings in C.C.No. 1906 of 2023 pending on the file of XVII Metropolitan Magistrate, Saidapet, Chennai.

2. The respondent filed a private complaint against the petitioners alleging that they made serious allegations and defamatory imputations against the respondent while filing affidavits in various interlocutory applications before the National Company Law Tribunal, Chennai Bench II (for short, the NCLT) and the National Company Law Appellate Tribunal, Chennai Bench (for brevity, the NCLAT).

3. According to the respondent, the petitioners made sweeping allegations and innuendos portraying the respondent in a very poor light and damaging his reputation and the sweeping allegations made by the petitioners would amount to an offence of defamation under Section 499 of the Indian Penal Code (hereinafter called the IPC), punishable under Section 500 of the IPC.

4. Heard the learned counsel for the petitioners and the respondent appearing in person.

5. The facts leading to filing of this petition are as follows:

(i) The petitioners are the directors in a company called as M/s.Jeypore Sugar Company Limited. At the behest of the IDBI Bank, an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) was admitted by the NCLT by an order dated 25.2.2019, the moratorium of the corporate debtor was declared and the respondent was appointed as the Interim Resolution Professional (IRP). Thereafter, by an order dated 29.5.2020, the NCLT appointed the respondent as the Liquidator of the corporate debtor.

(ii) In that, an application was filed by the petitioners in I.A.No. 579 of 2022 before the NCLT under Section 60(5) of the IBC to remove the respondent from his position and to appoint some other competent IRP as the Liquidator. This application was filed by making various allegations against the respondent. It was also contended by the petitioners that the respondent did not possess a valid authorization for assignment as required under Section 7(aa) of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016. Further, an interim order came to be passed by the NCLT on 03.6.2022 restraining the respondent not to deal with any of the assets of the corporate debtor till the disposal of the said application.

(iii) In addition, the IDBI Bank also filed I.A.No. 815 of 2020 before the NCLT seeking removal of the respondent from acting as the Liquidator of the corporate debtor and for other consequential reliefs. In that, the NCLT passed an order on 01.7.2022 holding that the respondent failed to exercise due care and diligence in performance of his functions while discharging his functions as Liquidator in respect of the corporate debtor and hence, the respondent was directed to be replaced.

(iv) Aggrieved by the order passed by the NCLT dated 01.7.2022 in I.A.No. 815 of 2020, the respondent filed an appeal before the NCLAT in Company Appeal No. 269 of 2022. The NCLAT considered the entire issue in detail and came to the conclusion that the order dated 01.7.2022 passed by the NCLT in I.A.No. 815 of 2020 did not require any interference and that the appeal itself was devoid of merits. Accordingly, the NCLAT dismissed the appeal filed by the respondent by order dated 20.12.2022.

(v) As against the order dated 20.12.2022 passed by the NCLAT, the respondent filed a special leave petition before the Apex Court and the same is pending. In the meantime, the respondent filed a private complaint against the petitioners on the ground that they made sweeping allegations against him, that they defamed him and that therefore, the respondent wanted the accused persons to be punished for the offence of defamation. This complaint was taken on file by XVII Metropolitan Magistrate, Saidapet, Chennai as C.C.No. 1906 of 2023. Seeking to quash the said proceedings, the petitioners are before this Court.

6. It is now a settled law that there is no legal b