Freedom of press under threat from SLAPP suits: SC sets aside Saket Court Order in Bloomberg vs Zee Entertainment case

Setting aside the ex-parte order of Saket District Court which ordered Bloomberg to take down defamatory article against Zee, SC cautions against SLAPP suits and pre-trial censorship

On March 22, the Supreme Court (SC) set aside the Saket District Court order which had directed media company Bloomberg to take down its article titled “India Regulator Finds $241 Million Accounting Issue at Zee”, noting that the District Court had applied the three-fold test used for passing an ex-parte injunction order in a mechanical manner, without any application of mind.

The Bloomberg article written by Anto Anthony and Saikat Das claimed that the Securities and Exchange Board of India (SEBI) had found a hole of more than $240 million in the accounts of Zee Entertainment Enterprises Ltd, and this amount, which was diverted illegally, is 10 times higher than the SEBI investigators had initially estimated, Indian Express reported.

The SC in its order of March 22 has said that “A cursory reproduction of the submissions and precedents before the court is not sufficient. The court must explain how the test is satisfied and how the precedents cited apply to the facts of the case.” The three-fold test used to grant interim injunctions in defamation suits consists of (i) a prima facie case, (ii) balance of convenience and (iii) irreparable loss or harm to the concerned party.

The apex court further expressed surprise over the role of Delhi High Court in upholding the District Court order and said the High Court should have intervened in the first place when such an order which restricted the freedom of press and right to information was passed by the subordinate court under its jurisdiction.

Further, the Supreme Court in its March 22 order cautioned against the threat to freedom of speech, especially freedom of press, arising from rising instances of SLAPP suits. Its order recorded that the term “‘SLAPP’ stands for ‘Strategic Litigation against Public Participation’ and is an umbrella term used to refer to litigation predominantly initiated by entities that wield immense economic power against members of the media or civil society, to prevent the public from knowing about or participating in important affairs in the public interest”.

Delhi High Court

The Supreme Court was also critical of the Delhi High Court’s conduct in the case, and pointed out that appellate courts need to intervene in cases where the subordinate courts have exercised their discretion “arbitrarily, capriciously, perversely, or where the court has ignored settled principles of law regulating the grant or refusal of interlocutory injunction.” It remarked that the single judge bench of High Court has committed the same error as the trial judge, significantly in the matter affecting right to free speech.

Saket Court, New Delhi

Justice Harjyot Singh Bhalla of Saket District Court on March 1, 2024, had passed the ex-parte and pre-trial injunction order against Bloomberg in the defamation suit filed by Zee entertainment. It recorded that the stock price of the company fell by almost 15% because of the circulation of the defamatory material. Zee alleged that the article was published to malign and defame it, with a pre-meditated and malafide intention. Consequently, the court granted the injunction order against Bloomberg using three-fold test, directing it to take down the article within 7 days. The order reads, “In my view, the plaintiff has made out a prima facie case for passing ad interim ex-parte orders of injunction, balance of convenience is also in favour of plaintiff and against the defendant and irreparable loss and injury may be caused to the plaintiff, if the injunction as prayed for is not granted.” Notably, the judge had merely recorded that “I have gone through the record available as on date”, without providing any further reasons for supporting the order.

The Saket District Court order may be read here:

What was the Bloomberg article about

The Bloomberg article written by Anto Anthony and Saikat Das claimed that the Securities and Exchange Board of India (SEBI) had found a hole of more than $240 million in the accounts of Zee Entertainment Enterprises Ltd, and this amount, which was diverted illegally, is 10 times higher than the SEBI investigators had initially estimated, Indian Express reported.

Rejecting the appeal filed by Bloomberg on March 14, the Delhi High bench of Justice Shalinder Kaur maintained in its order that “A reading of the impugned order suggests that the learned ADJ applied his mind to the facts of this case and satisfied himself that prima facie there was enough material to come to the conclusion for the purpose of granting an ex-parte ad-interim injunction…” Pertinently, SC rejected this view of the High Court, and found the District Court’s order lacking any application of mind.

The High Court order may be read here:

Empowering free media against SLAPP suits by corporate giants

The present SC order setting aside the previous orders of the trial judge and High Court and asking the former to hear the arguments afresh keeping in mind the order of apex court is a move in the right direction, and strengthens the cause of independent fearless media.

The verdict maintained that the three-fold test used for granting injunction orders cannot be applied mechanically to the detriment of the other party, and public at large. Importantly, it links the question of defamation and pre-trail ex-parte injunctions to the broader issues of free speech, press freedom, and right to information of the public. The court emphasised that the three-fold test alone is not sufficient and other factors need to be incorporated before an ex-parte injunction is granted, citing its decision in Morgan Stanley Mutual Fund v. Kartick Das. It also noted that ex parte injunction could be granted only under exceptional circumstances, and additional consideration of balancing the fundamental right to free speech with the right to reputation and privacy must be borne in mind, especially with regard to suits filed against journalists.

The bench comprising CJI, Justice Pardiwala and Justice Manoj Misra said that the Bonnard standard, as established in the decision of Bonnard v. Perryman, need to be followed in all the cases of pre-trial interim injunctions. Relying on the aforementioned case, the bench noted that “‘Until it is clear that an alleged libel is untrue, it is not clear that any right at all has been infringed; and the importance of leaving free speech unfettered is a strong reason in cases of libel for dealing most cautiously and warily with the granting of interim injunctions.’” Citing Fraser v. Envas, the order observes that even if the article is defamatory, if the defendant says that he intends to justify it or to make fair comment on a matter of public interest then there should be no restrain on the publication of such material, as it is in the public interest that the truth should come out.

The verdict said that “Granting interim injunctions, before the trial commences, in a cavalier manner results in the stifling of public debate. In other words, courts should not grant ex-parte injunctions except in exceptional cases where the defence advanced by the respondent would undoubtedly fail at trial. In all other cases, injunctions against the publication of material should be granted only after a full-fledged trial is conducted or in exceptional cases, after the respondent is given a chance to make their submissions.”

Commenting on SLAPP suits pursued by vested economic interests, especially corporate behemoths, the judges remarked that such interim pre-trial injunctions “often act as a ‘death sentence’ to the material sought to be published, well before the allegations have been proven.” Thus, the bench remained cognizant of the fact that SLAPP suits have been weaponised by the companies to silence critical voices and prevent public from accessing the truth.

Finally, disposing of the matter, the Supreme Court ordered the trial court to hear the petition afresh, keeping in mind the factors mentioned by it.

The SC order may be read here:



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