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BSES vs ToI: a defamation biggie

BSES Limited, a company in the Anil Dhirubhai Ambani Group (ADAG), has sought a stupendous Rs 5,000 crore as damages from BCCL for a series of stories in August based on a draft CAG report.

Date published: September 8, 2015Publication: Hoot, The Link to original article

The amounts being sought as damages by corporate entities in India against publications which have allegedly defamed them are reaching stratospheric levels, even if the chances of recovering such sums of money appear rather remote. In what could be the biggest defamation notice of its kind, BSES Limited, a company in the Anil Dhirubhai Ambani Group (ADAG), has sought a stupendous Rs 5,000 crore as damages from Bennett, Coleman and Company Limited (BCCL), publishers of the Times of India, the most widely circulated English daily in the world.

On August 18, the ToI carried a series of articles – including one on its front page – by Josy Joseph based on a draft report of the Comptroller & Auditor General of India (CAG) that found various discrepancies in the accounts maintained by electricity distribution companies in Delhi. The same day Mulla & Mulla and Craigie Blunt & Caroe, a firm of lawyers acting on behalf of BSES Rajdhani Power Limited and BSES Yamuna Power Limited (both part of BSES Ltd of the ADAG), served a notice of defamation on BCCL.

The series of articles containing allegedly defamatory content that was printed in the ToI and carried on its website,,were titled ‘Delhi discoms inflated dues by Rs 8,000cr: CAG’, ‘Delhi govt representatives in discoms slammed’, ‘Discom audit: CAG points out conflict of interests in deals’ and ‘Discoms made money from meters, says CAG’.

We have reviewed both the legal notice and BCCL’s reply for this story.

The notice says that the articles allegedly carried “False, fictitious and unacceptably offending claims, statements and inferences and conclusions” and the reporting was said to be “actuated by malice and per se defamatory”. It also mentions that the access to the draft report is sub judice since an interim order dated January 24, 2014 passed by the Delhi High Court had stated that the final report of the CAG on the subject would not be submitted without the permission of the court.
The ADAG companies accused the owners, publishers, correspondent and executive editor of the ToI of being guilty of contempt of court in addition to having “breached journalistic standards” by carrying news that was “sensationalized” to tarnish the “goodwill” of the client of the legal firm, namely, the corporate group headed by Anil Ambani. The legal notice has been served on:

  • Bennett, Coleman and Co. Ltd., the owners of the ToI,
  • Balraj Arora, publisher of the ToI,
  • Arindam Sengupta, Executive Editor, ToI, and
  • Josy Joseph, correspondent, ToI. (His official designation was Editor – Special Projects. He has just joined the Hindu newspaper.)

The notice details the efforts made by the power companies in reducing “AT&C” (or "aggregate technical and commercial") losses and says the names BSES Rajdhani Power Limited and BSES Yamuna Power Ltd carry “great value and reputation in the world of electricity distribution.” It says the reporting in the “Offending Articles” is “in compete disregard of our Clients’s actual performance and delivery and therefore highly reckless, malicious, negligent and offending.”

In their reply, BCCL and its representatives have stated that the news reports are “factually correct”, “based on proceedings before courts” and “documents received from reliable sources” and were published in the public interest. Four days after the series of articles were published, on August 22, the ToI published another article titled ‘No action on draft CAG report’that mentioned the observations of a bench of the high court comprising Chief Justice G Rohini and Justice Rajiv Sahai Endlaw.
The bench asked the Delhi government not to take any action against the power distribution companies on the basis of the interim audit report unless ordained by the court to do so. The latest article also stated that the CAG report had alleged that private electricity distribution companies in the national capital had “manipulated consumer figures” by misreporting the number of meters installed, “Bought costly power, inflated costs, suppressed revenue and favoured their group companies” and“inflated their regulatory assets by nearly Rs 8,000 crore”.

In its reply BCCL points out that “In the said news reports, we have not taken unilateral views and have published your clients’ position qua the CAG report. We have specifically stated that “The companies have, however, denied the report and claimed that it is both incomplete and subjudice.”

Elsewhere BCCL’s response goes on to say, “The report from a constitutional authority that enjoys the highest credibility not just in India but all over the world should be treated with deserving respect. The CAG is not India’s government auditor, but is also a member of the UN board of auditors. The CAG’s authority, competence and autonomy should and cannot be called to question for private interests.”

The reply adds, “There has not been any injunction, restriction or direction by any court of law on the publication of any article on the Delhi power distributor companies and imposing such a ban would be threatening the freedom of press and an assault on democracy. It is not legitimate to claim a right to privacy and confidentiality on the part of the distributor companies when larger public interest is involved. The articles carried by ToI are not personal opinions or allegations but reports based on information received by reliablesources.”

Along with retraction of the published material and unconditional apology, the ADAG distribution companies have made a claim of Rs 5,000 crore as ‘damages for the loss of their reputation and goodwill’ that has suffered through the circulation of the “offending” articles.

(The CAG report has been critical of all electricity distribution companies in Delhi which includes Tata Power Delhi Distribution Ltd, besides the ADAG companies.)

The amount sought as damages in this instance far exceeds the amount in similar defamation suits made in the recent past, which include the following instances.

  • In August, Essar Steel India sued Caravan, its publisher Delhi Press, many of its editors and reporter Krishn Kaushik, in the Ahmedabad city civil court seeking Rs 250 crore as damages for publishing an allegedly defamatory article against the company.
  • In July, the National Stock Exchange filed a Rs 100-crore defamation suit in the Bombay High Court against the online portal MoneyLife for allegedly publishing “false” reports on an algorithm trading mechanism on the platform of the bourse; the following month, the NSE filed another Rs 100-crore criminal defamation suit against yet another online portal India Samvad for publishing similar articles.
  • In February, Karnataka’s richest member of the legislative assembly, Priya Krishna, who represents Congress from Bengaluru's Govindarajanagara constituency, filed a defamation case against a Kannada television channel seeking Rs 100 crore in damages for airing allegations that he had illegally encroached on forest land; he deposited Rs 52 lakh as court fee, the highest so far in the state.
  • In January, cricketer Ravindra Jadeja sought damages of Rs 51 crore from a Rajkot newspaper called Abtak which had alleged that Jadeja and his business partner Jenesih Ajmera had links with Bali Dangar who is involved in a case of of land grabbing and extortion.
  • On 10 September 2008,Times Now television channel aired Justice P.B. Sawant's photo as part of its story on the provident fund scam, confusing him with Justice P.K. Samanta of the Calcutta High Court. Justice Sawant, former Judge of the Supreme Court and Chairman of Press Council of India, pursued this case as a defamation suit and a Pune trial court decreed the suit for Rs 100 crore against the TV channel.

The Times Group is no stranger to defamation notices. Apart from the Times Now case cited above,the newspaper has received legal notices from Lalit Modi, the DB Realty group headed by Shahid Balwa, Minister of State for External Affairs and Development of North-Eastern Region Gen V K Singh, besides Mumbai based Congress politician Kripashankar Singh and his son.

(Research Assistance: Ajita Banerjie)



Date posted: September 9, 2015Last modified: September 12, 2015Posted byEeshaan Tiwary
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