TMI Blog1988 (9) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... that the issue of debentures is invalid and that the application moneys have to be refunded. That, of course, the company will have to do in any event. There is however, no immediate cause for any apprehension on the part of the petitioner that the publication of any such article could abort the debenture issue in the manner it could have done before August 31, 1988. I, therefore, agree that there is no justification for the continuance of the interim order dated August 25, 1988, any longer. - CIVIL MISC. PETITIONS NOS. 21903 TO 21906 OF 1988 TRANSFER PETITION NOS. 192 AND 193 OF 1988 - - - Dated:- 23-9-1988 - SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ . F.S. Nariman, V.C. Kotwal, M.H. Baig, Harish N. Salve, P.S. Shroff, S.A. Shroff, V.K. Desai and S.S. Shroff for the Petitioner. G. Ramaswamy, Ram Jethmalani, C.V. Subba Rao, Subhashini, Mrs. Sushma Suri, P. Parmeshwaran, Mukul Rohtagi, Ms. Bina Gupta, Ms. Madhu Khatri, Parveen Anand, Anip Sachthey, B.L. Bagaria, P.K. Jain, P.S. Goyal, Arun Jetley, R.F. Nariman, Rajan Karanjawalla and Manik Karanjawalla for the Respondent. JUDGMENT Sabyasachi Mukharji, J. At this stage, we are concerned with the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plastic raw materials like High Density Polyethylene (HDPE) and Poly Vinyl Chloride (PVC) which are used for making various articles from films to pipes, auto parts to cable coating, and containers to furnishings. It was asserted that the issue was of global and national importance. It was claimed that Reliance's public issue was the largest public issue in India till date and the second largest issue in the world. The public issue was due to open on Monday August 22, 1988, and was scheduled to be closed on August 31, 1988. It was the claim of the petitioner that the debentures were being issued after obtaining the consent of the Controller of Capital Issues and on the basis of the schedule indicated therein, and after complying with all the requirements of the Companies Act and otherwise. Certain writ petitions and a suit had been filed in some High Courts, namely, Karnataka, Bombay, Rajasthan, Delhi and later on in Allahabad challenging the grant of consent or sanction for the issue of debentures. Such applications in the different High Courts and the courts were filed at the last moment when enormous amount of money had already been spent, it was claimed. It was stated that e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... August 18, 1988. On August 18, 1988, a transfer petition was filed in this court. It was claimed that any injunction order, after the satisfaction of the Central Government through the Controller of Capital Issues, would make the public issue stillborn and sums in excess of Rs, 4.5 crores had already been incurred for the public issue as pre-issue expenses and a sum of Rs. 20 crores was allocated as issue expenses for what was popularly known as "Mega Issue" as mentioned hereinbefore. It was claimed that grave prejudice would be caused to the petitioner company as well as the public at large who were investing in the issue, if the issue is not allowed to go through. It was claimed that there was no ground for the High Court to grant an injunction or a stay order in the facts and circumstances of this issue and this court should vacate those orders and transfer the applications pending in different courts to this court. On that application being moved on August 19, 1988, this court issued notices to all concerned making the same returnable on September 9, 1988, in terms of prayer ( a ) and paragraphs 2 and 4 of the affidavit of Mr. Balkrishna Bhandari affirmed on August 18, 19, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g anticipated to be committed by the delinquent. The publication threatened or expected to be published would cause very grave interference with the due administration of justice, and should, therefore, be prohibited. On that application being moved on August 25, 1988, this court directed that cognizance of contempt would only be considered after the necessary sanction from the Attorney-General is obtained. This court, on the facts of the alleged contempt, declined to take cognizance on that application without the views of the Attorney-General. This court, however, issued an order of injunction restraining all the six respondents mentioned therein from publishing any article, comment, report or editorial in any of the issues of the Indian Express or their related publications questioning the legality or validity of any of the consents, approvals or permissions to which the petitioners in the Transfer Petitions Nos. 192-193 of 1988 have made reference in the prospectus dated July 27, 1988, for the issue of 12.5% secured fully convertible debentures. Notice of that application was made returnable on September 9, 1988, and the same was to come up with other related matters. The res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stopped. On the other hand, it was submitted that due administration of justice must be unimpaired. We have to balance, in the words of Lord Scarman, in the House of Lords in Attorney-General v. British Broadcasting Corporation [1981] AC 303, 354, between the two interests of great public importance, freedom of speech and administration of justice. A balance, in our opinion, has to be struck between the requirements of free press and fair trial in the words of Justice Black in Harry Bridges v. State of California, (86 L. Ed. 252 at page 260). Therefore, in considering the question posed before us, as to whether there should be continuance of the order of injunction, we have to bear in mind and apply the basic principles of law to the facts and circumstances of this case. The point at issue has been canvassed very ably and vehemently on behalf of the petitioner by Shri M. H. Beg, assisted as he was by Shri S. S. Shroff and Smt. P. S. Shroff. They submit that the danger still persists and the publication of any article which would jeopardise the allotment of those debentures, should be prevented. On the other hand, Shri Ram Jethmalani and Shri Anil P. Diwan, senior cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e body of authority to be found in the decisions of the Supreme Court of America bearing on this concept of the freedom of speech and expression, Justice Bhagwati observed that it was trite knowledge that the fundamental right to the freedom of speech and expression enshrined in our Constitution was based on the provisions in the first amendment to the Constitution of the U.S.A. and, hence, it would be legitimate and proper to refer to those decisions of the Supreme Court of the U.S.A., in order to appreciate the true nature, scope and extent of this right in spite of the warning administered by this court against the use of American and other cases in State of Travancore-Cochin v. Bombay Co. Ltd. [1952] SCR 1112 and State of Bombay v. R. M. D. Chamarbaugwala [1957] AIR 1957 SC 699 (at p. 717-718). Our Constitution is not absolute with respect to freedom of speech and expression, as enshrined in the first amendment to the American Constitution. Our attention was drawn to the decision of this court In re : P. C. Sen's case [1969] 2 SCR 649 where this court upheld the order of conviction against the Chief Minister of West Bengal for broadcasting a speech justifying an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a committal for contempt of court for publication, pending trial of an issue in court, the decision of this court in P. C. Sen's case [1969] 2 SCR 649 in view of the facts involved, is not of much aid to us. The case of gross contempt was discussed by this court in C. K. Daphtary v. O. P. Gupta [1971] Suppl SCR 76. However, in view of the facts involved therein, that decision cannot give us much guidance at present. The law on this aspect has been adverted to in the decision of this court in Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India [1985] 1 SCC 641, where at page 659 of the report, Justice Venkataramiah referred to the importance of freedom of the press in a democratic society and the role of courts. Though the Indian Constitution does not use the expression "freedom of press"in article 19, it is included as one of the guarantees in article 19(l)( a ). The freedom of the press, as noted by Venkataramiah J., is one of the items around which the greatest and the bitterest of constitutional struggles have been waged in all countries where liberal constitutions prevail. Article 19 of the Universal Declaration of Human Rights, 1948 declares the free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the absolute terms of the First Amendment, unlike the conditional right of freedom of speech under article 19(l)( a ) of our Constitution, it would be worthwhile to bear in mind the "present and imminent danger" theory. Justice Black quoted from the observations of Justice Holmes in Abrams v. United States [1963] L Ed. 1173 at p. 1180, where the latter observed that to justify suppression of free speech, there must be a reasonable ground to fear that serious evil will result if free speech is practised. There must be reasonable ground to believe that the danger apprehended is imminent. Justice Black concluded that there must be clear and present danger and that would provide a workable principle in preventing publication consistent with the First Amendment. But, in our case, Mr. Baig submitted that under our article 19(1)( a ), as it is termed, anything that interferes with the due administration of justice should be prevented if it is a threat to the due administration of justice. His submission was that the article, published or proposed to be published herein, undermines the effect or pre-empts the effect of the order of injunction which was to help or boost up the chance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1988 SC 1208. This question again cropped up in John D. Pennekamp v. State of Florida [1945] 90 L Ed 331 and Justice Frankfurter reiterated that the "clear and present danger" conception was never used by Mr. Justice Holmes to express a technical legal doctrine or to convey a formula for adjudicating cases. It was a literary phrase not to be distorted by being taken away from its context. He reiterated that the judiciary could not function properly if what the press does is reasonably calculated to disturb the judicial judgment in its duty and capacity to act solely on the basis of what is before the court. A judiciary is not independent unless courts of justice are enabled to administer law by absence of pressure from without, whether exerted through the blandishments of reward or the menace of disfavour. A free press is vital to a democratic society for its freedom gives it power. In 1976, in Nebraska Press Association v. Hugh Stuart 49 L Ed. 683, where the facts of the case were entirely different from the present case, Chief Justice Burger delivered the opinion of the court saying that to the extent that the order prohibited the reporting of evidence adduced at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inferior courts of law and though the local valuation court has some of the attributes of the long-established "inferior courts", public policy required, in the interests of freedom of speech and freedom of the press, that the principles relating to contempt of court should not apply to it or to the host of other modern tribunals which might be regarded as "inferior courts". There, however, Lord Scarman emphasised that the due administration of justice should not, at all, be hampered. Lord Denning, in the Court of Appeal, referred to Borrie and Lowe, The Law of Contempt (1973) and mentioned that professionally trained judges are not easily influenced by publications. This is a point which was emphasised before us also. Lord Denning referred to the question whether there was contempt of court by the British Broadcasting corporation. He emphasised that there was no accused. The House of Lords, however, in appeal, held that the valuation court is not a court where the concept of contempt of court would apply. But it did make observations that such broadcasting or publication might influence a judge. Viscount Dilhorne, at page 335 of the report, observed as follows : "it is some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y General v. Times Newspapers Ltd. [1974] AC 273 (HL) between 1959 and 1961, a company made and marketed under licence a drug containing thalidomide. About 450 children were born with gross deformities to mothers who had taken that drug during pregnancy. In 1968, 62 actions against the company, begun within three years of the births of the children, were compromised by lump sum payments conditional on the allegations of negligence against the company being withdrawn. Thereafter, leave to issue writs out of time was granted ex parte in 261 cases, but apart from a statement of claim in one case and a defence delivered in 1969 no further steps had been taken in those actions. A further 123 claims had been notified in correspondence. In 1971 negotiations began on the company's proposal to set up a 3 1/4 million charitable trust fund for those children outside the 1968 settlement conditional on all the parents accepting the proposal. Five parents refused. An application to replace those parents by the Official Solicitor as next friend was refused by the Court of Appeal in April, 1972. Negotiations for the proposed settlement were resumed. On September 24, 1972, a national Sunday ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial proceedings should not be interfered with. (Emphasised by Mr. Baig). Lord Reid referred to the observations of Chief Justice Jordan in Ex parte Bread Manufacturers Ltd.'s case [1937] 37 SR (NSW) 242 to the following effect: "It is of extreme public interest that no conduct should be permitted which is likely to prevent a litigant in a court of justice from having his case tried free from all matters of prejudice. But the administration of justice, important though it undoubtedly is, is not the only matter in which the public is vitally interested; and if in the course of the ventilation of a question of public concern matter is published which may prejudice a party in the conduct of a law suit, it does not follow that a contempt has been committed. The case may be one in which as between competing matters of public interest the possibility of prejudice to a litigant may be required to yield to other and superior considerations. The discussion of public affairs and the denunciation of public abuses, actual or supposed, cannot be required to be suspended merely because the discussion or the denunciation may, as an incidental but not intended by-product, cause some likeli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of that court to decide it according to law. Lord Simon of Glaisdale, at page 315, emphasised as follows : "The first public interest involved is that of freedom of discussion in a democratic society. People cannot adequately influence the decisions which affect their lives unless they can be adequately informed on facts and arguments relevant to the decisions. Much of such fact-finding and argumentation necessarily has to be conducted vicariously, the public press being a principal instrument. This is the justification for investigative and campaign journalism. Of course it can be abused but so may anything of value. The law provides some safeguards against abuse : though important ones (such as professional propriety and responsibility) lie outside the law " (Emphasis supplied) Lord Cross of Chelsea, at page 322 of the report, observed as follows: " 'Contempt of court means an interference with the administration of justice and it is unfortunate that the offence should continue to be known by a name which suggests to the modern mind that its essence is a supposed affront to the dignity of the court. Nowadays when sympathy is readily accorded to anyone who defies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sums of money involved and the progress already made. It is necessary to reiterate that the continuance of this injunction would amount to interference with the freedom of the press in the form of preventive injunction and it must, therefore, be based on reasonable grounds for the sole purpose of keeping the administration of justice unimpaired. In the words of Mr. Justice Brandeis of the American Supreme Court concurring in Charlotte Anita Whitney v. People of the State of California, 71 L. Edn. 1095 at p. 1106, there must be reasonable ground to believe that the danger apprehended is real and imminent. This test we accept on the basis of balance of convenience. This court has not yet found or laid down any formula or test to determine how the balance of convenience in a situation of this type, or how the real and imminent danger should be judged in case of prevention by injunction of the publication of an article in a pending matter. In the context of the facts of this case, we must judge whether there is such an imminent danger which calls for continuance of the injunction. Incidentally, it may be mentioned that the so-called informed press may misrepresent the court pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isk which will be caused by the publication of the article and the damage to the fundamental right of freedom of knowledge of the people concerned and the obligation of the press to keep the people informed, that the injunction should not continue any further. In the aforesaid view of the matter, we direct that there is no further need for the continuance of the injunction. Publications, if any, however, would be subject to the decision of the court on the question of the contempt of court, namely, prejudging the issue and thereby interfering with the due administration of justice. Preventive remedy in the form of an injunction is no longer necessary. Whether punitive remedy will be available or not, will depend upon the facts and the decision of the matter after ascertaining the consent or refusal of the Attorney-General. The application for the present purpose is, therefore, disposed of with the direction that the injunction against publication in the order dated August 25, 1988, need not continue further. Ranganathan, J. I agree. I would, however, like to add a few words, having regard to the range of the arguments addressed before us. The principal ground urged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the absence of the consent of the learned Attorney-General. At the moment, we have to assess whether any article that may be published by the respondents, even assuming that it touches on the issues of validity or legality of the approvals, consent and permissions referred to in our order of August 19,1988, will so clearly and obviously prejudice or tend to prejudice the course of the proceedings, now pending in this court, that such publication should be injuncted by, what the respondents describe as, a "gagging order". I agree with my learned brother that there is no such imminent danger or apprehension in the circumstances present here, as calls for such an extreme step curtailing the freedom of a newspaper. It is sufficient, I think, to clarify, if at all any such clarification were needed, that should any newspaper publish any such matter, it will be doing so at its own risk and subject to its liability for being proceeded against by the petitioner or others for defamation, contempt of court or otherwise. A somewhat narrower ground, as I understand it, put forward for the petitioner was that the grant of ex parte injunction by us on August 19, 1988, and August 25, 1988, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , what predominantly influenced us to pass the order dated August 19, 1988, was that, even assuming, prima facie, as contended in the various writ petitions and suit, that there could be some doubt regarding the validity or otherwise of the consent orders, etc., the restraint by any court or Tribunal on the issue of debentures at a late stage might prove catastrophic and cause irreparable loss or damage to the petitioner. We were also of the opinion that, pending adjudication on the issue of validity raised in the various suits, the balance of convenience required that there should be no order of any court or Tribunal staying the debenture issue. Now, I shall turn to the circumstances in which the orders dated August 25, 1988, were passed. Subscriptions to the debenture issue were open between August 23, 1988, and August 31, 1988. It was during this interim period that the first article was published by the respondent newspaper attacking the validity of the consent granted by the Controller of Capital Issues to the issue of the debentures. I do not go into the merits of the article. But, when it was pointed out to us that this article had been published at a very crucial time whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een filed in the Allahabad High Court. Counsel submitted that, in a sensitive matter like issue of debentures, even the request for return of money by any one person could trigger off several applications of the same type and that the danger, that the petitioner company might be asked to refund moneys sent in respect of subscriptions already made on the basis of the allegations in such articles as the one already published, is real and imminent. He submitted that it is therefore as much necessary today to continue the injunction as it was when it was granted on August 25, 1988. I have given careful thought to this contention urged on behalf of the petitioner company. It is of course difficult in the absence of any reliable data for any person to come to a conclusion as to how exactly the publication of articles of the type published by the respondents would cause prejudice in the manner contended for by the petitioner. It seems to me, however, that the danger apprehended by the petitioner company is not so real or substantial as to warrant the continuance of the injunction order passed by us on August 25, 1988. Even if, for the purpose of argument, one were to assume that such cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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