TMI Blog2010 (5) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... f this appeal, may be stated thus: Appellant No.1 is the President and Chief Executive Officer of the Chartered Financial Analysts Institute (hereinafter referred to as CFA Institute ), incorporated under the laws of the State of Virginia, United States. Appellant No.2 is the President of the Indian Association of Investment Professionals, who is a member of the society of CFA Institute. CFA Institute is a non stock corporation and confers the designation of Chief Financial Analyst ( CFA for short) upon its members who fulfil a minimum professional criterion. CFA certification is considered to be a definitive standard for professional competence. 4. In the year 1985, on being approached by the Institute of Chartered Financial Analysts of India (for short ICFAI ), respondent No.2 herein, a registered society, having its office at Kolkata, CFA Institute entered into a licence agreement with them to conduct its CFA program in India. The agreed arrangement continued for quite some time. However, realising that respondent No.2 was not adhering to the required standards and quality in the said program, CFA Institute decided to wean off its arrangement with ICFAI - respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of the advertisement issued on 30th January 2007 was for subsequent programmes, which were not current at the time of the interim injunction order and, therefore, it was in breach of the said interim injunction. Accordingly, on 12th February 2007, CFA Institute issued a public notice under the caption A Word of Caution to the Indian Investment Community , (hereinafter referred to as Word of Caution ). The relevant extract of the said publication reads thus: There is confusion over the CFA name in India, and you deserve to know the facts. The Chartered Financial Analyst (CFA(R)) designation from CFA Institute is the only globally recognized CFA designation for financial professionals. However, the Institute of Chartered Financial Analysts of India (Icfai) offers an educational program specializing in finance, which they term the CFA Program , and awards a title called the CFA . On 4th August 2006, the Delhi High Court recognized that CFA Institute owns the exclusive rights to the CFA trademarks and that continued use by Icfai causes irreparable harm. The court ordered an interim injunction requiring Icfai to stop using the Chartered Financial Analyst and CFA b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er persons nominated by respondent No.2; under Section 21 of the Act, the Board of Management consists of 9 persons of whom as many as 7 persons are to be the nominees of respondent No.2. It was, thus, submitted that all the acts of the University were really the acts of respondent No.2 itself and, therefore, the advertisement issued for fresh admission by the University was clearly in breach of the order passed by the Delhi High Court. According to the learned counsel, the effect of the advertisement dated 30th January 2007 would have been to induce prospective students to believe that joining the new course offered by the University in the year 2007 would entitle them to get CFA designation from CFA Institute. It was argued that it was in these circumstances and keeping in mind the public interest that the appellants had issued a Word of Caution to the students who wished to obtain CFA certification. Learned counsel asserted that the prosecution of the appellants on account of publication of the said Word of Caution is an abuse of the process of the Court inasmuch as the said Word of Caution published by them was a public duty and thus, a legitimate expression. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dl. Labour Court, Hyderabad Ors.6 11.Learned counsel argued that a reading of the offending publication as a whole would show that omission of the sentence However, this order of injunction will not come into effect till the end of current academic session of CFA programme run by the defendants nor will anything said herein will mean final expression of opinion of this Court was a conscious and deliberate suppression intended to portray ICFAI as a wrong doer, which has violated an injunction order passed by the High Court and in the process is in contempt of the said order. According to the learned counsel, suppression of the fact that the interim injunction did not apply to the current academic session of the CFA Programme , which was to conclude only in May 2009; had subjected the students who were undergoing the three year course to fear and anxiety that three years (2001) 5 SCC 156 (2002) 9 SCC 708 of their lives would be wasted, giving the impression that respondent No.2 had cheated them. It was contended that the conscious and deliberate omission of the last sentence of the order of interim injunction was with the sole objective to deter the students from enrolling i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit case where the High Court in exercise of its jurisdiction under Section 482 of the Code should have quashed the complaint against the appellants? 16.Before addressing the contentions advanced on behalf of the parties, it will be useful to notice the scope and ambit of inherent powers of the High Court under Section 482 of the Code. The Section itself envisages three circumstances under which the inherent jurisdiction may be exercised, namely, (i) to give effect to an order under the Code; (ii) to prevent abuse of process of Court; and (iii) to otherwise secure the ends of justice. Nevertheless, it is neither possible nor desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction of the Court. Undoubtedly, the power possessed by the High Court under the said provision is very wide but is not unlimited. It has to be exercised sparingly, carefully and cautiously, ex debito justitiae to do real and substantial justice for which alone the court exists. It needs little emphasis that the inherent jurisdiction does not confer an arbitrary power on the High Court to act according to whim or caprice. The power exists to prevent abuse of authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only when a clear case for quashing is made out and failure to interfere would lead to a miscarriage of justice. The expression rarest of rare cases is not used in the sense in which it is used with reference to punishment for offences under Section 302 IPC, but to emphasize that the power under Section 482 Cr.P.C. to quash the FIR or criminal proceedings should be used sparingly and with circumspection. 20.Bearing in mind the afore-stated legal position in regard to the scope and width of the power of the High Court under Section 482 of the Code, we shall now advert to the facts at hand. 21.As noted above, the gravamen of the allegations made against the appellants in the complaint under Section 500 of the IPC is that when on 30th January 2007, respondent No.2 through its sponsored University at Tripura issued advertisement for fresh enrolments for award of CFA Certification, CFA Institute, through its President and CEO, appellant No.1, in this appeal, issued the offending Word of Caution wherein they: (1) deliberately and consciously did not publish the full text of the interim injunction granted by the High Court against respondent No.2 vide order dated 4th August 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The sole purpose is to defame and scandalize and thereby lower the image of the Society in the eyes of the general public as also in the eyes of its present students as also potential students and thereby harm the image of the Society, so that the organization of the accused persons can benefit therefrom. That in the defamatory advertisement dated 12.02.2007, the accused persons have further stated as follows:- On 4th August, 2006, the Delhi High Court recognized that CFA Institute owns the exclusive rights to the CFA trademarks and that continued use by ICFAI causes irreparable harm. The court ordered an interim injunction requiring Icfai to stop using the Chartered Financial Analyst and CFA brands and to change its corporate and CFA titles names. Unfortunately, Icfai has continued its unauthorized use of our trademarks by running advertisements from an Icfai-sponsored university . The said statements are patently false and defamatory in nature. The accused persons deliberately, wilfully and with malafide intention have not mentioned in the advertisement that the order dated 4.8.2006 passed by the Hon'ble High Court of Delhi, granting temporary injunction, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the complainant actually suffered directly or indirectly from the imputation alleged. 25.However, as per Explanation 4 to the Section, no imputation is said to harm a person's reputation, unless that imputation directly or indirectly lowers the moral or intellectual character of that person, or lowers the character of that person in respect of his caste or of his calling, or lowers the credit of that person, in the estimation of others or causes it to be believed that the body of that person is in a loathsome state, or in a state generally considered as disgraceful. 26.As stated above, the thrust of the argument of learned counsel for the appellants was that since the Word of Caution was issued in good faith for the benefit of those who were planning to acquire CFA Certificate, and the same being for the public good , the case falls within the ambit of Tenth Exception to Section 499 of the IPC and, therefore, the appellants cannot be held liable for defamation. 27.Tenth Exception to Section 499 of the IPC reads as follows: Tenth Exception.--Caution intended for good of person to whom conveyed or for public good.--It is not defamation to convey a cautio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was aimed at that group of people who were interested in acquiring a definitive standard for professional competence or for those who wanted to hire such professionals and not for the general public as such. According to them, this is clear from the text of the Word of Caution , which says that If you are planning to either hire an investment professional or obtain a designation, you need to make informed decisions that benefit your future. However, it cannot be denied that while the publication refers to the interim order passed by the Delhi High Court, it omits to mention that the said injunction will not come into effect till the end of current academic session of the CFA programme, which, according to respondent No.2, was to conclude in May 2009, and that the order would not mean expression of final opinion on the matter. According to respondent No.2, the omission of last two sentences of the interim order was a conscious and deliberate suppression to somehow project ICFAI in a bad light in order to harm its reputation in the eyes of the professional community and, therefore, the offending publication was neither in good faith nor in public interest . 32.It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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