NSE withdraws its Rs100 crore defamation suit against Moneylife, pays Rs50 lakh as cost and penalty
The National Stock Exchange on Tuesday withdrew its Rs100 crore defamation case against Moneywise Media Pvt Ltd, publisher of the fortnightly magazine Moneylife, Debashis Basu and Sucheta Dalal, founders of Moneylife (together Moneylife). The defamation case related to the publication of a whistleblower’s letter in Moneylife’s web portal that laid bare how certain NSE officials were giving undue advantage to specific brokers in their co-location facility set up for high-frequency trading (HFT). 
 
NSE moved the Bombay High Court on 21 July 2015 to stop the publication and circulation of the article and also asked Moneylife to offer an unconditional apology. This application was heard by Justice Gautam Patel, who passed severe strictures against NSE and imposed a cost and penalty of Rs50 lakhs. Moneywise Media was represented by Advocate Bapoo Malcolm while Debashis Basu and Sucheta Dalal argued their own positions. NSE had filed an appeal against this order before a division Bench of Bombay HC.  
 
On Tuesday, NSE told the division Bench of Justice Naresh Patil and Justice ZA Haq that it would honour the judgement of Justice Patel and withdraw appeal in the defamation case. Although the NSE came with demand drafts to pay up, they wanted Justice Patel's order nullified. Senior advocate Iqbal Chagla, counsel for NSE, started by saying that it was never the intention of the Exchange to gag the media. However, he argued hard and vehemently to have Justice Patel's order nullified. 
 
Mr Janak Dwarkadas, who argued for Moneylife pro bono, argued vehemently against such a move. The judges were convinced that Justice Patel’s order should stay. 
 
After the cheques were handed over, Mr Chagla remarked that this was probably the most hotly contested withdrawal of a suit.
 
At the appeal stage, NSE was represented by senior counsel Chagla while Debashis Basu and Sucheta Dalal were represented by Mr Dwarkadas, Sharan Jagtiani and Nirman Sharma, backed by solicitors, Veritas Legal, led by Rahul Dwarkadas and team member Areez Guzder.
 
Earlier on 9 September 2015, Justice Patel had asked NSE to pay Rs1.50 lakh each to Ms Dalal and Mr Basu “towards cost and Rs47 lakh as punitive and exemplary costs in equal parts for public causes to two trusts, Tata Memorial Hospital and the Masina Hospital, for free treatment of the poor.” 
 
The misuse of Colo or algo trading came to light when on 19 June 2015, Moneylife published a whistleblower's letter on manipulation and collusion with select players in algo trading and use of Colo servers at NSE. Moneylife had duly contacted NSE for its response before writing the article. On that occasion too, the NSE had refused to respond despite three attempts by Moneylife to elicit its views. After Moneylife published the articles on HFT, NSE filed a Rs100 crore defamation suit against Moneylife, with prayers to remove the articles and stop Moneylife from writing further on the issue.
 
Moneylife deeply acknowledge the help and support received from Dr Subramanian Swamy, Senior Adv Shyam Divan, Adv Ishkaran Bhandari, Mr Ravi Raghunath, Adv Harsh Desai and our many friends and colleagues in this fight for truth and justice.
 
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COMMENTS

Harish Kohli

1 year ago

My apologies for the mixup in the text of my write up. I had entered this piece as a response to Sucheta's mention about Justice Patel's judgement on NSE. Having appreciated the Goa judgement by Justice Patel, I wrote this bit to inform all. When I clicked the SUBMIT ICON, nothing happened. Having failed a couple of times, I sent it as a fresh response - a cut & paste job. Apologies for the bad job.

Harish Kohli

1 year ago

Though not connected with this case, I felt worthwhile to inform that Justice Gautam Patel is in the news today; see Page One Anchor in IndianExpress 12/10/17. His judgement w.r.t the the Central Govt. notification to move the western zone of NGT in Pune, which handles all cases from Goa, NGT Delhi principal bench. This shift based, on a proposal from Goa CM Mohan Parrikar is a pleasure to read. The CM has put forth that there is lack of air connectivity between Goa & Pune, loss of time of the trip costs Rs. 50,000 and availability of lawyers in Delhi. It is also stated in the report that there is an old proposal for a circuit bench in Goa. Justice Patel's judgement has pulled up the State Govt. for looking at the convenience of the lawyers and respondents instead of that of the litigants. He has quoted James Baldwin "If one really wishes to know how justice is administered in the country, one does not question the policemen, the lawyers, the judges or the protective members of the middle class. One goes to the unprotected - those, precisely, who need the law's protection most - and listens to their testimony". He also quotes JF Kennedy "sincerity needs evidence". Read on the whole, it is truly a wonderful judgment. Very well reported by Smita Nair.

Purva Joshi

1 year ago

Proud to be a reader of honest journalism like moneylife. Also, I can proudly recommend this magazine to other people over other media magazines and news websites.
CONGRATULATIONS.

NITIN PATIL

1 year ago

Certainly not just another feather in your cap but crowning glory ( so to say ) in investigative journalism. We can definitely imagine how traumatic ( apart from expense wise ) it must have been to take head on giants like NSE . But as Adv. Bapoo put it so very curtly - 'the bigger they are , the harder they fall ' ! 3 cheers for the victory !

Sheshadri Adiga

1 year ago

Superb...

Samita K Aiyer

1 year ago

Hearty Congrats Sucheta Di ,
Takes guts and grits to fight back !

Ragunathan Pattabiraman

1 year ago

Great win! It is still unfair that Goliaths barely get a scratch when they lose while Davids had to put their life on the line. Shouldn't the penalty be propositional to the defamation demanded originally? Though a complete novice about legalities, I think may be the penalty should be a decent multiple of, say 2 times, of what they demanded filing such a false case. This may deter shiver-inducing demands like 100 crores since when they fail the penalty would be big enough and everyone may pay more attention. Wish there is such a law.

REPLY

Bapoo Malcolm

In Reply to Ragunathan Pattabiraman 1 year ago

The normal "fine", called costs regime, is in the nature of a few thousand rupees at the motion stage. Six years ago, we had got Rs. 25,000/- which was a WOW amount then. So, the Rs. 50 lakhs is good for a start. It has deterrent value for others too. If frivolous litigation is given the boot, the courts will have so much time on their hands that judges will take the afternoon off to play golf.

Govinda Warrier

In Reply to Bapoo Malcolm 1 year ago

This is a landmark victory for Moneylife. Long back, in my article in Moneylife on judicial reforms, I had argued that the cases before all courts where one party is government or corporates chances of delays and appeals on flimsy grounds are more. From admission/listing of cases in the lowest court to appointment of Judges in Apex court need to be reviewed and reforms are overdue.

NITIN PATIL

In Reply to Ragunathan Pattabiraman 1 year ago

I agree . Wish there was such a law providing for proportionate penalty which could be a big deter ant for such Goliaths !

Pradeep Kumar M Sreedharan

In Reply to Ragunathan Pattabiraman 1 year ago

Absolutely, law must discriminate between people and corporates

Neeraj Singh

1 year ago

Satyameve Jayate..

Bapoo Malcolm

1 year ago

Glorious in defeat but magnanimous in victory. Let us not go overboard with the tons of oodle. This was just a small battle. There needs to be a war ahead and malicious prosecution must be stopped. Litigants need to be advised properly. There's way to go. Let's read the order. And let us hope that Debashish Basu has preserved those 52 rogatories.

REPLY

Sucheta Dalal

In Reply to Bapoo Malcolm 1 year ago

Thanks Bapoo. But you may have noticed that the 52 rogatories that we had composed are not out of date. A LOT of water has flowed down the NSE bridge since Justice Gautam Patel's order. For starters, the SEBI TEchnical Advisory Committee stood up to pressure and confirmed the findings of the letter. NSE's own inquiry ordered through a Big-4 consulting firm re-confirmed it. Then internal whistle blowers began to sing and sent us anonymous letters. We ourselves were fighting relentless using RTI - either directly or through friends like Mr Shailesh Gandhi (former CIC). The can of worms opened and Chitra Ramakrishna had to quit, soon after her favoured appointee Subramanian Anand. Ravin Narain has also gone. The withdrawal happened because there is NEW Managing Director and most of the board has changed. Just to update you!!

Harish Kohli

In Reply to Sucheta Dalal 1 year ago

Sucheta ji, you hit the nail on the head stating the reasons for the withdrawal. I had wanted to say "the jamindaars have gone and the new blood has prevailed". Nai umang (vichar) nai disha

Pradeep Kumar M Sreedharan

In Reply to Bapoo Malcolm 1 year ago

Yes, using the state and Judicial machinery for vandalism /hooliganism must be stopped. It is very much in the interests of the Judiciary that it is not used to threaten and perpetrate crimes.

Goutam Roy

1 year ago

Truly remarkable Moneylife

Mushtaq Khan

1 year ago

Never forget the cause of this Great Victory!
Moneylife victory remind us once again, "Honesty is the Best Policy"
Keep writing the truth only.
Wish you the best for your Victory!

SuchindranathAiyerS

1 year ago

Congratulations

Ketul Savla

1 year ago

Well done Moneylife team!!! You guys are the inspiration to many of us! Keep up the good work in educating the citizens and cleaning the corruption.

Janardhan Reddy

1 year ago

Congratulations

Sunil Charles

1 year ago

Congratulations .... this one is for keeps . Keep up the good work

Corruption: 1, Demonetisation 0. But these 3 Factors Can Turn the Tide
“…there will be a fiscal windfall both from the high denomination notes that are not returned to the RBI and from higher tax collections as a result of increased disclosure under the Pradhan Mantra Garib Kalyan Yojana (PMGKY).”---Economic Survey 2016-17 (January 2017)
 
The RBI Annual Report 2016-17 says that Rs15.28 lakh crore (roughly 99%) of the banned notes has been received till 30 June 2017. A quick assessment of the current state of play suggests that corruption is clearly ahead of demonetisation. The three crucial facts can turn the tide:
 
1. The 18-lakh suspicious accounts with around Rs2.89 lakh crore being frozen and with most of the moneys gradually finding a way to the exchequer. It is important to penalise tax evasion for signalling a high cost of for tax evasion in the future in order to have better future tax compliance.
 
2. A rise in the Tax/gross domestic product (GDP) ratio by say two percentage points in FY2018 that is sustained in the future would mean around Rs3 lakh crore of additional tax revenues each year.  The Economic Survey’s expectation of a 0.5 percentage point increase in this ratio is too little especially given that the “fiscal windfall” does not seem to be happening!  As mentioned in a report “Tax ratio similar to Rwanda, but wants to beat China: That’s India” by Amit Mudgill (The Economic Times, 22-Jul-2017) the current tax/GDP ratio is 16.6% while the tax/GDP ratio in OECD countries is around 34.3%. Taxes are the price we pay for a civilized society.---Justice Oliver Wendell Holmes Jr. The Tax/GDP ratio is an indicator of whether we are willing to pay for civilization. 
 
3. The currency notes of Rs2,000, Rs1,000 and Rs500 being replaced by heavy and big coins corresponding to these denominations! This would make it feasible for the poorest of the poor (or digitally-excluded) to undertake physical transactions while making it impractical for others to make large physical transactions. This is because the poor may have to deal with a few heavy and big coins however, tens of thousands of heavy and big coins will logistically difficult. 
This principle has been suggested by former Professor Kenneth Rogoff, former Chief Economist of International Monetary Fund (IMG) in his book “The Curse of Cash”.  This will help curb future tax evasion. Such a transition can be done gradually and need not be done at the stroke of the midnight hour given that data related to cash deposits after a transition was done at the midnight of 8 November 2017 is already available.
 
A not-so-easily observable sign is potentially better access to formal finance ---aided by higher adoption of digital payment ---among the poorest of the poor (or digitally excluded). In some ways the benefits of digital payments are independent of the anti-tax evasion intent of demonetisation and these benefits may be pursued independently.
 
The return of 99% of the banned notes almost makes it a winner-takes-all, in comparison with say a scenario in which 70% of the banned notes were returned and government takes no follow-up action resulting in partial wins for corruption and civilization in the medium term. Future inaction on the important follow-up steps would mean that the corruption mostly wins. On the other hand the government certainly has at least three ways to outsmart the enemies of civilization!
 
(Aniruddha M Godbole is a senior industry expert in financial services at Persistent Systems Ltd. Views expressed in this article are his personal views.)
 
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COMMENTS

Dr William Bell

1 year ago

Aniruddha is the greatest di*khead!

SuchindranathAiyerS

1 year ago

Grasping at silver cloud linings or whistling in the wind? Here is what I wrote when demonetization was going on: http://www.economist.com/comment/3318150#comment-3318150

Airlines asked to make 'No Fly' list of unruly passengers
In a bid to tackle increasing incidents of misbehaviour by passengers on flights, the Civil Aviation Ministry on Friday directed airlines to create a 'No Fly' list, which would entail ban on erring fliers ranging from three months to two years.
 
"India is the first country to put out such a list. The 'No Fly' list will ensure safety and check (flight) disruptions. It will safeguard the interests of passengers, airlines, and cabin crew," Minister of State for Civil Aviation Jayant Sinha told reporters here.
 
For every subsequent offence by a passenger, the ban will be for twice the period of the previous ban. However, "an airline would not be bound by the 'No Fly' list of another airline" he said.
 
"Safety is my top concern. Today, we have set in place mechanisms which are a step forward in our constant endeavour to keep our skies safe and vibrant," Civil Aviation Minister Ashok Gajapathi Raju told IANS.
 
The list will categorise unruly behaviour into three categories: Level 1 -- unruly behaviour (verbal); Level 2 -- physical behaviour; and Level 3 -- life-threatening behaviour.
 
On June 15, Telugu Desam Party MP J.C. Diwakar Reddy createda ruckus at the Visakhapatnam airport after he was denied a boarding pass for an IndiGo flight as he had showed up late. The lawmaker from Anantapur was said to have damaged a printer and misbehaved with IndiGo airline staff. 
 
In March, Shiv Sena MP Ravindra Gaikwad was accused of assaulting an Air India staffer, following which several airlines banned him from flying on their planes till he apologised.
 
Releasing the guidelines, the Civil Aviation Ministry said in a statment: "Such unruly behaviour will be probed through an internal committee set up by the airline under the chairmanship of a retired District and Sessions Judge as Chairman and members from different scheduled airlines and passenger/consumer associations and retired officers of Consumer Dispute Redressal Forums." 
 
The internal committee will have to decide the matter within 30 days along with the duration of ban on an unruly passenger. During this period, the airline concerned may impose a ban on the passenger.
 
The 'No Fly' list of such unruly passengers will be provided by the airline concerned and be made available on the Directorate General of Civil Aviation (DGCA) website.
 
"No Fly list will have two components -- unruly passengers banned for three months to more than two years based on level of unruly behaviour; and those persons perceived to be national security risk by the Ministry of Home Affairs," it said.
 
The guidelines will be applicable to all Indian operators engaged in scheduled and non-scheduled air passenger transport services, both domestic and international. These would also be applicable to foreign carriers subject to compliance with the Tokyo Convention of 1963. 
 
"Passenger's unruly behavior at airport premises will be dealt with by relevant security agencies under applicable penal provisions," it said.
 
The guidelines also contain a provision for appeal against the ban. 
 
"Aggrieved persons, other than persons identified as security threat by the Ministry of Home Affairs, can appeal within 60 days from the date of issuance of order to the Appellate Committee constituted by the Ministry of Civil Aviation comprising a retired judge of a High Court as Chairman and members from passenger/consumer associations/ retired officers of consumer dispute redressal forums and the airlines," the statement said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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