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.