Ajay Shah moves SC in MCX defamation case

Leading economist Ajay Shah today moved the Supreme Court challenging the order of the Bombay High Court which turned down his plea to quash the summons issued to him in a defamation suit by the Multi Commodity Exchange (MCX).

A Bench comprising justices Markandey Katju and A K Patnaik directed the parties to file their submissions and listed the matter for second week of July for hearing.

The High Court had dismissed Shah's petition to quash the summons issued to him by a Mumbai magistrate in a criminal defamation case filed by MCX over an article written by him on February 4, 2009.

In the article Shah referred to an action taken by the Forward Market Commission (FMC) which prevented MCX's rival commodity exchange NCDEX from reducing transaction fees and argued that the only beneficiary of the FMC action was the MCX.

Objecting to the article, MCX slapped a defamation suit on Shah in March 2009 under section 500 of the IPC. Acting on the plea, the magistrate issued summons to him on March 26, 2009. Following this Shah, who was also on the NCDEX board, moved the High Court to set aside the summons. But the HC rejected his plea on December 2, 2009.

The High Court had also rejected Shah's plea that he had written the article in public interest and observed, "there is no presumption that eminent people would write articles only for educating the public at large and in good faith... Experience has shown otherwise."

The court further observed that "the article was written at a time when MCX was contemplating a public issue. The timing of the article as such was to harm the complainant (MCX) at the time of the public issue".