Bombay High Court rejects NSE petition against Moneylife

Directs exchange to pay Rs 50 lakh in damages for trying to suppress legitimate reporting

The high court (HC) here has ruled in favour of defendants Sucheta Dalal and Debashis Basu, founders of Moneylife magazine, in a defamation notice of motion filed by the National Stock Exchange (NSE).

On Wednesday, it said NSE’s refusal to answer repeated queries from Dalal, prior to publication of the articles in question, either amounted to egregious arrogance or meant there was truth in the allegations put forth.

The court told NSE to pay Rs 1.5 lakh each to Dalal and Basu and another Rs 47 lakh as punitive damages to Tata Memorial Hospital and Masina Hospital in this city.

In June, Moneylife published a whistleblower's account that alleged various irregularities in the high-frequency trading (HFT) systems of NSE. It also published online the whistleblower's letter dated January 2015, addressed to the Securities and Exchange Board of India (Sebi). Dalal had got a copy of this (anonymous) letter in the post.

Dalal and Basu had given proof of e-mails and text messages sent to seek responses from NSE's managing director and chief executive officer, Chitra Ramkrishna, and the vice-chairman, Ravi Narain. Dalal had sent a mail addressed to U K Sinha, chairman of the Securities and Exchange Board of India (Sebi), with copies marked to Ramkrishna and Narain on June 11. She followed this with a reminder mail on June 15 and a text message on June 16. The article was published on June 19. Moneylife then published a second article on July 8, seeking a detailed probe into HFT at the exchange.

On July 21, NSE said it had moved the HC for damages of Rs 100 crore, for allegedly defamatory statements in these articles. As interim relief, it wanted these articles removed from the magazine’s website.

“We are thrilled with the judgement, as it was a tough battle for us. But, in the end, it’s not just about us; such defamation cases can put the entire media on the back foot,” said Dalal, the magazine’s co-founder (so is Basu, her husband). She reiterated that NSE is a public institution and had a duty to respond to journalists' queries.

“Since we have not received the final copy from the court, we are not in a position to comment further. However, it goes without saying that whatever is the court order, NSE will respect that,” said the exchange in an e-mailed response to Business Standard.

The two journalists had earlier told the HC that Moneylife's coverage of the whistleblower account was in the public interest and after following fair journalistic practices. The bourse had said the reply by Basu and Dalal did not provide conclusive proof of wrongdoing in the exchange.