Shahed Kamal v. M/s A. Surti Developers Pvt. Ltd.

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Citation: 2025 (4) KLR (SC) 86 : 2025 INSC 502
Court: Supreme Court of India
Bench: K.V. Viswanathan, J.; N. Kotiswar Singh, J.
Date of Judgment: 17th April 2025
Case No.: Criminal Appeal No. 2033 of 2025 (Arising out of SLP (Crl.) No. 9942 of 2024)

Defamation – Section 499, 500 IPC – Ninth Exception – Freedom of Speech – Peaceful Protest.

Homebuyers erected a public banner listing grievances against a developer for non-formation of society, poor maintenance, and unresolved defects. Developer filed a criminal complaint for defamation under Section 500 read with Section 34 IPC. 

Held

Banner’s temperate language, highlighting legitimate grievances in a builder-buyer relationship, constituted a peaceful protest made in good faith for protecting homebuyers’ interests, falling within Ninth Exception to Section 499 IPC. Protest protected under Article 19(1)(a), (b), and (c) of the Constitution. Criminal proceedings quashed as an abuse of process, as complaint failed to establish defamation. Magistrates and High Courts can consider exceptions to Section 499 at summons or quashing stage if materials disclose a complete defense. 

Appeal allowed; complaint and summons quashed.

For Petitioner(s): Mr. Sureshan P., AOR Mr. Ajay Panicker, Adv. Ms. Lavanya Panicker, Adv. Mr. Shivam Yadav, Adv.

For Respondent(s): Mr. Siddharth Luthra, Sr. Adv. Mr. Prasenjit Keswani, Sr. Adv. Mr. Nitin Sangra, Adv. Mr. Upmanyu Tewari, Adv. Mr. Syed Kamran Ali, Adv. Mr. Arjun Varma, Adv. Mr. Abhishek Sagar, Adv. Mrs. V. D. Khanna, AOR Mr. Shashibhushan P. Adgaonkar, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR

Facts

  • Parties: Appellants (Shahed Kamal & Ors., homebuyers) v. Respondent (M/s A. Surti Developers Pvt. Ltd., a developer company).
  • Background: The appellants, dissatisfied with the respondent’s services, erected a public banner on 10th August 2015 listing grievances such as non-formation of a housing society, poor maintenance, and unresolved defects in the residential building. The banner was in English and Hindi, visible to the public.
  • Respondent’s Action: The respondent demanded an apology, alleging defamation. Upon refusal, they filed a criminal complaint under Section 500 read with Section 34 of the Indian Penal Code (IPC) for defamation. The Metropolitan Magistrate Court, Borivali, Mumbai, issued summons on 04.10.2016.
  • Procedural History: The appellants’ revision petition and subsequent writ petition under Articles 226 and 227 of the Constitution and Section 482 of the CrPC to quash the complaint were dismissed by the High Court, prompting an appeal to the Supreme Court.

Issue

Whether the complaint filed by the respondent establishes a case for defamation under Section 500 read with Section 34 of the IPC against the appellants, or whether the appellants’ actions are protected under the exceptions to Section 499 IPC, particularly the Ninth Exception.

Arguments

  • Appellants:
    • The banner highlighted legitimate grievances (e.g., non-formation of society, poor maintenance) arising from the respondent’s breach of contractual obligations, which were also subject to a civil suit (No. 610 of 2019).
    • The banner used temperate language, devoid of defamatory content, and was a peaceful exercise of their right to free speech under Article 19(1)(a) of the Constitution.
    • The action was in good faith to protect their interests and those of other flat owners, falling under the Ninth Exception to Section 499 IPC.
    • The respondent suppressed prior communications from the appellants’ ad-hoc committee raising these issues.
  • Respondent:
    • The banner was a calculated attempt to defame the respondent, damaging their reputation publicly.
    • The appellants’ grievances were false and frivolous, with no prior civil or consumer proceedings initiated to address them.
    • The civil suit was filed later and primarily concerned Floor Space Index (FSI) issues, not the banner’s allegations.
    • The appellants did not initially raise the Ninth Exception in their revision petition, and the High Court rightly rejected its applicability.

Judgment

  • Holding: The Supreme Court allowed the appeal, quashed the High Court’s order dated 10.06.2024, and dismissed the criminal complaint and summons issued by the Magistrate.
  • Reasoning:
    • Application of Section 499 IPC: Defamation under Section 499 requires an imputation made with intent to harm or knowledge that it will harm the complainant’s reputation. The Ninth Exception protects imputations made in good faith for the protection of the maker’s or others’ interests or for public good.
    • Nature of the Banner: The banner used mild, temperate language, avoiding abusive or intemperate terms (e.g., “fraud” or “cheating”). It listed specific grievances related to the builder-buyer relationship, such as non-formation of a society and maintenance issues, without malice.
    • Ninth Exception: The Court found the appellants’ actions fell within the Ninth Exception. The imputations were made in good faith to protect the legitimate interests of the appellants and 128 other flat owners. The choice of words and peaceful protest indicated due care and attention, satisfying the test for good faith (relying on Harbhajan Singh v. State of Punjab and Chaman Lal v. State of Punjab).
    • Freedom of Speech: The protest was a legitimate exercise of the appellants’ rights under Article 19(1)(a) (free speech), 19(1)(b) (peaceful assembly), and 19(1)(c) (forming associations). The Court emphasized the importance of dissent and peaceful protest in a democracy (Subramanian Swamy v. Union of India, Javed Ahmad Hajam v. State of Maharashtra).
    • Abuse of Process: Allowing the criminal proceedings to continue would constitute an abuse of legal process, as the complaint did not establish the ingredients of defamation and was likely filed to suppress the appellants’ grievances.
    • Magistrate’s Role: Citing Iveco Magirus Brandschutztechnik GMBH v. Nirmal Kishore Bhartiya, the Court noted that Magistrates and High Courts can consider exceptions to Section 499 at the summons or quashing stage if the materials disclose a complete defense. The High Court erred in dismissing the appellants’ plea without reasoning.
    • Precedents: The Court distinguished cases like Queen-Empress v. E.M. Slater and Valmiki Faleiro v. Mrs. Lauriana Fernandes, where temperate language in business communications was protected under the Ninth Exception, and contrasted with cases where intemperate language exceeded privilege (Tuson v. Evans).

Conclusion

The Supreme Court held that the appellants’ banner was a peaceful protest protected under the Ninth Exception to Section 499 IPC and constitutional free speech guarantees. The criminal defamation complaint was quashed as an abuse of process, reinforcing the right to dissent and protest within reasonable limits in a democratic framework.

Multiple Choice Questions (MCQs)

  1. What was the primary issue before the Supreme Court in Shahed Kamal & Ors. v. M/s A. Surti Developers Pvt. Ltd. & Anr.?
    a) Whether the appellants breached a contract with the respondent.
    b) Whether the appellants’ banner constituted defamation under Section 500 read with Section 34 IPC.
    c) Whether the respondent failed to comply with the Maharashtra Ownership of Flats Act, 1963.
    d) Whether the appellants had a right to additional Floor Space Index (FSI).
    Answer: b) Whether the appellants’ banner constituted defamation under Section 500 read with Section 34 IPC.
  2. Which exception to Section 499 IPC was primarily relied upon by the appellants to defend their actions?
    a) First Exception: Truth for public good.
    b) Third Exception: Opinion on public conduct.
    c) Ninth Exception: Imputation in good faith for protection of interests.
    d) Fifth Exception: Merits of a case under judicial consideration.
    Answer: c) Ninth Exception: Imputation in good faith for protection of interests.
  3. What constitutional rights did the Supreme Court recognize as protecting the appellants’ peaceful protest?
    a) Article 14 (Equality before law).
    b) Article 19(1)(a), (b), and (c) (Free speech, peaceful assembly, and forming associations).
    c) Article 21 (Right to life and personal liberty).
    d) Article 32 (Right to constitutional remedies).
    Answer: b) Article 19(1)(a), (b), and (c) (Free speech, peaceful assembly, and forming associations).
  4. Why did the Supreme Court quash the criminal defamation complaint?
    a) The respondent failed to prove financial loss due to the banner.
    b) The banner’s imputations were made in good faith, protected under the Ninth Exception, and the proceedings were an abuse of process.
    c) The appellants apologized for erecting the banner.
    d) The respondent suppressed evidence of prior agreements.
    Answer: b) The banner’s imputations were made in good faith, protected under the Ninth Exception, and the proceedings were an abuse of process.
  5. What did the Supreme Court hold regarding the role of Magistrates and High Courts in defamation cases?
    a) They cannot consider exceptions to Section 499 IPC at the summons or quashing stage.
    b) They can dismiss a complaint if materials disclose a complete defense under any exception to Section 499 IPC.
    c) They must always proceed to trial regardless of defenses raised.
    d) They lack jurisdiction to quash summons in defamation cases.
    Answer: b) They can dismiss a complaint if materials disclose a complete defense under any exception to Section 499 IPC.
  6. What was the significance of the language used in the banner, as per the Supreme Court?
    a) It was irrelevant to the case.
    b) Its temperate and non-abusive nature indicated good faith, supporting the Ninth Exception.
    c) It was deemed offensive and defamatory.
    d) It violated the respondent’s right to privacy.
    Answer: b) Its temperate and non-abusive nature indicated good faith, supporting the Ninth Exception.
  7. Which precedent did the Supreme Court rely on to emphasize the importance of peaceful protest in a democracy?
    a) Iveco Magirus Brandschutztechnik GMBH v. Nirmal Kishore Bhartiya.
    b) Javed Ahmad Hajam v. State of Maharashtra.
    c) Chaman Lal v. State of Punjab.
    d) Valmiki Faleiro v. Mrs. Lauriana Fernandes.
    Answer: b) Javed Ahmad Hajam v. State of Maharashtra.
  8. What was the outcome of the appeal in the Supreme Court?
    a) The appeal was dismissed, and the appellants were directed to face trial.
    b) The appeal was allowed, and the complaint and summons were quashed.
    c) The case was remanded to the High Court for reconsideration.
    d) The appellants were ordered to pay damages to the respondent.
    Answer: b) The appeal was allowed, and the complaint and summons were quashed.

Frequently Asked Questions (FAQs)

  1. What was the basis of the dispute in Shahed Kamal & Ors. v. M/s A. Surti Developers Pvt. Ltd. & Anr.?
    The dispute arose when homebuyers (appellants) erected a public banner listing grievances against the developer (respondent) for issues like non-formation of a housing society, poor maintenance, and unresolved defects. The respondent filed a criminal defamation complaint, alleging the banner harmed their reputation.
  2. Why did the Supreme Court find that the appellants’ actions did not constitute defamation?
    The Court held that the banner’s imputations were made in good faith to protect the appellants’ and other flat owners’ legitimate interests, falling under the Ninth Exception to Section 499 IPC. The temperate language, lack of malice, and peaceful nature of the protest further supported this finding.
  3. How did the Supreme Court interpret the Ninth Exception to Section 499 IPC in this case?
    The Ninth Exception protects imputations made in good faith for the protection of the maker’s or others’ interests or for public good. The Court found that the appellants’ banner, highlighting genuine grievances in a builder-buyer relationship, met these criteria, as it was a careful and non-abusive expression of dissent.
  4. What role did the constitutional right to free speech play in the judgment?
    The Court recognized that the appellants’ peaceful protest was protected under Article 19(1)(a) (freedom of speech), 19(1)(b) (right to assemble peacefully), and 19(1)(c) (right to form associations). It emphasized that such rights are integral to democracy, subject to reasonable restrictions under Article 19(2).
  5. Why did the Supreme Court consider the criminal proceedings an abuse of process?
    The complaint failed to establish the ingredients of defamation under Section 499 IPC, and the Court found that continuing the proceedings would suppress the appellants’ legitimate right to protest and dissent, constituting an abuse of legal process.
  6. Can a Magistrate or High Court dismiss a defamation complaint at the initial stage?
    Yes, the Supreme Court clarified, citing Iveco Magirus Brandschutztechnik GMBH v. Nirmal Kishore Bhartiya, that if the complaint and supporting materials disclose a complete defense under any exception to Section 499 IPC, a Magistrate can dismiss the complaint at the summons stage, and a High Court can quash it under Section 482 CrPC.
  7. What significance did the Court attach to the language used in the banner?
    The Court noted that the banner’s mild, temperate, and non-abusive language (avoiding terms like “fraud” or “cheating”) indicated good faith and a legitimate intent to highlight grievances, which was a key factor in applying the Ninth Exception.
  8. How does this case reinforce the right to protest in India?
    The judgment underscores that peaceful protests, including raising grievances through public expressions like banners, are protected under constitutional rights, provided they are conducted within reasonable limits and without offensive language. It reaffirms the importance of dissent in a democratic society.
  9. Did the Court consider the truth of the appellants’ grievances listed in the banner?
    Unlike the First Exception to Section 499 IPC, which requires truth as an essential element, the Ninth Exception does not. The Court focused on whether the imputations were made in good faith, not on their factual accuracy, though it noted the grievances were part of a broader civil dispute.
  10. What broader implications does this judgment have for defamation law in India?
    The ruling strengthens protections for legitimate dissent and peaceful protests, particularly in commercial relationships like builder-buyer disputes. It cautions against using defamation laws to suppress criticism and clarifies that courts can intervene early to prevent frivolous complaints, balancing free speech with reasonable restrictions.
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