Freedoms are not given, they are forged – Justice GS Patel on NSE versus Money Life [Read judgment]

Yesterday, Justice GS Patel of the Bombay High Court dismissed an injunction plea made by the National Stock Exchange of India. Not only was the plea dismissed, but the NSE found itself saddled with costs of Rs 50 lakh; an amount that included donations of Rs. 47 lakh to two Mumbai hospitals..So, just what did the stock exchange do to warrant such exemplary and punitive costs?.Well, the NSE approached the High Court following the publication of an article on Moneylife in June this year. The article in question pointed towards a need for a probe into High Frequency Trades, and was largely based on a letter written by an anonymous whistleblower in January this year..The letter (which can be read here) detailed how,.“[The] NSE’s insiders allowed some chosen traders to benefit through faster connectivity, day after day.”.Between the time she received the letter, and the publication of the June piece, Dalal had made a number of attempts to contact the NSE top brass. She received no response..What she did receive though was a 100-crore defamation suit initiated by the NSE, as well as an injunction seeking the removal of the articles. Also impleaded was Debashis Basu (Moneylife’s Editor and founder). Although the defamation suit continues to be heard, it was while hearing the injunction plea that Justice Patel launched into the NSE. And how..On the time period between the publication of the whistleblower’s letter and the concerned article, the judge notes,.“This is the fact that on 11th June 2015, well before the article appeared, Ms. Dalal emailed the Chairman of SEBI with a copy to the two persons at the helm of the NSE’s affairs, Mr. Ravi Narayan and Ms. Chitra Ramakrishan….….There was no answer….. She sent a reminder a few days later on 15th June 2015.10 This too met with silence. The next day she sent an SMS to Mr. Ravi Narayan and Ms. Chitra Ramakrishan asking specifically whether the NSE had anything to say on these emails. Again: no response. “.As to the possible argument that the NSE may not be able to answer to every single query it receives, the judge writes,.“[The NSE] has no duty to respond to a wild or reckless allegation. But when a person, having made some enquiries, and herself having something of an established track record, makes a politely worded and pointed enquiry, not to respond to it seems to me either to be an example of the most egregious hubris and arrogance or, alternatively, an admission that there is an element of truth in what was being said. There is no third alternative.”.After finding that there is no case made out for an injunction, the judge moves onto the ancillary topic of freedom of the media. Which is where things get really interesting..“Defamation law is not to be used to gag, to silence, to suppress, to subjugate….the freedom of speech and expression is arguably the most volatile, the most sensitive to assault, and the most precious. .We forget that these freedoms have not come easily. They have not come cheap. They were hard won after years of sacrifice and toil and struggle. They have not been given. They have been forged. We surrender them at our peril..And on the role of the media..“It is fashionable these days to deride every section of the media as mere papparazzi, chasing the salacious and steamy. We forget again. None of the scams and the leaks of the past two decades would have been possible without journalists, editors, newspapers and television news anchors. We have grown accustomed to mocking them. We deride their manner, describing them as loud, brash, obnoxious, abrasive and opinionated. We forget.”There is moreToday, all our institutions face the crisis of dwindling public confidence. Neither the NSE nor the judiciary are exceptions to this. It presents a very real dilemma, for the existence of our institutions is posited on that very public confidence and faith and its continuance. The challenge is, I think, in finding legitimate methods of restoring that public trust, that balance. Hence the cries for transparency and accountability everywhere; and I see no reason why the NSE should be any exception to this.The final paragraphs explain the decision to impose costs on the stock exchange..“Not only is this necessary because the NSE is what it says it is, but if it is truly an organization or an institution that acts in the public interest then this must be demonstrated. The suit and the NSE’s conduct seem to me attempts at deflection and evasion. I also believe this entire action to be a gross abuse of the process of this Court. The NSE seems to have taken it more or less for granted that our Courts are too easily cowed by self-congratulatory assertions and overblown claims of rectitude to even consider refusing their claim. This is an approach that must be deprecated, and there is only one way to do that when dealing with an institution like the NSE.”.NSE was represented by Senior Advocates Veerendra V. Tulzapurkar and Viraag Tulzapurkar..(Stay tuned for an in-depth interview with Sucheta Dalal)