NSE can’t use defamation to gag press, observes HC

The magazine had published article on Algo trading based on a whistleblower’s letter to the Sebi that it said was also copied to Dalal.

Written by Khushboo Narayan | Mumbai | Published: July 25, 2015 3:33:36 am

The Bombay High Court on Friday said that the National Stock Exchange (NSE) “cannot use defamation to gag the press”. A single bench of the high court made this observation while hearing a Rs 100 crore defamation case filed by NSE against Moneylife magazine, founded
by Debashis Basu and Sucheta Dalal.

“How is it defamation when Ms Dalal sent you questions before publishing the article and you (NSE) chose not to respond to the query,” said Justice Gautam Patel while hearing the case. Virag Tulzapurkar, senior counsel representing NSE, however, said the article published by Moneylife is defamatory and should not be republished. Almost a month after Moneylife reported that a few investors had fixed the high frequency trade (HFT) or algorithm based trading in the NSE and thereby jeopardised the interest of retail investors, the exchange on July 21 filed a defamation case against the magazine with a claim of Rs 100 crore.

The magazine had published article on Algo trading based on a whistleblower’s letter to the Sebi that it said was also copied to Dalal. The letter detailed how certain institutions registered for HFT were allegedly allowed to profit illegally by the exchange’s insiders.

The exchange has sought withdrawal of these reports. The court on Friday asked both parties to submit replies and rejoinders and said it will hear the case on August 24 to decide on interim reliefs sought by NSE. Meanwhile, Moneylife in the court, has verbally agreed to not republish the story till the case is decided.

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