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 said this 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 21 July filed a defamation case against the magazine with a claim of Rs 100 crore.
The magazine had earlier published article on Algo trading based on a whistleblower’s letter to the Securities and Exchange Board of India (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 Bombay high court on Friday asked both the parties to submit their replies and rejoinders in the case and said it will hear the case on 24 August to decide on ad interim reliefs sought by NSE. Meahwhile, Moneylife in the court, has verbally agreed to not republish the story till the case is decided.
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