Delhi High Court Quashes Defamation Case Against Minority Shareholders

Court Finds Communication Made in Good Faith Under Exception 9 to Section 499 IPC, Preventing Abuse of Judicial Process

In a significant judgment delivered on October 8, 2025, the Delhi High Court has quashed a criminal defamation complaint filed against Ritesh Bawri and other minority shareholders of Calcom Cement India Ltd. (CCIL). The case revolved around a letter written by the minority shareholders to a lender bank, addressing alleged mismanagement by the majority shareholders of CCIL, Dalmia Cement Bharat Ltd.

Justice Neena Bansal Krishna presided over the case, where the petitioners sought relief from the defamation charges under Section 499 of the Indian Penal Code (IPC). The court concluded that the letter was penned in good faith and aimed at protecting legitimate financial interests, thereby falling under Exception 9 to Section 499 IPC. This exception permits imputation made in good faith for the protection of one's own interests or those of others, or for the public good.

The petitioners argued that the letter was a bona fide communication sent to Guarant Co, a lender to CCIL, to highlight financial irregularities and management issues concerning the majority shareholders. The court noted that this communication was strictly between parties with a legitimate interest in the matter, thereby not meeting the essential element of "publication" required for defamation.

The judgment emphasized that the ongoing disputes between the parties were of a civil and corporate nature, already being addressed in various legal forums, including the Company Law Tribunal and Arbitration. It underscored that the continuation of criminal proceedings would amount to an abuse of the judicial process, as the core issue was essentially civil in nature.

The High Court's decision comes as a relief to the minority shareholders, underscoring the importance of distinguishing civil disputes from criminal defamation and preventing misuse of legal avenues to settle corporate scores. The ruling also highlights the court's role in safeguarding the ends of justice by ensuring that criminal law is not used as a tool for harassment.

Bottom Line:

Criminal defamation under Section 499 IPC - Quashing of proceedings under Section 482 Cr.P.C., 1973 - Letter written by minority shareholders to a lender bank regarding alleged mismanagement of the company - Held, the letter was in good faith, aimed at protecting legitimate financial interests, and falls under Exception 9 to Section 499 IPC - Continuation of criminal proceedings would amount to abuse of process.

Statutory provision(s): Section 499 IPC, Section 482 Cr.P.C., Section 178 Cr.P.C., Section 202 Cr.P.C., Section 199 Cr.P.C.

Ritesh Bawri v. State, (Delhi) : Law Finder Doc Id # 2791069