On 14th March (Thursday) the Delhi High Court upheld a lower court order instructing news organization Bloomberg to remove a story claiming that market regulator Securities and Exchange Board of India (SEBI) had discovered a US $241 million accounting discrepancy in Zee Entertainment Enterprises Limited. Bloomberg had moved the High Court challenging the trial court verdict asking it to remove the article, and the High Court rejected the plea and directed the media house to comply with the court order.
Furthermore, Justice Shalinder Kaur stated that Bloomberg has three days to abide by the directive and take down the report, refusing to grant them more time to file an appeal with the Supreme Court. The order read, “It is clarified that the appellants shall comply with the trial court order within three days.”
Notably, Zee argued in the court that there were no SEBI observations against it as alleged by Bloomberg. On the other hand, Bloomberg alleged that the court order was issued without hearing them, and argued that it is an internationally renowned media house.
The court was subsequently informed by Zee’s attorney Vijay Aggarwal that his client would not file a contempt plea against Bloomberg until Tuesday. Additionally, the court turned down a plea from Bloomberg’s attorney to postpone the ruling for a week. After the verdict, Bloomberg counsel argued, “Parties who need to sign for me to avail the remedy (of further appeal) are not in Delhi. They are abroad,” to which the court answered, “We have given you sufficient time.”
Senior Advocate Rajiv Nayar who represented Bloomberg, claimed before the High Court that the lower court’s order lacked both a prima facie finding and a rationale. He charged, “This is the most amazing order. No prima facie case made, balance of convenience, irreparable loss or hardship.” He said that Bloomberg is a well-known media outlet, adding that the trial court judge did not even hear arguments from the news platform before issuing the judgement.
He alleged in his submission that the contested ruling was utterly irrational and offered no explanation for why Zee would have a prima facie case. “Where is the reasoning? And he grants a final relief by saying that takedown. I am an internationally reputed news agency. The ex parte order of taking down is passed without any reasoning. I am amazed,” he complained while reading the impugned order.
Bloomberg had filed the plea in the Delhi High Court to overturn a trial court ruling requiring them to take down a story claiming that SEBI had flagged accounting mismatches about US $240 million in Zee Entertainment’s books. Additional District Judge (ADJ) Harjyot Singh Bhalla of the Saket Courts issued the order ex parte. The court further stated that the parties would be free to request an early hearing before the ADJ in an emergency.
Justice Shalinder Kaur of the High Court noted that the ADJ used his judgment to consider the case’s facts and determined that, on the face of it, there was sufficient evidence to support the decision to grant an ex-parte ad interim injunction, otherwise, the application’s whole purpose would have been rendered moot. The court highlighted, “Being conscious of the provisions of Order XXXIX Rule 3A of the Code of Civil Procedure, the learned ADJ has fixed the next date of hearing as 26.03.2024 for deciding the application under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure. I, thus, do not find any ground to interfere with the order impugned herein. Consequently, the appeal along with pending applications, stands dismissed.”
The appeal was made in opposition to a decision made on 1st March by ADJ Harjyot Singh Bhalla. The order was rendered in a defamation lawsuit brought by Zee Entertainment against the online news platform’s management business, Bloomberg Television Production Services India Private Limited, as well as the publication’s writers and researchers. Bloomberg released a report on 21st February 2024 headlined “India Regulator Finds $ 241 Million Accounting Issue at Zee.”
According to the report, the market regulator discovered that Zee Entertainment’s accounts were missing about $241 million, with no appropriate transaction history displayed for the amount. Zee subsequently sued Bloomberg and its writers Anto Antony, Saikat Das, and Preeti Singh for defamation in a Delhi district court.
Zee informed the district court that Zee had not been found guilty by SEBI and that the article was slanderous. It was pointed out that although no such conclusion was provided, the article purports that SEBI had discovered significant financial mismanagement.
Advocate Vijay Aggarwal maintained that Bloomberg cannot disparage an Indian enterprise simply because it is a globally recognized media outlet. He further argued that the trial court’s direction was appropriate since Zee was experiencing irreversible injury as a result of the contested publication. The trial judge noted that Zee had established a strong case for ad interim ex-parte injunction orders and that the balance of convenience supported Zee’s position against Bloomberg. It added that Zee might suffer irreversible harm and loss in the event that the injunction was denied.
It was alleged that the article’s speculations were accurate and that they directly related to Zee’s corporate governance and business operations. Zee’s Lawyer Vijay Aggarwal argued that there was no evidence in the file to support Bloomberg’s claims. He pointed out, “They don’t have a case on facts. If there is any in the public record, dismiss my suit right now. Just because they are a company of international repute does not mean they can defame an Indian company.”
The online news site was additionally prohibited from sharing, disseminating or printing the story on any digital or physical platform until 26th March. Zee asserted that the piece was malicious and defamatory and that it was published with the deliberate and dishonest goal to tarnish and disparage it. It was also contended that Zee and its investors suffered financially as a result of the article’s publication, with the company’s stock price falling by over 15%.
Zee asserted that the article’s writers and researchers had written other pieces criticizing it earlier but the contested article went so far as to make baseless accusations of unlawful fund diversion. Zee was granted relief by the judge, who stated that ex parte and interim injunctions have been granted in comparable circumstances since the content of the contested information was inherently defamatory.
