Delhi High Court dismisses defamation plea filed by former PwC CFO who claimed he was forced to resign

The Delhi High Court recently dismissed a plea filed by a former Chief Financial Officer (CFO) of Pricewaterhousecoopers alleging that he was defamed, side lined in the organisation and made to resign after pointing out irregularities in the accounting firm's method of working. (Sarvesh Mathur v. State of NCT Delhi & Ors) .Dismissing the defamation plea filed by Sarvesh Mathur, Justice Asha Menon noted,"Criminal liability cannot be fastened on the basis of a person holding a position with nothing more to specify the role played by such a person in the commission of a crime.".The Court said that the conclusion of a sessions court that Mathur being described as a "disgruntled employee" was not slanderous."That apart, the conclusion of the learned Sessions Court that the use of the word "disgruntled employee" was not slanderous is a justified conclusion," the order said..Before the High Court, the petitioner had alleged that a PwC representative had defamed him in two newspaper articles by calling him a "disgruntled employee" after he sought to expose irregularities at the firm. He had previously made complaints to government authorities regarding evasion of income tax, benami transactions, falsification of books of accounts, violation of Foreign Exchange Management Act, 1999 (FEMA) and other laws, running into hundreds of crores of rupees by PwC. He even claimed that his allegations as a whistleblower were justified, given that the Supreme Court had ordered investigations into alleged illegal inflows from overseas and FEMA violations. He claimed that he was forced to resign in December 2011 and was served a letter of termination of employment in 2012, in which the company allegedly made defamatory statements against him.After the two articles were published in 2017 in the Economic Times and Outlook magazine, he filed a criminal defamation complaint in October 2018..On August 30, 2019, a metropolitan magistrate summoned the accused to face trial for criminal defamation, holding that the allegations made in the complaint prima facie constituted the said offence.However, in an order dated October 7, 2020, the Additional Sessions Judge (ASJ) at Tis Hazari Court set aside the order summoning senior executives of PwC. The ASJ had concluded that there was no material on the basis of which the trial court could have summoned any of the accused persons.Hence, the petitioner had to approach the High Court challenging the setting aside of the summoning order..Upon reading the allegedly defamatory articles, the Court supported the ASJ's observation that the grievance of the petitioner was actually a response to a query about certain litigation initiated by him and answered by the Economic Times."It is for him to explain how litigation initiated by him became subject matter of the publication. It is only fair reporting to seek a response from the person against whom charges have been levelled," the Court noted.The Court also said that no evidence was placed on record to support the petitioner's contention that the allegedly defamatory statements adversely affected his chances of employment or were in fact made by PwC. "Finally, if the statement that the petitioner's employment was terminated in 2012 after it was found that he had retained and misused some of the company's proprietary information had adversely affected his prospects of employment, no such evidence has been placed on record. In any case, the fundamental requirement was to establish that these statements were made by the respondents No.2-5," the Court stated.Elaborating on the requirements of evidence in such cases, the Court clarified that the petitioner must establish that PwC and its executives had made or published imputations concerning him, intending to harm him or knowing or having reason to believe that such imputation will harm his reputation. "Since the entire edifice of the case of the petitioner rests on the publication of these two articles, it was necessary to show how the respondents were connected to the publication. The petitioner has not done so."Further, the Court said that the publication in question should have been made by the accused persons, for which direct evidence had to be placed on the record connecting the arrayed PwC executives to the publications. "The reference in the article in the Economic Times to a “Spokesperson” cannot be inferred to refer to either respondent No.3 or respondent No.4, only because one is the Chairman of the respondent No.2 and the other is the Chief Communications Officer," the Court asserted.The Court, therefore, found no error or perversity in the ASJ's order. In fact, the Court went on to say that allowing the summoning order to continue would have resulted in grave injustice and abuse of process of court..Senior Advocate PK Dubey, along with Advocates Ruby Singh Ahuja, Vikas Gogna, Vishal, Lakshya Khanna, Satyam Chaturvedi, Anurag Andley, Akshat Sharma, Devesh Nath Tiwari, Harpreet Kalsi, Shiv Singh and Ipsita Agarwal appeared for the PwC executives.Advocate Manjeet Arya represented the State, while the petitioner appeared in person..[Read order]

Delhi High Court dismisses defamation plea filed by former PwC CFO who claimed he was forced to resign

Khadija Khan

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