Holding that removal from a bank panel is merely termination of a professional engagement and does not, by itself, amount to defamation, the Patna High Court has rejected Rs. 25 lakhs defamation suit filed by former SBI panel lawyer. The Court held that removal of an advocate from a bank’s panel is only a decision to discontinue a professional engagement and does not constitute a defamatory imputation under law.
To maintain a defamation claim, a plaintiff must plead that a defamatory statement was made and communicated to a third person. Mere loss of reputation, professional opportunity, or income is insufficient. The Court also reiterated that a bank’s relationship with its panel advocates is contractual and based on confidence, and a bank may discontinue empanelment if it chooses.
General assertions that information ‘spread everywhere’ or was discussed in the Bar and courts do not satisfy the legal requirement of pleading publication with material particulars, added the Court.
Briefly, the plaintiff, Mantosh Prasad Sinha, was an empanelled advocate of State Bank of India for the Jamui Civil Court from 1983 to 2018. He alleged that after another panel advocate opined that a title deed earlier verified by him was not genuine, the Bank removed him from its panel. According to him, the de-panelment damaged his reputation, dignity and professional standing, caused financial loss and mental agony, and therefore entitled him to Rs. 25 lakh as damages in a defamation suit.
The Bank officials contested the suit and filed an application under Order VII Rule 11 CPC seeking rejection of the plaint. They argued that de-panelment of an advocate does not amount to defamation, no defamatory act had been attributed to them, and the plaint did not disclose any valid cause of action. The Trial Court rejected that application, leading the Bank officials to approach the Patna High Court in revision.
A Single Judge Bench of Justice Ramesh Chand Malviya observed that while considering an application under Order VII Rule 11 CPC, the court must look only at the averments contained in the plaint and assume them to be true. The real question is whether those averments disclose a legally enforceable cause of action. If a plaint merely creates an illusion of a cause of action without pleading the essential legal ingredients, it is liable to be rejected at the threshold.
The Court emphasized that defamation requires specific legal ingredients, namely: an imputation concerning a person, publication of that imputation to a third person, and an intention or knowledge that such publication would harm the person’s reputation. Mere hurt feelings, loss of professional engagement, financial loss, or damaged ego do not by themselves constitute defamation.
The Court further observed that removal of an advocate from a professional panel is only a decision to discontinue a contractual engagement. Such a decision does not, by itself, contain any imputation regarding the advocate’s character, competence or integrity. Therefore, de-panelment alone cannot be equated with defamation.
Referring to recent Supreme Court jurisprudence, the Court noted that a bank’s relationship with its panel advocate is fundamentally contractual and based on confidence and trust. An advocate has no vested right to remain on a bank’s panel indefinitely, and the bank is entitled to assess the quality of services rendered and decide whether to continue or discontinue the engagement.
The Court also found that the plaint lacked material particulars regarding publication. The allegations that news of the de-panelment ‘spread everywhere’ or was discussed in court and among members of the Bar were vague and did not identify who allegedly made the statement, to whom it was communicated, when it was communicated, or how it was published. Such general assertions were insufficient to establish the essential ingredient of publication required for a defamation claim.
Additionally, the Court noted that the alleged statement was attributed to a newly appointed lawyer who was neither impleaded as a party nor specifically linked to the defendants through concrete factual allegations. The plaint merely alleged that the statement was made ‘at the instance’ of the defendants without providing any particulars. Such bald assertions could not sustain a cause of action for defamation against the Bank officials.
