Indian Kanoon - Search engine for Indian Law

47. Thus, a Court, while weighing the value of reputation of one party and freedom of expression of the other, has to keep in mind that in a democratic setup, a person who is complainant in such cases may be vulnerable in a given set of circumstances in face of his competing interest with that of the accused. ... ... In rendering equal protection, the court must balance the right of free speech with the need to prevent unjust harm to reputation. The injurious falsehood of a statement will definitely invite defamation and loss of reputation.

emphasis supplied

60. A learned Single Judge of this Court in Dabur India Limited (supra), which has also since been reiterated by a learned Single Judge of this Court in Hindustan Unilever Limited (supra), the act of disparagement has to be considered on the basis of three prong tests:-

"... ...12. ... ...The tort of the trade libel is variedly referred to as slander of goods, malicious falsehood or even injurious falsehood. It appears that in recent times courts have been using the expression of "malicious falsehood" to describe a tort of the kind involved in the present case. The reason perhaps is that the expression of "slander goods" or "trade libel" presents a narrower scope of the tort which essentially is tailored to protect the financial interest generally and not commercial interest. For a plaintiff to succeed in an action based on malicious falsehood, the necessary ingredients are:

(i) a false statement is made which is calculated to cause financial damage;

(ii) the statement is made maliciously with an intent to cause injury;

(iii) the impugned statement has resulted in a special damage unlike in defamation in which the falsehood of the statement is presumed, and it is for the defendant to prove that the statement is true."