Punjab & Haryana HC: Defamation Complaint Against ICICI Bank and Its Officials Quashed After Acquittal in Cheque Bounce Case

Case Name: ICICI Bank Ltd. v. Kusum Aggarwal; Munish Kumar Kaswan v. Kusum Aggarwal
Date of Judgment: January 13, 2020
Citation: CRM-M-43748-2015 (O&M) and CRM-M-41174-2015 (O&M)
Bench: Hon’ble Mr. Justice Harnaresh Singh Gill

Held: The High Court quashed the criminal defamation complaint filed under Sections 499/500 IPC against ICICI Bank and its officials after the respondent was acquitted in a cheque bounce case under Section 138 of the NI Act. It held that merely because the bank initiated legal proceedings which ended in acquittal does not amount to defamation, as mens rea or criminal intention was absent. The Court stressed that criminal law cannot be set into motion as a matter of course, and that acquittal in a case does not give a right to the accused to file defamation against the complainant. Since there was no evidence that the bank or its officers acted with intent to harm the respondent’s reputation, the essential ingredients of Section 499 IPC were not met, and the summoning order was unsustainable.

Summary: The respondent, Kusum Aggarwal, had availed a loan from ICICI Bank and issued a cheque which was later dishonoured. The bank filed a complaint under Section 138 NI Act through its Collection Manager. The Magistrate dismissed the complaint in February 2014, holding that the cheque was only a security instrument and not enforceable under Section 138. Subsequently, the respondent filed a defamation complaint alleging loss of reputation due to the bank’s criminal proceedings. The Magistrate summoned ICICI Bank through its then Managing Director and its officials. Challenging this, the petitioners argued that filing a complaint based on available records cannot constitute defamation, and mens rea was absent. The High Court agreed, noting that initiation of criminal proceedings by itself, even if unsuccessful, does not lower a person’s moral or intellectual character in the eyes of society. Relying on Pepsi Foods Ltd. v. Special Judicial Magistrate (1998) 5 SCC 749 and Bombay High Court precedent, it reiterated that Magistrates must carefully scrutinize evidence before issuing summons in defamation cases. In this case, the respondent’s complaint lacked the essential elements of defamation.

Decision: The High Court allowed the petitions, quashed the defamation complaint filed under Sections 499/500 IPC and set aside the summoning order dated 11.09.2015 against ICICI Bank and its officials.