Moneylife case: HC grants stay on order against NSE

The Bombay High Court on Monday granted a two-week stay on the order against the National Stock Exchange (NSE) in a defamation suit filed by the stock exchange against financial news site — Moneylife. The court also stayed a Rs 5000000 penalty imposed by Justice Gautam Patel on NSE for two weeks. A division bench of the high court comprising justices VM Kanade and Shalini Joshi will now hear the case after two weeks. On September 9, Justice Gautam Patel had dismissed NSE’s defamation petition against Moneylife, founded by Debashis Basu and Sucheta Dalal. Patel had also directed NSE to pay Rs 5000000 in damages. According to the high court order, the National Stock Exchange had to pay Rs 1.500000 each as damages to Basu and Dalal and Rs 23.500000 each to Tata Memorial Hospital and Masina Hospital as donations. The 30-page order of Patel had said that there is no case of defamation as NSE was given several opportunities to respond to an article on the stock exchange before it was published. Patel said that defamation law should “not to be used to gag, to silence, to suppress, to subjugate” the media and should be “narrowly construed” as it can restrict freedom of speech and expression. [related-post] “Defamation is a very thin red line. It must not be crossed, but it is not actionable only because it is approached, however closely,” Patel had said. Almost a month after Moneylife reported that a few investors had fixed the high frequency trade (HFT) or algorithm based trading in the NSE and thereby jeopardised the interest of retail investors, the exchange on July 21 filed a defamation case against the magazine with a claim of Rs 1000000000. The magazine had earlier published article on Algo trading based on a whistle blower’s letter to the Securities and Exchange Board of India (Sebi) that it said was also copied to Dalal. The letter detailed how certain institutions registered for HFT were allegedly allowed to profit illegally by the exchange’s insiders.