Delhi HC Keeps Crypto-Startup Co-Directors’ Defamation Suit In Delhi, Citing The Company’s Delhi Office And Local Investors

The plaintiff and defendant were directors of Inventphile Ventures Private Limited, whose registered office was in New Delhi.

The plaintiff alleged that the defendant sent defamatory emails on 23 November 2023, 16 December 2023 and 16 February 2024 to investors and other third parties, and that the defendant also communicated defamatory statements to Inc42, a digital media portal based in New Delhi.

The plaintiff claimed that the statements harmed his reputation and business, including in New Delhi, where the company and investors and prospective customers were based.

The defendant, a resident of Kanpur, applied under Order VII Rules 10 and 11 CPC, contending that the Delhi High Court lacked territorial jurisdiction.

The application concerned the territorial jurisdiction of the Court to entertain the defamation suit.

Section 19 CPC permits a suit for compensation for a wrong to the person or movable property to be brought either where the wrong was committed or, where the statutory conditions apply, where the defendant resides, carries on business or personally works for gain.

Applying Escorts Ltd. v. Tejpal Singh Sisodia, 2019 SCC OnLine Del 7607, and Sameer Dnyandev Wankhede v. Red Chillies Entertainments (P) Ltd., 2026 SCC OnLine Del 333, the Court identified two principles for online defamation: the “merger” rule, under which a plaintiff must sue where the wrong occurred within the defendant’s forum; and the “maximum wrong” rule, under which, where the wrong occurred in more than one jurisdiction but not in the defendant’s forum, the plaintiff may sue where the maximum harm occurred.

Ordinarily, that is the plaintiff’s natural forum; an alternative forum may be relied on if the wrong at the natural forum is comparatively minuscule. A plaintiff suing outside a natural forum must plead whose estimation of the plaintiff’s reputation was lowered.

The defendant’s residence in Kanpur gave the courts there jurisdiction, but the Court found that the plaint did not allege that the wrong was committed in Kanpur; the merger rule therefore did not apply.

The plaint alleged that defamatory communications reached Inc42 in New Delhi, that investors and other relevant persons there questioned the plaintiff’s business, and that the company’s registered office, investors and prospective customers were located in Delhi.

The Court held these allegations sufficiently identified New Delhi as the place where the plaintiff’s reputation suffered maximum harm. The company’s Delhi registration was relevant to identifying where the alleged harm was felt, but did not make the company a necessary party to the suit.

Given the pleaded connection between the plaintiff’s reputation and business interests and New Delhi, the Court rejected the contention that Kanpur was the only competent forum.

It dismissed the defendant’s application under Order VII Rules 10 and 11 CPC.

Remaining applications were listed for 8 December 2026.