Interim Injunction Denied Where Statements Regarding Loan Default and Vexatious Litigation Are Factually Substantiated

The Plaintiffs, a charitable trust and its trustee (Prashant Mehta), filed a suit for defamation and damages of Rs. 1,000 Crores against HDFC Bank and its executives.

The dispute stems from "Subject Statements" published by the Bank in June 2025, which alleged that Prashant Mehta and his family owed substantial unpaid dues for two decades and had launched "vexatious legal actions" to thwart recovery.

The Plaintiffs sought an interim injunction to restrain further statements and remove existing content from social media platforms (X Corp and Meta).

The court noted a history of litigation where the Debt Recovery Tribunal (DRT) had issued recovery certificates against the Mehta family following the death of the patriarch, Kishor Mehta.

The Plaintiffs had previously filed criminal complaints of "culpable homicide" against Bank officials and approached the Minorities Commission, both of which were dismissed or quashed.

1. Whether the "Subject Statements" published by HDFC Bank regarding the Plaintiffs’ indebtedness and litigation history are prima facie defamatory or fall under the defense of truth and justification.

2. Whether a mere plea of justification by the defendant is sufficient to deny interim relief in a defamation suit in India.

3. Whether the balance of convenience and the risk of irreparable harm warrant the grant of an interlocutory injunction.

The Court applied the Indian standard for interlocutory relief in libel actions, as established in Shree Maheshwar Hydel Power Corporation Ltd. v. Chitroopa Patil (2024), which mandates that a defendant must show statements were made bona fide, in public interest, and based on verifiable material.

The Court distinguished the Indian position from the English "mere plea of justification" rule.

The Court also referenced Rule 85 of the Second Schedule to the Income Tax Act, 1961 (via the RDB Act), which deems legal heirs liable for recovery "as if" they owed the money.

The court considered the principles of free speech under Article 19(1)(a) of the Constitution and the limits of "retaliatory defamation" as discussed in Kunwar Radha Krishen Pratap Singh v. H.S. Bates.

The Court found the "Subject Statements" to be factually accurate and supported by strong evidence.

Specifically, the DRT's issuance of recovery certificates and the failure of the Plaintiffs to meet pre-deposit conditions in Writ Petitions proved the existence of debt.

The Court noted that a prior Division Bench had already judicially characterized the Plaintiffs' conduct as a "spree of filing frivolous proceedings".

Regarding the Trust, the Court observed that though it had no direct debt, it had "jumped into the fray" by filing criminal complaints and holding press conferences, thereby aligning itself with Prashant Mehta’s interests.

The Bank’s statements were deemed a bona fide response to a media campaign initiated by the Plaintiffs.

The Court held that "gagging" the Bank would be contrary to truthful free speech and would expose the Bank to one-sided attacks.

It held that the Plaintiffs failed to establish a prima facie case of defamation as the statements were truthful, bona fide, and in the public interest.

The Court found the balance of convenience in favor of the Bank, noting the Plaintiffs' "established track record" of frustrating recovery.

The Court imposed costs of Rs. 5,00,000 on the Plaintiffs to be paid to HDFC Bank within six weeks.