Court directs union to pay damages of ₹1 lakh to SBI

Restrains it from issuing defamatory handbills and notices

August 18, 2018 01:11 am | Updated 01:12 am IST - CHENNAI

In a significant judgment, a city civil court here has directed a trade union and its three office-bearers to jointly pay damages of ₹1 lakh to the State Bank of India (SBI) for having defamed the institution by circulating handbills and pasting posters across the city alleging “loot of public funds” deposited in the bank.

Decreeing a suit preferred by the bank in 2014, judge S. Isvarane also granted a permanent injunction restraining SBI Ambedkar Trade Union from issuing defamatory handbills, notices and pamphlets; displaying placards and pasting posters against the bank. He directed the union to pay cost of the suit to the institution. “It is not possible to quantify the damages for defamation with arithmetical precision. The quantum of business lost or number of customers lost is incapable of calculation. But, the impact of the defamatory acts of the defendants on the reputation and business of the plaintiff bank cannot be underestimated,” the judge said.

Stating that the court could order either actual, assumed or punitive damages in a suit for defamation, Mr. Isvarane said: “In this case, the very purpose of ordering compensation on the defendants is only as a punishment to deter the defendants and persons having like mind to desist from doing scurrilous and defamatory acts.”

The judge agreed with the bank that insider dealings and corporate espionage had become the order of the day since private and public sector banks vie with each other to promote their business. In such circumstances, employees of a bank should not indulge in activities that tarnish the image of their own employer in the business world, he said.

“If employers cannot have control over their employees, then there will be no harmony in the organisational set-up. Obedience and subordination are always required in any organisational set-up for smooth and effective functioning of the organisation. Unauthentic rumours should not be propagated by the employees,” he added.

The court pointed out that the trade union had circulated the pamphlets and pasted posters in Tamil in May 2006 with the title ‘In State Bank, the fence itself is grazing the crops’. The union claimed that funds to the tune of several lakh rupees had been swindled from various branches of the bank.

The handbills and posters also wanted Pratip Chaudhuri, the then Chief General Manager of the bank, to take moral responsibility for the “fraud” and resign from his post. Claiming that the contents were defamatory, the bank, represented by its Assistant General Manager (Human Resources), had filed the suit by claiming damages of ₹1 lakh.

Filing a written statement in reply to the suit, the trade union as well as its then president M.V. Thangasami, general secretary S. Gunasekar and treasurer G. Arasakumar admitted that the act of having circulated the handbills and pasted the posters. However, they contended that the contents were true and therefore they were not liable to pay damages, the judge said.

Rejecting their contention, Mr. Isvarane observed that the union had not produced any material to substantiate its claim of fraud. Though the union claimed to have issued the pamphlets and posters in public interest, the judge said: “The responsibility of an employee in an organisation is much higher than a common man.”

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