IN THE COURT OF SAMAR VISHAL, ADDITIONAL CHIEF...

IN THE COURT OF SAMAR VISHAL,ADDITIONAL CHIEF METROPOLITAN MAGISTRATE – II

PATIALA HOUSE COURT, NEW DELHI

Complaint Case Number: 1626/2019VIVEK DOVAL Vs. JAIRAM RAMESH and OTHERS

02.03.2019

ORDER

1. The complainant Mr. Vivek Doval is prosecuting Mr. Jairam

Ramesh, Mr. Paresh Nath, the Editor-in-Chief of Caravan Magazine and

Mr. Kaushal Shroff, the author of the allegedly defamatory article in the

Caravan Magazine in this criminal defamation proceedings. Although its

a long complaint but needs to be reproduced to put the facts in right

perspective. The complainant alleges that he is a U.K. National and an

Overseas Citizen of India. He along with one Mr. Amit Sharma, is the

Founder- Director of GNY Asia, a hedge fund based out of Cayman

Islands (hereinafter referred to as the fund). The complainant,

additionally, is the younger son of Sh. Ajit Doval, who is the present

National Security Advisor of India. The complainant states that the

respondents have deliberately maligned and defamed him, seemingly to

settle scores with his father. Through calculated insinuations and

innuendos raised by way of published articles and press conferences, the

respondents have raised unfounded and baseless allegations against him,

and have caused irreparable damage to his reputation and goodwill that

he had earned for himself over years of hard work. Through the said

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Bar and Bench (www.barandbench.com)

deliberate insinuations, the respondents have made grave and serious

allegations of money laundering against the fund, which is a legitimate

and ethical business venture of the complainant, not only without any

proof thereof, but being completely aware of the falsity thereof.

2. The entire controversy started with the publication of the article

titled “The D-Companies” (hereinafter referred to as the “Article”) by

respondent no.2 in its online journal / publication on January 16, 2019.

Initially, the Article was accessible only upon subscription, however as on

date the Article is easily accessible on the internet without any

subscription. The Article is authored by respondent no.3, Mr. Kaushal

Shroff and insinuates various wrongdoings and unlawful actions on part

of the complainant regarding the formation and operation of the Fund etc.

Not only the complainant, but his elder brother and his companies have

also been maligned which clearly reveals that the complainant has been

targeted only by virtue of being the younger son of Sh. Ajit Doval. The

Article has been couched in a manner that it raises apprehensions on the

ventures of the complainant and candidly relates the same to the

demonetization in the country. The Article did serve its purpose of

creating a hue and cry and maligning the reputation of the complainant

and his family. Based on the Article, respondent no.1 Mr. Jairam Ramesh

held a press conferences and made irresponsible media statements further

maligning the reputation and goodwill of the complainant as well as the

entire Doval family. Respondent no.1 hold a responsible position in the

country being a senior Rajya Sabha Member and a former Cabinet

Minister to the Government of India. Statements made by such an

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eminent personality carry immense weight and credibility and are

perceived to have been so made with a very high degree of ownership,

due diligence and responsibility. The targeted attack by respondent no.1

on the complainant, who is a young professional working hard towards

building his name and reputation in professional circles, and who holds

no political views or affiliations as such, is highly deplorable, and

certainly unbecoming of a man of his stature. The video of the Press

Conference has attracted over twenty seven thousand views and the page

as on date has received hundreds of comments. The Article, Press

Conference and the snippets shared by respondent no.2 and 3 on social

media have garnered huge public attention and have reacted and

responded to. The respondent no.1, 2 and 3 are well aware of the

consequences that may ensue and had all the knowledge as well as the

reasons to believe that their act shall injure and harm the honour of the

complainant and his family.

3. The entire premise of the Article and the Press Conference is the

linking of the venture of the complainant with the demonetization of

Rs.500 and Rs.1000 currency notes in India in the year 2016. The only

basis of the allegation is proximity in the time of the launch of the Fund

with the announcement of demonetization. The allegation is completely

baseless and the true facts could have been known by the respondents

upon a prima facie due diligence.

4. The complaint then proceeds to give a brief narrative on the

executive profile of the complainant, the formation and operation of the

funds; in an endeavor to sufficiently and amply bring to fore the true

factual position in an endeavour to show that the insinuations made in the

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Article and subsequent Press Conference have no iota of truth and

contrary to the claims, have been made without any due diligence and

with definite knowledge of their falsity and baselessness.

Executive Profile of the Complainant.

The complainant says that he is a highly meritorious professional

having pursued his eduction from the most reputed and internationally

acclaimed educational institutes / universities. He bears the following

qualifications :

(i) B.Sc Economic (Hons) from the London School of

Economic (LSE) in 1999.

(ii) M.Sc Economic (Specialization: International and

Monetary Economic) from London School of Economic (LSE)

in 2001.

(iii) CFA from CFA Institute, Charlottesville, USA in 2006

and was awarded a Charter.

(iv) CAIA from CAIA Institute, Charlottesville, USA in

2010 and was awarded a Charter.

(v) Program for Leadership Development, Executive MBA

from the Harvard Business School, Boston, USA in 2014.

Besides being a meritorious student, the complainant has also

established himself as a reputed professional; having worked with the top

investment management companies and funds in Singapore and U.K, the

employment history of the complainant is a follows :

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Tenure Designation Company Average Salary

2001-2003 Junior Strategist – European

Equity Strategy

Bear Stearns, European

Equity Research,

London, U.K

INR 2,69,000/- per

month

2003-2005 Research Associate – European

Technology (Semiconductors &

IT Services) & Capital Goods

Bear Stearns, European

Equity Research,

London, U.K

INR 3,26,000/- per

month

2005-2007 Analyst – European Technology

(Telecom Equipment) Research

Credit Suisse, European

Equity Reserach,

London, U.K

INR 6,93,783/- per

month

2007-2012 Investment Analyst / Assistant

Fund Manager – Pacific Fund

Boyer Allan Investment

Management, LLP,

London, U.K.

INR 11,85,153/-

per month

2012-2016 Fund Manager, Asia Pacific

Fund

British Airways Pension

Investment

Management Fund,

London, U.K.

INR 11,66,232/-

per month

The employment history of the complainant clearly reflects that he

never used his family's contacts for deriving any benefits whatsoever

either for education in premier institutes or for employment. A testimony

to the soundness of the credentials of the complainant is the fact that

when the complainant decided to launch the Fund, the initial investors

who agreed to invest in the Fund where actually his friends, peers and ex-

employers, who knew and trusted him, his merits and his caliber. The

complaint has annexed his brief resume with the complainant as

Annexure C5.

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Conception of the idea to launch the Fund.

The complainant then narrates the timelines and the manner in

which the idea of launching the Fund was conceived and how the Fund

was subsequently launched. The timelines are essential and would

indicate that the demonetization announcement and the launch of the

Fund, though closely proximate in time, are two completely independent

events, none being related to other, even remotely.

(i) The Fund is co-founded by the complainant and one

Amit Sharma; who hold a B.Tech (Electronics) degree from the

esteemed Indian Institute of Technology as well as an MBA

degree from INSEAD. The complainant and Amit Sharma

have been colleagues since 2004 when the complainant worked

at Bear Stearns and Amit Sharma worked at Deutsche Bank,

both working as Semi-Conductor Companies analysts in Equity

Research.

(ii) Thereafter, when the complainant was working at Boyer

Allan in 2007, Amit Sharma was the equity salesperson

advising the complainant from Macquaire Securities in

London. Given his strong professional background previously

at Deutsche Bank, Amit Sharma offered investment advise to

the complainant, which helps the complainant in his investment

work at Boyer Allan. The same continued when the

complainant became the fund manager at British Airways

Pension Investment Management Limited om 2012.

(iii) By the close of 2015, the complainant had achieved a

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few years of out performance in managing a USD 2 billion Asia

Pacific fund at British Airways Pension Investment

Management Limited, and thus, the complainant deemed it

appropriate to make a move and venture into something

entrepreneurial.

(iv) Whilst it was at this point in time that substantial

developments in respect of the shared vision of the complainant

and Amit Sharma started taking place. The two had been

discussing propositions of partnering with each other and doing

something together, for a long time. The seeds for the funds

were first sown in January 2012 when the complainant and

Amit Sharma, in the post closure period of Boyer Allen,

discussed the possibility of forming an investment company /

fund at some point in the future and managing it together. Ever

since this discussion, they met over coffee on a weekly basis

(mostly scheduling a 7 a.m meeting on Sundays at Costa

Coffee, West Hampstead), and discussed various ideas they had

for taking their plans forward.

(v) To this end, the complainant and Amit Sharma

incorporated a company called VIVAM Hold Co. Ltd., in

October 2013, deriving the name of the company from the

initial alphabets of their respective first names.This company

was registered at the residential address of the complainant,

which at that time was in Hamsptead, London, U.K. However,

for multiple factors like the lack of funds and the financial

insecurities in their personal lives at the time, the company

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remained a non-starter. The will to actually go ahead with their

own venture kept them together. Copy of the certificate of

incorporation of Vivam Hold Co. Ltd., dated 28.10.2013 is

Annexure C-6.\

(vi) By the close of 2015, the complainant and Amit Sharma

once again started working on their plans and exploring the

setting up of a fund as they had envisioned. By November

2015, they had met with various service providers, including an

initial meeting with Gordian Capital at Singapore. They also

started looking for prospective investors.

(vii) However, considering their existing professional

commitments, the progress in respect of the setting up of the

fund was slow. Realising the impediments being presented by

such commitments, going forward in April 2016, Amit Sharma

quit his job at Macquaire Securities in London and plunged into

the process of setting up the fund; whilst the complainant

continued his job at British Airways Pension, funding the costs

of the fund creating by this professional earnings.

(viii) It is then, in the period between April and August of

2016, that the process finally gained the desired pace and things

started materializing. The most important development in this

period was the coming on board of Mr. Mohammed Althaf of

the Lulu Group – an old friend of the complainant, and a

professional with an impeccable record – with the promise of a

substantial investment for the fund which was ready to be

launched.

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(ix) Since the decision to launch the fund was taken , the

complainant and Amit Sharma now started working towards the

modalities for launching the fund. In light of the developments

and for furtherance of the work of the fund, the complainant

also resigned from his job at this point, to take on and execute

his responsibilities in the fund full time and with full vigour.

(x) One of the first decisions to be taken at this stage was

the jurisdiction / market in which the fund would invest. Based

on their past experience of working at the top asset

management companies and funds across the globe, the

complainant and Amit Sharma jointly took a decision to focus

in Asia and invest across major economics in the continent

especially China, Hongkong, Taiwan, Korea, ASEAN countries

and India. The step forward thus added to the development of

the name of the Fund, which now was appropriately decided to

be called GNY Asia Fund.

(xi) Further to the decision to have Asia as the primary

operations market for the Fund, Singapore, being a central

location having connectivity with the target countries of the

Fund, was selected as the jurisdiction from where the fund

would be managed. With these initial plans / decisions in

place, action thereafter was taken in accordance.

Formation of the Fund.

It is stated that it was crucial for progressing further that the

complainant and Amit Sharma get the needed service providers on board.

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The complaint then narrates how various service providers contributed

towards the materialization, formation and the subsequent operation of

the Fund

(i) Gordian Capital Singapore Pvt. Ltd.: Initially the

complainant and Amit Sharma explored the possibility of

formation of an asset management company in Singapore.

However, since it seemed to be an expensive affair,

especially for a start up fund with very limited cash flows,

the complainant and Amit Sharma opted for an investment

management platform called Gordian Capital after having

conducted their due diligence. Gordian Capital is an

investment management company and is Asia's leading fund

management platform providing investment management

services – fund establishment, operation management and

fund structure. Gordian Capital hold a Capital Market

Services License for fund management from the Monetary

Authority of Singapore. Gordian Capital provides all back-

offices and middle office functions for the fund so that the

investment management team of the fund concentrates only

on the research and due diligence process of making the

investment decisions. Mark Voumard, founder of Gordian

Capital and Paul Culberthson, Head of Compliance at

Gordian Capital are witness to the negotiations and talks

between the complainant and Amit Sharma and Gordian

Capital to avail the services of Gordian Capital as an

investment management platform. Copies of emails

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indicating that Gordian Capital was approached as long

back as October 2015 to explore hiring its services as an

investment management platform for the fund and

correspondence with Mark Voumard at Gordian Capital are

annexed with the complaint as Annexure C-7.

On October 24, 2016, a memorandum of understanding was

entered into between Gordian Capital on one side and Vivek Doval and

Amit Sharma on another wherein it was mutually agreed that :

(a) Gordian Capital shall be the investment manager of

GNYY Asia Fund and shall assist the Fund with structuring,

operations, marketing and investors relations support,

employment of and service offering to two portfolio

managers.

(b) Operational responsibility for the Fund shall vest with

Gordian Capital.

(c) For the housing of two Portfolio Managers, provision for

Fund and other related services, Gordian will receive a fee

based on sliding scale. The fees shall be separated from the

salary or other payments that may be made to investment

professionals.

(d) Vivek Doval and Amit Sharma, pursuant to employment

contracts, will join Gordian Capital as Portfolio Managers

and will receive a share of the management fees.

Copy of the MoU dated 24.10.2016 annexed with the

complaint is Annexure C-8. Subsequent to the incorporation

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of the Fund at Cayman Islands on 19.09.2016, an investment

management agreement was executed between Gordian

Capital and the Fund on 02.11.2016( Annexure C-9).

(ii) Cayman Islands as Fund Domicile: Based on the recommendation by

Gordian Capital, the complainant and Amit Sharma decided to domicile

the fund at Cayman Islands. Cayman Islands is part of the British

overseas territory; and the complainant is a UK citizen. Cayman Islands,

as a matter of fact is the most popular destination for global hedge funds

and to the knowledge of the complainant as many as 11,000 approximate

hedge funds are listed there, which accounts for over 60% of all the assets

in the hedge funds, attracting 80% of all new offshore fund formations.

Cayman Island is estimated to house more than 75% of the world's

offshore hedge funds and nearly half of the industry's estimated USD 1.1

trillion of assets under management as per Connyers, Dill and Pearlman.

In addition, Cayman Islands was relatively cheap and efficient

jurisdiction in setting up a hedge fund. Research indicates that at least

366 of the Fortune 500 companies have subsidiaries in Cayman Islands.

Goldman Sachs has the largest presence in Cayman Islands with 511

subsidiaries registered there. Besides this, even Pepsi, Meriott and Pfizer

are registered in Cayman Islands. Copies of the Article indicative of the

aforesaid facts is Annexure C-10 (colly).

(iii) The need of the complainant to shift bases : As regards the location

of the complainant and Amit Sharma (key protagonists of the fund) is

concerned, it was decided that the complainant shall move to Singapore

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to work at Gordian Capital and Amit Sharma would stay in London, he

being more settled in London. Since the complainant and Amit Sharma

were working on a shoe string budget, the complainant moved his family

to Delhi while he stayed in Singapore in a one BHK flat ad measuring

350 – 400 sq ft. approximately.

(iv) GNY Capital Limited : Gordian Capital was based in Singapore and

Amit Sharma was more settled in London. So as to enable Amit Sharma

to work for the Fund from London, VIVAM Hold Ltd., was brought into

action and its name was changed from VIVAM Hold Co. Ltd. To GNY

Capital Limited on 26.09.2016. It was agreed and decided that GNY

Capital shall provide advisory services to the Fund, assisting the Fund in

making investment decisions etc. GNY Capital Limited, was regulated by

FCA(Financial Conduct Authority) by an umbrella cover provided by

StoneWare Capital, a company providing hedge fund management

services. Considering the shift of the complainant to Singapore, and with

getting new Accountants on board to help manage the affairs of GNY

Capital Limited in respect of regulatory compliances, filings, etc., the

registered address of the company, earlier the residential address of the

complainant, was shifted to the official address of the accountants.

(v) DMS : The applicable laws required an independent member to be on

the board of the Fund. Gordian Capital recommended a company called

Director Management Services (DMS) which could provide the fund an

independent direction besides providing services regarding board meeting

organization and maintaining the minutes of the board meetings. Based

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on the Gordian Capital's reference and a meeting with DMS, it was hired

for providing an independent director and for board secretarial functions.

Mr. Don W Ebanks was then nominated by DMS to be an independent

director of the board of the fund. Email exchanged between Gordian

Capital, the complainant and Amit Sharma regarding engaging the

services of DMS are Annexure C-11. A copy of the profile of Don W

Ebanks as was provided by DMS to the complainant's and Amit Sharma

is Annexure C-12.

(vi) Walkers Global : The reputed international law firm was appointed to

provide legal services to the fund including preparation of all

documentation required for the incorporation of the fund. Walkers Global

formulated the investment memorandum (IM), prospectus and subscriber

document for the Fund (Fund Document) within a time span of 2-3

months. Upon completion of all documents, the Fund was registered as

an exempted limit liability company under the provisions of the

companies law (as amended) of the Cayman Islands on 14.09.2016.

(vii) Other Service Providers: Nomura International was chosen as the

prime broker for the Fund while Wells Fargo International (now called

the SS&C) was chosen as the administrator. DBS Bank of Singapore was

selected for banking services to the Fund while Price Waterhouse Coopers

(PWC) was chosen as the auditor of the fund. It is clear that only the

most reputed and proficient service providers were got on board by the

Fund. It is also pertinent to emphasize here that most of the service

providers adopt the strictest of KYC norms and are known for their

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compliance records.

(viii) Constitution of Board : The board of the Fund comprised of :

(a) The complainant was made a Board Member as he was

based out of Singapore where the investment manager was

also located.

(b) Mohammed Althaf was also taken as a member of the

board being a shareholder of the Fund and had impeccable

professional credentials.

(c) Independent director nominated by DMS, Don W. Ebanks.

(ix) On boarding the investors : Upon the finalization of the Fund

documents, the complainant and Amit Sharma met all major investors and

took them through filing the subscription documents. It was a very

tedious and time consuming exercise as the investors had to give a lot of

details about themselves including their addresses, business, bank account

details etc, and number of undertakings such as under the Foreign

Account Tax Compliance Account Act, 2006 of the United States of

America. Based on all the information provided, KYC checks were then

undertaken by Gordian Capital, Nomura International, Wells Fargo and

DBS on the clients. The investors and their sources of income were thus

vetted by multiple service providers of international repute and

impeccable integrity. This entire process is called as on-boarding and

would have lasted over 2 months.

(x) Investor Details : A number of other potential investors were

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contacted; however since it was a start up, a very small number of people

showed their willingness to participate in the Fund as investors. The

people who showed their interest in the start up Fund were people who

knew the complainant or Amit Sharma as friends, colleagues or

employees and had faith in their competence and abilities. The investors

who subscribed to the fund were as follows :

(a) The complainant and Amit Sharma;

(b) Mohammed Althaf and Family : Mr. Althaf M M is Director

of Lulu Group International, a highly diversified retail entity

with operations spanning a vast geographical landscape and

headquartered in Abu Dhabi. The group is spearheaded by the

retail division Lulu hypermarkets, which is a true community.

He is a Director of The Y International (UK) Ltd., a Birmingham

based Consolidation and Exports Company and also Director of

INKEL, an innovative Public Private Partnership (PPP)

initiative, which brings together government agencies and

prominent global investors and NRI industrials and businesses in

India and the Middle East. He holds a Masters degree in Law

from University of Delhi and an intellectual property rights

qualification from WIPO Geneva. He is based in Doha, Qatar.

The complainant has known him since his stay in London.

(c) Nicholas Allan : Nicholas Allan was Managing Partner of

Boyer Allan Investment Management LLP, a specialist Asian

fund management company and prior to setting up Boyer Allan

Investment Management in 1998, has senior roles with

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Kleinwort Benson, in London, New York, Tokyo and Hong

Kong. Nicholas brings the board a range of fund raising and

commercial insights alongside his financial expertise and

experience. He is also a trustee of families for children, a West

Country adoption agency, and of Sir Ernest Cassel Educational

Trust. Nicholas Allan was the complainant's senior at Boyer

Allan.

(d) Syed Ali Abbas : Senior ex-banker at Morgan Stanley and

ABN Amro and a friend of the complainant since 2000.

Currently, senior Managing Director at Torch Financial Services.

(e) Kumar Neeraj : Executive in British Petroleum, BP and a

friend of Amit Sharma from his INSED days.

The following are the details of the investments of the investors in the

Fund.

Name Investment (USD) % investment.

Vivek Doval 300,000 2.7%Amit Sharma 200,000 1.8%Mohammed Althaf & family 10,100,000 91.0%Nicholas Allan 250,000 2.3%Syed Ali Abbas 100,000 0.9%Kumar Neeraj 150,000 1.4%Total 11,100,000 100.0%

Depending upon everyone's capacity this was the seed fund given by colleagues and friends which they in their judgement where willing to risk in a start up venture.

(xi) Upon compilation of all documentation, the Fund documents were

filed with the Cayman Islands Monetary Authority (CIMA) at Cayman

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Islands and the Fund was registered in Cayman Islands under the Mutual

Funds Law (2015 Revision) on 21.11.2016. The Fund was then launched

in December 2016. The ideal launch date was fixed in September /

October 2016 but it took longer to launch the Fund owing to coordination

among various players working towards the objective. Copy of the

Certificate of Registration issued by CIMA dated 21.11.2016 is Annexure

C-13.

(xii) Subsequent to the launch of Fund, an investment advisory agreement

was entered into between GNY Asia Fund and GNY Capital Limited on

27.12.2016 thereby appointing GNY Capital as the investment advisor to

the Fund and subject to overall supervision, direction and control of the

investment manager i.e. Gordian Capital. Copy of the investment

advisory agreement dated 27.12.2016 is Annexure C-14.

5. The complaint also gives the timelines for the Fund formation and

launch as follows:

28.10.2013 Incorporation of Vivam Hold Co. in London with Complainant and Amit Sharma Directors.

31.03.2016 Amit Sharma resigned from Macquarie but would be employed till 1st week Aug 2016 (Gardening leave)

21.07.2016 Amit Sharma wrote as email to Mark Voumard (Gordian Capital) asking for Sep / Oct 2016 launch – follow-up from a meeting on 3rd Nov 2015.

08.08.2016 Trip to Singapore by Amit Sharma and Complainant – Met with Gordian Capital, Swiss Asia, Morgan Stanlay, CSFB PB, Wells Fargo

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10.08.2016 Received First proposal from Gordian Capital.

12.08.2016 Met with Tom Granger, Partner, Walker Global Singapore to engage them for legal advisory for the fund.

13.08.2016 Email from Mark Voumard at Gordian Capital with revised MOU post another meeting with Gordian Capital.

15.08.2016 Gordian Capital introduced the Complainant and Amit Sharma to Nomura International, largest Japanese Investment Bank

17.08.2016 Presentation to Morgan Stanlay PB (Stella Jaegar) for approval of Breker.

22.08.2016 Amit email to Mark, Gordian Capital asking him to go ahead with the Fund launch.

29.08.2016 Engagement letter with Walker Global signed by Amit Sharma followed by a retainer payment of USD 7500 on 01.09.2016.

07.09.2016 Wells Fargo International was finalized as the Administrator for the Fund.

10.09.2016 First draft of Project Portfolio Management received from Gordian Capital.

14.09.2016 Incorporation of GNY Asia as a limited liability company at Cayman Island.

26.09.2016 Name of Vivam Hold Co. Ltd., was changed to GNY Capital

28.09.2016 Received approval from Nomura International for them to

24.10.2016 Execution of MoU between Gordian Capital and Vivek Doval and Amit Sharma wherein Gordian Capital in principle agreed to be the investment manager for the fund.

02.11.2016 An Investment Management Agreement was executed between Gordian Capital and the Fund appointing Gordian Capital as the Investment

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Manager.

11.11.2016 DSB receives hardcopy of all documents. They normally take 2-3 weeks before the account opens.

17.11.2016 Final version of PPM and docs.

18.11.2016 Started FPI on boarding process with Edelweiss

17.11.2016 – 15.12.2016

Completed Subscription docs from Investors and receipts of monies.

21.11.2016 Registration of the Fund at Cayman Islands and issuance of certificate by CIMA.

16.12.2016 Fund launch.

21.12.2016 GNY Asia Fund obtains certificate of registration from SEBI as an FPI (Foreign Portfolio Investor)

27.12.2016 Investment Advisory Agreement between Fund and GNY Capital Limited.

6. Operation of the Fund in India :

(i) The Fund was a pan Asia Fund and wanted to invest across

Asia including India. However, the Fund encountered two major

issues for its operations in India -firstly, the prime broker Nomura

had no bandwidth to provide prime brokerage services in India;

and secondly, each overseas fund, needed an FPF, License in

India as per the SEBI (FII) Regulations 1995 and the SEBI (FPI)

Regulations 2014.

(ii) The complainant, to resolve the situation and in an

endeavor to launch the Fund in India, approached Edelweiss

Securities and their representative from Custody Services Mr.

Anand Singh confirmed that GNY Asia Fund can be given an FPI

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License subject to RBI Regulations and Edelweiss KYC.

Accordingly, all documentation in respect of the Fund was made

available to Edelweiss.

(iii) Upon scrutiny, the complainant was informed by

Edelweiss Custodial Services Limited that the Fund is not a broad

based fund since it neither has 20 or more shareholders; nor does

any shareholder have any predominant stake in the fund as

prescribed under Regulations 5 of SEBI (FPI) Regulations, 2014.

However, RBI did allow start up funds to get an FPI License and

trade in Indian Securities, provided the funds can become broad

based within a grace period of 6 months.

(iv) The Fund was thus issued a conditional registration FPI

License under category II on 21.12.2016 by Edelweiss Custodial

Services Pvt. Ltd., a Designed Depository Participant. Pursuant

to the grant of conditional registration, the Fund started carrying

out trading in Indian Securities. However, even with the six

months period, the Fund could not get the necessary investors on

board and thus, could not become broad based. The license

accordingly expired on 16.06.2017 i.e. upon the conclusion of the

six month grace period as provided under the SEBI Regulations.

Copes of the certificate of Registration dated 21.12.2016 and the

letter issued by Edelweiss Custodial Services Ltd., are Annexure

C-15 (colly).

(v) While the license expired on 18.06.2017 where after the

Fund could not take new positions in Indian securities; it did not

immediately impact the status of the holding with the Fund. The

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Fund has some further period of time to make an exit from the

Indian Market. It is finally on 18.08.2017 that the Fund, failing to

find new investors, or to broad base itself, was compelled to wrap

up its operations and make an exit from the Indian Market. All

relevant taxes were paid to the Indian authorities on gains made

by the Fund in India. The Fund's investment in India at its peak

was approximately USD 2 million, which is around 18% of the

total value of Fund.

(vi) The Fund was a start up fund with a very limited budget,

the complainant herein took help from his elder brother regarding

utilization of office space, hiring of outsourced resources in Noida

etc. A Facility Management Agreement was thus entered into

between GNY Asia Fund and Zeus Strategic Management

Advisors Pvt. Ltd., for availing certain facilities against adequate

payments by the Fund. Annexure I to the Agreement lists down

the services that were availed including the use of office space

and Annexure II to the Agreement lays down the services fees and

charges to be paid thereof. Copy of the Facility Management

Agreement dated 12.12.2016 is Annexure C-16.

7. Distorting all facts as narrated above and without conducting any

due diligence / inquires from the relevant quarters, the respondents with

ulterior motives and with a mala fide intent to demean and defame the

complainant and his family, publicity made various grave allegations

using falsified and baseless insinuations and innuendoes, thereby causing

irreparable harm to the reputation and goodwill of the complainant and

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his family, both in India and abroad.

8. A bird's eye view of the developments indicate a malicious,

deliberate, targated and calculated attack by the respondent persons on the

complainant and his family, seeking to completely destroy the decades of

repute and goodwill earned by the family. A web of conjectures and

surmises has been devised by selective and careful nitpicking of random

facts in respect of the complainant, his brother and his father – the facts

being completely unrelated to one another - and presenting them in a

manner that hints at deep rooted conspiracies between the family

members, in carrying out laundering of black money, by rerouting of

funds into India through the Cayman Islands, in the post demonetization

era. While there may be no explicit allegation so worded or phrased, to

that extent, a number of questions to that effect have been raised,

insinuating and imputing such wrongdoings, which leaves the public with

a certain negative perception of the actions of the complainant and his

family members, which perception was the anticipated and calculated

reaction that the very questions, insinuations and imputations were aimed

at.

9. The complaint provides the sequence of events to demonstrate the

malafide intent of the respondents to intentionally target the complainant.

(i) On 16.01.2019, the respondent no.2 published the Article

in its online journal / publication, narrating completely baseless

and unfounded facts, placed together in a calculated manner, to

raise grave insinuations and render an image to the reader of

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wrong doings on part of the complainant.

(ii) The Article was uploaded on the website of respondent

no.2 i.e. https://caravanmagazine.in and was available as the

highlight story, on the very home page of the website itself,

along with images of the complainant, his brother and his father.

The description / title along with the images read : “The D-

companies – Ajit Doval's sons run a web of companies including

a Cayman Islands hedge Fund even as father demands

crackdowns on tax havens”. The link provided on the page

leads to the full Article, which was made available at

https://caravanmagazine.in/business/ajit-doval-sons-cayman-

islands-hedge-fund-vivek-shaurya. The title of the Article was

framed in a concerted effort to grab immediate attention of the

viewers being indicative of a breaking story.

(iii) The Article was circulated to all the subscribers of the

magazine published by respondent no.2, in their email accounts.

(iv) Soon after the publishing of the Article and the

circulation to the subscribers via email, the respondent no.2 also

put the same out on various social media platforms with targeted

/ pointed snippets as captions, to catch the attention of the social

media population. The snippets were also selected so as to

directly mar the reputation of the complainant and his family, in

an attempt to diminish the high respect that the family

commands in the society.

(v) Once out on the social media platforms, various political

parties, taking advantage of the Article and the baseless

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allegations leveled therein, promptly politicized the issue,

leveling serious and grave allegations against the complainant

and his family members, in order to gain political credit and

advantage in this highly charged up election season. Overnight,

the reputation and respect that the complainant and his family

earned in decades was blemished and tarnished, beyond repair.

The losses caused are so immense that no amount of

compensation will ever be able to make up for it.

(vi) On 17.01.2019, the immediate next day of the publication

of the Article, respondent no.1 held a Press Conference

reiterating the baseless and unfounded facts as narrated in the

article and concocting a story while making insinuation and

innuendoes. The narration, tone and tenor of the Press

Conference went beyond the mere narration in the Article. It

appears that the some vague research that may or may not have

been conducted by respondent no.3 for the Article was made

available to the respondent no.1; or that respondent no.1 was

already geared and armed with the research to launch such an

attack, merely waiting for the publication of the Article which

could then provide a smokescreen to the otherwise targeted and

deliberate attack on the reputation of the complainant and his

family.

(vii) Further to the press conferences, the Indian Nation

Congress Party also uploaded on its official website the

transcript of the press address by respondent no.1, the entire

video recording of the press address, and various other

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documents comprising of the financial statements of GNY

Capital Ltd., information about Gordian Capital and other

documents. The web-link for the uploads is :

https://www.inc.in/en/media/press-releases/suspicious-fdi-

influx-from-tax-havens-shri-jairam-ramesh-highlighs-of-the-

press-briefing-along-with-annexures (visited on January

18,2019 at 10.16 p.m).

Till date, the Article and the transcript and the video have

garnered crores in audience via various means, including

television, newspaper reporting, online viewership, social media

apps, etc. Ever since the publication of the Article, the

complainant has been flooded with oral and telephonic inquiries

from a large number of persons, who were trying to find out the

correctness of the allegations and showing their dismay over

such alleged role. Some persons, buying into the insinuations,

even expressed their anguish, and blamed the complainant to

have forever blemished the name and goodwill of this family, by

his wrongdoings in respect of his business venture. Due to the

malafide and ill intended actions of the respondents, the

reputation of the complainant and his family was forever

marred.

10. The intention to maliciously defame the complainant and his

family members is writ large on the face of the Article and the ensuing

developments. The contents of the Article present no illegality on part of

the complainant, or on part of his business ventures; however the entire

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narration has been presented in a manner, which would suggest to the

readers wrongdoings, while making grave insinuations thereof, without

actually making any such accusations / allegations. The above averments

finds substantiations in the reactions of the general public to the Article,

which is precisely what the Article intended to achieve. The very

arrangement of the paragraphs and the interspersion of random

paragraphs, has been done with the very purpose of confusing the reader

and leaving him with the belief that there is a large conspiracy at play,

being spearheaded by the complainant.

11. The posts put out by the social media handles being operated and

managed by the respondent no.2 further clarifies its intent, which is

nothing more than creating hype amongst the general public. The 'tweets'

put out by the twitter handle of respondent no.2 which snippets from the

article, or conclusions and observations on the facts narrated therein,

makes it clear that the Article is merely a targeted attempt to malign and

tarnish the reputation of the complainant and his family, in an endeavor to

gain political credit in light of the upcoming general elections.

12. The Article has been used as a political tool to foster in

unscrupulous hands to seek vendetta and wreak vengeance. An analysis

of the Article suggest that the accused No. 3 has purposely and with

malafide intent, scripted the article in a manner that the average reader

will perceive the facts narrated therein, only in a certain tainted colour.

The title of the Article itself is scandalous to say the least. The accused

No. 2 and 3, with a malafide intent, titled the Article as “The D-

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Companies” creating a prejudice in the minds of the readers against the

complainant and his family. It is well known and of which judicial notice

can be taken that D-companies is a reference often given to one of the

India's most wanted criminal Dawood Ibrahim. A similar reference to

complainant's business set up smacks malafide and is a clear reflection on

the malafide intent of the accused persons.

13. While respondent no.3 claims to have accessed numerous

documents, there are crucial pieces of information that is conveniently

claimed as not accessible to the author. The true facts of the matter, that is

the history and background of the complainant and his business ventures,

as have been sufficiently detailed above, amply evidence that the author

has deliberately and selectively left out or claimed certain vital pieces of

information as inaccessible which would otherwise bring to the fore the

legality and propriety of the business venture of the complainant. The

same has enabled respondent no.3 to present narration that is appealing to

the conscience of the average reader, while swaying away from the truth

of the matter. A few instances of such key details are as follows :

(i) The very act of setting up and launching of a hedge

Fund, whether in the Cayman Islands or any other place in the

world, is not by itself an illegal and unlawful act. However, the

same, even without explicitly so stating, has been portrayed in a

manner that leads to the very setting up and launching of the

hedge Fund being perceived as an unlawful act. Whereas

Cayman Island was chosen as the domicile of the Fund, upon

recommendation of the service providers. It is also pertinent to

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emphasize that Cayman Island is associated with black money in

India, however it is not so perceived in developed global

financial centers. Cayman Islands is a leading domicile for

investment funds housing 11,000 hedge funds and 60% of all

assets of the global hedge fund industry estimated at USD 1

trillion. It attracts 80% of all new offshore fund formations and

houses more than 75% of the industry. Fund formation is a box

standard procedure for all funds, and the GNY Asia Fund and

more than 60% of the Fortune 500 companies are registered in

Cayman Islands.

(ii) Further, respondent no.3 being a reputed author and reporter,

can be reasonably expected to know and understand that a hedge

Fund cannot be set up overnight, or in a matter of days. There

are months, and at times years of planning and preparatory

works, including preparation of a business model acquiring

regulatory compliances, consulting and negotiating with service

providers, initiating talks with prospective investors etc., that go

into the setting up of a hedge fund and which are pre-requisite to

the launch. Even in the present case, the work for setting up of

the Fund had been initiated months prior to the demonetization

announcement, and the final launch of the Fund landing up in the

proximity of the demonetization announcement was a mere

coincidence arising on account of a number of unforeseen

circumstances.

(iii) Even if respondent no.3 was not aware, owing to the subject

matter of the Article that was being authored by him, there was

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an implicit duty of care upon him to look into such aspects

before drawing vague and unscrupulous theories and presenting

them to the masses as the truth. In the absence of any evidence

suggesting such a relation, insinuating such a relationship

between the two events is a purported, ill-intended attach on the

impeccable reputation of the complainant and his family.

Freedom of press cannot by any stretch of imagination be a tool

to casually make remarks and defame an individual.

(iv) The insinuations regarding the rerouting of black money

from Cayman Islands by the Fund or its alleged links to the

sudden jump in the FDI received in India from Cayman Islands

post the demonetization announcement holds no substance

whatsoever. It is amply clear that the Fund has only seven

investors, all of whom are professionals and based out of India.

The total corpus of the Fund is merely USD 11 million (Rs. 77

Crores), with one investor being a contributor of over 90% of the

investment pool (70 Crores). The investments received has

undergone strict scrutiny by multiple service providers and is

compliant with the strictest of KYC norms. Further the investors

have all complied with FATCA regulations. It is pertinent to

note that none of these investors are based in India, and no part

of the investment in the Fund was raised in India. The maximum

investment that was made in the Indian market was at no point

more than USD 2 million (Rs.14 Crores) i.e. 15% of the Fund.

Even this money exited the Indian market in August 2017 when

the Fund exited the market on account of the expiry of its FPI

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license. The said facts make it starkly evident that the allegations

leveled against the complainant are baseless and have been so

leveled only to tarnish the image of the complainant and

consequently his family.

(v) The Fund, while and for the period, it was operating in

India, was fully compliant with Indian laws including the

regulations promulgated by SEBI and RBI. Any allegations to

the contrary are completely false and have only been deliberately

leveled to further hype the entire concoction.

(vi) The insinuations and imputations regarding personnel

related to the Fund being named in the Panama Papers are

completely ill intended and to sway the common masses in

believing that the business venture is involved in some sort of

illegal activity. It must be mentioned that the registration of a

Fund in a Cayman Islands requires a local director to be named.

Firms like DMS Services provides services to all funds, to help

them meet such requirements. As narrated in the foregoing

paragraphs, DMS services was hired by the complainant for

providing services to the Fund, and it was DMS Services that

appointed Mr. Don W. Ebanks as their nominee director to the

Fund. Further, the Article does not prove or even suggest any

wrongdoing on part of the said Mr. Ebanks, but mentions his

name appearing in the Panama Papers and Paradise Papers thus

attributing a certain tainted colour to his personality and by

relations to the Fund.

(vii) It is stated that for a start up Fund, setting up office spaces

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in all jurisdictions is simply not feasible. Under such

circumstances, they often resort to hiring intermittent services

from professionals across jurisdiction. For reducing the cost base

of the Fund for its operations in India, the complainant used the

services of an analyst and economist from the company run by

his brother. Towards the use of office space, and the services

provided by these professionals, the Fund paid a monthly fee of

Rs.2 lakhs to the company belonging to the complainant's

brother. The action of misusing and misinterpreting this

information to draw completely baseless diagrams suggesting

complex web of inter-linkage between the business ventures of

the complainant, and those of his brother, merely to further the

propounded conspiracy theory, are offences that would certainly

attract criminal liability, being intended to tarnish the reputation

by propagating falsities. Besides a faculty management

agreement with Zeus Strategic Management Advisors Pvt. Ltd.

with proper and adequate consideration for each service, there is

no other relation between the Fund and the companies run by the

brother of the complainant's brother.

14. The Article itself garnered much publicity and wide viewership, the

subsequent conduct of the respondent no.1 resulted in escalating the issue

further, and ensuring that the damage suffered by the reputation of the

complainant and his family, is so permanently etched, that there is no

coming back from the same for either the complainant, his family or his

business ventures that he had worked very hard to launch and run.

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15. The sudden rush to the press conference on the facts derived from

an Article of a magazine and the undue haste shown to do so without

verifying the facts, does indicate towards the malafide of the respondent

no.1 abusing the platform of the Indian National Congress. It become

clear from the tone and tenor of respondent no.1 that the insinuations

leveled are of far reaching consequences, per se defamatory and libelous.

The no holds bar narrative is full of innuendos and yet knowing very well

that there is no truth in the allegations. Respondent no.1 also tries to hide

behind a statement towards the end that the narrative of his is only factual

and that he is not trying to level allegations. The last part of the press

conference is not in concert with the narrative of the press conference.

The following part of the narrative, amongst others, is not factual but

clearly comprises of imputations, innuendos and allegations :

(i) Pradhanmantri je ne 8 november, 2018 ko notebandi ki

ghoshna ki. 13 din baad 21 november, 2016 ko rashtriya

salahkaar ke bete Vivek Doval, cayman island me ek hedge

fund kholte hain. Cayman island kya hai – tax havan hai. Tax

haven ka zikra kisne kiya tha – Dovel sahib ne kiya tha....

(ii) 21 November, 2016 ko Vivek Dovel, “GNY Asia”, ye

fund ka naam hai, notenbandi ke 8 din baad ye fund kholte

hain, iska kya hota hai – chamatkaar dekhiye. 2000 se lekar

2017 tak yani ki 17 saal me Cayman Island se 8300 crore

rupaye ka FDI hamare desh me aaya. Cayman Island gaer-

kanooni nahi hai, par tax haven hai. 'kar ka swarg' hai, wahan

koi kar nahi lagata to sabhi waha jaakar register karte hai.

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2000 se 2017 tak, Ab kya hota hai – 2017-2018 me, ek saal me

yani April 2017 tak, 17 saalon me kareeb 8300 crore rupya

aata hai aur April 2017 tak aur April 2017 se lekar March

2018, ek saal me Cayman Island se 8300 crore rupya aata hai,

ye mein anumaan laga raha hu, yaha waha, 100 yaha, 100

waha ho sakta hai, mote taur se. yani ki jitna FDI 17 saalon

me Cayman Island se aaya hai, utna notebandi ke baad ek saal

me aata hai or notebandi hue 13 din hote hai, ye GNY Asia

fund khola jata hai.....

(iii) Toh ye GNY Asia ka kaand sirf ek bete tak seemit nahi

hai, jiss saal me dono bete fasse hue hain. Ye bilkul D-

Company ke tarah hai aur ye bilkul saaf hai.....

(iv) Toh notebandi ke kaaran ye fund 13 din baad khola jata

hai or agle 12 mahine me krantikaari tarekay se aap dekhiye,

jo nateeja hota hai, 17 saal me jitna FDI desh ko mila hai,

FDI- Foreign Direct Investment hota hai, “D” ka arth aur

kuch bhi ho sakta hai, mein nahi kahunga.

(v) Notebandi hona, itni bhari matra me paisa bahar se

aana aur mein puri zimmedari se kehta hu ki ye round tripping

bhi hai ki ye paisa bahar jata hai Cayman Island ko aur

Cayman Island se waapis hamare desh me aata hai..... ye

foreign direct investment nahi hai, ye round tripping bhi hai, ye

notebandi ka nateeja hai....

(vi) BJP me toh kalakaar beton ki koi kami nahi hai....

(vii) Ye jo Vivek Doval ne Cayman Island me fund khol kar

chamatkaar dikhaaya hai.....

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(viii) Ye toh tathya hai, ye aarop raje laga raha hai ki

Cayman Island me unhone ek fund ki sthapana ki thi, who sab

kagazaat me hai. Hum aarop nahi laga rahe hai. Notebandi

hui, ye vastavikta hai, FDI aaya hai wo vastavikta hai, fund

khola gaya hai, usmein koi aarop nahi hai......”

16. The complainant further alleges that there is no doubt that the

Constitution of India propagates free press in a democratic set up and

envisages a freedom of speech and expression under Article 19(1)(a),

however, the right is not absolute and is subject to reasonable restrictions;

the restrictions inter alia being public order, decency, morality,

defamation or incitement of offence. The respondent no.2 and 3, being a

part of the print media, owe a responsibility to report cautiously and only

after due diligence of satisfying itself about the authenticity of the facts

being reported more so as reputation and goodwill have been

acknowledged as valuable asset by the Apex Court of the Country. The

Article authored by respondent no.3 and published by respondent no.2

and 3 is not sustainable by any documents and it not backed by any due

diligence. Presuming that the respondent no.2 and 3 must have taken a

long period of time to have access and peruse the documents in order to

narrate a story; curiously it was only on 12.01.2019 that a questionaire

was sent to the Complainant (on Facebook messenger) and his elder

brother seeking details in a manner analogous to interrogation of an

accused by a policeman or a law enforcement officer while vaguely

mentioning that it is in regard to a story being done for the Caravan

Magazine managed by respondent no.2. It is pertinent to mention that

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such questionaire somehow could not be accessed and it vanished all of a

sudden from the FB messenger of the Complainant. As per information

of the complainant, the elder brother of the complainant accessed his

email only after the publication of the Article on 16.01.2019 and the press

conference on 17.01.2019. There was no phone call seeking any

clarification from the complainant or his elder brother. In any case, it is

clear that the questionaire sent to the complainant or his elder brother was

a mere eyewash done to complete the formality as a defense of any

criminal action as the respondents had knowledge that the reputations are

per se defamatory and false.

17. The complainant relies on the judgment of Hon’ble Supreme Court

in Sahib Singh Mehra v. State of Uttar Pradesh reported at AIR 1966

SC 1451 wherein it was observed that the Press has great power in

impressing the minds of the people and it is essential that persons

responsible for publishing anything in newspapers should take good care

before publishing anything which tends to harm the reputation of a

person. Reckless comments are to be avoided. The judgment further goes

on to say that the presumption is that every person has a good reputation

unless proved otherwise. The impugned remarks made by the respondent

persons in the Article and the press conference would certainly lead the

readers of the Article and the viewers/listeners of the press conference to

suspect the sanctity of the Fund and the credentials of the Complainant

alongwith his family.

18. Finally, the Complainant has stated that the acts and statements of

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the respondents are not covered by any exceptions to Section 499 of the

Indian Penal Code. He has stated that the statements/insinuations made

by the respondents are far from truth and have not been made in any good

faith. To the contrary, the insinuations have been so made by the

respondents, in active connivance with each other, with the concrete

knowledge that imputation will harm the reputation of the Complainant

and the Doval family. The imputations have neither been made for

promotion of any public good nor do they touch any public question but

have been made in a concerted effort to inflict injury on the complainant

and his family in view of the upcoming elections at the Centre. No due

diligence was conducted and no effort was made by the respondents to

verify any of the imputations made which itself reflects the malafide

intent of the respondents.

19. This is the reproduction of complaint. The complainant has

examined himself to prove what he has alleged in his complaint. Further,

he has examined two more witnesses namely, Amit Sharma and Nikhil

Kapoor, to show that due to the Article and the press conference, his and

his family's reputation has been lowered.

20. The complainant has deposed that he is the citizen of U.K.

However, he is also overseas citizen of India. His education qualification

are B.Sc. (Economics) from London School of Economics in 1999, M.Sc

Economics (Specialisation in International & Monetary Economics from

LSE in 2001. Although his career was started in the year 2001 but he

pursued higher studies further and obtained CFA from CFA Institute,

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Charlottesville, USA in 2006 and then he also did CAIA from CAIA

Institute, Amherst, USA in 2010 and he was awarded 'Charter' in CFA as

well as CAIA. Further, he did Programme for Leadership Development

from Harvard Business School, Boston, USA in 2014. He was sent for

this course by his company British Airways Pension in London. He has

filed this complaint to redress his grievances against the respondents on

account of making defamatory allegations against him and his family

which are completely baseless and false accusation. On 16.01.2019, he

was travelling to Doha for work. He received a call from his brother that

his father is very anxious and wants him to be in Delhi on account of

some news regarding him and the family. He flew back to Delhi on

17.01.2019 and went to his father, who confronted him with the article

published in the Caravan Magazine on 16.01.2019 and asked him about

the correctness of the contents of the article. He felt disturbed and

humiliated on being questioned by his father in this manner as he have

been a committed professional all his life. The defamatory articles

published by Caravan Magazine are exhibited as Ex.CW1/A and

Ex.CW1/B. He was livid after reading the article for the manner in which

the events were narrated and projected. The article was titled as “The D-

Companies” and contained the picture of his father in middle and his and

his brother on either side. His family was referred as D-companies

whereas they all know that in their country the D-companies refers to

Dawood Ibrahim, a known criminal, who figures in the most wanted list.

A question was raised on the integrity of his and his family especially, his

father, who has all along dedicated his life to the service of this country

especially also fighting against Dawood. The article branded his and his

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family as anti-nationals. Further, the article levelled allegations of money

laundering, converting the black money into white and round tripping

through his venture GNY Asia Fund. Without there being any basis, it

was written that INR 8300 crores of black money has been round tripped

and brought to the country (India) thereby tarnishing his career and his

venture GNY Asia Fund. The defamation did not stop here. On

17.01.2019, when he returned from Doha. a Press Conference was also

held by Mr. Jai Ram Ramesh an ex-minister of Indian National Congress

and senior parliamentarian. This press conference was on the platform on

the Indian National Congress. He had downloaded the video of the Press

Conference from youtube and prepared a CD containing that video. The

website of Indian National Congress has a link to that video on the

youtube. The CD is Ex.CW1/C. He has also seen the transcript

Ex.CW1/D of the said press conference on the website of Indian National

Congress and he took a printout of the same. Some random documents

were also posted on the said website of Indian National Congress

alongwith the transcript. These documents are 33 in number and are

exhibited as Ex.CW1/E(colly). There were very derogatory comments

spoken which raised numerous questions on the integrity of his family.

After hearing the press conference, he felt very angry and broke down for

all the unpleasantness that was bestowed on his and his family on the

basis of allegations based on falsehood and are totally malafide. Actually,

he was a soft target but in fact it was his family especially, his father, who

was the target of the malicious campaign. He was addressed by Mr. Jai

Ram Ramesh “BJP may to kalakar beton kee kami nahee hai” and in the

list, he was mentioned as the sixth son, fifth being his brother. He also

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stated “ye GNY Fund ka kaand ek betey tak seemit nahee hai, ismay dono

bete fasse hue hain. Ye bilkul D-Company ki tarah hai or aur ye bilkul

saaf hai”, “D kaa arth aur kuch bhi ho sakata hai, mai nahee kahunga”.

Without trying to ascertain these facts, these references were made in a

demeaning manner. He further alleged that “chamatkar dekhiya. 2000 se

lekar 2017 tak yani ki 17 saal me cayman island se 8300 crores rupee ka

FDI hamare desh me aaya. Cayman island gaer kanooni nahi hai, par

tax haven hai. Kar ka swarg hai, wahan koi kar nahi lagata to sabhee

waha jaakar register karte hai. 2000 se 2017 tak, 17 saalo me yaha se

bhaarat ko 8300 crores rupya FDI aata hai. Ab kya hota hai- 2017-18

mai, ek sal me yani ki April 2017 tak, 17 saalo me kareeb 8300 crores

rupya aata hai aur April 2017 se lekar March 2018, ek saal me cayman

island se 8300 crore rupya aataa hai........., Ye jo Vivek Doval ne cayman

island me fund kholkar chamatkaar dikhaya hai”. He made many other

defamatory utterances in the said press conference which are part of the

documents Ex.CW1/D. The repercussions of articles as well as the

Press Conference questioned his professional integrity, which is of critical

importance to his career and his social standing as a Fund Manager. If he

has a dubious integrity, his career is over as a Fund Manager. People

entrusted their hard earned money with the Fund Managers and if the

Fund Managers are perceived to be engaging in illegal activities, it causes

a lot of anxiety not only in the mind of the existing investor but also

prospective investors. His business venture which has been started after

years of hard work, has been tarnished in a moment. The news spread

fairly quickly not only in India but overseas. It had reached his investors

and service providers abroad, who started calling him frantically. The

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respondents left no stone unturned in ensuring mass outreach of the story

and sensationalizing it by sharing snippets on social media, like Twitter

and Facebook which have global audience. Printouts of the tweets and

re-tweets on Twitter are exhibit Ex.CW1/F(Colly). The various

defamatory comments made by people on the video of the Press

Conference on youtube are exhibit Ex.CW1/G(Colly). Printouts of the

#chhotadoval started on twitter are exhibited as Ex.CW1/H(Colly).

Printouts of the tweets and re-tweets made by respondent no. 2 on Twitter

are exhibit Ex.CW1/I(Colly). Printouts of various newspaper reports

repeating the defamatory allegations made in the article and the Press

Conference are exhibit Ex.CW1/J(colly). The respondents did not stop

here and continued to tweet on Twitter and posts on Facebook the

defamatory allegations alongwith updating the status of the present case

in the Court. The printouts of the tweets & posts are exhibited as

Ex.CW1/K(colly). He also received calls from close family members,

relatives and friends questioning the correctness of the contents of the

article and also about the statements made in the Press Conference. Some

of his close friends even made fun of him by calling him a part of D-

company and being the Chhota Doval. Some of his close friends could

understand that this is a malicious campaign and were satisfied with his

explanation but some friends and acquaintance who were not so well

versed with his personal life maintained a stoic and cold silence against

him. One of his friend Nikhil Kapoor even messaged expressing

displeasure with him, alleged involvement in such activities. The printout

of the message received by him on his Whatsapp messenger and its reply

is Ex.CW1/L. When they talked over phone he asked him, how did he

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handle so much of demonetised money. He was serious and expressed his

shock. Since he was not a professional from his trade, it was very difficult

to make him understand the falsity and technicalities of these allegations.

His partner Amit Sharma and the other investors even suggested

that in scenario like this, should he continue as the Fund Manager or he

should step down and somebody else should head the Fund. Any investor

who would invest in his fund in the future, will come across defaming

comments about him on Internet, which will substantially impair his

funds capability of raising capital and doing their business. Additionally,

he has been a professional all his life and his career and his credibility

amongst investors has been impaired for times to come. These

defamatory articles and the press conference has caused irreparable

damage to his reputation and to his career. He has no relation with House

of Saud and he does not know anybody in the House of Saud therein and

they have no investments in their Fund. Respondent No. 2 & 3 continued

accusations / innuendos in this regard, speaks of their intent to defame.

He started his professional career as Junior Strategist in Bear Stearns, in

European Equity Division at London in July, 2001. In 2003 he was

promoted as a Research Associate in the European Technology

(Semiconductors & IT Services) & Capital Goods at Bear Stearns in

London. In 2005, he joined Credit Suisse, European Equity at London as

an Analyst European Technology (Telecom Equipment)Research. He

continued there till 2007 after which he joined Boyer Allan Investment

Management LLP in London as an Investment Analyst/Assistant Fund

Manager-Pacific Fund. In 2012, He then shifted his job to British Airways

Pension Investment Management Fund, London and joined there as a

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Fund Manager, Asia Pacific Fund. He continued there till October 2016

after which he started his own venture GNY Asia Fund in November

2016. He has given details of the remunerations drawn by him during the

course of his employments in the complaint. He placed on record 18

years of his income tax returns filed in London and Singapore exhibit

Ex.CW1/M(colly). GNY Asia Fund was launched in November 2016 but

there is a history. In 2012, some of his friends including Amit Sharma

started talking about a venture and thus used to meet every Sunday at

Costa Coffee near West Hampstead, Tube station, London, at 7 am and

discussed various plans for starting a fund. Amit remained a constant

feature in the discussions. In October 2013, he and Amit formed a

company called VIVAM Holdco Ltd. with 'VIV' coming from Vivek and

'AM' coming from Amit. The company was incorporated in London

where they were based. He has the certificate of incorporation of the

company which he had taken from his accountant in London. From 2014

to March 2016 they started drawing various plans to shape to their

business. In later part of 2015, another friend Mohd. Althaf whom he has

known for several years and who is a Senior Executive in Lulu Group

pledged his support that if they ran the fund full time and quit their jobs,

he was ready to pledge seed money of USD 10 million. It came as a shot

in their arm and they decided to change the name of VIVAM to GNY

Capital. The change was necessary to give more professional and

generalised branding and was also in tune with a market that they were

targeting to invest in. Hence, came the name GNY Asia Fund. In March

2016, Amit left his job, he started working on the formation of the fund

rigorously. He was asked to continue so that his salary would be used to

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meet out the formation expenses of Fund. During this time, they made a

few trips to Singapore to meet professionals and service providers. In

October 2016, complainant also quit his job as they were getting close to

the point of fund launch. They had anticipated a fund launch of October

2016, however, because of administrative and legal delays, the fund got

created on November, 21st, 2016 and launched i.e. started investing on

16.12.2016. By the time the fund has launched, they only had a total of

six investors including he and Amit, who continue to remain as investors

to this date. He invested USD 3,00,000 and Amit invested USD 2,00,000

from their salary savings. The details of the other four investors are

mentioned in his complaint. They have been unable to add any more

investors till date since the launch of the fund. If one searches on Internet

about him and GNY Capital Ltd, the entire history narrated by him

regarding change of name from VIVAM to GNY with all details can

easily be accessed by a simple google search. The material details and the

certificate of incorporation is exhibited Ex.CW1/N(Colly). The service

providers for the GNY Asia Funds were best in class and included

Gordian Capital as the Hedge Fund Platform provider, Nomura Securities

as the prime broker, DBS Bank as the Bank for the fund, Walkers Global

as a legal advisor and Wells Fargo as the Administrator of the Fund. Price

Water House(PWC) were chosen as the auditor of the Fund. Gordian

Capital is a leading Hedge Fund Platform provider in Singapore and

Japan. Nomura Securities is the largest Japanese investment bank, DBS

Bank is Singapore largest bank and Walkers Global is a leading global

law firm in Cayman Islands. Wells Fargo is the largest fund administrator

in the world and is in the US based company. They also hired a company

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called Director Management Service (DMS) which provides independent

director and Board secretarial functions. DMS had been strongly

recommended to them by Gordian Capital. DMS nominated an

independent Director to the GNY Asia Fund by the name of Don W.

Ebanks, who has previously been the head of compliance of the Cayman

Island Monetary Authority. DMS had sent a copy of the resume of Don

W. Ebanks and since he had an impeccable credentials, the fund agreed to

take him on board as an independent director. A printout of the e-mail

alongwith the attachments sent by DMS for services and resume of Don

W. Ebanks is Ex.CW1/O. They chose Cayman Islands as the domicile for

the fund given 60% of all global hedge funds were based there and the

geography had an eco-system of lawyers, accountants, tax consultants,

which made the process of creating and managing of fund there efficient.

It was based also on the recommendation of GNY Asia Service Providers

such as Gordian Capital. The fund got registered on 21.11.2016. a copy of

the certificate of registration of GNY Asia Fund with in Cayman Islands

is now Ex.CW1/P. By track record, he had been investing in Asia for the

last 10 years at Boyer Allan and at British Airways Pension Investment

Management Ltd. Asia for him meant China, Hong Kong, Taiwan,

Korea, India and seven countries of the ASEAN. The intention was to

carry on investing in the same geographies as Boyer Allan did which was

across all the Asian countries mentioned above. GNY Asia Fund was

never launched in India which means that they never took subscriptions

from any person based in India or ever marketed the Fund in India. But

India was one of the investment destination and they obtained Foreign

Portfolio Investment(FPI) License from SEBI via Edelweiss Custodial

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Services Ltd. on December 21st, 2016. A copy of the FPI License dated

21.12.2016 and letter issued by Edelweiss Custodial Services Ltd of the

same date is Ex.CW1/Q(colly). FPI is different than FDI which is Foreign

Direct Investment. FDI is invested in the direct economy like

infrastructure, factories, industries, land etc whereas FPI is a portfolio

investment in equity, securities, stocks, bonds, debenture etc. As per SEBI

regulations, there can be no investment from any Indian residents in a FPI

fund. Therefore, there was not a rupee investment by any Indian based in

India, done in his Fund while his operations in India. In fact, there was no

investment whatsoever besides the six investors who had given seed

money before his operations started in India. So there is no question of

any investment of 8300 crores in his Fund or routed through his Fund in

India. His Fund's corpus was 11.1 million USD to start with and that

remained its highest peak even till date. In India, the Fund only invested

15% of the corpus amount which translate close to USD 2 million.

Therefore, at any point in time, they have not been even one percent of

the amounts alleged in the articles or in the press conference. The

investment to the Fund were on the following stocks – Asian Paints

Persistent Systems, Indus Ind Bank, State Bank of India, BPCL, Bharti

Airtel, TCS, L&T and Wipro. They invested in India during the period

January to August 2017 and since then they have not been investing in

India. GNY Asia Fund exited Indian market in August 2017. One of the

conditions for their FPI license was that they have to broad base GNY

Asia Fund to at least 20 investors in six months in terms of the SEBI

regulations. A start up fund is allowed with such conditions that in six

months time, the start up fund needs to broad base its investors base and

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if it cannot then it needs to cease its operations in India. Since they were

unable to add more investors after original six, the Fund followed the

rules and exited the Indian market. On their investments, they made a

profit of about USD 1,00,000 but had to spend a lot of money on

operations, brokerage, approvals and capital gain taxes. On an overall

analysis, they broke even. The income tax returns filed by GNY Asia

Fund in India for the assessment years 2017-18 and 2018-19 are exhibit

Ex.CW1/R and Ex.CW1/S respectively. The corpus of the GNY Asia

Fund is USD 8.3 million. The value of the investment have gone down

from the original USD 11.1 million due to the US-China trade war. The

financial statement of GNY Asia Fund for the period 14.09.2016 (date of

incorporation) to 31.12.2017 is Ex.CW1/T. This financial statement

Ex.CW1/T has been audited by PWC which is a largest accountancy firm

in the world.He is or was never a director in any company in India.

Outside India, he is a director in three companies i.e. (1) GNY Capital

Ltd. in London, (2) Mandeville Court Property Co. Ltd in London which

is a residents welfare association company, which manages flats of

Mandeville Court of which he was a resident and is non-profit venture,

and (3) Y Fin Advisor in Singapore, which is a dormant company and

which has never traded. This company was formed by him and Amit

Sharma but it never took off. He has an elder brother namely, Shaurya

Doval. He has no relationship with any company of his brother. They

were a start up Fund and had scarce funds. His brother was gracious

enough to provide a small space in his office and also two resources on

sharing basis. The Fund used to pay about USD 2000 every month for

such usage. The arrangement and the payments are duly reflected in the

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Facility Management Agreement between GNY Asia Fund and Zeus

Strategic Management Advisors P Ltd. Besides the research, these

resources attended one conference during their operation in India, which

was organized by their broker in India Edelweiss and this was attended by

300 small and big entities. He clarifed that the main broker of the Fund,

Nomura Securities, had no office or operation in India for providing

custodian services and therefore the Fund hired the services of

Edelweiss. His father is the National Security Advisor of India. His father

has no connection with him or his brother's companies/businesses. He has

never been a part of our businesses in any capacity. To the best of his

knowledge, his father has never been a director in any company or

partner in any firm. He has dedicated his life to the security and welfare

of the country. He is placed on record a certificate Ex.CW1/U under

section 65 B of the Indian Evidence Act for all the electronic documents

which are exhibited in evidence. The Caravan articles and Mr. Jairam

Ramesh's press conference have been pieced by bringing in random facts,

mis-facts, misleading inferences to create an impression that illegal

activities have been undertaken by the Doval family including money

laundering, round tripping of capital, knowing of demonetization in

advance, which has tarnished his and his family image. The comparison

of his family with D-Companies has created an impression that they were

doing anti-national and illegal activities which is the most preposterous

charge. A chart was presented in a Caravan Article labeling us the D-

companies, which portrayed his father, his brother and himself. This chart

has been repeatedly tweeted and re-tweeted by the respondent No. 2 & 3

and has been picked up by other newspapers and social platforms, which

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has further tarnished his and his family image and has invited comments

from the public terming him as Chhota Doval putting in line with Chhota

Rajan and Chhota Shakil who are hardened terrorist. The defamatory

articles and press conference has tarnished his image as a professional

globally and it will be hard or impossible to recover from this set back.

This harm cannot be quantified in monetary terms.

21. The complainant then examined Mr. Amit Sharma as CW-2, who

deposed that he is a citizen of United Kingdom with an Indian OCI. He

did his Engineering from Delhi IIT(Electrical Engineering) and after that

he did his MBA from INSEAD which is one of worlds top business

school. He has a CFA qualification from Charlottesville, USA. He has

been working in London for the past 17 years. He started his work as a

Fund Analyst at Zan Partners, London U.K. and after that he worked for

four years Deutsche Bank, as Semi-Conductor Analyst and then

subsequently as a Credit Analyst. He worked for Macquarie Bank,

London U.K. as associate director, Asia Equity Institutional Sales for

eight years. His last drawn remuneration was about 2 lakhs pounds

annually that is roughly Rs.Two crores He know the complainant Vivek

since 2004 when they both were semi-conductor analysts at different

banks. He was at Deutsche Bank and Vivek was at Bear Stearn Bank.

Since then they became friends and had been in regular contact. He

subsequently started work at Macquarie Bank as Institutional Sales in

2008 and Vivek started as a Senior Analyst at a very well known Hedge

Fund called Boyer Allan. Boyer Allan was one of his client at Macquarie

Bank and Vivek was interacting on their behalf with him. That is when

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they started to know each other professionally. Vivek and he discussed

stock ideas very regularly and got along very well over the course of the

next several years. In 2012, when Boyer Allan shut down, Vivek was

looking for what to do next. This is when they came up with the idea of

launching of a fund together. But they understood that it is too early

because for launching one's own fund, one required a track record as a

Fund Manager. Vivek then started working as Fund Manager at British

Airways Pensions managing USD 2 billion. Once Vivek was well settled

in his new job, they started meeting informally to discuss how to launch

their fund in the year 2012. They used to regularly meet every weekend at

7 am in the morning in Costa Coffee in West Hampstead Station and

discussed the fund strategies. In October, 2013, they registered a

company called VIVAM Holdco Ltd. This company although had no

employees or operations, was when they officially got into a business

relation with the aim of launching a fund. Since 2013, they had already

finalized an investment strategy. They started informally meeting

potential investors discussing a possible fund launch in 2014 onwards. A

lot of people were very impressed by their backgrounds and their work

experience and track record but they wanted the Fund already launched

before they invest their money in it. They wanted somebody else to

invest first so they did not make much progress and VIVAM could not

take off. It was only in late 2015, when they met Mohd Althaf, who was

known to Vivek for a long time. Mohd Althaf was very impressed with

their credentials and was supportive of a Fund launch. In November,

2015, he made a trip to Singapore to meet service providers for the Fund

and figure out the costs involved. In early 2016, Mohd Althaf told them

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that if they were to leave their current profession and work for full time

on a fund, he would invest the seed capital of USD 10 millions. This is

when he resigned from Macquarie Bank in March, 2016 (He was still on

Gardening Leave till August 2016). He set out to work on Fund launch

and other activities relating to the Fund. Before he met Mohd Althaf,

where he had agreed to invest a substantial amount, they already had an

investment strategy, list of possible stocks they will invest their fund in

and a possible structure of fund. His meetings in late November with the

service providers was also instrumental in this. In August, 2016, they took

another trip with the aim of finalizing all the Fund service providers and

operations. They decided on Singapore as the jurisdiction for the Fund

Investment Manager and Cayman Islands as the fund registration

location. They were aiming for an October 2016 launch, but due to KYC

and other formalities, it took them much longer and the Fund got

registered in November 2016. The Fund was regulated by Cayman

Islands as well as the Investment Manager was regulated by Monetary

Authority of Singapore. As per this structure, both Vivek and he, were to

be present in Singapore. However, he had children who were going to

very good schools in London and his wife is a Doctor in the UK system.

He was less flexible to move. They renamed VIVAM to GNY Capital and

got it registered with the FCA (UK Financial Authority) and they had an

investment advisory agreement with GNY Capital. This way, he could

carry on his duties as Head of Research and Head of Marketing for the

Fund based out of London. He is the Managing Director of GNY Capital

in U.K. He is also Head of Research and Head of Marketing for the GNY

Asia Fund. The Fund is an Asia focused fund. India is an important

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geography for themselves as India represents roughly 15% of Asian

market capitalization. Their prime broker Nomura did not have access to

Indian market. So, he shortlisted several custodians in India out of which

he shortlisted Kotak Securities and Edelweiss Securities given their long

standing contacts in these organizations. Edelweiss Securities however

was much more responsive and they decided to go with them for Indian

markets. Fund invested roughly 15% of the corpus in India representing

the rough size of India in Asian markets as a starting point. Fund operated

in Indian market for about six months and they exited as the Fund could

not comply with the FPI category-II regulations within the stipulated time

of six months. He is aware of the allegations made against Mr. Vivek and

the Fund. As Head of Research, he track news flow on all their markets

(including India) and he found an article on Google news, where there

was a link to the Caravan Article Ex.CW1/A. He read this article and also

read a lot of news feed on Twitter and Facebook. He also came across the

Press Conference, (the transcript Ex.CW1/D) subsequently by Mr. Jairam

Ramesh on INC platform. He also received calls & messages from people

in the U.K., some friends in Singapore and also people in the US. In one

of the tweets, photograph of his house in Radlett, London also appears.

The tweets were in relation to black money and although his house had

no relation with the same but it was highlighted perhaps because his name

was also in the article. Initially, he was very angry to know about the

article and more so on the repercussions that it will have on his

credentials and the reputation of the Fund in the market, solely on

account of their association with Vivek. There was a huge unrest amongst

investors and he was getting repeated calls with investors showing their

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anguish. Investors even till today are of the view that irrespective of the

allegations being true or false Vivek should not continue as Fund

Manager. He must step down and somebody else should take charge as

they apprehend that he would be a continued target due to his family

background in India. Fund has suffered gravely due to these allegations. A

number of prospective investors have backed out or have shown

reluctance to make investments in the Fund. People in London, Singapore

and Cayman Islands are closely following the story. They have been

professionals running an entrepreneurial venture. Reputation is one of the

most important things in such ventures in financial services. Investors

carry out a thorough due diligence (they do Google searches, they check

our background, they check our criminal record etc.) before they even

talk to them. Now, if a potential investor searches their background,

these allegations such as money laundering will show up in our records.

He highlighted that money laundering in the West and in big financial

centres is a very serious crime. Even an accusation of such nature

whether true or not causes irreparable damage. Any impression of being

involved in illegal activities has disastrous consequences. On the day of

the article, his Linkedin profile which is usually what professionals look

at, had a sudden increase in profile visitors. His reputation is directly

impacted as well by association with the Fund(He is the co-founder and

Head of Research) as well as with Vivek. He had to answer to service

providers, to other fellow professionals in London and friends & family.

He did not know of Vivek's father when Vivek and he associated as

business partners in 2013 in London. He knew that Vivek is a person of

integrity, has a value system consistent to mine and a thorough

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professional. Subsequently, when he came to know of his father, when he

was appointed the NSA, Vivek made it very clear from the beginning that

his father or his family contacts or background will not be used for any

business purposes. In his business dealings, he always maintained

distance from his family. As far as he is aware, he never had any political

ambition and did not concern himself with professional affairs of his

family members. Even Vivek's brother Shaurya runs his business of

investments but there is no financial interest between their fund and his

companies. The statement “Documents accessed by The Caravan also

show that Vivek Doval's overseas ventures are inextricably linked to

businesses run by his elder brother, Shaurya Doval in Asia” is absolutely

incorrect and malafide. Since he know Vivek and have been integral

part of this Fund from the very beginning, while also understanding the

industry well, he know that these allegations are false. But it is extremely

difficult to explain the same to people, who are not aware of the

functioning of the industry or who have not witnessed the hard work that

has gone into setting up and a launch of a Fund and to make them believe

the falsity of the allegations. Though he is mentioned in the article and

there are no allegations against him, yet this is his defamation as well.

Financial services is all about trust and integrity and the allegations

against the Fund which is managed by him as well has affected his

credibility as an investment banker. The Caravan never approached him

or never asked him any questions to know about the Fund.

22. The third and the last witness of the complainant is Mr. Nikhil

Kapur, who deposed that he is a businessman based in Pune. He own a

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wellness centre. Vivek Doval and he studied in the same school that is

Army Public School situated in Dhaula Kuan, New Delhi and they were

classmates from class 7th to 10th. Since then, they have been in touch and

over the years developed strong friendship. He first came across the

tweets on Twitter regarding a story by The Caravan on Vivek and his

venture. Subsequently, he read the full article Ex.CW1/A on Internet.

After reading the article he was disappointed because he assumed there

was some truth in the matter. Vivek Doval and he have a very frank

relationship and he sent him an SMS (Ex.CW1/L) sharing his annoyance

on his possible involvement in regard to what was published. After this,

Vivek called him and explained that the entire article was factually

incorrect and was done to malign him as well as his family. Since he is

not from the financial industry, Vivek had to spend a lot of time

explaining this matter. After this call, he again read the article in detail

and realized that it was the copy and paste job and there was no merit in

what was published. Without doubt, Vivek is not involved in any of the

things that has been published. Both Vivek and his father have worn the

uniform to serve the country. His father is a 1971 War Veteran and their

moral compass is very high. This is the reason why they are good friends

and he is confident that his conduct is beyond any doubt. In their friends'

Whatsapp group, he could make out that there are some under currents

after this false news came out. Some of their friends still believe that

there is some truth in the matter. It is unfortunate that they always tend to

believe what is published in the media and the person is guilty unless

proven innocent. Even though stories have been published with

clarifications from Vivek, some of the friends still believe otherwise.

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23. These are the evidences in support of the present defamation

complaint.

24. Now with these allegations and evidence in support of them, I have

to decide whether to summon the respondents for committing the offence

of defamation punishable under section 500 of Indian Penal Code or not.

25. Every person has a right to have his reputation preserved inviolate.

This right of reputation is acknowledged as an inherent personal right of

every person as part of the right of personal security. A good reputation is

an element of personal security, and is protected by the Constitution

equally with the right to the enjoyment of life, liberty and property. Right

to reputation is a facet of right to life of a person under Article 21 of the

Constitution. The right to free speech and expression similarly is also a

fundamental right under the Indian Constitution but this right is subject to

the reasonable restrictions imposed by law of defamation. The competing

interests which has to be balanced against the interest which a person has

in his reputation is the interest which every person has in freedom of

speech. The wrong of defamation protects reputation and the defences to

the wrong set out in section 499 of The Indian Penal Code in the form of

exceptions protects the freedom of speech. The law of defamation like

many other branches of the law provides for balancing of interests.

26. Reputation is not only the salt of life, but also the purest treasure

and the most precious perfume of life. It is extremely delicate and

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cherished value this side of the grave. It is a revenue generator for the

present as well as for the prosperity. The right to enjoyment of a private

reputation, unassailed by malicious assault on it is of ancient origin, and

is necessary to human society. A man's reputation is his property, more

valuable than other property. No mere poetic fancy suggested the truth

that a good name is rather to be chosen than great riches. Indeed, if one

reflect on the decree of suffering occasioned by loss of character, and

compare it with that occasioned by loss of property, the amount of the

former injury far exceeds that of the latter.

27. Defamatory statement is one which tends to injure the reputation of

a person. It is a publication which tends to lower a persons reputation in

the estimation of right thinking members of the society generally or

which make them shun or avoid that person. The essence of the offence

of defamation consists in its tendency to cause that description of pain

which is felt by a person who knows himself to be the object of the

unfavourable sentiments of his fellow- creatures, and those

inconveniences to which a person who is the object of such unfavourable

sentiments is exposed. The concept of defamation is very old and the

Penal Code makes no distinction between the written and spoken

defamation. According to section 499 of The Indian Penal Code, a person

is said to commit the offence of defamation when he, by words either

spoken or intended to be read, or by signs or by visible representations,

makes or publishes any imputation concerning any person intending to

harm, or knowing or having reason to believe that such imputation will

harm, the reputation of such person except where the publication is

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protected by the ten statutory exceptions provided in this provision itself.

In certain cases even an innocent and innocuous statement may also be

defamatory if the intention of the person making them is to release its

latent or hidden meaning. Explanation 3 says that an imputation in the

form of an alternative or expressed ironically, may amount to a

defamation. Words are prima facie defamatory when their natural,

obvious and primary sense is defamatory. Words prima facie innocent are

not actionable unless their secondary or latent meaning is proved. Where

the words alleged to be defamatory do not appear to be such on their face,

the complainant has make out the circumstances which made them

actionable, and he has to set forth in his complaint the defamatory sense

he attributes to them. Such explanatory statement is called an innuendo.

An innuendo is an explanatory averment in the statement of claim

defining the meaning which a complainant assigns to the words

complained of or specifying the complainant as the person to whom they

apply. An innuendo is necessary where the imputation is made in an

oblique way, or by way of question, exclamation, or conjecture, or irony.

One illustration to section 499 IPC is: A says-“Z is an honest man; he

never stole B's watch”; intending to cause it to be believed that Z did steal

B's watch. This is defamation, unless it falls within one of the exceptions.

28. The complaint clearly set out the imputations made against the

complainant by the respondents. In his evidence he demonstrated how

these allegations made in the Caravan Article as well as in the Press

Conference are false and defamatory. According to complainant the

Article did serve its purpose of creating a hue and cry and maligning the

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reputation of the complainant and his family and that the facts being

completely unrelated to one another are presented in such a manner

which hints at deep rooted conspiracies between the family members, in

carrying out laundering of black money, by rerouting of funds into India

through the Cayman Islands, in the post demonetisation era. Although

their was no direct allegation in the Article so worded or phrased, but

according to complainant, to that extent, a number of questions to that

effect have been raised, insinuating and imputing such wrongdoings,

which leaves the public with a certain negative perception of the actions

of the complainant and his family members, which perception was the

anticipated and calculated reaction that the very questions, insinuations

and imputations were aimed at. The representation: The D-companies –

Ajit Doval's sons run a web of companies including a Cayman Islands

hedge Fund is stated to be defamatory as D-companies is a reference

often given to one of the India's most wanted criminal Dawood Ibrahim

and a similar reference to complainant's business set up smacks malafide

and is a clear reflection on the malafide intent of the respondents , says

complainant. The insinuations regarding the rerouting of black money

from Cayman Islands by the Fund or its alleged links to the sudden jump

in the FDI received in India from Cayman Islands post the

demonetisation announcement holds no substance whatsoever according

to the complainant and is false. The fund is shown to have only seven

investors, all of whom are professionals and based out of India. The total

corpus of the Fund is shown as USD 11 million (Rs. 77 Crores), with one

investor being a contributor of over 90% of the investment pool (70

Crores). The complainant deposed on oath that the investments received

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has undergone strict scrutiny by multiple service providers and is

compliant with the strictest of KYC norms. The investors have all

complied with FATCA regulations. None of these investors are based in

India, and no part of the investment in the Fund was raised in India. The

maximum investment that was made in the Indian market was at no point

more than USD 2 million (Rs.14 Crores) i.e. 15% of the Fund. Even this

money exited the Indian market in August 2017 when the Fund exited the

market on account of the expiry of its FPI license. The complainant says

that these facts make it starkly evident that the allegations leveled against

him are baseless and have been so leveled only to tarnish his image and

consequently the image of his family.

29. As far as the Press Conference is concerned, there are indirect

imputations of money laundering, round tripping of demonitised money

through the Fund of the Complainant. The Press Conference further

relate it to the issue of demonetization and tries to make out a case that

the Fund of the Complainant may be involved in benefiting from the

process of demonetisation. The Press Conference also makes an attempt

to show some link between the increase in FDI in the year 2017-2018

with the Fund of the complainant. The receiving of Rs. 8,300 as FDI in

India in 20117-2018 from Cayman Island has been linked to the Fund of

the Complainant as it was said in the Press Conference that that the bulk

of these funds could have come from GNY Asia. This fact has been

falsified by the complainant in his evidence where he said that GNY India

has not invested in FDI and has invested in FPI only that too for a limited

period.

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30. The Caravan Article though it appears factual only, has according

to the complainant was not only damaging the way it was presented but

has actually caused a lot of damage not only to his reputation but also to

the reputation of family. Further many facts stated in the article are stated

not only as false but also defamatory. Like the manner in which the

pictures of complainants father and brother is depicted in the article when

they have no connection with the business of the complainant. The title

D-Companies is also alleged as defamatory as a reflection of some

relation with a notorious criminal of the country. The statement that the

Complainants Fund is linked inextricably to the business run by his

brother Shaurya Doval is also proved to be false. Further the statement

that “The overlaps between brother's business indicate a larger financial

universe run by them, with companies that are connected to the House of

Saud, the ruling dynasty of Saudi Arabia is also alleged as false in the

statement of the complainant according to which his business has no

connection with the House of Saud. There are other factually incorrect

statements according to the testimony of the complainant which need not

to be elaborated at this initial stage.

31. In order to decide whether to summon respondents for trial,

existence of only a prima facie case to summon them has to be seen in

contrast to the standard of proof “beyond reasonable doubt” required for

conviction. In legal terms, the consideration at this stage is whether there

exists sufficient grounds to summon them or not (section 204 of The

Code of Criminal Procedure). The situation may be different if the

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respondents are able to make out a defence for them from amongst those

defences carved out in the provision itself (section 499 of The Indian

Penal Code). But these defences cannot be looked at this stage according

to the law. The defences have to be pleaded and proved by the person

charged with defamation. At the initial stage, the court has to look into the

complainant and the statements/evidence of the witnesses and has to

believe them. The Court has to see whether if the impugned material is

prima facie defamatory or not and whether the Court has sufficient

grounds to proceed with the case. The words referred above are if seen in

the entire context of the things and evidence of the complainant and his

witnesses, seems to be defamatory if they do not fall within any of the

statutory defences prescribed by law itself. The entire burden will be on

respondents to plead and prove the defence on which they may rely upon.

32. At this stage, the Court only has the version of the complainant,

who has on oath deposed in Court that all the allegations made are false

and further brought witnesses to corroborate not only his impeccable and

unblemished reputation but to show how much damage has been caused

by the Article and the Press Conference. These witnesses also proved that

the reputation of the complainant was lowered in their estimation which

again is an essential requirement of the offence of defamation. A person

cannot be defamed in his own eyes. A mans reputation is the estimate in

which others holds him, not the good opinion which he has of himself.

There has to be other reasonable, prudent and right thinking members of

society, who says that the reputation of a person aggrieved is lowered in

their estimation. Mr. D.P.Singh, learned advocate appearing for the

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complainant has argued that the allegations made in the Article and the

Press Conference and the subsequent reactions of the general public are

defamatory on the face of it as the complainant has deposed that the

allegations are false and imaginary. He submitted that the subsequent

Press Conference based on the Article further aggravated defamation. He

submitted that if the article was plainly a narration of (wrong) facts then

how it was capable of causing so much harm to the complainant because

the witness Amit Sharma has deposed that there was a huge unrest

amongst investors and he was getting repeated calls with investors

showing their anguish and that investors even till today are of the view

that irrespective of the allegations being true or false complainant should

not continue as Fund Manager. He must step down and somebody else

should take charge as they apprehend that he would be a continued target

due to his family background in India. Fund has suffered gravely due to

these allegations. A number of prospective investors have backed out or

have shown reluctance to make investments in the Fund. People in

London, Singapore and Cayman Islands are closely following the story.

They have been professionals running an entrepreneurial venture.

Reputation is one of the most important things in such ventures in

financial services. Investors carry out a thorough due diligence (they do

Google searches, they check our background, they check their criminal

record etc.) before they even talk to them. Now, if a potential investor

searches their background, these allegations such as money laundering

will show up in their records. He highlighted that money laundering in

the West and in big financial centres is a very serious crime. Even an

accusation of such nature whether true or not causes irreparable damage.

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Any impression of being involved in illegal activities has disastrous

consequences. On the day of the article, his Linkedin profile which is

usually what professionals look at, had a sudden increase in profile

visitors. His reputation is directly impacted as well by association with

the Fund(He is the co-founder and Head of Research) as well as with the

complainant. He had to answer to service providers, to other fellow

professionals in London and friends & family.

33. In defamation cases, one of the test is whether under the

circumstances in which the writing was published reasonable men to

whom the publication was made would be likely to understand it in a

defamatory sense. Much also depends on the intention of the maker of the

statement which is a subject of trial. Sometimes it is possible to find out

the real intention behind publication from the publication itself and

sometimes particularly in innuendos it requires evidence. Like as

suggested by illustration (a) referred above, the intention of the maker of

the statement is an important factor in deciding. Of course the contents of

the publication are primary considerations but intention and consequent

harm is also equally important. It is not always necessary that the

publication alleges some illegality on the part the person defamed.

Explanation 4 of section 499 IPC makes it clear that any imputation that

lowers the moral or intellectual character of a person or lowers the credit

of a person also harms his reputation. The complainant in this case tried

to show how his credit has been lowered by the defamatory Article and

Press Conference in respect of his business where integrity of a person is

very important and by framing the Article in a manner suggesting

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indirectly that he may be involved along with his family in money

laundering and round tripping of black money particularly in post

demonitisation period.

34. The standard of scrutiny of the evidence which the Magistrate has

to adopt for deciding whether or not to issue process under Section 204

Cr.P.C. has been laid down by Hon'ble Supreme Court in Kewal Krishan

v. Suraj Bhan & Anr. [1980 (Supp) SCC 499] as-

“At the stage of Sections 203 and 204, Criminal Procedure

Code in a case exclusively triable by the Court of Session, all

that the Magistrate has to do is to see whether on a cursory

perusal of the complaint and the evidence recorded during the

preliminary inquiry under Sections 200 and 202, Criminal

Procedure Code, there is prima facie evidence in support of the

charge levelled against the accused. All that he has to see is

whether or not there is “sufficient ground for proceeding”

against the accused. At this stage, the Magistrate is not to

weigh the evidence meticulously as if he were the trial court.

The standard to be adopted by the Magistrate in scrutinising

the evidence is not the same as the one which is to be kept in

view at the stage of framing charges. This Court has held in

Ramesh Singh case that even at the stage of framing charges

the truth, veracity and effect of the evidence which the

complainant produces or proposes to adduce at the trial, is not

to be meticulously judged. The standard of proof and

judgment, which is to be applied finally before finding the

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accused guilty or otherwise, is not exactly to be applied at the

stage of framing charges. A fortiori, at the stage of Sections

202/204, if there is prima facie evidence in support of the

allegations in the complaint relating to a case exclusively

triable by the Court of Session, that will be a sufficient ground

for issuing process to the accused and committing them for

trial to the Court of Session.” Thus, in a case exclusively

triable by the Court of Session, all that the Magistrate has to do

at the stage of Section 204 Cr.P.C. is to see whether on a

perusal of the evidence there is “sufficient ground for

proceeding” against the accused and at this stage, the

Magistrate is not required to weigh the evidence meticulously

as if he was the trial court nor is he required to scrutinise the

evidence by the same standard by which the Sessions Court

scrutinises the evidence to decide whether to frame or not to

frame charges under Section 227/228, Cr.P.C.

35. The same principles applies in trial by Magistrates Courts as well.

Further, in view of provisions of Press and Registration Act, 1867,

particularly Section 7 unless the contrary is proved, the persons declared

as Printer, Publisher and Editor of the newspaper are presumed to be

responsible for the contents of the newspaper. (Shobhana Bhartia & Ors

vs NCT of Delhi & Anr 2007 SCC OnLine Del 1301:(2007) 144 DLT

519).

36. Therefore, the aforesaid discussions shows that allegations of the

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respondents are prima facie defamatory and refers to complainant Mr.

Vivek Doval, therefore, he is an aggrieved person within the meaning of

section 199 of the Code of Criminal Procedure to file this complainant.

He has denied the allegations made against him directly and otherwise, by

the respondents as false and imaginary. These defamatory statements

have been published, widely read and particularly by the witnesses

examined who deposed that the reputation of the complainant was

lowered in their estimation. The inquiry as contemplated under section

202 of the Code of Criminal Procedure has been duly conducted by

examining the complainant and his witnesses to arrive at the conclusion

for this stage of this case. Therefore in view of the aforesaid discussion

there exists sufficient grounds to proceed against all the respondents.

Accordingly Mr. Jairam Ramesh, Mr. Paresh Nath, the Editor-in-Chief of

Caravan Magazine and Mr. Kaushal Shroff, the author of the alleged

defamatory article in the Caravan Magazine are summoned for

commission of offence of defamation under section 500 of the Indian

Penal Code.

Announced in the open courtthis 02nd day of March 2019

SAMAR VISHALACMM-II (New Delhi), PHC, New Delhi

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