Blue
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Before
v.
TABLE OF CONTENTS
PRAYER …………………………………………………………………………………………………………...24
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6TH INTRA-FACULTY MOOT COURT COMPETITION, 2024
[MEMORIAL for PLAINTIFF]
LIST OF ABBREVIATIONS
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6TH INTRA-FACULTY MOOT COURT COMPETITION, 2024
[MEMORIAL for PLAINTIFF]
TABLE OF AUTHORITIES
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6TH INTRA-FACULTY MOOT COURT COMPETITION, 2024
[MEMORIAL for PLAINTIFF]
Constitution of Indices 19,24
Drugs and Cosmetics Act, 1940 14,15
Maritime Zones Act, 1976 16
United Nations Convention on the Law of the Sea, 1982 16
BOOKS | COMMENTARIES | DICTIONARY PAGE NO.
S.P. Tyagi & Rajesh Gupta, Commentary on The Narcotic Drugs and Psychotropic 08
Substances Act, 1985 (4th ed. 2023).
Avtar Singh, Company Law (18th ed. 2021). 17
Christopher Hill, Maritime Law (8th ed. 2018). 19
Malcolm N. Shaw, International Law (Cambridge University Press, 22d ed. 2021). 20
Robin Churchill, Vaughan Lowe & Amy Sander, The Law of the Sea (4th ed. 08
Manchester University Press 2022).
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[MEMORIAL for PLAINTIFF]
STATEMENT OF JURISDICTION
The Respondents respectfully submit that this Hon'ble High Court has jurisdiction to hear the present
matter under Article 226 of the Constitution of India, which empowers the High Court to issue
directions, orders, or writs for the enforcement of fundamental rights and other legal rights. Given that the
case involves the interpretation of contractual obligations and potential violations of legal rights, this
Hon'ble Court is vested with the authority to adjudicate the present dispute.
The Respondents respectfully this Hon'ble Court has the authority to adjudicate the present matter
involving disputes relating to breach of contract, frustration of contract under Section 56 of the
Indian Contract Act, 1872, and the tort of defamation under Indian Tort Law.
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[MEMORIAL for PLAINTIFF]
STATEMENT OF FACTS
BACKGROUND
Highgarden is a state located in a region prone to seasonal floods due to its geographical topography.
Geographically, Highgarden experiences periodic moderate to severe flooding, primarily due to its
proximity to large rivers and low-lying areas that are prone to seasonal monsoon rains. Flood records
show that flooding occurs every 3 to 5 years in certain parts of the country, with significant floods
occurring in 2015 and earlier, prompting advisories for contractors about potential risks in
construction projects.
Kord Construction Pvt. Ltd. (hereinafter "Plaintiff"), is a reputed construction company based in
Highgarden, with over 25 years of experience in handling large infrastructure projects. The company
has successfully completed numerous large-scale projects, including highways, bridges, and public
utilities, positioning itself as a leader in the construction sector. Their long-standing reputation for
quality and efficiency made them the preferred bidder for the Highgarden highway project.
CONTRACT TERMS
In May 2023, Kord Construction Pvt. Ltd. entered into a detailed contract with the State of
Highgarden for the construction of a major highway project intended to link key cities. The contract,
valued at ₹35,670 crores, required Kord Construction to complete the project within a two-year
timeframe, by May 2025. The payment structure for the abovesaid contract were set as follows:
• The first installment was scheduled to be paid after 25% of the project was completed,
amounting to ₹8,917 crores.
The contract between Kord Construction Pvt. Ltd. and the State of Highgarden included a
force majeure clause.The force majeure clause in this contract allowed for suspension or
termination of the contract if the performance became impossible due to an unforeseen event,
such as natural disasters, war, government actions, or other events that were not anticipated at
the time the contract was signed. This clause sought to provide relief to either party by excusing
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[MEMORIAL for PLAINTIFF]
them from performing their obligations without facing penalties, provided the event was truly
unforeseen and beyond their control.
Kord Construction invoked the force majeure clause following the unprecedented floods that
submerged the construction site in September 2023. The floods, which caused widespread
damage to machinery and materials, severely disrupted the progress of the project, halting
further construction work. Kord Construction relied on the force majeure clause to justify
suspending operations, as the natural disaster made it impossible to continue the project within
the stipulated timeframe.
The company sent an official communication to the State of Highgarden on 13th November
2023, stating that the suspension of work was due to the flooding and requested a revised
payment of ₹6,000 crores for the work completed thus far. Despite this, the State did not
respond to Kord Construction’s notice, nor did it acknowledge the force majeure claim.
TERMINATION AND NEW CONTRACT
In January 2024, the State of Highgarden entered into a new contract with Luthor
Infrastructure Ltd. to complete the remaining portion of the highway. The State cited Kord
Construction’s delays and inefficiencies as the primary reasons for the new agreement and
argued that the floods were a foreseeable event, not warranting the invocation of the force
majeure clause.
DEFAMATION
On 13th February 2024, Luthor Infrastructure Ltd. issued a public press release that
indirectly criticized Kord Construction’s performance, implying operational inefficiencies and
poor management. These statements severely damaged Kord Construction’s reputation, leading
to a significant drop in the company’s share prices and investor confidence.
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6TH INTRA-FACULTY MOOT COURT COMPETITION, 2024
[MEMORIAL for PLAINTIFF]
STATEMENT OF ISSUES
I
WETHER THE STATE OF HIGHGARDEN WAS JUSTIFIED IN TERMINATING THE
CONTRACT WITH KORD CONSTRUCTION PVT. LTD. ON THE GROUNDS OF DELAY
AND NON-PERFORMANCE?
II
WETHER THE PERFORMANCE OF THE WAS RENDERED IMPOSSIBLE OR
FUNDAMENTALLY ALTERED DUE TO THE UNFORESEEN FLOODING?
III
WETHER THE STATEMENTS MADE BY LUTHOR IFRASTRUCTURE LTD. IN THE PRESS
CONFERENCE AMOUNT TO CIVIL DEFAMATION UNDER INDIAN LAW?
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[MEMORIAL for PLAINTIFF]
SUMMARY OF ARGUMENTS
It is humbly submitted that in light of the September 2023 flooding, Kord Construction Pvt.
Ltd. faced insurmountable challenges in fulfilling its contractual obligations with the State of
Highgarden, as the unprecedented severity of the flooding caused extensive damage to the
construction site and equipment. Under Section 56 of the Indian Contract Act, 1872, such
unforeseeable events can render a contract "frustrated" if they disrupt the fundamental purpose
of the agreement. The floods, while periodic in the region, were exceptional and exceeded
historical norms, thus qualifying as a Force Majeure event. Legal precedents, including the
Delhi High Court's ruling in Prasar Bharati v. Comcon Industries and the Supreme Court's
decision in Satyabrata Ghose, underscore that a contract may be deemed frustrated when
unforeseen events fundamentally alter the contractual landscape, rendering performance
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[MEMORIAL for PLAINTIFF]
impossible or impractical. The destruction of the construction site and machinery due to
flooding illustrates a radical change in circumstances, confirming that the floods made the
fulfillment of the contract unfeasible.
III. WETHER THE STATEMENTS MADE BY LUTHOR IFRASTRUCTURE LTD. IN THE
PRESS CONFERENCE AMOUNT TO CIVIL DEFAMATION UNDER INDIAN LAW?
The plaintiff respectfully submits that the statements made by Luthor Infrastructure Ltd. in
its press release constitute civil defamation under Indian law, as they contained false and
damaging implications about Kord’s operational practices and reputation. Defamation occurs
when a statement is published with the intent or effect of harming another’s reputation, and
for a statement to be defamatory, it must be false, published to a third party, and likely to
lower the subject's reputation in society. In this case, Luthor's press release implied that Kord
was inefficient and engaged in unethical practices, thereby undermining its professional
credibility and leading to a decline in share prices and investor confidence. Legal precedents,
including D.P. Choudhary v. Kumari Manjulata and Ram Jethmalani v. Subramanian Swamy,
affirm that such statements, especially when they harm professional competence and
reputational standing, are considered defamatory. Furthermore, the defense of truth is
inapplicable as Luthor's statements lacked factual substantiation and were made with
apparent malice, as established in cases like Subramanian Swamy v. Union of India. Finally,
Luthor's press release resulted in actual damage to Kord’s reputation and financial standing,
as evidenced by a decline in share prices and loss of client trust, thus entitling Kord to seek
compensation for the harm caused by these defamatory remarks.
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[MEMORIAL for PLAINTIFF]
ARGUMENTS ADVANCED
1. It is humbly submitted that the state of Highgarden was not justified in terminating the
contract with Kord Construction as the plaintiffs could not have reasonably anticipated the
floods and for these circumstances the Force Majeure Clause was included in the contract and
the plaintiff only rightfully invoked this clause.
2. The plaintiffs further submit that the floods in the state of Highgarden were unforeseen and
unpredictable, since according to publicly available data the state of Highgarden has a history
of floods in every 3 to 5 years1, but since the last flood occurred in 2015 i.e. 8 years ago, and it
was difficult to predict the next flood and the impact thereof since it had gone against the trend
of occurring every 3 to 5 years. Therefore, it can be reasonably inferred that such an occurrence
constituted a Force Majeure event.
3. The plaintiffs argue that the floods were an unforeseeable and the consequences of such
floods could not be reasonably predicted by the plaintiff company, to substantiate this fact it
can be said that the 2023 flooding surpassed all previous floods in the area in its severity and
scope, resulting from a rare confluence of climatic events.2
4. The doctrine of Force Majeure is of French origin, this expression came from a detailed
examination in Lebeaupin v. Richard Crispin and Co.3 based on a definition taken from a
French legal textbook:
“This term is used with reference to all circumstances independent of the will of man, and
which it is not in his power to control, and such force majeure is sufficient to justify the non-
execution of a contract. Thus, war, inundations, and epidemics are cases of force majeure; it
has even been decided that a strike of workmen constitutes a case of force majeure.” 4
Therefore according to this definition any event on which man has no control over, qualifies to
1
Moot problem, Para 2
2
Moot problem, Para 3
3
[1920] 2 K.B. 714
4
SIR KIM LEWISON, The Interpretation of Contracts (5th ed., Sweet & Maxwell, 2016))
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[MEMORIAL for PLAINTIFF]
be a Force Majeure event, it can be reasonably inferred that the floods also qualified as Force
Majeure event.
5. Under the common law, the concept was enunciated in the case of Paradine v. Jane5 It was
held in that case that when a promisor by his own act commits to do an act under a contract, is
bound to do as he had an option to limit his liability if he had any difficulty in doing it. By
virtue of the above principle laid down in the common law, it can be said that the floods which
constituted a Force Majeure, limited the liability of the plaintiff.
6. The Supreme Court of India through various rulings has cemented the position that while
Section 326 deals with Force Majeure events as may be mentioned in a Contract, Frustration of
a Contract which leads to total cancellation or annulment of the contract is dealt by Section
567, through a positive law, viz., “an agreement to do an act impossible in itself is void”. In the
present case as the events were not in the contemplation of either parties so this falls under the
ambit of section 568, this establishes the fact that the flooding was a Force Majeure event that
was substantial enough to frustrate the contract.
7. The Supreme Court in Energy Watchdog v. CERC9, held that a force majeure clause may be
invoked when an unforeseen event significantly disrupts contractual obligations, provided that
the event was not within the contemplation of the parties at the time of contract formation.
Going by the standards laid down in the above we can infer that as in the present case the
flooding that has been described as “heavy and unprecedented flooding” 10 and a “rare
confluence of climatic events”11 made it an unforeseeable and a good reason to invoke the
Force Majeure clause, therefore it was reasonable to suspend work and wait for the situation to
improve.
8. It is respectfully submitted that the section 5612 of ICA excuses Kord Construction from
performing its contractual obligations due to the extraordinary nature of the floods. Under
5
[1647] EWHC KB J5
6
Indian Contract Act, 1872 (Act No. 9 of 1872).
7
Ibid
8
Supra note 6
9
(2017) 14 SCC 80
10
Moot problem, Para 3
11
Ibid
12
Supra note 6
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Indian law a contract is frustrated when an unforeseen event fundamentally changes the nature
of the contractual obligations, making them impracticable or impossible to perform.
9. The above statements have been affirmed by Supreme Court in various cases. In Satyabrata
Ghose v. Mugneeram Bangur & Co.13, the SC established the principle that frustration occurs
when an unforeseen event "upsets the very foundation upon which the parties rested their
bargain." This doctrine applies when the event is so fundamental that it changes the contract’s
nature, making further performance impossible or impracticable. The unprecedented flooding
significantly altered the foundational circumstances of the contract between Kord and the State
of Highgarden. The flood damaged machinery and submerged the site, preventing construction.
As per Satyabrata Ghose 14 , these altered conditions justify frustration under Section 56,
excusing Kord from further performance.
10. In the case of Alopi Parshad & Sons Ltd. v. Union of India15, the Supreme Court upheld
the principles that for frustration to be invoked, there must be an event that fundamentally alters
the obligations, rather than simply making them more difficult or costly. The plaintiff submits
that the flooding went beyond merely increasing costs or difficulty—it fundamentally impeded
Kord’s ability to perform. According to Alopi Parshad 16 case, the altered conditions are
sufficient to excuse Kord’s obligations, as performance became impossible within the
contract’s original terms
11. The Supreme Court in DDA v. Kenneth Builders & Developers Ltd17, has opined on the
nature of impossibility in which a contract can be frustrated, in the words of Madan B. Lokur,
J.:
“The essential idea upon which the doctrine is based is that of impossibility of performance of
the contract; in fact, impossibility and frustration are often used as interchangeable
expressions. The changed circumstances, it is said, make the performance of the contract
impossible and the parties are absolved from the further performance of it as they did not
promise to perform an impossibility. The parties shall be excused, as Lord Loreburn says “If
substantially the whole contract becomes impossible of performance or in other words
impracticable by some cause for which neither was responsible”.”18
13
AIR 1954 SC 44
14
Ibid
15
(1960) 2 SCR 793
16
Ibid
17
(2016) 13 SCC 561
18
DDA v. Kenneth Builders & Developers Ltd., (2016) 13 SCC 561
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[MEMORIAL for PLAINTIFF]
12. The above cited case laws and facts further go on to establish the fact that extreme flooding
qualifies as a frustrating event under Section 56, as it rendered contract performance impossible
and fundamentally altered Kord’s obligations. This unforeseen event excused Kord from
performance under the doctrine of frustration, making contract termination unjustified.
13. The counsel further submits that plaintiffs had rightfully and legitimately invoked the Force
Majeure clause due to the unforeseen flooding as the unprecedented floods caused
unpredictable destruction and made further work impossible, therefore the termination of
contract was unjustified.
14. In ONGC v. Saw Pipes Ltd.19 the Supreme Court of India set a significant precedent for
cases involving delays in contractual obligations due to unforeseen circumstances, particularly
in the context of force majeure clauses. This case consolidates the principles that if delays are
caused by genuinely unforeseeable events, then it does not constitute a ground for termination.
15. In the present case, if we consider the above principles as laid down by the hon’ble Supreme
Court then it can be reasonably argued that the termination of the contract by the Defendants
were wrongful in terminating the contract.
16. The SC in Energy Watchdog v. CERC20, remarked that the contracts should account for
force majeure events that are caused by unforeseeable events that are not in the control or
anticipation of any party to the contract. In the present case it should be noted that the events
were a force majeure event, but they were only a temporary offset and only shifted the project
timeline a little further instead of being a ground for complete termination.
17. In view of the above facts the plaintiffs demand that under Section 73 of the Indian Contract
Act, 1872, Kord Construction Pvt. Ltd. is entitled to claim compensation for the losses
sustained as a direct result of the wrongful termination by the State of Highgarden. Section 73
states:
“When a contract has been broken, the party who suffers by such breach is entitled to receive,
from the party who has broken the contract, compensation for any loss or damage caused to
him thereby, which naturally arose in the usual course of things from such breach, or which
19
AIR 2003 SUPREME COURT 2629
20
(2017) 14 SCC 80
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[MEMORIAL for PLAINTIFF]
the parties knew, when they made the contract, to be likely to result from the breach of it.”
Kord’s suspension of work was justified under the force majeure clause due to the
unprecedented flooding, an unforeseeable event that impeded performance. The State of
Highgarden ignored this legitimate invocation and terminated the contract without exhausting
other options, leading to financial losses for Kord in terms of unfinished work, equipment
damage, and reputation. These losses arose directly from the State’s premature and wrongful
termination, making compensation under Section 73 appropriate.
18. The rule of foreseeability that was devised by the English courts in Hadley v. Baxendale21,
states that parties are liable for the losses that were in the contemplation of the parties at the
time of the making of the contract, in the current scenario it can be easily interpreted that the
parties knew of the direct impact of termination of the contract and as per Hadley v. Baxendale22
these losses should be compensated as the wrongful termination directly impacted the ability
of the plaintiff to perform their obligations.
19. The plaintiff respectfully submits that under Section 7323, Kord Construction Pvt. Ltd. is
entitled to compensation for the direct and foreseeable losses resulting from the State of
Highgarden’s wrongful termination. The State’s premature action disregarded Kord’s valid
invocation of force majeure, depriving Kord of its right to complete the project and recover
expected profits.
II. WETHER THE PERFORMANCE OF THE WAS RENDERED IMPOSSIBLE OR
FUNDAMENTALLY ALTERED DUE TO THE UNFORESEEN FLOODING?
13. It is respectfully submitted that the September 2023 flooding fundamentally altered the
conditions under which Kord Construction Pvt. Ltd. could fulfill its contractual obligations
with the State of Highgarden. The unprecedented flooding event, which caused extensive
damage to the construction site and equipment, went beyond regular monsoon risks, rendering
further performance of the contract temporarily impossible. Under Indian contract law,
specifically Section 56 of the Indian Contract Act, 1872, a contract may be considered
“frustrated” if an unforeseeable event disrupts the foundational purpose of the agreement,
preventing the fulfillment of its terms.
21
(1854) 9 Exch 341 (UK)
22
Ibid
23
Supra note 6
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[MEMORIAL for PLAINTIFF]
14. It is humbly submitted that the September 2023 flooding was an unforeseeable event of
such unusual severity that it disrupted Kord Construction’s ability to perform under the
contract. Though the region of Highgarden is known for periodic moderate flooding, the 2023
flood was exceptional, surpassing all historical records in scale and impact. Therefore, under
section 5624, this section the contract shall stand frustrated.
15. The records and facts and circumstances of the case show that floods occur every 3 to 5
years in the state of Highgarden25 but the last floods occurred in 2015, i.e. 8 years since the last
floods therefore the reliability of the available data could be brought in question and the it can
be concluded that the floods were truly unforeseeable and unpredictable in nature thereby
constituting a Force Majeure event.
16. The Delhi High Court in Prasar Bharati v. Comcon Industries26, emphasized on the fact that
for an event to be qualified as a force majeure event it must be unforeseeable, and it must
materially affect the ability to perform contractual obligations. In the case at hand the floods
rendered the site to be completely submerged, and the machinery being completely destroyed
leading to any further work being impossible.
17. The SC has upheld these principles as laid by the Delhi High Court in the case of Ganga
Saran v. Ram Charan Ram Gopal27 where the court emphasized that if an unforeseen event
occurs that fundamentally alters the nature of the contract or makes its performance impossible,
then the contract may be considered frustrated.
18. By the help of the above cited cases and facts the counsel seeks to establish that the floods
were unforeseeable and unprecedented in scale, especially affecting the plaintiff’s ability to
work on the contractual obligations. By virtue of this change in the fundamental nature of the
obligations undertaken by the plaintiffs the event of flooding qualifies as a force majeure event
thereby making the contract eligible to be frustrated.
24
Supra note 6
25
Supra note 1
26
2018 SCC Online Del 7639
27
AIR 1952 SUPREME COURT 9
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6TH INTRA-FACULTY MOOT COURT COMPETITION, 2024
[MEMORIAL for PLAINTIFF]
19. It is humbly submitted that the floods in the state of Highgarden had rendered further progress
impossible and fundamentally impacted the ability of Kord Construction to continue with the
performance of their contractual obligations, due to this fact the unprecedented flooding qualified to
be a “Force Majeure” event.
20. Under section 5628, a contract may be deemed “frustrated” if an unforeseen event changes the
foundational conditions, rendering performance impossible or impractical. The plaintiff argues that
the floods led to destruction at the construction site that further work was impossible and not feasible
under the original contract terms. The SC in Satyabrata Ghose29 has interpreted the law contained in
section 5630 as a “positive law” that does not leave the matter to be decided on the intention of the
parties. In the words of B.K. Mukherjea, J.:
“In deciding cases in India, the only doctrine that we have to go by is that of supervening impossibility
or illegality as laid down in section 56 of the Contract Act taking the word "Impossible" in its
practical and not literal sense. It must be borne in mind, however, that section 56 lays down a rule of
positive law and does not leave the matter to be determined according to the intention of the
parties.”31 By virtue of the above opinion of the SC we must consider the practical adverse effects of
the situation into mind, i.e. in this case the after flooding destroyed the construction site beyond repair
and even submerged the requisite machinery, made the soil unfeasible to continue the contract as per
the original terms of the contract.
21. In this case, the Supreme Court of India dealt with the doctrine of frustration under Section 56 of
the Indian Contract Act, 1872. The case involved a contract for the sale of land that was intended to
be developed into a housing colony. During World War II, the land was requisitioned by the
government for military purposes, which delayed the development. The court held that frustration
occurs when an unforeseen event changes the fundamental basis of the contract, making performance
impossible or impractical. Importantly, the court clarified that “impossibility” in the context of
Section 56 doesn’t only mean physical or literal impossibility—it also includes cases where
performance becomes impracticable or pointless given the object of the contract.
In this case, the requisition did not frustrate the contract entirely, as the land could still be used after
the requisition ended. The Supreme Court therefore ruled that the contract was not frustrated, since
the temporary requisition did not destroy the purpose of the contract in an absolute sense.32
22. This intention of the framers of the law can be confirmed by the foundational case of Taylor v.
28
Supra note 6
29
Supra note 13
30
Supra note 6
31
Satyabrata Ghose v. Mugneeram Bangur & Co., AIR 1954 SC 44
32
Ibid
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6TH INTRA-FACULTY MOOT COURT COMPETITION, 2024
[MEMORIAL for PLAINTIFF]
33
Caldwell wherein it was held by an English court that a contract is discharged if an unforeseen event
destroys a fundamental element, making performance impossible.
23. In Naihati Jute Mills Ltd. v. Khyaliram Jagannath34, the SC has affirmed that for frustration to
apply, the change in circumstances must make the contract obligations “radically different” from
what was initially agreed. From the facts of the present case it can be reasonably inferred that the
floods resulted in changed circumstances making further progress impossible and this resulted in
“radically different” circumstances. This can be confirmed from the following lines:
In September 2023, heavy and unprecedented flooding affected the construction sites, rendering
further progress impossible. The flood led to the complete submergence of the construction site,
destruction of materials, and severe damage to machinery.35
24. Applying the above principles in light of the facts of the case it can be reasonably interpreted that
the floods had changed the very nature of the contractual obligations, and it became impossible to
perform the original contractual obligations.
III. WETHER THE STATEMENTS MADE BY LUTHOR IFRASTRUCTURE LTD. IN THE
PRESS CONFERENCE AMOUNT TO CIVIL DEFAMATION UNDER INDIAN LAW?
25. It is respectfully submitted that the statements made by Luthor Infrastructure Ltd. in its widely
circulated press release amounted to civil defamation under Indian law, as they contained false and
damaging implications about Kord Construction Pvt. Ltd.’s operational practices and reputation.
Defamation under Indian law, and principles established in tort law, occurs when a statement is
published with the intent or effect of harming another’s reputation. To constitute defamation, the
statements must be false, published to a third party, and likely to lower the reputation of the individual
or entity in the eyes of society.
26. It is respectfully submitted that the statements made by Luthor Infrastructure Ltd. in its
press release were defamatory in nature as they implied false and damaging information about
Kord Construction Pvt. Ltd., undermining its professional reputation. Under Indian law, and
particularly Tort Law principles a statement is considered defamatory if it:
A) Is false,
33
(1863) 3 B & S 826 (UK)
34
(1968) 1 SCR 821
35
Moot problem, para 3
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6TH INTRA-FACULTY MOOT COURT COMPETITION, 2024
[MEMORIAL for PLAINTIFF]
B) Is published to a third party, and
27. In this case, Luthor’s press release indirectly accused Kord of inefficiency, poor management,
and unethical practices. By using terms like “operational inefficiencies” and “questionable
practices,” and asserting that Luthor “does not associate with companies plagued with poor
management,” the press release suggested that Kord lacked professionalism and reliability. Such
statements were not only false but also intended to discredit Kord, which resulted in a decline in its
share prices and a loss of investor confidence. The language and tone of the press release indicate
that it was designed to harm Kord’s standing, especially in the context of their contractual dispute.
28. In D.P. Choudhary v. Kumari Manjulata36, the Rajasthan High Court held that a statement
is defamatory if it tarnishes the reputation of an individual in the eyes of society. In the present
case it can be reasonably argued that Luthor’s statements, published widely and alleging Kord’s
inefficiencies, aimed to tarnish Kord’s reputation in the construction industry. According to
D.P. Choudhary37, these comments were defamatory as they were likely to diminish Kord’s
standing in the business community.
29. Similarly, in Ram Jethmalani v. Subramanian Swamy38, the SC held that defamation claims
succeed if statements harm reputation in a manner intended to disparage professional
competence. In this case drawing parallels from the above statements of the court it can be said
that Luthor’s claims about Kord’s inefficiency and questionable practices directly impugned
Kord’s professional competence. This aligns with Ram Jethmalani v. Subramanian Swamy39,
as the statements were clearly designed to harm Kord’s professional image.
30. The Supreme Court in Sahara India Real Estate Corp.Ltd.& Ors vs Securities &
Exch.Board Of India & Anr40, underscored that the right to reputation is part of the fundamental
right to life and personal liberty under Article 2141. This aligns with the plaintiff's argument
that Luthor’s statements impacted Kord Construction's reputation severely, damaging their
goodwill and corporate image. The plaintiff argues that the defamatory statements in Luthor's
press release interfered with this fundamental right, as the statements were widely circulated
36
AIR 1997 Raj 170
37
Ibid
38
(2006) 8 SCC 1
39
Ibid
40
AIR 2012 SUPREME COURT 3829
41
Constitution of India, 1950.
21
6TH INTRA-FACULTY MOOT COURT COMPETITION, 2024
[MEMORIAL for PLAINTIFF]
and directly impacted Kord's business and social standing, reflected in their declining share
prices and reputational harm.
31. It is respectfully submitted that the defense of truth is not applicable in this case, as the
statements made by Luthor Infrastructure Ltd. in the press release were neither accurate nor
substantiated by evidence. Under Indian law, the defense of truth in defamation cases is
available only if the statements are true and made for the public good. Merely asserting truth
without proof or evidence does not meet the legal requirements for this defense, particularly
when the statements harm another’s reputation unjustifiably.
33. Subramanian Swamy v. Union of India42 is a landmark judgement in this regard as in this
the SC highlights the principle that for truth to be a valid defense in defamation, the statements
must be both true and in the public interest. Truth alone is insufficient if the statements are
intended to harm rather than inform. Luthor’s statements about Kord’s inefficiency and
questionable practices were neither verified nor in the public interest. As per the above case,
truth is a valid defense only if it serves public welfare, which is not applicable here as the
statements were issued amidst a private dispute and intended to discredit Kord.
34. Also, in Rajagopal v. State of Tamil Nadu43, the Supreme Court emphasized that truth as
a defense must be substantiated by evidence and cannot merely be claimed as a pretext to
defame. The Court clarified that a defendant must establish the factual accuracy of statements
to claim truth as a defense. Luthor’s accusations of “operational inefficiencies” lacked any
substantiated evidence, making the defense of truth invalid.
35. The plaintiff respectfully submits that the defense of truth does not apply to Luthor
Infrastructure Ltd.’s statements, as they were unsubstantiated, vague, and intended to harm
Kord’s reputation during a business dispute. According to Indian legal standards, truth alone
42
(2016) 7 SCC 221
43
(1994) 6 SCC 632
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6TH INTRA-FACULTY MOOT COURT COMPETITION, 2024
[MEMORIAL for PLAINTIFF]
does not constitute a defense in defamation; the statements must be factually accurate and serve
a public interest, both of which are lacking in this case. Consequently, Luthor’s statements
remain defamatory, entitling Kord to seek damages for reputational harm.
36. It is respectfully submitted that the statements made by Luthor Infrastructure Ltd. in its
press release caused substantial, actual damage to Kord Construction Pvt. Ltd.’s reputation and
financial standing. Under Indian law, defamation claims often require proof of actual harm to
reputation, financial losses, or both, particularly when the defamation pertains to business
entities. In this case, the statements made by Luthor, alleging “operational inefficiencies” and
“questionable practices” at Kord, had a direct, negative impact on Kord’s reputation and
financial stability, as evidenced by the decline in its share prices and a loss of client confidence.
37. In the case of Tata Sons Ltd. v. Greenpeace International44 the Delhi High Court recognized
that harm to corporate reputation, leading to decreased public trust and financial loss, is
actionable as actual damage in defamation cases. Luthor’s statements damaged Kord’s public
trust, directly impacting its business value. According to Tata Sons Ltd45., this harm to Kord’s
goodwill and financial interests is actionable as actual damage under defamation principles,
supporting Kord’s right to compensation.
38. The decline in Kord’s share prices following the press release is a conclusive evidence of
the fact that they suffered direct financial loss due to reputational damage. Luthor’s statements
impacted Kord’s relationships with investors, who were concerned by the allegations of
inefficiency and poor management, as reflected in declining stock performance. Kord’s
business reputation suffered from Luthor’s statements, leading to diminished goodwill and a
loss of potential future contracts, as public and client confidence were negatively affected.
39. The plaintiff respectfully submits that Luthor Infrastructure Ltd.’s statements caused actual
damage to Kord Construction Pvt. Ltd. by harming its reputation, reducing share value, and
impacting investor and public confidence. Case law consistently supports that reputational
harm with demonstrable financial losses is actionable in defamation, entitling Kord to
compensation for the actual damages sustained as a result of Luthor’s defamatory remarks.
44
2011 SCC OnLine Del 4663
45
Ibid
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[MEMORIAL for PLAINTIFF]
PRAYER
WHEREFORE IN THE LIGHT OF ISSUES RAISED, ARGUMENTS ADVANCED AND AUTHORITIES CITED,
IT IS HUMBLY PRAYED THAT THIS HONORABLE COURT MAY BE PLEASED TO DECLARE THAT:
I. That this Hon'ble Court declare the termination of the contract by the State of
Highgarden to be unlawful, and award damages of the amount ₹15,000 crores plus
such interest as the court may deem fit, for breach of contract.
II. That this Hon'ble Court award a sum of ₹6,000 crores to Kord Construction Pvt. Ltd.
On the basis of quantum meruit for the work performed and resources expended
prior to the termination of the contract by State of High Garden.
III. That compensation of the amount of ₹250 crores be awarded for loss of reputation and
business caused by the defamatory statements made by Luthor Infrastructure Ltd..
AND PASS ANY OTHER ORDER, DIRECTION, OR RELIEF THAT IT MAY DEEM FIT IN THE INTEREST
OF JUSTICE, FAIRNESS, EQUITY AND GOOD CONSCIENCE
24