Recently, in the case of Google India Private Limited v. Nayana Krishna1, the Karnataka High Court ("Court") examined whether a subsidiary company can be retained as a defendant in a defamation suit where the cause of action is based solely on the alleged acts of its parent company, and there are no specific allegations against the subsidiary. The Court's ruling provides clarity on the application of the doctrine of separate legal personality in the context of multinational corporate groups and highlights the need for detailed and substantiated pleadings in defamation suits.
The plaintiff, Nayana Krishna ("Plaintiff"), filed the present case seeking a permanent injunction against twenty-one defendants, including Google India Private Limited ("Google India"). The Plaintiff alleged that the defendants had published, posted, web-hosted and broadcast defamatory photos, videos, and statements through various digital and print platforms, which had harmed the Plaintiff's reputation.
In response, Google India filed a written statement denying any involvement in the alleged defamatory activity. Google India submitted that it did not post, web-host, broadcast, or publish any material concerning the Plaintiff. Further, it stated that it was merely a subsidiary of Google LLC ("Google LLC"), a foreign corporation, and provided technical support and advertising services to Google LLC, which were unrelated to the subject matter of the suit. Accordingly, Google India moved an application seeking deletion from the array of parties, arguing that there were no specific allegations or cause of action arising from any actions of Google India. At the outset, the trial court rejected the application by Google India without assigning detailed reasons, which resulted in the present writ petition being filed before the Court.
The issues for consideration before the Court were: (i) whether Google India was a necessary and proper party to the defamation suit in the absence of specific allegations against it; and (ii) whether the trial court's refusal to delete Google India from the array of parties was legally sustainable.
Firstly, on the issue of the requirement of specific pleadings in defamation suits, the Court referred to the Supreme Court decision in M.J. Zakharia Sait v. T.M. Mohammed2, which reiterated the settled legal principle that in an action for defamation, the plaintiff must submit pleadings which specifically describe the defamatory content, the context, and the parties responsible for publication of the alleged defamatory content. The Court noted that in the absence of these necessary submissions, the plaint would be liable to be rejected on the ground that it does not disclose any cause of action. Upon perusing the plaint, the Court found no submission specifying the details of the defamatory material being published or hosted by Google India, nor was there any material accompanying the plaint showing the involvement of Google India in such publication. Thus, the Court held that the basic elements of a defamation claim against the petitioner were not satisfied by the Plaintiff.
Secondly, on the doctrine of separate legal entity, the Court observed that Google India, despite being a wholly owned subsidiary of Google LLC, is a distinct legal entity registered under the laws of India, and it cannot be held liable for acts allegedly committed by Google LLC through its platforms, Google and YouTube. Relying on corporate documents and terms of service placed on record, the Court reaffirmed the principle of separate legal personality, holding that a subsidiary cannot be held vicariously liable for the acts of its parent company in the absence of any evidence of direct involvement or control.
Lastly, the Court took note of similar orders passed in analogous cases where trial courts had struck off Google India as a defendant in the past. It was noted that despite this consistent judicial approach, the trial court had, in the present case, failed to provide any reasons for rejecting a similar application, indicating a non-application of mind.
In the absence of specific pleadings or material to demonstrate that Google India participated in or facilitated the alleged defamatory content, and having observed that Google India is a distinct legal entity separate from Google LLC, the Court held that it was impermissible to continue proceedings against Google India. Accordingly, the writ petition was allowed, and Google India was deleted from the array of parties.
This judgment reiterates the strict standards for pleading in defamation claims and upholds the doctrine of separate legal personality. The decision will aid in safeguarding subsidiary corporations from unwarranted litigation where their role is peripheral or non-existent, especially in cases involving digital content and internet intermediaries. By setting aside the trial court's order and directing the deletion of Google India from the suit, the Court set a precedent against vague and speculative litigation.
Footnotes
1 W.P. No. 22125/2019.
2 (1990) 3 SCC 396.
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