Ajay Shah

It has all the makings of a Grisham novel — an economist fighting a large corporation. But unlike the American writer’s potboilers where the small man defeats the big daddy, the jury is — or rather the juries are — still out on this face-off.

It all started in 2009 when economist-commentator Ajay Shah, now at the Delhi-based think tank National Institute of Public Finance and Policy (NIPFP), mentioned the Mumbai-based commodity exchange, Multi-Commodity Exchange of India (MCX), in an article in a business daily on policies relating to exchanges. MCX found it unflattering and was not amused. And now the differences have reached the courts.

MCX filed three criminal defamation suits against Shah in Mumbai, Kohlapur and Surat (the third was filed by MCX-SX, a stock exchange which is an associate of MCX). Shah had approached the Bombay High Court and then the Supreme Court to get the case in Mumbai quashed but failed.

He also failed to get the case in Kolhapur quashed. He has approached the Ahmedabad High Court to quash the case in Surat, where the lower court issued a bailable warrant for his arrest.

Filing defamation cases in faraway locations is not uncommon. A Delhi-based management institute filed three defamation cases in 2005, 2009 and 2011 in Silchar, Assam, against writers and publications based in Delhi and Mumbai. One of them was the Delhi-based magazine Caravan, which approached the Supreme Court to have the 2011 case transferred to Delhi. The Lucknow-based business house, Sahara, slapped the Delhi-based financial newspaper Mint with a defamation case in Patna.

Nor are defamation cases against the media exactly new. According to thehoot.org, a website that tracks the media, eight cases of defamation notices involving the media were issued in 2011. Among them was one by television channel Times Now against thehoot.org. Most of these cases were civil suits where the complainant asked for damages.

MCX said in its petitions that Shah had tarnished its reputation in articles he wrote in 2009 and 2011 and on television in 2011. All three petitions invoke Sections 499 and 500 of the Indian Penal Code. The first defines defamation while the second sets the penalty as simple imprisonment of two years or a fine or both.

In the petition in Mumbai, MCX said that Shah had a “personal agenda”. He was, it alleges, a director of MCX’s competitor, the National Commodity and Derivatives Exchange, another Mumbai-based commodities exchange, as well as the National Stock Exchange Clearing Corporation. Both are subsidiaries of the National Stock Exchange (NSE), with which, the petition says, Shah has been closely involved, serving as a member of its committees.

Two days after Shah’s 2009 article, the MCX chief economist wrote a rebuttal which was carried in the same newspaper. MCX then issued a full page advertisement in the paper refuting Shah’s article and detailing Shah’s links with the NSE. The court case came after this. All three cases filed by MCX and MCX-SX are against Shah and not the newspaper or channel where he aired his views. Petitioners usually tend to sue the media organisation along with the journalist.

When The Telegraph contacted Shah, he said he would counter these charges in court. All that he was willing to say was that his engagements with the NSE were public policy activities for which the only payment he got was for attending meetings.

Both Shah and MCX declined to speak on the details of the case, because the matter is in court.

The courts will decide whether Shah is guilty or whether MCX is harassing Shah — the plea he is taking in his defence. But the issue raises larger questions. Do commentators have the freedom to cite examples of companies when they want to point to a faulty policy?

For Shah, freedom of speech is at stake. “It is important that all views be heard. It is my birthright to say whatever I want to on matters of public policy. Others may disagree, which is fine. We in India are in deep trouble if people muzzle voices that will say things that are not convenient for someone.”

Other economists who also write columns are concerned about the implications. “It would be unfortunate if this incident makes columnists weigh every word they write or refrain from criticising anyone,” says Surjit Bhalla, chairman, Oxus Investments, a Delhi-based company. Bhalla is a frequent commentator on macro-economic issues.

Former chief economic consultant to the finance ministry Ashok Desai, who highlighted Shah’s case in his column for The Telegraph, insists that a writer should have the freedom to express an opinion about a public matter. “Public debate is essential for judging a public body and MCX is a public body.”

But Bibek Debroy, another economist and commentator, believes that columnists should be careful about what they write or say in the public domain.

Yet Debroy believes that Shah’s 2009 article did not warrant such an action by MCX, a sentiment Bhalla shares. Anyone aggrieved by an article can take recourse to any of five options — write a letter to the editor of the publication in which the article appeared presenting his views; complain to the Press Council of India; publish an advertisement in newspapers (several companies have done this); file a civil defamation case seeking damages or a criminal defamation case. Debroy recalls that he had been critical of some companies when he wrote a regular column for a financial newspaper. “The companies sent a rejoinder, the newspaper carried it and that was the end of the matter,” he points out.

But Shah’s association with the NSE throws up a dilemma for economist-columnists, many of whom serve on government committees or undertake consultancy work for private and public agencies. Should they then not write on matters related to these?

That’s a difficult call, since they are appointed to committees and asked to write columns because of their expertise in particular areas. “My ‘conflicts of interest’ have nothing to do with the positions I take. Judge an argument by the strength of an argument and not by who is saying it,” asserts Shah. He points out that he is a member of the board of the Clearing Corporation of India, whose setting up the Reserve Bank of India encouraged, but is also a forceful critic of the RBI.

A person is not disqualified from expressing a view and cannot be presumed to have a bias because he is connected to an organisation, argues Desai. “Simply because someone has a bias or because there is reason to think that his view may be biased, it does not follow that his argument has no merit.”

Debroy and Bhalla feel this problem is best addressed by columnists giving disclaimers where there is a possible conflict of interest. “Readers will presume we are unbiased, so we must indicate where the bias may occur,” says Debroy.

Shah doesn’t agree. Every columnist, he points out, has complicated engagements because of his expertise. “If we start describing the engagement of every columnist with the field in which he is writing, it would completely burden the columnist,” he argues.

Should columnists, then, avoid citing micro examples to make larger points about policy, a common tool they use? No, says Shah. “What we need is sharp, specific, pointed attacks on all matters of public policy. That is the only way to repair the damage.” Bhalla argues that columnists should get a bit more leeway in their writings.

The issue, clearly, has no rights or wrongs. But, one way or the other, MCX vs Shah is going to set a precedent.