Uncle trying to defame me in my village What action can I take

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As per your query, you can file a defamation case against your uncle who is doing such actions to harm your public image and ruining your reputation in the eyes of the general public.
You can file a case under Section 499 of the Indian Penal Code which states as follows
499. Defamation.—Whoever, 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, is said, except in the cases hereinafter expected, to defame that person. Explanation 1.—it may amount to defamation to impute anything to a deceased person, if the imputation would harm the reputation of that person if living, and is intended to be hurtful to the feelings of his family or other near relatives. Explanation 2.—it may amount to defamation to make an imputation concerning a company or an association or collection of persons as such. Explanation 3.—an imputation in the form of an alternative or expressed ironically, may amount to defamation. Explanation 4.—No imputation is said to harm a person’s reputa¬tion, unless that imputation directly or indirectly, in the estimation of others, lowers the moral or intellectual character of that person, or lowers the character of that person in respect of his caste or of his calling, or lowers the credit of that person, or causes it to be believed that the body of that person is in a loathsome state, or in a state generally considered as disgrace¬ful.

Since the cause of action arose in your home town you will have to file a case at the place that your uncle has spread such rumors.
 

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