NSE Phone Tapping Case: Delhi High Court Grants Bail To Chitra Ramkrishna In Money Laundering Case

The Delhi High Court on Thursday granted bail to former NSE (National Stock Exchange) CEO Chitra Ramkrishna in a money laundering case related to the alleged illegal phone tapping of employees by National Stock Exchange (NSE). 

Justice Jasmeet Singh said that prima facie, there are reasonable grounds to believe that Ramakrishna is not guilty of the offence and that she is not likely to commit any offence while on bail. 

The court said that prima facie, no scheduled offences against her were  established and thus, the provisions of PMLA cannot be attracted to the present case.

“In the present case there is no allegation that the Applicant has derived or obtained any property or proceeds of crime. Additionally, there is no allegation or evidence produced before me to suggest that the Applicant has concealed, possessed, used, projected or claimed any proceeds of crime as untainted property,” it said.

With regards to offence under section 120B of IPC, the court observed that the ingredients of the offence were not established since the criminal intent i.e., agreement to do an illegal act was not made out.

It also said that there was no complaint from NSE or any employee that Ramakrishna cheated them or she deceived or fraudulently induced NSE to deliver any property to any person.

“The Applicant was at all times acting on behalf of NSE and representing NSE in her capacity as DMD/JMD/MD of NSE. She carried out her duties in the capacity of DMD/JMD/MD of NSE, therefore, it is wrong to allege that the Applicant deceived or fraudulently induced NSE to enter into an agreement with M/s ISEC and make payments to M/s ISEC,” the court said.

Observing that no victim was identified by ED wo suffered wrongful loss on account of deception or cheating by Ramakrishna, the court said that except for a vague and bald averment that customers were cheated, there was no mention of names of persons who were allegedly cheated been cheated. 

“Thus, the ingredients of section 420 IPC are not made out in the present case,” the court said.

It also said that the ingredients of section 13(1)(d) of the Prevention of Corruption Act were also not made out as Ramakrishna was not a public servant within the meaning of the enactment.

Chitra Ramakrishna was denied bail by Rouse Avenue Courts in the ED case in August last year. Ramakrishna is already on bail in the CBI case on the alleged illegal phone tapping. 

Justice Singh in December 2022 had also granted bail to Sanjay Pandey, former Mumbai Police Commissioner, in the ED case. 

The court had observed that tapping phone lines or recording calls without the concerned individual's consent is a breach of privacy as enshrined under Article 21 of the Constitution of India.

As per Enforcement Directorate, senior officials of NSE had issued agreement or work orders "under the guise of Periodic Study of Cyber Vulnerabilities of NSE in favour of iSEC Services Pvt. Ltd." and illegally intercepted the phone calls of its employees.

The agency further alleged that the illegal interception was done by installing a machine without seeking permission from the competent authority as per the Telegraph Act.

ISEC Services Private Limited, an entity which had entered into a contract with NSE for analysing data and evaluating cyber vulnerabilities, was allegedly also asked by the NSE in 2009 to analyse the pre-recorded calls of its employees. This was purportedly done to "identify and isolate suspicious calls bearing on the issue of data and information security and cyber and process vulnerability".

An FIR was registered initially by CBI alleging that ISEC was illegaly monitoring and analysing such calls and sending periodic reports to the NSE. It has been alleged that the telephone monitoring was carried out without taking permission of the competent authority under Indian Telegraph Act, 1885 and that the same was done without the knowledge and consent of NSE employees.

The FIR was registered under sections 120B, 409 and 420 of IPC, sections 69B, 72, 72A of Information Technology Act, 2000, sections 20, 21, 24 and 26 of the Indian Telegraph Act, sections 3 and 6 of the Indian Wireless Telegraphy Act and sections 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988.

Thereafter, the Enforcement Directorate (ED) registered an ECIR on the allegations of scheduled offences. The agency had alleged that the revenue of Rs. 4.54 crores generated by ISEC for providing the services constituted "proceeds of crime‟.

Title: CHITRA RAMKRISHNA v. ASSISTANT DIRECTOR, ENFORCEMENT DIRECTORATE

Citation: 2023 LiveLaw (Del) 131

Click Here To Read Order