Tapping Phone Lines Or Recording Calls Without Consent Violates Right To Privacy: Delhi High Court, Grants Bail To Former Mumbai Police Chief

The Delhi High on Thursday said 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.

"I am prima facie of the view that tapping phone lines or recording calls without consent is a breach of privacy. The right to privacy enshrined under Article 21 of the Constitution demands that phone calls not be recorded. Only with consent of the individuals concerned, can such activity be carried out otherwise it will amount to breach of the fundamental right to privacy," Justice Jasmeet Singh said.

The court made the observations while granting bail to Sanjay Pandey, the former Mumbai Police Commissioner, in a money laundering case related to the alleged illegal phone tapping of employees by National Stock Exchange (NSE). 

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‟.

Justice Singh said he prima facie is in agreement with the CBI argument that the actions of NSE and ISEC are violative of the Telegraph Act. However, the court said the offences under the Telegraph Act are not scheduled offences under PMLA.

"In the present case, recording or tapping of phone lines by ISEC was not an action of the State. The facets of privacy include right of noninterference with the individual body, protection of personal information and autonomy over personal choices. Consent is essential when it comes to recording phone lines which aspect was disregarded by both NSE and ISEC. However, this aspect need not detain me any further as in the present application, I am only dealing with the bail application of the applicant and not the quashing petition".

The court said for the bail application in the PMLA case, it is only required to look at the scheduled offences in the FIR and that other offences are not relevant.

Justice Singh said that no offence under section 72 of the IT Act is made out as Pandey or ISEC had never been conferred with any powers in terms of the enactment or rules and regulations made therein. ISEC was only recording conversations pursuant to the contractual obligations with NSE, the court said.

"The act of tapping and recording phone calls without consent of the concerned person can be penalised under various sections of the Indian Telegraph Act and Indian Wireless Telegraphy Act but the offences under the said statutes are not scheduled offences. On the other hand, invocation of sec. 72 of the IT Act is only limited to breach of confidentiality and privacy, which offence has not been made out," the court added.

Regarding the offences under the IPC, the court said that prima facie the ingredients of the alleged offences are not made out in the matter.

"The scheduled offences under section 120B read with 409 and 420 IPC are not made out. NSE and ISEC, both knew the purport of the agreement and obligations of the contracting parties was clear from the beginning. ISEC did not induce or deceive NSE to part with money," Justice Singh said.

The court further said that the prosecution case has failed to satisfy the ingredients of criminal breach of trust under section 405 of the IPC, since there is not even a whisper of any misappropriation of property. It also noted that the prosecution's case is also silent on there being any wilful loss caused to any person either by ISEC or Pandey.

"The entire prosecution is silent on the identity of the victim who has suffered a wrongful loss. There is nobody named in the prosecution complaint who has been deceived or cheated. Nobody has been named to whom a wrongful loss has been caused and as to what is the wrongful loss. Except for a bald averment that various customers have been cheated, the complaint is totally silent on the name of the customers, the way and manner that they have been cheated," Justice Singh said.

While the allegation is that 'customers' were cheated as they shared information only under an assumption that the same would not be recorded, Justice Singh said that the ED has "failed to show" the nature of such information which was shared or misused or to cause any wrongful loss or wrongful gain.

"Moreover, no 'customers'  have filed any complaint or been made witnesses in the complaint," the court said.

The court further said the offence under section 120-B IPC (which is also a PMLA scheduled offence) is also not made out "as the criminal intent i.e., agreement to do an illegal act as defined under sec.120-A IPC is not established." 

"NSE has been involved in call-recording since 1997 through other vendors such as M/s Comtel, prior to ISEC being brought into the picture to analyse recorded calls. Since call recording was being done prior to the arrival of ISEC, there is no criminal conspiracy entered into between ISEC and NSE with the intention of committing an illegal act, namely, call recording. Thus, the element of criminal intent is not made out in the present case and no offence under section 120 B read with 409 and 420 IPC is established." 

The court also said that offences under sections 13(2) and 13(1)(d) of the PC Act cannot be invoked in the matter since there is no allegation in the prosecution case of giving or receiving a bribe or illegal gratification.

"NSE is a private entity, thus no offences under section 13 of the PC Act, can be said to have been committed over the course of ISEC‟s contractual dealings with it. This is a case where the NSE, which is a private company, engaged ISEC to perform a service. Payments were made in lieu of receipt of such services. ISEC duly showed amounts in tax returns and paid income tax on said income. Therefore, I find merit in the petitioner‟s submission that contractual compensation of Rs. 4.54 crores for services rendered cannot amount to a "pecuniary advantage" in terms of the PC Act," the court said.

Granting bail to Pandey, the court said that there is nothing on record to demonstrate that the former cop employed any corrupt or illegal means to obtain a valuable thing or pecuniary advantage for himself, adding that no offence under section 13(1)(d) of the PC Act can be alleged to have been committed "as no presumption treating the receipt of monies as illegal gratification can be drawn."

"Since none of the ingredients of the scheduled offences viz., Section 72 IT Act, Section 120B r/w 409 and 420 IPC, Section 13(2) read with 13(1)(d) PC Act are made out, there is no occasion to allege acquisition or retention of "proceeds of crime", which under Section 2(u) of PMLA is defined to mean proceeds arising out of scheduled offences," the court said.

The court said since it has prima facie given a finding that none of the ingredients of the scheduled offence are made out, the provisions of PMLA are not attracted.

"I am of the view that in the present case, no scheduled offence is prima facie made out, concomitantly there cannot be proceeds of crime having been generated as there is no criminal activity relating to a scheduled offence. This position is in consonance with the dicta of Vijay Madanlal Choudhar," it added.

Title: SANJAY PANDEY v. DIRECTORATE OF ENFORCEMENT

Citation: 2022 LiveLaw (Del) 1154

Click Here To Read Order