TaxTMI 
TaxTMI 
2023 (2) TMI 398
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....Information Technology Act (IT Act), and Sections 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act (PC Act). 3. The Applicant has been in custody since 14.07.2022 in relation to the present ECIR. 4. The applicant and other persons have been alleged to have illegally intercepted / monitored telephone calls of employees of the National Stock Exchange Ltd. (hereinafter "NSE"). It is stated that illegal tapping of phone calls of NSE employees was conducted under the guise of an agreement between NSE and M/s ISEC Services Private Limited (hereinafter "ISEC"). 5. To conduct Periodic Study Of Cyber Vulnerabilities, a payment of approximately Rs. 4.54 crores was made by NSE to ISEC for the work between 01.01.2009 to 13.02.2017. 6. It has been alleged that ISEC monitored / intercepted the calls of 4 MTNL PRI lines, each having capacity of 30 telephone connections used by the employees of NSE. 7. It is also alleged that ISEC submitted the transcripts of conversations to top management of NSE during 01.01.2009 to 13.02.2017. The applicant was the Deputy Managing Director (hereinafter "DMD") of the NSE till 2010, Joint Managing Director (hereinafter "JMD") till March, ....
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....vt. Ltd., and not the applicant. 11.3. Ms. John, learned senior counsel states that a perusal of the statements of Ravi Narain and Sanjay Pandey reveal that in 2009 it was Ravi Narain, who was the Managing Director and at the helm of affairs at NSE, who approved the proposal submitted by ISEC Services Pvt. Ltd. and directed the Applicant, the then Deputy Managing Director to implement his instructions. This goes to show that the Applicant has been wrongly named as an accused in the case as her role is similar to that of Ravi Varanasi and Mahesh Haldipur, who were also tasked with the implementation of the instructions given by Ravi Narain. 11.4. The learned senior counsel states that the scheduled offences against the applicant are under Section 120-B/420 IPC, Section 72 of the IT Act, 2000 and 13(2) r/w 13(1)(d) of PC Act, 1988. She further states that in the facts of the present case none of the ingredients of the aforesaid Sections are attracted. 11.5. As regards Section 420 IPC is concerned, Ms. John, learned senior counsel has drawn my attention to Section 39 CrPC under which Section 420 IPC is not an offence for which any member of the public can go and report a crime t....
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....ces Private Limited. She states that the applicant has not unjustly enriched herself. 11.11. The learned senior counsel submits that the Delhi High Court in its order dated 15.04.2010 passed in Writ Petition (CIVIL) No. 4748 of 2007 held NSE to be a public authority under the RTI Act. The said order has been stayed by the Division Bench of the Delhi High Court in LPA No. 315 of 2010 vide order dated 04.05.2010 and stay was made absolute on 21.08.2012. Thus, it is the NSE's own case that NSE is not a public authority. 11.12. Lastly, it is the submission of the learned senior counsel for the applicant that the Proviso of Section 45 PMLA will apply to the applicant being a woman. 11.13. She draws an analogy with Section 437 of the CrPC to state that an exception is carved out for a woman and even in cases such as Section 302 IPC, a woman is entitled to bail. 11.14. It is submitted that the applicant is in custody since 14.07.2022. The charge sheet has already been filed and the applicant deserves to be released on bail. 11.15. She places reliance on the judgment of the Hon'ble Supreme Court viz., Vijay Madanlal Choudhary and Ors. v. UOI and Ors., 2022 SCC OnLine SC 929 where....
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....nce shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof. Explanation.- It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object." 12.3. He states that the definition of 120A IPC reveals that the agreement between two or more persons to do an illegal act is the most important ingredient for the offence of conspiracy. The illegal act may or may not be committed pursuant to the agreement but the very agreement is an offence and the conspiracy to commit an illegal act is itself a standalone scheduled offence which in the present case was a conspiracy to record and tap telephone lines that violates the Telegraph Act. 12.4. He argues that it is not necessary that the object of the conspiracy should be achieved. Failing to execute the conspiracy on account of abandonment or detection before commission of offence is immaterial as the very act of entering into an illegal agreement is itself an offence punishable under law. In this regard, he places reliance on Yogesh alias Sachin Jagdish Joshi v. State of Maharashtra (2008) 10 S....
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....harge of the supplier of the equipment who categorically stated: "Q6. What is the function of this equipment supplied by you to iSec Services Private Limited and installed at NSE Office at Bandra Kuria Complex, Mumbai? Ans 6. It records all incoming and outgoing calls of all Primary Rate Interface (PRI) lines which are connected to the Voice logging System. Q7. In what manner were these PRI lines connected to the Voice Logging System? Ans7. The PRI lines coming from the service provider were split into two lines with the help of a splitter. Out of these two lines, one went to the EPABX system of NSE and the other line went to the Voice logging system." 12.10. He states that Section 25(b) of the Indian Telegraph Act which reads as under: "25. Intentionally damaging or tampering with telegraphs.-If any person, intending- (a) to prevent or obstruct the transmission or delivery of any message, or (b) to intercept or to acquaint himself with the contents of any message, or (c) to commit mischief, damages, removes, tampers with or touches any battery, machinery, telegraph lines, post or other thing whatever, being part of or used in or about any telegraph or in the wo....
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....instructed Mr. Ravi Varanasi to receive the call monitoring reports from ISEC Services Private Limited and to brief her if anything significant was noticed. It is a proven fact that she was deeply and fully involved in monitoring/interception/recording of telephone calls of NSE employees and its nomenclature as 'Periodic Study of Cyber Vulnerabilities'. It was she who along with Sh. Ravi Narain had participated in the discussions with Mr. Sanjay Pandey on behalf of NSE regarding monitoring/ interception/recording of telephone calls of NSE employees and also the decision to term* as Cyber Vulnerability Studies. The work order dated 03.06.2009 was issued as per instructions. She had issued, instructions to Sh. Ravi Varanasi to forward the proposals for the work orders issued to ISEC Services Private Limited for the interception of phone calls of NSE employees from the year 2010 onwards. For all the subsequent years till 2016 (for the period upto 13.02.2017), the proposals were forwarded by him to Ms. Chitra Ramkrishna, the then Joint Managing Director/Managing Director of NSE for necessary approvals as instructed by her. It was on her instructions that the approval for the period Jan....
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....nversations of the employees were co-terminus with the Applicant holding key position as JMD/MD in NSE. 12.21. In December 2016, the applicant retired and the contract with ISEC was not renewed after 13.02.2017. 12.22. He states that the offence is money-laundering is non-bailable and cognizable. He states the Hon'ble Supreme Court in Vijay Madanlal Choudhary (supra) has observed as under: "406. It was urged that the scheduled offence in a given case may be a non-cognizable offence and yet rigors of Section 45 of the 2002 Act would result in denial of bail even to such accused. This argument is founded on clear misunderstanding of the scheme of the 2002 Act. As we have repeatedly mentioned in the earlier part of this judgment that the offence of money-laundering is one wherein a person, directly or indirectly, attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime. The fact that the proceeds of crime have been generated as a result of criminal activity relating to a scheduled offence, which incidentally happens to be a noncognizable offence, would make no difference. The person i....
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....upon the special circumstances attending to such categories of person and not as a matter of Thumb rule that all such categories of persons shall necessarily be granted bail." ANALYSIS: 13. I have heard learned counsel for the parties. 14. In the present case, for the purpose of this bail application, I am only to decide prima-facie whether the scheduled offences are made out against the Applicant. 15. The scheduled offences alleged against the applicant are: * Section 72 of the IT Act * Section 120-B of IPC read with section 420 of IPC * Section 13(2) read with section 13(1)(d) of the PC Act 16. Section 72 of the IT Act reads as under: "72. Penalty for breach of confidentiality and privacy.- Save as otherwise provided in this Act or any other law for the time being in force, if any person who, in pursuance of any of the powers conferred under this Act, rules or regulations made thereunder, has secured access to any electronic record, book, register, correspondence, information, document or other material without the consent of the person concerned discloses such electronic record, book, register, correspondence, information, document or other material to any other p....
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....t case. 21. The ED has vehemently argued that section 120B of IPC is a standalone scheduled offence. However, the pleadings and case set up by the ED is to the contrary. A bare perusal of the FIR, Prosecution Complaint as well as the Remand Applications make it evident that section 120B IPC has not been invoked as an independent standalone scheduled offence as the same is read with section 420/409 IPC. Section 409 IPC is not a scheduled offence. 22. The Remand Application dated 14.07.2022 reads as under: "3. That Sections 120B r/w 420 of IPC Section 72 of information Technology Act, 2000 and Section 13(2) r/w.13(1)(d) of PC Act,1988 are covered under the definition of Scheduled Offences as defined under Section 2(1) (y) of the prevention of Money- Laundering Act, 2002 (PMLA) As such investigation have been initiated by the applicant under PMLA, 2002 for the offence of money laundering as defined under Section 3 & punishable under Section 4 of PMLA 2002." 23. The Remand Application 18.07.2022 reads as under: "4. That Sections 120B r/w 420 of IPC, Section 72 of Information Technology Act, 2000 and Section 13(2) r/w 13(1)(d) of PC Act, 1988, are covered under the definition of ....
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....other scheduled offences. The relevant paras of the reply read as under: "c. That Sections 120B r/w 420 of IPC, Section 72 of Information Technology Act, 2000 and Section 13(2) r/w 13(1)(d) of PC Act, 1988, are covered under the definition of 'Scheduled Offences' as defined under Section 2 (1)(y) of The Prevention of Money-Laundering Act, 2002 (PMLA). As such, investigations have been initiated by the applicant under PMLA, 2002 for the offence of money-laundering as defined under Section 3 & punishable under Section 4 of PMLA, 2002." 27. The order dated 29.08.2022 reads as under: "2. As per record, CBI had registered FIR/RC bearing No. RC2212022E0030 dated 07.7.2022 inter-alia for commission of offences punishable under Section 120B read with Section 409 & 420 IPC, Section 20, 21, 24 & 26 of Indian Telegraph Act, Section 3 & 6 of Indian Wireless Telegraphy Act, Section 13(2) read with Section 13(1)(d) of PC Act and Section 69B, 72 & 72A of Information Technology Act at EO-III, CBI, New Delhi against M/s iSec Services Pvt.Ltd. & other accused persons including the applicant regarding illegal interception/monitoring of telephone calls of NSE Employees. Since, some of afo....
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....blished." 32. As per the documents placed before me, it is observed that NSE was recording conversations since 1997 through other vendors and the transactions with ISEC occurred from 2009 to 2017. The Applicant was DMD of NSE till 2010 and JMD till 2013 and MD till 2016. As call recording was done by NSE prior to ISEC's involvement, it is wrong to allege that the Applicant conspired with ISEC to illegally tap and record calls. Thus, the ingredients of section 120B IPC are not made out in the present case. 33. Section 420 of the IPC reads as under: "420. Cheating and dishonestly inducing delivery of property.-Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine." 34. The Apex Court in Prof. R.K. Vijayasarathy and Anr. v. Sudha Seetharam and Anr. (2019) 16 SCC 739 held that for the offence of cheating to manifest unde....
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....ed) is reproduced below: "13. Criminal misconduct by a public servant.- (1) A public servant is said to commit the offence of criminal misconduct,- ... (d) if he,- (i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or ... (2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine." 42. The Hon'ble Supreme Court has outlined the essential ingredients for determining the offence under Section 13(1)(d) of PC Act in A. Subair v. State of Kerala (2009) 6 SCC 587 while stating the following: "14. Insofar as Section 13(1)(d) of the Act is concerned, its essential ingredients are: i. that he should have been a public servant; ii. that he should have used corrupt or ill....
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....r is actually involved; * In any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property. 50. This court in Sanjay Pandey (supra) has held as under: "77. 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 Choudhary (supra) where the Hon'ble Supreme Court held as under: "406.... The fact that the proceeds of crime have been generated as a result of criminal activity relating to a scheduled offence, which incidentally happens to be a non-cognizable offence, would make no difference. The person is not prosecuted for the scheduled offence by invoking provisions of the 2002 Act, but only when he has derived or obtained property as a result of criminal activity relating to or in relation to a scheduled offence and then indulges in process or activity connected with such proceeds of crime. Suffice it to observe that the argument under cons....