TaxTMI 
TaxTMI 
2026 (9) TMI 1760
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....ns arise from the same FIR and concern the same alleged transaction. They were, therefore, heard together and are being decided vide this common judgment. BACKGROUND Factual history 3. The controversy in the present petitions relates to the recording and examination of the telephone calls that were made from the premises of the National Stock Exchange of India Limited [hereinafter referred to as 'NSE']. The prosecution case itself proceeds on the basis that a system for recording certain telephone calls existed at NSE even before iSEC Services Private Limited [hereinafter referred to as 'iSEC'] was engaged. The present proceedings, however, relate to the engagement of iSEC between 01.01.2009 and 13.02.2017 under work orders described as relating to a "Periodic Study of Cyber Vulnerabilities". According to the CBI, the work undertaken pursuant to the said work orders included the unauthorised interception and monitoring of telephone calls of certain NSE employees. 4. Sanjay Pandey, an officer of the Indian Police Service [hereinafter referred to as 'IPS'] who has since retired, had incorporated iSEC in 2001, held 50 per cent of its shareholding and was one of its two dir....
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....es regarding the volume of call data examined, the calls identified as suspicious and the work performed by the personnel associated with the assignment. The procurement and installation of recording equipment at the premises of NSE are also alleged to have been undertaken by iSEC at his very instance. 9. CBI further alleges that the recorded data was copied at regular intervals by employees of iSEC and taken to its office for examination. Selected calls were allegedly listened to and transcribed, following which reports identifying calls that were considered suspicious were supplied to senior officials of NSE. Some of these reports are stated to have been recovered from the possession of NSE officials and others from the office of iSEC. The prosecution further alleges that neither permission from the competent authority nor the consent of the concerned employees had been obtained and that NSE paid approximately Rs. 4.54 crores to iSEC during the relevant period. 10. The respondents deny having participated in any unauthorised interception. Sanjay Pandey maintains that iSEC was supplied with pre-recorded call data by NSE for analysis from the perspective of information securi....
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....y CBI in relation to its registered case on 24.09.2022 and Chitra Ramakrishna subsequently, on 27.09.2022. Both of them moved separate applications for grant of regular bail before the learned Special judge. 15. During the pendency of the aforesaid bail applications filed before the learned Special judge seeking bail in the case registered by CBI, a coordinate bench of this Court, vide judgment dated 08.12.2022 in BAIL APPLN. 2409/2022, granted regular bail to Sanjay Pandey with respect to the case registered by ED. So, while considering the applications for grant of regular bail to both the respondents in relation to the CBI's case, the learned Special judge referred to the prima facie observations concerning the scheduled offences made in the aforesaid judgment of this Court wherein only the respondent Sanjay Pandey was granted regular bail, and vide separate orders dated 21.12.2022, granted regular bail to both the respondents in the present petitions, subject to the conditions stipulated in the impugned orders. 16. On the following day, i.e. 22.12.2022, the CBI filed Charge-sheet No. 44/2022 against iSEC, the present respondents and the other accused persons. The charge-s....
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.... particular bail proceeding. That the prima facie assessment made in that judgment could not, therefore, be adopted as a conclusion in CBI's case. 21. Reliance is placed by the learned counsel appearing for CBI on Manik Bhattacharya v. Ramesh Malik, 2022 SCC OnLine SC 1465 to submit that an order or a judgment operating in a proceeding conducted by one investigating agency cannot insulate an accused from lawful action in a separate proceeding conducted by another investigating agency merely because the two proceedings share a common factual foundation. That the learned Special judge in the present case was required to examine CBI's case on its own merits and record rather than import an assessment made in the proceedings connected with the ED's case. 22. It is further submitted that the impugned orders in the present case reproduce the prima facie conclusion arrived at in the PMLA bail judgment dated 08.12.2022 which is that the ingredients of the scheduled offences were not made out. So according to CBI, applying that conclusion to its own case without an independent evaluation effectively prejudges the very offences sought to be tried and is capable of seriously prejudicing....
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....r submitted that this delay in taking of cognizance does not validate the exercise of discretionary power by the learned Special judge in the impugned orders and that likewise, alteration of penal provisions between the FIR and the chargesheet is no ground to oppose the present petitions as the remaining provisions must still be independently examined. On behalf of respondent Sanjay Pandey 29. Learned counsel appearing on behalf of respondent Sanjay Pandey submits that CBI has not met the threshold for interference with an order granting regular bail. That the correctness of an order granting bail is tested by asking whether the discretion was exercised improperly or arbitrarily and whether the order is perverse, illegal or unjustified in nature. That cancellation for subsequent misconduct stands on a different footing and ordinarily requires supervening circumstances or breach of bail conditions. Reliance in this regard is placed on Deepak Yadav v. State of U.P. [supra], which reiterates the distinction explained in Mahipal v. Rajesh Kumar, (2020) 2 SCC 118 and Neeru Yadav v. State of U.P., (2014) 16 SCC 508. 30. It is submitted that the decision in Manik Bhattacharya v. ....
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....factual allegations, it is submitted by the learned counsel that iSEC was engaged under written contracts to analyse calls recorded within NSE's system and to identify suspicious communications bearing on insider trading and related vulnerabilities. It is further submitted that respondent Sanjay Pandey had ceased to be a director of iSEC before the relevant work orders and that he had relinquished the company upon returning to public service. It is submitted that NSE had been recording calls long before iSEC was engaged and that Rs 4.54 crores represented not an unlawful pecuniary advantage, but a consideration given for services that were rendered. 35. It is lastly submitted by the learned counsel that the case is founded substantially on documentary material which has been collected by the investigating agency, that neither has there been a breach of a bail condition nor any subsequent attempt to influence the investigation has been shown and that the bail granted to certain co-accused persons has not been challenged. The petition is therefore said to disclose neither any perversity in the impugned order nor any subsequent circumstance warranting cancellation and is accord....
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....holder were granted bail, and the CBI did not challenge every such order wherein they were granted such bail. The learned counsel further contends that no principled basis has been shown for unsettling his client's bail while leaving that of the others' undisturbed. He submits that since the learned Special judge considered the rival positions and no supervening circumstance that may have arisen since has been shown by CBI, the concerned petition is liable to be dismissed. ANALYSIS 42. This Court has heard the learned SPP appearing for CBI as well as the learned counsels appearing for the respective respondents. The material placed on record has also been perused by this Court. 43. Having considered the rival submissions, this Court considers it imperative to state at the very outset that, it has not been called upon to adjudicate the prosecution's case or make findings concerning the guilt or innocence of any party involved herein. 44. It is also made clear that this Court is neither examining the correctness of the judgment dated 08.12.2022 pronounced by a Coordinate bench of this Court nor sitting in appeal over any prima facie observation contained therein. 45. V....
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....rning a challenge to an order granting bail and distinguished such a challenge from an application seeking cancellation of bail. The principles were summarised as follows: "19. The principles which emerge as a result of the above discussion are as follows: (i) An appeal against grant of bail cannot be considered to be on the same footing as an application for cancellation of bail; (ii) The Court concerned must not venture into a threadbare analysis of the evidence adduced by prosecution. The merits of such evidence must not be adjudicated at the stage of bail; (iii) An order granting bail must reflect application of mind and assessment of the relevant factors for grant of bail that have been elucidated by this Court. [See: Y v. State of Rajasthan (Supra); Jaibunisha v. Meherban and Bhagwan Singh v. Dilip Kumar @ Deepu] (iv) An appeal against grant of bail may be entertained by a superior Court on grounds such as perversity; illegality; inconsistency with law; relevant factors not been taken into consideration including gravity of the offence and impact of the crime; (v) However, the Court may not take the conduct of an accused s....
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....22 vide which regular bail was granted to the respondents in CBI's case suffer from any perversity, illegality, material defect or non-application of judicial mind so as to warrant interference by this Court in exercise of its inherent jurisdiction. 53. To conduct the aforesaid limited assessment, two questions have to be considered by this Court. First, whether reference to and taking into consideration of, the judgment dated 08.12.2022 passed by a Coordinate bench of this Court in the PMLA proceedings with respect to respondent Sanjay Pandey granting him regular bail therein, by the learned Special judge, to grant regular bail to both the respondents herein, amounted to an abdication of the jurisdiction vested in the learned Special judge. Second, whether any material circumstance placed by the CBI before the learned Special judge was left out of consideration so as to render the grant of bail perverse or unjustified in nature. First 54. The proceedings whenever conducted, in relation to the case of the CBI and the ED, are undoubtedly distinct in nature. An order passed in one proceeding neither binds the other investigating agency to the one with respect to which the sa....
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....acts. Further, the conditions imposed in the ED proceedings were made applicable mutatis mutandis to the bail granted in the CBI case. The decision thus recognises that a bail order passed in proceedings under the PMLA may constitute a relevant circumstance in the connected CBI proceedings where both arise from the same factual foundation or similar set of facts. 58. The relevance of an earlier order must, however, be distinguished from its conclusiveness. In P. Chidambaram v. Directorate of Enforcement, (2020) 13 SCC 791, the Hon'ble Supreme Court observed that the precedent of another case cannot, by itself, form the basis for either granting or refusing bail, though it may have a bearing on the consideration, which must ultimately proceed on the facts of each case. Thus, the judgment dated 08.12.2022 could be considered by the learned Special judge as one of the relevant circumstances, but could neither bind the CBI nor substitute the requirement of arriving at an independent satisfaction in the bail applications before the concerned learned Special judge. 59. A similar qualification follows from Ramesh Bhavan Rathod v. Vishanbhai Hirabhai Makwana, (2021) 6 SCC 230. The Ap....
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....aid order was filed in a quashing petition filed by the accused herein for quashing of instant FIR which is still pending before the Hon'ble High Court. 7. I have given my thoughtful consideration to the rival contentions, raised from both the sides and also carefully gone through the entire record. 8. It is pertinent to note here that aforementioned ED matter i.e. ECIR/DLZO-I/28/2022 is based on the premise that accused persons including the applicant herein indulged in illegal interception of MTNL lines at NSE during the period 2009-2017, resulting into commission of various offences under 120-B, 409, 420 of IPC, Section 72 of IT Act, Section 13(2) r/w 13(1)(d) of the PC Act covered in the category of scheduled offences/predicate offences under Prevention of Money Laundering Act (PMLA) and same also led to generation of proceeds of crime to the tune of Rs. 4.54 crores given by NSE to applicant's company M/s iSec Services Pvt. Limited for the aforementioned illegal activity, thereby making them (accused) also liable for the offence of money laundering punishable under Section 4 of PMLA. 9. It is also important to note that for consideration of bail in a ....
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....t NSE during the period from 2009 to 2017. The alleged payment of Rs.4.54 crores by NSE to iSEC and the offences which formed the basis of the ED proceedings were also recorded. The reliance upon the judgment dated 08.12.2022 was, therefore, preceded by an identification of the common factual and legal foundation of the two proceedings. 63. The learned Special judge was also conscious that the observations made in the judgment dated 08.12.2022 were only prima facie in nature. The impugned order did not treat those observations as an adjudication upon the guilt or innocence of the respondent. It proceeded on the limited consideration required at the stage of bail and expressly clarified that nothing stated in the order would amount to an expression of opinion on the merits of the case. 64. A perusal of the impugned order clearly shows that it cannot be characterised as one which was passed upon a mere mechanical adoption of the judgment passed in the PMLA proceedings. The learned Special judge considered the objection of CBI, the common factual foundation, the nature of the alleged predicate offences, the additional rigours of Section 45 of the PMLA and the fact that the remai....
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....ity as per provisions of Telegraph Act. Transcripts of these calls were provided by M/s iSec and received by the officials of NSE at the top level, which resulted in breach of confidentiality and privacy of the employees of NSE and caused wrongful gain of Rs. 4.54 crores to iSec as payment for this task and corresponding wrongful loss to NSE. 15. As per the allegations, the applicant was directly connected with the illegal recording of telephone calls of NSE employees because the approvals for giving contract of Periodic Study of Cyber Vulnerabilities under the guise of which illegal tapping of phone calls of NSE Employees was done, was processed/granted by the applicant/accused in her capacity as Deputy Managing Director/Joint Managing Director/Managing Director of NSE during the period of offence between 2009-2017. 16. However, in the light of the aforementioned observation made by the Hon'ble High Court regarding lack of essential ingredient of the predicate offences, this court is inclined to grant bail to the accused/applicant in the instant case. Mere fact that CBI was not a party to bail application of the co-accused moved before the Hon'ble High Court in s....
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....gredients of an offence are distinct considerations. Even where the acts attributed to two accused persons are different, a prima facie judicial assessment concerning the absence of an essential ingredient of the common offence may still remain relevant to both. The learned Special judge also clarified that the observations made in the concerned judgment were prima facie and that the consideration before her was similarly confined to the grant of bail. 69. Therefore, the impugned orders passed in both of their cases, cannot be read as having been passed without taking into account CBI's objections or the alleged factual role attributed respectively to both of them. FINDINGS 70. The learned Special judge was not required, while deciding the applications for bail, to undertake a detailed evaluation of every document or record findings upon each ingredient of the alleged offences. Such an exercise would have travelled beyond the limited consideration permissible at the stage of bail and could have prejudiced the trial. What was required was an application of mind to the material circumstances bearing upon the continued custody of the respondents which is clear from the analys....