A Delhi court on Monday dismissed the bail application of former managing director and chief executive officer of the National Stock Exchange (NSE) Chitra Ramkrishna in a money laundering case related to alleged illegal phone tapping and snooping of NSE employees.
Special Judge Sunena Sharma denied the relief, saying bail cannot be given at this stage. During the hearing, the Enforcement Directorate had opposed the bail plea, claiming that the investigation was ongoing in the matter and she was directly or indirectly involved in the crime.
The judge said that the accused not only infringed the privacy and confidentiality of NSE employees but also committed a criminal breach of trust in respect of NSE's fund and property over which she had dominion. Monetary loss was caused to NSE by allowing the iSec to gain money out of said illegal activity done under the guise of a legitimate contract of Study of Cyber Vulnerabilities, the judge said.
Chitra Ramkrishna was arrested by the CBI on March 6 in the case registered in May 2018 related to the co-location scam. The ED arrested her on July 14 in the phone tapping case. The material on record prima facie shows that but for the active involvement of NSE top officials including the applicant in the illegal activity of phone tapping, iSec could not have earned Rs 4.54 crore and project it as untainted money generated through a legitimate source of a legal contract, the judge said on Monday.
The court denied the defence request to grant bail to the accused as she was a woman, saying the extension of that benefit could not be claimed as a matter of right as she was having dominion over the properties and funds of the NSE and was responsible to discharge her duties in the interest of the NSE. During the relevant time when the alleged offences were committed, the applicant was holding key positions in NSE and was actively involved in all important affairs of the company.
"She was the one who accorded approval to the facade contract of Study of Cyber Vulnerabilities. She was the one who used to identify the phone numbers for recording of conversation and was supplied with the transcript of said conversation by the iSec, the judge said. She said that the material on record was sufficient to prima-facie show that the accused was the major role player in the entire conspiracy as well as in the projection of proceeds of crime as untainted money.
In the backdrop of these circumstances, there is absolutely no reasonable ground for this court to record any such opinion that the accused is not guilty of the offence alleged against her especially at this stage when the investigation is yet not complete, the judge said. ED's Special Public Prosecutor N K Matta had told the court that during 2009 to 2017, former NSE CEO Ravi Narain, Ramkrishna, Executive Vice President Ravi Varanasi and Head (Premises) Mahesh Haldipur and others conspired together to cheat NSE and its employees.
For this, iSEC Services Pvt Ltd was engaged for alleged illegal interception of phone calls of employees of NSE in the guise of a periodic study of cyber vulnerabilities of NSE. The top officials of NSE issued agreement/ work orders in the guise of Periodic Study of Cyber Vulnerabilities of NSE in favour of iSEC Services Pvt. Ltd., represented by former Mumbai Police Commissioner Sanjay Pandey, and illegally intercepted the phone calls of its employees by installing an illegal machine without seeking the requisite permission from the competent authority as mandated under the law, the ED said.
Further, no consent of the employees of NSE was taken in this matter, it added. Transcripts of these calls were provided by iSEC and received by the officials of NSE at the top level in breach of confidentiality and L privacy of employees of NSE and thereby, caused wrongful gain of Rs 4.54 crore to iSEC as payment for this task and corresponding wrongful loss to NSE, the agency said.
The court had recently refused bail to former Mumbai Police Commissioner Sanjay Pandey in the case. The ED averred that the amount of Rs 4.54 crore represented the proceeds of crime in this case which were acquired by iSEC Services Pvt. Ltd. from NSE of India and which were projected as fees for non-existent 'Periodic Study of Cyber Vulnerabilities of NSE.
The investigating officer (IO) submitted that the Enforcement Directorate had recorded statements of various persons including Ramkrishna and had collected various documents which prove the allegations contained in the CBI FIR, based on which the ED filed the current case. The documents included the ''Monitoring Reports for Call Logs Approval Notes of NSE bearing approval granted by Chitra Ramkrishna for the so-called Periodic Study of Cyber Vulnerabilities, etc".
It was submitted that Ramkrishna was in possession of material evidence and information relating to the offence of money laundering and custodial interrogation of Ramkrishna is necessary to establish the money trail of proceeds of crime and to gather crucial evidence. Ramkrishna was appointed as as Joint MD in 2009 and remained in the position till March 31, 2013. She got elevated as MD and CEO on April 1, 2013.It was during this period that co-location facility was started by NSE, the CBI has alleged. In the co-location facility offered by NSE, brokers could place their servers within the stock exchange premises giving them faster access to the markets. It is alleged that some brokers in connivance with insiders abused the algorithm and the co-location facility to make windfall profits.