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2023 (2) TMI 398 - HC - Money LaunderingSeeking grant of regular bail - scheduled offences or not - 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 - HELD THAT - As regards section 72 of the IT Act is concerned, the elements of the said offence are not made out in the present case as neither the Applicant nor the NSE was conferred with any powers under the said Act. Moreover, the Applicant or the NSE was not acting in pursuance of the powers conferred under the IT Act or the rules or regulations made therein. As per the documents placed, 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 - In the present case, there was no complaint from NSE or any employee of the NSE that the Applicant cheated NSE or its employees. Furthermore, there is no allegation that the Applicant deceived or fraudulently induced NSE to deliver any property to any person. The documents titled Periodic Study of Cyber Vulnerabilities clearly records that M/s ISEC proposes to continue its services in the area of electronic monitoring services at NSE . Since NSE was at all times aware that the scope of Periodic Study of Cyber Vulnerabilities includes electronic monitoring, there is no deception, fraud or dishonest inducement on the part of the Applicant - Pertinently, no victim has been identified by the ED who has suffered a wrongful loss on account of deception or cheating by the Applicant. Except for a vague and bald averment that customers have been cheated, there is no mention of the names of the persons who have been cheated. Thus, the ingredients of section 420 IPC are not made out in the present case - prima facie the ingredients of the scheduled offences under IPC viz., Section 120B read with section 420 IPC are not made out against the Applicant. There is no evidence placed on record to prove corruption or abuse of position by the Applicant. The consideration received by M/s ISEC is pursuant to a contract entered into with NSE and work orders issued with the approval of Mr. Ravi Narain, the Managing Director. Thus, the ingredients of section 13(1)(d) r/w 13(2) PC Act are not made out against the Applicant. Hence, scheduled offence under section 13 PC Act is not established against the Applicant - prima facie no scheduled offences against the Applicant are established, the provisions of PMLA cannot be attracted to the present case. In the case of Vijay Madanlal Choudhary 2022 (7) TMI 1316 - SUPREME COURT the Hon ble Supreme Court has opined that provisions of PMLA would apply when a person has derived or obtained property as a result of a scheduled offence, and then indulged in any process or activity connected with such property - 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. Prima facie there are reasonable grounds to believe that the Applicant is not guilty of the offence and she is not likely to commit any offence while on bail. Opportunity provided to the ED to oppose the bail application thereby satisfying the twin conditions enumerated under 45 PMLA. The application is allowed and the applicant is granted bail subject to the conditions imposed.
Issues Involved:
1. Grant of regular bail under the Prevention of Money Laundering Act, 2002 (PMLA). 2. Allegations of illegal interception/monitoring of telephone calls. 3. Applicability of Section 72 of the Information Technology Act, 2000. 4. Applicability of Section 120-B of the Indian Penal Code (IPC) read with Section 420 IPC. 5. Applicability of Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act (PC Act). 6. Provisions of PMLA and the twin conditions for bail. 7. Specific arguments by the prosecution and defense regarding the role of the applicant. Detailed Analysis: 1. Grant of Regular Bail under PMLA: The applicant sought regular bail in connection with ECIR/DLZO-I/28/2022 dated 11.07.2022 for offences under Sections 3 and 4 of PMLA. The applicant had been in custody since 14.07.2022, and the charge sheet was filed on 09.09.2022. The bail application was initially dismissed by the Special Judge, Rouse Avenue, on 29.08.2022. 2. Allegations of Illegal Interception/Monitoring of Telephone Calls: The applicant and others were alleged to have intercepted/monitored telephone calls of NSE employees under the guise of an agreement between NSE and M/s ISEC Services Private Limited. Payments of approximately Rs. 4.54 crores were made by NSE to ISEC for this work between 01.01.2009 to 13.02.2017. The applicant held various senior positions at NSE during this period. 3. Applicability of Section 72 of the Information Technology Act, 2000: Section 72 of the IT Act deals with the penalty for breach of confidentiality and privacy. The court found that the elements of Section 72 were not made out in this case as neither the applicant nor NSE was conferred with any powers under the IT Act. The court referenced a previous judgment in Sanjay Pandey v. Directorate of Enforcement, which held that Section 72 penalizes only those acting in pursuance of powers conferred under the IT Act. 4. Applicability of Section 120-B of IPC Read with Section 420 IPC: Section 120-B IPC pertains to criminal conspiracy. The court noted that the pleadings and case set up by the Enforcement Directorate (ED) did not treat Section 120-B as a standalone scheduled offence but read it with Section 420/409 IPC. The court found that the ingredients of Section 120-B were not established since the criminal intent (agreement to do an illegal act) was not made out. Additionally, the court held that the elements of Section 420 IPC (cheating and dishonestly inducing delivery of property) were not made out as there was no complaint from NSE or its employees that the applicant cheated them. 5. Applicability of Section 13(2) Read with Section 13(1)(d) of the PC Act: Section 13(1)(d) of the PC Act pertains to criminal misconduct by a public servant. The court found that the applicant was not a public servant within the meaning of the PC Act, as NSE is not a public authority. The court referenced an order by the Division Bench of the Delhi High Court, which stayed the order holding NSE to be a public authority. The court also found no evidence of corruption or abuse of position by the applicant. 6. Provisions of PMLA and the Twin Conditions for Bail: Under Section 45 PMLA, the twin conditions for bail are: (i) the public prosecutor must be given an opportunity to oppose bail, and (ii) there must be reasonable grounds to believe that the accused is not guilty of the offence and is not likely to commit any offence while on bail. The court held that since no scheduled offences were prima facie made out against the applicant, the provisions of PMLA could not be attracted. The court referenced the judgment in Vijay Madanlal Choudhary, which stated that PMLA provisions apply when a person has derived or obtained property as a result of a scheduled offence. 7. Specific Arguments by the Prosecution and Defense Regarding the Role of the Applicant: The defense argued that the applicant was wrongly named as an accused, as her role was similar to that of other NSE officials who were not charged. The defense also contended that the scheduled offences were not attracted in this case. The prosecution argued that the applicant was the mastermind of the conspiracy and that the proceeds of crime were generated through illegal activities. However, the court found that the allegations did not establish the necessary elements of the scheduled offences. Conclusion: The court granted bail to the applicant, holding that prima facie no scheduled offences were established against her. The court imposed several conditions for bail, including furnishing a personal bond, joining the investigation, and not leaving the country. The court also noted that the applicant had been granted regular bail in a related CBI case.
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