The Delhi High Court on Thursday dismissed a petition filed by former Managing Director and Chief Executive Officer of National Stock Exchange (NSE), Chitra Ramkrishna, challenging the constitutional validity of the definitions of “public duty” and “public servant” under the Prevention of Corruption Act, 1988, holding that NSE performs functions of public importance and its top executive falls within the statutory framework governing public duty.
The Division Bench of Justice Navin Chawla and Justice Ravinder Dudeja held that there was no constitutional infirmity or vagueness in Sections 2(b) and 2(c)(viii) of the PC Act. The provisions clearly apply to a person who holds an office by virtue of which he or she is authorised or required to discharge a public duty, namely a duty in which the State, the public or the community at large has a substantial interest, it noted.
The Bench held that the mere fact that every office is not specifically enumerated under Section 2(c) does not render the provision arbitrary or unconstitutional. It ruled that whether an individual satisfies the statutory requirements of holding an office and performing a public duty must be determined on the facts and evidence of each case, and therefore the provisions cannot be struck down as violative of Articles 14 or 21 of the Constitution.
The High Court further held that the NSE performs vital economic and regulatory functions that directly impact the securities market, investors and the public at large. It observed that, as the country’s leading stock exchange operating in a highly regulated financial sector, the NSE discharges public duties. Consequently, Ramkrishna, as its MD and CEO during the relevant period, cannot be divorced from the public functions performed by the exchange.
The Court observed that the extent of Ramkrishna’s role in the day-to-day administration of the NSE, policy decisions and the transactions referred to in the chargesheet are disputed questions of fact that must be examined during trial on the basis of evidence. Such mixed questions of fact and law cannot be adjudicated in proceedings seeking quashing of criminal prosecution.
The Division Bench also rejected Ramkrishna’s challenge to the validity of the prosecution sanction granted by the NSE Board of Directors. It held that the sanction orders could not be invalidated merely because the Board had clarified that it was not admitting the applicability of the Prevention of Corruption Act or conceding that Ramkrishna was a public servant. The Court observed that these issues would ultimately be decided by the trial court after appreciation of evidence.
Accordingly, the High Court dismissed the petition as well as the pending applications, clearing the way for the criminal proceedings to continue.
Ramkrishna is an accused in the alleged NSE co-location scam being investigated by the Central Bureau of Investigation (CBI). The agency has alleged that she abused her official position by appointing former NSE official Anand Subramanian without following due process, repeatedly revising his designation and remuneration, and conferring undue benefits upon him. The CBI has also alleged that irregular dissemination of market data from the NSE’s co-location facility conferred an unfair advantage on certain brokers and trading members, causing serious prejudice to market integrity and public investors.
The investigation also concerns allegations that Ramkrishna shared confidential information with a person described by her as a Himalayan Yogi, whom the investigating agency has alleged was, in fact, Subramanian. Separate proceedings arising out of the CBI case are also pending before the Enforcement Directorate under the Prevention of Money Laundering Act. Ramkrishna is presently on bail in both the CBI and ED cases.
The High Court had earlier reserved its verdict after hearing arguments on the constitutional challenge to the statutory provisions and the validity of the prosecution sanction. With the dismissal of the petition, the Court has upheld the applicability of the Prevention of Corruption Act to the case and allowed the prosecution against the former NSE chief to proceed in accordance with law.
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