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TMI Blog2025 (4) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... emain Director of the Company between 20.03.2013 till 01.10.2013. The appellant Company gave undated proposal to National Stock Exchange India Ltd. (NSE) to conduct periodic study of Cyber vulnerabilities. The proposal was processed in NSE. It was followed with work order for conducting periodic study of cyber vulnerabilities at exchange plaza. 4. The work order was issued with a note "kind attention to Mr. Sanjay Pandey" on 03.06.2009. The instrument was installed by M/s Comptel to monitor/intercept the calls of four PRI lines used by the employees of NSE. The Company submitted copies of transcript of conversation to the top management from time to time. It was however alleged to be without required permission under section 5 of the Indian Telegraph Act,1885 and without the consent of the employee. 5. The interception of the telephone lines was identified by Ms. Chitra Ramakrishna (DMD) NSE, Mumbai and conveyed to Sh. Ravi Varanasi, Executive Vice President. It was alleged that interception and recording of the calls was without the consent of the employees and thus not only provisions of the Indian Telegraph Act of 1885 but Information and Technology Act were violated. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Despite a specific allegation in the FIR to make out a case under section 420, the bail was granted to Sanjay Pandey by the Delhi High Court. The order was passed without taking all the facts into consideration and otherwise bail order does not exonerate the accused. The elaborate argument in reference to it was made and would be referred while recording the finding on each issue raised by the representative appeared for the appellant Company. Finding of the Tribunal :- 12. We have considered the rival submission of the learned counsel for the parties and perused the record. The appellant has challenged the order mainly on the ground that no predicate offence is made out, thus impugned order is not sustainable. 13. It would be gainful to refer the facts of the case to find out whether an offence under section 420 IPC is made out or not. It would be coupled with the facts as to whether a case for offence under the PMLA Act, 2002. 14. The following facts along with the allegations are relevant, thus referred as under:- 1. An FIR No RC2212022E0030 dated 07.07.2022 was registered by CBI. It is alleged that M/s. iSec Services Pvt. Ltd, B- 1/1810, Vasant Kunj, New Delhi- 110070 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , each line having a capacity of 30 telephone connections by MTNL which originated from MTNL and terminated at EPABX of NSE. 3) M/s. iSec monitored/ intercepted the calls of these four PRI lines used by employees of NSE. M/s. iSec also submitted copies of transcript of conversations to the top management of NSE between 01.01.2009 to 13.02.2017. This telephone monitoring was carried out by M/s. iSec without taking permission of the competent authority as required under Section 5 of the Indian Telegraph Act, 1885 as well as without the knowledge or consent of the employees. These PRI lines were allegedly intercepted before their termination at EPABX of NSE. The telephone numbers to be monitored were identified by Ms. Chitra Ramkrishna (DMD), NSE Mumbai and conveyed to Mr. Ravi Varanasi, Vice President NSE. Sh. Varanasi in turn provided the same to Sh. Mahesh Haldipur, Head (Premises) who gave it to M/s. iSec. The identified officers/ departments included Market Watch, Market Surveillance, Risk Management having access to critical online information and access to online Real time data bases. In 2012, Sh. Naman Chaturvedi of M/s. iSec was deputed for this task by M/s. iSec. He provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has relied on the order passed by Delhi High Court in the case of Sanjay Pandey (supra) to submit that a case for commission of offence under section 420 was not accepted. We have perused the order of the High Court in the case of Sanjay Pandey (supra). It was as to whether the appellant is entitled for the bail or not. It is not a discharge or acquittal order of the accused. The order (supra) was passed on 08.12.2022 and the accused have not been acquitted or discharged as yet. The criminal case is still pending before the Competent Court. In any case, we would independently analyze as to whether an offence under section 420 IPC is made out or not and for that section 420 and 415 IPC are quoted hereunder:- Section 420 in The Indian Penal Code, 1860 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 exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ask & corresponding wrongful loss to the NSE. The illegal acts as detailed above, prima facie, disclose commission of cognizable offences punishable u/s 120B, 409, 420 of IPC & Ss. 69B, 72, 72A of IT Act, 2000 & Ss. 20, 21, 24, 26 of Indian Telegraph Act of 1885, Ss. 3 & 6 of Indian Wireless Telegraphy Act, 1933 & 13(2) r/w 13(1)(d) of PC Act, 1988. 17. If the entire FIR is looked into, the serious allegation of connivance of top official of NSE with the appellant Company has been made. The learned representative appearing for the appellant could not disclose as to how NSE could gain out of the work assigned to the appellant for a sum of Rs. 4.54 crore. The allegation otherwise refers to the position of Sanjay Pandey who remained the IPS Officer and Commissioner of Police and established the Company taking his mother (Smt. Santosh Pandey) as Director where even Directors were changed from time to time. All these facts were not brought to the notice of Delhi High Court. 18. For ready reference relevant paras no. 31 to 33, 51 to 55, 57 to 63 of the order passed by the Delhi High Court are quoted hereunder:- 31. I am prima facie of the view that tapping phone lines or recording ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Vijayasarathy v. Sudha Seetharam, (2019) 16 SCC 739 are as under: "19. The ingredients to constitute an offence under Section 420 are as follows: 19.1. i) A person must commit the offence of cheating under Section 415; and 19.2. ii) The person cheated must be dishonestly induced to (a) deliver property to any person; or (b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. 20. Cheating is an essential ingredient for an act to constitute an offence under Section 420." 53. The Apex court in V.Y. Jose v. State of Gujarat, (2009) 3 SCC 78 observed the pre-requisites for determining offence under Section 420 IPC and more particularly, paragraph 14 which reads as under: "14. An offence of cheating cannot be said to be made out unless the following ingredients are satisfied: (i) deception of a person either by making a false or misleading representation or by other action or omission; (ii) fraudulently or dishonestly inducing any person to deliver any property; or to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IPC is not established. NSE has been involved in call-recording since 1997 through other vendors such as M/s. Comtel, prior to ISEC being Drought into the picture to analyse recorded calls. Since call recording was being done prior to the arrival of ISEC, there is no criminal conspiracy entered into between ISEC and NSE with the intention of committing an illegal act, namely, call recording. Thus, the element of criminal intent is not made out in the present case and no offence under section 1208 read with 409 and 420 IPC is established. 59. In addition, even though 120B IPC is a standalone scheduled offence under PMLA, in the present case, the offences under section 120B is alleged along with section 409 and 420 IPC. It has been stated in para 3 of the Prosecution Complaint that 120B is read with 420 IPC: "3. Brief facts of the offence/allegation/charge/ amount involved under PMLA: a. That an investigation under PMLA was initiated vide F. No. ECIR/DLZO-1/28/2022 in Enforcement Directorate, Delhi Zone-I and is under investigation in Delhi Zone-1. The LEA case of predicate offence vide RC2212022E0030 dated 07.07.2022 under Sections 1208 r/w 409 & 420 of Penal Code, 1860, Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nology Act, 2000 at EO-III, CBI, New Delhi against M/s. iSec Private Limited and other accused including Mr. Sanjay Pandey, regarding illegal interception/monitoring of telephone calls of NSE employees." 62. In fact, the ED whilst seeking further remand custody of the applicant has stated under para 4 that 120B is read with 420 IPC: "4. The Central Bureau of Investigation registered FIR/RC bearing no. RC2212022E0030 dated 07.07.2022 inter-alia for the commission of offences punishable u/s section 1208 r/w 409 & 420 of Penal Code, 1860, Section 20, 21, 24 & 26 of Indian Telegraph Act, 1885, Section 3 & 6 of Indian Wireless Telegraphy Act, 1933, Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988 and Section 698, 72 & 72A of Information Technology Act, 2000 at EO-III, CBI, New Delhi against M/s. iSec Private Limited and other accused including Mr. Sanjay Pandey, regarding illegal interception/monitoring of telephone calls of NSE employees." 63. Hence, prima facie, for the reasons stated above, ingredients of section 120B read with section 409 and 420 IPC have not been made out in the present case. 19. The learned counsel for the respondent submitted that para 51 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved as payment for this task & corresponding wrongful loss to the NSE". 22. Here, it may be clarified that mere execution of the agreement with intention to cause wrongful loss to one party and gain to the other with the involvement of the top officials would not mean that mere execution or agreement may not result in the offence under section 420 IPC. In fact, if aforesaid is taken to be the correct proposition of law than even on commission of serious fraud in the agreement, the FIR cannot be registered for the offence under section 420 of IPC, whereas, day and day out fraud in the agreement or an element to cheating where one party is put to loss and another to gain, the offence is taken to be under section 420 IPC. 23. In the light of the finding aforesaid, we find not only prima facie case of commission of offence under section 420 but even a case under section 3 of the PMLA Act, 2002 and for ready reference section 3 of the Act would be made out. 3. Offence of money-laundering. Whosoever 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 includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses or activities connected with proceeds of crime, namely:- (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever. 28. The learned counsel for the appellant then submitted that chargesheet has not been filed alleging offence under section 420 and 73 of the Information and Technology Act. We do not find chargesheet on record and otherwise there is a fair admission of the representative that chargesheet by the police is not a last word rather cognizance of the offence can be taken other than for the offences disclosed in the charge sheet. In fact the Trial Court can take cognizance of the offence if material is found to make out a case for the offences of which charge sheet has not been filed. 29. The last argument ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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