Delhi court dismisses Chitra Ramkrishna bail plea in money laundering case

Delhi court dismisses Chitra Ramkrishna bail plea in money laundering case

It pertains to the Securities and Exchange Board of India order in February

A Delhi court has denied bail to former National Stock Exchange (NSE) managing director Chitra Ramkrishna. The court observed that she was a major player in the money laundering and illegal phone-tapping case registered by the Enforcement Directorate.

Special Judge Sunena Sharma underlined, "Ramkrishna accorded approval to the facade contract of study of cyber vulnerabilities. She would identify the phone numbers for the recording of the conversation and was supplied the transcript of the conversation by iSec. The applicant had dominion over the properties and funds of the NSE and was responsible to discharge her duties in the interest of the NSE."

The ED claimed that NSE's top officials, including Ramkrishna, conspired with a private company iSec Securities, for illegal tapping of phone calls and snooping of NSE's employees. It was carried out under the guise of the legal contract under which certain suspicious numbers, identified by Ramkrishna, were given to iSec for recording. iSec, in turn, allegedly prepared the transcripts of the recorded conversations of these numbers and shared them with her and NSE officials.

The investigating agency said that monetary loss was caused to NSE by allowing iSec to gain money out of illegal activity. It claimed that iSec generated Rs.4.54 crores and gave it a color of untainted money. It showed the amount as earned through a legitimate source.

Appearing for Ramkrishna, senior advocate Rebecca John argued that the complaint that led to the registration of the first information report (FIR) and the Enforcement Case Information Report (ECIR) was filed on behalf of the Ministry of Home Affairs and not by the NSE or its employees, who were allegedly cheated by the accused.

The lawyer contended that no prosecution for the offence of Section 420 (cheating) of the Indian Penal Code could be initiated on the complaint of a person other than the person aggrieved or the person allegedly cheated.

On the other hand, ED's special counsel Zoheb Hossain argued that at a nascent stage of investigation of both the ECIR and the predicate FIR, no finding could be recorded regarding the presence or absence of essential ingredients of the predicate offences. Also, for the consideration of bail, the matter was to be assessed only on the case's 'broad probabilities.'

The defence counsel relied on the first proviso of the Prevention of Money Laundering Act, saying Ramkrishna being a woman was entitled to the benefit of bail.

But the judge ruled, "The extension of benefit cannot be claimed as a matter of right as the discretion lies with the court to exercise such powers only in suitable cases. However, I do not find the case fit for the exercise of such discretion in favor of the applicant because when the alleged offences were committed, the applicant was holding key positions of DMD/MD/JD in NSE. She was actively involved in all important affairs of the company."

The court maintained that under the guise of a study, illegal phone tapping was carried out by using the direct lines of the Mahanagar Telephone Nigam Limited. For this purpose, the software and hardware of the recording/monitoring server, purchased by iSec from Nexco Techno Solution, were allowed to be installed in the upper basement of the NSE building.

The case relates to the 11 February order of the Securities and Exchange Board of India (SEBI) that found Ramakrishna allegedly involved in financial misdeeds relating to the fixation and frequent revision of another NSE official Anand Subramanian's compensation in a disproportionate manner.