The Delhi High Court has dismissed a writ petition filed by former National Stock Exchange (NSE) Managing Director and CEO Chitra Ramkrishna, refusing to strike down provisions of the Prevention of Corruption Act, 1988 (PC Act) defining ‘public servant’ and ‘public duty’, and declining to quash the criminal proceedings initiated against her in the NSE co-location case.
A Division Bench of Justice Navin Chawla and Justice Ravinder Dudeja rejected Ramkrishna’s challenge to the constitutional validity of Sections 2(c)(viii) and 2(b) of the PC Act. She had contended that the provisions were vague, arbitrary and unconstitutional insofar as they sought to treat employees and directors of private companies as ‘public servants’. She also sought quashing of the sanction orders issued by the NSE Board and the Special Judge’s order taking cognizance against her.
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The case arises out of the CBI’s investigation into the alleged misuse of NSE’s co-location facilities between 2010 and 2014. The prosecution alleges that while serving as Joint Managing Director and later Managing Director and CEO of NSE, Ramkrishna conspired with others to confer unfair access to certain brokers by permitting preferential access to NSE’s exchange servers and by abusing her official position.
Rejecting the constitutional challenge, the High Court held that the definitions of ‘public servant’ and ‘public duty’ under the PC Act are neither vague nor uncertain. Referring to the Statement of Objects and Reasons of the 1988 Act and a series of Supreme Court decisions, the Bench observed that Parliament deliberately widened the scope of the expression ‘public servant’ to strengthen anti-corruption laws and that the provisions deserve a purposive interpretation.
The Court further observed that the NSE, as a recognised stock exchange operating under the Securities Contracts (Regulation) Act and the regulatory supervision of SEBI, performs functions in which the investing public has a significant interest. It held that the Managing Director and CEO of the NSE cannot be viewed in isolation from those functions and, therefore, performs duties that are closely connected with public interest.
At the same time, the Bench clarified that whether Ramkrishna, in the facts of the case, performed a ‘public duty’ so as to fall within the definition of a ‘public servant’ under the PC Act is a mixed question of fact and law that must be decided on evidence during trial. Consequently, the Court held that the chargesheet could not be quashed at the threshold on that ground.
The High Court also rejected the challenge to the sanction orders issued by the NSE Board of Directors. It held that although the Board had clarified that the sanction should not be construed as an admission that NSE officials are public servants under the PC Act, that caveat did not invalidate the sanction. The issue, the Court said, would also be open for determination before the trial court based on the evidence led by the parties.
Finding no merit in the petition, the Division Bench dismissed the writ petition and clarified that none of its observations would influence the trial court while deciding the issues arising in the criminal proceedings.