Delhi High Court: In a writ petition challenging the constitutional validity of Section 2(c)(viii) and b), Prevention of Corruption Act, 1988, the sanction orders issued for the petitioner’s prosecution, and the order taking cognizance in the alleged National Stock Exchange (NSE) co-location scam, a Division Bench of Navin Chawla* and Ravinder Dudeja, JJ., dismissed the petition. The Court held that the definition of “public servant” under the Prevention of Corruption Act is intentionally broad and is neither vague nor arbitrary, requiring only that a person hold an “office” by virtue of which he or she performs a “public duty”. Observing that a recognised stock exchange performs vital public functions under the Securities Contracts (Regulation) Act, 1956, the Court held that the petitioner, as the Managing Director and Chief Executive Officer of NSE, could not be divorced from the public duties discharged by the Exchange. The Court further held that whether the petitioner ultimately satisfies the statutory requirements of a “public servant” is a mixed question of fact and law to be determined at trial, and consequently upheld the sanction orders and the order taking cognizance while dismissing the writ petition.
Background
The writ petition arises out of the alleged misuse of the National Stock Exchange’s (NSE) co-location facility during the period 2010—2014, when the petitioner served first as Joint Managing Director and subsequently as Managing Director and Chief Executive Officer of NSE. Following complaints that certain brokers had been granted preferential access to NSE’s trading servers, the Securities and Exchange Board of India (SEBI) initiated an inquiry, which concluded that OPG Securities (P) Ltd. had consistently secured unfair access to market data by exploiting the Exchange’s server architecture.
Acting on these findings, the Central Bureau of Investigation (CBI) registered an FIR on 28 May 2018 alleging a criminal conspiracy involving unknown officials of NSE and SEBI, offences under the Prevention of Corruption Act, 1988 (PC Act), the Penal Code, 1860 (IPC), and the Information Technology Act, 2000. During the course of investigation, the petitioner was accused of conspiring with Anand Subramanian to provide preferential access to certain brokers, irregularly appointing and granting disproportionate remuneration to Subramanian, and abusing her official position for private gain.
The CBI proceeded on the premise that officials of NSE perform a public duty and are “public servants” within the meaning of Section 2(c)(viii), PC Act, necessitating prior sanction under Section 19 of the Act. Accordingly, the Board of Directors of NSE granted sanction for prosecution through orders dated 15 November 2022 and 11 February 2023, which were accepted by the Special Court. Thereafter, by order dated 18 July 2023, the Special Judge (PC Act) took cognizance of the offences against the petitioner and the co-accused. Aggrieved, the petitioner approached the Delhi High Court challenging the validity of the sanction orders, the order taking cognizance, and the constitutional validity of Section 2(c)(viii) and (b), PC Act insofar as they extend the definition of “public servant” and “public duty” to employees of a private company such as NSE.
Analysis
The Court held that the Prevention of Corruption Act, 1988 was enacted to widen the scope of anti-corruption laws by expanding the definition of “public servant” beyond that contained in the Prevention of Corruption Act, 1947, so as to effectively curb bribery and corruption through a purposive and liberal interpretation. Rejecting the petitioner’s challenge to the constitutional validity of Section 2(c)(viii) and (b), PC Act, the Court observed that the provisions are neither vague nor arbitrary, as they prescribe two clear preconditions for attracting the definition of “public servant”, namely, that the person must hold an “office” and, by virtue of such office, be authorised or required to perform a “public duty”, i.e., a duty in the discharge of which the State, the public or the community at large has an interest. Whether a person satisfies these conditions, the Court held, must be determined on the facts of each case and the absence of an exhaustive enumeration of offices does not render the provisions unconstitutional.
Applying the above principles, the Court held that the National Stock Exchange (NSE), being a recognised stock exchange under the Securities Contracts (Regulation) Act, 1956, performs vital economic and regulatory functions in the public interest and is not an ordinary commercial venture. Referring to the statutory framework governing recognised stock exchanges, the Memorandum of Association of NSE, and earlier judicial precedents recognising stock exchanges as performing public functions, the Court concluded that NSE discharges a “public duty”. Consequently, the petitioner, who served as the Managing Director and Chief Executive Officer of NSE, could not be divorced from the functions performed by the Exchange and, by virtue of the office held by her, equally performed duties in which the public at large had an interest.
The Court further held that questions regarding the petitioner’s precise role in the internal management of NSE, the extent of her involvement in the acts alleged in the charge-sheet, and whether she ultimately falls within the definition of “public servant” are mixed questions of fact and law to be determined on the basis of evidence during trial. Likewise, the conditional nature of the sanction orders did not invalidate the prosecution, as the issue of applicability of the PC Act would be adjudicated by the trial court.
Decision
Finding no merit in the challenge to the constitutional validity of the statutory provisions, the sanction orders, or the order taking cognizance, the Court dismissed the writ petition along with the pending application.
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[Chitra Ramkrishna v. Union of India, W.P.(CRL) 3343/2023, decided on 9-7-2026]
*Judgement authored by: Justice Navin Chawla
Advocates who appeared in this case:
For the Petitioner: N. Hariharan, Sr. Adv. With Rony John, Shivam Batra, Arshdeep Singh, Arpita Bhardwaj, Abhishek Bhushan, Mohd. Ibrahim, Amaan Shreyas, Punya Rekha Angara, Aman Akhtar, Vasundhara N., Sana Singh, Vasundhara Raj Tyagi, Arjan Singh Mandla, Prateek Bhalla and Mallika Chadha, Advocates
For the Respondent: Chetan Sharma, ASG and Amit Tiwari, CGSC, Anupam S. Sharma, SPP with Chetanya Puri, Ayushi Srivastava, Arpan Narwal, Kushagra Malik and Ujjwal Tyagi, Harpreet Kalsi, Vashisht Rao, Amisha P Dash, Abhiyant Singh, Mayank Tyagi, Pragati Ojha and Pragya Nath, Advocates
