New Delhi: The Delhi High Court on Thursday granted bail to former Mumbai Police Commissioner Sanjay Pandey in a money laundering case related to alleged illegal phone tapping and snooping of National Stock Exchange (NSE) employees, saying he is prima facie "not guilty" of acquiring or retaining the "proceeds of crime".
Justice Jasmeet Singh ordered his release on a personal bond of Rs 1 lakh with two sureties in the like amount subject to certain conditions.
The judge said while tapping phone lines without consent is prima facie a breach of privacy, the scheduled offences under the under the Prevention of Money Laundering Act (PMLA) are not made out and the Enforcement Directorate (ED) has "not substantiated" that Pandey "derived or obtained any property" from a criminal activity.
"Since none of the ingredients of the scheduled offences viz., Section 72 IT Act, Section 120B r/w 409 and 420 IPC, Section 13(2) read with 13(1)(d) Prevention of Corruption Act are made out, there is no occasion to allege acquisition or retention of 'proceeds of crime', which under Section 2(u) of PMLA is defined to mean proceeds arising out of 'scheduled offences'.
"In view of the above discussion, the Applicant cannot be held to have derived or obtained property as a result of criminal activity relating to or in relation to a scheduled offence," the court said in its 48-page order.
The court also said, on the basis of the material collected and referenced by the ED, it can be concluded that the central agency has not substantiated that Pandey has derived or obtained any property as a result of a scheduled offence or indulged in any activity or process relating to that property.
The court observed there was no likelihood of the accused committing an offence under the PMLA if released and noted: "The application is allowed and the applicant is granted bail." "I am of the view that according to sec 45 PMLA, prima facie, there are reasonable grounds to believe that the Applicant is not guilty of the offence and he is not likely to commit any offence while on bail," the court said.
The court clarified that at the stage of bail, it was not determining the guilt of the accused but only assessing the matter on broad probabilities.
The money laundering case being probed by ED arises from a CBI FIR against Pandey and his company iSec Services Private Limited for the alleged commission of offences under the Indian Penal Code, Indian Telegraph Act and Prevention of Corruption Act.
Pandey had founded iSec Services Pvt. Ltd. in 2001 after he had resigned from the IPS. He later quit the company and rejoined the Indian Police Service.
According to the CBI, iSec, in conspiracy with other accused persons illegally intercepted MTNL lines at the NSE between 2009 and 2017 and recorded calls by various exchange officials. It has been alleged that the telephone monitoring was carried out by iSec without taking permission of the competent authority as required under the provisions of the Indian Telegraph Act and also without the knowledge or consent of the NSE employees.
The ED alleged the revenue of Rs 4.54 crore generated by iSEC for providing the services constituted the "proceeds of crime" under the PMLA.
ED arrested Sanjay Pandey
Pandey was arrested by the ED on July 19 and subsequently sent to judicial custody.
In the order, the court stated the alleged illegal interception of the phone calls of employees of the NSE is prima facie violative of the Telegraph Act but the offences under that Act are not scheduled offences under PMLA.
"The act of tapping and recording phone calls without consent of the concerned person can be penalised under various sections of the Indian Telegraph Act and Indian Wireless Telegraphy Act but the offences under the said statutes are not scheduled offences," the court said.
"I am prima facie of the view that tapping phone lines or recording calls without consent is a breach of privacy. The right to privacy enshrined under Article 21 of the Constitution demands that phone calls not be recorded. Only with consent of the individuals concerned, can such activity be carried out otherwise it will amount to breach of the fundamental right to privacy," stated the court.
"In the present case, recording or tapping of phone lines by ISEC was not an action of the State. The facets of privacy include right of non-interference with the individual body, protection of personal information and autonomy over personal choices. Consent is essential when it comes to recording phone lines which aspect was disregarded by both NSE and ISEC," it observed.
The court said it found merit in the accused's stand that his contractual compensation of Rs 4.54 crore for services rendered cannot amount to "pecuniary advantage" in terms of the Prevention of Corruption Act.
It observed that no call recordings were ever entrusted to Pandey on account of his capacity as a "public servant" and that "there is no allegation in the prosecution case of giving or receiving a bribe or illegal gratification".
Since NSE is a private entity, no offences under section 13 of the Prevention of Corruption Act can be said to have been committed, it added.
The court also stated the "entire prosecution is silent on the identity of the victim who has suffered a wrongful loss" in the case and there is "a bald averment that various customers have been cheated".
While granting bail, the court directed Pandey to join investigation whenever asked to, appear before the trial court when the case is taken up, and keep his mobile number switched on at all times.
It also asked him to not leave the country during the bail period and surrender his passport.
The court also directed him to not communicate with, or come into contact with any of the prosecution witnesses or tamper with the evidence of the case.
