Ramakrishna Faces Prosecution As Supreme Court Refuses To Challenge Sanction In NSE Case

The Supreme Court on Tuesday refused to interfere with the sanction granted for the prosecution of former National Stock Exchange (NSE) managing director and chief executive officer Chitra Ramakrishna under the Prevention of Corruption Act in the NSE co-location case. A bench comprising Justices JB Pardiwala and K Vinod Chandran disposed of Ramakrishna’s challenge to a Delhi High Court order that had upheld the prosecution sanction. However, the top court allowed her to raise before the trial court the question of whether she was performing a “public duty” and could therefore be treated as a public servant under the anti-corruption law. The Supreme Court’s order means that the challenge to the sanction will not stop the proceedings at this stage, while the question of her status under the Prevention of Corruption Act can be examined during the trial.

The case stems from the NSE co-location controversy, involving allegations concerning the manner in which certain brokers accessed the exchange’s servers between 2010 and 2014. The Central Bureau of Investigation (CBI) has alleged that some brokers received preferential access to NSE servers, potentially giving them an advantage over other market participants. In its chargesheet, the agency has alleged that Ramakrishna, while heading the exchange, facilitated a system that was susceptible to manipulation and enabled certain brokers to obtain preferential access. The CBI has also alleged that she abused her position in the appointment and remuneration of Anand Subramanian as chief strategic adviser to the managing director. These allegations remain matters for determination in the criminal proceedings.

Ramakrishna had challenged the prosecution sanction before the Delhi High Court, arguing that the nature of her duties did not amount to a “public duty” under the Prevention of Corruption Act. Her position was that her responsibilities were primarily connected with managing the NSE’s business and corporate governance and should not be treated as functions performed by a public servant. She also argued that the sanction was legally defective because the NSE board had itself maintained that the exchange and its employees were not “public servants” within the meaning of the anti-corruption law. According to her plea, the board could not subsequently rely on the same law to grant sanction for her prosecution. She further contended that the authority competent to remove her as managing director and CEO was the NSE’s shareholders rather than its board.

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The Delhi High Court rejected those arguments in July and upheld the sanction granted by the NSE board. The high court held that the NSE performs a public duty because of its important role in the economy and financial markets. It also observed that Ramakrishna, because of her position as managing director and CEO, could not be completely separated from the functions discharged by the exchange. At the same time, the high court said questions about whether Ramakrishna was actually responsible for the NSE’s day-to-day functioning and policy decisions, including matters connected with the acts and contracts mentioned in the chargesheet, were issues that would have to be established through evidence during the trial rather than decided at the stage of examining the sanction.

The Centre opposed Ramakrishna’s challenge before the courts, maintaining that her position had a significant bearing on public interest and the functioning of financial markets. It argued that the functions she performed consequently amounted to a public duty. The CBI took a somewhat different position, submitting that it was not necessary to first determine whether the NSE itself qualified as a public authority. According to the agency, the relevant question was whether Ramakrishna personally performed a public duty and therefore fell within the statutory definition of a public servant under the Prevention of Corruption Act. The high court had also rejected her argument that the statutory provisions defining “public servant” and “public duty” were vague and violated Articles 14 and 21 of the Constitution. It held that the absence of an exhaustive definition covering every possible situation did not by itself make the provisions unconstitutional.

With the Supreme Court now disposing of Ramakrishna’s challenge, the prosecution sanction remains in place and the case can proceed before the trial court. The top court’s order, however, leaves open the question of whether Ramakrishna was performing a public duty and could legally be treated as a public servant under the Prevention of Corruption Act. That issue can now be raised during the trial, where the court will examine the evidence concerning her role, responsibilities and the allegations made by the CBI. The Supreme Court’s refusal to interfere at this stage does not amount to a finding of guilt against Ramakrishna. The allegations arising from the NSE co-location case will ultimately have to be established through the judicial process.

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