The Supreme Court on Monday upheld the bail granted to former Mumbai police chief Sanjay Pandey in a money laundering case related to the alleged tapping of phones of employees of the National Stock Exchange, Bar and Bench reported.
The former police commissioner was booked by the Enforcement Directorate on money laundering charges on July 14 along with former chiefs of the National Stock Exchange Chitra Ramkrishna and Ravi Narain.
In December, the Delhi High Court had granted bail to Pandey after observing that although the case showed prima facie violations of the Telegraph Act, the allegations did not constitute scheduled offences under the Prevention of Money Laundering Act.
Under the Act, the Enforcement Directorate can only file a complaint pertaining to money laundering allegations based on a case registered by another investigative agency. The original case is called a scheduled offence or a predicate offence.
In August, the Supreme Court had ruled that PMLA proceedings cannot continue if there is no scheduled offence.
The High Court, while granting bail to Pandey, in December had said that it has to look at only the scheduled offences in the first information report and that other offences are not relevant, reported Live Law.
It had also noted that Pandey was prima facie “not guilty” of acquiring or retaining the “proceeds of crime”.
The central agency had challenged this order in the Supreme Court. On Monday, Additional Solicitor General SV Raju, appearing for the Enforcement Directorate, said that the High Court had conducted a “mini trial” in the case, reported Live Law.
A division bench of Justices Sanjay Kishan Kaul and Ahsanuddin Amanullah said that bail pleas are being argued at length these days and refused to interfere with the Delhi High Court verdict. They, however, stated that the observations made in the High Court order will not have any effect during the trial in the case.
The co-location scam
The case against Pandey is linked to the alleged phone tapping of employees of the National Stock Exchange when the co-location scam took place within the trading platform. The Central Bureau of Investigation has alleged that Pandey had set up a company called iSec Securities, which was used for electronic surveillance of the employees.
The co-location scam pertains to allegations of preferential access to the National Stock Exchange trading platform that allowed certain brokers to trade before the markets opened. The first FIR in the case was filed in 2018.
Pandey was first questioned by the Enforcement Directorate on July 5 for its investigation into a money laundering angle in the co-location scam. He had retired as Mumbai Police commissioner on June 30.
Enforcement Directorate officials allege that the agency had found evidence of secret phone surveillance during the questioning. The agency then informed about the development to the Union home affairs ministry, which asked the Central Bureau of Investigation to look into the case.
iSec Securities was one of the firms tasked to conduct security audits at the National Stock Exchange between 2010 to 2015, during which the co-location scam allegedly took place. The company did not alert the stock exchange that its servers were compromised, the Central Bureau of Investigation has alleged.
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