Delhi HC Upholds NSE MD Chitra Ramkrishna's Public Servant Status Under PC Act, Dismisses Constitutional Challenge
A Delhi High Court Division Bench dismissed Chitra Ramkrishna's challenge to her prosecution under the Prevention of Corruption Act, holding that NSE's MD and CEO qualifies as a public servant under Section 2(c)(viii) and declining to strike down or read down the provision.
The High Court of Delhi, in a judgment pronounced on 9 July 2026, dismissed a writ petition filed by Chitra Ramkrishna, former Managing Director and CEO of the National Stock Exchange of India Limited (NSE), challenging the constitutional validity of Section 2(c)(viii) and Section 2(b) of the Prevention of Corruption Act, 1988 (PC Act). She had also sought quashing of two prosecution sanction orders passed by the NSE Board of Directors and a cognizance order dated 18 July 2023 passed by the Special Judge (PC Act), CBI-02, Rouse Avenue District Court, New Delhi. The Division Bench of Justice Navin Chawla, who authored the judgment, and Justice Ravinder Dudeja held that the definitions of “public servant” and “public duty” in the PC Act are not vague or unconstitutional, and that the NSE and its senior officers perform a public duty in which the community at large has an interest.
The NSE Co-Location Case and the Path to Prosecution
Chitra Ramkrishna served as Joint Managing Director of the NSE from 2009 to 31 March 2013, after which she took charge as CEO and MD. She resigned on 2 December 2016 following complaints about misuse of the NSE's co-location facilities during her tenure.
The Central Bureau of Investigation registered FIR No. RC/AC1/2018/A0011 on 28 May 2018, alleging that between 2010 and 2014, Sanjay Gupta, owner of OPG Securities Pvt. Ltd., in conspiracy with NSE officials, had abused the NSE's server architecture. The allegation was that certain NSE officers passed information about switch-on times of exchange servers, giving OPG Securities unfair first-login access and preferential data feed, including access to backup servers with zero load. SEBI's Technical Advisory Committee, following its own inquiry, confirmed that OPG Securities had exploited the tick-by-tick architecture of the NSE by consistently being the first to log in during the period 2010 to 2014.
After investigation, the CBI filed a chargesheet on 21 April 2022 against Ramkrishna and Anand Subramanian, the then Group Operating Officer and Advisor to the MD, under Section 120B of the Indian Penal Code and Section 13(1)(d) read with Section 13(2) of the PC Act. The chargesheet alleged that Ramkrishna, as a public servant, had conspired with Subramanian to grant preferential server access to certain brokers and had made arbitrary appointments and disproportionate remuneration increases for Subramanian without approval of the Nomination and Remuneration Committee of the NSE. A Supplementary Chargesheet followed on 18 August 2022, alleging that Ramkrishna was a key decision-maker in the co-location facility design and had misused her position to shield system weaknesses prone to manipulation.
Since the charges under the PC Act required prior sanction under Section 19, the CBI sought prosecution sanction from the NSE Board of Directors. The Board, by resolution dated 19 June 2022, granted conditional sanction. Two formal Sanction Orders followed: one dated 15 November 2022 and another dated 11 February 2023 based on the Supplementary Chargesheet. Both orders carried a clarification that the sanction did not amount to an acceptance by the NSE that its personnel are public servants or that the PC Act applies to it. The Special Judge took the sanction orders on record in February and May 2023, and on 18 July 2023, took cognizance of offences under Section 120B of the IPC read with Section 13(1)(d) and 13(2) of the PC Act and allied provisions of the IPC and the Information Technology Act, 2000.
The Constitutional and Statutory Challenge
Ramkrishna filed W.P.(CRL) 3343/2023 seeking, among other reliefs, a declaration that Section 2(c)(viii) and Section 2(b) of the PC Act are vague, arbitrary, and unconstitutional for being violative of Articles 14 and 21, insofar as they are applied to private persons employed by a private company. In the alternative, she sought a reading-down of the provisions to exclude private individuals employed by or serving as directors of private limited companies. She also sought quashing of the two Sanction Orders and the cognizance order.
Senior Counsel Mr. N. Hariharan, appearing for Ramkrishna, argued that the definition of “public servant” under Section 2(c)(viii) is so elastic that if applied as the CBI proposed, virtually every person employed in a private enterprise could be drawn into the PC Act's ambit. He relied on Supreme Court judgments including Kartar Singh v. State of Punjab, Shreya Singhal v. Union of India, and A.K. Roy v. Union of India on the doctrine of vagueness in penal law. He also pointed to Justice Ranjan Gogoi's concurring opinion in CBI, Bank Securities and Fraud Cell v. Ramesh Gelli, which cautioned that an over-broad reading of “public servant” may obliterate all distinctions between private and public office.
On the NSE's character, Senior Counsel argued that the NSE has no government shareholding as such, that public sector equity participation by entities like LIC and IDBI does not constitute government aid or control, and that the NSE's Memorandum of Association and SEBI regulations limit the role of directors to matters of corporate governance rather than public duty. He further submitted that where Parliament intends private company employees to be public servants, it does so by an express deeming provision — as in Section 46A of the Banking Regulation Act, 1949 — and no such provision exists for NSE officials. He also contended that the Sanction Orders were issued by an incompetent authority, since under the Articles of Association it was only the shareholders of the NSE, and not the Board of Directors, who could remove the MD.
He additionally pointed out that the single-judge order in National Stock Exchange of India Ltd. v. Central Information Commission (2010 SCC OnLine Del 1513), which had declared the NSE a public authority under the RTI Act and which the chargesheet relied upon, had been stayed absolutely in LPA 315/2010 on 21 August 2012 and that appeal remained pending.
How the Division Bench Reasoned
The bench began by tracing the legislative history. Before the PC Act, 1988, the law relied on the narrow definition of “public servant” in Section 21 of the Indian Penal Code, which was confined largely to persons in government service or pay. The Prevention of Corruption Bill, 1987 was introduced expressly to widen this definition. The Statement of Objects and Reasons, and Parliamentary debates, confirmed that the amendment was intended to extend coverage to cooperative society office-bearers receiving government financial aid, university officials, and educational and scientific institution employees receiving government funding.
The bench drew on P.V. Narasimha Rao v. State (CBI/SPE) for the proposition that sub-clause (viii) of Section 2(c) is neither ambiguous nor obscure and that its words are clear enough that they cannot be cut down by reference to ministerial statements. It quoted from Government of Andhra Pradesh v. P. Venku Reddy to hold that a purposive construction is required — one that does not limit the definition against the statute's spirit. State of Gujarat v. Mansukhbhai Kanjibhai Shah reinforced that where two constructions are possible, the court must accept the one that seeks to eradicate corruption.
On the vagueness challenge, the bench referred to the Constitutional Bench judgment in A.K. Roy v. Union of India, which acknowledged that not every concept is capable of mathematical precision and that provisions are not void for vagueness merely because they require case-by-case application. The bench held that Section 2(c)(viii) has two specific and identifiable preconditions: first, the person must hold an “office”; second, by virtue of that office, he or she must be authorised or required to perform a “public duty” — meaning a duty in the discharge of which the State, the public, or the community at large has an interest. These preconditions, it said, are sufficiently determinate and do not render the provision constitutionally infirm under Articles 14 or 21.
Turning to whether the NSE performs a public duty, the bench analysed the Securities Contracts (Regulation) Act, 1956 at length. A Recognised Stock Exchange under Section 4 of the SCR Act is granted recognition only if the Central Government is satisfied that recognition would be in the interest of trade and in the public interest. Section 5 empowers the Central Government to withdraw recognition in the interest of trade or public interest. Sections 6, 7, 8, 9, 10, 11, 12, and 12A of the SCR Act vest the Central Government and SEBI with extensive regulatory, supervisory, and even supersession powers over recognised exchanges. The bench held that the NSE is not an ordinary commercial venture — it performs vital economic functions in the public interest. The bench also referred to the NSE's own Memorandum of Association, which states as its main object “to facilitate, promote, assist, regulate and manage in the public interest, dealings in securities of all kinds.”
The bench referred to the Division Bench judgment of this Court in K.C. Sharma v. Delhi Stock Exchange, which had held the Delhi Stock Exchange to be “State” within the meaning of Article 12 of the Constitution of India, approved subsequently by the Supreme Court. It also noted a coordinate Division Bench judgment in National Stock Exchange of India Ltd. v. Central Information Commission, 2026:DHC:5170-DB, decided recently, which held that the NSE qualifies as a “public authority” under the RTI Act because the government exercises deep and pervasive control over its functioning. These conclusions pointed, in the bench's view, clearly toward the NSE discharging a public duty.
On the question whether Ramkrishna personally, as MD and CEO, performed a public duty, the bench examined Clause 158 of the NSE's Articles of Association, which confers on the Board of Directors extensive powers to organise, maintain, control, manage, regulate and facilitate exchange operations, subject to the SCR Act, the SEBI Act, and SEBI directives. The bench held that the NSE acts through its officers, and the MD and CEO — as the principal executive — cannot be wholly separated from the functions performed by the NSE. Mansukhbhai Kanjibhai Shah was applied to affirm that the emphasis of Section 2(c)(viii) is not on the position held but on the public duty performed. The bench declined to accept the argument that Ramkrishna owed a duty only to the NSE as a company and not to the public.
On the Sanction Orders, the bench held that the caveat inserted by the NSE Board — that the grant of sanction was not an admission that NSE personnel are public servants or that the PC Act applies to NSE — made the orders conditional only to the limited extent of leaving those issues open for determination by the Trial Court. This caveat did not, in the bench's view, render the Sanction Orders invalid at the pre-trial stage. Whether the Board or shareholders were the competent authority to grant sanction, and whether the petitioner was in fact a public servant under the PC Act, were described as mixed questions of fact and law requiring evidence before the Trial Court.
The bench also declined to act on the earlier single-judge bail order in Chitra Ramkrishna v. Assistant Director, Enforcement Directorate (Bail Application No. 2919/2022), wherein this Court had reportedly observed that the NSE is not a public authority and the petitioner cannot be treated as a public servant. The bench's reasoning on the merits of the public duty question effectively departed from that interim observation without directly addressing it.
Order
The Division Bench dismissed W.P.(CRL) 3343/2023 and the pending Criminal Miscellaneous Application No. 31018/2023 in their entirety. The constitutional challenge to Section 2(c)(viii) and Section 2(b) of the PC Act was rejected. The Sanction Orders dated 15 November 2022 and 11 February 2023, and the cognizance order dated 18 July 2023, were upheld against challenge at this stage. The bench made clear that none of its observations would influence the Trial Court in deciding the issues on the basis of evidence, and that those issues remain open for consideration in accordance with law. No order as to costs was made.