NSE phone-tapping case: Whistleblower, tapped to check illegal acts, Mumbai ex-top cop tells Delhi court


Former Mumbai Police commissioner Sanjay Pandey, in judicial custody for his alleged role in tapping of phones of NSE employees, told a Delhi court on Wednesday that he is a whistleblower who had, in fact, pointed out criminal activities such as “betting in IPL” that were purportedly taking place in the stock exchange.

Pandey’s lawyers made the submissions before Special Judge Sunena Sharma, who will pronounce the order on his bail plea on Thursday.

Appearing for Pandey, advocate Tanvir Ahmed Mir told the court that Pandey was a whistleblower who flagged suspicious activities in the National Stock Exchange (NSE).

The court asked Mir whether his client was engaged as a spy. Mir replied, “Spy would not be a good word coming from the court. My job is to flag suspicious calls.”

Mir told the court that NSE gave Pandey a record, and he flagged calls that indicated illegal activities. “NSE employees are betting in IPL and I am flagging those activities…. What wrong did I commit,” he asked. “Was I running (away) from India? Proceeds of crime in total amount to Rs 4.54 crore. It is not camouflaged or layered. Who is dissipating evidence? The ED arrested for ulterior reasons [motive]. I told them (NSE) about system operation breach, access control breach, IPL betting.”

Mir submitted that the NSE engaged his client’s services to ensure that “trade secrets do not go out (and) insider trading does not happen”, and for that the NSE recorded calls and gave his company transcripts.

He said that a company, Nexus, had installed the phone-tapping hardware in NSE in 2012. He submitted that recording of phone calls had taken place in other government institutions, including banks, and that does not make the recording of phone calls at NSE illegal.

The NSE, the court was told, has been “recording calls since 1997 to save itself. To ensure there is no illegal activity…it is being done all over, including government companies and banks. If it is not an offence there, how is it an offence here? Call it snooping or whatever, this is being done everywhere. The West Bengal State Distribution company has this. Why is no one being arrested? SEBI says record all calls…”

Mir argued that his client was arrested first and the Enforcement Directorate (ED) began the investigation later, in violation of safeguards stipulated by law. Thus, he submitted, the court is empowered to grant him bail.

“If there are powers to arrest then there are also safeguards and checks and balances,” he told the court.

Additional Solicitor General S V Raju, who appeared for ED, began his arguments by addressing Mir’s contention that no predicate offence was made out. “He has not challenged this FIR, nor gone for quashing. He cannot now argue no predicate offence is made out,” Raju contended. “Whether predicate offence is made out or not is in the exclusive domain of CBI.”

On SEBI’s directives regarding recording phone calls, which Mir cited, Raju said, “SEBI doesn’t say you record private conversations. They have no business tampering with MTNL lines.”

Referring to the ED case, the court asked Raju why the NSE engaged services of iSec — the company related to Pandey — to record phone calls of NSE employees. Raju replied, “To make money. We are still investigating. Because of a split-second decision, you can make a lot of money.”

Mir rebutted this by stating that even though the ASG submitted that split-second decisions were taken, “iSec was getting data two weeks later”..”





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