Managing Director and CEO of a Recognized Stock Exchange is a "Public Servant" Performing "Public Duty" under the PC Act.

The Petitioner, former MD and CEO of the National Stock Exchange (NSE), challenged the constitutional validity of Sections 2(c)(viii) and 2(b) of the Prevention of Corruption Act (PC Act), 1988

The CBI registered an FIR (2018) alleging that during the Petitioner’s tenure, M/s OPG Securities was granted unfair preferential access to NSE’s co-location facilities and server architecture through a criminal conspiracy

Chargesheets were filed under the PC Act and IPC, alleging the Petitioner acted as a "public servant"

The Board of Directors of NSE granted sanction for prosecution under Section 19 of the PC Act, while clarifies that such sanction did not constitute an admission that NSE personnel are public servants

The Petitioner sought to quash the Sanction Letters and the Cognizance Order dated 18.07.2023

The Court applied Section 2(b) of the PC Act, defining "public duty" as a duty in which the State or community has an interest, and Section 2(c)(viii), defining "public servant" as anyone holding an office to perform such duty

It relied on P.V. Narasimha Rao v. State (1998), which established that "office" is a position with attached duties

State of Gujarat v. Mansukhbhai Kanjibhai Shah (2020), which held that anti-corruption laws must be interpreted broadly to favor the eradication of corruption

The Court further referenced the Securities Contracts (Regulation) Act (SCR Act), specifically Sections 4 and 5, regarding the "public interest" nature of recognized stock exchanges

K.C. Sharma v. Delhi Stock Exchange, which recognized stock exchanges as "State" under Article 12

The Court rejected the challenge of "vagueness," holding that while penal statutes must be definite, the PC Act’s definitions are intentionally broad to address the "menace of corruption" and cannot be encased in a mathematical strait-jacket

The Court determined that the NSE is not an "ordinary commercial venture" because it is a "Recognized Stock Exchange" under the SCR Act, performing vital economic functions regulated by SEBI in the "public interest"

The Petitioner, as MD and CEO, held an "office" through which these public duties were executed

Regarding the sanction, the Court noted that the NSE Board's caveat was merely a reservation for judicial determination and did not invalidate the sanction

The question of whether the Petitioner's specific daily functions constituted "public duty" was deemed a mixed question of fact and law to be decided during trial

It concluded that the Petitioner fell within the prima facie definition of "public servant" as NSE performs duties in which the public at large is invested

The High Court dismissed the Writ Petition and upheld the challenged provisions. The Court refused to quash the Sanction Orders or Cognizance Order, leaving the final determination of the Petitioner's status to the Trial Court based on evidence. No order as to costs was made