Sanction to prosecute public servants must in money laundering cases too: Court

The Supreme Court has ruled that prior government sanction, as required under Section 197(1) of the CrPC, is necessary for prosecuting public servants even in money laundering cases under the Prevention of Money Laundering Act (PMLA).

In Short

• Telangana High Court quashed ED's complaint against two IAS officers
• ED's plea against the verdict quashing chargesheet dismissed by top court
• Supreme Court ruled prior sanction needed even in money laundering cases

The Supreme Court has ruled that the requirement for prior government sanction to prosecute public servants, as mandated under the Code of Criminal Procedure (CrPC), also applies to complaints involving money laundering cases.

A bench of Justice Abhay Oka and Justice Augustine George Masih dismissed a plea by the Enforcement Directorate (ED), which had challenged a high court verdict that quashed the cognisance order on the agency's complaint (chargesheet) against two IAS officers. The court held that the provisions of Section 197(1) of the CrPC are applicable to complaints under Section 44(1)(b) of the Prevention of Money Laundering Act (PMLA).

The Telangana High Court had earlier set aside a trial court's order that had taken cognisance of the Enforcement Directorate's (ED)'s prosecution complaint on money laundering charges against two senior Andhra Pradesh government bureaucrats.

The Supreme Court referred to Section 197(1) of the CrPC (now Section 218 under the Bharatiya Nyaya Sanhita, 2023), which governs the prosecution of judges and public servants.

According to the CrPC, a Special Court may take cognisance of an offence under Section 3 upon receiving a complaint from an authority under the Act. The court's order implies that prior sanction, as required under Section 197(1) of the CrPC, must be obtained before a Special Court can take cognisance of a money laundering offence under the PMLA.

The Court upheld the High Court's decision to set aside the Special Court's order taking cognisance of the case against the accused--former IAS officer BP Acharya and another accused, Adityanath Das--without obtaining prior sanction.

The bench observed that the purpose of Section 197(1) of the CrPC is to protect public servants from prosecution for actions taken in the course of their duties. It further remarked that, given the intent behind the section, its application cannot be disregarded unless there is a conflicting provision within the PMLA. The court noted that no such provision was found in this case.

However, the court has left the door open for the Enforcement Directorate to approach the Special Court to take cognisance of the offence against the accused if the required sanction is granted in the future.