In a landmark decision, the Supreme Court of India has ruled that prior sanction under Section 197(1) of the Criminal Procedure Code (CrPC) is mandatory before initiating criminal proceedings against public servants accused under the Prevention of Money Laundering Act, 2002 (PMLA).
Complaints were filed by the Directorate of Enforcement against Bibhu Prasad Acharya and Adityanath Das, alleging their involvement in money laundering activities during their tenure in public office.
The accusations centred around misuse of their official positions for illegal financial gains. Both officials had challenged the proceedings before the Andhra Pradesh High Court, arguing that no sanction had been obtained from the government as required under Section 197(1) of CrPC.
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The High Court had upheld their plea and quashed the complaints, prompting an appeal by the Enforcement Directorate to the Supreme Court.
The Supreme Court upheld the High Court’s decision, reaffirming that both respondents were public servants as defined under the law and were performing official duties when the alleged acts took place. The Apex Court observed that the purpose of Section 197(1) is to protect public servants from frivolous or vexatious litigation for acts carried out in the discharge of their official duties. This protection ensures that prosecutions proceed only after careful consideration by the government.
Addressing the interaction between the PMLA and CrPC, the Court pointed out that Section 65 of the PMLA explicitly applies the provisions of the CrPC to cases under the PMLA, as long as they are not inconsistent. It found no inconsistency between the requirement of sanction under Section 197(1) of CrPC and the provisions of the PMLA.
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While Section 71 of the PMLA gives the Act overriding authority over other laws, the Court clarified that this does not nullify procedural safeguards such as the need for prior sanction. If Section 71 were interpreted to override Section 197(1), it would render Section 65 meaningless, a result the Court deemed unacceptable.
The decision by Justices Abhay S. Oka and Augustine George Masih also observed that the issue of sanction can be raised at any stage of the legal process, including after a court has taken cognizance of an offence.
In this case, the Court agreed that the absence of prior sanction invalidated the cognizance taken by the Special Court against the accused. However, the Supreme Court left open the possibility for the Enforcement Directorate to revive the complaints if the necessary government sanction is obtained.
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