Sanction needed under PMLA to prosecute public servants: SC

CategoryPolity

Last Updated08/11/2024

The Supreme Court on Wednesday held that Section 197(1) of the Code of Criminal Procedure (CrPC) that mandates prior sanction from the government to take cognizance of an offence against public servants will apply to the Prevention of Money Laundering Act (PMLA) too.

The Supreme Court ruled that Section 197(1) of the Code of Criminal Procedure (CrPC), which requires government sanction to prosecute public servants, also applies to the Prevention of Money Laundering Act (PMLA).
The decision upheld the Telangana High Court’s order, reversing a trial court’s decision to take cognizance of money laundering charges against IAS officers Bibhu Prasad Acharya and Adityanath Das without prior sanction.

Provision Summary: Section 197(1) mandates that no court can take cognizance of offences allegedly committed by judges, magistrates, or public servants while discharging official duties, without prior government sanction.
SC’s Interpretation: The Court noted that as both officers are civil servants and the allegations are related to their official duties, the requirements of Section 197(1) are met.

Position of Acharya: ED argued that Acharya was not a public servant as defined in Section 197(1), claiming he was not immune to removal without government sanction.
Overriding Effect of PMLA: The ED further contended that Section 71 of the PMLA overrides other statutes, including the CrPC, making prior sanction unnecessary.

Consistency with PMLA: The Court held that Section 65 of the PMLA allows CrPC provisions to apply to PMLA proceedings unless inconsistent with PMLA provisions. The Court found no inconsistencies between Section 197(1) of the CrPC and the PMLA.
Section 71 Not Overriding Section 197(1): The Court clarified that Section 71 of the PMLA does not override applicable CrPC provisions, as doing so would render Section 65 ineffective, which is not a valid interpretation of the law.

Bibhu Prasad Acharya: Accused of conspiring with former Andhra Pradesh CM Jagan Mohan Reddy to allocate 250 acres of land to Indu Techzone Pvt Ltd for an SEZ project, allegedly violating norms.
Adityanath Das: Allegedly conspired with Reddy to allocate an additional 10 lakh liters of water from the River Kagna to India Cement Ltd, violating established regulations.

The Court concluded that the trial court took cognizance of PMLA offences against Acharya and Das without obtaining prior sanction as mandated by Section 197(1) of the CrPC, rendering the trial court's actions invalid without government authorization.