The Supreme Court (SC) recently mandated that prior sanction is required to prosecute public servants under the Prevention of Money Laundering Act (PMLA).

Key Highlight of the Verdict

• Section 71 of PMLA: Asserts that PMLA provisions have overriding authority over other laws in cases of inconsistency.
• Supreme Court Ruling: Public servants cannot be prosecuted under PMLA without prior sanction under Section 197 of the CrPC.
  • SC upheld a 2019 Telangana HC order, setting aside the trial court’s cognisance due to lack of prior sanction.
• Reasoning: Section 65 of the PMLA makes CrPC provisions applicable unless inconsistent.
  • Accused public servants’ alleged criminal acts were connected to their official duties, requiring sanction.

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About Prior Sanction Provision

• The prior sanction provision is a legal safeguard designed to protect public servants from frivolous or politically motivated prosecutions. 
• This provision is mentioned in Section 197 of the Code of Criminal Procedure, 1973, and Section 218 of the Bharatiya Nagarik Suraksha Sanhita, 2023.
• It mandates that law enforcement agencies, such as the Enforcement Directorate (ED), must obtain prior approval from the government before initiating a prosecution against a public servant.

Mechanism for Prior Sanction

• Allegation Against Public Servant: An allegation is made against a public servant, often involving corruption or misuse of office.
• Investigation: Law enforcement agencies investigate the allegations to gather evidence.
• Prior Sanction Request: If the investigation reveals sufficient grounds for prosecution, the agency must seek prior sanction from the appropriate government authority.
• Government Review: The government reviews the evidence and determines whether there is a prima facie case to proceed with the prosecution.
• Sanction Granted or Denied: The government may grant or deny the sanction based on the merits of the case.
• Prosecution: If sanction is granted, the prosecution can proceed. If denied, the case cannot be pursued.

Key Provisions on Prior Sanction for Public Servants

• Under Section 197 of the CrPC: Courts cannot take cognisance of offences allegedly committed by public servants while discharging official duties without prior sanction from the government.
  • Exceptions: Crimes such as rape, sexual harassment, stalking, and human trafficking do not require prior sanction.
• Under Prevention of Corruption Act (PCA): Section 19(1) requires prior sanction to prosecute offences like bribery and undue advantage.
• Section 17A  of PMLA (Amended in 2018): Requires government approval to investigate decisions made in discharge of official duties.
  • The SC case will decide if Section 17A applies to pre-2018 cases.

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Cases Leading to SC Direction on Prior Sanction

• Devinder Singh v. State of Punjab (2016): Established that Section 197 protection applies only to acts in official duty, not crimes disguised as authority.
• P K Pradhan v. State of Sikkim (2001): Held that absence of sanction under Section 197 can be argued at any trial stage, even post-conviction, if linked to official duties.
• Bibhu Prasad Acharya & Adityanath Das Case (2023): SC upheld the Telangana HC ruling that prior sanction under Section 197 is mandatory for public servants charged under PMLA, as their alleged acts were linked to official duties.

Implications for ED Cases Involving Public Servants

• On Investigation and Complaints: ED investigations and complaints can continue, but trial courts cannot take cognisance of chargesheets against public servants without prior sanction.
• On Trials and Appeals: Public servants convicted without prior sanction can challenge the trial’s validity during appeals, arguing the absence of sanction.
• Potential Impact: Convictions may be overturned if courts accept the argument of missing sanction for acts allegedly performed in official capacity.
• On Public Servant: This ruling emphasizes the need to protect public servants performing bona fide official duties while ensuring accountability for misuse of authority.
• • It may delay trials and provide legal grounds for accused public servants to contest proceedings or convictions in cases involving PMLA charges.

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