Prior sanction must to try public servants on money laundering charge, rules SC

Holding that a prior sanction is needed to prosecute public servants accused of money laundering while discharging official duty, the Supreme Court has dismissed the Enforcement Directorate’s petition challenging a Telangana High Court verdict that quashed the cognisance order of the ED’s complaint (chargesheet) against two IAS officers.

The order came on the ED’s petition challenging the high court decision quashing an order of the trial court that had taken cognisance of the ED’s prosecution complaint on money laundering charges against the two senior bureaucrats of Andhra Pradesh, Bibhu Prasad Acharya and Adityanath Das.

The ED had contended that considering the object of the PMLA, the requirement of obtaining a sanction under Section 197(1) of CrPC will be inconsistent with Section 71 of the PMLA. The ED alleged that Acharya conspired with former Andhra CM YS Jagan Mohan Reddy and allotted 250 acres meant for a SEZ project to a private company by violating the existing norms.

Das, who was the Principal Secretary in the state government, conspired with Reddy and extended favours to another firm by allotting an additional 10 lakh litres of water from Kagna river without referring the matter to the Interstate Water Resources Authority in violation of the existing norms, the probe agency alleged.

Referring to Section 197(1) of the CrPC (corresponding to Section 218 of the Bhartiya Nagrik Suraksha Sanhita, 2023), a Bench of Justice Abhay S Oka and Justice Augustine George Masih on Wednesday said, “This provision is for the protection of honest and sincere officers. However, the protection is not unqualified. They can be prosecuted with a previous sanction from the appropriate government.”

Upholding the high court’s order, the top court set aside the trial court’s order taking charges against the two senior IAS officers. However, it said the ED may proceed against them after obtaining a prior sanction for the prosecution.

Section 197 (1) says, “When any person who is or was a judge, magistrate or a public servant not removable from his office save by or with the sanction of the government, is accused of any offence while acting or purporting to act in the discharge of his official duty, no court shall take cognisance of such offence except with the previous sanction.”