Summary
The Supreme Court held that Section 197(1) CrPC applies to a complaint under Section 44(1)(b) of the PMLA by virtue of Section 65 of that Act, and that Section 71 does not override CrPC provisions made applicable through Section 65. As the two respondents were civil servants removable by the State Government and the acts alleged were done while purporting to discharge official duty, cognizance taken against them without previous sanction was rightly quashed.
Issues
- Whether the requirement of previous sanction under Section 197(1) CrPC applies to a complaint for money laundering under Section 44(1)(b) of the PMLA, or is excluded by Section 71 of the PMLA.
- Whether a civil servant on deputation as Vice Chairman and Managing Director of a State Government corporation is a public servant removable only by or with the sanction of the Government.
- Whether the acts alleged against the respondents were committed while acting or purporting to act in the discharge of their official duty.
- Whether the plea of want of sanction could be decided after cognizance, without waiting for trial.
Provisions considered
- Section 197(1), Code of Criminal Procedure, 1973Quoted (noted to correspond to Section 218 BNSS); held to have two conditions: the accused must be a public servant removable by or with the Government's sanction, and the offence must be alleged to have been committed while acting or purporting to act in the discharge of official duty. Both were found satisfied for both respondents. (¶¶ 5, 6, 7, 11, 13, 14, 15, 19)
- Section 65, Prevention of Money Laundering Act, 2002Read as applying CrPC provisions to all proceedings under the PMLA, including a complaint under Section 44(1)(b), so far as they are not inconsistent with the PMLA; no PMLA provision was found inconsistent with Section 197(1) CrPC. (¶¶ 16, 17, 18)
- Section 71, Prevention of Money Laundering Act, 2002Held not to override a CrPC provision that applies to PMLA proceedings by virtue of Section 65, since reading it otherwise would make Section 65 redundant. (¶¶ 16, 18)
- Section 44(1)(b), Prevention of Money Laundering Act, 2002The complaints were filed under this clause for the offence under Section 3 punishable under Section 4; held to be 'other proceedings' attracting the CrPC through Section 65, and the sanction issue arose once cognizance was taken on them. (¶¶ 1, 8, 17, 19)
Held
- Section 197(1) CrPC protects public servants from prosecution for acts done in the discharge of their duties, but the protection is qualified: they may be prosecuted with previous sanction of the appropriate Government. It applies only where the accused is a public servant removable by or with the Government's sanction and the offence is alleged to have been committed while acting or purporting to act in the discharge of official duty. (¶¶ 6, 11)
- The question of sanction may arise at any stage and can be raised after cognizance; once the Enforcement Directorate had filed complete complaints and cognizance had been taken, there was no bar to deciding the plea of absence of sanction, and no need to defer it to trial. (¶¶ 8, 14)
- The ruling that officers of government companies or public sector undertakings do not get Section 197 protection does not apply to a civil servant whom the State Government placed on deputation as Vice Chairman and Managing Director of a corporation; as the Government appointed him and had the power to remove him under the Memorandum, he satisfied the first condition, as did the second respondent, a Principal Secretary. (¶¶ 9, 10, 12, 13)
- Taking the complaints as they stand, the allotment of land for an SEZ project by the first respondent and the allocation of additional water to a company by the second respondent were acts related to their entrusted duties, and it was not even alleged that they lacked power to do them; the second condition of Section 197(1) was therefore met. (¶¶ 13, 15)
- By Section 65 of the PMLA, CrPC provisions apply to all proceedings under that Act unless inconsistent with it; no provision of the PMLA is inconsistent with Section 197(1) CrPC, which therefore applies to a complaint under Section 44(1)(b). (¶ 17)
- Section 71 of the PMLA cannot be invoked to exclude a CrPC provision that applies to PMLA proceedings by virtue of Section 65; such a reading would render Section 65 otiose, and no statute may be interpreted so as to make any of its provisions redundant. (¶ 18)
- Cognizance of the offence under Section 3, punishable under Section 4 of the PMLA, taken against the respondents without previous sanction under Section 197(1) CrPC was rightly set aside; cognizance against the other accused was unaffected, and the Enforcement Directorate may move the Special Court again if sanction is granted, subject to the respondents' objections. (¶ 19)
Result
Appeals by the Directorate of Enforcement dismissed. Orders of cognizance set aside only as against the two respondents; cognizance against the other accused unaffected; liberty to the appellant to seek cognizance afresh against the respondents if sanction under Section 197(1) CrPC is granted, subject to their legal and factual objections.