Factual aspect
Appeal against the quashing order of complaint filed by the ED against the public servant for want of sanction
1. The appellant has filed complaints against the respondents and others under Section 44(1)(b) of the Prevention of Money Laundering Act, 2002 (for short, ‘the PMLA’). The complaint is for an offence under Section 3 of the PMLA, which is punishable under Section 4. Both private respondents are accused in the complaints. They are Bibhu Prasad Acharya (described hereafter as the first respondent) and Adityanath Das (described hereafter as the second respondent). The Special Court took cognizance of the complaints and issued summons to the respondents and other accused persons. Both of them filed writ petitions before the High Court challenging the cognizance taken by the Trial Court and inter alia prayed for quashing the complaints on the ground that both of them were public servants and, therefore, it was necessary to obtain prior sanction under sub-section (1) of Section 197 of the Code of Criminal Procedure, 1973 (for short, ‘the CrPC’). By the impugned judgment, the High Court upheld the respondents’ contentions and quashed the orders of taking cognizance passed by the Special Court on the complaints only as against the said respondents.
Consideration of submissions
Scope of Section 197(1) CrPC [section 218 BNSS 2023]
5. Section 197 (1) of CrPC (which corresponds to Section 218 of Bhartiya Nagrik Suraksha Sanhita, 2023) reads thus:
“197. Prosecution of Judges and public servants.— (1) When any person who is or was a Judge or Magistrate or a public servant not removable from his office save by or with the sanction of the Government, is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction —
(a) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of the Union, of the Central Government;
(b) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of a State, of the State Government:
[Provided that where the alleged offence was committed by a person referred to in clause (b) during the period while a Proclamation issued under clause (1) of Article 356 of the Constitution was in force in a State, clause (b) will apply as if for the expression “State Government” occurring therein, the expression “Central Government” were substituted.]
[Explanation.—For the removal of doubts it is hereby declared that no sanction shall be required in case of a public servant accused of any offence alleged to have been committed under section 166A, section 166B, section 354, section 354A, section 354B, section 354C, section 354D, section 370, section 375, section 376 [section 376A, section 376AB, section 376C, section 376D, section 376DA, section 376DB] or section 509 of the Indian Penal Code (45 of 1860).]
Under section 197(1) IPC government servants can be prosecuted only with a previous sanction
6. The object of Section 197(1) must be considered here. The object is to protect the public servants from prosecutions. It ensures that the public servants are not prosecuted for anything they do in the discharge of their duties. 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.
Judicial interpretation on discharge of his official duty
7. The expression “to have been committed by him while acting or purporting to act in the discharge of his official duty” has been judicially interpreted. A bench of three Hon’ble Judges of this Court in the case of Centre for Public Interest Litigation v. Union of India [(2005) 8 SCC 202], in paragraph no 9, observed thus:
“9………………….. This protection has certain limits and is available only when the alleged act done by the public servant is reasonably connected with the discharge of his official duty and is not merely a cloak for doing the objectionable act. If in doing his official duty, he acted in excess of his duty, but there is a reasonable connection between the act and the performance of the official duty, the excess will not be a sufficient ground to deprive the public servant from the protection. The question is not as to the nature of the offence such as whether the alleged offence contained an element necessarily dependent upon the offender being a public servant, but whether it was committed by a public servant acting or purporting to act as such in the discharge of his official capacity. Before Section 197 can be invoked, it must be shown that the official concerned was accused of an offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duties. It is not the duty which requires examination so much as the act, because the official act can be performed both in the discharge of the official duty as well as in dereliction of it. The act must fall within the scope and range of the official duties of the public servant concerned. It is the quality of the act which is important and the protection of this section is available if the act falls within the scope and range of his official duty. There cannot be any universal rule to determine whether there is a reasonable connection between the act done and the official duty, nor is it possible to lay down any such rule. One safe and sure test in this regard would be to consider if the omission or neglect on the part of the public servant to commit the act complained of could have made him answerable for a charge of dereliction of his official duty. If the answer to this question is in the affirmative, it may be said that such act was committed by the public servant while acting in the discharge of his official duty and there was every connection with the act complained of and the official duty of the public servant. This aspect makes it clear that the concept of Section 197 does not get immediately attracted on institution of the complaint case.” (emphasis added)
Cognizance has been taken based on the complaints
8. In the decision of this Court in the case of Prakash Singh Badal and Another [(2007) 1 SCC 1], in paragraph 38, this Court held thus:
“38. The question relating to the need of sanction under Section 197 of the Code is not necessarily to be considered as soon as the complaint is lodged and on the allegations contained therein. This question may arise at any stage of the proceeding. The question whether sanction is necessary or not may have to be determined from stage to stage.” (emphasis added)
In the present case, after completing the investigation, the appellant has filed exhaustive complaints under Section 44(1)(b) of the PMLA. Cognizance has been taken based on the complaints. Therefore, the issue of the absence of sanction will arise at this stage.
Twin conditions for applicability of section 197(1) CrPC
11. There are two conditions for applicability of Section 197(1). The first condition is that the accused must be a public servant removable from his office by or with the government’s sanction. The second condition is that the offence alleged to have been committed by the public servant while acting or purporting to act in the discharge of his duty.
12. We have perused the decisions relied upon by learned ASG. In the case of Mohd. Hadi Raja [(1998) 5 SCC 91], this Court took the view that the protection of Section 197 of CrPC will not be available to the officer of the Government Companies or Public Sector Undertakings. The first respondent is a civil servant. As such, the State Government appointed him as the Corporation’s Vice Chairman and Managing Director on deputation. Therefore, the decision in the abovementioned case will not apply to the first respondent.
13. The first condition is satisfied in the case of both the respondents as they are civil servants. The allegation in the complaint against the first respondent is that he, in conspiracy and connivance with Shri Y.S. Jagan Mohan Reddy (the then Chief Minister of the state), another accused, allotted 250 acres of land for the SEZ project to M/s. Indu Tech Zone Private Ltd. by violating the existing norms, regulations and procedures. Further allegation against the first respondent is that he was indirectly involved in the offence of money laundering by knowingly assisting M/s. Indu group of companies in the creation of vast proceeds of crime. The allegation against the second respondent, who was at the relevant time Principal Secretary, I & CAD Department of the State Government, is that in conspiracy with Shri Y.S.Jagan Mohan Reddy, he extended favour to India Cement Limited by allotting an additional 10 lakh litres of water from River Kagna without referring the matter to Interstate Water Resources Authority and by violating the existing norms, regulations and procedures.
Accused can raise the plea of absence of sanction after taking cognizance
14. A Bench of three Hon’ble Judges of this Court in the case of P.K. Pradhan v. State of Sikkim [(2001) 6 SCC 704], in paragraphs 5 and 15 held thus:
“paragraphs. 5 & 15”
Thus, there is no embargo on considering the plea of absence of sanction, after cognizance is taken by the Special Court of the offences punishable under Section 4 of the PMLA. In this case, it is not necessary to postpone the consideration of the issue.
The act alleged in the complaint against the accused has been done by him purporting to act in discharge of his official duties
15. We have carefully perused the allegations against the respondents in the complaint. The allegation against the second respondent is of allocating an additional 10 lakh litres of water to India Cement Ltd. Taking the averments made in the complaint against him as it is, the act alleged against him has been committed by him while purporting to act in the discharge of his official duties. The allegation against the first respondent is of the allotment of land measuring 250 acres to M/s. Indu Tech Zone Private Ltd. Taking the averments made in the complaint as correct, the act alleged against him has been done by him purporting to act in the discharge of his official duties. In the case of both respondents, the acts alleged against them are related to the discharge of the duties entrusted to them. It is not even the allegation in the complaints that the two respondents were not empowered to do the acts they have done. There is a connection between their duties and the acts complained of. The second condition for the applicability of Section 197(1) also stands satisfied, and therefore, in this case, Section 197(1) of CrPC applies to the respondents, assuming that Section 197(1) of CrPC applies to the proceedings under the PMLA.
No provision under the PMLA is inconsistent with the provision of section 197(1) Cr.P.C
17. Section 65 makes the provisions of the CrPC applicable to all proceedings under the PMLA, provided the same are not inconsistent with the provisions contained in the PMLA. The words ‘All other proceedings’ include a complaint under Section 44 (1)(b) of the PMLA. We have carefully perused the provisions of the PMLA. We do not find that there is any provision therein which is inconsistent with the provisions of Section 197(1) of CrPC. Considering the object of Section 197(1) of the CrPC, its applicability cannot be excluded unless there is any provision in the PMLA which is inconsistent with Section 197(1). No such provision has been pointed out to us. Therefore, we hold that the provisions of Section 197(1) of CrPC are applicable to a complaint under Section 44(1)(b) of the PMLA.
Though the cognizance taken by the Special Court is bad without obtaining sanction does not prevent ED to move the Special Court to take cognizance in the future after obtaining proper sanction
19. In this case, the cognizance of the offence under Section 3, punishable under Section 4 of the PMLA, has been taken against the respondents accused without obtaining previous sanction under Section 197(1) of CrPC. Therefore, the view taken by the High Court is correct. We must clarify that the effect of the impugned judgment is that the orders of the Special Court taking cognizance only as against the accused B.P.Acharya and Adityanath Das stand set aside. The order of cognizance against the other accused will remain unaffected. However, it will be open for the appellant to move the Special Court to take cognizance of the offence against the two respondents if a sanction under Section 197(1) of CrPC is granted in future. This liberty will be subject to legal and factual objections available to the respondents. Hence, the appeals must fail and are dismissed subject to what is observed above.
Party
Directorate of Enforcement …Appellant versus Bibhu Prasad Acharya, etc. …Respondents – Criminal Appeal Nos. 4314-4316 Of 2024 – 2024 INSC 843 – November 06, 2024.
