SC mandates prior sanction to prosecute public servants under PMLA: What this means, its implications

What is the prior sanction provision?

Section 197 of the Code of Criminal Procedure, 1973, (CrPC) bars courts from taking cognisance of offences alleged to have been committed by a judge, a magistrate, or a public servant who was “acting or purporting to act in the discharge of his official duty” while committing the alleged offence, unless prior or “previous” sanction has been given by the government. An identical requirement can be found under Section 218 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) as well.

This provision is meant to shield public servants from unnecessary prosecution. However, the explanation to the provision clarifies that “no sanction shall be required” when public servants are accused of certain crimes against women (such as rape, sexual harrassment, stalking, and voyeurism), and other serious crimes such as human trafficking.

Several rulings on the provision have held that the provision does not extend its protective cover to every act or omission of a public servant while in service. It applies only to those acts or omissions which are done by public servants while discharging their official duties. For instance, in the case of Devinder Singh v. State of Punjab (2016), the SC held that “Protection of sanction is an assurance to an honest and sincere officer to perform his duty honestly and to the best of his ability to further public duty. However, authority cannot be camouflaged to commit crime.”

What does the recent SC verdict say?

On November 6, the apex court held that Section 197(1) of the CrPC will apply to alleged offences under the Prevention of Money Laundering Act (PMLA) too. A Bench comprising Justices A S Oka and Augustine George Masih delivered the verdict in a case involving IAS officers Bibhu Prasad Acharya and Adityanath Das, both of whom are facing money laundering charges, in a case that also implicates former Andhra Pradesh Chief Minister Jagan Mohan Reddy.

In a short, 18-page decision, the SC essentially upheld an January 2019 order by the Telangana High Court which set aside the trial court’s order taking cognisance of the case. The challenge was on the ground that both of them were public servants and, therefore, it was necessary to obtain prior sanction under Section 197(1) of the CrPC before they could be prosecuted.

The SC noted that although there is no specific provision in the PMLA that states prior sanction is not required, it did not find “any provision therein which is inconsistent with the provisions of Section 197(1) of CrPC”. The Bench referred to Section 65 of PMLA which makes the provisions of the CrPC applicable to all proceedings under the PMLA, unless they are inconsistent with the PMLA provisions.

The SC also recorded that the accused were public servants, and that there was a connection between their duties and alleged criminal acts, thus satisfying both conditions for requirement of prior sanction under CrPC section 197(1).

The SC’s judgement has now been cited by public servants such as Congress MP and former finance minister P Chidambaram and former Delhi CM Arvind Kejriwal before the Delhi HC to challenge the cognisance taken by trial court of ED chargesheets in the absence of prior prosecution sanction by the central agency. In Chidambaram’s case the prosecution complaints against him were filed in 2018, and the trial court took cognisance in 2021.

Is prior sanction required in other kinds of cases?

Apart from the requirement under CrPC section 197(1), the Prevention of Corruption Act (PCA) also provides for the requirement of prior sanction to prosecute for offences alleged under PCA against public servants.

Section 19(1) of PCA contains a requirement for prior sanction from the government before the court can take cognizance of certain offenses against public officials such as accepting bribes (Section 7) or receving undue advantage without paying sufficient consideration in return (Section 11). This sanction, in most cases, must be obtained by the police or the investigating agency. Further, the public servant must be given an opportunity to be heard by the government before allowing the prosecution to go ahead.

In 2018, the PCA was amended to expand the situations where prior sanction is necessary to prosecute public officials. Under the new Section 17A of the PCA, any recommendation or decision made by a public official “in discharge of his official functions or duties” cannot be investigated without the “previous approval’ of the government. Following a split verdict in January, a case is pending at the SC to decide if this section applies to cases filed before Section 17A was introduced in 2018.

Notably, with former CM Arvind Kejriwal challenging the cognisance of an ED chargesheet in the liquor policy excise case before Delhi HC on grounds of absence of prior prosecution sanction, one of the arguments put forth has been that for the very same allegations against him, the Central Bureau of Investigation (CBI) had filed the chargesheet against him “only after applying for Sanction u/s 19 of the PC Act, which clearly shows that the facts of the present matter also required the sanction to be obtained.”

How will the requirement of prior sanction impact ED cases involving public servants?

While complaints and the investigation under PMLA will hold, cognisance of chargesheets accusing public servants of money laundering purportedly while in discharge of their duty, by the trial court can go away.

In effect, this can mean that an accused public servant, even if convicted by the trial court, can argue during an appeal that the offences alleged were in discharge of their duty, and that the trial took place without obtaining prior sanction from the government. If this argument is accepted, it can result in the court setting aside the conviction.

In P K Pradhan v. State of Sikkim (2001), the SC held that the argument that prior sanction under Section 197 was not obtained can be raised by the accused at any time during a trial, or even after conviction. However, the accused public servant must establish that his alleged act was in the course of the performance of his official duty.

As the SC held in the Bibhu Prasad Acharya judgement, “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.”