Prior sanction required to prosecute public servants for money laundering: SC

Posted 08 Nov 2024

2 min read

The Supreme Court (SC) ruled prior sanction mandatory to prosecute public servants

SC ruled that prior sanction is mandatory to prosecute public servants in money laundering cases, establishing a key procedural safeguard under the stringent Prevention of Money Laundering Act (PMLA) and adding a layer of accountability to PMLA prosecutions.

Key highlights of the Directorate of Enforcement Vs Bibhu Prasad Acharya case

Supremacy of CrPC: The court asserted that the PMLA doesn't supersede the requirement for prior sanction under Section 197 of CrPC.
- The provision corresponds to Section 218 of the Bhartiya Nagrik Suraksha Sanhita, 2023, which has replaced the CrPC with effect from July 1, 2024
Section 197 of CrPC: To protect the public servants from prosecutions & from being prosecuted for anything they do in the discharge of their duties.
Exception: Protection is not unqualified & public servants can be prosecuted with a previous sanction from the appropriate government.

Provision towards protection of Civil Servants

Articles 311 (1) and 311 (2): They provide Constitutional protection to Civil Servants
Public Servants (Inquiries) Act, 1850: Ensures inquiries are conducted fairly and transparently, upholding principles of natural justice within public administration.

About PMLA, 2002

About: Comprehensive law to prevent money-laundering and to provide for confiscation of property derived from money laundering.
Implementation authority: Enforcement Directorate (ED) and Financial Intelligence Unit – India (FIU-IND).
According to PMLA, money laundering is the process of making illegally-earned money appear legitimate. The PMLA defines money laundering as any activity that involves:
- Concealing the proceeds of crime; Possessing the proceeds of crime; Acquiring the proceeds of crime, etc.