Prior sanction for prosecuting public servants under PMLA was required before cognizance where acts arose from official duty.

Previous sanction under Section 197 CrPC was treated as mandatory before cognizance against public servants where the alleged acts were connected with decisions taken in discharge of official duties. The Prevention of Money-Laundering Act was read with Sections 44, 46, 65 and 71, and because it does not expressly exclude Section 197 and applies the CrPC where not inconsistent, the protection of prior sanction continued to operate. In the absence of a sanction order, the Special Court could not validly act on the complaints, and the cognizance orders were held unsustainable.

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Issues: Whether previous sanction under Section 197 of the Code of Criminal Procedure, 1973 was mandatory before the Special Court could take cognizance of offences under the Prevention of Money-Laundering Act, 2002 against the petitioners, who were public servants allegedly acting in discharge of official duties.

Analysis: The statutory scheme of the Prevention of Money-Laundering Act, 2002 was examined along with Sections 44, 46, 65 and 71. The Act authorises the Special Court to take cognizance on a complaint by the competent authority, applies the Code of Criminal Procedure, 1973 to proceedings before the Special Court so far as not inconsistent with the Act, and gives overriding effect only where inconsistency exists. The Act does not contain any provision expressly excluding the operation of Section 197 of the Code. Since the allegations against the petitioners were connected with decisions taken in their official capacity, the protection contemplated by Section 197 was held to apply. The absence of a sanction order meant that the complaints could not have been acted upon for cognizance.

Conclusion: Previous sanction under Section 197 of the Code of Criminal Procedure, 1973 was held to be mandatory and the cognizance orders were unsustainable for want of such sanction.

Ratio Decidendi: Where a special statute is silent on sanction and does not exclude the Code of Criminal Procedure, 1973, a public servant cannot be prosecuted for acts alleged to have been done in discharge of official duties without previous sanction under Section 197 before cognizance is taken.

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