Prior sanction for public servants is required before cognizance of money-laundering complaints linked to official duty.
Where a public servant is accused of money-laundering conduct reasonably connected with official duty, prior sanction is a condition precedent to cognizance by virtue of Section 65 of the Prevention of Money Laundering Act and the applicable criminal procedure law. The High Court found that the allegations were linked to the petitioner's official position, so Section 197 CrPC was attracted. Because sanction had not been obtained when cognizance was taken, the order was unsustainable and was set aside, with liberty to proceed afresh after obtaining the requisite sanction.
Issues: Whether the Special Judge could take cognizance of the money-laundering complaint against a public servant without previous sanction for prosecution, and whether the alleged acts had the requisite nexus with official duty.
Analysis: The complaint was directed against a person holding a public office at the relevant time. The governing test is whether the alleged offence was committed while acting or purporting to act in the discharge of official duty, and whether the alleged act bears a reasonable connection with that duty. Section 65 of the Prevention of Money Laundering Act, 2002 makes the Code of Criminal Procedure applicable to proceedings under the Act so far as there is no inconsistency, and the Supreme Court has held that Section 197 of the Code of Criminal Procedure, 1973 applies to a complaint under Section 44 of the Prevention of Money Laundering Act, 2002. Since the material allegations themselves were linked to the petitioner's official position, the requirement of prior sanction was attracted. The sanction had not been obtained when cognizance was taken.
Conclusion: Cognizance against the petitioner without prior sanction was unsustainable and was set aside; liberty was left to proceed afresh after production of the sanction order.
Final Conclusion: The revision succeeded on the sanction issue, and the impugned cognizance order was quashed insofar as it concerned the petitioner, with permission to revive proceedings in accordance with law after obtaining the requisite sanction.
Ratio Decidendi: Where the accused is a public servant and the alleged conduct is reasonably connected with official duty, prior sanction is a condition precedent to cognizance of a complaint under the Prevention of Money Laundering Act, 2002 by virtue of Section 65 and the applicable criminal procedure law.
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