Discharge stage scrutiny: sanction is not an automatic bar, and prima facie money-laundering material can sustain trial.

At the discharge stage, absence of sanction under Section 197 CrPC is not an automatic bar; sanction depends on whether the alleged act has a reasonable nexus with official duty, so discharge was not warranted on that ground. The challenge to the PMLA prosecution also failed because money laundering is treated as a continuing offence, and the court need only see whether the materials disclose a prima facie nexus with proceeds of crime, not conduct a mini-trial. Under Section 227 CrPC, the charge-sheet materials disclosed grave suspicion and sufficient ingredients to proceed, so the refusal to discharge was held legally sustainable.

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Issues: (i) Whether the plea of absence of sanction under Section 197(1) of the Code of Criminal Procedure, 1973 barred the prosecution at the stage of discharge. (ii) Whether the offence under the Prevention of Money Laundering Act, 2002 was liable to be rejected as impermissible on the ground of temporal application and want of material showing proceeds of crime. (iii) Whether the impugned order refusing discharge under Section 227 of the Code of Criminal Procedure, 1973 suffered from any illegality or impropriety.

Issue (i): Whether the plea of absence of sanction under Section 197(1) of the Code of Criminal Procedure, 1973 barred the prosecution at the stage of discharge.

Analysis: The governing test is whether the alleged act bears a reasonable nexus with official duty. Protection under Section 197(1) is not automatic and is not to be invoked mechanically at the threshold. The requirement of sanction may arise at a later stage and, in an appropriate case, depends upon the evidence that emerges during trial. The plea is therefore not a complete jurisdictional bar merely because it is raised before charge.

Conclusion: The plea of absence of sanction did not warrant discharge at the threshold and does not help the petitioners.

Issue (ii): Whether the offence under the Prevention of Money Laundering Act, 2002 was liable to be rejected as impermissible on the ground of temporal application and want of material showing proceeds of crime.

Analysis: The offence of money laundering is independent of the scheduled offence and is of continuing nature so long as the proceeds of crime are concealed, possessed, acquired, used, or projected as untainted property. The expression proceeds of crime is expansive and includes transformed property and equivalent value. At the stage of discharge, the Court is not to conduct a mini-trial or weigh probative value; it is sufficient if the materials disclose a prima facie nexus with the alleged laundering activity. Whether the property is genuinely acquired or otherwise is a matter for trial.

Conclusion: The temporal objection and the challenge to the existence of proceeds of crime did not justify discharge and are rejected.

Issue (iii): Whether the impugned order refusing discharge under Section 227 of the Code of Criminal Procedure, 1973 suffered from any illegality or impropriety.

Analysis: At the stage of Section 227, the Court is required to see whether the prosecution material, taken at face value, discloses the ingredients of the offence and gives rise to grave suspicion. The materials referred to in the charge-sheet were sufficient to bring the matter to trial, and the trial court did not exceed its jurisdiction or undertake any impermissible exercise. No patent illegality or impropriety is shown in the order refusing discharge.

Conclusion: The refusal to discharge was legally sustainable and called for no interference.

Final Conclusion: The revision failed because the petitioners did not establish any ground to prevent the trial from proceeding on the existing material, and the prosecution was allowed to continue.

Ratio Decidendi: At the stage of discharge, the Court must assume the prosecution material to be true and interfere only if the record clearly fails to disclose a prima facie offence; sanction under Section 197 is not an automatic threshold bar, and money-laundering liability may continue so long as proceeds of crime are dealt with in any proscribed manner.

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