Previous sanction required for cognizance against public servants in PMLA proceedings; absence of sanction vitiates the order.

Where a public servant is alleged to have acted in discharge of official duty, previous sanction is a mandatory condition precedent to cognizance, and the Special Court could not sustain cognizance without it. The complaint concerned PMLA proceedings, and the court applied the settled principle that Section 65 of the PMLA imports the CrPC where not inconsistent, while Section 71 does not displace Section 197 once it is attracted. On that basis, Section 197 applied to the PMLA complaint, the cognizance and process orders were quashed, and fresh cognizance was left open only if valid sanction is later obtained.

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Issues: (i) Whether previous sanction under Section 197 of the Code of Criminal Procedure, 1973 was a condition precedent for the Special Court to take cognizance against the applicants in the PMLA complaint. (ii) Whether the provisions of Section 197 of the Code of Criminal Procedure, 1973 apply to proceedings under the Prevention of Money Laundering Act, 2000.

Issue (i): Whether previous sanction under Section 197 of the Code of Criminal Procedure, 1973 was a condition precedent for the Special Court to take cognizance against the applicants in the PMLA complaint.

Analysis: The applicants were public servants at the relevant time, and the complaint alleged offences said to have been committed while acting or purporting to act in discharge of official duty. In that situation, previous sanction is required before a court can take cognizance. It was also undisputed that no such sanction had been obtained when the cognizance order was passed.

Conclusion: Yes. The cognizance order could not be sustained in the absence of previous sanction.

Issue (ii): Whether the provisions of Section 197 of the Code of Criminal Procedure, 1973 apply to proceedings under the Prevention of Money Laundering Act, 2000.

Analysis: The governing principle was treated as settled by the Supreme Court, which held that Section 65 of the PMLA makes the Criminal Procedure Code applicable to PMLA proceedings where not inconsistent, and Section 71 does not override Section 197 once it is attracted through Section 65. On that basis, the sanction requirement applies to cognizance under PMLA.

Conclusion: Yes. Section 197 applies to PMLA proceedings and the absence of sanction vitiated the cognizance order.

Final Conclusion: The revision applications succeeded, the cognizance and process orders were quashed, and the matter was left open for any future cognizance only if valid sanction is subsequently obtained.

Ratio Decidendi: Where the accused is a public servant alleged to have acted in discharge of official duty, previous sanction is a mandatory condition precedent to cognizance, and that requirement applies to PMLA proceedings through Section 65 of the PMLA notwithstanding the overriding clause in Section 71.

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