Section 197(1) CrPC Applicable To Complaint U/S 44(1)(B) PMLA: Supreme Court

The Supreme Court held that the provisions of Section 197(1) of the Criminal Procedure Code (CrPC) are applicable to a complaint under Section 44(1)(b) of the Prevention of Money Laundering Act, 2002 (PMLA).

The Court held thus in a criminal appeal preferred by the Enforcement Directorate (ED) against the judgment of the High Court by which it quashed the orders of taking cognizance against the accused persons.

The two-Judge Bench comprising Justice Abhay S. Oka and Justice Augustine George Masih observed, “Section 65 makes the provisions of the CrPC applicable to all proceedings under the PMLA, provided the same are not inconsistent with the provisions contained in the PMLA. The words ‘All other proceedings’ include a complaint under Section 44 (1)(b) of the PMLA. We have carefully perused the provisions of the PMLA. We do not find that there is any provision therein which is inconsistent with the provisions of Section 197(1) of CrPC. Considering the object of Section 197(1) of the CrPC, its applicability cannot be excluded unless there is any provision in the PMLA which is inconsistent with Section 197(1). No such provision has been pointed out to us. Therefore, we hold that the provisions of Section 197(1) of CrPC are applicable to a complaint under Section 44(1)(b) of the PMLA.”

Additional Solicitor General (ASG) S.V. Raju and Senior Advocate Sonia Mathur appeared for the appellant while Senior Advocate Kiran Suri appeared for the respondents.

In this case, the appellant/ED had filed complaints against the respondents and others under Section 44(1)(b) of PMLA. The complaint was for an offence under Section 3 of PMLA, which is punishable under Section 4. Both respondents were accused in the complaints and the Special Court took cognizance of the complaints and issued summons to the respondents and other accused persons.

Both of them filed writ petitions before the High Court challenging the cognizance taken by the Trial Court and inter alia prayed for quashing the complaints on the ground that both of them were public servants and, therefore, it was necessary to obtain prior sanction under sub-section (1) of Section 197 of CrPC. The High Court upheld the respondents' contentions and quashed the orders of taking cognizance passed by the Special Court on the complaints only as against the said respondents. Hence, the appellant was before the Apex Court.

The Supreme Court after hearing the arguments from both sides, noted, “Section 71 gives an overriding effect to the provisions of the PMLA notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Section 65 is a prior section which specifically makes the provisions of the CrPC applicable to PMLA, subject to the condition that only those provisions of the CrPC will apply which are not inconsistent with the provisions of the PMLA.”

The Court added that, when a particular provision of CrPC applies to proceedings under the PMLA by virtue of Section 65 of PMLA, Section 71(1) cannot override the provision of CrPC which applies to the PMLA.

“Once we hold that in view of Section 65 of the PMLA, Section 197(1) will apply to the provisions of the PMLA, Section 71 cannot be invoked to say that the provision of Section 197(1) of CrPC will not apply to the PMLA. A provision of Cr. P.C., made applicable to the PMLA by Section 65, will not be overridden by Section 71. Those provisions of CrPC which apply to the PMLA by virtue of Section 65 will continue to apply to the PMLA, notwithstanding Section 71”, it further said.

The Court elucidated that, if Section 71 is held applicable to such provisions of the CrPC, which apply to the PMLA by virtue of Section 65, such interpretation will render Section 65 otiose and no law can be interpreted in a manner which will render any of its provisions redundant.

“In this case, the cognizance of the offence under Section 3, punishable under Section 4 of the PMLA, has been taken against the respondents accused without obtaining previous sanction under Section 197(1) of CrPC. Therefore, the view taken by the High Court is correct. We must clarify that the effect of the impugned judgment is that the orders of the Special Court taking cognizance only as against the accused B.P.Acharya and Adityanath Das stand set aside. The order of cognizance against the other accused will remain unaffected”, it also said.

The Court however, clarified that it will be open for the appellant to move the Special Court to take cognizance of the offence against the respondents if a sanction under Section 197(1) of CrPC is granted in future and this liberty will be subject to legal and factual objections available to the respondents.

Accordingly, the Apex Court dismissed the appeals.

Cause Title- Directorate of Enforcement v. Bibhu Prasad Acharya, etc. (Neutral Citation: 2024 INSC 843)

Appearance:

Appellant: ASG Suryaprakash V Raju, Senior Advocate Sonia Mathur, AOR Mukesh Kumar Maroria, Advocates Arvind Kumar Sharma, Kanu Agarwal, Annam Venkatesh, and Zoheb Hussain.

Respondents: Senior Advocate Kiran Suri, AOR Satish Kumar, Advocates Abhaya Nath Das, Sunil Kumar Das, Vidushi Garg, and B.C. Bhatt.

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