Directorate of Enforcement Etc. v. Bibhu Prasad Acharya Etc. 2024 LiveLaw (SC) 670

The Apex Court clarifies that what are the requirement for prior sanction under Section 197 CrPC and whether they will be applicable in proceedings under PMLA and their alleged acts were connected to their official duties to warrant protection under Section 197 CrPC. The Facts of the case are as follows: 

• The Directorate of Enforcement (ED) filed a case under the PMLA involving alleged misconduct by two individuals: 
  • B.P. Acharya, Vice Chairman & Managing Director of APIIC. 
  • Adityanath Das, Principal Secretary of Andhra Pradesh. 
• The accusations pertained to: 
  • Alleged misuse of authority in land allotment and water allocation. 
• The trial court took cognizance of the offenses without prior sanction under Section 197 CrPC. 
• The High Court quashed the cognizance for Acharya and Das, holding that they were public servants and that prior sanction under Section 197 CrPC was required. 

• Whether B.P. Acharya and Adityanath Das qualified as public servants under Section 197 CrPC? 
• Whether the requirement for prior sanction under Section 197 CrPC was applicable in proceedings under PMLA? 
• Whether their alleged acts were connected to their official duties to warrant protection under Section 197 CrPC? 

• The Supreme Court upheld the High Court's decision, quashing the cognizance against Acharya and Das. 
• The Court observed that: 
  • Acharya qualified as a public servant since he was appointed as Vice Chairman & Managing Director of APIIC by the Andhra Pradesh government. 
  • Das was indisputably a public servant, being the Principal Secretary. 
  • Their actions were directly connected to the discharge of their official duties, thereby requiring prior sanction under Section 197(1) CrPC. 
• The Supreme Court reaffirmed the applicability of Section 197 CrPC to protect public servants under the PMLA. 
• Acts connected to official duties, even under PMLA, cannot be prosecuted without prior sanction. 
• The ruling reinforces the balance between accountability and protection of public servants in their official roles. 

• On Public Servant Status:
  • The Memorandum and Articles of Association of APIIC showed state control over appointments and removals, qualifying Acharya as a public servant.
• On Prior Sanction Requirement:
  • The alleged misconduct involved acts tied to their official roles, such as land allotment and water allocation.
  • Prior sanction was mandatory under Section 197 CrPC.
• On Applicability of CrPC to PMLA:
  • Section 65 of PMLA integrates CrPC provisions unless inconsistent.
  • Section 71 of PMLA does not override Section 197 CrPC, as no direct inconsistency exists.
• Protection against Misuse: 
  • The Court emphasized safeguarding public servants from unwarranted harassment in executing official duties.