A costly oversight? Supreme Court's judgment in Bibhu Prasad Acharya

Fīat iūstitia ruat cælum (Let justice be done though the heavens fall) is one of the salutary principles around which the entire legal edifice revolves. Everyone is equal in the eyes of law, irrespective of how mighty a person may be. When a crime is committed and the investigation machinery is set in motion, the sole objective is to discover the truth as to whether any offence has been committed, and if so by whom.

Penal substantive law does not discriminate on the basis of the position held by the accused at the time of commission of the offence. What matters is that actus reus and mens rea for any given offence exists. The more serious or heinous the offence committed, the graver the punishment. On the other hand, under procedural laws, there are certain restrictions on the power of courts in Chapter XV in Sections 215-222 in the Bhartiya Nagarik Suraksha Sanhita (BNSS), 2023 [Chapter XIV in sections 195 to 199 of the Code of Criminal Procedure (CrPC), 1973].

One of the restrictions around which the judgment of the Supreme Court in Directorate of Enforcement v. Bibhu Prasad Acharya revolves is Section 218 of BNSS, 2023 (S. 197 of CrPC), which restrains the court from taking cognizance of offences committed by a public servant who is not removable from office save by sanction of the government.

The Court in Bibhu Prasad Acharya upheld the quashing of a money laundering case against former a Indian Administrative Service (IAS) officer on the ground that no sanction had been secured by the Enforcement Directorate (ED) to prosecute him under Section 197 of CrPC. It was held that prosecuting public servants without the required sanction violates procedural propriety. The Court emphasised that a sanction u/s 197 of CrPC is necessary in Prevention of Money Laundering Act (PMLA) cases involving public servants, if the alleged offence is connected to their official duties.

For the said protection to be available to the public servant, two conditions must be satisfied. One, the accused cannot be removed from office without the previous sanction of the appropriate government and, secondly, the alleged offence should have been committed in discharge of his official duties. The requirement of sanction is to protect the public servant from vexatious prosecution when they are discharging official duties, as held in General Officer Commanding vs. CBI.

The judgment of Bibhu Prasad Acharya has been delivered in a case under the PMLA, which is a special law which is a complete code in itself. However, the CrPC (now BNSS) is still applicable in PMLA cases, by virtue of Section 65 of PMLA. The provisions of PMLA kick in with the commission of a predicate offence, which is a fundamental requirement. In Bibhu Prasad Acharya, the allegation revolves around allotment of government land de hors the statutory requirements.

While delivering the judgment, the Court did not take into consideration the fact that a case under PMLA can succeed only if the predicate case results in the conviction of at least one accused, and allegations and capacity of accused (in the predicate case) are such that the predicate agency is required to obtain previous sanction for prosecuting the public servant accused. Would it not amount to a travesty of justice and a vexatious exercise if two separate prosecution agencies have to obtain sanction, especially when the money laundering case emanates from the predicate case? Furthermore, the sanctioning authority would also be essentially the same and would have already applied its mind in granting sanction for the predicate case.

There will always be an inextricable link between the predicate offence and the money laundering case, as has been observed by the Delhi High Court in Prakash Industries and Gagandeep Singh. The Court in these cases observed that there ought to be a prerequisite relation between the commission of a scheduled offence under the PMLA and the subsequent offence of money laundering. Hence, requiring sanction from the same authority for prosecuting a public servant for acts constituting the process or activity of money laundering - acts which are highly unlikely to occur in the discharge of official duties - by both the predicate agency and the ED, would result in unnecessary duplication of efforts.

In Sambhoo Nath Misra v. State Of UP and Ors, while dealing with the question as to whether a public servant who allegedly commits the offence of fabrication of records or misappropriation of public funds can be said to have acted in the discharge of his official duties, the apex court observed as under,

“…It is not the official duty of the public servant to fabricate the false records and misappropriate the public funds etc. in furtherance of or in the discharge of his official duties. The official capacity only enables him to fabricate the record or misappropriate the public fund etc. It does not mean that it is integrally connected or inseparably interlinked with the crime committed in the course of the same transaction, as was believed by the learned Judge.”

It also observed,

“…performance of official duty under colour of public authority cannot be camouflaged to commit crime. Public duty may provide him an opportunity to commit crime. The Court, to proceed further in the trial or the enquiry, as the case may be, applies its mind and records finding that the crime and the official duty are not integrally connected.”

Therefore, apart from the two prerequisites under Section 197 CrPC, there is another facet to Section 197 hitherto untouched by Bibhu Prasad Acharya: certain acts/illegal omissions which cannot be done in exercise of official duties.

In Bibhu Prasad Acharya, the Court discussed the PMLA case as well as Section 197 of CrPC, without unambiguously identifying the scheduled offence from which money laundering case had emanated. The allegations in the predicate case and the PMLA case, or the process or activity undertaken by the accused with respect to the proceeds of crime (generation, concealment, acquisition, use, possession, claim etc) have not been discussed. In holding that Section 197 CrPC applies to proceedings under the PMLA, the Court has discussed only Sections 65 and 71 of the PMLA, without examining how any process or activity in relation to the proceeds of crime could be undertaken in the discharge of official duties by a public servant, in order for it to constitute the offence of money laundering.

The prosecution had cited Parkash Singh Badal v. State of Punjab and argued that money laundering cannot be committed by the respondent in discharge of official duties. In para 15 of the judgment, the Court has considered the act of respondent no 1 to allot land measuring 250 acres to M/s Indu Tech Zone and the act of respondent no 2 of allocation of additional 10 lakh litre of water, as  ‘acts done in discharge of official duty’. However, the allegation was that through the said acts, the accused knowingly assisted in creation of proceeds of crime and projection of the same as untainted property. The Court has overlooked the question as to how any process or activity of money laundering as defined in Section 3 of PMLA can be committed by the accused in the ‘discharge of official duties’. If the test laid down in Sambhoo Nath Mishra is applied to present case, the acts of the accused which led to infraction of PMLA cannot be said to be done in discharge of official duties. Further, the legislative intent behind enacting PMLA was also not considered.

Although the judgment delivered by the Supreme Court in Bibhu Prasad Acharya is undoubtedly a landmark one in many respects, it leaves several critical questions unanswered. In the pursuit of justice, such ambiguities-particularly in matters as complex and sensitive as money laundering -represent a regression rather than progress. It is, therefore, imperative to provide greater clarity to ensure that one of the country’s premier investigative agencies is equipped to discharge its functions effectively and without impediment.

Mayank Makhija is an Assistant Legal Advisor & Special Public Prosecutor for the Directorate of Enforcement.