The Enforcement Directorate (ED) has instructed all its units across India to seek prior sanction under Section 197(1) of the Criminal Procedure Code (CrPC) before filing prosecution complaints (charge sheets) in money laundering cases involving public servants. This directive follows a Supreme Court ruling in November 2024, which clarified that Section 197(1) applies to cases under the Prevention of Money Laundering Act (PMLA) as well. Section 197(1) of the CrPC mandates that no prosecution can proceed against a public servant for acts done during their official duties without the prior approval of the government.
The Supreme Court ruling emphasized that the objective of Section 197(1) is to protect public servants from frivolous prosecutions for actions carried out in the discharge of their official duties. The Court pointed out that this provision exists to ensure that public servants are not prosecuted for acts undertaken in good faith and within the scope of their functions. The ruling makes clear that the protection extends to money laundering cases under PMLA, requiring prior sanction before any prosecution against public servants.
In line with the Court's directive, the ED has begun the process of requesting prior sanction from the relevant ministries and departments for all cases involving public servants. This process has already started for ongoing investigations, including high-profile cases involving prominent political figures. The ED has instructed its investigating officers to seek the necessary sanctions before filing charge sheets, thereby ensuring compliance with the legal framework set out by the Supreme Court.
Before this ruling, the ED had argued that it was not required to seek prior sanction in cases where other agencies, such as the Central Bureau of Investigation (CBI), had already obtained it. However, following internal discussions and the Supreme Court’s decision, the ED now plans to request prior sanction in all relevant cases, irrespective of whether other agencies have obtained it. This new approach is aimed at avoiding legal challenges during trials and ensuring that all money laundering cases involving public servants follow due process.
The application of Section 197(1) to PMLA cases is significant, as it ensures that the legal process does not move forward in such cases without first securing the appropriate government approval. This provision aims to prevent the misuse of prosecutorial powers and ensures that public servants can carry out their duties without the constant threat of prosecution for actions taken in good faith. The Supreme Court’s ruling further clarifies the scope of this protection, ensuring that public servants in money laundering cases are also covered under this provision.
As of July 31, 2024, the ED had filed 7,083 cases under the PMLA, with more than 5,000 of these cases registered in the last decade. The agency’s workload has significantly increased since 2020, with approximately 800 to 1,000 PMLA cases being filed each year, compared to an average of 150 to 190 cases annually in previous years. The new directive requiring prior sanction for prosecutions involving public servants will be integrated into the ED’s standard operating procedures, impacting the agency’s future approach to high-profile money laundering investigations and prosecutions.