Digambar Kamat, Churchill Alemao v. Directorate of Enforcement

What happened

The applicants in Criminal Revision Applications No. 22/2024 and 625/2021 (F) are co-accused in a complaint under section 44(1)(b) of the Prevention of Money Laundering Act pending before the Special Court at Mapusa, Goa. An FIR was registered on 21 July 2015 as the predicate offence and an ECIR on 7 August 2015; the complaint was instituted on 12 July 2018; the Special Court took cognizance and issued summons by an order of 21 July 2018, and framed charges under section 3 of the PMLA on 22 July 2021. The applicants confined their challenge to cognizance on the ground that no prior sanction under section 197 of the Code of Criminal Procedure was obtained. They relied on Directorate of Enforcement v. Bibhu Prasad Acharya, (2025) 1 SCC 404. The Enforcement Directorate's counsel conceded that, on the date of the order taking cognizance, it had not obtained sanction under section 197.

Questions before the court

• Could the Special Court take cognizance of the PMLA complaint against public servants without previous sanction under section 197 of the Code of Criminal Procedure?

Why the court ruled this way

Sanction under section 197(1) is a condition precedent to cognizance where the accused is a public servant and the offence alleged was committed while acting or purporting to act in the discharge of official duty (paragraph 9). The Court recorded that, from the Directorate's own replies and arguments, the applicants were public servants at the time cognizance was taken, so section 197(1) was squarely attracted (paragraph 10). Whether section 197 applies to PMLA offences is no longer res integra after Bibhu Prasad Acharya, where the Supreme Court held that section 65 makes the Code applicable to the PMLA, that section 71 does not exclude it, and that cognizance without previous sanction cannot stand, with liberty to seek cognizance again after sanction (paragraph 10). The cognizance order could not be sustained as no previous sanction was obtained on the date (paragraph 11).

Controlling point

The orders taking cognizance and issuing process were unsustainable for want of sanction.

Order and next steps

The order taking cognizance and issuing process of 21 July 2018 was set aside. It is open to the Enforcement Directorate to move the Special Court at Mapusa to take cognizance if sanction under section 197(1) is granted in future, subject to legal and factual objections available to the applicants. Both revision applications were disposed of, miscellaneous applications disposed of, and the Registry was to waive office objections and register Criminal Revision Application No. 625/2021 (F).

Practical implications

An accused who held public office when cognizance was taken in a PMLA case should check the record for a previous sanction under section 197(1) and raise its absence at the first opportunity, relying on Bibhu Prasad Acharya.

Limits of this ruling

• The ruling concerns accused who were public servants whose acts were in the discharge of official duty; the Court did not decide the merits of the complaint and left fresh cognizance open after sanction.