Allowed

Anil Tuteja v. Directorate of Enforcement

Chhattisgarh HC1 Apr 2025CRR/246/2025

Case brief

AI extract

What is this about?

Revision by a former IAS officer challenging cognizance taken under Sections 3 and 4 PMLA without prior sanction under Section 197(1) CrPC. Following the Supreme Court's decision in Bibhu Prasad Acharya, holding that sanction is mandatory for public servants, and noting sanction was absent on the date of cognizance, the High Court set aside the cognizance order with liberty to seek cognizance afre

What did the court decide?

Order dated 05/10/2024 taking cognizance against petitioner set aside; ED permitted to seek cognizance afresh before trial court upon production of prosecution sanction.

Anil Tuteja Vs Directorate of Enforcement — Money Laundering | Chhattisgarh HC (2025)

2025:CGHC:15512

AFR

HIGH COURT OF CHHATTISGARH AT BILASPUR

¶5

CRR No. 246 of 2025

¶6

1 - Anil Tuteja S/o Late H. L. Tuteja Aged About 61 Years R/o House No. 35/1396, Beside Farishta Nursing Home, Katora Talab, Civil Lines, Raipur (C.G.) ( Details Wrongly Mentioned In Certified Copy Of Impugned Order Annexure A/1 With Other Co-Accused).

¶7

...Applicant(s)

¶8

versus

¶9

1 - Directorate Of Enforcement Through Assistant Director, E.D., Raipur Zonal Office, Raipur, District- Raipur, C.G. (Details Wrongly Mentioned As 039assistant Director Pmla, Directorate Of Enforcement, Raipur, Zonal Office, Raipur, C.G.039 In Certified Copy Of Impgned Order Annexure A/1)

¶10

... Respondent(s)

¶11

For Applicant(s) : Mr. Saurabh Dangi, Advocate For Respondent(s) : Dr. Saurabh Kumar Pandey, Advocate

¶12

Hon’ble Shri Justice Arvind Kumar Verma, Judge

¶13

Order on Board

¶14

02/04/2025

¶15

The instant revision has been filed under Section 438 read with Section 422 BNSS, 2023 against the order dated 05/10/2024 passed by the learned Special Judge (PMLA), Raipur, C.G.

¶16

¶17

whereby the cognizance has been taken in prosecution complaint dated 19/06/2024 filed in ECIR/RPZO/04/2024 dated 11/04/2024 against the petitioner under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002.

¶18

The Petitioner is a retired officer of the Indian Administrative Services with a distinguished and unblemished service record. He retired as the Joint Secretary in Department of Commerce and Industry, Chhattisgarh in May, 2023. The Petitioner is a well reputed individual having deep roots in the society and resides in Raipur along with his wife and two children. The Petitioner does not have any criminal antecedents. In the instant case, it is pertinent to note that at the time of passing the Impugned Order (i.e., on 05.10.2024) where cognizance of the offence of money laundering was taken, no sanction u/s 197(1) CrPC was obtained by the Respondent/ED for prosecution of the Petitioner herein, despite the Petitioner being a Public Servant at the time of the commission of the alleged offence and despite the mandatory requirement for obtaining such a sanction in terms of Section 197(1) CrPC read with Section 65 PMLA. Pertinently, even as on date, to the best of the Petitioner's knowledge, no sanction u/s 197(1) CrPC has been obtained by the Respondent/ED for prosecution of the Petitioner. Based upon a prosecution Complaint filed by the Income Tax Department bearing Ct. Case. No. 1183/2022 u/s 276(C)/277/278/278E IT Act r/w Sec. 120-B/191/199/200/204

¶19

¶20

IPC ("IT Complaint") the ED registered an ECIR bearing No. ECIR/RPZO/11/2022 ("ECIR 11") treating the offence u/s 120B IPC as the standalone scheduled offence. The ECIR 11 alleged existence of a liquor scam in the State of Chhattisgarh that allegedly existed between 2019-2022. On 04.07.2023, the Respondent/ED filed a Prosecution Complaint u/s 44 r/w Sec. 45 of the Prevention of Money Laundering Act, 2002 ("PMLA") in relation to ECIR 11. Notably, the Petitioner was not arraigned s an accused by the Respondent/ED despite having raised several allegations against him. On 17.01.2024, the ACB, Raipur registered the FIR bearing No. 04/2024 ("Chhattisgarh FIR" / "Scheduled Offence FIR") at the behest of the Respondent/ED inter alia against the Petitioner based upon a letter dated 11.07.2023 sent during the course of an illegal investigation by the ED in absence of any Scheduled Offence. Pertinently, on 18.01.2024, the ACB, Raipur had sought for and was granted sanction u/s 17A of the Prevention of Corruption Act, 1988 on 22.02.2024 for investigation qua the Petitioner herein in the Scheduled Offence FIR. Copy of the FIR bearing No. 04/2024 registered by the ACB, Raipur is annexed herewith as Annexure A/2. Copy of letter sent by the Director General, EOW, to the Secretary, Chhattisgarh General Administration, for prior approval under Section 17A of the Prevention of Corruption Act, regarding the investigation against inter-alia the Petitioner is annexed herewith as Annexure A/3 . Copy of Prior

¶21

¶22

approval received under Section 17A of the Prevention of Corruption Act for investigation against inter-alia the Petitioner is annexed herewith as Annexure A/4. On 08.04.2024, the Hon'ble Supreme Court was pleased to quash the Prosecution Complaint dated 04.07.2023 filed by the Respondent/ED in ECIR 11, along with the entire material and investigation conducted by the ED therein, with a finding that no scheduled offence is made out and there were no proceeds of crime in relation to ECIR 11 and the Prosecution Complaint filed therein. Copy of the Order dated 08.04.2024 passed by the Hon'ble Supreme Court is annexed herewith as Annexure A/5. On 11.04.2024, within 3 days of quashing of the ECIR, a subsequent ECIR bearing No. ECIR/RPZO/04/2024 ("Subject ECIR") was registered by the ED on the same facts, allegations and underlying material as the ECIR 11. The Subject ECIRis predicated upon the offences in the Chhattisgarh FIR as the alleged scheduled offences. Copy of ECIR bearing No. 04/2024 dated 11.04.2024 is annexed herewith as Annexure A/6 . On 20.04.2024, the Petitioner was arrested in the utmost mala fide and illegal manner by the Respondent/ED after the Petitioner had appeared before the ACB, Raipur pursuant to summons in relation to the Chhattisgarh FIR.

¶23

3. Learned counsel for the petitioner would contend that:-

¶24

(a) at the time of passing the order on 05.10.2024 where cognizance of the offence of money laundering was taken, no

¶25

¶26

sanction u/s 197(1) CrPC or u/s 218(1) BNSS was obtained by the Respondent/ED for prosecution of the Petitioner, despite the fact that the petitioner was a Public Servant at the time of the commission of the alleged offence and despite the mandatory requirement for obtaining such a sanction in terms of Section 197(1) CrPC read with Section 65 PMLA. He would next contend that even as on date, no sanction u/s 218 BNSS has been obtained by the Respondent/ED for prosecution of the Petitioner. He would next contend that Section 218(1) BNSS having been obtained by the Respondent/ED for prosecution of the Petitioner herein, despite the fact that the Petitioner was a public servant at the time the alleged commission of the alleged offence.

¶27

(b) He would next contend that a sanction from the concerned government, as envisaged under Section 197 Cr.P.C. or Section 218 BNSS, is a necessary precondition for a Court to take cognizance of any offence alleged to have been committed by a public servant. Without such sanction from the concerned government, the competent Court does not have the jurisdiction to take further proceedings in the matter, including taking cognizance of the alleged offences. He would next contend that the Hon'ble Supreme Court has recently held in the case of Enforcement Directorate v. Bibhu Prasad Acharya, 2024 SCC OnLine SC 3181 and declared the law that the Sanction under Section 197(1), CrPC for prosecution of inter alia a Public Servant must have been obtained prior to taking cognizance of the offence of money laundering u/s 3 of the PMLA as well.

¶28

(c) He would also contend that by virtue of the above position of law as settled and clarified by the Hon'ble Supreme Court in Bibhu Prasad Acharya (supra) , it is therefore abundantly clear that the provisions of Section 197(1), CrPC are applicable to a Complaint u/s 44 of the PMLA. Thus, the previous Sanction u/s 197(1) CrPC is a pre- requisite for prosecution of a Public Servant, i.e., the Petitioner herein in the Subject Case, for the offence u/s 3, PMLA, and cognizance cannot be taken in the absence thereof. He would next contend that in the Prosecution Complaint dated 28.06.2024, the Respondent/ ED has alleged that the Petitioner, who was a public servant (a promote IAS Officer) at the time of commission of the alleged offences, in his capacity as an IAS Officer and being the Joint Secretary of the Department of Commerce and Industry at the

¶29

¶30

relevant time, was allegedly the most powerful bureaucrat in the State of Chhattisgarh allegedly wielding enough power to control the police, mining, environment, liquor department including by allegedly placing individuals in key position. It was also alleged that the Petitioner was chief architect of the alleged liquor scam and by virtue of his office and close proximity with the erstwhile Chief Minister, controlled postings of all IAS-IPS and other government officials. It was also alleged that he placed one Sh. Arun Pati Tripathi as the MD of Chhattisgarh State Marketing Corporation Limited ("CSMCL"). It has been alleged that the Petitioner was doing large scale corruption and misused his, position. Therefore, as per the allegations levelled by the Respondent/ED the Petitioner herein was a public servant removable from his office by or with the Government's sanction, and the alleged offence is alleged to have been committed while holding such public office and acting or purporting to act in the discharge of his duties as the then the Joint Secretary of the Department of Commerce and Industry. Further, Section 65 PMLA makes all provisions of the CrPC applicable to proceedings under the PMLA, including Section 197 CrPC. Thus, the protection under Section 197(1), CrPC extends to the Petitioner and the Ld. Special Judge erred in taking cognizance of the offence u/s 3 r/w Section 4 of the PMLA as against the Petitioner without the Respondent/ED having obtained previous sanction u/s 197(1), CrPC.

¶31

(d) He would next contend that that Ld. Special Judge erroneously passed the Impugned Order thereby taking cognizance of the offence u/s 3 r/w Section 4, PMLA without any prior Sanction having been obtained by the Respondent/ED for prosecution of the alleged offence qua the Petitioner, being a Public Servant at the time of alleged commission of the alleged offence. It is settled law that the question of sanction u/s 197(1), CrPC can be raised at any time after the cognizance, whether that be immediately after cognizance or framing of charge or even at the time of conclusion of trial and after conviction as well. He placed his reliance in the law laid down by the Supreme Court in the matters of Prakash Singh Badal & Anr. v. State of Punjab & Ors., (2007) 1 SCC 1; P.K. Pradhan v. State of Sikkim, (2001) 6 SCC 704; Bibhu Prasad Acharya, (supra) . Hence, the impugned order taking cognizance of the offence of money laundering u/s 3 r/w 4 PMLA, as alleged in the Prosecution

¶32

¶33

Complaint dated 19.06.2024 without prosecution sanction taking cognizance by the special judge is per se illegal, therefore, the same may be set aside with respect to the petitioner.

¶34

Per contra, learned counsel for the Respondent would contend that:-

¶35

(A). In the instant case the prosecution complaint against the petitioner was filed on 19/06/2024 before the Special PMLA Court and cognizance was taken on 05/10/2024 by the learned trial Court.

¶36

(B). He would next contend that at the time of taking cognizance by the learned trial Court there was no requirement for taking prosecution sanction under Section 197 (1) of Cr.P.C. He placed his reliance in the law laid down by this Court in the matter of Vinod Maleshwar Vs. The Enforcement Directorate, Raipur {CRR No.816 of 2018, decided on 17/06/2022} wherein it has been laid down that if the applicants are made accused in the money-laundering case, there is no illegality and also there is no any bar under any law for their impleadment in money laundering case.

¶37

(C) He would lastly contend that The accused Anil Tuteja has committed the offence of money laundering as defined under section 3 of PMLA, 2002 punishable under section 4 of PMLA, 2002 and he was arrested by the Directorate of Enforcement, Raipur Zonal Office on 20.04.2024. The prosecution complaint

¶38

¶39

against him was filed on 19.06.2024 before the Hon'ble Special Court (PMLA) Raipur. On the basis of material available, the Ld. trial Court took cognizance of the offence against the present applicants on 05.10.2024. The sanction for prosecution from the competent authority under Section 197 Cr.P.C. was not required at that time in view of the judgment of Chhattisgarh High Court in the case of Vinod Malewar Vs. The Enforcement Directorate, Raipur in CRR No. 816 of 2018 . And at that time, it was not a mandatory requirement to be complied in the cases of PMLA. It is further submitted that after the mandate of the Hon'ble Supreme Court in the case of Directorate of Enforcement Vs. Bibhu Prasad Acharya, 2024 SCC OnLine SC 3181, approval of the competent authority has been taken, and the same has been received to prosecute Anil Tuteja for the offence of money laundering under Section 3 read with Section 4 of the PMLA vide letter dated 14.02.2025 from the office of the Additional secretary, Chhattisgarh Government. The Order of Prosecution Sanction has been duly submitted before the Hon'ble Special Court on 18.02.2025 for making it a part of the record.

¶40

I have heard learned counsel for the parties and perused the documents.

¶41

¶42

The questions fall for consideration before this Court are (i) whether the offence is committed by a public servant?; (ii) whether petitioner’s alleged act reasonably connect with the discharge of official duty?

¶43

The term public servant has been defined in Section 2 (28) of the Bharitya Nyay Sanhita, and it is an admitted fact that the petitioner was working as Joint Secretary of the Department of Commerce and Industry in the State of Chhattisgarh and he is in the service of Central Government, therefore, he is public servant as defined under Section 2 (28) of the BNS.

¶44

Now coming to the second question that whether petitioner’s alleged act reasonably connect with the discharge of official duty?

¶45

Section 197 of the Cr.P.C. is reproduced hereinbelow:-

¶46

197 Prosecution of Judges and public servants.- (1) When any person who is or was a Judge or Magistrate or a public servant not removable from his office save by or with the sanction of the Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction¹ [save as

¶47

¶48

otherwise provided in the Lokpal and Lokayuktas Act, 2013

¶49

(a) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of the Union, of the Central Government;

¶50

(b) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of a State, of the State Government:

¶51

A bare perusal of Section 197 Cr.P.C. shows that the essential conditions must be satisfied for the appreciation of Section 197 Cr.P.C. i.e.; (1) Offence mention therein must be committed by a public servant.; (2) The protection is available only when the alleged act done by the public servant is reasonably connected with the discharge of his official duty.

¶52

Therefore, from the above reading, it is crystal clear there must be connection between official duty with the alleged offence. Section 197 Cr.P.C. restrict its scope of operation to only those acts or actions which are done by a public servant in discharge of official duty.

¶53

¶54

The Supreme Court in Enforcement Directorate v. Bibhu

¶55

Prasad Acharya, 2024 SCC OnLine SC 3181 has held thus in paras 17, 18 & 19 which are reproduced hereinbelow:-

¶56

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.

¶57

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

¶58

¶59

with the provisions of the PMLA. Therefore, when a particular provision of CrPC applies to proceedings under the PMLA by virtue of Section 65 of the 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. 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. No law can be interpreted in a manner which will render any of its provisions redundant.

¶60

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.

¶61

¶62

Acharya and Adityanath Das stand set aside. The order of cognizance against the other accused will remain unaffected. However, it will be open for the appellant to move the Special Court to take cognizance of the offence against the two respondents if a sanction under Section 197(1) of CrPC is granted in future. This liberty will be subject to legal and factual objections available to the respondents. Hence, the appeals must fail and are dismissed subject to what is observed.

¶63

Since Respondent/ ED has alleged that the Petitioner, who was the Joint Secretary of the Department of Commerce and Industry at the time of commission of the alleged offences. The alleged offence is alleged to have been committed while acting or purporting to act in the discharge of his duties as Joint Secretary of the Department of Commerce and Industry. Therefore, there is official nexus in doing the said act.

¶64

It is also pertinent to mention here that during the course of argument learned counsel for the Respondent has contended that the ED has obtained sanction of prosecution under Section 197 (1) of Cr.P.C. (Section 218 of B.N.S.S., 2023) only on 14/02/2025 whereas on the date of filing of prosecution complaint the same was not obtained, therefore, ED is given liberty to take recourse to the concerned Court for taking cognizance against the applicant afresh. Therefore, the ED knows very well that in this case

¶65

¶66

prosecution sanction is mandatory to prosecute the petitioner. It is crystal clear that on the date of taking cognizance there was no prosecution sanction obtained by the ED and without posecution sanction learned Special Judge PMLA, Raipur has taken cognizance on 05.10.2024 against the petitioner which is illegal and bad in law and it deserves to be set aside.

¶67

Accordingly, the order dated 05/10/2024 passed by the learned Special Judge (PMLA) Raipur whereby the cognizance has been taken in Prosecution Complaint dated 19/06/2024 sine qua to the petitioner is set aside. However, the respondent/ ED is granted liberty to take recourse to the concerned Trial Court for taking cognizance afresh against the petitioner. And, the learned Trial Court is directed to examine the sanction order produced by the respondent/ED before taking cognizance.

¶68

As a result, the instant criminal revision stands allowed to the extent indicated above.

¶69

Sd/-

¶70

(Arvind Kumar Verma) JUDGE

¶71

Madhurima

Anil Tuteja v. Directorate of Enforcement

Case brief

What is this about?

What did the court decide?

Anil Tuteja v. Directorate of Enforcement

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Jaswant Singh Vs State of Chhattisgarh

Ram Kumar Bharia Vs State of Chhattisgarh

A Vs State of Chhattisgarh

Smt. Sunita Bai Vs State of Chhattisgarh

Domsingh @ Paklu Vs State of Chhattisgarh

Naveen Bajaj Vs State of Chhattisgarh