The Supreme Court has reaffirmed that a purportedly invalid sanction cannot serve as a basis for discharging an accused in cases under the Prevention of Corruption Act, 1988 (PC Act).

A bench comprising Justice M.M. Sundresh and Justice Satish Chandra Sharma allowed appeals filed by the Karnataka Lokayukta Police, overturning a Karnataka High Court order that had discharged the accused due to an alleged lack of sanction. The High Court had also quashed a related money laundering case, which arose from the same corruption proceedings.

The Supreme Court observed that the High Court’s approach was “clearly contrary to law,” citing Section 19(3)(a) of the PC Act. The bench referred to earlier rulings, including State v. T. Venkatesh Murthy (2004), State of Madhya Pradesh v. Virender Kumar Tripathi (2009), and State of Bihar v. Rajmangal Ram (2014), which bar High Courts from interfering mid-trial on the ground of alleged invalidity of sanction.

Under Section 19(3)(a), interference on the basis of sanction validity is permissible only if it can be shown that a failure of justice has occurred. These precedents clarify that failure of justice can be determined only after the trial concludes, and not at the stage of charge framing.

In Virender Kumar Tripathi, the Court held that halting criminal proceedings mid-trial due to a defective sanction is inappropriate unless it can be demonstrated that it caused a failure of justice. The judgment emphasized that this determination can only be made once the trial has begun and evidence is presented. The Court explained:

“No order or sentence by a Special Judge shall be overturned on account of any error, omission, or irregularity in sanction unless a failure of justice has in fact resulted. At the stage of framing the charge, it cannot be ascertained whether a failure of justice has occurred. This can only be evaluated during trial once evidence is led.”

Rajmangal Ram similarly reiterated that the trial stage is the proper point for assessing any failure of justice arising from sanction issues.

Reinstatement of Money Laundering Proceedings

With the predicate offense under the PC Act restored, the Supreme Court also held that the quashing of the money laundering case under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA), 2002, is no longer valid. The Court clarified that all issues, including the validity of sanction, remain open for trial consideration. The Court did not rule on the broader question of whether PMLA proceedings can continue if the underlying PC Act case is subsequently quashed.

Considering the advanced age of the respondents, the Court exempted them from personal appearance unless directed by the trial court.

Related Case: Summons under PMLA Cannot Be Quashed Simply Because Accused Was Discharged in Predicate Offense – Supreme Court

Case: THE KARNATAKA LOKAYUKTHA POLICE v. LAKSHMAN RAO PESHVE