The Supreme Court on Monday underscored the severe implications of money laundering by public officials on governance and public trust as it rejected a plea from former Gujarat IAS officer Pradeep Sharma, who is under investigation by the Enforcement Directorate. The bench, comprising Justices Vikram Nath and P B Varale, emphasized that such acts contribute to economic instability and systemic vulnerabilities in financial institutions.
Sharma, facing multiple corruption charges filed by Gujarat Police, had sought a preliminary inquiry into his cases and dismissal of the charges at the pre-trial stage. However, the top court dismissed these requests, stating the importance of a thorough trial to explore the full scope of the allegations.
“Money laundering has far-reaching consequences, not only in terms of individual acts of corruption but also in causing significant loss to the public exchequer,” the court noted in its judgment. It further elaborated that the Prevention of Money Laundering Act (PMLA) was specifically enacted to prevent such economic offences and to ensure that the proceeds of crime do not undermine the financial system.
Justice Vikram Nath, authoring the verdict, highlighted the gravity of the allegations against Sharma, which include financial misconduct and misuse of his official position to engage in money laundering activities. The court stressed the necessity of allowing the trial to proceed to ensure comprehensive adjudication of the complex financial transactions and involved parties.
The Supreme Court also addressed the appellant’s request to halt all proceedings at a preliminary stage, clarifying that such a move would prevent a full examination of the extensive evidence and would be contrary to the principles governing money laundering prosecutions. “Discharging the appellant at this stage would be premature and contrary to the principles governing the prosecution in money laundering cases,” the bench stated.
On the matter of Sharma’s plea for a preliminary inquiry, the court observed that the allegations pertain to cognizable offences related to abuse of official position and corruption. It ruled that there is no legal necessity for a preliminary inquiry before registering an FIR in such cases and dismissed the notion that FIRs against him were filed with an ulterior motive, a claim that should rather be assessed during the trial.
The verdict concluded by affirming that Sharma has adequate legal remedies available, including the right to challenge frivolous FIRs, apply for bail, and contest any illegal actions by the investigating authorities. The court firmly stated that it could not issue directives that would contravene the established legal framework or result in judicial overreach.
