No Pre-Cognizance Hearing for SFIO Accused: Punjab & Haryana HC Rules Section 223 BNSS Does Not Apply to Companies Act Special Courts

The Punjab and Haryana High Court held that the first proviso to Section 223 of the BNSS, mandating a pre-cognizance hearing for proposed accused in complaint cases, does not apply to SFIO complaints filed before Special Courts under the Companies Act, 2013.

Justice Subhas Mehla, sitting singly at the Punjab and Haryana High Court, dismissed a petition filed by Vivo India Private Limited seeking a pre-cognizance hearing before the Special Court at Gurugram in an SFIO fraud complaint. The court held that the Companies Act, 2013 constitutes a self-contained statutory scheme governing investigation, filing of complaint, taking of cognizance, and framing of charges, and that the first proviso to Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) — which introduced a mandatory pre-cognizance hearing for complaint cases — has no application to proceedings before Special Courts under the Companies Act. The ruling turns on the scope of the deeming fiction in Section 212(15) of the Companies Act, 2013, and the distinction between a Court functioning as a Magistrate under Chapter XVI of the BNSS and a Special Court functioning as a Court of Sessions under Section 438 of the Companies Act.

The Complaint and the Dismissed Application

The Serious Fraud Investigation Office (SFIO) filed a complaint on 26 August 2025 before the Special Court, District Gurugram, in a case styled Serious Fraud Investigation Office v. VIVO Mobile Communication Company Ltd. and 70 others, bearing COMA No. 24 of 2025. The complaint was purportedly under Sections 447, 7(5), 7(6), and 449 of the Companies Act, 2013. Vivo India Private Limited was arrayed as proposed accused no. 3.

On 11 February 2026, when the Special Court was hearing arguments on the point of cognizance from the Special Public Prosecutor and panel counsel for the SFIO, Vivo India appeared through counsel and filed an application under the first proviso to Section 223 of the BNSS. The application contended that the proceedings were governed by Chapter XVI of the BNSS as a complaint case, and that the court was therefore mandated to grant a pre-cognizance hearing to the proposed accused before taking cognizance.

The SFIO opposed the application. The Additional Sessions Judge, Gurugram, dismissed it by order dated 11 February 2026. Vivo India challenged that order before the High Court under Section 528 of the BNSS, also seeking to set aside all consequential proceedings.

The Legal Question

Section 223 of the BNSS, unlike its predecessor Section 220 of the Code of Criminal Procedure, contains a newly inserted first proviso mandating that a Magistrate, before taking cognizance of a complaint, shall afford a hearing to the proposed accused. The central question before the High Court was whether this requirement applies to complaints filed by the SFIO before Special Courts constituted under the Companies Act, 2013.

The petition raised a cluster of connected issues: whether an SFIO filing is a “complaint” or a “police report” for procedural purposes; the scope of the deeming fiction in Section 212(15) of the Companies Act; whether the Special Court functions as a Magistrate's court or as a Court of Sessions when taking original cognizance; and whether Supreme Court decisions on the PMLA's procedural framework translate to the Companies Act.

Petitioner's Case: SFIO Files a Complaint, Not a Police Report

Senior counsel for Vivo India argued that the SFIO filing is unambiguously a complaint in law. Section 439(2) of the Companies Act prohibits any court from taking cognizance of an offence under the Act except on a “complaint in writing” by the Registrar, a shareholder, a member, or a person authorised by the Central Government. The second proviso to Section 212(6) separately provides that the Special Court may take cognizance of offences investigated by the SFIO only upon a “complaint in writing” by the Director, SFIO, or an authorised officer. Section 436(1)(d) expressly distinguishes two modes of cognizance — upon a police report, or upon a complaint — confirming these are mutually exclusive categories.

The petitioner pointed to an internal contradiction in the impugned order: the Additional Sessions Judge had initially recorded the SFIO's filing as a “complaint” (registering it under the COMA category), but then treated the same filing as a “police report” when declining the pre-cognizance hearing. This inconsistency, counsel argued, rendered the order legally unsustainable.

On the scope of Section 212(15), senior counsel contended that the deeming fiction — treating the investigation report as a police report under Section 173 of the Cr.P.C. (now Section 193 of the BNSS) — is expressly confined to “framing of charges,” a stage posterior to cognizance. It cannot be extended to convert the character of proceedings at the cognizance stage from a complaint case into a police-report case. At cognizance, proceedings retain the character of a complaint case, attracting Section 223 of the BNSS.

Counsel further argued that Section 438 of the Companies Act expressly incorporates the Cr.P.C. (now the BNSS) for proceedings before Special Courts, making it impermissible to exclude Section 223. The petitioner drew an analogy with PMLA proceedings, where the Supreme Court in Yash Tuteja & Anr. v. Union of India & Ors., (2024) 8 SCC 465, Tarsem Lal v. Directorate of Enforcement, Jalandhar, (2024) 7 SCC 61, and Kushal Kumar Aggarwal v. Directorate of Enforcement, 2025 INSC 760, had held that complaint proceedings by the Directorate of Enforcement are governed by the procedural framework of the Cr.P.C./BNSS. Section 46 of the PMLA and Section 438 of the Companies Act were said to be pari materia.

On the Additional Sessions Judge's reliance on Sanjabij Tari v. Kishore S. Borcar & Anr., 2025 INSC 1158, the petitioner contended that judgment was decided in the narrow context of summary trials under Section 143 of the Negotiable Instruments Act, 1881. That rationale cannot be extended to prosecutions under Section 447 of the Companies Act, which prescribes punishment up to ten years' imprisonment and falls outside the summary trial mechanism in Section 436(3) of the Companies Act (which permits summary trial only for offences carrying imprisonment of up to three years).

SFIO's Defence: A Comprehensive Special Code Excludes Section 223

Senior counsel for the SFIO contended that the Companies Act, 2013 is a self-contained code providing a complete mechanism for investigation, cognizance, and trial, and that Sections 4(2) and 5 of the BNSS preserve the operation of special statutes against general procedure. The BNSS's general provisions yield to the specific scheme of the Act.

The SFIO's principal argument rested on Section 212(15): because the legislature has statutorily equated the SFIO investigation report with a police report, the entire proceeding must be treated as one based on a police report, not a private complaint. The proviso to Section 223 of the BNSS was said to apply only to private complaints where no prior investigation material exists. SFIO proceedings, instituted only after a detailed investigation by an officer with powers to record statements on oath and with powers of a civil court for discovery, are qualitatively different from a private complaint.

The SFIO also relied on the Special Court's constitution as a court of Sessions under Section 435(1)(a) for offences carrying two years or more imprisonment. Since the principal allegation under Section 447 carries a minimum of three years' imprisonment, the Special Court here functions as a Court of Sessions, and Section 213 of the BNSS (governing cognizance by a Court of Sessions) applies, not Section 223. Section 213 does not provide for any pre-cognizance hearing to the accused.

On the PMLA analogy, the SFIO argued that Kushal Kumar Aggarwal was confined to the PMLA's specific framework and cannot be generalised. The PMLA contains no provision equivalent to Section 212(15) of the Companies Act, which is a materially distinguishing feature.

How the Court Reasoned

Justice Mehla undertook a detailed examination of the Companies Act's statutory scheme across four sequential stages: investigation, filing of the complaint, taking of cognizance, and framing of charges. The court found that the Act makes specific and comprehensive provision for each stage, differentiating it sharply from the general procedure under the Cr.P.C. or the BNSS.

On investigation, the court noted that SFIO investigations are qualitatively distinct: they can be initiated only on Central Government order, are confined to specified companies, require compulsory association of directors and officers who must produce documents and give evidence on oath, confer civil court powers on the investigating officer for discovery and enforcement of attendance, make false statements separately punishable, and culminate in a report that goes to the Central Government or the SFIO Director — not directly to court. The investigating officer cannot himself file a complaint; separate authorisation from the Director or the Central Government is needed.

On filing and cognizance, the court confirmed that the Act mandates a “complaint in writing” — but treated this as a deliberate departure from ordinary procedure to ensure that prosecution commences only after the Central Government has examined the investigation report and directed initiation of proceedings. The use of the word “complaint” in the Act is not meant to import the full procedural apparatus of Chapter XVI of the BNSS; it is used to ensure that the Special Court's jurisdiction is triggered only after due governmental sanction, not by the investigating officer acting unilaterally.

On the deeming fiction in Section 212(15), the court accepted that the provision is expressly worded to apply “for framing of charges” — but held that this deeming fiction, read together with the overall statutory scheme, governs the character of the proceedings more broadly. The investigation report is placed before the Special Court along with the complaint, and the Special Court proceeds on both. The Act does not envisage any additional pre-cognizance stage; it does not require the presence of the accused or the complainant at the cognizance stage, and Section 439(3) does not even require the designated officer-complainant to be present unless the court directs otherwise.

On the Sessions Court point, Justice Mehla held that in cases involving offences punishable with two years or more imprisonment — including Section 447 offences — the Special Court consists of a Sessions Judge or Additional Sessions Judge under Section 435(1)(a) and is deemed to be a Court of Sessions under Section 438. Section 213 of the BNSS, which governs cognizance by a Court of Sessions and does not provide for a pre-cognizance hearing, therefore applies. Section 223 of the BNSS applies to Magistrates taking cognizance of complaints under Chapter XVI, not to a Court of Sessions.

The court also rejected the petitioner's challenge to the registration of the case under the COMA category. Administrative categorisation in the filing register cannot override the true legal character of proceedings as determined by the statutory framework. The use of the label “complaint” in the Act is a mechanism to ensure Central Government approval before prosecution, not a signal that Chapter XVI of the BNSS applies wholesale.

On the PMLA analogy, the court held that the Supreme Court's decisions in Yash Tuteja, Tarsem Lal, and Kushal Kumar Aggarwal do not lay down an inflexible rule that whenever a special enactment incorporates the Cr.P.C./BNSS, the entirety of Chapter XVI must apply. Those judgments were decided in the specific context of the PMLA, which contains no provision equivalent to Section 212(15) of the Companies Act. That distinction is material.

On Sanjabij Tari, the court agreed with the broader principle the Supreme Court articulated: general procedural provisions of the BNSS cannot be applied in a manner that defeats the special statutory framework governing prosecutions under special enactments. Justice Mehla held that this principle applies to Companies Act prosecutions as well, given that the legislature has consciously enacted a separate investigative and prosecutorial mechanism through the SFIO, complete with a deeming fiction for the investigation report.

The court's conclusion was stated plainly: “prosecution complaints instituted by the SFIO pursuant to investigation under Section 212 of the Act, 2013 are not governed by the proviso to Section 223 of the BNSS, and the proposed accused have no vested right to claim a pre-cognizance hearing before the Special Court.”

Order

Justice Subhas Mehla dismissed CRM-M-10158-2026 on 7 July 2026. The impugned order dated 11 February 2026 passed by the Additional Sessions Judge, Gurugram, rejecting Vivo India's application for a pre-cognizance hearing, was upheld. The court found no illegality, perversity, or jurisdictional error in the impugned order warranting interference under Section 528 of the BNSS. All pending miscellaneous applications were disposed of.