PMLA Cognizance Without Hearing Accused Is Void, Supreme Court Holds Under BNSS Section 223

A Division Bench sets aside a Special Court's cognizance order under PMLA, holding the first proviso to BNSS Section 223(1) is mandatory and its breach renders proceedings void.

The Supreme Court has set aside a cognizance order passed by a designated Special Court under the Prevention of Money Laundering Act, 2002, after finding that the accused was not given an opportunity of hearing before cognizance was taken. The Court held that the first proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 is mandatory in character, confers a substantive right on the accused rooted in Article 21 of the Constitution, and that non-compliance renders the cognizance order void ab initio. 

The Court also declined to refer the earlier decision in Kushal Kumar Agarwal v. Directorate of Enforcement, 2025 SCC OnLine SC 1221, to a larger Bench, reaffirming that the complaint procedure under Sections 223 to 228 of the BNSS applies fully to PMLA proceedings before a Special Court.

How the Dispute Reached the Supreme Court

An Enforcement Case Information Report was registered against Parvinder Singh on 24 July 2023. He was arrested on 27 April 2024. Within two months of arrest, the Directorate of Enforcement filed a prosecution complaint on 24 June 2024 before the designated Special Court under Sections 44 and 45 of the PMLA, alleging offences under Section 3 read with Section 4 of the Act.

On the same day the complaint was filed, the Special Court directed it to be registered as a miscellaneous case and fixed the matter for hearing on cognizance on 28 June 2024. That date was adjourned to 2 July 2024 because the Presiding Officer was on recess. In the intervening period, the CrPC was replaced by the BNSS with effect from 1 July 2024.

On 2 July 2024, the Special Court took cognizance of the offence. The appellant was produced from judicial custody through video conferencing. The Special Court recorded that sufficient material was available and took cognizance of Section 3 read with Section 4 of the PMLA against Parvinder Singh. The miscellaneous case was re-registered as Special Sessions Trial No. 28 of 2024.

On 24 December 2024, the appellant filed an application before the Special Court seeking recall of the cognizance order, contending that the first proviso to Section 223(1) of the BNSS had not been complied with because he was not given an opportunity of hearing before cognizance was taken. The Special Court dismissed the application on 22 March 2025, characterising it as a dilatory tactic and holding that once cognizance is taken, the same court cannot reconsider it. On the same day, the Special Court framed charges against the appellant and posted the matter for recording of prosecution evidence.

The appellant challenged both the cognizance order and the order dismissing the recall application before the High Court of Uttarakhand. The High Court, by its judgment dated 19 May 2025, held that Section 223 of the BNSS had no application because the PMLA proceedings were initiated prior to the BNSS coming into force, relying on Section 531(2)(a) of the BNSS which saves proceedings initiated under the CrPC. The High Court dismissed the revision against the cognizance order but partly allowed the revision against the charge-framing order, quashing the charges and remanding the matter for a fresh hearing on that issue.

Parvinder Singh approached the Supreme Court by way of a Special Leave Petition, which was converted into a Criminal Appeal.

The Competing Arguments

Senior Counsel for the appellant argued that Sections 200 to 205 of the CrPC, now replicated as Sections 223 to 228 of the BNSS, apply to PMLA proceedings. There is no inconsistency between those provisions and the PMLA. The appellant was therefore entitled to be heard before cognizance was taken, as required by the first proviso to Section 223(1) of the BNSS. Reliance was placed on Kushal Kumar Agarwal v. Directorate of Enforcement, 2025 SCC OnLine SC 1221, and the earlier decisions in Yash Tuteja & Ors. v. Union of India, (2024) 8 SCC 465, and Tarsem Lal v. ED, (2024) 7 SCC 61.

It was further argued that the Special Court's direction on 24 June 2024 to number the complaint and post it for cognizance was a purely ministerial act. It did not constitute an “inquiry” within the meaning of Section 2(1)(k) of the BNSS. Section 531(2)(a) of the BNSS, which saves pending inquiries under the CrPC, therefore had no application.

Additional Solicitor General S. V. Raju, appearing for the Directorate of Enforcement, took a different position. He submitted that the PMLA is a stand-alone enactment and the BNSS has no application to its proceedings. There is no committal procedure under the PMLA, and the Special Court functions as a court of original jurisdiction with a distinct object. Chapters XIV to XVII of the BNSS do not apply. The ASG also urged that Kushal Kumar Agarwal be referred to a larger Bench for reconsideration.

Without prejudice, the ASG contended that the complaint was filed on 24 June 2024, before the BNSS came into force, and that the Special Court had passed orders on that date. An inquiry had therefore commenced under the CrPC, and Section 531(2)(a) of the BNSS required the proceedings to continue under the CrPC. Reliance was placed on Hardeep Singh v. State of Punjab, (2014) 3 SCC 92. The ASG also argued that the appellant had not demonstrated any prejudice from the failure to hear him before cognizance.

The Court's Analysis of the Statutory Framework

The Court examined the relevant provisions of both the PMLA and the BNSS in detail.

Section 43 of the PMLA defines a Special Court as a Court of Session designated by the Central Government. Section 44(1)(b) empowers the authorised authority to file a complaint before the Special Court without the accused being committed for trial. Section 44(1)(d) requires the Special Court to hold trial in accordance with the CrPC, as it applies to a trial before a Court of Session. Section 46 of the PMLA deems the Special Court to be a Court of Session and makes the provisions of the CrPC applicable to proceedings before it, save as otherwise provided in the PMLA. Section 65 of the PMLA extends the CrPC to all proceedings under the Act insofar as those provisions are not inconsistent with the PMLA. Section 71 gives the PMLA an overriding effect over any inconsistent law.

On the BNSS side, Section 4(2) makes the BNSS applicable to offences under other laws, subject to any enactment governing the field. Section 5 protects special or local laws in the absence of a specific contrary provision in the BNSS. Section 213 bars a Court of Session from taking direct cognizance unless a case is committed by a Magistrate, but carves out exceptions where any other law provides otherwise. Section 223(1) requires a Magistrate taking cognizance on a complaint to examine the complainant on oath, and its first proviso prohibits cognizance from being taken without giving the accused an opportunity of being heard.

The Court held that Section 46 of the PMLA, read with Sections 65 and 44(1)(d), makes the complaint procedure under the CrPC and now the BNSS applicable to PMLA proceedings. None of the provisions in Sections 200 to 205 of the CrPC, or their equivalents in Sections 223 to 228 of the BNSS, are inconsistent with the PMLA. The Court found that the decisions in Tarsem Lal, Yash Tuteja, and Kushal Kumar Agarwal had consistently taken this view and declined to depart from them.

The Court rejected the ASG's argument for a reference to a larger Bench. It reasoned that accepting the ASG's position would strip the Special Court of the power to dismiss a complaint for lack of evidence, postpone the issuance of process, issue process, or dispense with the appearance of an accused under Sections 225 to 228 of the BNSS. The Court said such a result would be disastrous.

The First Proviso to Section 223(1) Is Substantive, Not Procedural

The Court addressed the character of the first proviso to Section 223(1) of the BNSS directly. Although Section 223 sits within Chapter XVI of the BNSS, which deals with complaints to a Magistrate, the Court held that the first proviso is substantive in nature. It does not merely regulate the manner of proceedings. It confers a right on the accused to be heard before cognizance is taken, and that right forms part of the right to a fair trial under Article 21 of the Constitution.

The word “shall” in the proviso is mandatory. Non-compliance does not attract the curative provisions in Sections 506 or 511 of the BNSS, which deal with irregularities. The failure to hear the accused before taking cognizance is an illegality, not a mere irregularity, and it vitiates the entire cognizance order. The Court held that cognizance taken without complying with the proviso is void ab initio.

Whether an Inquiry Had Commenced Before the BNSS Came Into Force

The Court then turned to the question of whether Section 531(2)(a) of the BNSS saved the proceedings. That provision requires any pending appeal, application, trial, inquiry, or investigation to continue under the CrPC if it was initiated before the BNSS came into force on 1 July 2024.

The Court held that a mere ministerial act cannot constitute an “inquiry” under Section 2(1)(k) of the BNSS. An inquiry is a judicial act requiring the application of judicial mind, reflected through a recording made by a court. Taking cognizance is the point at which judicial mind is applied. Until that point, no inquiry commences.

The Special Court's direction on 24 June 2024 to number the complaint and post it for a future hearing on cognizance was a purely administrative step. It did not involve any application of judicial mind. The Court found support for this in Hardeep Singh v. State of Punjab, (2014) 3 SCC 92, which the ASG had himself relied upon. That decision held that even the stage of ensuring compliance with Sections 207 to 209 of the CrPC cannot be termed an inquiry because there is no judicial application of mind at that stage. The Court said the Hardeep Singh decision actually militated against the ASG's submission.

Since no inquiry had commenced before 1 July 2024, Section 531(2)(a) of the BNSS did not apply. Cognizance was taken on 2 July 2024, after the BNSS had come into force. The first proviso to Section 223(1) of the BNSS therefore governed the taking of cognizance.

The Court also rejected the argument that the appellant had to demonstrate prejudice. The right to be heard before cognizance is a substantive right tied to personal liberty. Its breach is an illegality that goes to the root of the proceedings and cannot be excused by the absence of demonstrated prejudice.

On the question of delay, the Court noted that the appellant had filed the recall application at the earliest opportunity, placing reliance on the first proviso. Had the Special Court allowed that application, the trial would have proceeded. The appellant could not be faulted for any delay.

Order

The Supreme Court allowed the appeal. The impugned judgment of the High Court of Uttarakhand dated 19 May 2025 and the cognizance order passed by the Special Court dated 2 July 2024 were both set aside.

The Special Court was directed to afford the appellant an opportunity of hearing and to proceed from the stage of taking cognizance. This exercise was to be completed within eight weeks from the date of receipt of a copy of the judgment. Pending applications, if any, were disposed of.