Pre-Cognizance Hearing Of Accused U/S 223 BNSS Not Applicable To SFIO Proceedings Under Companies Act: Punjab & Haryana High Court

The Punjab and Haryana High Court has held that the mandatory pre-cognizance hearing of accused, contemplated under the first proviso to Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), is not available to persons proposed to be arrayed as accused in prosecutions instituted by the Serious Fraud Investigation Office (SFIO) under the Companies Act, 2013. [2025 LiveLaw (PH) 224]

Justice Subhas Mehla noted,

"...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."

Dismissing a petition filed by Vivo India Private Limited under Section 528 BNSS, the Court said that once the investigation report submitted by the SFIO is statutorily deemed to be a "police report" under Section 212(15) of the Companies Act, the procedural safeguards meant for complaint cases under Chapter XVI of the BNSS, including the newly inserted pre-cognizance hearing requirement, stand excluded.

Referring to Section 4 and 5 of the BNSS the Court explained, "A bare reading of Section 436(1)(d) [of Companies Act] reflects that there is no statutory requirement of affording a pre-cognizance hearing to the accused before taking cognizance upon a complaint. The provision is clear in its design and does not contemplate any preliminary opportunity of hearing before cognizance is taken. Therefore, it cannot be said that the Act, 2013 is silent on the aspect of procedure for cognizance; rather, it provides a specific mechanism without any statutory requirement of pre‐cognizance notice."

Vivo India had been arrayed in a complaint filed by the SFIO before the Special Court, Gurugram, alleging offences under Sections 447, 7(5), 7(6) and 449 of the Companies Act, 2013. When the matter came up before the Additional Sessions Judge, Gurugram on the point of cognizance, the petitioner sought a pre-cognizance hearing under the first proviso to Section 223 BNSS, contending that the SFIO's filing was a "complaint" attracting Chapter XVI of the BNSS. The trial court rejected the application on February 11, 2026, prompting the petitioner to approach the High Court.

Senior counsel for Vivo India argued that Section 438 of the Companies Act expressly imports the Cr.P.C./BNSS into proceedings before the Special Court, and that since the SFIO's own filing, its reply, and its counter-affidavit all described the proceeding as a "complaint," the safeguard under Section 223 BNSS was squarely attracted.

Reliance was placed on the Supreme Court's cases in Yash Tuteja v. Union of India, Tarsem Lal v. Directorate of Enforcement and Kushal Kumar Aggarwal v. Directorate of Enforcement, which held that complaints filed by the Enforcement Directorate under the PMLA, a provision the petitioner argued was pari materia with Section 438 of the Companies Act, attract the ordinary Cr.P.C./BNSS procedure. It was also contended that the deeming fiction under Section 212(15), by its own terms, operates only "for the purposes of framing of charges" and cannot be stretched to defeat the pre-cognizance safeguard.

The SFIO countered that the Companies Act is a self-contained special code excluding the general provisions of the BNSS under Sections 4 and 5 thereof. It was argued that Section 212(15) deems the SFIO's investigation report to be a police report, thereby taking the proceedings outside Chapter XVI altogether, and that in any event Section 223's proviso is intended only for private complaints where no prior investigation exists, not for prosecutions following a full-fledged statutory investigation.

Reliance was placed on the Supreme Court's ruling in Sanjabij Tari v. Kishore S. Borcar, and on Deloitte Haskins & Sells LLP v. Union of India (NCLAT), besides the argument that the Special Court, being headed by a Sessions Judge for offences under Section 447, functions as a Court of Session governed by Section 213 BNSS rather than Section 223.

Examining the scheme of the Companies Act in detail, the Court held that the Act constitutes an exclusive code governing four distinct stages, investigation, filing of the complaint, taking of cognizance, and framing of charge, each with features materially different from the ordinary Cr.P.C./BNSS procedure.

On the deeming fiction under Section 212(15),  the Court rejected the petitioner's narrow reading, holding that although the fiction is textually confined to the stage of framing of charge, Section 436(1)(d) independently makes clear that the Special Court takes cognizance on perusal of either a police report or a complaint, without any intervening hearing.

The Court opined that since the investigation process itself associates the company and its officers, records their statements on oath, and affords them a chance to place material on record, a further pre-cognizance hearing would be a "repetitive exercise."

On the "generalia specialibus non derogant" principle, the Court held that the Companies Act, being a special statute with a self-contained procedural scheme, prevails over the general provisions of the BNSS to the extent of inconsistency, relying on Sections 4 and 5 of the BNSS as saving provisions.

The Court accepted the SFIO's submission that a complaint following a detailed, two-tier statutory investigation, first by SFIO officers exercising civil court powers, and then scrutinised by the Central Government, stands on a different footing from a private complaint where a Magistrate has nothing but bare allegations before him. The rationale of Section 223's proviso, the Court held, does not extend to such statutory prosecutions.

The Court held that where the Special Court is presided over by a Sessions Judge or Additional Sessions Judge (as for offences under Section 447 carrying punishment up to ten years), it functions as a Court of Session governed by Section 213 BNSS, not Section 223 BNSS, which applies only to Magistrates.

Justice Mehla distinguished Yash Tuteja, Tarsem Lal and Kushal Kumar Aggarwal on the ground that the PMLA, unlike the Companies Act, contains no equivalent to Section 212(15)'s deeming fiction. It held that the ratio of Sanjabij Tari, though rendered in the context of the Negotiable Instruments Act, reflected a broader principle — that general BNSS procedure cannot be imported to dilute a special statute's own scheme — which applied equally to Companies Act prosecutions.

The Judge also rejected the argument founded on the trial court's registration of the matter under the "COMA" category and its description as a "complaint," holding that mere nomenclature in administrative registers cannot override the true legal character of the proceedings as emerging from the statutory scheme itself.

Holding that prosecution complaints instituted by the SFIO pursuant to investigation under Section 212 of the Companies Act are not governed by the proviso to Section 223 BNSS, and that proposed accused have no vested right to a pre-cognizance hearing before the Special Court, the High Court upheld the order of the Additional Sessions Judge, Gurugram, and dismissed the petition.

Mr. R.S. Rai, Senior Advocate, with Mr. V.P. Singh and others, for the petitioner.

Mr. Arvind Moudgil, Senior Advocate, with Mr. Tajeshvar Singh Sullar, CGC (UOI) and others, for the SFIO.

Mr. Pradeep Yadav, Senior Prosecutor, with others, for the Union of India.

Case Title: Vivo India Private Limited v. Serious Fraud Investigation Office, Ministry of Corporate Affairs, Union of

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