PMLA Accused Entitled To Hearing Before Cognizance Is Taken Of ED Complaint Filed After BNSS Came Into Effect : Supreme Court

The Supreme Court held that before taking cognizance of a money laundering complaint under section 44(1)(b) of the Prevention of Money Laundering Act (PMLA), the special court has to give opportunity to the accused to be heard as per the proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023.

A bench comprising Justice Abhay S Oka and Justice Ujjal Bhuyan quashed the cognizance order passed by the Special Court dated November 20, 2024, after noting that the BNSS, which came effect from July 1, 2024, mandated pre-cognizance hearing of the accused as per Section 223(1). Such a provision was not present in the earlier Code of Criminal Procedure.

The bench noted that in Tarsem Lal vs ED, it was held that a complaint filed by Enforcement Directorate under Section 44(1)(b) of PMLA will be governed by Sections 200 to 204 of the CrPC. As a corollary, provisions of chapter 16 (sections 223 to 226 of BNSS) will also apply to the complaint under Section 44 of PMLA.

The proviso to subsection (1) puts an embargo on the power of the court to take cognizance by providing that no cognizance of an offence shall be taken by the magistrate without giving the accused an opportunity of being heard.

"In this case, admittedly, the opportunity was not given to the accused by the learned special judge before taking cognizance of the offence alleged in the complaint. Only on that ground, the order dated 20th November 2024 will have to be set aside," the Court said.

Additional Solicitor General SV Raju made two submissions. Firstly, that the hearing given to the accused in terms of proviso to subsection (1) of section 223 will be confined to the question whether a case is made out to proceed on the basis of the complaint and hence, only the complaint and the documents produced along with the complaint can be considered at the time of hearing. His second submission was that it is well settled that cognizance is taken by the Criminal Court of the offence and not the offender. Therefore, after taking cognizance after following the procedure prescribed by the proviso to subsection (1) of section 223, if cognizance is taken, there will be no occasion to again take cognizance of the same offence when supplementary or further complaints are filed.

The Court said that these submissions need not be considered as the same do not arise in this appeal at this stage. They were left open.

The Court directed the appellant to appear before the Special Court on 14th July so that he can be given an opportunity of being heard in terms of proviso to subsection (1) of section 223.  

On the previous hearing, the ED had raised an argument that since the investigation was completed by the ED before the commencement of the BNSS, accused cannot demand pre-cognizance hearing. However, this point was not raised today.

Case no. – Petition for Special Leave to Appeal (Crl.) No. 2766/2025

Case Title – Kushal Kumar Agarwal v. Directorate of Enforcement