The Supreme Court of India has delivered an important ruling on the interaction between the Prevention of Money Laundering Act, 2002, and the Bharatiya Nagarik Suraksha Sanhita, 2023. The Court has held that in a complaint case, an accused must be given an opportunity of hearing before cognizance is taken under the first proviso to Section 223(1) BNSS.
The judgment came in Parvinder Singh v. Directorate of Enforcement, where the Supreme Court set aside the Uttarakhand High Court judgment as well as the Special Court’s cognizance order in a PMLA matter. The Court held that failure to comply with the hearing requirement under Section 223(1) BNSS would make the cognizance order void ab initio. :contentReference[oaicite:0]{index=0}
Background of the Case
The case arose from an Enforcement Case Information Report registered by the Enforcement Directorate in July 2023. The ED later filed a prosecution complaint under Sections 44 and 45 of the PMLA on June 24, 2024.
This filing happened before the BNSS came into force on July 1, 2024. However, the Special Court took cognizance on July 2, 2024, after BNSS had already commenced. The cognizance was taken without giving the accused an opportunity of hearing.
The accused challenged the cognizance order on the ground that the first proviso to Section 223(1) BNSS required the court to hear him before taking cognizance.
What Was the Legal Issue?
The central question before the Supreme Court was whether the hearing safeguard under Section 223(1) BNSS applies to a PMLA prosecution complaint when the complaint was filed before BNSS came into force, but cognizance was taken after BNSS commenced.
In simpler terms, the issue was this:
Can a Special Court take cognizance of a PMLA complaint after July 1, 2024, without hearing the accused, merely because the ED complaint had been filed before BNSS came into force?
The Supreme Court answered this question in favour of the accused.
ED’s Arguments Before the Court
The Enforcement Directorate opposed the accused’s challenge mainly on three grounds.
First, ED argued that PMLA is a special statute and its procedure should not be displaced by the general criminal procedure under BNSS.
Second, ED argued that since the prosecution complaint was filed before BNSS came into force, the old Code of Criminal Procedure should continue to apply.
Third, ED submitted that the accused had not demonstrated any prejudice caused by the absence of a hearing.
The Supreme Court rejected these arguments.
Supreme Court’s Ruling on Section 223(1) BNSS
The Supreme Court held that the first proviso to Section 223(1) BNSS is mandatory. The Court emphasized that the provision uses the word “shall”, which indicates that compliance is not optional.
The Court further held that the right to be heard before cognizance is not a mere procedural formality. It is a substantive safeguard connected with the accused’s right to a fair trial under Article 21 of the Constitution.
This is the most important part of the ruling: if cognizance is taken without complying with this safeguard, the order is not merely irregular. It is void from the beginning.
No Need to Prove Prejudice
The Supreme Court also rejected ED’s argument that the accused must show actual prejudice.
According to the Court, once a statutory safeguard creates a right in favour of the accused, violation of that safeguard itself vitiates the cognizance order. The accused is not required to separately prove how the lack of hearing caused prejudice.
This makes the ruling significant because it treats Section 223(1) BNSS as a real enforceable protection, not as a technical step that courts can ignore.
Does BNSS Apply to PMLA Complaints?
Yes, according to the Supreme Court, the complaint procedure under general criminal law applies to PMLA complaints unless there is a direct inconsistency with the PMLA framework.
The Court relied on its earlier decisions including Tarsem Lal v. ED, Yash Tuteja v. Union of India, and Kaushal Kumar Agarwal v. ED. It reiterated that once a complaint under Section 44(1)(b) PMLA is filed before the Special Court, the complaint-case procedure under general criminal law becomes relevant.
Therefore, PMLA being a special statute does not automatically exclude the safeguards available under BNSS.
The BNSS Savings Clause Argument
Another important part of the judgment concerns Section 531 BNSS, which deals with savings and transition from the old CrPC to BNSS.
ED argued that because the complaint had been filed before July 1, 2024, the case should continue under the old CrPC regime.
The Supreme Court disagreed. It held that merely filing or numbering a complaint does not amount to commencement of an inquiry if the court has not yet applied its judicial mind.
Since cognizance was taken on July 2, 2024, after BNSS had come into force, the accused was entitled to the benefit of the hearing safeguard under Section 223(1) BNSS.
The Court clarified that this was not retrospective application of BNSS. It was a prospective application of a substantive right available at the time of cognizance.
What Did the Supreme Court Finally Direct?
The Supreme Court set aside the cognizance order passed by the Special Court on July 2, 2024. It also set aside the Uttarakhand High Court judgment.
However, the Court did not quash the prosecution itself. It directed the Special Court to proceed afresh from the stage of taking cognizance after giving the accused an opportunity of hearing. The Court directed that this exercise should be completed within eight weeks.
This distinction is important. The accused was not discharged or acquitted. The prosecution complaint remains alive. What has been invalidated is the cognizance order passed without complying with the mandatory BNSS safeguard.
Why This Judgment Matters
This judgment is important for three reasons.
First, it strengthens fair-trial safeguards under BNSS. The Court has made it clear that Section 223(1) is not symbolic language. It creates a real right in favour of the accused.
Second, it confirms that PMLA proceedings before Special Courts cannot ignore general complaint-case safeguards unless there is a clear inconsistency with PMLA.
Third, it clarifies the transition from CrPC to BNSS. If cognizance is taken after July 1, 2024, courts must consider the safeguards introduced under BNSS, even if the complaint was filed before BNSS came into force.
Impact on PMLA and ED Cases
This ruling may affect PMLA complaints where the ED filed the prosecution complaint before July 1, 2024, but the Special Court took cognizance after BNSS came into force without hearing the accused.
In such cases, accused persons may rely on this judgment to challenge the cognizance order.
However, this judgment should not be misunderstood as weakening PMLA prosecutions altogether. It does not prevent ED from prosecuting cases. It only requires courts to follow the mandatory hearing safeguard before taking cognizance.
KanoonPlus Legal View
The real importance of this ruling is not that ED lost one procedural round. The deeper point is that even in serious economic offence cases, statutory safeguards and fair-trial protections cannot be bypassed.
The Supreme Court has drawn a clear line: seriousness of allegations cannot replace due process.
For PMLA cases, this judgment will likely become an important reference on pre-cognizance hearing, BNSS transition, and the rights of accused persons in complaint cases.
Conclusion
The Supreme Court’s decision in Parvinder Singh v. Directorate of Enforcement is a major clarification on BNSS Section 223(1) and its application to PMLA complaints.
The Court has held that an accused must be heard before cognizance is taken in a complaint case. If this mandatory safeguard is ignored, the cognizance order becomes void ab initio.
The judgment does not end the PMLA prosecution. It requires the Special Court to restart from the cognizance stage after giving the accused an opportunity of hearing.
In simple terms, the message is clear: even in PMLA cases, courts must follow the procedure established by law.
Hindi Summary:
Supreme Court ने साफ किया है कि PMLA complaint case में भी BNSS Section 223(1) के तहत cognizance लेने से पहले accused को hearing देना जरूरी है. अगर Court accused को सुने बिना cognizance लेती है, तो order void ab initio होगा. हालांकि, इससे prosecution खत्म नहीं होती; Court को cognizance stage दोबारा कानून के अनुसार करना होगा.
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PMLA, BNSS Section 223, Supreme Court of India, Enforcement Directorate, ED, accused hearing, cognizance, void ab initio, fair trial, Article 21, criminal procedure, money laundering, PMLA complaint, Special Court, KanoonPlus, Adv Ravi Kumar