Summary
Where a PMLA prosecution complaint was filed before the BNSS came into force but cognizance was taken afterwards, the first proviso to Section 223(1) BNSS applied, because merely numbering the complaint and listing it for cognizance is not an 'inquiry' saved by Section 531(2)(a). The right to be heard before cognizance is substantive and mandatory, so cognizance taken without hearing the accused was void and was set aside without any need to show prejudice.
Issues
- Whether the complaint provisions of the CrPC/BNSS (Sections 200 to 205 CrPC, now Sections 223 to 228 BNSS) apply to a complaint under Section 44(1)(b) of the PMLA, and whether Kushal Kumar Agarwal required reconsideration.
- Whether an 'inquiry' was pending before 01.07.2024 within Section 531(2)(a) BNSS when the Special Court had only registered the complaint and listed it for cognizance.
- Whether cognizance taken without hearing the accused under the first proviso to Section 223(1) BNSS is void, and whether the accused must show prejudice.
Provisions considered
- Section 223(1), first proviso, Bharatiya Nagarik Suraksha Sanhita, 2023Bars cognizance on a complaint without giving the accused an opportunity of being heard; held substantive, forming part of the Article 21 right to a fair trial, and mandatory, so cognizance taken in breach is void ab initio. (¶¶ 26, 27, 37, 38)
- Section 531(2)(a), Bharatiya Nagarik Suraksha Sanhita, 2023Saves proceedings such as an inquiry pending before the BNSS came into force so they continue under the CrPC, to avoid piecemeal application; it did not apply because no inquiry had begun before 01.07.2024. (¶¶ 28, 29, 36, 37)
- Section 2(1)(k), Bharatiya Nagarik Suraksha Sanhita, 2023An 'inquiry' is a judicial act requiring application of judicial mind; a ministerial direction to number a complaint and list it for cognizance is not an inquiry. (¶¶ 21, 34, 36)
- Sections 4(2), 5, 210 and 213, Bharatiya Nagarik Suraksha Sanhita, 2023Read with the PMLA to show that general procedure applies to offences under other laws subject to special enactments, and that the bar on direct cognizance by a Court of Session yields to a contrary provision in another law. (¶¶ 22, 23, 24, 25)
- Sections 506 and 511, Bharatiya Nagarik Suraksha Sanhita, 2023Taking cognizance without hearing the accused is an illegality vitiating the proceedings, not a mere irregularity curable under these sections, so prejudice need not be shown. (¶ 37)
- Sections 43, 44, 46, 65 and 71, Prevention of Money Laundering Act, 2002The Special Court is a designated Court of Session that takes cognizance on a complaint without committal; CrPC (now BNSS) provisions apply to its proceedings save where the PMLA provides otherwise or is inconsistent, and the PMLA prevails only in case of inconsistency. (¶¶ 14, 15, 16, 17, 18, 19)
- Article 21, Constitution of IndiaThe pre-cognizance hearing under the first proviso to Section 223(1) BNSS forms part of the accused's right to a fair trial. (¶ 27)
Held
- Sections 200 to 205 CrPC, now Sections 223 to 228 BNSS, apply to complaints under the PMLA; the Court agreed with Tarsem Lal, Yash Tuteja and the decision reported at 2025 SCC OnLine SC 1221 and declined the request to refer the question to a larger Bench, noting that otherwise the Special Court would lack powers to dismiss a complaint, postpone or issue process, or dispense with appearance. (¶¶ 30, 31, 32, 33)
- The first proviso to Section 223(1) BNSS is substantive, not merely procedural: it confers on the accused a right to be heard before cognizance as part of the fair trial guaranteed by Article 21; 'shall' in it is mandatory, and cognizance taken without compliance is void ab initio. (¶ 27)
- Section 531(2)(a) BNSS keeps proceedings already initiated under the CrPC under that Code, but a substantive right conferred by the BNSS benefits an accused against whom no saved proceeding had been initiated; applying it in such a case is prospective, not retrospective. (¶¶ 28, 29)
- A merely ministerial act is not an 'inquiry' under Section 2(1)(k) BNSS; an inquiry begins only with the application of judicial mind. The Special Court's direction to number the complaint and list it for cognizance did not start an inquiry, and Hardeep Singh supports rather than defeats this view. (¶¶ 34, 35, 36)
- As cognizance was taken on 02.07.2024, after the BNSS commenced, without hearing the accused, the order was vitiated; this is an illegality, not an irregularity, so the accused need not show prejudice, and the seriousness of the allegations does not save the order. (¶¶ 37, 38)
Result
Appeal allowed; the High Court judgment dated 19.05.2025 and the Special Court's cognizance order dated 02.07.2024 were set aside; the Special Court was directed to hear the appellant and proceed from the stage of cognizance within 8 weeks of receiving the judgment.