The Supreme Court has ruled that before taking cognizance of a money laundering complaint filed under Section 44(1)(b) of the Prevention of Money Laundering Act (PMLA), the Special Court must give the accused an opportunity to be heard in accordance with the newly introduced Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).

This provision, effective from July 1, 2024, was absent in the earlier Code of Criminal Procedure.

A bench comprising Justices Abhay S. Oka and Ujjal Bhuyan quashed the cognizance order passed by the Special Court on November 20, 2024, on the ground that the mandatory pre-cognizance hearing had not been provided to the accused.

Referring to its earlier ruling in Tarsem Lal v. ED, the bench reiterated that a complaint filed under Section 44(1)(b) of the PMLA is to be governed by the procedural framework applicable to complaints under Sections 200 to 204 of the CrPC—now corresponding to Sections 223 to 226 under the BNSS. The proviso to Section 223(1) explicitly bars courts from taking cognizance of an offence without first giving the accused a chance to be heard.

"In this case, admittedly, the opportunity was not given to the accused by the learned Special Judge before taking cognizance. On that ground alone, the order dated 20th November 2024 will have to be set aside," the Court observed.

During the hearing, Additional Solicitor General SV Raju argued that the hearing under the proviso to Section 223(1) should be limited to the issue of whether there is a prima facie case to proceed, based solely on the complaint and its accompanying documents.

He further contended that cognizance is taken of the offence, not the offender, and once taken properly, the process need not be repeated for supplementary complaints. However, the bench noted that these arguments were not relevant to the current appeal and left them open for future consideration.

The Court directed the appellant to appear before the Special Court on July 14, 2025, so that he may be given the opportunity to be heard as required under Section 223(1) of the BNSS.

Although the Enforcement Directorate had earlier contended that the BNSS should not apply since the investigation was completed prior to its commencement, this argument was not pressed during the present hearing.

Case Title: Kushal Kumar Agarwal v. Directorate of Enforcement
Case No.: Special Leave to Appeal (Crl.) No. 2766/2025