2025 (7) TMI 1870 - HC - Money Laundering

No Cognizance Under Section 223(1) Without Accused's Hearing; Order Set Aside and Case Remitted

The HC held that cognizance under Section 223(1) of BNSS cannot be taken without first giving the accused an opportunity to be heard, as mandated by the ... Money laundering by Government servant - amazed assets which is 113.45% in excess of known sources of income, while working as public servant - cognizance of the offence without first giving the accused an opportunity to be heard - HELD THAT:- The crucial aspect of Section 223(1) is the first proviso, which mandates that the Magistrate cannot take cognizance of the offence without first giving the accused an opportunity to be heard. This is a significant departure from the provisions of the Cr.P.C, which did not mandate this pre-cognizance hearing for the accused - Similarly, examination of the complainant and witnesses is not required if the complaint is made by a public servant in their official capacity or by a court. Additionally, if a case is transferred under Section 212 of BNSS, the new Magistrate is not required to re-examine the complainant and witnesses if they were already examined by the previous Magistrate. Thus, on evaluation of the materials available and the order issuing summons after taking cognizance, it is emphatically clear that, in this case, the cognizance taken by the learned Special Judge is without complying the mandate of the first proviso to Section 223 (1) of the BNSS and therefore, the same is non est. Hence, the same is liable to be set aside. This petition stands allowed and thereby, the cognizance taken by the Special Judge as per the order dated 27.03.2025 stands set aside and the case is reverted back to the pre-cognizance stage, with direction to the Special Judge to comply first proviso to Section 223(1) of the BNSS, before taking cognizance in this case. 1. ISSUES: 1. Whether cognizance of an offence under the Prevention of Money Laundering Act (PMLA) can be taken by the Special Court without complying with the mandatory procedural requirement under Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), specifically the requirement to give the accused an opportunity of being heard before taking cognizance.2. Whether the Special Court can take cognizance of offences under the PMLA without obtaining prior sanction as required under Section 218 of the BNSS (analogous to Section 197 of the Code of Criminal Procedure).3. The applicability of the procedural safeguards introduced by the BNSS, including Sections 223 to 228, to complaints filed by the Enforcement Directorate under the PMLA. 2. RULINGS / HOLDINGS: 1. The Court held that the proviso to sub-section (1) of Section 223 of the BNSS 'puts an embargo on the power of the Court to take cognizance' by mandating that 'no cognizance of an offence shall be taken by the Magistrate without giving the accused an opportunity of being heard,' and failure to comply with this requirement renders the cognizance 'non est' and liable to be set aside.2. The Court ruled that cognizance taken by the Special Court without obtaining sanction under Section 218 of the BNSS is improper, and the Special Court must consider the question of sanction before taking cognizance of offences under the PMLA.3. The Court recognized that Sections 223 to 228 of the BNSS, which are analogous to Sections 200 to 205 of the Cr.P.C., apply to complaints under Section 44(1)(b) of the PMLA filed by the Enforcement Directorate, thereby mandating procedural safeguards including examination of complainant and opportunity to the accused. 3. RATIONALE: 1. The Court applied the statutory framework of the BNSS, particularly Section 223(1), which introduces a procedural safeguard requiring the Magistrate to give the accused an opportunity to be heard before taking cognizance, a significant departure from prior law under the Cr.P.C.2. The Court relied on binding precedent from the Apex Court, which emphasized the mandatory nature of the pre-cognizance hearing under Section 223(1) BNSS and the requirement of sanction under Section 218 BNSS (analogous to Section 197 Cr.P.C.) for offences under the PMLA.3. The Court noted the legislative intent behind BNSS to enhance procedural fairness and ensure accused persons are heard prior to cognizance, especially in cases initiated by the Enforcement Directorate under the PMLA.4. There was no dissent; the learned Standing Counsel for the Enforcement Directorate conceded the legal position and agreed that the matter should be reverted to the pre-cognizance stage for compliance with the mandatory procedural requirements.