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of <h1>Proviso to Section 223 BNSS requires pre-cognizance hearing for complaints after July 1, 2024; matter remanded</h1> <h3>Pushpraj Bajaj Versus The Union of India through the Assistant Director, Enforcement Directorate Patna, The Assistant Director, Enforcement Directorate, Patna.</h3> HC allowed the revision petition, set aside the Special Court's 08.01.2025 order and remanded the matter to the Special Judge, PMLA, Patna for fresh ... Money Laundering - PMLA Court did not provide any opportunity of pre-cognizance hearing to the petitioner in terms of proviso to Section 223 of BNSS - violation of principles of natural justice - prospective effect of the decision of Kushal Kumar Agrawal [2025 (5) TMI 2001 - SUPREME COURT] - HELD THAT:- The contention raised by the learned special counsel about ratio of Kushal Kumar Agrawal (supra) to be applicable only against prospective cases is strange and against the settled principles of law. If a statute provides for doing something, the same could not be said to be dependent on future interpretation by a constitutional Court. The law is there and it is to be applied in the light of its plain meaning and purport. If the learned trial court did not proceed in the matter giving effect to its true import and subsequently, the Hon'ble Supreme Court dealt with the same provision demonstrating its scope, then the law from the day one is what the Hon'ble Supreme Court said subsequently and not what the trial court meant it to be. There cannot be two laws in operation side by side, one prior to the interpretation by the Hon'ble Supreme Court and the other after the interpretation of the Hon'ble Supreme Court. The law is what the Hon'ble Supreme Court says it is and, therefore, the contention that law was something else prior to the decision of Kushal Kumar Agrawal is not tenable. Section 210 of BNSS empowers the Magistrate to take cognizance of any offence under the circumstances enumerated thereunder. Section 506 talks about cases in which cognizance has been taken, but the Magistrate is not empowered by law to do so. But Section 223 of BNSS which has been introduced in BNSS along with its proviso in its new 'Avatar' of corresponding provision under Section 200 of Cr.P.C., has incorporated one of the principles of natural justice which mandates that a Magistrate prior to taking cognizance must hear the other side. If such right is taken away on the ground that not affording an opportunity of hearing is merely an irregularity, the same would amount to acting against the statutory mandate and legislative intent. So, even if the Magistrate would not be empowered to take cognizance in absence of pre-cognizance hearing, the same would not merely be an irregularity. There are no merit in the contention of the learned special counsel for the Directorate of Enforcement that the petitioner failed to demonstrate or show that any prejudice was caused to him due to not affording an opportunity of pre-cognizance hearing. There are no hesitation in holding that as the complaint has been filed after 01.07.2024 and cognizance has been taken on 08.01.2025, Section 223 of BNSS will apply to the present complaint. Thereafter, proviso to Section 223 of BNSS mandatorily provides for an opportunity of hearing to an accused before cognizance could be taken against him, which means no cognizance of an offence shall be taken by the Magistrate without giving the accused of an opportunity of being heard and admittedly, no opportunity has been given by the learned Special Court to the petitioner before taking cognizance of an offence. The impugned order dated 08.01.2025 passed by the learned Special Court in Special Trial No. (PMLA) 10/2024 suffers from infirmity and, hence, the same is set aside. The matter is remanded to the learned Special Judge, PMLA, Patna for taking decision afresh in accordance with law after hearing the petitioner in terms of Section 223(1) of BNSS within a reasonable time. Revision petition allowed by way of remand. ISSUES PRESENTED AND CONSIDERED 1. Whether the proviso to Section 223(1) of BNSS obliges a Magistrate to afford a pre-cognizance opportunity of hearing to an accused in complaints filed after 01.07.2024. 2. Whether the absence of a pre-cognizance hearing under Section 223(1) of BNSS is a mere procedural irregularity salvaged by Section 506(e) of BNSS (or analogous Section 460(e) Cr.P.C.) or is fatal to the cognizance and subsequent proceedings. 3. Whether a later judicial interpretation (specifically the Supreme Court decision in Kushal Kumar Agrawal) can be treated as having only prospective effect so as not to invalidate cognizance taken before that interpretation. 4. Whether alleged absence of prejudice, prior opportunities during investigation (e.g., interrogation under Section 50 of PMLA), or right of hearing at later stages (e.g., framing of charges) cures the omission of a pre-cognizance hearing mandated by Section 223(1) BNSS. ISSUE-WISE DETAILED ANALYSIS - 1. Obligation under Section 223(1) BNSS to afford pre-cognizance hearing Legal framework: Section 223(1) BNSS (examination of complainant) includes a proviso: 'no cognizance of an offence shall be taken by the Magistrate without giving the accused an opportunity of being heard.' Section 210 BNSS sets out modes of cognizance; Section 531 BNSS deals with repeal/savings affecting PMLA proceedings post-01.07.2024. Precedent treatment: The judgment relies on the Supreme Court ruling in Kushal Kumar Agrawal (reported) and several High Court decisions (Allahabad, Calcutta, Delhi) interpreting BNSS provisions in the PMLA context to require pre-cognizance hearing when complaints/prosecution complaints are filed after 01.07.2024. Interpretation and reasoning: The proviso to Section 223(1) is a statutory mandate incorporating a principle of natural justice at the cognizance stage. Section 223 must be read with Section 210 but not treated as subordinate; the proviso creates a mandatory pre-condition for taking cognizance on complaints falling within Chapter 16. If a statute prescribes a mode of action, it must be followed; therefore pre-cognizance hearing is obligatory where Section 223 applies. Ratio vs. Obiter: Ratio - the proviso to Section 223(1) mandates pre-cognizance hearing and applies to complaints filed after BNSS came into force. Obiter - references to comparative precedents on procedural stages (e.g., Section 200/204 Cr.P.C. distinctions) serve illustrative purposes. Conclusion: Section 223(1) BNSS requires the accused to be given an opportunity of being heard before cognizance is taken in complaints subject to BNSS; that requirement applied to the complaint in question filed and cognized after 01.07.2024. ISSUE-WISE DETAILED ANALYSIS - 2. Effect of non-compliance: irregularity under Section 506(e) BNSS or fatal infirmity Legal framework: Section 506 BNSS lists irregularities which do not vitiate proceedings, including taking cognizance by an unempowered Magistrate under clause (e). Section 223(1) proviso is statutory and newly framed; overarching principle: statutes prescribing a manner must be complied with. Precedent treatment: Reliance was placed for the irregularity argument on Pradeep S. Wodeyar (Supreme Court) and analogous Cr.P.C. jurisprudence that some jurisdictional errors are irregularities not vitiating proceedings. Counter-authorities (Kushal Kumar Agrawal and High Court decisions) treat denial of the substantive pre-cognizance right as fatal. Interpretation and reasoning: Section 210 empowers cognizance in stated modes, but Section 223(1) contains a proviso affecting the mode of taking cognizance on complaints; non-compliance with a statutory proviso that confers a substantive right to be heard cannot be treated as a mere procedural irregularity preserved by Section 506(e). Permitting Section 506(e) to override the clear statutory mandate of Section 223(1) would defeat legislative intent and the embedded natural justice protection. Ratio vs. Obiter: Ratio - denial of the statutory pre-cognizance hearing under Section 223(1) is not saved as a mere irregularity by Section 506(e) when the statute prescribes hearing as a condition precedent. Obiter - discussions of Section 506(e)'s scope vis-à-vis other provisions are explanatory. Conclusion: Failure to afford the pre-cognizance hearing mandated by Section 223(1) BNSS vitiates the cognizance order and consequent proceedings; it is not automatically cured as a mere irregularity under Section 506(e). ISSUE-WISE DETAILED ANALYSIS - 3. Temporal effect of judicial interpretation (prospective vs. retrospective) Legal framework: Principle that law is what courts declare it to be; where a statutory provision exists, its meaning is what authoritative interpretation establishes, applicable from inception unless otherwise directed. Precedent treatment: The Directorate argued prospective operation of Kushal Kumar Agrawal; petitioner relied on the rule that later clarification of statute elucidates what statute meant ab initio. The Court cited established authorities (including administrative law maxims) supporting the proposition that statutory requirements must be followed irrespective of subsequent judicial clarification. Interpretation and reasoning: Allowing a later judicial interpretation to be treated as creating a new obligation only prospectively would permit two inconsistent legal regimes to co-exist; where the statute always contained the requirement, courts must apply the correct interpretation to earlier acts taken in breach of that requirement. Judicial clarification does not change law retroactively but declares what the law has always been. Ratio vs. Obiter: Ratio - the decision in Kushal Kumar Agrawal interprets a statutory mandate which applies from the statute's commencement; the Court rejects the contention that the decision should be confined to prospective effect to validate pre-existing non-compliant cognizance orders. Conclusion: The judicial interpretation in Kushal Kumar Agrawal elucidates the pre-existing statutory requirement and is applicable to the complaint/cognizance at issue; the cognizance taken without pre-cognizance hearing cannot be insulated on the ground that the Supreme Court decision post-dates the cognizance. ISSUE-WISE DETAILED ANALYSIS - 4. Cure by prior investigative opportunities, absence of pleaded prejudice, or later hearing at charge-framing Legal framework: Statutory right to be heard under Section 223(1) BNSS; procedural remedies at later stages (e.g., hearing at framing of charges under BNSS or PMLA provisions) exist but are distinct stages; jurisprudence on prejudice requires demonstration where statutory protection is procedural rather than substantive. Precedent treatment: The Directorate relied on authorities holding that mere breach of natural justice does not invalidate proceedings absent demonstrated prejudice (e.g., Sudhir Kumar Singh, Fertico). The petitioner and other authorities held that denial of a substantive statutory right to be heard at a specified stage constitutes prejudice per se. Interpretation and reasoning: The proviso to Section 223(1) grants a substantive, stage-specific right (pre-cognizance hearing). Prior investigatory encounters (e.g., Section 50 PMLA interrogations) or subsequent procedural hearings cannot cure the statutory omission at the prescribed stage because the legislature deliberately conferred the right at cognizance. The Court reasons that denial of the statutory hearing amounts to prejudice and miscarriage of justice without the need for separate proof of consequential harm; subsequent opportunities cannot retrospectively validate an initial non-compliant act. Ratio vs. Obiter: Ratio - absence of pre-cognizance hearing under Section 223(1) is not cured by prior investigative participation or later procedural stages and the accused need not separately demonstrate prejudice where the statutory right has been denied; Obiter - comparative discussion of prejudice jurisprudence. Conclusion: Prior investigatory opportunities, failure to plead specific prejudice, or future hearings at charge-framing do not cure the statutory requirement of a pre-cognizance hearing under Section 223(1); omission vitiates cognizance. REMEDY AND CONCLUSION Having applied the foregoing legal principles and relevant precedents, the Court concluded that the cognizance order taken without affording the statutorily mandated pre-cognizance hearing under Section 223(1) BNSS is infirm. The cognizance order was set aside and the matter remanded to the trial court to decide afresh after hearing the accused in terms of Section 223(1) BNSS within a reasonable time. The Court clarified that interference was limited to procedural illegality and did not express any view on the merits of the substantive allegations.
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