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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether the first proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 applies to complaint proceedings under the Prevention of Money-Laundering Act, 2002, including proceedings against corporate accused; (ii) whether summons issued without the mandatory pre-cognizance notice and supply of complaint under Section 227(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 are liable to be set aside.
Issue (i): Whether the first proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 applies to complaint proceedings under the Prevention of Money-Laundering Act, 2002, including proceedings against corporate accused.
Analysis: The pre-cognizance opportunity of hearing mandated by the first proviso to Section 223(1) applies to complaint proceedings under the Prevention of Money-Laundering Act, 2002. The protection is not confined to natural persons and extends to corporate accused as well, since a company can be proceeded against along with its officers and persons in charge under Section 70 of the Prevention of Money-Laundering Act, 2002. The statutory safeguard is necessary where cognizance is taken and process is issued in a complaint case.
Conclusion: The first proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 applies to PMLA complaint proceedings and to corporate accused.
Issue (ii): Whether summons issued without the mandatory pre-cognizance notice and supply of complaint under Section 227(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 are liable to be set aside.
Analysis: The mandatory notice contemplated by the first proviso to Section 223(1) was not complied with, and the complaint copies required under Section 227(3) were also not furnished. Since these procedural requirements are mandatory before cognizance and issuance of process, their breach vitiates the proceedings and renders the summons unsustainable in law.
Conclusion: The impugned summons were liable to be set aside for non-compliance with the mandatory statutory procedure.
Final Conclusion: The summons were quashed and the matter was left open for reconsideration by the trial court after affording the petitioners an opportunity of being heard in accordance with law.
Ratio Decidendi: In complaint proceedings under the Prevention of Money-Laundering Act, 2002, the pre-cognizance hearing mandated by the first proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 is mandatory and applies equally to corporate accused; failure to comply vitiates the proceedings.
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