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2025 (7) TMI 1459
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....Mr. Ankit Khanna, Mr. Deepak Sharma, Ms. Swati Kumari Singh, Ms. Rupam ... Advocates. JUDGMENT SABYASACHI BHATTACHARYYA, J.:- 1. The present Criminal Revisions assail an order dated February 15, 2025, whereby the learned Chief Judge, City Sessions Court at Calcutta, acting in the capacity of Special Court under the Prevention of Money-Laundering Act, 2002 (for short, "the PMLA") taking cognizance of offences under Sections 3 and 4, read with Section 70 of the PMLA against each of the petitioners. The petitioners further seek quashing of the proceedings initiated in connection with the complaint, being the ECIR/KLZO-I/10/2023 dated March 24, 2023. 2. Learned senior counsel appearing on behalf of the petitioners contends that the learned Special Judge took cognizance in violation of the First Proviso to Section 223 of the Bhartiya Nagarik Suraksha Sanhita, 2023 (for short, "the BNSS") since no opportunity of hearing was given to any of the petitioners/accused persons prior to taking such cognizance. Learned senior counsel contends that the provision of affording an opportunity of hearing to the accused prior to taking cognizance has been introduced in the new regime of criminal l....
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.... Shivananda S. Patil [Criminal Petition No.7526 of 2024]; (ii) Suby Antony v. R1 & Ors. [Crl. MC No.508/2025]; (iii) Mohd. Muzayyn v. State of U.P. [Application u/s 482 No.9725 of 2025]; (iv) Anil Kumar Yadev v. Directorate of Enforcement [CRM(M) No.329/2025]; 6. Learned senior counsel appearing for the petitioners further points out that a consistent stand has been taken by the learned Additional Solicitor General of India (ASGI) as well as other counsel appearing for the ED before different for a in the various cases enumerated below, where the ED conceded to the above legal position: (i) ED v. Sonia Gandhi & Ors. [CT No.14/2025]; (ii) Surender Panwar v. Directorate of Enforcement [CRM-M 26482-2025]; (iii) Directorate of Enforcement v. Mr. Arvind Dham [Crl. M.C. 7860 of 2024]; (iv) Nili Sheth W/O Siddharth Sheth v. State of Gujarat & Anr.; 7. Learned senior counsel flags the inconsistent approach adopted by the ED before different courts which, according to him, is contrary to the spirit and sanctity of the sage counsel given by the Hon'ble Supreme Court in Pankaj Bansal v. Union of India and others, reported at 2023 SCC OnLine SC 1244. 8. Learned senior counsel ....
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....next relies on Tsering Dolkar v. Administrator, Union Territory of Delhi, reported at (1987) 2 SCC 69, where it was held by the Supreme Court that in the matter of preventive detention, the test is not one of prejudice but one of strict compliance with the provisions of the Act. The principles of preventive detention, it is contended, have been applied in PMLA cases while elaborating the scope of Section 19 thereof in respect of power to arrest, including in the case of Avind Kejriwal v. Directorate of Enforcement, reported at (2025) 2 SCC 248. 16. The petitioner cites State of Haryana v. Bhajan Lal, reported at 1992 Supp (1) SCC 335, in support of the contention that the investigation of an offence is a field exclusively reserved for police officers, whose powers in that field are unfettered so long as the power to investigate into the cognizable offence is legitimately exercised in strict compliance with the provisions falling under the Cr.P.C. If a police officer transgresses the circumscribed limits and improperly and illegally exercises his investigatory powers in breach of any statutory provision, causing serious prejudice to the personal liberty and property of a person, th....
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.... is argued on behalf of the ED that no prejudice has either been demonstrated or pleaded by the petitioners on account of not getting an opportunity of hearing in terms of the first proviso to Section 223. Thus, unless miscarriage of justice is pleaded and proved, the proceedings cannot be set aside, as held in Fertigo Mktg. & Investment (P) Ltd. v. CBI, reported at (2021) 2 SCC 525 and State of Karnataka v. Kuppuswamy Gownder, reported at (1987) 2 SCC 74. 24. In U.P. v. Sudhir Kumar Singh, reported at (2021) 19 SCC 706, it is argued, the Supreme Court has settled the law that no prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-challenge or non-denial or admission of facts, in cases in which the court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice. 25. The "prejudice" exception must be more than a mere apprehension or even a reasonable suspicion of a litigant and should exist as a matter of fact, to be based upon a defini....
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....uestions have been raised by the parties, which can be summarised as follows: (i) Whether violation of the first proviso to Section 223, BNSS vitiates the order of taking cognizance and consequential proceedings. (ii) Whether absence of the words "including any complaint filed by a person authorised under Special Law", as enumerated in Section 210 (1) (a) of the BNSS, in Section 223, BNSS excludes operation of the first proviso to Section 223 to cognizance in respect of such complaints. (iii) Whether the accused has a burden to show "prejudice" and "miscarriage of justice" to vitiate an order taking cognizance on the ground of depriving the accused of pre-cognizance opportunity of hearing. (iv) Whether complaints under the PMLA are in the nature of charge sheets and not "complaints" under Sections 210 and 223 of the BNSS. (v) Whether the concessions given by the ED and divergent stands taken by it in previous cases can be taken note of while deciding the issues involved herein. (i) Whether violation of the first proviso to Section 223, BNSS vitiates the order of taking cognizance and consequential proceedings. 31. There are primarily two sub-issues involved under the ab....
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....vision which governs and circumscribes Section 210, but is itself not the source of power of the Magistrate to take cognizance of offences in the first place. Such power is derived from Section 210 itself. Thus, the expression "empowered by law" used in Section 506 relates to the authority of the Magistrate, be it territorial or hierarchical or otherwise, of the Magistrate to take cognizance under Section 210 in the first place and has nothing to do with the compliance under Section 223, first proviso. There lies the fallacy of such argument of the ED. Thus, the non-compliance of the first proviso to Section 223, BNSS cannot be an "irregularity" contemplated in Section 506. 36. Another aspect of the matter deserves serious consideration. The ED, in its arguments, seeks to relegate the non-compliance of the first proviso to Section 223, which emanates from the cardinal principle of Audi Alteram Partem embedded in natural justice, to a mere "irregularity" which is curable. 37. We are to keep in mind that the Legislature, in its wisdom, has deliberately introduced the first proviso to Section 223, thereby conferring on the accused the right to have an opportunity of hearing at the p....
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....rudence in India. As held in Baldev Singh (State of Punjab v. Baldev Singh, reported at (1999) 6 SCC 172), "the severer the punishment, the greater has to be the care taken to see that all safeguards provided in a statute are scrupulously followed". Hence, it is all the more necessary to put the right of hearing afforded to the accused under the first proviso to Section 223(1) of the BNSS, which is obviously a progressive piece of legislation keeping in view the transition of criminal jurisprudence from a retributive to a reformative regime, on its proper pedestal of a mandatory pre-requisite of cognizance under Section 210, BNSS. Thus, the negation of such right altogether cannot be relegated to a mere irregularity, the compliance of which would not affect the cognizance itself and, consequentially, the resultant proceedings. 42. Accordingly, this issue is answered in the affirmative, holding that the denial of opportunity of hearing to the accused persons/petitioners prior to taking cognizance under Section 210, BNSS, is fatal to such cognizance and vitiates the order of cognizance itself, along with the subsequent proceedings undertaken in pursuance thereof. (ii) Whether absen....
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....223(1) has two distinct components-examination upon oath of the complainants and witnesses present and reducing the substance thereof to writing signed by the complainants and the witnesses on the one hand, and giving an opportunity of hearing to the accused on the other. While the second proviso to Section 223 remains as it was in the Cr.P.C. and carves out an exception regarding the examination of the complainant and the witnesses in certain cases, no corresponding exception has been provided in Section 223 with regard to opportunity of hearing to the accused, in case of complaints under special statutes. Thus, by its very omission, the legislative intent is manifested to the effect that no relaxation regarding opportunity of evidence being given to an accused, as provided under the first proviso to Section 223(1), BNSS has been sought to be read into Section 223 with regard to complaints under special laws. 50. Hence, this issue is held in the negative. The absence of the words "including any complaint filed by a person authorised under any Special Law" in Section 223 of the BNSS does not have the impact of exclusion of the operation of the first proviso to Section 223(1) in re....
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....ot be taken in the first place in view of the negative language of the first proviso to Section 223(1), BNSS. The "prejudice" argument of the ED, cannot, thus, be accepted. 56. Certain judgments have been relied on by the ED for the said proposition, one of which is Fertigo Mktg. & Investment (P) Ltd. (Fertigo Mktg. & Investment (P) Ltd. v. CBI, reported at (2021) 2 SCC 525). In the said judgment, the Supreme Court took into consideration a "mere technical error or irregularity" in the complaint which, in the opinion of the Supreme Court, did not warrant setting aside of the investigation unless prejudice was shown to have been caused to the accused. There, the Supreme Court was considering a case of absence of prior consent under Section 6 of the Delhi Special Police Establishment Act and lack of approval of the CVC prior to investigation. 57. Again, in Kuppuswamy Gownder (State of Karnataka v. Kuppuswamy Gownder, reported at (1987) 2 SCC 74.), a technical objection as to lack of territorial jurisdiction was taken. In such context, it was held that an investigation cannot be derailed merely on technical errors or irregularities. 58. As opposed thereto, the substantive opportuni....
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....024) 8 SCC 465, and Tarsem Lal v. Directorate of Enforcement Jalandhar Zonal Office, reported at (2024) 7 SCC 61, violation of mandatory pre-requisites under the Cr.P.C. even in cases of PMLA complaints, vitiates the cognizance itself. 63. Section 65, read with Section 46 of the PMLA, make it abundantly clear that the provisions of the Criminal Procedure Code are applicable to all proceedings before Special Courts under the PMLA. Vide Notification No. S.O. 2790 (E) dated July 16, 2024, the provisions of the BNSS have replaced the Cr.P.C. in the said Sections. Thus, there cannot be any manner of doubt that if the mandatory provision of the first proviso to Section 223(1) of BNSS is violated, in view of the negative language in which the said proviso is couched, the cognizance itself becomes a nullity and is patently vitiated. 64. Kushal Kumar Agarwal (supra), cited by the petitioners, held in no uncertain terms that, in such cases, the order taking cognizance has to be set aside. 65. Accordingly, this court is of the firm view that the denial of the right of prior hearing, as enumerated in the first proviso to Section 223 of the BNSS, is sufficient to vitiate the order taking cog....
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....ed senior counsel for the petitioners vociferously argues that the ED has been taking divergent stands before different courts, on a case-to-case basis. It is alleged that whereas concessions were given on behalf of the ED in certain cases by learned ASGI, while appearing before different courts, as to non-compliance of the first proviso to Section 223(1) of BNSS vitiating the cognizance, a diametrically opposite stand is being taken before this Court. 70. Although such contention appears to be true, much weight cannot be lent to such argument in the present context. It is seen from the observations made in Pankaj Bansal (Pankaj Bansal v. Union of India and others, reported at 2023 SCC OnLine SC 1244) that the Supreme Court deprecated the style of functioning of the ED, being a premier investigating agency charged with the onerous responsibility of curbing the debilitating economic offence of money-laundering in our country, on the ground that it was failing to discharge its function in exercise of its powers as per such parameters. It is also found from the materials placed before this court that, in several cases before various courts, the ED has conceded to the issue of non-com....