TaxTMI 
TaxTMI 
Pre-Cognizance Hearing under Section 223 BNSS in PMLA Complaints
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.... afforded an opportunity of hearing before cognizance is taken. The Court characterised this safeguard as substantive, mandatory and integral to a fair trial under Article 21 of the Constitution of India. The ruling is significant for two connected reasons. First, it rejects the proposition that the PMLA Special Court may disregard the general complaint procedure merely because it is a Court of Session exercising special statutory jurisdiction. Secondly, it confines the BNSS saving clause to proceedings that had genuinely reached a pending appeal, application, trial, inquiry or investigation before commencement of the BNSS. A ministerial direction to register a complaint and post it for consideration of cognizance does not, by itself, constitute an inquiry. Legal & Statutory Context The PMLA framework: special jurisdiction with incorporated criminal procedure Section 44 of the Prevention of Money-Laundering Act, 2002 is the immediate source of the Special Court's cognizance jurisdiction. Section 44(1)(b) provides that a Special Court may, upon a complaint by an authorised authority, take cognizance of an offence under Section 3 "without the accused being committed t....
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....e and unqualified restraint: "no cognizance of an offence shall be taken by the Magistrate without giving the accused an opportunity of being heard." This is the decisive operative phrase. The further provisos to Section 223(1) permit the dispensing with examination of the complainant and witnesses where a written complaint is made by a public servant acting in official discharge or by a Court, and in specified transfer situations. They do not dispense with the accused's hearing under the first proviso. The statutory exceptions to complainant examination cannot be treated as exceptions to the distinct pre-cognizance hearing requirement. For transitional cases, Section 531(2)(a) of the BNSS provides that an appeal, application, trial, inquiry or investigation pending immediately before the BNSS came into force shall continue under the CrPC as if the BNSS had not come into force. The definition of "inquiry" in Section 2(1)(k) of the BNSS means every inquiry, other than a trial, conducted under the Sanhita by a Magistrate or Court. Its application was central to the transitional issue. Interpretative Issues Does direct cognizance under Section 44(1)(b) exclude complain....
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....cognizance stage was governed by the BNSS. As the accused had not been heard before cognizance, the first proviso to Section 223(1) was violated. The Court held that the proviso is substantive rather than merely procedural because it confers a right that forms part of the fair-trial guarantee under Article 21. The expression "shall" was construed as mandatory. Cognizance taken without compliance was held void ab initio, rather than an irregularity that could be sustained absent proof of prejudice. This conclusion establishes an important distinction between procedural defects and jurisdictional or foundational illegality. Failure to provide a hearing is not cured by demonstrating that the allegations are serious, that material exists against the accused, or that the accused cannot show actual prejudice. The hearing is a condition precedent to the lawful exercise of cognizance power. The appropriate corrective course is restoration to the cognizance stage, followed by a hearing and a fresh decision in accordance with law. The holding does not convert pre-cognizance hearing into a trial on merits. The Special Court retains its obligation to examine the complaint and supporting ....
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....tion 65. This supplies broader doctrinal support for the approach to Section 223: an incorporated criminal-procedure protection remains operative unless the PMLA expressly or necessarily excludes it. In 2024 (9) TMI 508 - Supreme Court, the Court reached a different result in relation to summons issued during inquiry under Section 50 of the PMLA. It held that the special PMLA inquiry and summons regime displaced inconsistent CrPC provisions governing police investigation. That decision does not undermine the application of Section 223 to a PMLA prosecution complaint. Rather, it demonstrates the governing distinction: where the PMLA creates a specific and incompatible procedure, it prevails; where there is no inconsistency at the complaint-and-cognizance stage, the BNSS complaint procedure applies. In 2024 (3) TMI 926 - KARNATAKA HIGH COURT, the Court held that an authorised PMLA complaint need not undergo an inquiry under Section 202 of the CrPC before process is issued. That proposition concerns postponement of process and a distinct statutory setting; it cannot be expanded into an exemption from the later statutory mandate of a hearing before cognizance under the first prov....
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....f a complaint from the judicial exercise of cognizance. The order-sheet should demonstrate that the proposed accused received an opportunity of hearing before cognizance was decided. • For proposed accused, the hearing is a statutory opportunity to address the legal sufficiency of cognizance. The challenge should be directed to the complaint, the jurisdictional prerequisites and the prima facie material, without treating the hearing as a substitute for trial or charge-stage adjudication. • In transition cases, the decisive question is not merely when the complaint was lodged. It is whether an appeal, application, trial, inquiry or investigation was actually pending before the BNSS commencement date. A mere listing or registration order does not establish a pending inquiry. • Where cognizance has already been taken without the required hearing, the consequence identified in the governing decision is restoration to the cognizance stage. In 2026 (5) TMI 1236 - Supreme Court, the Court set aside the cognizance order and directed the Special Court to afford a hearing and complete the exercise within eight weeks. Concluding Remarks Th....