In a significant judgment, the Supreme Court has ruled that any accused in a money laundering case filed under the Prevention of Money Laundering Act (PMLA) must be given a chance to be heard before a court takes cognizance of the complaint, if the case falls under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023.
A bench of Justice Abhay S Oka and Justice Ujjal Bhuyan set aside the cognizance order passed by a Special Court on November 20, 2024, as it violated this requirement. The Court noted that BNSS, which replaced the old criminal procedure law and came into force on July 1, 2024, clearly mandates that the accused must be heard before the court takes cognizance of the offence.
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“In this case, admittedly, the opportunity was not given to the accused by the learned special judge before taking cognizance of the offence alleged in the complaint. Only on that ground, the order dated 20th November 2024 will have to be set aside,” the Supreme Court stated.
The case in question is Kushal Kumar Agarwal v. Directorate of Enforcement, Special Leave Petition (Crl.) No. 2766/2025.
Earlier, in the case of Tarsem Lal vs ED, it was held that complaints under Section 44(1)(b) of PMLA are to be governed by Sections 200 to 204 of the old CrPC. Since BNSS has replaced CrPC, the new provisions in Chapter 16, especially Sections 223 to 226, now apply to such complaints.
Section 223(1) of BNSS includes a proviso that prevents the magistrate from taking cognizance without first giving the accused a chance to respond.
The Court also addressed the arguments made by Additional Solicitor General SV Raju. He argued that the hearing under Section 223 should only focus on whether the complaint and its documents form a valid case to proceed. He also submitted that the court takes cognizance of the offence, not the person, and hence, once taken, there is no need to take cognizance again for any supplementary complaint.
However, the Court noted: “These submissions need not be considered as the same do not arise in this appeal at this stage. They are left open.”
In a previous hearing, the Enforcement Directorate (ED) had argued that since the investigation was completed before BNSS came into effect, the accused had no right to demand a hearing. However, this argument was not raised in the final hearing.
The Supreme Court directed the accused to appear before the Special Court on July 14, 2025, so that he can be properly heard in line with Section 223 of BNSS.
“The appellant shall now appear before the Special Court on 14th July so that he can be given an opportunity of being heard,” the Court ordered.
Case no. – Petition for Special Leave to Appeal (Crl.) No. 2766/2025
Case Title – Kushal Kumar Agarwal v. Directorate of Enforcement
