‘BNSS citizen-centric’: Supreme Court rules hearing mandatory before cognisance in PMLA cases

Justices M M Sundresh and N Kotiswar Singh rejected the ED’s contention that proceedings in the case had already advanced into the “inquiry” stage before the BNSS came into force.

“The BNSS is an improved version of the erstwhile CrPC. This is a procedural Code designed to act as a guiding framework to all the stakeholders in the criminal justice system. While retaining several provisions contained in the earlier statute, a conscious endeavour has been made to make the BNSS citizen-centric, while facilitating the investigating agencies and the Courts,” the Supreme Court said on May 20, rejecting the ED’s argument that the accused had to demonstrate prejudice caused by non-hearing.

The matter centred on the interpretation of the first proviso to Section 223(1) of the BNSS after the new criminal laws came into force on July 1, 2024. The BNSS, which replaced the colonial era Criminal Procedure Code (CrPC) on July 1, 2024, governs criminal procedure in India.

Quashing proceedings under the Prevention of Money Laundering Act (PMLA) against an accused, the court declared that any cognisance taken in violation of Section 223(1) of the BNSS would be “void ab initio”.

Court praises BNSS as rights-oriented reform

• The Supreme Court described the BNSS as a significant improvement over the CrPC, 1973.
• The BNSS is an “improved version” of the erstwhile CrPC, the court said, adding that it is a procedural code designed to act as a “guiding framework” to all stakeholders in the criminal justice system.
• The Supreme Court further noted that while retaining several provisions from the old criminal procedure code, “a conscious endeavour has been made to make the BNSS citizen-centric”.
• The judges said the first proviso to Section 223(1) of the BNSS, which bars courts from taking cognisance without hearing the accused, was not a mere procedural formality but a substantive right flowing from Article 21 (protection of life and personal liberty) of the Constitution.

ECIR registered in 2023

The ED had registered an Enforcement Case Information Report (ECIR) against Parvinder Singh on July 24, 2023. He was arrested on April 27, 2024, following which the agency filed a prosecution complaint under Sections 3 and 4 of the PMLA before the special court on June 24, 2024.

The special court directed the complaint to be registered and initially fixed June 28, 2024, for hearing on cognisance. However, because the presiding officer was on leave, the matter was adjourned to July 2. By then, the BNSS had already replaced the CrPC with effect from July 1, 2024.

On July 2, 2024, the special court took cognisance in the presence of the ED’s special public prosecutor and the accused, who appeared through video conferencing from judicial custody. The court held that sufficient material existed to proceed under the PMLA.

Accused challenged cognisance order

Singh subsequently moved an application on December 24, 2024, seeking recall of the cognisance order on the ground that the mandatory hearing requirement under Section 223(1) of the BNSS had been violated.

The special court rejected the plea on March 22, 2025, describing it as a delaying tactic and holding that cognisance orders could not be reconsidered once passed. It also framed charges against the accused under Sections 3 and 4 of the PMLA.

The accused then approached the Uttarakhand High Court by way of revision petitions, challenging both the cognisance order and the rejection of the recall plea.

The high court dismissed the challenge to cognisance, ruling that proceedings had already commenced before the BNSS came into force and therefore the CrPC would continue to apply by virtue of the saving clause under Section 531(2)(a) of the BNSS.

PMLA stand-alone law: ED

Before the Supreme Court, Additional Solicitor General S V Raju argued that the PMLA is a stand-alone statute and that the complaint procedure contemplated under the BNSS does not apply to proceedings before special courts under the anti-money laundering law.

The ED also contended that an “inquiry” had already commenced once the complaint was filed before July 1, 2024 and therefore the old CrPC regime would continue to govern the proceedings. The Supreme Court, however, rejected the argument outright.

‘Disastrous consequences’ if ED stand accepted

• The Supreme Court held that Sections 223 to 228 of the BNSS, corresponding to Sections 200 to 205 of the CrPC, continue to apply to PMLA proceedings because there is no inconsistency between those provisions and the special statute.
• The court relied on earlier rulings and reiterated that special courts under the PMLA must follow complaint procedures under criminal law while taking cognisance.
• The judges warned that accepting the ED’s argument would create “disastrous consequences” because special courts would then lose powers to dismiss complaints lacking evidence, postpone the process, or issue a summons in accordance with criminal procedure law.
• The mandate of a legislation which ensures the right of an accused to a fair trial, whose liberty is at stake, cannot be dispensed with, the Supreme Court said.

Mere filing of complaint not ‘inquiry’: SC

• The Supreme Court also rejected the ED’s contention that proceedings had already advanced into the “inquiry” stage before the BNSS came into force.
• A “mere ministerial act” cannot be termed as an ‘inquiry’, the Supreme Court said, clarifying that inquiry begins only when there is judicial application of mind.
• The judges held that the June 24, 2024 order, merely directing registration of the complaint and posting the matter for hearing, did not amount to commencement of inquiry under Section 2(1)(k) of the BNSS.

Cognisance order set aside

Allowing the appeal, the Supreme Court set aside both the Uttarakhand High Court’s judgment dated May 19, 2025, and the Special Court’s cognisance order dated July 2, 2024.

The apex court directed the special court to hear the accused afresh at the stage of cognisance and complete the exercise within eight weeks.

The ruling is expected to have a significant impact on PMLA prosecutions instituted after the BNSS came into force, especially in cases where special courts proceeded to take cognisance without granting the accused a pre-cognisance hearing mandated under the new criminal procedure regime.