Supreme Court Makes Pre-Cognizance Hearing Mandatory In PMLA Cases Under BNSS

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New Delhi: In a major judgment redefining procedural safeguards in money laundering prosecutions, the Supreme Court has ruled that accused persons in Enforcement Directorate complaints under the Prevention of Money Laundering Act (PMLA) must be given an opportunity of hearing before Special Courts take cognizance of offences under the Bharatiya Nagarik Suraksha Sanhita (BNSS).

A Bench of Justices M. M. Sundresh and Nongmeikapam Kotiswar Singh delivered the ruling while allowing an appeal filed by Parvinder Singh against the Directorate of Enforcement. The Court set aside both the Uttarakhand High Court judgment dated May 19, 2025, and the Special Court order dated July 2, 2024, by which cognizance had been taken without hearing the accused.

The controversy arose after the ED filed a prosecution complaint against the appellant under Sections 3 and 4 of the PMLA on June 24, 2024. Though the complaint was filed before the BNSS came into force on July 1, 2024, cognizance was taken by the Special Court only on July 2, 2024, without granting the accused an opportunity of hearing.

The apex court examined the scope of the first proviso to Section 223(1) of the BNSS, which states that no cognizance of an offence shall be taken without giving the accused an opportunity of being heard. The Court held that the provision is mandatory and substantive in nature because it advances the constitutional guarantee of a fair trial under Article 21.

Writing for the Bench, Justice Sundresh observed that the word “shall” used in the proviso leaves no discretion with the court and that cognizance taken in violation of the provision would be “void ab initio.”

The ED had argued that the PMLA is a stand-alone legislation and that proceedings initiated before the BNSS came into force would continue under the old Code of Criminal Procedure by virtue of Section 531(2)(a) of the BNSS. However, the Supreme Court rejected the contention, holding that mere registration or numbering of a complaint prior to July 1, 2024 did not amount to commencement of an “inquiry.”

The Court further reaffirmed earlier judgments including Tarsem Lal v. Enforcement Directorate, Yash Tuteja v. Union of India, and Kaushal Kumar Agarwal v. Directorate of Enforcement, holding that provisions relating to complaint cases under the CrPC — now embodied in Sections 223 to 228 of the BNSS — apply fully to PMLA prosecutions unless expressly excluded.

Importantly, the Bench rejected the ED’s plea that the accused must demonstrate prejudice caused by the absence of hearing. The Court held that denial of hearing at the cognizance stage is not a mere procedural irregularity but an illegality that strikes at the root of the proceedings.

The Special Court has now been directed to hear the accused afresh at the stage of cognizance and complete the exercise within eight weeks.