The Proposed Accused under PMLA must be given an opportunity of Hearing by the PMLA Court Before taking Cognizance against him: Supreme Court

Section 223 of BNSS-2024 is equally applicable in the Complaint filed under Section 44/45 of PMLA before Special Court and the opportunity of being heard must be given to the accused prior to the cognizance is taken by the Special Court under PMLA.

The recent implementation of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) which replaces the colonial-era Criminal Procedure Code (CrPC) has introduced significant procedural changes in the Indian criminal justice system. One such change gaining legal attention is its potential impact on proceedings under The Prevention of Money Laundering Act, 2002 (PMLA), particularly concerning the rights of accused persons before cognizance is taken by the Special Court.

A crucial development is the growing recognition that accused persons under PMLA are entitled to be heard before cognizance is taken on an Enforcement Directorate (ED) complaint filed after the BNSS came into effect. This interpretation not only aligns with principles of natural justice but also reflects the spirit of fair procedure embedded in the BNSS.

Under the PMLA, complaints by the ED are filed before a Special Court, which proceeds to take cognizance of the offence. Traditionally, under the CrPC regime, this was a unilateral step taken by the court based solely on the ED's complaint, without any requirement of hearing the accused at the cognizance stage.

Why a Pre-Cognizance Hearing Matters ?

1. Reinforcement of Natural Justice
The principle of audi alteram partem—the right to be heard—is a corner stone of fair trial rights under Article 21 of the Constitution. Allowing the accused to be heard before cognizance ensures that frivolous or politically motivated complaints do not proceed unchecked.

2. Heightened Threshold Under PMLA
The PMLA is a stringent law with severe consequences including arrest, attachment of property, and prolonged incarceration without bail. Given these drastic consequences, any procedural safeguard—such as a pre-cognizance hearing—serves to balance the scales in favor of due process.

The proviso to sub-section (1) of Section 223 puts an embargo on the power of the Court to take cognizance by providing that no cognizance of an offence shall be taken by the Magistrate without giving the accused an opportunity of being heard.

The Hon’ble Supreme Court noted that in Tarsem Lal Vs ED (Criminal Appeal No. 2608 of 2024), it was held that a complaint filed by Enforcement Directorate under Section 44(1) (b) of PMLA will be governed by Sections 200 to 204 of the CrPC. As a corollary, provisions of chapter 16 (sections 223 to 226 of BNSS) will also apply to the complaint under Section 44 of PMLA. The proviso to subsection (1) puts an embargo on the power of the court to take cognizance by providing that no cognizance of an offence shall be taken by the magistrate without giving the accused an opportunity of being heard.

Supreme Court "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 Court said. Additional Solicitor General SV Raju made two submissions. Firstly, that the hearing given to the accused in terms of proviso to subsection (1) of section 223 will be confined to the question whether a case is made out to proceed on the basis of the complaint and hence, only the complaint and the documents produced along with the complaint can be considered at the time of hearing.

The Court said that these submissions need not be considered as the same do not arise in this appeal at this stage. They were left open. The Court directed the appellant to appear before the Special Court on 14th July so that he can be given an opportunity of being heard in terms of proviso to subsection (1) of section 223. On the previous hearing, the ED had raised an argument that since the investigation was completed by the ED before the commencement of the BNSS, accused cannot demand pre-cognizance hearing. However, this point was not raised today.

Recently in the matter of Kushal Kumar Aggarwal Vs ED (Crl. Appeal No.2749 / 2025) the Hon’ble Supreme Court remanded the matter back to the special court directing them to render a sufficient opportunity of being heard to the accused prior to taking cognizance. Following the mandate of law settled in Kushal Kumar Aggarwal (supra) Hon’ble High Court of Delhi also in the matter of Lakshya Vij Vs ED [CRL.M.C. 246/2025] held that since the complaint under PMLA was filed after 01.07.2024 so provision of Section 223(1), BNSS shall apply and hence, the accused must be given an opportunity to be heard by the trial prior taking cognizance.

The argument that accused persons under PMLA are entitled to a hearing before cognizance is taken on complaints filed after the BNSS came into effect represents a bold and necessary evolution in criminal jurisprudence. It harmonizes procedural rigor with the constitutional commitment to justice and liberty.

As the courts continue to interpret and apply the BNSS in complex statutory settings like the PMLA, it is imperative to keep fairness and due process at the core of all proceedings. The road ahead may involve nuanced balancing acts—but the direction is undoubtedly towards a more participatory, transparent, and just criminal justice system.