The Supreme Court set aside an order of a Special Court where an opportunity of being heard was not given to the accused before taking cognizance of the offence on the complaint filed under Section 44(1)(b) of the Prevention of Money Laundering Act, 2002. The Apex Court held that the provisions of Chapter XVI of the Bharatiya Nagarik Suraksha Sanhita 2023, containing Sections 223 to 226, will also apply to a complaint under Section 44 of the PMLA.

A complaint was filed under Section 44(1)(b) of the Prevention of Money Laundering Act, 2002 (PMLA) against the accused-appellant.

The Division Bench of Justice Abhay S. Oka and Justice Ujjal Bhuyan explained, “Therefore, the provisions of Chapter XVI, containing Sections 223 to 226, will also apply to a complaint under Section 44 of the PMLA. As the complaint has been filed after 1st July, 2024, Section 223 of the BNSS will apply to the present complaint.”

“In this case, admittedly, an opportunity of being heard was not given by the learned Special Judge to the appellant before taking cognizance of the offence on the complaint”, it said while also adding, “The impugned order dated 20th November, 2024, is set aside only on the ground of non-compliance with the proviso to sub-section (1) of Section 223 of the BNSS.”

Advocate Vijay Aggarwal represented the Appellant while Additional Solicitor General Suryaprakash V. Raju represented the Respondent.

Reasoning

Referring to the judgments in Yash Tuteja v/s Union of India and others (2024) and Tarsem Lal v/s Enforcement Directorate (2024), the Bench said, “This Court has taken a consistent view that a complaint filed by the Enforcement Directorate under Section 44 (1)(b) of the PMLA will be governed by Sections 200 to 204 of the CrPC.”

The Bench explained that 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.

Two submissions were raised by the Additional Solicitor General. One of them was that the hearing given to the accused in terms of the proviso to sub-section (1) of Section 223 of the BNSS will be confined to the question whether a case is made out to proceed on the basis of the complaint. Another submission was that after taking cognizance and after following the procedure prescribed by the proviso to sub-section (1) of Section 223 of the BNSS, if cognisance is taken, there will be no occasion to again take cognizance of the same offence when supplementary or further complaints are filed.

The Bench held that these submissions need not be considered, as the same did not arise in this appeal at this stage. However, the Bench kept the contentions expressly open so that they could be raised before the Special Court. Partly allowing the appeal, the Bench set aside the impugned order only on the ground of non-compliance with the proviso to sub-section (1) of Section 223 of the BNSS held.

“We direct the appellant to appear before the Special Court on 14th July, 2025, so that he can be given an opportunity of being heard in terms of the proviso to sub-section (1) of Section 223 of the BNSS. We make it clear that no further notice shall be issued by the Special Court to the appellant”, it concluded.

Cause Title: Kushal Kumar Agarwal v. Directorate of Enforcement (Neutral Citation:2025 INSC 760)

Appearance

Appellants: Advocates Vijay Aggarwal, Nagesh Behl, Animesh Rajoriya, Barkha Rastogi, Rhythm Aggarwal,Vishal Gaurav, AOR Somesh Chandra Jha, Advocates Shekhar Pathak, Saurabh Nagar, Ashish Arya

Respondent: Additional Solicitor General Suryaprakash V. Raju, Advocates Annam Venkatesh, Zoheb Hussain, Samrat Goswami, AOR Arvind Kumar Sharma, Advocates Aditi Singh, Anushka Gupta, Anand Kirti, Vismaya Bansal, Geeta Bajaj, Rajesh Batra, Sonia Kukreja, Prabhas Bajaj, Ansh Singh Luthra

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Justice Abhay S OkaJustice Ujjal Bhuyan

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.