Failure to hear accused before cognizance makes ED complaint order illegal, Madras HC rules

The Directorate of Enforcement filed a complaint under Section 44(1)(b) of the Prevention of Money Laundering Act, 2002 (PMLA), dated 9 September 2024, against Jaffer Sadiq.

The XIII Additional Sessions Judge/Special Judge for CBI Cases, Chennai, took cognizance of the complaint on 18 October 2024 without issuing notice to or affording an opportunity of hearing to the petitioner.

The petitioner challenged the cognizance order and sought quashing of the proceedings in Spl.C.C. No.17 of 2024, relying on the proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).

The Enforcement Directorate argued that the ECIR had been registered before the BNSS came into force on 1 July 2024 and that, under Section 531 of the BNSS, the proceedings were therefore governed by the repealed Code of Criminal Procedure, 1973 (CrPC).

1. Whether a complaint filed by the Enforcement Directorate under Section 44(1)(b) of the PMLA after 1 July 2024 is governed by Section 223 of the BNSS, notwithstanding that the underlying ECIR was registered before that date?

2. Whether the Special Court could take cognizance of the complaint without first giving the accused an opportunity of being heard, as required by the proviso to Section 223(1) of the BNSS?

The Court applied Section 44(1)(b) of the PMLA, under which the Enforcement Directorate may institute a complaint before the Special Court; Sections 200 to 204 of the CrPC, which govern the cognizance process for such complaints; and Sections 223 to 226 of the BNSS, which correspond to the complaint procedure under the CrPC.

The Court held, following Yash Tuteja v. Union of India and Tarsem Lal v. Enforcement Directorate, that an Enforcement Directorate complaint under Section 44 of the PMLA is governed by the complaint procedure in the procedural code.

Section 223(1) of the BNSS contains a material new proviso stipulating that no cognizance may be taken without giving the accused an opportunity of being heard.

Relying principally on Kushal Kumar Agarwal v. Directorate of Enforcement, 2025 SCC OnLine SC 1221, the Court held that where the PMLA complaint is filed after 1 July 2024, Section 223 of the BNSS applies and the hearing requirement is mandatory.

The Court treated the filing of the PMLA complaint—not the earlier registration of the ECIR—as the relevant procedural event for determining the applicable law.

Since the complaint was filed on 9 September 2024, after the BNSS came into force on 1 July 2024, the complaint procedure under Section 223 of the BNSS applied.

Section 223(1) expressly imposed an embargo on taking cognizance without giving the accused an opportunity of hearing.

The trial court had taken cognizance on 18 October 2024 without issuing such notice.

Applying the binding rule in Kushal Kumar Agarwal, the High Court held that the cognizance order was directly contrary to the statutory requirement and was therefore per se illegal and impermissible.

The respondent’s reliance on Section 531 of the BNSS and authorities concerning proceedings initiated under the earlier procedural regime did not alter this conclusion.

The order dated 18 October 2024 taking cognizance in Spl.C.C. No.17 of 2024 was accordingly set aside.

The complaint was restored to its original file and the Special Court was directed to proceed in accordance with law.

The Criminal Original Petition was partly allowed, and the connected miscellaneous petition was closed.