Supreme Court Declares Cognizance under PMLA Vitiated Without Prior Hearing under BNSS

The Supreme Court has ruled that when a magistrate takes cognizance of an alleged offence under the PMLA after the BNSS came into force, the order is void unless the first proviso of Section 223(1) is complied with. Key Developments The bench of Justice MM Sundresh and Justice Nongmeikapam Kotiswar Singh set aside the Uttarakhand High Court’s order that had taken cognizance without a hearing. The complaint was filed on 24 June 2024 under Sections 44 and 45 of the PMLA, but cognizance was taken on 2 July 2024 , after the BNSS replaced the CrPC (effective 1 July 2024). The Court rejected the argument that the magistrate’s administrative act of numbering the complaint amounted to an “inquiry” under the BNSS savings clause. The order taking cognizance was declared vitiated; the Special Court must grant a hearing and re‑take cognizance within eight weeks of the judgment. Important Facts • The Enforcement Directorate lodged the complaint. • The Special Court, created under the PMLA, is the trial forum for money‑laundering cases. • The Court held that a mere ministerial direction to register a complaint does not constitute an “inquiry” as defined in Section 2(1)(k) of BNSS. UPSC Relevance • Understanding the shift from the Criminal Procedure Code to the BNSS is essential for GS 2 (Polity) and GS 3 (Economy) questions on legal reforms. • The principle of cognizance and the mandatory prior hearing reflect procedural safeguards enshrined in the Constitution, relevant for questions on due‑process and fair trial. • The role of the ED illustrates the intersection of law enforcement and economic policy, a frequent GS 3 topic. Way Forward The Special Court must: Allow the appellant’s application for recall of the cognizance order under the first proviso of Section 223(1). Conduct a proper hearing before re‑taking cognizance. Complete the re‑taken cognizance process within eight weeks of receiving the judgment copy. This judgment underscores that procedural rights cannot be ignored even when a case originates before a new law comes into force. Aspirants should note the emphasis on safeguarding the accused’s right to a fair trial, a cornerstone of constitutional law.