A PMLA Special Court’s cognizance order could not stand because it issued process without first hearing the accused as required by the proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023, the Bombay High Court held.
Justice Milind N. Jadhav quashed the 14 February 2025 order in PMLA Special Case No. 313 of 2025 and restored the Enforcement Directorate proceeding to the pre-cognizance stage.
“the impugned order dated 14.02.2025 cannot be sustained on the ground that the Petitioner was not given an opportunity of hearing before taking cognizance.”
— Para 6
Why it matters. The first proviso to Section 223(1) creates a substantive hearing right before a complaint becomes a criminal case through cognizance. For PMLA prosecution complaints filed after BNSS commenced on 1 July 2024, skipping that step makes the resulting order legally unsustainable.
The new pre-cognizance safeguard
ED filed its complaint on 10 February 2025. Four days later, the Special Court took cognizance ex parte and issued process against Nikita Nimesh Shah and 14 co-accused without notice to them under Section 223.
The High Court applied Kushal Kumar Agarwal v. Directorate of Enforcement, where the Supreme Court held that Sections 200 to 204 of the Code of Criminal Procedure, 1973 governed an ED complaint and that the corresponding BNSS procedure applied after commencement. Under the new code, Sections 223 to 226 cover that complaint stage.
It also relied on Parvinder Singh v. Directorate of Enforcement, which treated the proviso’s word “shall” as mandatory and the hearing as part of Article 21’s fair-trial protection. The judgment accordingly maps the old complaint procedure in Section 200 CrPC to Section 223 BNSS. Shah invoked the High Court’s inherent jurisdiction under Section 528 BNSS, corresponding to Section 482 CrPC, alongside Article 227.
ED’s counsel did not dispute either the governing legal rule or the fact that Shah had not been heard.
The judgment
The High Court quashed the cognizance-and-process order and returned ECIR No. ECIR/MBZO-I/73/2022 to the Special Court at the cognizance stage. It did not quash ED’s complaint or decide whether its allegations establish money laundering.
Shah must appear on the next hearing date, so no fresh court notice is required. ED must inform her sufficiently in advance of the listing. The Special Court must then give her the statutory opportunity and reconsider cognizance in accordance with law. All parties were directed to cooperate.
The petition was allowed and disposed of on those terms.
“the learned Special Counsel appearing for Respondent No.1 – Directorate of Enforcement does not dispute the legal position nor he disputes the fact that Petitioner was not heard by the Special Court before it took cognizance.”
— Para 5
“Petitioner shall appear on the next date of hearing before the Special Court and the Special Court shall give an opportunity of hearing to the Petitioner in accordance with the extant legal position.”
— Para 7
“Petitioner shall however be informed by Respondent No.1 – Directorate of Enforcement well in advance about the date of listing of the aforesaid case before the Special Court.”
— Para 8