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PMLA: Hearing of accused at the pre-cognizance stage

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The applicability of the mandatory rule under the first proviso to Section 223(1) of the BNSS IS Core issue, which requires giving the accused a hearing before taking cognizance, to a PMLA complaint filed before the BNSS came into force but where cognizance was taken after its commencement.The Supreme Court set aside the High Court’s judgment and the Special Court’s cognizance order, holding that the first proviso to Section 223(1) of the BNSS is substantive and mandatory. The Special Court was directed to afford the appellant an opportunity to be heard at the stage of taking cognizance.

1. Factual Background

  • ECIR and Arrest: The Directorate of Enforcement (ED/Respondent) registered an ECIR against Parvinder Singh (Appellant) on July 24, 2023, and subsequently arrested him on April 27, 2024.
  • Filing of Complaint: The ED filed a prosecution complaint under Sections 44 and 45 of the PMLA on June 24, 2024, before the designated Special Court. On the same day, the Special Court ordered the complaint to be registered as a miscellaneous case and fixed a hearing for cognizance.
  • Transition to BNSS: On July 1, 2024, the old Code of Criminal Procedure, 1973 (CrPC) was repealed and replaced by the BNSS.
  • Cognizance and Recall: On July 2, 2024 (after the BNSS took effect), the Special Court took cognizance of the offence without giving the appellant a prior hearing. The appellant later filed an application to recall the cognizance order, citing a breach of the first proviso to Section 223(1) of the BNSS. The Special Court dismissed this application on March 22, 2025, calling it a dilatory tactic, and proceeded to frame charges.

2. High Court’s Ruling

The Appellant challenged the orders before the High Court of Uttarakhand. The High Court dismissed the challenge against the cognizance order, ruling that because the PMLA proceedings were initiated before the BNSS commenced, the old CrPC applied pursuant to the savings clause under Section 531(2)(a) of the BNSS. It did, however, partly allow the other revision by quashing the framed charges and remanding the matter back for a fresh hearing on charges.

3. Arguments Raised

  • On Behalf of the Appellant: It was argued that the provisions governing complaints under the CrPC/BNSS seamlessly apply to PMLA trials since there is no textual inconsistency. Because cognizance was taken on July 2, 2024, the first proviso to Section 223(1) of the BNSS was fully active and mandated a pre-cognizance hearing for the accused. A mere ministerial act like numbering a complaint before July 1 did not qualify as a pending “inquiry” to trigger the savings clause of the old CrPC.
  • On Behalf of the Respondent (ED): The Additional Solicitor General (ASG) contended that the PMLA is a standalone special enactment, meaning general chapters of the BNSS regarding magistrate complaints do not apply. Alternatively, the ED argued that an “inquiry” had already commenced prior to July 1, 2024, when the court first dealt with the complaint, meaning the old CrPC was correctly applied under Section 531(2)(a) of the BNSS. They also argued that no actual prejudice was suffered by the appellant due to the lack of a hearing.

4. Key Legal Issues & Findings of the Supreme Court

A. Interplay Between PMLA and the CrPC / BNSS

The Supreme Court re-affirmed its established precedents (Tarsem Lal, Yash Tuteja, and Kushal Kumar Agarwal) holding that provisions regulating complaint procedures (previously Sections 200–205 of the CrPC, now Sections 223–228 of the BNSS) apply directly to PMLA complaints. There is no structural inconsistency between these statutes. Denying this linkage would dangerously strip a PMLA Special Court of basic powers, such as dismissing meritless complaints or dispensing with personal attendance.

B. Definition of “Inquiry” and Section 531(2)(a) of the BNSS

The Court clarified that under Section 2(1)(k) of the BNSS, an “inquiry” is a conscious, judicial act requiring the application of a judicial mind.

  • A purely administrative or ministerial act—such as directing a complaint to be numbered and fixing a future date for a cognizance hearing—does not constitute the commencement of an inquiry.
  • Drawing from Hardeep Singh v. State of Punjab, the Court held that since judicial mind had not been applied to the complaint before July 1, 2024, no inquiry was legally pending under the old CrPC. Consequently, the savings clause in Section 531(2)(a) could not be utilized to bypass the BNSS.

C. Nature of the First Proviso to Section 223(1) of the BNSS

The Court delivered a landmark interpretation regarding the pre-cognizance hearing rule:

  • Substantive Right: The first proviso to Section 223(1) of the BNSS is not merely a procedural or regulatory mechanism; it is substantive in nature. It directly feeds into the right to a fair trial protected under Article 21 of the Constitution of India.
  • Mandatory Character: The word “shall” in the proviso is strictly mandatory.
  • Effect of Non-compliance: Taking cognizance without granting the accused a prior opportunity to be heard is an illegality that renders the order void ab initio. The prosecution’s argument that the accused must demonstrate “prejudice” was completely rejected, as this constitutes an absolute illegality rather than a curable procedural irregularity.

5. Final Direction

The Supreme Court set aside the High Court’s judgment and the Special Court’s cognizance order dated July 2, 2024. The case was remanded to the Special Court with a directive to grant the appellant a proper hearing at the pre-cognizance stage and complete the entire exercise within 8 weeks.

2026 INSC 519

Parvinder Singh V. Directorate of Enforcement (D.O.J. 19.05.2026)

2026 INSC 519 click here to view full text of judgment

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Supreme Court Summary 2nd September, 2026

September 4, 2026 No Comments

                                                            Supreme Court Judgments Summary

              2nd Sep, 2026

Fishing in Exclusive Economic Zones

This judgment addresses the complex regulatory framework governing the rights of fishermen using purse seine nets to transit through the territorial waters of Tamil Nadu to access the Exclusive Economic Zone (EEZ) for fishing. The Supreme Court established that while the State has autonomous legislative competence to regulate marine fishing within its territorial waters to conserve marine ecology, it cannot obstruct access to the EEZ—which falls under central jurisdiction—provided statutory rules and tracking mechanisms are strictly adhered to by the fishers.

2026 INSC 937 : Fisherman Care v. The Government of India Department of Animal Husbandry, Dairying and Fisheries and Ors. (D.O.J.2.09.2026)

 

The Mandate of Reason: Setting Aside Laconic Orders in Criminal Appeals

This appeal challenged a cryptic, unreasoned High Court order that dismissed an appeal under Section 14A(2) of the SC/ST Act against a trial court order summoning additional accused under Section 319 of the Cr.P.C. The Supreme Court held that the High Court failed in its fundamental duty to provide reasons for its decision, reiterating that a reasoned order is a mandatory safeguard ensuring application of mind and enabling effective judicial review.

2026 INSC 938 : Rajeev Singh and Ors. v. State of Uttar Pradesh and Anr. (D.O.J.31.08.2026)

Granting Divorce on Grounds of Desertion After Decades of Separation

This civil appeal examined whether continuous separation and the refusal of a spouse to resume cohabitation constituted desertion under Section 13(1)(ib) of the Hindu Marriage Act, 1955. The Supreme Court held that where parties have lived separately for over two decades with no children born and all reconciliation efforts having failed, the marriage is irretrievably broken down, and the appellant-husband successfully established the ground of desertion.

2026 INSC 939 : Bijendra v. Rekha (D.O.J.02.09.2026)

Releasing Seized Transport Vehicles Pending Trial Under the Gujarat Prohibition Act

This appeal addressed whether a commercial truck seized for transporting a large quantity of prohibited Indian-Made Foreign Liquor (IMFL) could be released into the interim custody of its owner pending trial under Section 451 of the Cr.P.C. / Section 497 of the BNSS, despite the restrictive provisions of Section 98(2) of the Gujarat Prohibition Act, 1949. The Supreme Court held that Section 98(2) does not operate as an absolute embargo against the release of vehicles, and courts must exercise their discretionary powers to prevent seized property from decaying indefinitely at police stations.

2026 INSC 940 : M/s ABC Express v. State of Gujarat (D.O.J.02.09.2026)

Navigating Liability and Clearing Member Duties in the Derivatives Market

This consolidated appeal before the Supreme Court examined whether Professional Clearing Members (PCMs) can be held liable to restitute or compensate individual retail investors for securities liquidated following defaults by Trading Members (TMs) in the Futures & Options (F&O) segment. The Court held that PCMs do not have a statutory obligation or real-time visibility to verify the debit and credit positions of individual clients of a TM under the regulatory framework active during the relevant period. Furthermore, the Member and Core Settlement Guarantee Fund Committee (MCSGFC) lacks the statutory power to order monetary restitution or disgorgement under exchange byelaws.

2026 INSC 941 : Edelweiss Custodial Services Limited v. NSE Clearing Ltd. & Anr. (D.O.J.02.09.2026)

The Supremacy of Juvenile Justice Rights Over Technical Finality

This appeal examined whether the High Court can refuse to entertain a plea of juvenility under section 482 of the Code of Criminal Procedure on the ground that the matter had attained finality up to the Supreme Court. The Supreme Court held that the bar of finality and Section 362 of the Code of Criminal Procedure cannot override the mandatory statutory protections granted to a juvenile, and that the High Court possesses inherent powers to recall judgments to prevent a miscarriage of justice when a juvenile has been wrongly tried and convicted as an adult.

2026 INSC 942 : Mahavir @ Avnish v. The State of Madhya Pradesh (D.O.J.02.09.2026)

The Legality of SARFAESI Enforcement on Assigned Debts

These appeals addressed whether a bank defined under Section $2(1)(c)$ of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 can utilize its provisions to recover a debt assigned by a financial entity that was not governed by the SARFAESI Act when the debt was originally created. The Supreme Court ruled that when a live debt is acquired by a bank to which the SARFAESI Act already applies, the loan account immediately assumes the attributes of a secured debt under the statute, allowing the assignee bank to initiate recovery measures regardless of the original lender’s initial status.

2026 INSC 943 : Kotak Mahindra Bank Limited v. Trupti Sanjay Mehta and others (D.O.J.02.09.2026)

The Impermissibility of Revoking Decades-Old Land Survey Records

This appeal evaluated whether the revisional authority under Section 56 of the Karnataka Land Revenue Act, 1964 can initiate proceedings to cancel city survey numbers decades after their allotment. The Supreme Court held that the revisional jurisdiction exercised after 35 years was patently time-barred under the three-year limitation period stipulated in the proviso to Section 56(3) of the Act, and that authorities cannot bypass statutory limitations or upend settled third-party rights on the strength of stale complaints.

2026 INSC 944 : M.R.R. Setty (Dead), by LRs v. Government of Karnataka and others (D.O.J.02.09.2026)

Acquittal in a Brutal Child Murder Case Due to Fatal Gaps in Evidence

This appeal challenged the concurrent judgments of the High Court and Trial Court which convicted the appellant under Sections 302, 201, and 377 of the Indian Penal Code based on circumstantial evidence, a “last seen” theory, an extra-judicial confession, and subsequent disclosures. The Supreme Court set aside the conviction, ruling that the prosecution failed to establish a complete and unbroken chain of circumstances connecting the accused to the crime, burdened as the case was by major discrepancies, fabricated timelines, and an unreliable extra-judicial confession.

2026 INSC 945 : Sahab Singh alias Sat Pal v. State of Haryana (D.O.J.02.09.2026)

Vehicle Release and Confiscation Powers Under the NDPS Act

This appeal addresses the legality of denying the release of a vehicle seized under the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) following the acquittal of the accused, and clarifies whether such conveyances fall under the exclusive jurisdiction of the Drug Disposal Committee (DDC) or the trial court.

2026 INSC 946 : R Manimaran v. State of Tamil Nadu (D.O.J. 24.08.2026)

Custom Duty : Setting Aside Adjudications Polluted by AI Hallucinations

This appeal challenged a Gujarat High Court order which had upheld a massive customs penalty imposed on the appellant for allegedly mis-declaring natural diamonds as lab-grown diamonds. The Supreme Court set aside both the High Court order and the original adjudication order, ruling that the reliance by the customs authority on non-existent, fake, or AI-hallucinated case laws and citations vitiated the entire decision-making process, as artificial intelligence can only serve as an assistive tool and never substitute genuine judicial adjudication.

2026 INSC 947 : Vijay Ghanshyam Gadiya v. Union of India & Anr (D.O.J.2.9.2026)

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Supreme Court Upholds RBI’s Authority to Supersede Boards of Multi-State Co-Operative Banks

September 4, 2026 No Comments

These civil appeals address the critical interplay between the constitutional democratic governance of co-operative societies under Part IXB and the statutory powers of the Reserve Bank of India (RBI) under the Banking Regulation Act, 1949 (BR Act), to supersede the Board of Directors (BoD) of a multi-State co-operative bank. The Supreme Court dismissed the appeals and upheld the Bombay High Court’s judgment, ruling that the RBI’s power to supersede a multi-State co-operative bank’s board under Section 36AAA of the BR Act is not restricted by the six-month limit in Article 243ZL(1) of the Constitution and can be extended beyond the original elected term of the board up to an aggregate outer limit of five years.

  • Brief of Judgment: The Abhyudaya Co-operative Bank Limited, a multi-State co-operative bank, faced severe financial deterioration, leading the RBI to issue a supersession order on November 24, 2023, and appoint an Administrator. The elected directors challenged the supersession and its subsequent extensions, arguing that successive orders passed after the expiry of their statutory five-year term violated Articles 243ZL and 243ZT of the Constitution. The Supreme Court rejected these contentions, holding that the third proviso to Article 243ZL(1) incorporates the BR Act independently into the constitutional framework to prioritize depositor protection and robust economic regulation over standard co-operative tenures.
  • Supersession Limits: The RBI’s power of supersession under Section 36AAA(1) of the BR Act is bounded by an aggregate outer limit of five years, and extensions can legally occur beyond the original tenure of the erstwhile board.
  • Constitutional Harmonization: The third proviso to Article 243ZL(1) of the Constitution acts as an independent substantive provision ensuring that co-operative banks remain under the specialized regulatory oversight of the RBI.
  • Inapplicability of State Consultation: The statutory requirement for prior state government consultation under the proviso to Section 36AAA(1) applies exclusively to uni-State co-operative banks registered with a State Registrar, and not to multi-State co-operative banks.

2026 INSC 955

Sandeep S. Ghandat & Ors. v. Reserve Bank of India & Ors. (D.O.J. 03.09.2026)

2026 INSC 955 click here to view full text of judgment

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Electricity Regulation: Supreme Court Declines to Interfere with Interim Order Permitting Third-Party Participation

September 4, 2026 No Comments

This special leave petition challenges an interim order passed by the High Court of Jharkhand, which rejected the petitioners’ preliminary objection regarding the maintainability of a Public Interest Litigation (PIL) filed by ‘Energy Watchdog’ and allowed the respondent to participate in departmental proceedings. The Supreme Court declined to interfere with the interim measure under Article 136 of the Constitution, noting that the High Court’s cautious approach aimed to ensure transparency in an inquiry involving alleged unauthorized power supplies and massive cross-subsidy surcharge defaults.

  • Brief of Judgment: Petitioner No. 1 entered into an agreement with Jharkhand Bijli Vitran Nigam Ltd. (JBVNL) for surplus captive power supply, which later triggered complaints by Energy Watchdog alleging lack of valid ‘captive user’ status and unauthorized power transmission. After JBVNL issued show cause and demand notices for cross-subsidy surcharges exceeding Rs. 280 crores total, a PIL was instituted. The High Court held the PIL maintainable and permitted the complainant to take part in the proceedings to ensure full disclosure of facts. The Supreme Court upheld this interim arrangement while clarifying that JBVNL must act independently and that all legal questions regarding third-party intervention under the Electricity Act, 2003 remain open for final adjudication.
  • Statutory Framework of the Electricity Act: Reaffirming precedents like PTC India Ltd. and Southern Power Distribution Company, the Electricity Act is an exhaustive code leaving no unallocated regulatory residue outside commissions like the State Commission, which is mandated to ensure transparency under Section 86.
  • Justification for Interim Measure: The High Court adopted a pragmatic interim measure because the circumstances suggested that prior administrative inaction warranted third-party inputs to bring full facts before JBVNL.
  • Preservation of Legal Contentions: The Supreme Court explicitly refrained from commenting on the merits, leaving it open for the High Court to comprehensively examine the scope and ambit of third-party intervention during the final hearing of the writ petition.

2026 INSC 954

M/s. Amalgam Steels and Power Ltd. and Anr. v. Energy Watchdog and Ors. (D.O.J. 03.09.2026)

2026 INSC 954 click here to view full text of judgment

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Empowering Educational Regulators: Upholding NCTE’s Mandate to Mandate Performance Appraisal Reports for Teacher Training Institutions

September 4, 2026 No Comments

This civil appeal addresses the statutory authority of the National Council for Teacher Education (NCTE) to mandate the online submission of annual Performance Appraisal Reports (PAR) along with a processing fee from recognized Teacher Education Institutions (TEIs). The Supreme Court allowed the appeal and set aside the Delhi High Court’s Division Bench judgment, ruling that the NCTE and its Executive Committee possess full statutory and ancillary powers under the NCTE Act, 1993, to enforce accountability and regulatory oversight over educational institutions.

  • Brief of Judgment: The litigation originated when TEIs challenged a 2019 Public Notice issued by the Member Secretary of the NCTE’s Executive Committee requiring them to submit online PARs and nominal processing fees. While a single judge dismissed the challenge, the Division Bench quashed the notice on the premise that the specific proforma had not been explicitly approved by the general body of the Council and that delegation to the Member Secretary was improper. The Supreme Court strongly disapproved of the High Court’s pedantic approach, holding that statutory regulators must be empowered to enforce institutional transparency, performance audits, and accountability without judicial overreach.
  • Statutory Framework and Duty Bearers: The judgment emphasizes that following the enactment of Article 21A and the Right of Education (RTE) Act, 2009, elementary school teachers, TEIs, and the NCTE act as critical constitutional duty bearers responsible for upholding high standards of educational quality.
  • Scope of Regulatory Powers: Section 12(k) of the NCTE Act expressly empowers the Council to evolve suitable performance appraisal systems and mechanisms to enforce accountability, which includes the incidental power to collect processing fees and utilize digital portals for management information systems.
  • Role of the Executive Committee: The Executive Committee, operating as the executive arm of the Council, is fully competent to implement decisions made by the General Body, such as substituting cumbersome annual renewal regimes with streamlined PAR submissions.
  • Reversal of High Court Judgment: The Supreme Court set aside the High Court’s order, reaffirming that courts must support and enable the effective functioning of statutory regulators rather than restrict them through hyper-technical interpretations.

2026 INSC 953

The National Council for Teacher Education v. Association of NCTE Approved Colleges Trust and Ors. (D.O.J. 03.09.2026)

2026 INSC 953 click here to view full text of judgment

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