Indian Judgements

Indian Judgements

PMLA: Hearing of accused at the pre-cognizance stage

Picture of Judgments Online

Judgments Online

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  • Transition to BNSS: On July 1, 2024, the old Code of Criminal Procedure, 1973 (CrPC) was repealed and replaced by the BNSS.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

Share
Next Story

Supreme Court Clarifies That Disability Pension Precedent Cannot Be Mechanically Applied

October 13, 2026 No Comments

This miscellaneous application was filed by the Union of India seeking a clarification of the Supreme Court’s common judgment dated February 12, 2026 (passed in C.A. Nos. 6820-6824 of 2018), which had granted ex-servicemen disability pension with broad-banding benefits and arrears from specified dates. The Union of India contended that the judgment was being mechanically relied upon by various courts and tribunals to alter final orders and reopen stale pensionary claims where the very entitlement to a disability pension was initially in dispute. The Supreme Court disposed of the application by clarifying that judgments must be read in the context of their specific facts and that the common judgment cannot be construed to mean that disability pension with arrears can be automatically claimed in every case. The Court emphasized that each claim must be examined and decided on its own individual merits.

  • Nature of the Application: The Union of India sought clarification regarding the broader application of the Supreme Court’s February 12, 2026 common judgment concerning ex-servicemen disability pensions.
  • Concerns Raised by the State: The Additional Solicitor General pointed out that numerous cases across High Courts and the Armed Forces Tribunal were relying on the judgment to modify final orders and settle stale claims where the underlying entitlement to pension was disputed, leading to significant administrative and financial implications.
  • Core Legal Principle Restated: Citing established precedents, the Supreme Court reiterated that observations in a judgment cannot be read like a statute or divorced from their original factual context.
  • Final Clarification: The Court clarified that its earlier common judgment does not mandate the grant of disability pension with arrears in every case, and all future claims must be adjudicated strictly on their own separate merits.

2026 INSC 1113

Union of India Through Its Secretary & Ors. v. SGT Girish Kumar and Ors. (D.O.J. 12.10.2026)

2026 INSC 1113 click here to view full text of judgment

Next Story

Plaint Amendments: SC Rules on Late-Stage Amendments and the Discovery of Unknown Decrees

October 13, 2026 No Comments

This civil appeal challenged an order of the Orissa High Court which declined to interfere with a trial court order rejecting an application under Order VI Rule 17 of the CPC for amending a plaint in a long-standing title suit. The original plaintiff had sought to incorporate foundational pleadings regarding a compromise decree in a separate suit (T.S. No. 105 of 1998) which he discovered later and which purportedly affected a portion of the suit property. The Supreme Court allowed the appeal and set aside the orders of the High Court and trial Court, holding that the statutory requirement of “due diligence” under the proviso to Order VI Rule 17 was satisfied because the plaintiff was not a party to the prior compromise suit and only discovered it upon obtaining certified copies. The Court emphasized that a liberal approach should be adopted to prevent multiplicity of proceedings, leaving all questions regarding limitation, maintainability, and the applicability of Order XXIII Rule 3A open for the trial court to determine.

  • Nature of the Original Dispute: The litigation originates from C.S. No. 86 of 2009, filed by the original plaintiff (predecessor of the appellants) seeking a declaration of right, title, interest, recovery of possession, and rectification of registered sale deeds concerning a 0.12-acre property.
  • Discovery of Compromise Decree: During the proceedings, upon searching records following written statements filed by defendants, the plaintiff discovered a compromise decree passed in T.S. No. 105 of 1998 to which he was a stranger, affecting a portion of the suit plot.
  • Satisfaction of Due Diligence: The Supreme Court noted that the explanation regarding the date of knowledge and procurement of certified copies on June 22, 2020, adequately fulfilled the due diligence requirement under the proviso to Order VI Rule 17, and the amendment did not fundamentally alter the nature of the suit.
  • Preservation of Legal Defences: While allowing the amendment subject to costs of Rs. 25,000, the Court explicitly clarified that it was not deciding on the merits, limitation, or the bar under Order XXIII Rule 3A of the CPC, leaving all such statutory objections open for the contesting respondents to raise before the trial court.

2026 INSC 1112

Haramani Sahoo and Others v. Lalita Nayak and Others (D.O.J. 12.10.2026)

2026 INSC 1112 click here to view full text of judgment

Share
Next Story

Unravelling Non-Signatory Liability: SC Rules on Veritable Parties and the Reach of Arbitration Agreements

October 13, 2026 No Comments

This civil appeal challenged a portion of a High Court order under Section 11 of the Arbitration and Conciliation Act, 1996, which had declined to include the 3rd and 4th respondents in ongoing arbitration proceedings on the ground that they were non-signatories to the original arbitration agreement. The Supreme Court allowed the appeal in part, modifying the High Court’s order to hold that the 3rd and 4th respondents are veritable parties to the dispute on a prima facie view. The Court reasoned that the ownership of the subject commercial asset hinges entirely on whether a disputed 1995 retirement deed is valid, which directly impacts the subsequent partnership deeds under which the 3rd and 4th respondents claim rights. Consequently, non-signatories intimately linked to the subject matter and core commercial obligations cannot be shut out at the threshold, leaving all questions of limitation and estoppel open for the Arbitral Tribunal to decide.

  • The Core Property Dispute: The litigation revolves around a 3,500 sq. ft. commercial property in Worli, Mumbai, originally acquired by a partnership firm governed by a 1985 partnership deed containing an arbitration clause.
  • The Chain of Reconstitutions: Appellants claimed they never retired and that a 1995 retirement deed was forged, whereas subsequent reconstitutions led to the 3rd and 4th respondents being inducted as partners into a later incarnation of the firm.
  • Application of Cox & Kings Principles: Drawing from the Constitution Bench precedent in Cox & Kings Limited, the Supreme Court noted that arbitration law is autonomous, and courts must not adopt an overly rigid approach to exclude non-signatories whose conduct, relationships, and involvement tie them to the underlying contract.
  • Prima Facie Status and Tribunal’s Jurisdiction: While the referral court must enter a prima facie satisfaction that a non-signatory is a veritable party, detailed contentions regarding limitation, estoppel, and whether the non-signatories are ultimately bound must be left for the Arbitral Tribunal to determine.

2026 INSC 1111

Hemant D. Shah HUF & Anr. v. Chittaranjan D. Shah HUF & Ors. (D.O.J. 12.10.2026)

2026 INSC 1111 click here to view full text of judgment

Share
Next Story

When E-Payments Meet Paper Rules: SC Quashes Tender Rejection Over “Original” Bid Security Demands

October 13, 2026 No Comments

This civil appeal challenged a Division Bench judgment of the Patna High Court which had affirmed the rejection of the appellant’s technical bid for an Engineering, Procurement, and Construction (EPC) rail link project. The respondent authorities rejected the bid because the appellant failed to submit the “original” of the bid security, as stipulated under Clause 2.20.6(ii) of the Request for Proposal (RFP), despite the appellant having remitted the security via the official e-payment gateway and uploading its digital receipt. The Supreme Court allowed the appeal and set aside the High Court’s order, holding that demanding the physical production of an original receipt for an e-payment—where funds have already directly entered the government’s account—is a legal perversity and an impossibility. The Court ruled that rigid adherence to paper-form rules cannot be used to invalidate an e-payment bid security, and consequently directed that the appellant’s bid be processed.

  • Nature of the Dispute: The appellant’s bid for the Bikramshila-Katareah New Line Rail Link Project was disqualified at the threshold because it did not physically submit an original document for its bid security.
  • The e-Payment Exception: While instruments like Bank Guarantees or Demand Drafts necessitate physical handover to establish a legal lien, the appellant chose the e-payment gateway option, transferring funds directly to the respondents and uploading the digital receipt.
  • Perversity of Rigid Compliance: The Supreme Court observed that insisting on an “original” physical copy for a digital money transfer creates an impossible compliance requirement. The Court noted that this constitutes a clear perversity, falling under the recognized exception to the general rule that courts must defer to an awarder’s tender interpretations.
  • Final Directions: The Supreme Court set aside the lower orders, instructing the respondents to facilitate a re-remittance or renewal of the bid security within a specified timeframe so that the appellant’s financial bid could be opened and evaluated alongside others.

2026 INSC 1110

Hardev Construction Private Limited v. Union of India & Ors. (D.O.J. 12.10.2026)

2026 INSC 1110 click here to view full text of judgment

Share

The specified slider does not exist.

Recent Articles

Hi Judgments Online

Subscribed
Logins