India’s Supreme Court ruled that courts cannot take cognisance in Prevention of Money Laundering Act cases without first hearing the accused, in line with Section 223 of the Bharatiya Nagarik Suraksha Sanhita. The requirement ensures that a person facing money laundering charges receives an opportunity to be heard before judicial proceedings formally commence against them in trial courts.
PMLA prosecutions have expanded significantly as enforcement agencies pursue financial crime linked to predicate offenses across sectors including banking, real estate, and public procurement. Procedural safeguards at the cognisance stage determine when an accused transitions from investigation to trial-ready status and what rights attach at that moment in the criminal process.
The bench emphasized that hearing the accused before cognisance aligns with broader fair-trial principles even in statutes carrying stringent attachment and bail provisions that have been subject to separate constitutional challenges. Prosecutors and investigating officers will need to adjust filing practices to accommodate the mandated hearing step before courts accept complaints or police reports for trial.
The ruling may affect numerous pending and future PMLA matters where cognisance was taken without a prior hearing, potentially opening avenues for procedural review in cases at early trial stages where trials have not substantially progressed. Defense counsel are expected to raise the holding in bail and quashing petitions across jurisdictions.
Special courts designated for money laundering trials will develop practices for scheduling pre-cognisance hearings that balance expedition with meaningful opportunity for accused persons to present preliminary objections to jurisdiction and process.
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