- 1 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA CRIMINAL PETITION NO. 9817 OF 2026 BETWEEN: MR. BASAVARAJ R. HEBASUR S/O RUDRAPPA FAKIRAPPA HEBSUR, AGED ABOUT 56 YEARS, RESIDING AT: VILLAGE KUBIHAL, POST KUBIHAL, TALUKA-KUNDAGOL, DISTRICT-DHARWAD, KARNATAKA – 580 028. …PETITIONER (BY SRI SAMIT PARVATIKAR, ADVOCATE) AND: DEPUTY DIRECTOR DIRECTORATE OF ENFORCEMENT, GOVERNMENT OF INDIA, 3RD FLOOR, 'B' BLOCK, BMTC BUILDING, SHANTHINAGAR, TTMC, K.H. ROAD, BENGALURU – 560 027. (REPRESENTED BY SPECIAL PUBLIC PROSECUTOR). …RESPONDENT (BY SMT. ANUPARNA BORDOLOI, ADVOCATE) THIS CRL.P IS FILED U/S 528 BNSS (FILED U/S 482 CR.PC) PRAYING TO 1. SET ASIDE THE ORDER TAKING Digitally signed by PADMAVATHI B K Location: High Court of Karnataka - 2 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 COGNIZANCE DATED 27.11.2024 BY THE HON’BLE SPL. JUDGE (PREVENTION OF MONEY LAUNDERING ACT, 2002) AT MANGALORE, FOR THE OFFENCES P/U/S 45 R/W SECTION 44 OF THE PMLA ACT, FOR COMMISSION OF OFFENCE DEFINED U/S 3 OF THE ACT, AND P/U/S 4 AND SEC. 8(5) OF THE PMLA ACT AS AGAINST THE PETITIONER (ANNEXURE-“D”); 2. SET ASIDE THE ORDER TAKING COGNIZANCE DATED 30.09.2025 BY THE HON’BLE SPL.JUDGE (PREVENTION OF MONEY LAUNDERING ACT, 2002) AT MANGALORE, FOR THE OFFENCES P/U/S 45 R/W SECTION 44 OF THE PMLA ACT, FOR COMMISSION OF OFENCE DEFINED U/S 3 OF THE ACT, AND P/U/S 4 AND SEC. 8(5) OF THE PMLA ACT AS AGAINST THE PETITIONER (ANNEXURE-“E”). THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA ORAL ORDER The petitioner is before the Court calling in question the proceedings in Spl.C.C.No.233 of 2024 with particular reference to an order dated 27-11-2024 of the concerned Court taking cognizance of the offences punishable under Sections 3, 4 and Section 8(5) of the Prevention of Money Laundering Act, 2002, - 3 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 (‘PMLA’ for short), on the score that pre-cognizance notice is not issued as is obtaining in law. 2. Heard Sri Samit Parvatikar, learned counsel appearing for petitioner and Smt Anuparna Bordoloi, learned counsel appearing for respondent. 3. learned counsel for petitioner submits that the issue in the lis stands completely answered by the judgment of the Apex Court in the case of PARVINDER SINGH v. ENFORCEMENT DIRECTORATE1, wherein the Apex Court has steer cleared the controversy by observing that, even for the cases instituted under the PMLA Act, 2002, the Special Court, prior to taking of cognizance, must follow the procedure as stipulated under the Section 223 of the BNSS and provide an opportunity of hearing to the accused before taking cognizance of the complaint. The Apex Court, in the aforesaid judgment, observes as follows: "……. ……. ……. 1 2026 SCC OnLine SC 903 - 4 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 30. The issue of application of the procedure pertaining to a complaint under the CrPC (now BNSS) to proceedings under the PMLA is no longer res integra, as has been elaborately dealt with by this Court in the decisions of Tarsem Lal (supra), Yash Tuteja (supra) and Kushal Kumar Agarwal (supra). Though we find that in the instant case the said issue has not been specifically raised either before the Trial Court or the High Court, we are willing to consider the same, being a pure question of law. 31. The submission of the learned ASG that the earlier decision of this Court in Kushal Kumar Agarwal (supra) will have to be reconsidered and, therefore, be referred to a larger Bench cannot be countenanced. Taking away the applicability of the provisions governing a complaint under Sections 200 to 205 of the CrPC (now Sections 223 to 228 of the BNSS) to the proceedings under the PMLA, including the one that has a serious bearing not only on the right of the accused but also on the power of the Court, would lead to disastrous consequences. If the argument so made by the learned ASG is accepted, then the Special Court under the PMLA would have no jurisdiction to: dismiss a complaint despite an absolute lack of evidence, postpone the issuance of process, issue process or dispense with the appearance of an accused as provided under Sections 225 to 228 of the BNSS, respectively. 32. In such view of the matter, we are in absolute agreement with the decisions rendered by this Court in Tarsem Lal (supra), Yash Tuteja (supra) and Kushal Kumar Agarwal (supra), which we quote profitably. Tarsem Lal v. Enforcement Directorate, (2024) 7 SCC 61 “17. After carefully perusing the provisions of PMLA, we find that there is no provision therein which is in any manner inconsistent with Section 205 CrPC. Hence, it will apply to a complaint under PMLA. A summons is issued on a complaint to ensure attendance of the accused before the criminal court. If an accused is in custody, no occasion arises for a court to dispense with the - 5 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 personal attendance of the accused. We may note here that Section 205 empowers the court to grant exemption only when a summons is issued. Sub- section (2) of Section 205 provides for enforcing the attendance of the accused before the court at the time of the trial. If the accused who appears pursuant to the summons issued on a complaint were deemed to be in custody, the lawmakers would not have provided for Section …… *** 33. Now, we summarise our conclusions as under: 33.1. Once a complaint under Section 44(1)(b) PMLA is filed, it will be governed by Sections 200 to 205 CrPC as none of the said provisions are inconsistent with any of the provisions of PMLA; 33.2. If the accused was not arrested by ED till filing of the complaint, while taking cognizance on a complaint under Section 44(1)(b), as a normal rule, the court should issue a summons to the accused and not a warrant. Even in a case where the accused is on bail, a summons must be issued; 33.3. After a summons is issued under Section 204 CrPC on taking cognizance of the offence punishable under Section 4 PMLA on a complaint, if the accused appears before the Special Court pursuant to the summons, he shall not be treated as if he is in custody. Therefore, it is not necessary for him to apply for bail. However, the Special Court can direct the accused to furnish bond in terms of Section 88 CrPC; 33.4. In a case where the accused appears pursuant to a summons before the Special Court, on a sufficient cause being shown, the Special Court can grant exemption from personal appearance to the accused by exercising power under Section 205 CrPC;” *** - 6 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 (emphasis supplied) Yash Tuteja v. Union of India, (2024) 8 SCC 465 “6. The only mode by which the cognizance of the offence under Section 3, punishable under Section 4 PMLA, can be taken by the Special Court is upon a complaint filed by the Authority authorised on this behalf. Section 46 PMLA provides that the provisions of CrPC (including the provisions as to bails or bonds) shall apply to proceedings before a Special Court and for the purposes of CrPC provisions, the Special Court shall be deemed to be a Court of Sessions. However, sub- section (1) of Section 46 starts with the words “save as otherwise provided in this Act”. Considering the provisions of Section 46(1) PMLA, save as otherwise provided in PMLA, the provisions of the Criminal Procedure Code, 1973 (for short “CrPC”) shall apply to the proceedings before a Special Court. Therefore, once a complaint is filed before the Special Court, the provisions of Sections 200 to 204 CrPC will apply to the complaint. There is no provision in PMLA which overrides the provisions of Sections 200 to Sections 204 CrPC. Hence, the Special Court will have to apply its mind to the question of whether a prima facie case of a commission of an offence under Section 3 PMLA is made out in a complaint under Section 44(1)(b) PMLA. If the Special Court is of the view that no prima facie case of an offence under Section 3 PMLA is made out, it must exercise the power under Section 203 CrPC to dismiss the complaint. If a prima facie case is made out, the Special Court can take recourse to Section 204 CrPC.” (emphasis supplied) Kaushal Kumar Agarwal v. Directorate of Enforcement, 2025 SCC OnLine SC 1221. “5. This Court has taken a consistent view that a complaint filed by the Enforcement Directorate under Section 44(1)(b) of the PMLA - 7 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 will be governed by Sections 200 to 204 of the CrPC. This view has been taken by this Court in the cases of Yash Tuteja v. Union of India, (2024) 8 SCC 465, and Tarsem Lal v. Enforcement Directorate, (2024) 7 SCC 61. Therefore, the provisions of Chapter XVI, containing Sections 223 to 226, will also apply to a complaint under Section 44 of the PMLA. As the complaint has been filed after 1st July, 2024, Section 223 of the BNSS will apply to the present complaint. 6. The proviso to sub-section (1) of Section 223 puts an embargo on the power of the Court to take cognizance by providing that no cognizance of an offence shall be taken by the Magistrate without giving the accused an opportunity of being heard. 7. In this case, admittedly, an opportunity of being heard was not given by the learned Special Judge to the appellant before taking cognizance of the offence on the complaint. Only on that ground, the impugned order dated 20th April, 2024, will have to be set aside.” (emphasis supplied) 33. Accordingly, we have no hesitation in holding that Sections 200 to 205 of the CrPC (now Sections 223 to 228 of the BNSS) would be applicable to proceedings under the PMLA. 34. A mere ministerial act cannot be termed as an “inquiry” under Section 2(1)(k) of the BNSS. Taking cognizance is nothing but an application of judicial mind. So long as the application of the judicial mind is not exercised, an inquiry cannot commence. It is the judicial notice of an offence by the Court which is relevant. While doing so, it is presumed that the Court would take note of the complaint along with the materials placed before it. 35. The learned ASG placed reliance upon the decision of this Court in Hardeep Singh (supra) to contend that in the facts of the instant case, the inquiry had been initiated upon filing of the prosecution complaint on 24.06.2024 which is, admittedly, prior to the commencement of the - 8 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 BNSS on 01.07.2024. We find that the said decision actually militates against the submission made by him, and would only quote the following paragraphs in the aforesaid decision: “26. In Raghubans Dubey v. State of Bihar, AIR 1967 SC 1167, this Court held: (AIR p. 1169, para 9) “9. … once cognizance has been taken by the Magistrate, he takes cognizance of an offence and not the offenders; once he takes cognizance of an offence it is his duty to find out who the offenders really are and once he comes to the conclusion that apart from the persons sent up by the police some other persons are involved, it is his duty to proceed against those persons. The summoning of the additional accused is part of the proceeding initiated by his taking cognizance of an offence.” 27. The stage of inquiry commences, insofar as the court is concerned, with the filing of the charge-sheet and the consideration of the material collected by the prosecution, that is mentioned in the charge-sheet for the purpose of trying the accused. This has to be understood in terms of Section 2(g) CrPC, which defines an inquiry as follows: “2. (g) ‘inquiry’ means every inquiry, other than a trial, conducted under this Code by a Magistrate or court.” 28. In State of U.P. v. Lakshmi Brahman, (1983) 2 SCC 372, this Court held that from the stage of filing of charge-sheet to ensuring the compliance with the provision of Section 207 CrPC, the court is only at the stage of inquiry and no trial can be said to have commenced. The above view has been held to be per incuriam in Raj Kishore Prasad v. State of Bihar, (1996) 4 SCC 495, wherein this Court while observing that Section 319(1) CrPC operates in an ongoing inquiry into, or trial of, an offence, held that at the stage of Section 209 CrPC, the court is neither at the stage of inquiry nor at the stage of trial. Even at the stage of ensuring compliance with Sections 207 and 208 CrPC, it cannot be said that the court is at the stage of inquiry - 9 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 because there is no judicial application of mind and all that the Magistrate is required to do is to make the case ready to be heard by the Court of Session.” (emphasis supplied) 36. As rightly held by this Court in Hardeep Singh (supra), even the stage of ensuring compliance with Sections 207 to 209 of the CrPC, 1973 cannot be termed as an inquiry because there is no application of judicial mind. In the facts of the instant case, the direction issued by the Special Court, vide order dated 24.06.2024, to number the complaint and, thereafter, post the matter on a future date for hearing on cognizance would certainly not come within the purview of an “inquiry” under Section 2(1)(k) of the BNSS. In such view of the matter, the aforestated contention raised by the learned ASG falls to the ground. 37. As already discussed, though the complaint under the PMLA was filed earlier, the cognizance was only taken subsequently, on 02.07.2024, by which time the BNSS had come into force. Admittedly, the appellant has not been heard at the time of taking cognizance. The mandate of a legislation which ensures the right of an accused to a fair trial, whose liberty is at stake, cannot be dispensed with. Thus, the contention of the learned ASG that prejudice caused due to non- hearing at the stage of cognizance will have to be shown by the accused cannot be accepted, as it is not a mere irregularity that would attract either Section 506 or 511 of the BNSS, but is an illegality that would vitiate the very proceedings. 38. Based on the above discussion, the views expressed by the High Court are, therefore, liable to be set aside. We do find that the allegations against the appellant are quite serious. However, non- compliance with the first proviso to Section 223(1) of the BNSS vitiates the very order taking cognizance, and the same cannot be sustained in the eyes of the law. In fact, the appellant has, at - 10 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 the earliest point in time, filed the application for recall of the order taking cognizance by placing reliance upon the said proviso. Had the Special Court allowed it, the trial would have proceeded further. Suffice it to state that the appellant cannot be faulted for any delay that has occasioned." (Emphasis supplied) The Apex Court observes that, non-compliance with the first proviso to Section 223(1) of the BNSS vitiates the very order of taking cognizance, and that the failure to hear the accused at the stage of taking cognizance is not a mere irregularity, but an illegality that vitiates the proceedings itself. 4. In the light of the issue standing completely answered by the Apex Court, as quoted supra, leaving open all other contentions on the merit of the matter, I deem it appropriate to obliterate the order of taking of cognizance passed by the concerned Court on 27-11-2024, and remit the matter back to the hands of the concerned Court, to follow the procedure contained under Section 223 of the BNSS, as discussed by the Apex Court in the afore-quoted judgment. - 11 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 5. For the aforesaid reasons, the following: ORDER (i) The petition is allowed in-part. (ii) The order taking cognizance dated 27-11-2024, passed by the concerned Court, qua the petitioner, stands quashed. (iii) The matter is remitted back to the hands of the concerned Court to appropriately follow the law as is laid down by the Apex Court quoted supra, and also by following the procedure as contained under Section 223 of the BNSS, bearing in mind the observations made by this Court in the course of the order. (iv) The concerned Court shall now pass necessary orders in accordance with law within eight (8) weeks from the date of it being taken up. - 12 - HC-KAR CNR: KAHC010457612026 NC: 2026:KHC:36794 CRL.P No. 9817 of 2026 (v) The petitioner is reserved liberty to knock at the doors of the appropriate fora in the aftermath of the order. Sd/- (M.NAGAPRASANNA) JUDGE BKP List No.: 2 Sl No.: 78