Table of Contents

Introduction

Most people imagine the ED case ends with arrest or attachment. In truth, that is where the real contest begins. The Special Court trial under the PMLA runs on rules unlike an ordinary criminal case — a different charging document, a reversed burden of proof, and disclosure rights still being shaped by the Supreme Court.

This guide explains that trial stage in full, with linked judgments. It closes the liberty track I have covered through my guides on the ECIR, ED summons, and arrest under Section 19. For the statutory framework, start with my cornerstone guide: Introduction to PMLA and ED Law in India.

The Special Court: Constitution and Character

Section 43 empowers the Central Government, in consultation with the Chief Justice of the High Court, to designate Sessions Courts as Special Courts for PMLA trials. Ordinarily, the Special Court trying the scheduled offence also tries the money-laundering offence connected with it — Section 44(1) mandates a joint trial wherever practicable. This linkage is not incidental; it mirrors the doctrinal truth I explained in my guide on proceeds of crime and scheduled offences — the PMLA case cannot outlive its predicate offence.

Procedurally, the Special Court follows the CrPC/BNSS trial-of-warrant-case procedure, subject to the PMLA’s specific modifications. It is presided over by a Sessions Judge or Additional Sessions Judge, and appeals from its judgments lie to the High Court.

The Prosecution Complaint: Not a Chargesheet

Here lies the first structural difference. The police file a chargesheet under Section 173 CrPC (now Section 193 BNSS). The ED files no such thing. Instead, under Section 44(1)(b), it files a “complaint” — often called a prosecution complaint — before the Special Court.

The distinction matters practically. A complaint case does not carry the same default-bail architecture that governs a police-investigated case in every respect, though the outer time limits under the CrPC/BNSS for filing continue to anchor the accused’s rights while in custody. Vijay Madanlal Choudhary v. Union of India, (2022) 10 SCC 24 upheld this complaint-based structure as a valid, self-contained procedure distinct from police investigation.

The complaint sets out the ED’s case: the scheduled offence, the proceeds of crime, the process or activity connected with them, and the persons alleged to be involved. Cognizance is taken by the Special Court on this complaint under Section 44, not through the ordinary Section 190 CrPC route governing police reports — a distinction I discuss in my note on Section 190 BNSS.

The Pre-Cognizance Hearing: Section 223 BNSS Applies to PMLA Too

One more procedural safeguard now protects every accused before a PMLA Special Court even summons him — and it is easy to miss if the complaint was filed after 1 July 2024.

The first proviso to Section 223(1) of the BNSS (replacing Sections 200 to 204 of the CrPC) provides that no cognizance of an offence shall be taken on a complaint without giving the accused an opportunity of being heard. The question was whether this safeguard, drafted for ordinary complaint cases, extends to a PMLA prosecution complaint filed under Section 44(1)(b).

The Supreme Court has now settled this decisively across three rulings. In Tarsem Lal v. Directorate of Enforcement, (2024) 7 SCC 61, and Yash Tuteja v. Union of India, (2024) 8 SCC 465, the Court first held that an ED complaint under Section 44(1)(b) is governed by the CrPC provisions on complaints — and, by extension, by Sections 223 to 228 BNSS once the complaint is heard after 1 July 2024. The Court then applied this squarely to the pre-cognizance hearing in Kushal Kumar Agarwal v. Directorate of Enforcement, 2025 SCC OnLine SC 1221, holding that the proviso to Section 223(1) is substantive and mandatory, and that taking cognizance without first hearing the accused vitiates the order of cognizance.

The ED pressed the Court to reconsider this position and refer it to a larger Bench. The Court refused. In Parvinder Singh v. Directorate of Enforcement, a Bench of Justices M.M. Sundresh and Nongmeikapam Kotiswar Singh reaffirmed Tarsem Lal, Yash Tuteja, and Kushal Kumar Agarwal, holding that Sections 223 to 228 BNSS are fully applicable to PMLA proceedings, and that denying the accused a hearing before cognizance renders the resulting proceedings void ab initio. The Court set aside the Special Court’s cognizance order dated 2 July 2024 and the Uttarakhand High Court’s judgment upholding it, and directed the Special Court to hear the appellant afresh from the cognizance stage. Significantly, the Court also held the appellant could not be faulted for the resulting delay, since he had raised the objection — through a recall application — at the earliest opportunity.

Principle: Before a PMLA Special Court takes cognizance of a complaint filed after 1 July 2024, it must give the proposed accused an opportunity of being heard. This is not a discretionary courtesy; it is a substantive right rooted in Article 21’s guarantee of fair procedure, and its denial makes the cognizance order — and everything built on it — void ab initio.

In practice, this gives every accused a genuine pre-emptive opportunity. The moment you learn that the ED has filed, or is about to file, a prosecution complaint, move an application before the Special Court seeking a hearing under Section 223(1) BNSS before cognizance is taken. If the Court has already taken cognizance without hearing you, file a recall application immediately — as Parvinder Singh shows, prompt objection protects you from any charge of causing delay, and the remedy of setting aside cognizance remains fully available.

Appearance on Summons: The Tarsem Lal Protection

Cognizance triggers one of the most important protections in the entire PMLA framework. In Tarsem Lal v. Directorate of Enforcement, 2024 INSC 434, the Supreme Court held that once the Special Court takes cognizance of the complaint, the ED cannot arrest the accused under Section 19. If the accused was never arrested during investigation, his appearance before the Special Court on summons does not amount to custody. He need not apply for either regular or anticipatory bail. Furnishing bonds under Section 88 CrPC (now the equivalent BNSS provision) suffices to secure his presence for trial.

This ruling has changed how I advise cooperating clients. If you attended every summons, produced every document, and were never arrested, resist any suggestion that you must now seek bail merely because a complaint has been filed. Appear, furnish bonds, and contest the case on merits. For clients who were arrested earlier in the process, the bail framework remains essential — see my guides on bail in PMLA cases and bail in white-collar crimes.

Section 24: The Reverse Burden Explained

The PMLA’s most distinctive trial feature is Section 24, which reverses the ordinary presumption of innocence in a defined way.

Read the provision carefully. Where a person is charged with the offence of money laundering, the court or authority shall presume, unless the contrary is proved, that the proceeds of crime are involved in money laundering. For a person charged with directly involving himself in the offence, this presumption applies at the very threshold. For others, it engages once the prosecution proves the person’s connection with the proceeds of crime.

Three things about this provision demand precision:

It does not eliminate the prosecution’s burden entirely. The ED must first establish the foundational facts — a valid scheduled offence, criminal activity connected to it, and property linked to that activity — before the presumption of Section 24 comes into play at all. This is the “foundational facts first” sequence I set out in detail in my guide on proceeds of crime and scheduled offences.
The standard of rebuttal is civil, not criminal. The accused must rebut the presumption on a preponderance of probabilities, not beyond reasonable doubt. This is a real, but not insurmountable, burden.
It operates at trial, not at the summons or arrest stage. Do not confuse Section 24 with the Section 45 bail threshold. They serve different purposes at different stages, though both narrow the space available to the accused.

My defence approach mirrors this structure exactly: attack the foundational facts first — the Schedule check, the nexus, the timeline — and only then build the rebuttal evidence: source-of-funds documentation, contemporaneous records, and an honest explanation for every transaction the ED flags.

Section 197 CrPC: The Sanction Defence for Public Servants

Where the accused is a public servant, and the alleged acts relate to the discharge of official duty, a distinct threshold defence arises. In Directorate of Enforcement v. Bibhu Prasad Acharya, 2024 INSC 843, decided on 6 November 2024 by Justices Abhay S. Oka and Augustine George Masih, the Special Court had taken cognizance against two IAS officers accused of colluding to allot land improperly for an SEZ and of extending unlawful water-resource benefits, without any prior sanction. The High Court quashed cognizance against them; the ED’s appeal reached the Supreme Court. The Court held that Section 197(1) of the CrPC applies to complaints under Section 44(1)(b) PMLA. Prior sanction of the appropriate government is necessary before the Special Court can take cognizance of a complaint against a public servant for acts done, or purportedly done, in discharge of official duty. The Court found no inconsistency between the PMLA and Section 71, and clarified that the ED remains free to move the Special Court afresh once sanction is obtained — the plea of absence of sanction may be raised at any stage, and need not await final hearing.

Practically, if my client is a public servant and the ED’s narrative ties the alleged laundering to acts done, or purportedly done, in the discharge of official duty, I raise the sanction objection at the very first opportunity — ideally before charge, since it goes to the Special Court’s jurisdiction to proceed at all.

Disclosure and Fair Trial: The Sarla Gupta Principle

A trial is only as fair as the material both sides can see. In Sarla Gupta v. Directorate of Enforcement, 2025 INSC 645, decided on 7 May 2025 by a three-Judge Bench of Justices Abhay S. Oka, Ahsanuddin Amanullah, and Augustine George Masih, the Court addressed a recurring grievance in a common judgment covering Sarla Gupta and the connected QVC Realty appeals. The ED had seized voluminous papers during searches but had supplied the accused only selected, relied-upon material.

The Court laid down three rules. First, the accused from whose possession documents were seized under Sections 17 and 18 is entitled to true copies of every such record, irrespective of reliance. Secondly, upon cognizance, the Special Court must furnish, along with the summons, the complaint, every document produced up to cognizance, and a list of all unrelied statements and documents in ED custody. Thirdly, at the framing-of-charge stage, the accused may seek production of specific unrelied documents under Section 91 CrPC (now Section 94 BNSS) — a right the Court held must be liberally construed, given the onerous reverse burden the accused carries under Section 24. The Court even extended this to bail hearings under Section 45(1)(ii): an accused may invoke Section 91 CrPC to seek unrelied documents at the bail stage itself, unless the court finds the request an abuse of process. The ED cannot play “hide-and-seek” with the record.

I now routinely demand, at the framing-of-charge stage, a complete list of all documents seized during the ECIR investigation, whether relied upon or not. This single application has, in my experience, uncovered material that materially altered the trajectory of the defence.

Framing of Charge and the Trial Sequence

Once cognizance is taken and the accused appears, the trial proceeds broadly as follows: supply of the complaint and relied-upon documents, arguments on charge, framing of charge if a prima facie case exists, prosecution evidence, examination of the accused under Section 313 CrPC (now Section 351 BNSS), defence evidence, and final arguments.

At the charge stage itself, several defences from earlier in the process remain fully live. A collapsed predicate offence can still end the case at this point, through the routes explained in my guides on quashing under Section 482 CrPC / Section 528 BNSS and quashing before the Delhi High Court. Equally, the arrest-legality challenges I detailed in my Section 19 guide, and the nexus challenges from my proceeds-of-crime guide, continue to inform bail and discharge arguments throughout.

Trial Delay and Bail: The Constitutional Counterweight

Special Court trials, given the volume of documentary evidence, often run for years. The Supreme Court has repeatedly held that Section 45’s rigour cannot become a licence for indefinite pre-trial incarceration. In Manish Sisodia v. Directorate of Enforcement, 2024 INSC 595, and V. Senthil Balaji v. Deputy Director, ED, 2024 INSC 739, the Court granted bail precisely because trials showed no realistic prospect of concluding soon. At the same time, Union of India v. Kanhaiya Prasad, 2025 INSC 210, insists that bail orders record genuine satisfaction on the twin conditions rather than being granted casually. I have mapped this entire tension in my dedicated guide on bail in PMLA cases.

Frequently Asked Questions (FAQ)

Q1. Does the ED file a chargesheet like the police? No. The ED files a “prosecution complaint” under Section 44(1)(b) of the PMLA, a distinct procedure the Supreme Court upheld in Vijay Madanlal.

Q2. If I was never arrested, must I seek bail once the complaint is filed? No. Tarsem Lal holds that an accused who was never arrested, and appears on the Special Court’s summons, need not apply for bail. Bonds suffice.

Q3. What does Section 24 actually presume? Once the prosecution proves the foundational facts — a scheduled offence and connected proceeds — the court presumes those proceeds are involved in laundering, unless the accused rebuts this on a preponderance of probabilities.

Q4. Does the ED need sanction to prosecute a public servant? Yes, where the alleged acts relate to the discharge of official duty. Bibhu Prasad Acharya confirms that Section 197 CrPC sanction is mandatory before cognizance.

Q5. Can I see documents the ED seized but did not rely upon? Yes. Sarla Gupta entitles the accused to a list of unrelied documents and, where justified, their production.

Q6. Can trial delay itself be a ground for bail? Yes. Where trial shows no prospect of timely conclusion, constitutional courts have granted bail despite Section 45’s twin conditions, as in Manish Sisodia and Senthil Balaji.

Q7. Must the Special Court hear me before taking cognizance of the ED’s complaint? Yes, for complaints heard after 1 July 2024. Kushal Kumar Agarwal and Parvinder Singh hold that the proviso to Section 223(1) BNSS is mandatory; cognizance taken without hearing you is void ab initio.

Conclusion

The Special Court trial is where documents, dates, and defences finally converge. The complaint replaces the chargesheet. Section 24 shifts a defined burden, not the entire case. Sanction protects public servants acting in the course of duty. Disclosure now runs both ways. And an accused who cooperated from day one, without ever being arrested, may walk into this trial needing nothing more than a bond. Prepare accordingly, and prepare early — trial strategy in PMLA cases is written long before the first witness is examined.

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