Supreme Court quashes cognisance in ED case against Rathi Steel & its top exec

New Delhi: The Supreme Court has set aside the cognisance of a prosecution complaint (equivalent to a chargesheet) taken by a lower court in a money laundering trial involving M/s Rathi Steel and its top executive, who were booked by the Enforcement Directorate (ED) in connection with a coal allocation case.

A division bench comprising Justices AS Oka (who retired last month) and Ujjal Bhuyan set aside the cognisance order dated November 20, 2024, solely on the ground of "non-compliance" with new provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS). These provisions require trial courts to issue a show-cause notice to an accused before summoning them to face trial.

Clarifying that it had not expressed any opinion on the merits of the ED's complaint, the bench directed executive Kushal Kumar Agarwal to appear before the trial court on July 14, "so that he can be given an opportunity of being heard in terms of the proviso to sub-section (1) of Section 223 of the BNSS." The order also stated, "We make it clear that no further notice shall be issued by the Special (trial) Court to the appellant (Agarwal)."

Section 223 of the BNSS applies specifically to "complaints" and not to cases investigated by the police or the CBI. Advocate Vijay Aggarwal, representing the petitioners, argued that under Section 223, accused persons are entitled to be heard before being summoned by the trial court. He emphasized that this section stipulates that "no cognisance of an offence shall be taken by the magistrate without giving the accused an opportunity of being heard."

In response, ED's counsel argued that under the new BNSS provision, the hearing granted to the accused is limited to determining whether a case is made out to proceed based solely on the complaint and its accompanying documents.

The ED further contended that cognisance is taken of the offence-not the offender. Thus, once cognisance is taken, it need not be taken again when supplementary or further complaints are filed. "Therefore, at that stage, there will be no occasion to give the accused the opportunity to be heard," the ED's counsel argued.

Addressing these arguments, the Supreme Court stated in its order that the ED's submissions "need not be considered, as the same do not arise in this appeal at this stage." However, it added, "We make it clear that the said contentions are expressly kept open and can be raised before the Special Court."