SFIO Complaints Under Companies Act Don't Require Pre-Cognizance Hearing Of Accused Under Section 223 BNSS: Punjab & Haryana High Court

"The directions for issuance of pre-cognizance notice as envisaged under Section 223 of the BNSS in a prosecution initiated under the Act, 2013, are alien to the statutory scheme and will frustrate the object of the Act, 2013." Punjab and Haryana High Court, in a significant ruling, held that the mandatory pre-cognizance hearing for accused persons contemplated under the first proviso to Section 223 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) does not apply to complaints filed by the Serious Fraud Investigation Office (SFIO) under the Companies Act, 2013.

A bench of Justice Subhas Mehla observed that the Companies Act is a self-contained special statute that overrides the general procedural provisions of the BNSS in cases of inconsistency.

The Court further clarified that since an SFIO investigation report is statutorily deemed to be a "police report" for procedural purposes, it stands excluded from the definition of a "complaint" under Section 2(1)(h) of the BNSS, thereby making the requirement of a pre-cognizance hearing inapplicable.

The petitioner, Vivo India Private Limited, approached the High Court under Section 528 of the BNSS challenging an order passed by the Additional Sessions Judge, Gurugram. The Special Court had dismissed Vivo's application seeking a pre-cognizance hearing in a complaint filed by the SFIO alleging offences under Sections 447, 7(5), 7(6), and 449 of the Companies Act, 2013. The petitioner contended that as the complaint was filed after the enforcement of the BNSS, the mandatory safeguard under the first proviso to Section 223 was applicable.

The primary question before the court was whether the newly inserted first proviso to Section 223 of the BNSS, which mandates a pre-cognizance hearing for the accused in complaint cases, applies to prosecutions initiated by the SFIO under the Companies Act, 2013. The Court was also called upon to determine if the "deeming fiction" under Section 212(15) of the Companies Act, which treats an SFIO report as a police report, excludes the application of Chapter XVI of the BNSS.

Companies Act 2013 Is A Self-Contained Code For Corporate Frauds

The Court began by analyzing the statutory architecture of the Companies Act, 2013, noting that it provides a comprehensive and distinct procedural mechanism for the investigation, prosecution, and trial of corporate offences. The bench emphasized that Sections 212, 435, 436, 438, and 439 of the Act collectively establish a separate legislative scheme that governs proceedings before the Special Court.

Legislative Intent For Expeditious Trials Overrides General BNSS Procedures

The Court observed that the criminal provisions of the Companies Act were enacted with the specific objective of addressing complex corporate frauds through specialized mechanisms. The bench noted that the Act provides its own procedure for taking cognizance under Section 436(1)(d), which does not contemplate any preliminary opportunity of hearing for the accused.

"The legislative intent is to ensure expeditious trial of corporate offences by removing procedural hurdles that otherwise apply under general criminal law," the Court remarked.

SFIO Investigation Report Statutorily Deemed As A 'Police Report'

A pivotal part of the judgment focused on Section 212(15) of the Companies Act, which creates a legal fiction treating the SFIO investigation report as a "police report" filed under the criminal procedure code. The Court rejected the petitioner's argument that this fiction was limited only to the stage of framing charges.

Court Explains Scope Of Deeming Fiction Under Section 212(15)

The bench held that once the legislature directs that an SFIO report be treated as a police report, the Court is bound to carry this legal fiction to its logical conclusion. Since Section 2(1)(h) of the BNSS explicitly states that a "complaint" does not include a police report, the procedural safeguards of Section 223 BNSS—which apply exclusively to complaint cases—cannot be imported into SFIO prosecutions.

"Once the legislature has clearly provided that the SFIO investigation report shall be treated as a report under Section 173 of the Cr.P.C. (now Section 193 of the BNSS), the procedural consequences ordinarily flowing from a police report cannot be ignored," the bench held.

Special Court Functions As A Court Of Session, Not A Magistrate

The Court highlighted a jurisdictional distinction, noting that Section 223 of the BNSS applies specifically to a "Magistrate" taking cognizance. However, for serious corporate offences like fraud under Section 447, the Special Court is presided over by a Sessions Judge or Additional Sessions Judge.

Section 213 BNSS Governs Cognizance By Special Courts

The Court observed that the Special Court, functioning as a Court of Sessions, is governed by Section 213 of the BNSS read with Section 436(1)(d) of the Companies Act. It held that any attempt to import the proviso of Section 223 into the scheme of Section 213 would amount to "overriding judicial legislation" and would contradict the express statutory framework designed by the Parliament.

Hearing Opportunity Already Inbuilt In Statutory Investigation Process

The bench further noted that the reason for not including a pre-cognizance hearing in the Companies Act is that the opportunity for the concerned company or accused to be heard is already inbuilt during the investigation phase. Under Section 217, the investigating officer records statements on oath and exercises the powers of a Civil Court.

"Giving an opportunity of hearing to the concerned person(s) before taking cognizance would only be a repetitive exercise," the Court observed.

Distinction Between Private Complaints And Statutory Complaints By Public Servants

The Court found substance in the SFIO's contention that its complaints stand on a materially different footing than private complaints filed by individuals. While a Magistrate in a private complaint has no prior investigation material, an SFIO complaint follows a detailed statutory investigation by public servants and a two-tier scrutiny by the Central Government.

Ratio Of Sanjabij Tari Case Applicable To Companies Act

The Court relied on the principle established in Sanjabij Tari v. Kishore S. Borcar (2025), noting that general procedural provisions of the BNSS cannot be applied in a manner that defeats or dilutes the special statutory framework of specialized enactments. The bench concluded that the safeguard in Section 223 BNSS was intended for complaints not founded upon prior statutory investigation.

Dismissing the petition, the Court held that the Gurugram Special Court's order did not suffer from any illegality or jurisdictional error. The bench reaffirmed that accused persons in SFIO-initiated prosecutions have no vested right to claim a pre-cognizance hearing under the BNSS, as the Special Court is empowered to take cognizance directly based on the investigation report.

Date of Decision: 07 July 2026