Cognizance and Trial (Section 44)

Section 44 is the procedural keystone of the Prevention of Money Laundering Act, 2002. It answers three deceptively simple questions — which court tries the offence of money laundering, how that court is set in motion, and what happens to the underlying scheduled (predicate) offence. The answers depart sharply from the ordinary criminal process under the Code of Criminal Procedure: there is no FIR, no police report, no committal proceeding, and the money-laundering charge travels alongside the scheduled offence in a single Special Court. After the trilogy of Vijay Madanlal Choudhary (2022), Tarun Kumar (2023) and Tarsem Lal (2024), the contours of cognizance and trial under Section 44 are now reasonably settled — and they are a favourite hunting ground for judiciary and CLAT-PG examiners.

Where Section 44 sits in the PMLA scheme

Chapter VII of the PMLA (Sections 43 to 47) deals with Special Courts. Section 43 empowers the Central Government, in consultation with the Chief Justice of the High Court, to designate one or more Courts of Session as Special Courts for the trial of the offence punishable under Section 4. Section 44 then tells us what those Special Courts may try and how they are set in motion, while Section 46 applies the Code of Criminal Procedure, 1973 to proceedings before them save as otherwise provided. Read together, these provisions create a self-contained procedural code that overrides the ordinary CrPC route in several crucial respects.

The starting point is the offence of money laundering under Section 3, which is made punishable by Section 4. That offence is parasitic on a scheduled offence — a predicate crime listed in the Schedule to the Act that generates the proceeds of crime. Because every money-laundering prosecution presupposes a scheduled offence being tried (often) by a different ordinary criminal court, Section 44 has to solve a coordination problem: how do you keep the two prosecutions from colliding? Its answer is to funnel both into the Special Court. To place Section 44 in its wider statutory context, see the PMLA notes hub.

A second design choice underpins the whole chapter. The legislature deliberately routed the money-laundering prosecution outside the ordinary magistracy and into a designated Court of Session, because the offence is treated as a grave economic crime warranting a senior trial forum and a streamlined process. That is why Section 43 ties the designation of Special Courts to consultation with the Chief Justice of the High Court, and why Section 44 invests those courts with the power to take direct cognizance. The provision has been amended more than once — most significantly by the Finance (No. 2) Act, 2018, which sharpened the cognizance language, and the Finance (No. 2) Act, 2019, which added the transfer mechanism and the clarificatory Explanation — and each amendment has tightened the coordination between the predicate prosecution and the money-laundering prosecution.

The anatomy of Section 44(1)

Section 44(1), as it now stands after the Finance (No. 2) Act, 2018 and the Finance (No. 2) Act, 2019, opens with a non-obstante clause — “Notwithstanding anything contained in the Code of Criminal Procedure, 1973” — which signals that wherever the section speaks, it displaces the ordinary Code. The sub-section then proceeds through four clauses:

Clause (a): An offence punishable under Section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed. A proviso preserves continuity for scheduled offences already being tried before the commencement of the Act.

Clause (b): A Special Court may, upon a complaint made by an authority authorised in this behalf under the Act, take cognizance of the offence under Section 3 without the accused being committed to it for trial. This is the operative cognizance provision and the part examiners care most about.

Clause (c): Inserted to solve the coordination problem — if the court trying the scheduled offence is not the Special Court, that court shall, on an application by the authority authorised to file the PMLA complaint, commit the scheduled-offence case to the Special Court, which shall thereafter proceed to try it from the stage at which it stands. The Madras High Court has held that this transfer is mandatory and leaves the trial court no discretion once the application is made.

Clause (d): A Special Court, while trying the scheduled offence or the money-laundering offence, may try any other offence with which the accused may be charged under the CrPC at the same trial. The 2019 Explanation clarifies that the jurisdiction of the Special Court over money laundering does not depend on any order passed in respect of the scheduled offence, and that the trial of both sets of offences by the same court shall not be construed as a joint trial.

Why it is a complaint, not an FIR or a police report

The single most important structural feature of Section 44(1)(b) is that the Special Court is set in motion by a complaint — not by a police report under Section 173 CrPC, and not by an FIR. In Vijay Madanlal Choudhary v. Union of India, 2022 SCC OnLine SC 929, the three-judge Bench (Khanwilkar, Dinesh Maheshwari and C.T. Ravikumar JJ.) held that the Enforcement Directorate is not a “police” agency in the conventional sense and that the Enforcement Case Information Report (ECIR) is an internal departmental document that cannot be equated with an FIR registered under Section 154 CrPC. It follows that the safeguards the CrPC builds around FIR-based investigation — mandatory supply of the FIR, the Section 173 charge-sheet mechanism, and committal under Section 209 — simply do not attach.

This is why the section expressly dispenses with committal: a Sessions Court ordinarily cannot take cognizance unless the case has been committed to it by a magistrate under Section 209 CrPC. Section 44(1)(b) overrides that rule — the Special Court (which is a Court of Session) takes direct cognizance of the Section 3 offence on the ED's complaint, bypassing the magistrate entirely. The adjudicating authority's proceedings on attachment run on a separate civil track and are not a precondition to this criminal cognizance.

How cognizance is taken: Sections 200–204 CrPC apply

Because the prosecution is initiated by complaint, the question arises: which procedural chapter of the CrPC governs the cognizance stage? In Tarsem Lal v. Directorate of Enforcement (Criminal Appeal No. 2608 of 2024, decided 16 May 2024), a Bench of Abhay S. Oka and Ujjal Bhuyan JJ. held that a complaint under Section 44(1)(b) is governed by the procedure for complaint cases — Sections 200 to 204 of the CrPC. On receiving the ED's complaint the Special Court may examine the complainant, and if it is satisfied that there is sufficient ground to proceed, it takes cognizance and issues process (summons or, exceptionally, warrant) under Section 204.

Critically, Tarsem Lal held that when the Special Court issues a summons to an accused who has not been arrested by the ED during investigation, that accused need not apply for regular bail at all. An accused who appears in answer to a summons is not in the custody of the court; the rigours of the twin conditions in Section 45 are therefore not triggered. At most, the court may take a bond under Section 88 CrPC, which the judgment described as a mere undertaking to appear and not an order granting bail. This is a significant liberalisation for accused who were never arrested during the ED's investigation.

ED's power to arrest after cognizance

Tarsem Lal also settled a contested question about Section 19. The Court held that once the Special Court has taken cognizance of a complaint under Section 44(1), the Enforcement Directorate cannot exercise its power of arrest under Section 19 against an accused named in that complaint. If the ED thereafter wants such an accused in custody, it must apply to the Special Court for custody under Section 309 CrPC; it cannot resort to the drastic Section 19 power, which is confined to the investigation stage. The Court reasoned that the Section 19 safeguards — recorded reasons to believe, communication of grounds of arrest, production before the Special Court within 24 hours — are calibrated to pre-cognizance investigation, after which the matter is in the seisin of the court.

The judgment also clarified that Sections 41 and 41A CrPC (the Arnesh Kumar notice regime) do not directly govern the ED, because the ED is not a police officer investigating a cognizable offence under the CrPC; the PMLA has its own self-contained arrest code in Section 19. This dovetails with the Vijay Madanlal holding that ED officials are not police officers and that statements recorded under Section 50 are therefore not hit by the bar in Sections 25–26 of the Evidence Act.

Joint trial with the scheduled offence

Section 44(1)(a) and (c) together ensure that the scheduled offence and the money-laundering offence are tried by the same Special Court. Where the scheduled offence is pending before a different court — a CBI court, a magistrate, or another Sessions Court — clause (c) requires that court, on the ED's application, to commit the scheduled-offence case to the Special Court. The object is to avoid the spectre of two courts returning inconsistent findings on the same underlying facts and the same proceeds of crime.

In Vijay Madanlal Choudhary the Supreme Court upheld the constitutional validity of this joint-trial mechanism, rejecting the argument that clubbing a predicate offence (often a relatively minor IPC or special-statute offence) with the grave money-laundering charge prejudices the accused. The Court reasoned that a common forum promotes consistency and judicial economy, and that the Explanation to Section 44 (inserted in 2019) makes clear that the same court trying both is not technically a “joint trial” that would attract the misjoinder objections of Sections 218–223 CrPC. The Madras High Court in 2026 reiterated that the trial of the scheduled offence should ordinarily follow the money-laundering trial, not precede it, so that the consolidated proceeding can run efficiently before one judge.

Dependence on the scheduled offence: discharge and acquittal

Although money laundering is a stand-alone offence under Section 3, it is not freestanding — it requires proceeds of crime generated from a scheduled offence. Vijay Madanlal Choudhary drew the crucial line: the existence of proceeds of crime traceable to a scheduled offence is a sine qua non for the Section 3 offence. Consequently, if the person accused of the scheduled offence is finally discharged or acquitted by a court of competent jurisdiction, or the criminal case against him is quashed, there can be no offence of money laundering against that very person in relation to those proceeds.

The Explanation to Section 44 nonetheless preserves the Special Court's jurisdiction: it provides that the Special Court's power over the money-laundering offence is not dependent on any order passed in respect of the scheduled offence. The two propositions are reconciled thus — the Special Court has jurisdiction to proceed irrespective of the status of the scheduled-offence proceeding, but if and when there is a final exoneration on merits in the scheduled offence, the substantive money-laundering prosecution against the same accused must fall, because its factual foundation (proceeds derived from criminal activity) has collapsed.

The qualifier “on merits” is important. A discharge or acquittal that is not on the merits — for instance, a withdrawal under Section 321 CrPC, a technical quashing on procedural grounds, or an acquittal of a co-accused who is not the launderer — does not automatically dissolve the money-laundering case. Equally, where the scheduled-offence proceeding is still pending, the Special Court may continue the money-laundering trial; it is not obliged to stay its hand until the predicate prosecution concludes. This is the practical reach of the Explanation: it decouples the Special Court's jurisdiction from the fate of the predicate case while leaving intact the substantive rule that the money-laundering charge cannot ultimately survive the same accused's final exoneration in the scheduled offence.

Supply of documents and the accused's fair-trial rights

One of the recurring grievances under the PMLA is the non-supply of the ECIR. Vijay Madanlal Choudhary held that because the ECIR is not an FIR, the accused has no right to a copy of it during investigation; disclosure of the grounds of arrest at the time of arrest under Section 19 is sufficient. However, the position changes at the cognizance stage: once the Special Court takes cognizance of the ED's complaint under Section 44(1)(b), the accused becomes entitled, in the ordinary course, to copies of the complaint and the documents that the prosecution proposes to rely upon, consistent with Sections 207 and 208 CrPC and the constitutional guarantee of a fair trial under Article 21.

This staged disclosure — minimal during ED investigation, fuller after cognizance — is one of the balancing devices the Supreme Court relied upon to sustain the constitutionality of the PMLA's departures from ordinary criminal procedure. Examiners frequently test the distinction between the investigation stage (no ECIR copy, Section 50 summons, Section 19 arrest) and the trial stage (complaint copy supplied, Sections 200–204 procedure, Section 309 custody).

Interface with Section 45 bail conditions

Trial under Section 44 cannot be understood without the bail regime in Section 45, whose twin conditions — the public prosecutor's opportunity to oppose, and the court's satisfaction that there are reasonable grounds to believe the accused is not guilty and is not likely to commit an offence on bail — were revived by the 2018 amendment and upheld in Vijay Madanlal Choudhary. In Tarun Kumar v. Assistant Director, Directorate of Enforcement (2023), the Supreme Court (Bela M. Trivedi and Satish Chandra Sharma JJ.) reaffirmed that the twin conditions are mandatory and that the burden under Section 24 PMLA to displace the statutory presumption rests on the accused; the Court refused bail to an accused who had been arrested and could not satisfy that threshold.

Tarsem Lal harmonises the two: the twin conditions of Section 45 bite only where the accused is in custody or seeks release from custody. An accused who was never arrested during investigation and merely appears on a Special Court summons is not in custody, so Section 45 is not attracted at that point. The distinction — arrested accused (Section 45 twin conditions apply) versus summoned-but-never-arrested accused (no bail application needed, Section 88 bond at most) — is now a high-frequency examination point.

Trial procedure: Court of Session and the CrPC

Once cognizance is taken, Section 44 read with Section 46 directs that the Special Court tries the case as a Court of Session, following the procedure prescribed by the CrPC for trial before a Court of Session (Sections 225–237 CrPC), to the extent not inconsistent with the PMLA. The public prosecutor conducts the prosecution; charges are framed; the prosecution evidence is led; the accused is examined under Section 313 CrPC; and judgment follows. The non-obstante clause means that where the PMLA prescribes a different course — such as direct cognizance without committal, or the reverse burden under Section 24 — the PMLA prevails.

Section 44(2) preserves the High Court's powers: nothing in Section 44 affects the special powers of the High Court regarding bail under Section 439 CrPC, and the High Court may exercise such powers including the power under Section 439(1)(b) to impose conditions. Section 47 (not part of Section 44 but closely linked) makes the Special Court's judgment appealable to the High Court. The practical upshot is a hybrid: a Sessions-style trial driven by an ED complaint, hedged by PMLA-specific presumptions and bail conditions, and overseen on appeal by the High Court.

Only a Special Court — and only on an authorised complaint

Two jurisdictional locks are built into Section 44. First, only a Special Court may take cognizance of the Section 3 offence — no magistrate and no ordinary Sessions Court can do so. Where a designated Special Court does not yet exist, the trial of the scheduled offence may continue before the existing court, but the money-laundering offence must await the Special Court. Second, cognizance may be taken only on a complaint by an authority authorised in that behalf — in practice, an officer of the Enforcement Directorate not below the rank specified by the Central Government. A private complaint cannot set the Special Court in motion for money laundering.

The Madras High Court's 2026 ruling on Section 44(1)(c) illustrates how these locks operate in practice: a CBI court trying the scheduled offence must, on the ED's application, commit that case to the Special Court — the CBI court has no discretion to retain it once the statutory condition is met. This ensures that the locus of the money-laundering trial, and of any connected scheduled offence, is always the designated Special Court.

Exam pointers and common traps

For judiciary and CLAT-PG candidates, the high-yield propositions are: (1) Special Court = a designated Court of Session under Section 43; (2) cognizance under Section 44(1)(b) is on a complaint, without committal, and only by an authorised ED officer; (3) the ECIR is not an FIR (Vijay Madanlal); (4) complaint procedure under Sections 200–204 CrPC governs the cognizance stage (Tarsem Lal); (5) after cognizance the ED cannot arrest under Section 19 — it must seek custody under Section 309 CrPC (Tarsem Lal); (6) a summoned-but-never-arrested accused is not in custody and need not apply for bail (Tarsem Lal), whereas an arrested accused faces the Section 45 twin conditions (Tarun Kumar); and (7) final discharge/acquittal in the scheduled offence dissolves the money-laundering case against the same accused (Vijay Madanlal).

The classic trap is to assume the ordinary CrPC committal route applies — it does not, because of the non-obstante clause. A second trap is to conflate the investigation-stage safeguards (Section 19 arrest, Section 50 summons, no ECIR copy) with the trial-stage rights (complaint copy, Sessions trial, Section 309 custody). A third is to overstate the independence of money laundering: it is a stand-alone offence, but it cannot survive without proceeds of crime traceable to a scheduled offence. Keep the PMLA notes hub handy to revise the connected provisions on offence, punishment and attachment.