Supplementary Complaint Not A Fresh Cognizance Under PMLA: Madras High Court Dismisses Revision Challenge In Money Laundering Case Based On SFIO-Linked Allegations
Isabella Mariam
The High Court of Madras Division Bench of Justice S.M. Subramaniam and Justice Mohammed Shaffiq held that a supplementary complaint under Section 44 of the Prevention of Money Laundering Act functions as an extension of the main complaint and does not require a fresh act of cognizance. The Court noted that treating each supplementary filing as an independent complaint would lead to repetitive cognizance of the same offence and unnecessarily delay proceedings. Dismissing the challenge raised by the petitioner, the Bench affirmed that the second supplementary complaint—based on additional material emerging from an SFIO complaint—was validly taken on file and that the trial court’s order warranted no interference, directing that the prosecution continue on its merits.
The proceedings arise from allegations that a company engaged in a conspiracy to defraud public sector banks of significant loan amounts through misappropriation, manipulation of accounts, and the use of shell entities to divert funds. According to the Enforcement Directorate, the diverted amounts were layered through multiple transactions before being invested in various assets, forming the alleged proceeds of crime. The Directorate initially filed a main prosecution complaint under the Prevention of Money Laundering Act (PMLA), followed by a first supplementary complaint against additional accused persons.
A second supplementary prosecution complaint was later filed, in which the petitioner was arrayed as an accused for the first time. The Directorate stated that this filing was based on material arising from a complaint submitted by the Serious Fraud Investigation Office alleging corporate fraud and related violations. The Directorate asserted that this complaint, along with a forensic audit report forming part of those proceedings, constituted new material connected to a scheduled offence under the PMLA.
The petitioner contended that the supplementary complaint relied on material already available to the Directorate during earlier filings and that no new evidence had emerged to justify arraigning him at a later stage. He further argued that he was entitled to a pre-cognizance hearing under the proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita. The Directorate disputed this, maintaining that the supplementary complaint flowed from further investigation permitted under Section 44 of the PMLA and included additional transactions, entities, and evidence.
The Court recorded that “cognizance essentially means that the Judge should have applied his judicial mind and prima facie be satisfied that the allegations in the complaint, if proved, would constitute an offence.” It noted earlier precedent stating that the term indicates the point when a judge “first takes judicial notice of an offence.”
It stated that “cognizance is in regard to the offence and not the offender” and noted the judicial view that while cognizance of the main offence may already have been taken, a supplementary complaint may relate to additional charges or additional accused with reference to the same offence. The Bench recorded that Explanation (ii) to Section 44 PMLA “clarifies that the prosecution complaint shall be deemed to include any subsequent complaint in respect of further investigation… whether named in the original complaint or not.”
It observed that the supplementary complaint is “not a fresh or independent complaint but is deemed to be part and parcel of the main complaint in respect of which cognizance has already been taken.” Regarding the order dated 17 February 2025, the Court noted that the expression stating cognizance against accused 28 to 42 “can be understood as merely an error and can be ignored.”
The Bench recorded that the trial judge’s order “sufficiently demonstrates application of mind” and that a detailed order was not necessary at the stage of issuing process. It relied on the principle that at such a stage, “the Magistrate is mainly concerned with the allegations made… and he is only to be prima facie satisfied whether there are sufficient grounds for proceeding against the accused.”
On the contention regarding pre-cognizance hearing, the Court stated that it “cannot be applied to the present case, as it does not involve taking cognizance of the Main Prosecution Complaint for the first time.”
On the issue of stale versus new material, the Court noted the petitioner’s contention that the second supplementary complaint relied on earlier material and that no new evidence had been collected. It recorded the Enforcement Directorate’s submission that the second supplementary complaint was based on the SFIO complaint dated 9 September 2022, which was filed after the searches of 2021, and that the ECIR was amended to incorporate this as a scheduled offence. The Court observed that the SFIO complaint contained new allegations regarding corporate fraud and violations under the Companies Act, and that the forensic audit report constituted fresh documentary evidence.
The Bench stated that “the SFIO complaint dated 09.09.2022 constitutes fresh and new material and that the supplementary complaint is not based on stale material.” It concluded that the decision relied on by the petitioner was distinguishable based on the facts.
The Court recorded that “the impugned order dated 17.02.2025 in Spl.C.C.No.9 of 2022… need not be interfered with. The revision is devoid of merits and the same is liable to be dismissed. The trial Court shall proceed with the case on merits, uninfluenced by the observations made on facts. The Criminal Revision Case is dismissed. Connected Miscellaneous Petitions, if any, are closed. No costs.”
Advocates Representing the Parties
For the Petitioners: Mr. Shree Singh for Mr. Vishnu Vardhan J and Mr. Mayank Pandey
For the Respondents: Mr. N. Ramesh, Special Public Prosecutor for ED Cases
Case Title: Rahul Surana v. The Assistant Director, Directorate of Enforcement
Case Number: CRL RC No. 1541 of 2025
Bench: Justice S.M. Subramaniam and Justice Mohammed Shaffiq
