Supreme Court Clips the ED’s Wings: Why BNSS Section 223 is the New Shield in PMLA Trials

The End of the Endless Investigation

For years, defense counsel in India have battled a frustrating reality in white-collar trials: the Directorate of Enforcement (ED) files a prosecution complaint, a special court takes cognizance, but the investigation is never truly "over." The ED historically kept the sword hanging, routinely filing supplementary complaints to keep accused persons incarcerated and drag out trials. But the Supreme Court’s landmark April 2026 ruling in Parvinder Singh vs. Directorate of Enforcement has finally put a judicial leash on this practice, leveraging the newly minted Bharatiya Nagarik Suraksha Sanhita (BNSS).

If you are practicing on the criminal side, especially in PMLA courts, Parvinder Singh alters your immediate strategy. The Supreme Court decisively ruled that once a magistrate takes cognizance of an offence under the Prevention of Money Laundering Act (PMLA) post-BNSS commencement, the prosecution cannot proceed with further investigation on its own accord.

“It is mandatory to obtain a leave of the court before conducting further investigation under Section 223 of the BNSS.”

Why this matters: Under the old regime (Section 173(8) of the CrPC), investigating agencies often treated "further investigation" as an unfettered executive prerogative. While judicial permission was sought as a matter of prudence, the ED frequently bypassed it, claiming independent statutory powers. Section 223 of the BNSS tightens this loophole. The Supreme Court has now made it unequivocally clear that judicial oversight is not a courtesy; it is a statutory mandate. For defense lawyers, the immediate takeaway is clear: any supplementary probe conducted by the ED post-cognizance without express prior leave of the court under Section 223 BNSS is legally vitiated. Move for discharge or quashing immediately if the agency brings in "newly discovered" evidence without a judge’s prior nod.

Resurrecting Arnesh Kumar: Arrest as the Exception (Section 35 BNSS)

When the BNSS replaced the CrPC, there was palpable fear among the Bar that the new code expanded police powers at the cost of civil liberties. The Supreme Court has spent the first quarter of 2026 actively dispelling that fear, strictly interpreting Section 35 of the BNSS (which replaces Section 41 of the CrPC).

Reaffirming the spirit of the legendary Arnesh Kumar guidelines, the Apex Court has ruled that for offences punishable with imprisonment up to 7 years, issuing a notice of appearance under Section 35(3) BNSS is the absolute rule. Effecting an arrest under Section 35(6) (read with 35(1)(b)) is a strict exception that requires recorded, compelling reasons.

Furthermore, the Court stepped in to clarify the often-misinterpreted bail provisions of the new code. They ruled that the stringent bail conditions outlined under Section 480(3) of the BNSS simply do not apply to these sub-7-year offences.

The Practitioner's Angle: Magistrates have historically been timid in pulling up Investigating Officers for routine arrests in 498A IPC (now Section 85 BNS) or cheating cases. With the Supreme Court explicitly stating that Section 480(3) conditions cannot be weaponized to deny bail in lesser offences, defense counsel have a potent statutory weapon. If your client is arrested for an offence under 7 years, your first argument at the remand hearing should not just be about bail; it must be a direct challenge to the legality of the arrest under Section 35(6) BNSS.

High Court Chaos: The Remand Conundrum

While the Supreme Court is busy laying down the macro-jurisprudence of the BNSS, the High Courts are grappling with the messy operational realities—and they are not always on the same page.

Take the contentious issue of police custody and remand. The BNSS controversially allows police custody to be sought in tranches over a 40-to-60-day period (replacing the strict 15-day continuous limit under Section 167 CrPC).

The Delhi High Court recently ruled that the period an accused spends out on interim bail is strictly excluded from the time limit for calculating police custody under Section 187 BNSS. Meanwhile, the Gujarat High Court ruffled feathers by ruling that remand beyond 15 days for an accused already in custody is not inherently illegal under Section 346 BNSS, stating that a Habeas Corpus petition will not automatically lie in such cases.

This divergence is dangerous. It essentially means that the right to default bail and protections against extended police interrogation currently depend on which state you are practicing in. The Delhi High Court itself has flagged a possible conflict between the interpretation of Section 223 BNSS and existing Supreme Court law on cognizance, referring it to a larger bench.

The Bottom Line

The transition from the IPC/CrPC to the BNS/BNSS framework was never going to be seamless. However, the first wave of 2026 judgments reveals a clear trend: the higher judiciary is actively resisting the "police state" narrative. By mandating judicial leave for further PMLA probes and reinforcing the "bail, not jail" principle for offences under 7 years, the Supreme Court is embedding constitutional safeguards into the very fabric of the BNSS.

For the practicing Indian lawyer, the era of relying solely on CrPC precedents is over. You must master the statutory distinctions of the BNSS. Start drafting your applications under Section 223 to block rogue supplementary charge-sheets, and use Section 35 to litigate illegal arrests at the very first remand hearing. The law has changed, and our defense strategies must evolve with it.