Section 223 BNSS Not Applicable to SFIO Complaints under the Companies Act: Punjab & Haryana High Court
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Introduction
In a significant judgment delivered on 7 July 2026 in Vivo India Private Limited v. Serious Fraud Investigation Office, the Punjab & Haryana High Court has clarified that an accused facing prosecution by the Serious Fraud Investigation Office (SFIO) under the Companies Act, 2013 is not entitled to a pre-cognizance hearing under the first proviso to Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
The decision is one of the first to examine the interaction between the newly introduced proviso to Section 223 BNSS and the special procedural framework governing SFIO investigations.
The judgment assumes considerable importance because several accused persons have recently argued that, after the enactment of the BNSS, every complaint case requires a hearing before cognizance is taken. The High Court has now held that such a proposition cannot be mechanically extended to prosecutions under the Companies Act.
Background
The SFIO filed a prosecution against Vivo India and several other accused alleging offences under Sections 447, 448 and other provisions of the Companies Act, 2013.
Before the Special Court could take cognizance, Vivo sought a pre-cognizance hearing by relying upon the first proviso to Section 223 BNSS.
The principal contention was simple:
the prosecution had been instituted through a written complaint;
Section 223 BNSS applies to complaint cases; and
therefore, the accused had a statutory right to be heard before cognizance could be taken.
The Special Court rejected the application, following which the matter reached the Punjab & Haryana High Court.
The Principal Question
The Court framed the controversy as follows:
Whether the newly inserted proviso to Section 223 BNSS requiring a pre-cognizance hearing in complaint cases applies to prosecutions instituted by the SFIO under the Companies Act, 2013?
Petitioner's Arguments
The petitioner argued that:
Section 212(6) and Section 439(2) of the Companies Act specifically require prosecution to be initiated through a complaint in writing.
Since proceedings commence through a complaint, Chapter XVI of the BNSS applies.
Consequently, Section 223 mandates that the accused must be granted a hearing before cognizance is taken.
Section 438 of the Companies Act expressly applies the BNSS procedure unless excluded.
There is no express exclusion of Section 223.
The Supreme Court's decisions under the Prevention of Money Laundering Act recognising the applicability of procedural safeguards under the CrPC/BNSS should equally apply to SFIO prosecutions.
SFIO's Response
The SFIO resisted the petition on several grounds.
It argued that:
the Companies Act constitutes a complete procedural code;
Section 212(15) treats the SFIO investigation report as a police report for criminal procedure purposes;
prosecutions initiated after an extensive statutory investigation cannot be equated with ordinary private complaints;
importing Section 223 into the Companies Act would frustrate the legislative objective of speedy prosecution of serious corporate frauds.
Findings of the High Court
1. The Companies Act contains a special procedural code
The Court undertook an extensive examination of Sections 212, 435, 436, 438 and 439 of the Companies Act.
It observed that these provisions comprehensively regulate:
investigation;
filing of prosecution;
cognizance; and
framing of charge.
Accordingly, the Court held that the Companies Act prescribes a distinct statutory mechanism which prevails over the general provisions contained in the BNSS wherever inconsistency exists.
2. SFIO investigation is fundamentally different from ordinary police investigation
The Court noted several distinguishing features of an SFIO investigation.
Amongst others:
investigation begins only after Central Government approval;
inspectors possess extensive statutory powers;
statements are recorded on oath;
companies are under a statutory duty to cooperate;
investigation reports possess statutory evidentiary value;
prosecution can only be launched after Governmental scrutiny of the investigation report.
Because of these safeguards, the Court observed that the accused already participates extensively during investigation itself.
3. The deeming fiction under Section 212(15) has practical significance
One of the principal arguments raised by Vivo was that Section 212(15) merely treats the investigation report as a police report for framing of charges.
The High Court rejected this narrow interpretation.
According to the Court, the legislative fiction demonstrates Parliament's intention that prosecutions founded upon an SFIO investigation should procedurally proceed in the same manner as cases instituted on a police report rather than as ordinary complaint cases.
4. Section 223 BNSS applies only to complaint cases
The Court also relied upon the definition of "complaint" under Section 2(1)(h) BNSS.
Since that definition expressly excludes a police report, and since SFIO investigations are statutorily placed on a similar procedural footing, the Court concluded that Section 223 could not be invoked merely because the prosecution is formally instituted through a written complaint.
5. No pre-cognizance hearing is contemplated under the Companies Act
The Court observed that the Companies Act deliberately omits any requirement of hearing the accused before cognizance.
Introducing such a requirement through Section 223 BNSS would amount to judicially rewriting the statutory scheme.
The Court emphasised that Parliament intentionally created Special Courts to ensure expeditious prosecution of serious corporate frauds, and importing an additional procedural stage would defeat that legislative objective.
Practical Significance
The judgment is likely to have significant implications for future white-collar crime litigation.
First, it substantially narrows attempts to invoke Section 223 BNSS in prosecutions under the Companies Act.
Secondly, it reinforces the principle that special statutes containing comprehensive procedural mechanisms may override the newly introduced procedural safeguards under the BNSS.
Thirdly, it demonstrates that the mere use of the expression "complaint in writing" does not necessarily convert every prosecution into a complaint case attracting Chapter XVI of the BNSS.
An Interesting Contrast with PMLA
One aspect likely to generate further legal debate is the apparent divergence between prosecutions under the Companies Act and those under the Prevention of Money Laundering Act.
Recent Supreme Court decisions have recognised the applicability of the CrPC/BNSS procedural framework to complaints filed by the Enforcement Directorate.
The Punjab & Haryana High Court distinguished those authorities by holding that the Companies Act contains a far more elaborate procedural architecture governing SFIO investigations and prosecutions.
Whether this distinction ultimately receives approval from the Supreme Court remains an important question for future litigation.
Conclusion
The Punjab & Haryana High Court has now clarified that persons facing prosecution by the SFIO cannot insist upon a pre-cognizance hearing under Section 223 BNSS merely because the prosecution is initiated through a written complaint.
The Court viewed the Companies Act as a self-contained procedural code designed for efficient prosecution of serious corporate fraud, and held that importing an additional hearing requirement would be inconsistent with the legislative scheme.
Given that Section 223 BNSS is a relatively new provision and similar issues are likely to arise under several other special statutes, this judgment is expected to become an important precedent in the evolving jurisprudence concerning the relationship between the BNSS and special economic offence legislation.
