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P. CHIDAMBARAM VS DIRECTORATE OF ENFORCEMENT - 2019 7 Supreme 613 : Under Section 19 of the Prevention of Money Laundering Act, 2002, the specified officer (such as the Director, Deputy Director, Assistant Director, or any other officer authorised by the Central Government) has the power to arrest a person only if they have ''''reason to believe'''' that the person has committed an offence punishable under the PMLA, and the ''''reasons for such belief'''' must be recorded in writing. This requirement of recording reasons in writing ensures that the order of arrest is reasoned and not arbitrary. Furthermore, Rule 3 of the Prevention of Money-Laundering (The Forms and the Manner of Forwarding a Copy of Order of Arrest of a Person along with the Material to the Adjudicating Authority and its Period of Retention) Rules, 2005 mandates that the arresting officer must forward a copy of the order of arrest and the material to the Adjudicating Authority in a sealed cover marked ''''confidential'''', thereby ensuring the confidentiality and integrity of the reasons recorded. These provisions collectively establish that the order taking cognizance under PMLA, particularly in the context of arrest, must be reasoned and supported by written reasons.Checking relevance for Abhishek Banerjee VS Directorate Of Enforcement...

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Girdhar Gopal Bajoria VS Rajesh Kumar Sharma, Assistant Director, Directorate Of Enforcement - 2021 0 Supreme(Raj) 850 : The court found that the learned court below had passed a reasoned order and found a prima facie case against the petitioners, indicating that an order taking cognizance under the PMLA must be reasoned in order to be valid and legally sound.Checking relevance for State Of W. B. VS Mohd. Khalid: Mohd. Rashid Khan: Abdulaziz...

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• Order Taking Cognizance Must Be Reasoned - Courts are required to apply their mind judiciously before taking cognizance of offences under PMLA, ensuring procedural correctness and adherence to statutory provisions. Several cases highlight that the order of cognizance must be based on sufficient material, and the court's reasoning should be explicit, especially when rejecting reports or proceeding based on complaint files. For instance, the Supreme Court in Bibhu Prasad Acharya emphasized that sanction under Section 197(1), CrPC must precede cognizance in money laundering cases involving public servants ARUN PATI TRIPATHI vs DIRECTORATE OF ENFORCEMENT - Chhattisgarh.

• Pre-cognizance Opportunity and Procedural Compliance - Several judgments stress the importance of providing accused persons an opportunity of hearing before cognizance is taken, especially under Section 223(1) of BNSS. Failure to do so renders the order liable to be set aside. The courts also underscore that cognizance involves the court applying its mind to the materials, not merely formal acts, and that this process must be reasoned and compliant with statutory mandates TUTU GHOSH vs ENFORCEMENT DIRECTORATE - Calcutta, Amit Chandole vs Directorate of Enforcement - Bombay.

• Cognizance on Supplementary or Complaint Files - When a supplementary complaint is filed, the court must consider whether it is necessary to take cognizance again. Generally, once cognizance is taken, subsequent proceedings should not require re-taking unless new material justifies it. The courts clarified that the mere filing of a complaint or report does not automatically trigger a new cognizance unless the court explicitly applies its mind anew, which must be documented S GURDEEP SINGH vs DIRECTORATE OF ENFORCEMENT GOI REPRESENTED BY ASSISTANT DIRECTOR PRADEEP NARWAL JAMMU - Jammu and Kashmir, AMIT CHANDOLE vs DIRECTORATE OF ENFORCEMENT AND ANR - Bombay.

• Cognizance and Arrest/ Summons - In PMLA cases where the accused is not arrested at the time of filing the complaint, courts are mandated to issue summons and record reasons for proceeding without arrest. The issuance of summons after cognizance is a procedural requirement, and failure to do so can invalidate the order. The Supreme Court and High Courts have reiterated that the court's decision to proceed without arrest must be reasoned and in accordance with statutory provisions DEEPAK ASTICKAR v/s STATE OF KARNATAKA - Karnataka, INKAR00000054880.

• Legal Principles and Judicial Expectations - The core principle across cases is that taking cognizance is a judicial act that must be reasoned, supported by material, and compliant with procedural safeguards. The court's application of mind is central, and any violation, such as omitting pre-cognizance hearing or failing to record reasons, renders the order liable to be set aside. This ensures fairness, transparency, and adherence to the rule of law in PMLA proceedings ARUN PATI TRIPATHI vs DIRECTORATE OF ENFORCEMENT - Chhattisgarh, Amit Chandole vs Directorate of Enforcement - Bombay.

Analysis and Conclusion:The judicial consensus underscores that Order Taking Cognizance under PMLA Must be Reasoned. Courts must ensure that their orders are supported by material, provide accused persons an opportunity of hearing, and follow statutory procedures. Any deviation, such as taking cognizance without due application of mind or pre-cognizance hearing, invalidates the proceedings. This principle safeguards the rights of the accused and upholds the integrity of the judicial process under PMLA.