The High Court of Punjab and Haryana at Chandigarh has ruled that a mandatory factual report from a public servant’s superior officer is a prerequisite for taking cognizance of a complaint under the Prevention of Money Laundering Act, 2002. In a significant judgment delivered on October 27, 2026, the court set aside a cognizance order issued by the Special Judge (PMLA), Gurugram, against Harjeet Singh Puri, a former Chief General Manager of Finance at the National Hydroelectric Power Corporation (NHPC) Ltd., and his wife, Arvinderjeet Kaur. The court held that the absence of this factual report under Section 223(2)(b) of the Bharatiya Nagarik Suraksha Sanhita, 2023, renders the initial cognizance proceedings legally invalid.

Justice Sumeet Goel, presiding over the matter, emphasized that the statutory safeguard provided under the new procedural code is a "condition-precedent" that cannot be ignored or bypassed. By establishing this precedent, the court underscored that compliance with these pre-cognizance requirements is essential to prevent the abuse of the judicial process against public servants who might otherwise face vexatious or retaliatory litigation.

Judicial Clarification on Procedural Compliance

The central issue before the court was whether the procurement of a sanction for prosecution under Section 218 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, automatically satisfies the requirement for a factual report under Section 223(2)(b) of the same code. The Directorate of Enforcement had contended that since a formal sanction order had already been obtained from the Chairman and Managing Director of NHPC Ltd. prior to the filing of their complaint, the additional requirement of a superior officer’s report was effectively fulfilled.

The court rejected this argument, observing that the two provisions serve entirely distinct purposes. While a sanction for prosecution acts as an executive threshold to authorize legal proceedings against a public servant, the report required by Section 223(2)(b) functions as a factual, internal departmental account. Justice Goel noted, "The two provisions operate as independent, non-overlapping protections/safeguards of criminal procedure, and both must be given full effect in letter and spirit." The court reasoned that failing to seek this report would strip public servants of a specific, protective layer enacted by the legislature to ensure that only well-founded complaints proceed to trial.

New Timeline for Administrative Reporting

Recognizing that the statute itself was silent on the timeframe for submitting such reports, the court exercised its inherent jurisdiction under Section 528 of the BNSS to prevent administrative inertia from delaying justice. To bridge this gap, the High Court issued binding interim guidelines that govern how these reports must be processed by government departments.

Under these new directives, a superior officer is now strictly required to furnish a factual report within 30 days of receiving a court’s order. If compelling circumstances exist, the Special Court may grant a single extension of up to 15 days. Critically, the court affirmed its power to initiate coercive measures against any official who fails to comply with these timelines, ensuring that the judicial process is not hampered by institutional delay.

Case Background and Procedural Impact

The legal challenge arose from a complaint filed by the Directorate of Enforcement in March 2025, alleging that Harjeet Singh Puri had generated proceeds of crime amounting to approximately ₹1.04 crore—calculated as 112.01% of his known sources of income—through misconduct while serving as a public servant. Although the Special Court had taken cognizance of these allegations in April 2026, the petitioner moved the High Court to challenge the legality of that decision, citing the failure to adhere to the procedural requirements of the BNSS.

The High Court clarified that while the Enforcement Directorate remains empowered to investigate and prosecute money laundering cases, they are bound by the procedural framework of the BNSS as it applies to all criminal trials. The court noted that because the complaint was filed after the enforcement of the new code, the Special Court was strictly obligated to allow the petitioner an opportunity to present his version of events and to independently obtain a report from his department.

The court ultimately quashed the cognizance and summoning order dated April 23, 2026, directing the Special Judge in Gurugram to conduct a fresh assessment of the case. In its concluding order, the High Court instructed the trial court to strictly comply with the requirements under Section 223(2)(b) before any further process is issued against the accused. The court clarified that its intervention focused solely on the procedural legality of the initial order and did not address the merits of the allegations against the petitioner, leaving the Special Court free to proceed in accordance with the law once the mandatory safeguards are satisfied.