Bombay HC quashes ED cognisance order in OctaFX case, sets aside NBW and Red Corner Notice steps

The Bombay High Court has set aside a Special Prevention of Money Laundering Act (PMLA) Court order taking cognisance of a money laundering case involving OctaFX India Private Limited, now known as Tauga Private Limited, ruling that mandatory legal procedures had not been followed.

In an order dated October 26, 2026, Justice Milind N Jadhav held that the Special Court’s December 24, 2024, cognisance order was legally unsustainable. The High Court also quashed consequential prosecution steps concerning the issuance of non-bailable warrants (NBWs) and Red Corner Notices against the company in the present case.

The ruling is a procedural setback for the Enforcement Directorate (ED), which had recently approached the Special PMLA Court seeking NBWs against the company and other accused persons.

Court says accused must be heard before cognisance

The High Court passed the order on a writ petition filed by Tauga Private Limited challenging the initiation of judicial proceedings without giving the accused an opportunity to be heard under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023.

Justice Jadhav emphasised that the statutory procedure governing the taking of cognisance must be followed. The Special Court must consider the prosecution’s response and hear the accused persons before passing an appropriate order on the matter.

The High Court’s decision requires the Special PMLA Court to reconsider the question of cognisance after hearing the objections raised by the accused and following the prescribed legal process.

Consequential steps on warrants and notices quashed

In a significant direction, the High Court quashed consequential steps taken by the prosecution concerning the issuance of Red Corner Notices and non-bailable warrants against the petitioner company in the case.

The court also directed the ED to ensure that the other accused persons are properly served in accordance with law. In the case of Tauga Private Limited, fresh service of summons and notice under Section 223(1) of the BNSS was waived.

The relief comes amid the ED’s recent move before the Special PMLA Court seeking non-bailable warrants against the company and other accused persons.

OctaFX to return to Special PMLA Court

Senior advocate Aabad Ponda, along with the Khaitan & Co. legal team, represented the company and challenged the validity of the cognisance order.

With the December 2024 order set aside, the Special PMLA Court will have to hear the accused persons’ objections and reconsider whether cognisance should be taken in accordance with the statutory procedure. The next hearing before the Special Court is scheduled for November 18, 2026.

The High Court’s ruling marks a significant procedural victory for OctaFX, reaffirming that proceedings under stringent financial crime legislation must comply with mandatory safeguards protecting the rights of accused persons.

However, the judgment does not decide the merits of the underlying money laundering allegations. Instead, it requires the prosecution to follow the legally prescribed process before the Special Court can take cognisance afresh.