New Delhi: The Supreme Court has held that a Magistrate cannot validly take cognizance of a criminal complaint under the repealed Foreign Exchange Regulation Act, 1973 (FERA) if the mandatory "opportunity notice" required under the proviso to Section 61(2) of the Act was not served upon the proposed accused, and has gone on to quash a 23-year-old complaint against Standard Chartered Bank on this ground, coupled with a prolonged violation of the right to a speedy trial.
A Bench of Justice J.B. Pardiwala and Justice Manoj Misra was hearing appeals filed by Standard Chartered Bank and one of its officers against a judgment of the Bombay High Court dated 22.03.2012, which had declined to quash two complaints bearing Criminal Case Nos. 1503-1504 of 2002, filed under Sections 56(1) and 73(3) of FERA.
The complaints alleged that the appellants had contravened FERA in handling remittances routed through the bank's Vostro Account in Mumbai, involving banker's cheques procured through proxy purchasers for the benefit of a UK-based entity. The bank had itself later reversed the credit entries on discovering the irregularity and surrendered the blocked amount of Rs. 30,00,000 to the authorities in 1993, pursuant to a directive under Section 33(2) of FERA.
Senior Advocate Mr. Shyam Divan, appearing for the appellants, argued that the High Court had erred in holding that a quashing petition under Section 482 of the CrPC was not maintainable merely because an alternative remedy of revision under Section 397 was available, relying on Dhariwal Tobacco Products Ltd. v. State of Maharashtra. He further submitted that no opportunity notice under Section 61(2) of FERA had ever been placed on record or received by the appellants, and that a 10-year delay in investigation followed by a further 10-year delay before trial violated the appellants' right to a speedy trial under Article 21. Senior Advocate Ms. Ruchi Kohli, for the respondents, contended that the High Court had in substance examined the quashing plea on merits and rejected it on the ground of delay alone, and that any delay was attributable to the appellants' own failure to appear on service of summons.
On the first issue, the Supreme Court held that the mere availability of a revisional remedy under Section 397 of the CrPC does not bar the exercise of inherent jurisdiction under Section 482, reaffirming the position taken in Dhariwal Tobacco, Prabhu Chawla v. State of Rajasthan, and Akanksha Arora v. Tanay Maben, and held that the High Court had erred in treating the availability of revision as the threshold for testing maintainability.
On the second and central issue, the Court examined Section 61(2) of FERA, under which no complaint alleging contravention of a provision requiring prior permission can be filed unless the accused has first been given an opportunity to show that such permission existed. Surveying a line of Delhi High Court decisions including Devashis Bhattacharya v. Union of India, Sanjay Malviya v. R.K. Rawal, United India Airways Ltd. v. Chief Enforcement Officer, and Shilpi Modes v. Directorate of Enforcement the Court held that this opportunity notice is a mandatory, meaningful safeguard rooted in natural justice, and that a Magistrate must satisfy himself of compliance before taking cognizance. In the present case, the respondents had neither placed the opportunity notice on record, nor stated its date, nor furnished any proof of service, despite repeated opportunities before the High Court and the Supreme Court itself to do so.
On the third issue, the Court applied the constitutional framework on the right to a speedy trial laid down in Abdul Rehman Antulay v. R.S. Nayak and P. Ramachandra Rao v. State of Karnataka, and reiterated in its own recent decision in Kailash Chandra Kapri v. State of Uttar Pradesh. Tracing the chronology of the case, the Court found that the complaint, filed in 2002 for a transaction dating to 1991-92, remained frozen at the stage of service of summons for nearly a decade, with the respondent-complainant repeatedly failing to collect or serve summons, seek non-bailable warrants in time, or comply with the High Court's own time-bound directions to conclude the trial. The Court held that:
"To permit the respondent-complainant to continue in such circumstances would be to allow the appellants to remain... in a state of suspended animation indefinitely."
Holding that the delay in the case was squarely attributable to the prosecution's want of diligence rather than any fault of the appellants, and that the mandatory opportunity notice under Section 61(2) of FERA had never been shown to have been served, the Supreme Court quashed the complaints bearing Criminal Case Nos. 1503-1504 of 2002 and the summoning order dated 30.05.2002 as against the appellants, set aside the impugned judgment of the Bombay High Court, and allowed the appeals.
Appearances:
For the Appellants: Mr. Shyam Divan, Senior Advocate.
For the Respondents: Ms. Ruchi Kohli, Senior Advocate.
Case Title: Standard Chartered Bank & Anr. vs. Enforcement Officer, Ministry of Home Affairs & Anr., Criminal Appeal Nos. 2142-2143 of 2013 (2026 INSC 727)
