Service Of Opportunity Notice U/S 61(2) FERA Mandatory Requirement For Taking Cognizance: Supreme Court Quashes 23-Year-Old Complaint Against Standard Chartered Bank
The Bench said that availability of revisional remedy under Section 397 CrPC is no threshold bar to Section 482 petition; 23-year pre-trial delay violates right to speedy trial under Article 21.
Justice J.B. Pardiwala, Justice Manoj Misra, Supreme Court
The Supreme Court has held that producing and proving the service of a statutory opportunity notice under the proviso to Section 61(2) of the Foreign Exchange Regulation Act, 1973 (FERA) is a mandatory condition precedent for a Magistrate to take valid cognizance of an offence.
The Court said that where the prosecution completely fails to place on record or establish the service of such a notice, the order taking cognizance and issuing summons suffers from total non-application of mind and is void in law.
The Bench further clarified that the availability of an alternative remedy of filing a criminal revision under Section 397 CrPC does not operate as a threshold bar to the maintainability of a petition under Section 482 CrPC. Emphasizing that High Courts must not non-suit litigants on hyper-technical grounds, the Court observed that High Courts possess the inherent power to convert a petition under Section 482 into Section 397 CrPC, or vice versa, to secure the ends of justice.
A Division Bench comprising Justice J.B. Pardiwala and Justice Manoj Misra observed, “…the service of an opportunity notice under the proviso to Section 61(2) of FERA is a mandatory requirement, without compliance of which no complaint under Section 56 or 57 of FERA respectively, can validly be instituted, and no Magistrate can validly take cognizance of the offence alleged therein. This opportunity must be meaningful and adequate, and not a mere technical or notional compliance, given the drastic penal consequences that follow from proceedings under FERA. The burden lies upon the prosecution to establish, at the threshold, that such notice was issued and served in the prescribed manner. The Magistrate shall satisfy himself, before taking cognizance, that such opportunity was in fact given, or otherwise it may render the order taking cognizance unsustainable and liable to be quashed”.
Senior Advocate Shyam Divan appeared for the appellant and Senior Advocate Ruchi Kohli appeared for the respondent.
The dispute arose from two criminal complaints instituted in May 2002 alleging offences under Sections 56(1) and 73(3) of FERA against Standard Chartered Bank and its officer regarding remittance transactions conducted in 1991–1992.
The prosecution alleged unauthorized credit entries routed through a foreign account for an entity resident outside India. However, the bank had reversed the entries and surrendered the entire sum of Rs.30,00,000/- to the authorities in January 1993.
The complaint was filed right before the expiry of the FEMA sunset clause without producing proof of serving the mandatory opportunity notice.
The appellants challenged the complaints and summoning orders before the Bombay High Court, which dismissed the petitions, holding that Section 482 CrPC could not be invoked when a revisional remedy under Section 397 CrPC was available, and held that delay alone did not justify quashing.
Reversing the High Court’s judgment, the Supreme Court held that inherent powers under Section 482 CrPC are preserved to prevent abuse of process and cannot be ousted by Section 397 CrPC. On FERA compliance, the Court held that proof of an opportunity notice under Section 61(2) is mandatory for valid cognizance.
Finally, noting that 23 years had elapsed without the trial progressing beyond summons, the Bench held that keeping the accused under prolonged uncertainty violated the fundamental right to a speedy trial under Article 21 of the Constitution of India.
“...It is pertinent to mention that 23-years have now elapsed since the institution of the complaint, and over three decades since the transaction it concerns, without the trial having progressed beyond the stage of service of summons. To permit the respondent - complainant to continue in such circumstances would be to allow the appellants to remain, in the words of this Court in Kailash Chandra Kapri (supra), in a state of suspended animation indefinitely”, the Bench said.
The Court allowed the appeals, set aside the Bombay High Court order, and quashed Criminal Case and the summoning order dated May 30, 2002.
Cause Title: Standard Chartered Bank & Anr. v. Enforcement Officer, Ministry of Home Affairs & Anr. (Neutral Citation: 2026 INSC 727)
Appearances:
Appellant: Shyam Divan, Senior Advocate, Ateev Kumar Mathur, Ananta Prasad Mishra, AOR.
Respondents: Sarthak Karol, Ruchi Kohli, Senior Advocate, Anuj Udupa, Vatsal Joshi, Arvind Kumar Sharma, AOR, Aaditya Aniruddha Pande, AOR, Siddharth Dharmadhikari, Shrirang B. Varma, Sourav Singh, Chitransha Singh Sikarwar, Advocates.