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In a major relief to Standard Chartered Bank, the Supreme Court on Tuesday quashed a 23-year-old complaint and the summons issued against the bank under the Foreign Exchange Regulation Act (FERA). The apex court said the complaint was not backed by documentary evidence and that the case had remained pending for more than two decades without any real progress.
A bench of Justices J.B. Pardiwala and Manoj Misra set aside the Bombay High Court's orders, observing that over 23 years had passed since the complaint was filed and more than 30 years since the alleged transaction took place, yet the trial had not made any progress.
"In view of all that is stated above, we are of the considered view that this is a fit case warranting the exercise of the inherent powers of this court to bring these proceedings to an end," the bench said.
The court noted that the complaint was based on an alleged opportunity notice issued under Section 61(2) of FERA, but the complainant had failed to produce any acceptable proof of the notice even after all these years.
The bench said allowing the proceedings to continue in such circumstances would leave the bank and its officials in a "state of suspended animation indefinitely."
Subsequently, the Supreme Court quashed the criminal complaint and the summons issued on May 30, 2002, in relation to Standard Chartered Bank and its officials.
The apex court also held that the Bombay High Court was wrong in refusing to entertain the bank's petition under Section 482 of the Criminal Procedure Code (CrPC) merely because an alternative remedy of filing a revision under Section 397 of the CrPC was available.
Justice Pardiwala, who authored the judgment, said the two provisions operate in different fields and the existence of one remedy does not prevent the High Court from exercising its inherent powers to prevent abuse of the legal process or secure the ends of justice.
The court ruled that the availability of a revision petition cannot be treated as the deciding factor while considering the maintainability of a petition under Section 482 of the CrPC.
The Supreme Court further clarified that issuing an opportunity notice under Section 61(2) of FERA is a mandatory requirement before launching criminal proceedings under the Act.
The bench observed that the accused must be given a genuine opportunity to explain whether the required permission had been obtained before any complaint is filed.
"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 court also said that magistrates must satisfy themselves that such a notice was served before taking cognisance of any offence under FERA.
Finally, the Supreme Court criticised the authorities for their prolonged inaction, observing that the case reflected years of unexplained delays on the part of the complainant, which ultimately weakened the prosecution's case.
English (US) ·