Supreme Court Says FERA Complaint Is Invalid If Mandatory Notice Was Not Served Before Cognisance
The Supreme Court has held that a Magistrate cannot validly take cognisance of a criminal complaint under the repealed Foreign Exchange Regulation Act, 1973 (FERA) unless the mandatory opportunity notice under Section 61(2) of the Act has first been served upon the proposed accused. Holding that compliance with the statutory notice requirement is mandatory and not a mere procedural formality, the Court quashed criminal complaints and summoning orders issued against Standard Chartered Bank and one of its officers in a decades-old FERA prosecution.
A Bench of Justice J.B. Pardiwala and Justice Manoj Misra also held that the Bombay High Court erred in refusing to entertain a petition under Section 482 of the Code of Criminal Procedure merely because the accused had an alternative remedy of revision.
Supreme Court Declares Opportunity Notice Under FERA Mandatory
The Court ruled that the opportunity notice contemplated under the proviso to Section 61(2) of FERA is a mandatory precondition before initiating prosecution under Sections 56 or 57 of the Act.
According to the Bench, the notice must provide a genuine and meaningful opportunity to the proposed accused to demonstrate that the necessary statutory permission existed.
The Court held that where such notice is not served, the complaint itself becomes legally unsustainable and the Magistrate lacks jurisdiction to take cognisance of the alleged offence.
Magistrate Must Verify Compliance Before Taking Cognisance
The Supreme Court observed that it is the Magistrate's duty to satisfy himself that the mandatory notice requirement has been complied with before issuing process.
The prosecution bears the burden of establishing that:
An opportunity notice was issued;
The notice was properly served;
The accused received a meaningful opportunity to respond; and
The statutory procedure was followed before filing the complaint.
Failure to satisfy these conditions renders the order taking cognisance vulnerable to being quashed.
High Court Erred in Rejecting Section 482 Petition
The Supreme Court also criticised the Bombay High Court for refusing to examine the petition under Section 482 CrPC solely because the appellants could have filed a criminal revision under Section 397 CrPC.
Reiterating earlier precedents, including Dhariwal Tobacco Products Ltd. v. State of Maharashtra and Prabhu Chawla v. State of Rajasthan, the Court held that the existence of an alternative statutory remedy does not bar the High Court from exercising its inherent jurisdiction where the ends of justice require intervention.
Prosecution Failed to Prove Service of Mandatory Notice
Examining the facts, the Court found that although the Enforcement Directorate claimed that an opportunity notice had been issued, it failed to produce:
A copy of the notice;
The date on which it was issued;
Any proof of service; or
Any material showing that the Magistrate had verified compliance before taking cognisance.
Even after being granted opportunities during the proceedings, the prosecution could not place the alleged notice on record.
The Court held that this amounted to a clear violation of the mandatory statutory requirement under Section 61(2) of FERA and the principles of natural justice.
Supreme Court Finds Serious Violation of Right to Speedy Trial
The Bench also found that the prosecution was almost entirely responsible for the extraordinary delay in the criminal proceedings.
The alleged transactions dated back to 1991–1992, while the complaint was filed only in 2002.
Even after filing the complaint, the prosecution failed to diligently pursue the matter. The Court noted that:
Summons were not collected for nearly two years;
Service remained incomplete for several years;
The prosecution repeatedly remained absent before the trial court;
Directions of the High Court to conclude the trial within a fixed timeframe were not complied with; and
More than 23 years had elapsed since the complaint was filed without the trial progressing beyond the stage of service of summons.
The Court observed that allowing the prosecution to continue under such circumstances would keep the accused in a perpetual "state of suspended animation", violating the constitutional guarantee of a speedy trial under Article 21.
Complaints and Summoning Orders Quashed
Allowing the appeals, the Supreme Court quashed:
Criminal Case Nos. 1503 and 1504 of 2002; and
The summoning order dated 30 May 2002 issued against Standard Chartered Bank and its officer.
The Court also set aside the Bombay High Court's judgment and directed the Registry to circulate copies of the judgment to all High Courts.
Why This Judgment Matters
The judgment reinforces that mandatory procedural safeguards cannot be treated as empty formalities, particularly where criminal prosecution carries serious penal consequences.
The Supreme Court has clarified that statutory notice requirements under FERA were intended to safeguard natural justice and cannot be bypassed by investigative agencies. The ruling also reiterates that prolonged prosecutorial inaction may amount to a violation of the accused's fundamental right to a speedy trial under Article 21 of the Constitution.
Although FERA has since been replaced by the Foreign Exchange Management Act, 1999 (FEMA), the judgment remains significant for pending legacy prosecutions and for its broader principles concerning statutory compliance, criminal procedure and constitutional protections.
Key Takeaways
The Supreme Court held that service of the opportunity notice under Section 61(2) of FERA is mandatory before prosecution.
A Magistrate cannot validly take cognisance if the statutory notice requirement has not been complied with.
The Court reiterated that the availability of a revision remedy does not bar the High Court from exercising powers under Section 482 CrPC.
The prosecution failed to establish that any opportunity notice had been served before filing the complaint.
Criminal proceedings pending for over two decades were quashed after the Court found violations of both statutory safeguards and the right to a speedy trial.
Case Title: Standard Chartered Bank & Anr. v. Enforcement Officer, Ministry of Home Affairs & Anr.
Citation: 2026 INSC 727
Date of Judgment: 21 July 2026
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