{"id":244324,"date":"2008-01-25T00:00:00","date_gmt":"2008-01-24T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/s-k-sinha-chief-enforcement-vs-videocon-international-ltd-ors-on-25-january-2008"},"modified":"2017-08-07T02:24:51","modified_gmt":"2017-08-06T20:54:51","slug":"s-k-sinha-chief-enforcement-vs-videocon-international-ltd-ors-on-25-january-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/s-k-sinha-chief-enforcement-vs-videocon-international-ltd-ors-on-25-january-2008","title":{"rendered":"S.K. Sinha, Chief Enforcement &#8230; vs Videocon International Ltd. &amp; Ors on 25 January, 2008"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">S.K. Sinha, Chief Enforcement &#8230; vs Videocon International Ltd. &amp; Ors on 25 January, 2008<\/div>\n<div class=\"doc_author\">Author: C Thakker<\/div>\n<div class=\"doc_bench\">Bench: C.K. Thakker, P.P. Naolekar<\/div>\n<pre>           CASE NO.:\nAppeal (crl.)  175 of 2007\n\nPETITIONER:\nS.K. SINHA, CHIEF ENFORCEMENT OFFICER\n\nRESPONDENT:\nVIDEOCON INTERNATIONAL LTD. &amp; ORS.\n\nDATE OF JUDGMENT: 25\/01\/2008\n\nBENCH:\nC.K. THAKKER &amp; P.P. NAOLEKAR\n\nJUDGMENT:\n<\/pre>\n<p>J U D G M E N T<br \/>\nARISING OUT OF SPECIAL LEAVE PETITION (CRL) NO. 5718 OF 2006<br \/>\nC.K. THAKKER, J.\n<\/p>\n<p>1.\t\tLeave granted.\n<\/p>\n<p>2.\t\tIn the present appeal, we are called<br \/>\nupon to decide the correctness or otherwise of<br \/>\nthe proposition of law by the High Court of<br \/>\nJudicature at Bombay whether issuance of<br \/>\nprocess in a criminal case is one and the same<br \/>\nthing or can be equated with taking cognizance<br \/>\nby a Criminal Court? And if the period of<br \/>\ninitiation of criminal proceedings has elapsed<br \/>\nat the time of issue of process by a Court, the<br \/>\nproceedings should be quashed as barred by<br \/>\nlimitation?\n<\/p>\n<p>3.\t\tTo appreciate the controversy raised<br \/>\nin the appeal instituted by the Chief<br \/>\nEnforcement Officer, Enforcement Directorate,<br \/>\nGovernment of India (appellant herein), few<br \/>\nrelevant facts may be noted.\n<\/p>\n<p>4.\t\tRespondent No.1M\/s. Videocon<br \/>\nInternational Ltd. (Company for short) is a<br \/>\nPublic Limited Company incorporated under the<br \/>\nCompanies Act, 1956 having its business at<br \/>\nMumbai and Aurangabad in the State of<br \/>\nMaharashtra. On October 13, 1989, the Company<br \/>\nentered into an agreement with Radio Export<br \/>\n(Moscow) for the supply of colour tubes,<br \/>\nelectrolytic capacitors, transformers, etc.,<br \/>\nfor Rs.44,04,00,000\/-. The payment was made by<br \/>\nrespondent No.1 Company to Japanese and Korean<br \/>\nsuppliers. But before any payment could be<br \/>\nreceived by respondent No.1 from the USSR<br \/>\nCompany, there was political turmoil in the<br \/>\nUSSR and payment to foreign suppliers was<br \/>\ndisrupted. On January 5, 1993, Additional<br \/>\nDirector General, Directorate of Revenue<br \/>\nIntelligence, Mumbai addressed a letter to the<br \/>\nappellant alerting him about the activities of<br \/>\nthe Company in connection with the agreement to<br \/>\nsupply television sets to Radio Export, Moscow.<br \/>\nBased on the information forwarded by the<br \/>\nDirectorate of Revenue Intelligence, Bombay,<br \/>\nthe appellant addressed two letters to the<br \/>\nChief Manager of Indian Bank, Nariman Point,<br \/>\nBombay requesting the Bank to supply details of<br \/>\nthe export outstanding of the Company. Indian<br \/>\nBank supplied necessary information and<br \/>\nindicated that the export outstanding of the<br \/>\nCompany was Rs.16,60,00,000\/-. The Reserve Bank<br \/>\nof India turned down the request of the Company<br \/>\nfor reimbursement of differential amount<br \/>\nremaining unpaid on the ground that the exports<br \/>\nwere effected from Korea and Japan and not from<br \/>\nIndia and the Company was not entitled to<br \/>\nreimbursement. In pursuance of the summons<br \/>\nissued under Section 40 of the Foreign Exchange<br \/>\nRegulation Act, 1973 (hereinafter referred to<br \/>\nas FERA), Raj Kumar Dhoot, Director of the<br \/>\nCompany appeared before the Department on April<br \/>\n25, 1999 and made a statement that there was an<br \/>\nagreement between the Company and M\/s Radio<br \/>\nExport, Moscow for supply of two lakh<br \/>\ntelevision sets and other equipments for<br \/>\nRs.44,04,00,000\/-. The amount was received by<br \/>\nthe Company through State Bank of India,<br \/>\nOverseas Branch, Bombay. He further stated that<br \/>\nthe television sets had been procured from<br \/>\nKorea and Japan who had been paid equivalent to<br \/>\nRs.19,00,00,000\/- in foreign exchange. Export<br \/>\nbills raised from the sale to M\/s Radio Export,<br \/>\nMoscow were equivalent to Rs.16,00,00,000\/-.<br \/>\nWhereas the contract with the suppliers in<br \/>\nKorea and Japan stipulated payment in US<br \/>\nDollars, the contract with the USSR Company<br \/>\nrequired payment in Indian Rupees. Since the<br \/>\nvalue of Rupee against the US Dollar fell down,<br \/>\nthe Company had to pay more Rupees to their<br \/>\nforeign suppliers. On June 1, 2000, FERA was<br \/>\nreplaced by the Foreign Exchange Management<br \/>\nAct, 1999 (hereinafter referred to as FEMA).\n<\/p>\n<p>5.\t\tOn May 24, 2002, the appellant-<br \/>\ncomplainant in the capacity as Chief<br \/>\nEnforcement Officer, Government of India, filed<br \/>\nCriminal Complaint No. 1149\/S\/2002 against the<br \/>\nCompany alleging that the Company had received<br \/>\nan amount of Rs.44,04,00,000\/- through State<br \/>\nBank of India, Bombay but it failed to take<br \/>\nsteps to realize export proceeds amounting to<br \/>\nRs.16,60,00,000\/- within the stipulated period<br \/>\nof six months. It thereby contravened Section<br \/>\n18(2) and 18(3) read with Section 68(1),<br \/>\npunishable under Section 56(1)(ii) of FERA. On<br \/>\nthe same day, i.e. on May 24, 2002, after<br \/>\nhearing the learned counsel for the Department,<br \/>\nthe Chief Metropolitan Magistrate, Esplanade,<br \/>\nMumbai took cognizance of the offence and<br \/>\nissued summons to the accused. On February 3,<br \/>\n2003, the Chief Metropolitan Magistrate issued<br \/>\nprocess requiring the respondents to appear<br \/>\nbefore the Court and answer the charge under<br \/>\nFERA.\n<\/p>\n<p>6.\t\tIn October, 2004, the respondents<br \/>\nfiled a petition being Criminal Writ Petition<br \/>\nNo. 476 of 2005 in the High Court of Judicature<br \/>\nat Bombay by invoking Article 227 of the<br \/>\nConstitution as also Section 482 of the Code of<br \/>\nCriminal Procedure, 1973 (hereinafter referred<br \/>\nto as the Code) seeking quashing of criminal<br \/>\nproceedings initiated vide complaint dated May<br \/>\n24, 2002 on the ground that cognizance was<br \/>\ntaken by the Court after the period of<br \/>\nlimitation and the proceedings were, therefore,<br \/>\nliable to be quashed. The High Court, by the<br \/>\nimpugned order dated April 26, 2006, quashed<br \/>\nthe proceedings initiated against the<br \/>\nrespondents on the ground that cognizance could<br \/>\nbe said to have been taken when process was<br \/>\nissued and since process was issued in<br \/>\nFebruary, 2003, the proceedings were time-<br \/>\nbarred. The complaint was, therefore, quashed<br \/>\nby the High Court. The said order is challenged<br \/>\nby the appellant in the present appeal.\n<\/p>\n<p>7.\t\tNotice was issued by this Court on<br \/>\nSeptember 29, 2006. The respondents appeared.<br \/>\nCounter affidavit and rejoinder affidavit were<br \/>\nthen filed. The Registry was directed to place<br \/>\nthe matter for final hearing on a non-<br \/>\nmiscellaneous day and that is how the matter is<br \/>\nplaced before us.\n<\/p>\n<p>8.\t\tWe have heard the learned counsel for<br \/>\nthe parties.\n<\/p>\n<p>9.\t\tThe learned counsel for the appellant<br \/>\ncontended that the High Court was in clear<br \/>\nerror in equating taking cognizance of an<br \/>\noffence with issuance of process and in holding<br \/>\nthat the cognizance was taken after the period<br \/>\nof limitation and hence the proceedings were<br \/>\ntime-barred and liable to be quashed. It was<br \/>\nsubmitted that FEMA came into force from June<br \/>\n1, 2000 and under sub-section (3) of Section 49<br \/>\nof FEMA, cognizance of an offence under FERA<br \/>\ncould have been taken within a period of two<br \/>\nyears from the date of commencement of the new<br \/>\nAct. It was submitted that cognizance was taken<br \/>\nby the Chief Metropolitan Magistrate, Mumbai on<br \/>\nMay 24, 2002, i.e. the day when complaint was<br \/>\nfiled which was well within the period of<br \/>\nlimitation provided by Section 49(3) of FEMA<br \/>\nand as such the Criminal Court was within its<br \/>\npower in issuing process and in proceeding with<br \/>\nthe matter and the High Court was not justified<br \/>\nin quashing the proceedings on the ground that<br \/>\ncognizance was taken by the Court on February<br \/>\n3, 2003 when process was issued by the Chief<br \/>\nMetropolitan Magistrate, Mumbai. It was<br \/>\nalternatively submitted by the learned counsel<br \/>\nthat the relevant date for counting the period<br \/>\nof limitation is not the date of taking<br \/>\ncognizance or issuance of process by the Court<br \/>\nbut the date of filing complaint. It was stated<br \/>\nthat the point has been concluded by various<br \/>\ndecisions of this Court. Since the complaint<br \/>\nwas filed on May 24, 2002, which was within the<br \/>\nperiod of limitation, the High Court was wrong<br \/>\nin treating the criminal complaint as barred by<br \/>\nlimitation and in quashing it. The order passed<br \/>\nby the High Court, thus, deserves to be set<br \/>\naside by directing the Chief Metropolitan<br \/>\nMagistrate, Mumbai to proceed with the case and<br \/>\ndecide it in accordance with law.\n<\/p>\n<p>10.\t\tThe learned counsel for the<br \/>\nrespondents, on the other hand, supported the<br \/>\norder passed by the High Court. It was<br \/>\nsubmitted that the High Court was wholly right<br \/>\nin quashing the proceedings. Admittedly,<br \/>\nprocess was issued in February, 2003 while<br \/>\nunder Section 49(3) of FEMA, proceedings under<br \/>\nthe old Act (FERA) could not have been<br \/>\ninitiated after the expiry of two years from<br \/>\nthe commencement of the new Act (FEMA). FEMA<br \/>\ncame into force on June 1, 2000 and hence<br \/>\ncognizance of an offence under FERA could have<br \/>\nbeen taken under FEMA latest by June 1, 2002.<br \/>\nIssuance of process in February, 2003,<br \/>\ntherefore, was clearly time-barred and the High<br \/>\nCourt was right in quashing the proceedings. It<br \/>\nwas also submitted that the appellant was not<br \/>\nright in submitting that the relevant date for<br \/>\ncomputing the period of limitation is date of<br \/>\nfiling of complaint. The material date is the<br \/>\ndate of taking cognizance by a competent<br \/>\nCriminal Court. Sub-section (3) of Section 49<br \/>\nof FEMA is a special provision, which must be<br \/>\ngiven effect to and even on that ground, the<br \/>\ncomplaint was barred by time. Finally, it was<br \/>\nsubmitted that though the High Court had not<br \/>\nconsidered the merits of the matter, the<br \/>\nprovisions of FERA had no application to the<br \/>\nfacts of the case as it cannot be said that the<br \/>\naccused had committed any offence under FERA.<br \/>\nConsidering the said fact also, this Court may<br \/>\nnot interfere with the order passed by the High<br \/>\nCourt in exercise of discretionary jurisdiction<br \/>\nunder Article 136 of the Constitution. It was,<br \/>\ntherefore, submitted that the appeal may be<br \/>\ndismissed.\n<\/p>\n<p>11.\t\tHaving heard learned counsel for the<br \/>\nparties and having perused the relevant<br \/>\nprovisions of law as also various judicial<br \/>\npronouncements, we are of the view that the<br \/>\nHigh Court was in error in equating issuance of<br \/>\nprocess with taking cognizance by a Criminal<br \/>\nCourt and in quashing the proceedings treating<br \/>\nthem as time-barred.\n<\/p>\n<p>12.\t\tThe expression cognizance has not<br \/>\nbeen defined in the Code. But the word<br \/>\n(cognizance) is of indefinite import. It has no<br \/>\nesoteric or mystic significance in criminal<br \/>\nlaw. It merely meansbecome aware of and when<br \/>\nused with reference to a Court or a Judge, it<br \/>\nconnotes to take notice ofjudicially. It<br \/>\nindicates the point when a Court or a<br \/>\nMagistrate takes judicial notice of an offence<br \/>\nwith a view to initiating proceedings in<br \/>\nrespect of such offence said to have been<br \/>\ncommitted by someone. Taking cognizance does<br \/>\nnot involve any formal action of any kind. It<br \/>\noccurs as soon as a Magistrate applies his mind<br \/>\nto the suspected commission of an offence.<br \/>\nCognizance is taken prior to commencement of<br \/>\ncriminal proceedings. Taking of cognizance is<br \/>\nthus a sine qua non or condition precedent for<br \/>\nholding a valid trial. Cognizance is taken of<br \/>\nan offence and not of an offender. Whether or<br \/>\nnot a Magistrate has taken cognizance of an<br \/>\noffence depends on the facts and circumstances<br \/>\nof each case and no rule of universal<br \/>\napplication can be laid down as to when a<br \/>\nMagistrate can be said to have taken<br \/>\ncognizance. Chapter XIV (Sections 190-199) of<br \/>\nthe Code deals with Conditions requisite for<br \/>\ninitiation of proceedings. Section 190<br \/>\nempowers a Magistrate to take cognizance of an<br \/>\noffence in certain circumstances. Sub-section<br \/>\n(1) thereof is material and may be quoted in<br \/>\nextenso.\n<\/p>\n<p>1) Subject to the provisions of this<br \/>\nChapter, any Magistrate of the first<br \/>\nclass, and any Magistrate of the<br \/>\nsecond class specially empowered in<br \/>\nthis behalf under sub-section (2), may<br \/>\ntake cognizance of any offence<\/p>\n<p>(a) upon receiving a complaint of<br \/>\nfacts which constitute such offence;\n<\/p>\n<p>(b) upon a police report of such<br \/>\nfacts;\n<\/p>\n<p>(c) upon information received from any<br \/>\nperson other than a police officer, or<br \/>\nupon his own knowledge, that such<br \/>\noffence has been committed.\n<\/p>\n<p>13.\t\tChapter XV (Sections 200-203) relates<br \/>\nto Complaints to Magistrates and covers cases<br \/>\nbefore actual commencement of proceedings in a<br \/>\nCourt or before a Magistrate. Section 200 of<br \/>\nthe Code requires a Magistrate taking<br \/>\ncognizance of an offence to examine the<br \/>\ncomplainant and his witnesses on oath. Section<br \/>\n202, however, enacts that a Magistrate is not<br \/>\nbound to issue process against the accused as a<br \/>\nmatter of course. It enables him before the<br \/>\nissue of process either to inquire into the<br \/>\ncase himself or direct an investigation to be<br \/>\nmade by a Police Officer or by such other<br \/>\nperson as he thinks fit for the purpose of<br \/>\ndeciding whether there is sufficient ground for<br \/>\nproceeding further. The underlying object of<br \/>\nthe inquiry under Section 202 is to ascertain<br \/>\nwhether there is prima facie case against the<br \/>\naccused. It thus allows a Magistrate to form an<br \/>\nopinion whether the process should or should<br \/>\nnot be issued. The scope of inquiry under<br \/>\nSection 202 is, no doubt, extremely limited. At<br \/>\nthat stage, what a Magistrate is called upon to<br \/>\nsee is whether there is sufficient ground for<br \/>\nproceeding with the matter and not whether<br \/>\nthere is sufficient ground for conviction of<br \/>\nthe accused.\n<\/p>\n<p>14.\t\tThen comes Chapter XVI (Commencement<br \/>\nof proceedings before Magistrates). This<br \/>\nChapter will apply only after cognizance of an<br \/>\noffence has been taken by a Magistrate under<br \/>\nChapter XIV. Section 204, whereunder process<br \/>\ncan be issued, is another material provision<br \/>\nwhich reads as under:\n<\/p>\n<p>204.Issue of process.- (1) If in the<br \/>\nopinion of a Magistrate taking<br \/>\ncognizance of an offence there is<br \/>\nsufficient ground for proceeding, and<br \/>\nthe case appears to be <\/p>\n<p>(a) a summons-case, he shall issue his<br \/>\nsummons for the attendance of the<br \/>\naccused, or<\/p>\n<p>(b) a warrant-case, he may issue a<br \/>\nwarrant, or, if he thinks fit, a<br \/>\nsummons, for causing the accused to be<br \/>\nbrought or to appear at a certain time<br \/>\nbefore such Magistrate or (if he has<br \/>\nno jurisdiction himself) some other<br \/>\nMagistrate having jurisdiction.\n<\/p>\n<p>(2) No summons or warrant shall be<br \/>\nissued against the accused under sub-<br \/>\nsection (1) until a list of the<br \/>\nprosecution witnesses has been filed.\n<\/p>\n<p>(3) In a proceeding instituted upon a<br \/>\ncomplaint made in writing, every<br \/>\nsummons or warrant issued under sub-<br \/>\nsection (1) shall be accompanied by a<br \/>\ncopy of such complaint.\n<\/p>\n<p>(4) When by any law for the time being<br \/>\nin force any process-fees or other<br \/>\nfees are payable, no process shall be<br \/>\nissued until the fees are paid and, if<br \/>\nsuch fees are not paid within a<br \/>\nreasonable time, the Magistrate may<br \/>\ndismiss the complaint.\n<\/p>\n<p>(5) Nothing in this section shall be<br \/>\ndeemed to affect the provisions of<br \/>\nsection 87.\n<\/p>\n<p>15.\t\tFrom the above scheme of the Code, in<br \/>\nour judgment, it is clear that Initiation of<br \/>\nProceedings, dealt with in Chapter XIV, is<br \/>\ndifferent from Commencement of Proceedings<br \/>\ncovered by Chapter XVI. For commencement of<br \/>\nproceedings, there must be initiation of<br \/>\nproceedings. In other words, initiation of<br \/>\nproceedings must precede commencement of<br \/>\nproceedings. Without initiation of proceedings<br \/>\nunder Chapter XIV, there cannot be commencement<br \/>\nof proceedings before a Magistrate under<br \/>\nChapter XVI. The High Court, in our considered<br \/>\nview, was not right in equating initiation of<br \/>\nproceedings under Chapter XIV with commencement<br \/>\nof proceedings under Chapter XVI.\n<\/p>\n<p>16.\t\tLet us now consider the question in<br \/>\nthe light of judicial pronouncements on the<br \/>\npoint.\n<\/p>\n<p>17.\t\tIn Superintendent &amp; Remembrancer of<br \/>\nLegal Affairs Vs. Abani Kumar Banerjee, AIR<br \/>\n1950 Calcutta 437, the High Court of Calcutta<br \/>\nhad an occasion to consider the ambit and scope<br \/>\nof the phrase taking cognizance under Section<br \/>\n190 of the Code of Criminal Procedure, 1898<br \/>\nwhich was in pari materia to Section 190 of the<br \/>\npresent Code of 1973. Referring to various<br \/>\ndecisions, Das Gupta, J. (as His Lordship then<br \/>\nwas) stated:\n<\/p>\n<p>What is taking cognizance has not<br \/>\nbeen defined in the Criminal Procedure<br \/>\nCode, and I have no desire now to<br \/>\nattempt to define it. It seems to me<br \/>\nclear, however, that before it can be<br \/>\nsaid that any Magistrate has taken<br \/>\ncognizance of any offence under<br \/>\nSection 190(1)(a), Criminal P. C., he<br \/>\nmust not only have applied his mind to<br \/>\nthe contents of the petition, but he<br \/>\nmust have done so for the purpose of<br \/>\nproceeding in a particular way as<br \/>\nindicated in the subsequent provisions<br \/>\nof this Chapter,-proceeding under<br \/>\nSection 200, and thereafter sending it<br \/>\nfor enquiry and report under Section\n<\/p>\n<p>202. When the Magistrate applies his<br \/>\nmind not for the purpose of proceeding<br \/>\nunder the subsequent sections of this<br \/>\nChapter, but for taking action of some<br \/>\nother kind, e.g., ordering<br \/>\ninvestigation under Section 156(3), or<br \/>\nissuing a search warrant for the<br \/>\npurpose of the investigation, he<br \/>\ncannot be said to have taken<br \/>\ncognizance of the offence.\n<\/p>\n<p>18.\t\t<a href=\"\/doc\/1591771\/\">R.R. Chari v. State of Uttar Pradesh,<\/a><br \/>\n1951 SCR 312 was probably the first leading<br \/>\ndecision of this Court on the point. There, the<br \/>\npolice, having suspected the appellant-accused<br \/>\nto be guilty of offences punishable under<br \/>\nSections 161 and 165 of the Indian Penal Code<br \/>\n(IPC) as also under the Prevention of<br \/>\nCorruption Act, 1947, applied to the District<br \/>\nMagistrate, Kanpur to issue warrant of arrest<br \/>\non October 22, 1947. Warrant was issued on the<br \/>\nnext day and the accused was arrested on<br \/>\nOctober 27, 1947. On March 25, 1949, the<br \/>\naccused was produced before the Magistrate to<br \/>\nanswer the charge-sheet submitted by the<br \/>\nprosecution. According to the accused, on<br \/>\nOctober 22, 1947, when warrant for his arrest<br \/>\nwas issued by the Magistrate, the Magistrate<br \/>\nwas said to have taken cognizance of offence<br \/>\nand since no sanction of the Government had<br \/>\nbeen obtained before that date, initiation of<br \/>\nproceedings against him was unlawful. The<br \/>\nquestion before the Court was as to when<br \/>\ncognizance of the offence could be said to have<br \/>\nbeen taken by the Magistrate under Section 190<br \/>\nof the Code. Considering the circumstances<br \/>\nunder which cognizance of offence under sub-<br \/>\nsection (1) of Section 190 of the Code can be<br \/>\ntaken by a Magistrate and referring to Abani<br \/>\nKumar Banerjee, the Court, speaking through<br \/>\nKania, C.J. stated:\n<\/p>\n<p>It is clear from the wording of the<br \/>\nsection that the initiation of the<br \/>\nproceedings against a person commences<br \/>\non the cognizance of the offence by<br \/>\nthe Magistrate under one of the three<br \/>\ncontingencies mentioned in the<br \/>\nsection. The first contingency<br \/>\nevidently is in respect of non-\n<\/p>\n<p>cognizable offences as defined in the<br \/>\nCriminal Procedure Code on the<br \/>\ncomplaint of an aggrieved person. The<br \/>\nsecond is on a police report, which<br \/>\nevidently is the case of a cognizable<br \/>\noffence when the police have completed<br \/>\ntheir investigation and come to the<br \/>\nMagistrate for the issue of a process.<br \/>\nThe third is when the Magistrate<br \/>\nhimself takes notice of an offence and<br \/>\nissues the process. It is important to<br \/>\nremember that in respect of any<br \/>\ncognizable offence, the police, at the<br \/>\ninitial stage when they are<br \/>\ninvestigating the matter, can arrest a<br \/>\nperson without obtaining an order from<br \/>\nthe Magistrate. Under section 167(b)<br \/>\nof the Criminal Procedure Code the<br \/>\npolice have of course to put up the<br \/>\nperson so arrested before a Magistrate<br \/>\nwithin 24 hours and obtain an order of<br \/>\nremand to police custody for the<br \/>\npurpose of further investigation, if<br \/>\nthey so desire. But they have the<br \/>\npower to arrest a person for the<br \/>\npurpose of investigation without<br \/>\napproaching the Magistrate first.<br \/>\nTherefore in cases of cognizable<br \/>\noffence before proceedings are<br \/>\ninitiated and while the matter is<br \/>\nunder investigation by the police the<br \/>\nsuspected person is liable to be<br \/>\narrested by the police without an<br \/>\norder by the Magistrate.\n<\/p>\n<p>19.\t\tApproving the observations of Das<br \/>\nGupta, J. in Abani Kumar Banerjee, this Court<br \/>\nheld that it was on March 25, 1949 when the<br \/>\nMagistrate issued a notice under Section 190 of<br \/>\nthe Code against the accused that he took<br \/>\ncognizance of the offence. Since before that<br \/>\nday, sanction had been granted by the<br \/>\nGovernment, the proceedings could not be said<br \/>\nto have been initiated without authority of<br \/>\nlaw.\n<\/p>\n<p>20.\t\tAgain in <a href=\"\/doc\/151029\/\">Narayandas Bhagwandas<br \/>\nMadhavdas v. State of West Bengal,<\/a> (1960) 1 SCR<br \/>\n93, this Court observed that when cognizance is<br \/>\ntaken of an offence depends upon the facts and<br \/>\ncircumstances of each case and it is impossible<br \/>\nto attempt to define what is meant by taking<br \/>\ncognizance. Issuance of a search warrant for<br \/>\nthe purpose of an investigation or a warrant of<br \/>\narrest of accused cannot by itself be regarded<br \/>\nas an act of taking cognizance of an offence.<br \/>\nIt is only when a Magistrate applies his mind<br \/>\nfor proceeding under Section 200 and subsequent<br \/>\nsections of Chapter XV or under Section 204 of<br \/>\nChapter XVI of the Code that it can be<br \/>\npositively stated that he had applied his mind<br \/>\nand thereby had taken cognizance of an offence<br \/>\n[see also Ajit Kumar Palit v. State of W.B. &amp;<br \/>\nAnr., (1963) Supp (1) SCR 953; <a href=\"\/doc\/85087\/\">Hareram Satpathy<br \/>\nv. Tikaram Agarwala &amp; Anr.,<\/a> (1978) 4 SCC 58].\n<\/p>\n<p>21.\t\tIn Gopal Das Sindhi &amp; Ors. v. State of<br \/>\nAssam &amp; Anr., AIR 1961 SC 986, referring to<br \/>\nearlier judgments, this Court said:<br \/>\nWe cannot read the provisions of<br \/>\nSection 190 to mean that once a<br \/>\ncomplaint is filed, a Magistrate is<br \/>\nbound to take cognizance if the facts<br \/>\nstated in the complaint disclose the<br \/>\ncommission of any offence. We are<br \/>\nunable to construe the word may in<br \/>\nSection 190 to mean must. The reason<br \/>\nis obvious. A complaint disclosing<br \/>\ncognizable offences may well justify a<br \/>\nMagistrate in sending the complaint<br \/>\nunder Section 156(3) to the police for<br \/>\ninvestigation. There is no reason why<br \/>\nthe time of the Magistrate should be<br \/>\nwasted when primarily the duty to<br \/>\ninvestigate in cases involving<br \/>\ncognizable offences is with the<br \/>\npolice. On the other hand, there may<br \/>\nbe occasions when the Magistrate may<br \/>\nexercise his discretion and take<br \/>\ncognizance of a cognizable offence. If<br \/>\nhe does so then he would have to<br \/>\nproceed in the manner provided by<br \/>\nChapter XVI of the Code.\n<\/p>\n<p>22.\t\t<a href=\"\/doc\/1379027\/\">In Nirmaljit Singh Hoon v. State of<br \/>\nWest Bengal &amp; Anr.,<\/a> (1973) 3 SCC 753, the Court<br \/>\nstated that it is well settled that before a<br \/>\nMagistrate can be said to have taken cognizance<br \/>\nof an offence under Section 190(1) (a) of the<br \/>\nCode, he must have not only applied his mind to<br \/>\nthe contents of the complaint presented before<br \/>\nhim, but must have done so for the purpose of<br \/>\nproceeding under Section 200 and the provisions<br \/>\nfollowing that section. Where, however, he<br \/>\napplies his mind only for ordering an<br \/>\ninvestigation under Section 156(3) or issues a<br \/>\nwarrant for arrest of accused, he cannot be<br \/>\nsaid to have taken cognizance of the offence.\n<\/p>\n<p>23.\t\t<a href=\"\/doc\/78734\/\">In Darshan Singh Ram Kishan v. State<br \/>\nof Maharashtra,<\/a> (1972) 1 SCR 571, speaking for<br \/>\nthe Court, Shelat, J. stated that under Section<br \/>\n190 of the Code, a Magistrate may take<br \/>\ncognizance of an offence either (a) upon<br \/>\nreceiving a complaint, or (b) upon a police<br \/>\nreport, or (c) upon information received from a<br \/>\nperson other than a police officer or even upon<br \/>\nhis own information or suspicion that such an<br \/>\noffence has been committed. As has often been<br \/>\nsaid, taking cognizance does not involve any<br \/>\nformal action or indeed action of any kind. It<br \/>\noccurs as soon as a Magistrate applies his mind<br \/>\nto the suspected commission of an offence.<br \/>\nCognizance, thus, takes place at a point when a<br \/>\nMagistrate first takes judicial notice of an<br \/>\noffence.\n<\/p>\n<p>24.\t\t<a href=\"\/doc\/412326\/\">In Devarapalli Lakshminarayana Reddy &amp;<br \/>\nOrs. v. V. Narayana Reddy &amp; Ors.,<\/a> (1976) 3 SCC<br \/>\n252, this Court said:\n<\/p>\n<p>It is well settled that when a<br \/>\nMagistrate receives a complaint, he is<br \/>\nnot bound to take cognizance if the<br \/>\nfacts alleged in the complaint,<br \/>\ndisclose the commission of an offence.<br \/>\nThis is clear from the use of the<br \/>\nwords &#8220;may take cognizance&#8221; which in<br \/>\nthe context in which they occur cannot<br \/>\nbe equated with must take cognizance&#8221;.<br \/>\nThe word &#8220;may&#8221; gives a discretion to<br \/>\nthe Magistrate in the matter. If on a<br \/>\nreading of the complaint he finds that<br \/>\nthe allegations therein disclose a<br \/>\ncognizable offence and the forwarding<br \/>\nof the complaint to the police for<br \/>\ninvestigation under Section 156(3)<br \/>\nwill be conducive to justice and save<br \/>\nthe valuable time of the Magistrate<br \/>\nfrom, being wasted in enquiring into a<br \/>\nmatter which was primarily the duty of<br \/>\nthe police to investigate, he will be<br \/>\njustified in adopting that course as<br \/>\nan alternative to taking cognizance of<br \/>\nthe offence, himself.\n<\/p>\n<p>This raises the incidental question :<br \/>\nWhat is meant by &#8220;taking cognizance of<br \/>\nan offence&#8221; by a Magistrate within the<br \/>\ncontemplation of Section 190?. This<br \/>\nexpression has not been defined in the<br \/>\nCode. But from the scheme of the Code,<br \/>\nthe content and marginal heading of<br \/>\nSection 190 and the caption of Chapter<br \/>\nXIV under which Sections 190 to 199<br \/>\noccur, it is clear that a case can be<br \/>\nsaid to be instituted in a Court only<br \/>\nwhen the Court takes cognizance of the<br \/>\noffence alleged therein. The ways in<br \/>\nwhich such cognizance can be taken are<br \/>\nset out in Clauses (a), (b) and (c) of<br \/>\nSection 190(1). Whether the Magistrate<br \/>\nhas or has not taken cognizance of the<br \/>\noffence will depend on the<br \/>\ncircumstances of the particular case<br \/>\nincluding the mode in which the case<br \/>\nis sought to be instituted and the<br \/>\nnature of the preliminary action, if<br \/>\nany, taken by the Magistrate. Broadly<br \/>\nspeaking, when on receiving a<br \/>\ncomplaint, the Magistrate applies his<br \/>\nmind for the purposes of proceeding<br \/>\nunder Section 200 and the succeeding<br \/>\nsections in Chapter XV of the Code of<br \/>\n1973, he is said to have taken<br \/>\ncognizance of the offence within the<br \/>\nmeaning of Section 190(1)(a). If,<br \/>\ninstead of proceeding under Chapter<br \/>\nXV, he has in the judicial exercise of<br \/>\nhis discretion, taken action of<br \/>\nsome other kind, such as issuing a<br \/>\nsearch warrant for the purpose<br \/>\nof investigation, or ordering<br \/>\ninvestigation by the police under<br \/>\nSection 156(3), he cannot be said to<br \/>\nhave taken cognizance of any offence.<br \/>\n[see also <a href=\"\/doc\/419584\/\">M.L. Sethi v. R.P. Kapur &amp;<br \/>\nAnr.,<\/a> (1967) 1 SCR 520].\n<\/p>\n<p>25.\t\tIn the case on hand, it is amply clear<br \/>\nthat cognizance of the offence was taken by the<br \/>\nChief Metropolitan Magistrate, Mumbai on May<br \/>\n24, 2002, i.e., the day on which the complaint<br \/>\nwas filed, the Magistrate, after hearing the<br \/>\ncounsel for the department, took cognizance of<br \/>\nthe offence and passed the following order:<br \/>\nMr. S.A.A. Naqvi, counsel for the<br \/>\ndepartment is present. Complainant is<br \/>\npublic servant. Cognizance is taken.<br \/>\nIssue summons to accused under Section<br \/>\n18(2)(3) of FERA, 73 read with Central<br \/>\nNotification and r\/w Section 68(1) of<br \/>\nthe said Act and r\/w 56 (1)(i) and r\/w<br \/>\nSection 49(3) (4) of FEMA, 1999.<br \/>\nSummons returnable on 7.2.2003 at 3<br \/>\np.m.              (emphasis supplied)\n<\/p>\n<p>26.\t\tUndoubtedly, the process was issued on<br \/>\nFebruary 3, 2003. In our judgment, however, it<br \/>\nwas in pursuance of the cognizance taken by the<br \/>\nCourt on May 24, 2002 that a subsequent action<br \/>\nwas taken under Section 204 under Chapter XVI.<br \/>\nTaking cognizance of offence was entirely<br \/>\ndifferent from initiating proceedings; rather<br \/>\nit was the condition precedent to the<br \/>\ninitiation of the proceedings. Order of<br \/>\nissuance of process on February 3, 2003 by the<br \/>\nCourt was in pursuance of and consequent to<br \/>\ntaking cognizance of an offence on May 24,<br \/>\n2002. The High Court, in our view, therefore,<br \/>\nwas not right in equating taking cognizance<br \/>\nwith issuance of process and in holding that<br \/>\nthe complaint was barred by law and criminal<br \/>\nproceedings were liable to be quashed. The<br \/>\norder passed by the High Court, thus, deserves<br \/>\nto be quashed and set aside.\n<\/p>\n<p>27.\t\tIt was also contended by the learned<br \/>\ncounsel for the appellant that the relevant<br \/>\ndate for considering the question of limitation<br \/>\nis the date of filing of complaint and not<br \/>\ntaking cognizance or issuance of process by a<br \/>\nCourt of law. In this connection, our attention<br \/>\nwas invited by the counsel to <a href=\"\/doc\/523051\/\">Bharat Damodar<br \/>\nKale &amp; Anr. v. State of A.P.,<\/a> (2003) 8 SCC 559<br \/>\nand a recent decision of this Court in <a href=\"\/doc\/1432851\/\">Japani<br \/>\nSahoo v. Chandra Sekhar Mohanty,<\/a> (2007) 7 SCC\n<\/p>\n<p>394. In Japani Sahoo, one of us (C.K. Thakker,<br \/>\nJ.), after considering decisions of various<br \/>\nHigh Courts as also Bharat Damodar Kale,<br \/>\nstated:\n<\/p>\n<p>52. The matter can be looked at from<br \/>\ndifferent angle also. Once it is<br \/>\naccepted (and there is no dispute<br \/>\nabout it) that it is not within the<br \/>\ndomain of the complainant or<br \/>\nprosecuting agency to take cognizance<br \/>\nof an offence or to issue process and<br \/>\nthe only thing the former can do is to<br \/>\nfile a complaint or initiate<br \/>\nproceedings in accordance with law.<br \/>\nIf that action of initiation of<br \/>\nproceedings has been taken within the<br \/>\nperiod of limitation, the complainant<br \/>\nis not responsible for any delay on<br \/>\nthe part of the Court or Magistrate in<br \/>\nissuing process or taking cognizance<br \/>\nof an offence. Now, if he is sought to<br \/>\nbe penalized because of the omission,<br \/>\ndefault or inaction on the part of the<br \/>\nCourt or Magistrate, the provision of<br \/>\nlaw may have to be tested on the<br \/>\ntouchstone of Article 14 of the<br \/>\nConstitution.  It can possibly be<br \/>\nurged that such a provision is totally<br \/>\narbitrary, irrational and<br \/>\nunreasonable. It is settled law that a<br \/>\nCourt of Law would interpret a<br \/>\nprovision which would help sustaining<br \/>\nthe validity of law by applying the<br \/>\ndoctrine of reasonable construction<br \/>\nrather than making it vulnerable and<br \/>\nunconstitutional by adopting rule of<br \/>\nlitera legis.  Connecting the<br \/>\nprovision of limitation in Section 468<br \/>\nof the Code with issuing of process or<br \/>\ntaking of cognizance by the Court may<br \/>\nmake it unsustainable and ultra vires<br \/>\nArticle 14 of the Constitution.\n<\/p>\n<p>28.\t\tThe learned counsel for the<br \/>\nrespondent, on the other hand, tried to<br \/>\ndistinguish Bharat Damodar Kale and Japani<br \/>\nSahoo submitting that in both the decisions,<br \/>\nthis Court was called upon to consider, inter<br \/>\nalia, Section 468 of the Code providing for<br \/>\nlimitation for taking cognizance of certain<br \/>\noffences. According to the counsel, Section 468<br \/>\nof the Code starts with the expression Except<br \/>\nas provided elsewhere in this Code. Section<br \/>\n49(3) of FEMA, on the other hand, starts with a<br \/>\nnon-obstante clause (Notwithstanding anything<br \/>\ncontained in any other law for the time being<br \/>\nin force). It was, therefore, submitted that<br \/>\nthe ratio laid down in the above two cases<br \/>\nwould not be applicable to the instant case.\n<\/p>\n<p>29.\t\tIn our opinion, it would not be<br \/>\nnecessary for us to express any opinion one way<br \/>\nor the other on the larger question. We have<br \/>\nalready held in the earlier part of the<br \/>\njudgment that in the case on hand, cognizance<br \/>\nof an offence had already been taken by the<br \/>\nChief Metropolitan Magistrate, Mumbai on May<br \/>\n24, 2002, well within the period prescribed by<br \/>\nsub-section (3) of Section 49 of FEMA within<br \/>\ntwo years of coming into force of the Act from<br \/>\nJune 1, 2000. We, therefore, express no opinion<br \/>\non the question raised by the learned counsel<br \/>\nfor the respondent.\n<\/p>\n<p>30.\t\tAs regards quashing of proceedings on<br \/>\nmerits, the learned counsel for the appellant<br \/>\nis right in submitting that the High Court has<br \/>\nnot at all touched the merits of the case and<br \/>\nproceedings were not quashed on the ground that<br \/>\nthe provisions of FERA do not apply to the case<br \/>\nbefore the Court. The High Court dealt with<br \/>\nonly one point as to whether the proceedings<br \/>\nwere liable to be quashed on the ground that<br \/>\nthey were time-barred and upholding the<br \/>\ncontention of the accused, passed the impugned<br \/>\norder. As we are of the view that the High<br \/>\nCourt was not right in quashing the proceedings<br \/>\non the ground of limitation, the order deserves<br \/>\nto be set aside by remitting the matter to the<br \/>\nChief Metropolitan Magistrate, Mumbai to be<br \/>\ndecided in accordance with law. We may,<br \/>\nhowever, clarify that it is open to the<br \/>\nrespondents to take all contentions including<br \/>\nthe contention as to applicability or otherwise<br \/>\nof FERA to the facts of the case. As and when<br \/>\nsuch question will be raised, the Court will<br \/>\npass an appropriate order in accordance with<br \/>\nlaw.\n<\/p>\n<p>31.\t\tFor the foregoing reasons, the appeal<br \/>\nis allowed. The order passed by the High Court<br \/>\nis set aside and it is held that cognizance of<br \/>\nthe offence had already been taken by the<br \/>\ncompetent Criminal Court i.e. Chief<br \/>\nMetropolitan Magistrate, Mumbai on May 24, 2002<br \/>\nand it could not be said that the proceedings<br \/>\nwere barred by Section 49(3) of FEMA. The Chief<br \/>\nMetropolitan Magistrate will now proceed to<br \/>\nconsider the matter in accordance with law. All<br \/>\ncontentions of all parties are kept open except<br \/>\nthe one decided by us in this appeal. Since the<br \/>\nmatter is very old, the Court will give<br \/>\npriority and will decide it as expeditiously as<br \/>\npossible, preferably before June 30, 2008.\n<\/p>\n<p>32.\t\tOrdered accordingly.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India S.K. Sinha, Chief Enforcement &#8230; vs Videocon International Ltd. &amp; Ors on 25 January, 2008 Author: C Thakker Bench: C.K. Thakker, P.P. Naolekar CASE NO.: Appeal (crl.) 175 of 2007 PETITIONER: S.K. SINHA, CHIEF ENFORCEMENT OFFICER RESPONDENT: VIDEOCON INTERNATIONAL LTD. &amp; ORS. DATE OF JUDGMENT: 25\/01\/2008 BENCH: C.K. THAKKER &amp; P.P. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-244324","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>S.K. 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