Foreign exchange prosecution can proceed independently of adjudication; cognizance is sustained on prima facie allegations.

Prosecution under foreign exchange law is not contingent on completion of adjudication proceedings, because adjudication and criminal prosecution are distinct in nature. At the stage of cognizance, the court will not test the truth or falsity of the allegations in detail or replace the Special Judge's prima facie satisfaction with its own view. On the facts alleged, the challenge based on absence of prior adjudication and disclosure to income tax authorities did not warrant quashing, and the cognizance order and criminal proceeding were treated as maintainable.

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Issues: Whether the order taking cognizance under the foreign exchange laws and the consequential criminal proceeding were liable to be quashed on the ground that no prior adjudication had been completed and that the remittances had been disclosed to the Income Tax authorities.

Analysis: The complaint alleged contravention of the foreign exchange law in relation to remittances received in the names of the petitioners, and the Special Judge had found a prima facie case and taken cognizance. The Court held that prosecution for offences under the foreign exchange law is not dependent upon the outcome of an adjudication proceeding, because adjudication and criminal prosecution are distinct in nature. At the stage of cognizance, the Court would not meticulously assess the truth or falsity of the allegations or substitute its own view for the prima facie satisfaction recorded by the Special Judge. The cited decisions were held to be inapplicable on the facts.

Conclusion: The challenge to the cognizance order failed, and the prosecution was held to be maintainable.

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