FEMA limitation on adjudication: "take notice" means prima facie application of mind, not service of show-cause notice.

Section 49(3) of FEMA bars adjudication on a contravention of the repealed Act after two years from FEMA's commencement unless the adjudicating officer has taken notice within that period. The court explained that "take notice" means the stage at which the officer applies his mind to the materials and forms a prima facie view before issuing the first show-cause notice under the Adjudication Proceedings and Appeal Rules, 1974. It is not equivalent to service of notice, expiry of the reply period, or criminal-law concepts such as taking cognizance. Section 49(5)(a) does not require service within two years. On this construction, notice was taken in time and the adjudication was valid.

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Issues: Whether the adjudicating officer had taken notice of the alleged contravention of the repealed Act within two years from the commencement of FEMA so as to validly initiate adjudication proceedings.

Analysis: Section 49(3) of FEMA bars adjudication after the expiry of two years from the commencement of FEMA unless notice of the alleged contravention of the repealed Act has been taken within that period. The first notice under Rule 3(1) of the Adjudication Proceedings and Appeal Rules, 1974 is founded on a prima facie opinion formed on the materials placed before the adjudicating officer, and that formation of opinion precedes the issuance of the notice. The expression "take notice" therefore refers to the stage when the adjudicating officer applies his mind and forms that prima facie view, not the later stage after service of notice or expiry of the show-cause period. The words "take notice" are not to be equated with "take cognizance" or read ejusdem generis with criminal procedure concepts, because adjudication and criminal proceedings are distinct. Section 49(5)(a) does not require service of notice within the two-year period.

Conclusion: The adjudicating officer had taken notice on 31-5-2002 within the statutory period, and the show-cause notice and the ensuing adjudication were valid. The objection to jurisdiction failed.

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