Mandatory prior notice before foreign exchange prosecution failed where service was not made at the correct address.

Prior notice under the proviso to Section 61(2) of the Foreign Exchange Regulation Act was a mandatory condition precedent to a complaint under Section 56. The record indicated that the petitioner had notified its fresh address, yet the opportunity notice was not served at that correct address and the enforcement authority did not verify it through the bank or the Reserve Bank of India. On those facts, the statutory requirement of prior opportunity and hearing was not met. Applying the rule that a prescribed statutory mode must be followed and that proceedings with serious civil consequences require natural justice, the complaint and consequential proceedings were held unsustainable and quashed.

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Issues: Whether the statutory opportunity notice under the proviso to Section 61(2) of the Foreign Exchange Regulation Act, 1973 was served on the petitioner, and whether non-service vitiated the complaint and all consequential proceedings under Section 56 of the Foreign Exchange Regulation Act, 1973.

Analysis: The dispute turned on compliance with the mandatory precondition in the proviso to Section 61(2), which requires that no complaint for an offence under Section 56 can be made unless the accused is given an opportunity to show that the requisite permission existed. The record showed that the petitioner had communicated its fresh Gurgaon address to the bank, the bank later corresponded at that address, and the enforcement proceedings were initiated thereafter. The material on record, including the judicial observations relied upon, indicated that the Enforcement Directorate did not serve the opportunity notice at the correct address and did not obtain the fresh address from the bank or the Reserve Bank of India. In such circumstances, the statutory requirement of prior notice and hearing was not satisfied. The Court also applied the settled principle that where law prescribes a mode for doing an act, it must be done in that manner, and that proceedings carrying serious civil consequences cannot stand without observance of natural justice.

Conclusion: The opportunity notice was not validly served, the mandatory requirement under Section 61(2) was not complied with, and the proceedings under Section 56 could not be sustained. The writ petition was therefore allowed and the ex parte complaint and consequential proceedings were quashed.

Ratio Decidendi: Where the statute makes prior opportunity to show requisite permission a condition precedent to a complaint, failure to serve that notice at the correct address invalidates the complaint and the ensuing proceedings for want of compliance with mandatory statutory procedure and natural justice.

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