TaxTMI 
TaxTMI 
2008 (1) TMI 618
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.... controversy raised in the appeal instituted by the Chief Enforcement Officer, Enforcement Directorate, Government of India (appellant herein), few relevant facts may be noted. 4. Respondent No. 1-M/s. Videocon International Ltd. ('Company' for short) is a 'Public Limited Company' incorporated under the Companies Act, 1956 having its business at Mumbai and Aurangabad in the State of Maharashtra. On 13-10-1989, the Company entered into an agreement with Radio Export (Moscow) for the supply of colour tubes, electrolytic capacitors, transformers, etc., for Rs. 44,04,00,000. The payment was made by respondent No. 1 Company to Japanese and Korean suppliers. But before any payment could be received by respondent No. 1 from the USSR Company, there was political turmoil in the USSR and payment to foreign suppliers was disrupted. On 5-1-1993, Additional Director General, Directorate of Revenue Intelligence, Mumbai addressed a letter to the appellant alerting him about the activities of the Company in connection with the agreement to supply television sets to Radio Export, Moscow. Based on the information forwarded by the Directorate of Revenue Intelligence, Bombay, the appellant addresse....
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.... accused. On 3-2-2003, the Chief Metropolitan Magistrate issued process requiring the respondents to appear before the Court and answer the charge under FERA. 6. In October, 2004, the respondents filed a petition being Criminal Writ Petition No. 476 of 2005 in the High Court of Judicature at Bombay by invoking Article 227 of the Constitution as also section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as 'the Code') seeking quashing of criminal proceedings initiated vide complaint dated 24-5-2002 on the ground that cognizance was taken by the Court after the period of limitation and the proceedings were, therefore, liable to be quashed. The High Court, by the impugned order dated 26-4-2006, quashed the proceedings initiated against the respondents on the ground that cognizance could be said to have been taken when process was issued and since process was issued in February, 2003, the proceedings were time-barred. The complaint was, therefore, quashed by the High Court. The said order is challenged by the appellant in the present appeal. 7. Notice was issued by this Court on 29-9-2006. The respondents appeared. Counter affidavit and rejoinder affidavit ....
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....into force on 1-6-2000 and hence cognizance of an offence under FERA could have been taken under FEMA latest by 1-6-2002. Issuance of process in February, 2003, therefore, was clearly time-barred and the High Court was right in quashing the proceedings. It was also submitted that the appellant was not right in submitting that the relevant date for computing the period of limitation is date of filing of complaint. The material date is the date of taking cognizance by a competent Criminal Court. Sub-section (3) of section 49 of FEMA is a special provision, which must be given effect to and even on that ground, the complaint was barred by time. Finally, it was submitted that though the High Court had not considered the merits of the matter, the provisions of FERA had no application to the facts of the case as it cannot be said that the accused had committed any offence under FERA. Considering the said fact also, this Court may not interfere with the order passed by the High Court in exercise of discretionary jurisdiction under Article 136 of the Constitution. It was, therefore, submitted that the appeal may be dismissed. 11. Having heard learned counsel for the parties and having p....
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....nd his witnesses on oath. Section 202, however, enacts that a Magistrate is not bound to issue process against the accused as a matter of course. It enables him before the issue of process either to inquire into the case himself or direct an investigation to be made by a Police Officer or by such other person as he thinks fit for the purpose of deciding whether there is sufficient ground for proceeding further. The underlying object of the inquiry under section 202 is to ascertain whether there is prima facie case against the accused. It thus allows a Magistrate to form an opinion whether the process should or should not be issued. The scope of inquiry under section 202 is, no doubt, extremely limited. At that stage, what a Magistrate is called upon to see is whether there is sufficient ground for proceeding with the matter and not whether there is sufficient ground for conviction of the accused. 14. Then comes Chapter XVI (Commencement of proceedings before Magistrates) . This Chapter will apply only after cognizance of an offence has been taken by a Magistrate under Chapter XIV. Section 204, whereunder process can be issued, is another material provision which reads as under: ....
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....Criminal Procedure Code, and I have no desire now to attempt to define it. It seems to me clear, however, that before it can be said that any Magistrate has taken cognizance of any offence under section 190(1)(a), Criminal P.C., he must not only have applied his mind to the contents of the petition, but he must have done so for the purpose of proceeding in a particular way as indicated in the subsequent provisions of this Chapter, - proceeding under section 200, and thereafter sending it for enquiry and report under section 202. When the Magistrate applies his mind not for the purpose of proceeding under the subsequent sections of this Chapter, but for taking action of some other kind, e.g., ordering investigation under section 156(3), or issuing a search warrant for the purpose of the investigation, he cannot be said to have taken cognizance of the offence. . . ." (p. 438) 18. R.R. Chari v. State of Uttar Pradesh AIR 1951 SC 207 was probably the first leading decision of this Court on the point. There, the police, having suspected the appellant-accused to be guilty of offences punishable under sections 161 and 165 of the Indian Penal Code (IPC) as also under the Prevention of C....
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.... liable to be arrested by the police without an order by the Magistrate". . . . (p. 208) 19. Approving the observations of Das Gupta, J. in Abani Kumar Banerjee's case (supra) this Court held that it was on 25-3-1949 when the Magistrate issued a notice under section 190 of the Code against the accused that he took 'cognizance' of the offence. Since before that day, sanction had been granted by the Government, the proceedings could not be said to have been initiated without authority of law. 20. Again in Narayandas Bhagwandas Madhavdas v. State of West Bengal, [1960] 1 SCR 93, this Court observed that when cognizance is taken of an offence depends upon the facts and circumstances of each case and it is impossible to attempt to define what is meant by taking cognizance. Issuance of a search warrant for the purpose of an investigation or a warrant of arrest of accused cannot by itself be regarded as an act of taking cognizance of an offence. It is only when a Magistrate applies his mind for proceeding under section 200 and subsequent sections of Chapter XV or under section 204 of Chapter XVI of the Code that it can be positively stated that he had applied his mind and thereby ha....
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....gnizance, thus, takes place at a point when a Magistrate first takes judicial notice of an offence. 24. In Devarapalli Lakshminarayana Reddy v. V. Narayana Reddy [1976] 3 SCC 252, this Court said : "13. It is well settled that when a Magistrate receives a complaint, he is not bound to take cognizance if the facts alleged in the complaint, disclose the commission of an offence. This is clear from the use of the words 'may take cognizance' which in the context in which they occur cannot be equated with must take cognizance. The word 'may' gives a discretion to the Magistrate in the matter. If on a reading of the complaint he finds that the allegations therein disclose a cognizable offence and the forwarding of the complaint to the police for investigation under section 156(3) will be conducive to justice and save the valuable time of the Magistrate from, being wasted in enquiring into a matter which was primarily the duty of the police to investigate, he will be justified in adopting that course as an alternative to taking cognizance of the offence, himself. 14. This raises the incidental question : What is meant by 'taking cognizance of an offence' by a Magistrate within th....
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....ating proceedings rather it was the condition precedent to the initiation of the proceedings. Order of issuance of process on 3-2-2003 by the Court was in pursuance of and consequent to taking cognizance of an offence on 24-5-2002. The High Court, in our view, therefore, was not right in equating taking cognizance with issuance of process and in holding that the complaint was barred by law and criminal proceedings were liable to be quashed. The order passed by the High Court, thus, deserves to be quashed and set aside. 27. It was also contended by the learned counsel for the appellant that the relevant date for considering the question of limitation is the date of filing of complaint and not taking cognizance or issuance of process by a Court of law. In this connection, our attention was invited by the counsel to Bharat Damodar Kale v. State of A.P. (2003) 8 SCC 559 and a recent decision of this Court in Japani Sahoo v. Chandra Sekhar Mohanty (2007) 7 SCC 394. In Japani Sahoo's case (supra) one of us (C.K. Thakker, J.) after considering decisions of various High Courts as also Bharat Damodar Kale's case (supra) stated : "51. The matter can be looked at from different angle al....