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CASE NO.: Appeal (crl.)  175 of 2007

PETITIONER: S.K. SINHA, CHIEF ENFORCEMENT OFFICER

RESPONDENT: VIDEOCON INTERNATIONAL LTD. & ORS.

DATE OF JUDGMENT: 25/01/2008

BENCH: C.K. THAKKER & P.P. NAOLEKAR

JUDGMENT: J U D G M E N T ARISING OUT OF SPECIAL LEAVE PETITION (CRL) NO. 5718 OF 2006 C.K. THAKKER, J.

1.              Leave granted. 2.              In the present appeal, we are called  upon to decide the correctness or otherwise of  the proposition of law by the High Court of  Judicature at Bombay whether issuance of  process in a criminal case is one and the same  thing or can be equated with taking cognizance  by a Criminal Court? And if the period of  initiation of criminal proceedings has elapsed  at the time of issue of process by a Court, the  proceedings should be quashed as barred by  limitation? 3.              To appreciate the 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\027M/s. Videocon  International Ltd. (\021Company\022 for short) is a  \021Public Limited Company\022 incorporated under the  Companies Act, 1956 having its business at  Mumbai and Aurangabad in the State of  Maharashtra. On October 13, 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 January 5, 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 addressed two letters to the  Chief Manager of Indian Bank, Nariman Point,  Bombay requesting the Bank to supply details of  the export outstanding of the Company. Indian  Bank supplied necessary information and

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indicated that the export outstanding of the  Company was Rs.16,60,00,000/-. The Reserve Bank  of India turned down the request of the Company  for reimbursement of differential amount  remaining unpaid on the ground that the exports  were effected from Korea and Japan and not from  India and the Company was not entitled to  reimbursement. In pursuance of the summons  issued under Section 40 of the Foreign Exchange  Regulation Act, 1973 (hereinafter referred to  as \021FERA\022), Raj Kumar Dhoot, Director of the  Company appeared before the Department on April  25, 1999 and made a statement that there was an  agreement between the Company and M/s Radio  Export, Moscow for supply of two lakh  television sets and other equipments for  Rs.44,04,00,000/-. The amount was received by  the Company through State Bank of India,  Overseas Branch, Bombay. He further stated that  the television sets had been procured from  Korea and Japan who had been paid equivalent to  Rs.19,00,00,000/- in foreign exchange. Export  bills raised from the sale to M/s Radio Export,  Moscow were equivalent to Rs.16,00,00,000/-.  Whereas the contract with the suppliers in  Korea and Japan stipulated payment in US  Dollars, the contract with the USSR Company  required payment in Indian Rupees. Since the  value of Rupee against the US Dollar fell down,  the Company had to pay more Rupees to their  foreign suppliers. On June 1, 2000, FERA was  replaced by the Foreign Exchange Management  Act, 1999 (hereinafter referred to as \021FEMA\022). 5.              On May 24, 2002, the appellant- complainant in the capacity as Chief  Enforcement Officer, Government of India, filed  Criminal Complaint No. 1149/S/2002 against the  Company alleging that the Company had received  an amount of Rs.44,04,00,000/- through State  Bank of India, Bombay but it failed to take  steps to realize export proceeds amounting to  Rs.16,60,00,000/- within the stipulated period  of six months. It thereby contravened Section  18(2) and 18(3) read with Section 68(1),  punishable under Section 56(1)(ii) of FERA. On  the same day, i.e. on May 24, 2002, after  hearing the learned counsel for the Department,  the Chief Metropolitan Magistrate, Esplanade,  Mumbai took cognizance of the offence and  issued summons to the accused. On February 3,  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 \021the Code\022) seeking quashing of criminal  proceedings initiated vide complaint dated May  24, 2002 on the ground that cognizance was  taken by the Court after the period of  limitation and the proceedings were, therefore,

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liable to be quashed. The High Court, by the  impugned order dated April 26, 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  September 29, 2006. The respondents appeared.  Counter affidavit and rejoinder affidavit were  then filed. The Registry was directed to place  the matter for final hearing on a non- miscellaneous day and that is how the matter is  placed before us. 8.              We have heard the learned counsel for  the parties. 9.              The learned counsel for the appellant  contended that the High Court was in clear  error in equating taking cognizance of an  offence with issuance of process and in holding  that the cognizance was taken after the period  of limitation and hence the proceedings were  time-barred and liable to be quashed. It was  submitted that FEMA came into force from June  1, 2000 and under sub-section (3) of Section 49  of FEMA, cognizance of an offence under FERA  could have been taken within a period of two  years from the date of commencement of the new  Act. It was submitted that cognizance was taken  by the Chief Metropolitan Magistrate, Mumbai on  May 24, 2002, i.e. the day when complaint was  filed which was well within the period of  limitation provided by Section 49(3) of FEMA  and as such the Criminal Court was within its  power in issuing process and in proceeding with  the matter and the High Court was not justified  in quashing the proceedings on the ground that  cognizance was taken by the Court on February  3, 2003 when process was issued by the Chief  Metropolitan Magistrate, Mumbai. It was  alternatively submitted by the learned counsel  that the relevant date for counting the period  of limitation is not the date of taking  cognizance or issuance of process by the Court  but the date of filing complaint. It was stated  that the point has been concluded by various  decisions of this Court. Since the complaint  was filed on May 24, 2002, which was within the  period of limitation, the High Court was wrong  in treating the criminal complaint as barred by  limitation and in quashing it. The order passed  by the High Court, thus, deserves to be set  aside by directing the Chief Metropolitan  Magistrate, Mumbai to proceed with the case and  decide it in accordance with law. 10.             The learned counsel for the  respondents, on the other hand, supported the  order passed by the High Court. It was  submitted that the High Court was wholly right  in quashing the proceedings. Admittedly,  process was issued in February, 2003 while  under Section 49(3) of FEMA, proceedings under

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the old Act (FERA) could not have been  initiated after the expiry of two years from  the commencement of the new Act (FEMA). FEMA  came into force on June 1, 2000 and hence  cognizance of an offence under FERA could have  been taken under FEMA latest by June 1, 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 perused the relevant  provisions of law as also various judicial  pronouncements, we are of the view that the  High Court was in error in equating issuance of  process with taking cognizance by a Criminal  Court and in quashing the proceedings treating  them as time-barred. 12.             The expression \021cognizance\022 has not  been defined in the Code. But the word  (cognizance) is of indefinite import. It has no  esoteric or mystic significance in criminal  law. It merely means\027\021become aware of\022 and when  used with reference to a Court or a Judge, it  connotes \021to take notice of\027judicially\022. It  indicates the point when a Court or a  Magistrate takes judicial notice of an offence  with a view to initiating proceedings in  respect of such offence said to have been  committed by someone. \021Taking cognizance\022 does  not involve any formal action of any kind. It  occurs as soon as a Magistrate applies his mind  to the suspected commission of an offence.  Cognizance is taken prior to commencement of  criminal proceedings. Taking of cognizance is  thus a sine qua non or condition precedent for  holding a valid trial. Cognizance is taken of  an offence and not of an offender. Whether or  not a Magistrate has taken cognizance of an  offence depends on the facts and circumstances  of each case and no rule of universal  application can be laid down as to when a  Magistrate can be said to have taken  cognizance. Chapter XIV (Sections 190-199) of  the Code deals with \021Conditions requisite for  initiation of proceedings\022. Section 190

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empowers a Magistrate to take cognizance of an  offence in certain circumstances. Sub-section  (1) thereof is material and may be quoted in  extenso. 1) Subject to the provisions of this  Chapter, any Magistrate of the first  class, and any Magistrate of the  second class specially empowered in  this behalf under sub-section (2), may  take cognizance of any offence\027   (a) upon receiving a complaint of  facts which constitute such offence;    (b) upon a police report of such  facts;    (c) upon information received from any  person other than a police officer, or  upon his own knowledge, that such  offence has been committed.

13.             Chapter XV (Sections 200-203) relates  to \021Complaints to Magistrates\022 and covers cases  before actual commencement of proceedings in a  Court or before a Magistrate. Section 200 of  the Code requires a Magistrate taking  cognizance of an offence to examine the  complainant and 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: 204.Issue of process.- (1) If in the  opinion of a Magistrate taking  cognizance of an offence there is  sufficient ground for proceeding, and  the case appears to be \026   (a) a summons-case, he shall issue his  summons for the attendance of the  accused, or

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 (b) a warrant-case, he may issue a  warrant, or, if he thinks fit, a  summons, for causing the accused to be  brought or to appear at a certain time  before such Magistrate or (if he has  no jurisdiction himself) some other  Magistrate having jurisdiction.   (2) No summons or warrant shall be  issued against the accused under sub- section (1) until a list of the  prosecution witnesses has been filed.   (3) In a proceeding instituted upon a  complaint made in writing, every  summons or warrant issued under sub- section (1) shall be accompanied by a  copy of such complaint.   (4) When by any law for the time being  in force any process-fees or other  fees are payable, no process shall be  issued until the fees are paid and, if  such fees are not paid within a  reasonable time, the Magistrate may  dismiss the complaint.   (5) Nothing in this section shall be  deemed to affect the provisions of  section 87.

15.             From the above scheme of the Code, in  our judgment, it is clear that \021Initiation of  Proceedings\022, dealt with in Chapter XIV, is  different from \021Commencement of Proceedings\022  covered by Chapter XVI. For commencement of  proceedings, there must be initiation of  proceedings. In other words, initiation of  proceedings must precede commencement of  proceedings. Without initiation of proceedings  under Chapter XIV, there cannot be commencement  of proceedings before a Magistrate under  Chapter XVI. The High Court, in our considered  view, was not right in equating initiation of  proceedings under Chapter XIV with commencement  of proceedings under Chapter XVI. 16.             Let us now consider the question in  the light of judicial pronouncements on the  point. 17.             In Superintendent & Remembrancer of  Legal Affairs Vs. Abani Kumar Banerjee, AIR  1950 Calcutta 437, the High Court of Calcutta  had an occasion to consider the ambit and scope  of the phrase \021taking cognizance\022 under Section  190 of the Code of Criminal Procedure, 1898  which was in pari materia to Section 190 of the  present Code of 1973. Referring to various  decisions, Das Gupta, J. (as His Lordship then  was) stated: \023What is \021taking cognizance\022 has not  been defined in the 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

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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\024. 18.             R.R. Chari v. State of Uttar Pradesh,  1951 SCR 312 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  Corruption Act, 1947, applied to the District  Magistrate, Kanpur to issue warrant of arrest  on October 22, 1947. Warrant was issued on the  next day and the accused was arrested on  October 27, 1947. On March 25, 1949, the  accused was produced before the Magistrate to  answer the charge-sheet submitted by the  prosecution. According to the accused, on  October 22, 1947, when warrant for his arrest  was issued by the Magistrate, the Magistrate  was said to have taken cognizance of offence  and since no sanction of the Government had  been obtained before that date, initiation of  proceedings against him was unlawful. The  question before the Court was as to when  cognizance of the offence could be said to have  been taken by the Magistrate under Section 190  of the Code. Considering the circumstances  under which \021cognizance of offence\022 under sub- section (1) of Section 190 of the Code can be  taken by a Magistrate and referring to Abani  Kumar Banerjee, the Court, speaking through  Kania, C.J. stated: \023It is clear from the wording of the  section that the initiation of the  proceedings against a person commences  on the cognizance of the offence by  the Magistrate under one of the three  contingencies mentioned in the  section. The first contingency  evidently is in respect of non- cognizable offences as defined in the  Criminal Procedure Code on the  complaint of an aggrieved person. The  second is on a police report, which  evidently is the case of a cognizable  offence when the police have completed

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their investigation and come to the  Magistrate for the issue of a process.  The third is when the Magistrate  himself takes notice of an offence and  issues the process. It is important to  remember that in respect of any  cognizable offence, the police, at the  initial stage when they are  investigating the matter, can arrest a  person without obtaining an order from  the Magistrate. Under section 167(b)  of the Criminal Procedure Code the  police have of course to put up the  person so arrested before a Magistrate  within 24 hours and obtain an order of  remand to police custody for the  purpose of further investigation, if  they so desire. But they have the  power to arrest a person for the  purpose of investigation without  approaching the Magistrate first.  Therefore in cases of cognizable  offence before proceedings are  initiated and while the matter is  under investigation by the police the  suspected person is liable to be  arrested by the police without an  order by the Magistrate\024. 19.             Approving the observations of Das  Gupta, J. in Abani Kumar Banerjee, this Court  held that it was on March 25, 1949 when the  Magistrate issued a notice under Section 190 of  the Code against the accused that he took  \021cognizance\022 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 had taken cognizance of an offence  [see also Ajit Kumar Palit v. State of W.B. &  Anr., (1963) Supp (1) SCR 953; Hareram Satpathy  v. Tikaram Agarwala & Anr., (1978) 4 SCC 58]. 21.             In Gopal Das Sindhi & Ors. v. State of  Assam & Anr., AIR 1961 SC 986, referring to  earlier judgments, this Court said: \023We cannot read the provisions of  Section 190 to mean that once a  complaint is filed, a Magistrate is  bound to take cognizance if the facts  stated in the complaint disclose the

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commission of any offence. We are  unable to construe the word \021may\022 in  Section 190 to mean \021must\022. The reason  is obvious. A complaint disclosing  cognizable offences may well justify a  Magistrate in sending the complaint  under Section 156(3) to the police for  investigation. There is no reason why  the time of the Magistrate should be  wasted when primarily the duty to  investigate in cases involving  cognizable offences is with the  police. On the other hand, there may  be occasions when the Magistrate may  exercise his discretion and take  cognizance of a cognizable offence. If  he does so then he would have to  proceed in the manner provided by  Chapter XVI of the Code\024. 22.             In Nirmaljit Singh Hoon v. State of  West Bengal & Anr., (1973) 3 SCC 753, the Court  stated that it is well settled that before a  Magistrate can be said to have taken cognizance  of an offence under Section 190(1) (a) of the  Code, he must have not only applied his mind to  the contents of the complaint presented before  him, but must have done so for the purpose of  proceeding under Section 200 and the provisions  following that section. Where, however, he  applies his mind only for ordering an  investigation under Section 156(3) or issues a  warrant for arrest of accused, he cannot be  said to have taken cognizance of the offence. 23.             In Darshan Singh Ram Kishan v. State  of Maharashtra, (1972) 1 SCR 571, speaking for  the Court, Shelat, J. stated that under Section  190 of the Code, a Magistrate may take  cognizance of an offence either (a) upon  receiving a complaint, or (b) upon a police  report, or (c) upon information received from a  person other than a police officer or even upon  his own information or suspicion that such an  offence has been committed. As has often been  said, taking cognizance does not involve any  formal action or indeed action of any kind. It  occurs as soon as a Magistrate applies his mind  to the suspected commission of an offence.  Cognizance, thus, takes place at a point when a  Magistrate first takes judicial notice of an  offence. 24.             In Devarapalli Lakshminarayana Reddy &  Ors. v. V. Narayana Reddy & Ors., (1976) 3 SCC  252, this Court said: \023It 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

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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. This raises the incidental question :  What is meant by "taking cognizance of  an offence" by a Magistrate within the  contemplation of Section 190?. This  expression has not been defined in the  Code. But from the scheme of the Code,  the content and marginal heading of  Section 190 and the caption of Chapter  XIV under which Sections 190 to 199  occur, it is clear that a case can be  said to be instituted in a Court only  when the Court takes cognizance of the  offence alleged therein. The ways in  which such cognizance can be taken are  set out in Clauses (a), (b) and (c) of  Section 190(1). Whether the Magistrate  has or has not taken cognizance of the  offence will depend on the  circumstances of the particular case  including the mode in which the case  is sought to be instituted and the  nature of the preliminary action, if  any, taken by the Magistrate. Broadly  speaking, when on receiving a  complaint, the Magistrate applies his  mind for the purposes of proceeding  under Section 200 and the succeeding  sections in Chapter XV of the Code of  1973, he is said to have taken  cognizance of the offence within the  meaning of Section 190(1)(a). If,  instead of proceeding under Chapter  XV, he has in the judicial exercise of  his discretion, taken action of     some other kind, such as issuing a  search warrant for the purpose        of investigation, or ordering  investigation by the police under  Section 156(3), he cannot be said to  have taken cognizance of any offence\024.  [see also M.L. Sethi v. R.P. Kapur &  Anr., (1967) 1 SCR 520]. 25.             In the case on hand, it is amply clear  that cognizance of the offence was taken by the  Chief Metropolitan Magistrate, Mumbai on May  24, 2002, i.e., the day on which the complaint  was filed, the Magistrate, after hearing the  counsel for the department, took cognizance of  the offence and passed the following order: \023Mr. S.A.A. Naqvi, counsel for the  department is present. Complainant is  public servant. Cognizance is taken.  Issue summons to accused under Section

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18(2)(3) of FERA, 73 read with Central  Notification and r/w Section 68(1) of  the said Act and r/w 56 (1)(i) and r/w  Section 49(3) (4) of FEMA, 1999. Summons returnable on 7.2.2003 at 3  p.m.\024              (emphasis supplied) 26.             Undoubtedly, the process was issued on  February 3, 2003. In our judgment, however, it  was in pursuance of the cognizance taken by the  Court on May 24, 2002 that a subsequent action  was taken under Section 204 under Chapter XVI.  Taking cognizance of offence was entirely  different from initiating proceedings; rather  it was the condition precedent to the  initiation of the proceedings. Order of  issuance of process on February 3, 2003 by the  Court was in pursuance of and consequent to  taking cognizance of an offence on May 24,  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 & Anr. 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, one of us (C.K. Thakker,  J.), after considering decisions of various  High Courts as also Bharat Damodar Kale,  stated: \02352. The matter can be looked at from  different angle also. Once it is  accepted (and there is no dispute  about it) that it is not within the  domain of the complainant or  prosecuting agency to take cognizance  of an offence or to issue process and  the only thing the former can do is to  file a complaint or initiate  proceedings in accordance with law.   If that action of initiation of  proceedings has been taken within the  period of limitation, the complainant  is not responsible for any delay on  the part of the Court or Magistrate in  issuing process or taking cognizance  of an offence. Now, if he is sought to  be penalized because of the omission,  default or inaction on the part of the  Court or Magistrate, the provision of  law may have to be tested on the  touchstone of Article 14 of the  Constitution.  It can possibly be  urged that such a provision is totally  arbitrary, irrational and  unreasonable. It is settled law that a

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Court of Law would interpret a  provision which would help sustaining  the validity of law by applying the  doctrine of reasonable construction  rather than making it vulnerable and  unconstitutional by adopting rule of  \021litera legis\022.  Connecting the  provision of limitation in Section 468  of the Code with issuing of process or  taking of cognizance by the Court may  make it unsustainable and ultra vires  Article 14 of the Constitution\024.   28.             The learned counsel for the  respondent, on the other hand, tried to  distinguish Bharat Damodar Kale and Japani  Sahoo submitting that in both the decisions,  this Court was called upon to consider, inter  alia, Section 468 of the Code providing for  limitation for taking cognizance of certain  offences. According to the counsel, Section 468  of the Code starts with the expression \023Except  as provided elsewhere in this Code\005\024. Section  49(3) of FEMA, on the other hand, starts with a  non-obstante clause (\023Notwithstanding anything  contained in any other law for the time being  in force\024). It was, therefore, submitted that  the ratio laid down in the above two cases  would not be applicable to the instant case. 29.             In our opinion, it would not be  necessary for us to express any opinion one way  or the other on the larger question. We have  already held in the earlier part of the  judgment that in the case on hand, cognizance  of an offence had already been taken by the  Chief Metropolitan Magistrate, Mumbai on May  24, 2002, well within the period prescribed by  sub-section (3) of Section 49 of FEMA within  two years of coming into force of the Act from  June 1, 2000. We, therefore, express no opinion  on the question raised by the learned counsel  for the respondent. 30.             As regards quashing of proceedings on  merits, the learned counsel for the appellant  is right in submitting that the High Court has  not at all touched the merits of the case and  proceedings were not quashed on the ground that  the provisions of FERA do not apply to the case  before the Court. The High Court dealt with  only one point as to whether the proceedings  were liable to be quashed on the ground that  they were time-barred and upholding the  contention of the accused, passed the impugned  order. As we are of the view that the High  Court was not right in quashing the proceedings  on the ground of limitation, the order deserves  to be set aside by remitting the matter to the  Chief Metropolitan Magistrate, Mumbai to be  decided in accordance with law. We may,  however, clarify that it is open to the  respondents to take all contentions including  the contention as to applicability or otherwise  of FERA to the facts of the case. As and when  such question will be raised, the Court will  pass an appropriate order in accordance with

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law. 31.             For the foregoing reasons, the appeal  is allowed. The order passed by the High Court  is set aside and it is held that cognizance of  the offence had already been taken by the  competent Criminal Court i.e. Chief  Metropolitan Magistrate, Mumbai on May 24, 2002  and it could not be said that the proceedings  were barred by Section 49(3) of FEMA. The Chief  Metropolitan Magistrate will now proceed to  consider the matter in accordance with law. All  contentions of all parties are kept open except  the one decided by us in this appeal. Since the  matter is very old, the Court will give  priority and will decide it as expeditiously as  possible, preferably before June 30, 2008. 32.             Ordered accordingly.