The Supreme Court has quashed criminal proceedings initiated against Standard Chartered Bank and one of its officials under the Foreign Exchange Regulation Act, 1973 (FERA), holding that the prosecution failed to comply with a mandatory legal requirement before filing the complaint. The Court also found that the extraordinary delay in pursuing the case had infringed the appellants' right to a speedy trial.
A Bench of Justice J.B. Pardiwala and Justice Manoj Misra allowed the appeals and set aside the Bombay High Court's judgment, which had earlier refused to quash the criminal complaints.
Background of the Case
The case arose from two criminal complaints filed in 2002 against Standard Chartered Bank and one of its officials concerning alleged violations of FERA relating to foreign exchange transactions routed through the bank's Vostro account. The Enforcement Directorate alleged that the bank had improperly handled remittances connected with a person resident outside India, attracting prosecution under Sections 56(1) and 73(3) of FERA.
Before the High Court, the appellants argued that the prosecution was legally unsustainable because the mandatory opportunity notice under Section 61(2) of FERA had never been served. They also contended that continuing a prosecution after decades violated their constitutional right to a speedy trial.
However, the High Court declined to interfere and held that the appellants should have pursued the alternative remedy of criminal revision instead of invoking the High Court's inherent powers under Section 482 of the Code of Criminal Procedure.
Court's Observations
The Supreme Court first clarified that the availability of a revision remedy does not automatically prevent a High Court from exercising its inherent jurisdiction under Section 482 CrPC.
The Bench observed:
“The availability of an alternative remedy of revision under Section 397 of the CrPC does not, by itself, operate as a bar to the exercise of the inherent jurisdiction of the High Court under Section 482 of the CrPC.”
The Court held that the High Court committed an error by treating the existence of a revision remedy as a threshold bar to examining the maintainability of the petitions.
The Bench then turned to the central issue whether the mandatory opportunity notice required under the proviso to Section 61(2) of FERA had been issued before launching prosecution.
According to the Court, this notice is not a mere procedural formality but a statutory safeguard ensuring compliance with principles of natural justice. The prosecution must establish that such notice was properly issued and served before a Magistrate can take cognizance of an offence.
The Court noted that although the complaints referred to an opportunity notice, the respondents failed to produce the notice, disclose its date, or place any proof of service before the Magistrate, the High Court, or even the Supreme Court. The Magistrate had also taken cognizance without recording satisfaction regarding compliance with this mandatory condition.
The Bench observed:
“The mandatory requirement of the proviso to Section 61(2) of FERA has not been complied with... and therefore, the order of the Magistrate taking cognizance... cannot be sustained in law.”
Right to Speedy Trial
The Supreme Court also examined whether the prolonged criminal proceedings violated Article 21 of the Constitution.
It noted that more than 23 years had passed since the filing of the complaints, while over three decades had elapsed since the underlying transactions, yet the trial had not progressed beyond the stage of service of summons. The Court also found that the respondent authorities had shown little diligence in prosecuting the case despite repeated directions for expeditious disposal.
The Bench remarked that permitting the prosecution to continue in such circumstances would leave the appellants in a prolonged state of uncertainty without meaningful progress in the case.
Decision
Allowing the appeals, the Supreme Court quashed Criminal Case Nos. 1503-1504 of 2002 and the summoning order dated 30 May 2002 as against the appellants.
The Court also set aside the Bombay High Court's judgment refusing to quash the proceedings and directed that a copy of the judgment be circulated to all High Courts.
Case Details
Case Title: Standard Chartered Bank & Anr. v. Enforcement Officer, Ministry of Home Affairs & Anr.
Case Number: Criminal Appeal Nos. 2142-2143 of 2013
Judge: Justice J.B. Pardiwala and Justice Manoj Misra
Decision Date: 21 July 2026
