Holding

Issuance of process cannot be equated with taking cognizance; cognizance was taken on May 24, 2002, within the two‑year limitation under s.49(3) FEMA, so the proceedings are not barred.

Summary

The Chief Enforcement Officer filed a criminal complaint under the Foreign Exchange Regulation Act (FERA) against Videocon International Ltd. on May 24, 2002. The Chief Metropolitan Magistrate took cognizance of the offence on the same day and later issued summons on February 3, 2003. The accused sought quashing of the proceedings, arguing that the limitation period under Section 49(3) of the Foreign Exchange Management Act (FEMA) – two years from its commencement on June 1, 2000 – had expired because the process was issued after June 1, 2002. The High Court agreed and set aside the proceedings. On appeal, the Supreme Court held that "taking cognizance" is a judicial act distinct from the later issuance of process; cognizance was taken on May 24, 2002, well within the two‑year period, so the proceedings were not time‑barred. Consequently, the High Court order was reversed and the matter remitted to the magistrate for trial.

Issues considered

Whether issuance of process in a criminal case is identical to taking cognizance of an offence.
Whether the limitation period prescribed in Section 49(3) of FEMA for taking cognizance of an offence under FERA had elapsed, rendering the proceedings time‑barred.

Legislation cited

Code of Criminal Procedure, 1973s. 190, s. 200, s. 202, s. 204, s. 468
Foreign Exchange Management Act, 1999s. 49(3)
Foreign Exchange Regulation Act, 1973s. 18(2), s. 18(3), s. 56(1)(ii), s. 68(1)

Subjects

Foreign Exchange Management ActFERALimitation periodCognizanceIssuance of processCriminal Procedure CodeSection 49(3) FEMAArticle 227Criminal complaintMagistrate

Judgment

[2008] 2 S.C.R. 36

A S.K. SINHA, CHIEF ENFORCEMENT OFFICER
II.
MIS. VIDEOCON INTERNATIONAL LTD. & ORS.
(Criminal Appeal No. 175 of 2008)
JANUARY 25, 2008
B
(C.K. THAKKER AND P.P. NAOLEKAR, JJ.)

Foreign Exchange Management Act, 1999
s. 49(3) - Period of limitation for initiating proceedings
C for offences committed under FERA - Criminal complaint for
violation of provisions of FERA filed on a date within two years
of coming into force of FEMA - Taking of cognizance by
Magistrate and issuance of summons to accused on the date
of filing of the complaint itself - Writ petition under Article 227
D before High Court by accused seeking quashing of
proceedings on the ground that process was issued on a date
beyond 2 years of commencement of FEMA - High Court
quashing proceedings as time-barred - HELD: High Court >-
erred in equating 'issuance of process' with 'taking cognizance'
E by the Magistrate and in quashing the proceedings treating
them as time-barred - On facts, cognizance of offence was
taken by Magistrate and summonses were issued well within
period of 2 years of coming into force of FEMA, as prescribed
under sub-s. (3) of s. 49 thereof - Foreign Exchange
F Regulation Act, 1973 - ss. 18(2), 18(3), 68(1) and 56(1)(ii) -
Code of Criminal procedure 1973 - ss. 190 to 202 and 204.
Code of Criminal Procedure, 1973:
S. 190, 200 and 204 - 'Cognizance of offences by
G-~ Magistrate' -'Initiation of proceedings' - 'Commencement of
proceedings' and 'Issuance of process' for appearance of
accused - Connotation of - HELD: 'Issuance of process'
cannot be equated with 'taking cognizance' by a criminal court
- The expression 'cognizance' when used with reference to a
H 36
. -+
/
S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 37
M/S. VIDEOCON INTERNATIONAL LTD. & ORS.

court orjudge, it indicates the point when a court or a Magistrate A
takes judicial notice of an offence with a view to initiating
proceedings in respect of such offence - 'Initiation of
proceedings' dealt with in Chapter XIV of the Code is different
from 'commencement of proceedings' covered by Chapter XVI
- Order of 'issuance of process' is in pursuance of and B
consequent upon 'taking cognizance' of offence - Foreign
y Exchange Management Act, 1999 - s. 49(3).
Words and Phrases:
Expressions 'taking cognizance' of offence by court/ c
Magistrate, "Initiation of proceedings', 'commencement of
proceedings' and 'issuance of process' - Connotation of - In
terms of ss. 190, 200 and 204 of Code of Criminal Procedure,
1973.
Appellant-Chief Enforcement Officer filed a criminal D
complaint on 24.5.2002 against the respondent-Company
alleging contravention of Sections 18(2) and 18(3) read
with section 68(1) punishable under Section 56(1)(ii) of
the Foreign Exchange Regulation Act, 1973. On the same
day the Chief Metropolitan Magistrate took cognizance E
of the offence and issued summons to the accused. On
3.2.2003 the Chief Metropolitan Magistrate issued process
requiring the accused to appear before the Court and
answer the charge under FERA. The accused filed a
criminal writ petition under Article 227 of the Constitution F
before the High Court seeking quashing of the criminal
proceedings initiated upon the criminal complaint dated
24.5.2002 on the ground that cognizance was taken by
the court after the period of limitation and, therefore, the
proceedings were liable to be quashed. The High Court
G
,._ quashed the proceedings holding that the cognizance
could be said to have been taken when the process was
issued in February 2003, and, therefore, the proceedings
were time-barred.
In the instant appeal filed by the complainant, it was H
38 SUPREME COURT REPORTS (2008] 2 S.C.R. -+
A contended for the appellant that under sub-section. (3) of
section 49 of the Foreign Exchange Management Act,
1999 cognizance of an offence under FERA could be taken
within a period of two years from 1.6.2000, the date of
commencement of FEMA, and since the Magistrate took
B cognizance on 24.5.2002, the date on which the complaint
was filed, which was well within the period of limitation
provided under s. 49(3) of FEMA, the High Court erred in
quashing the proceedings. The stand of the accused, on
the other hand, was that keeping in view the date of
c commencement of FEMA being 1.6.2000, cognizance of
an offence under FERA could have been taken under
FEMA latest by 1.6.2002, and, therefore, issuance of
process in February, 2003 was clearly time-barred.
The questions for consideration before the Court
D were: (i) whether issuance of process in a criminal case
is one and the same thing as taking cognizance; and (ii)
whether the period of limitation for initiation of criminal
proceedings had elapsed in the instant case.
Allowing the appeal, the Court
E
HELD: 1.1 Tne 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. [para 11] [46.;F]
F 1.2 The expression 'cognizance' has not been
defined in the Code of Criminal Procedure, 1973. But the
word 'cognizance' is of indefinite import. It means-
'become aware of' and when used with reference to a
Court or a Judge, it connotes 'to take notice of' and when
G used with reference to a Court or a Magistrate takes
judicial notice of an offence with a view to initiating -1
proceedings in respect of such offence said to have been
committed by someone. 'Taking cognizance' does not
involve any formal action of any kind. It occurs as soon
H as a Magistrate applies his mind to the suspected
S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 39
M/S. VIDEOCON INTERNATIONAL LTD. & ORS.

commission of an offenc·e. Cognizance is thus a sine qua A
non or condition precedent for holding a valid trial.
[para 12] [46-G-H; 47-A-B]
R.R. Chari v. State of Uttar Pradesh, 1951 SCR 312 -
relied on.
B
Gopal Das Sindhi & Ors. v. State of Assam & Anr., AIR
r- 1961 SC 986; Nirmaljit singh Hoon v. State of West Bengal &
Anr., (1973) 3 SCC 753; Darshan Singh Ram Kishan v. State
of Maharashtra, (1972) I SCR 571; Devarapalli
Lakshminarayana Reddy & Ors. v. Narayana Reddy & Ors. c
(1976) 3 SCC 252; and Superintendent & Remembrancer of
Legal Affairs Vs. Abani Kumar Banerjee, AIR 1950 Calcutta
437 - referred to.
1.3 Cognizance is taken of an offence and not of an
offender. Whether or not a Magistrate has taken D
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. [para 12] [47-8-C]
Naraindas Bhagwandas Madhavdas vs. State of West E
Bengal [1960] 1 SCR 93; Ajit Kumar Pa/it v. State of WB. &
Anr., (1963) Supp (1) SCR 953; and Hareram Satpathy v.
Tikaram Agarwala & Anr., (1978) 4 SCC 58 - relied on.
2.1 The High Court was also not right in equating F
'initiation of proceedings' under Chapter XIV with
'commencement of proceedings' under Chapter XVI of the
Code of Criminal Procedure, 1973. [para 15] [49-D-E]
2.2 Chapter XIV (Sections 190-199) of the Code deals
with 'Conditions requisite for initiation of proceedings'. G
Section 190 empowers a Magistrate to take cognizance
of an offence in certain circumstances. Sub-section (1)
thereof is material. As regards criminal complaints to
Magistrate, Section 200 of the Code requires a Magistrate
taking cognizance of an offence to examine the H
40 SUPREME COURT REPORTS [2008] 2 S.C.R.

A 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
B 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
c 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
0
accused [para 12-13] [47-C, D, G, H; 48-A-C]
2.3 Chapter XVI (Commencement of proceedings
before Magistrates) will apply only after cognizance of an
offence has been taken by a Magistrate under Chapter
E XIV. Section 204 is the section whereunder process can
be issued. [para 14] [48-D]
2.4 From the scheme of the Code, it is clear that
'Initiation of Proceedings', dealt with in Chapter XIV is
different from 'Commencement of Proceedings' covered
F by Chapter XVI, For commencement of proceedings, there
must be initiation of proceedings. Thus, initiation of
proceedings must precede commencement of
proceedings. Without initiation of proceedings under
Chapter XIV, there cannot be commencement of
G proceedings before a Magistrate under Chapter XVI.
[para 15] [49-C-D] ~-

3.1 In the instant case, it is amply clear that
cognizance of the offence was taken by the Chief
Metropolitan Magistrate, on May 24, 2002, i.e., the day on
H
+- S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 41
M/S. VIDEOCON INTERNATIONAL LTD. & ORS.
>.
which the complaint was filed; the Magistrate, after A
hearing the counsel for the department, observed
"cognizance is taken" and directed issue of summons.
The cognizance of the offence had thus been taken by
the Chief Metropolitan Magistrate on May 24, 2002, well
within the period prescribed by sub-section (3) of Section B
49 of FEMA i.e. within two years of coming into force of
the Act from June 1, 2000. [para 29] [56-G-H; 57-A]
3.2 Undoubtedly, the process was issued on
February 3, 2003. However, it was in pursuance of the
cognizance taken by the Court on May 24, 2002 that a c
subsequent action was taken under Section 204 under
Chapter XVI of the Code. 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 D
3, 2003 by the Court was in pursuance of and consequent
to taking cognizance of the offence on May 24, 2002.
[para 26] [55-B-D]
Bharat Damodar Kale & Anr. v. State of A.P, (2003) 8
SCC 559; and Japani Sahoo v. Chandra Sekhar Mohanty, E
(2007) 7 sec 394 - referred to.
4. As regards quashing of proceedings on merits, the
. High Court has not at all touched the merits of the case.
The High Court dealt with only one point as to whether F
T 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 the High
Court was not right in quashing the proceedings on the
ground of limitation, the order is set aside and the matter
G
is remitted to the Chief Metropolitan Magistrate, for
).- decision in accordance with law. However, 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. [para 30] [57-B-D]
H
-+---
\_
42 SUPREME COURT REPORTS [2008] 2 S.C.R.

)..
A CRIMINALAPPELLATE JURISDICTION: Criminal Appeal
No. 175 of 2008.
From the Judgment and final Order dated 26.4.2006 of
the High Court of Judicature at Bombay in Crl. W.P. No. 476/ •·
;

2005
B
B. Dutta, A.S.G., A.K. Srivastava, Naveen Prakash, Vikas
Sharma and B. Krishna Prasad for the Appellant. t I

R.F. Nariman, Sr. Adv., Subrat Birla, S.C. Birla, Shivaji M. '-
.~

Jadhav, Rahul Joshi, Chinmoy Khaladkar and Ravindra
c Keshavrao Adsure for the Respondents.
The Judgment of the Court was delivered by
C.K. THAKKER, J. 1. Leave granted.

D 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
E 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
F 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
G business at Mumbai and Aurangabad in the State of 'r
Maharashtra. On October 13, 1989, the Comp~ny entered into -{ ~r

">,
an agreement with Radio Export (Moscow) for the supply of
colour tubes, electrolytic capacitors, transformers, etc., for I
Rs.44,04,00,000/-. The payment was made by respondent No.1
H Company to Japanese and Korean suppliers. But before any
+·
S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 43
M/S. VIDEOCON INT. LTD. & ORS. [THAKKER, J.]

payment could be received by respondent No.1 from the USSR A
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 B
to supply television sets to Radio Export, Moscow. Based on
Y 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 c
of the Company. Indian Bank supplied necessary information
and 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 D
from Korea and Jap<:tn 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 'FERA'), Raj Kumar Dhoot,
Director of the Company appeared before the Department on
April 25, 1999 and made a statement that there was an E
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 F
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 Mis 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 G
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
H
44 SUPREME COURT REPORTS [2008] 2 S.C.R.
--t-
A Management Act, 1999 (hereinafter referred to as 'FEMA').
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 I
B Rs.44,04,00,000/- through State Bank of India,. Bombay but it j:-

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
c 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
D 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 I·
E (hereinafter referred to as 'the .Code') 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,
liable to be quashed. The High Court, by the impugned order
F dated April 26, 2006, quashed the proceedings initiated against ~
the respondents on the ground that cogniz_ance 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
G 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. T~e Registry was directed to place the
H
--+-· S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 45
M/S. VIDEOCON INT. LTD. & ORS. [THAKKER, J.]

matter for final hearing on a non-miscellaneous day and that is A
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 B
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, cognizanpe c
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
D
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
--1 in quashing the proceedings on the ground that cognizance was
taken by the Court C?n February 3, 2003 when process was issued
by the Chief Metropolitan Magistrate, Mumbai. It was E
alternatively submitted by the learned counsel that the relevant
date for counting the period of limitation is not the date of.taking
l 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 F
)' 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 ord~r passed by the
High Court, thus, deserves to be set aside by directing the Chief
Metropolitan Magistrate, Mumbai to proceed with the case and G
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
H
46 SUPREME COURT REPORTS [2008] 2 S.C.R.

A proceedings. Admittedly, process was issued in February, 2003
while ·under Section 49(3)
. .of FEMA, ·proceedings
. . . under 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
B offence unde·r 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 "
c 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
D
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
E 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 .
F 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 'cognizance' has not been defined in
G the Code. But the word (cognizance) is of indefinite import. It
has no esoteric or mystic significance in criminal law. It merely
means-'become aware of' and when used with reference to a ~
Court or a Judge, it connotes 'to take notice of-judicially'. It
'f
indicates the point when a Court or a Magistrate takes judicial
H notice of an offence with a view to initiating proceedings in
·-
.:...

S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 47
MIS. VIDEOCON INT. LTD. & ORS. [THAKKER,· J.]
respect of such offence sai~ to have .been committed by A
someone. 'Taking cognizance' 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 B
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 c
taken cognizance. Chapter XIV (Sections 190-199) of the Code
deals with 'Conditions requisite for initiation of proceedings'.
Section 190 empowers a Magistrate to take cognizance of an
offence in certain circumstances. Sub-section (1) thereof is
material and may be quoted in extenso.
D
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-
(a) upon receiving a complaint of facts which constitute E
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 F
offence has been committed.
13. Chapter XV (Sections 200-203) relates to 'Complaints
to Magistrates' and covers cases before actual commencement
of proceedings in a Court or before a Magistrate. Section 200 G
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 ~ither to inquire into H
48 SUPREME COURT REPORTS [2008] 2 S:C.R.

A 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
8 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
c 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
.D under Chapter XIV. Section 204, whereunder process can be
issued, is another material provision which reads as under:
204.lssue 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 -
E
(a) a summons-case, he shall issue his summ.ons for the
attendance of the accused, or
(b) a warrant-case, he may issue a warrant, or, if he thinks
fit 1 a summons, for causing the accused to be·brought or
F 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
G
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
H
S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 49
M/S. VIDEOCON INT. LTD. & ORS. [THAKKER, J.]

complaint. A

(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. 8

(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 'Initiation of Proceedings', dealt with in Chapter C
XIV, is different from 'Commencement of Proceedings' 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 D
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 E
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 F
scope of the phrase 'taking cognizance' 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:

"What is 'taking cognizance' has not been defined in the G
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),
H
50 SUPREME COURT REPORTS [2008].2 S . C.R.
-4.
~

A Criminal P. C., he must not only have applied his.mind to
the contents nf 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
B 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
'T
of some other kind, e.g., ordering investigation under
Section 156(3), or issuing a search warrant for the purpose
c of the investigation, he cannot be said to have taken
cognizance of the offence".
18. R.R. Chari v. State of Uttar Pradesh, 1951 SCR 312
was probably the first lea.Ping decision of this Court on the point.
There, the police, having suspected the appellant-accused to
D be guilty of offences punishable under Sections 161and165 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 Qctober
E 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
F 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 'cognizance of offence' under sub-section (1) of
G
Section 190 of the Code can be taken by a Magistrate and
referring to Abani Kumar Banerjee, the Court, speaking through -4
Kania,· C.J. stated:
"It is clear from the wording of the section that the initiation
H of the proceedings against a person commences on the
S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 51
MIS. VIDEOCON. INT. LTD. & ORS. [THAKKER, J.]
)>..
cognizanc~ o.f the offenGe by the Magistrate under one of A
the t~r_ee continQencies men~lone,d in th~ section. The ,first
contingency_ evidently .is in resp~ct of. non-cognizable
offences as define.a -ir.i the. Criminal Procedure Code on
th~ qomplaint o.f an aggrieved person. The second is on
a police report, which evidently is the case of a cognizable B
offence when the police have completed 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 c
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
D
and obtain an order of remand to police custody for the
purpose offurther 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 E
investigation by the police the suspected person is liable
to be arrested by the police without an order by the
Magistrate".
19. Approving the observations of Das Gupta, J. in Abani F
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 'cognizance' of the
offence. Since before that day, sanction had been granted by
the Government, the proceedings could not be said to have been
G
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 H
- ""
A
52 SUPREME COURT REPORTS [2008] 2 S.C.R.

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
B 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 a/so Ajit Kumar Pa/it v. State of WB. & Anr.,
(1963) Supp (1) SCR 953; Hareram Satpathy v. Tikaram
c 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:
"We cannot read the provisions of Section 190 to mean
that once a complaint is filed, a Magistrate is bound to
D
take cognizance if the facts stated in the complaint disclose
the commission of any offence. We are unable to construe
the word 'may' in Section 190 to mean 'must'. The reason
~
is obvious. A complaint disclosing cognizable offences
may well justify a Magistrate in sending the complaint under
E 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, I

there may be occasions when the Magistrate may
F 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".
22. In Nirma/jit Singh Hoon v. State of West Bengal &
G
Anr., (1973) 3 SCC 753, the Court stated that it is well settled
that before a Magistrate can be said to have taken cognizance -4
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
H
+-
I

S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 53
M/S. VIDEOCON INT. LTD. & ORS. [THAKKER, J.]

of proceeding under Section 200 and the provisions following A
that s~ction. 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.
B
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 c
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 D
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:
E
"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 F
1 be equated with must.take cognizance". The word "may"
gives a discretion to the Magistrate in the matter. If on a
-l
' 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
G
156(3) will be conducive to justice and save the valuable
1- 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.
H
- ·-t- -
54 SUPREME COURT REPORTS [2008] 2 S.C.R.

A 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
riot been defined in the Code. But from the scheme of the
Code, the content and marginal heading of Section 190
B 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)
c 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
D
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
E Chapter XV, he has in the judicial exercise of his discretion,
taken action of some other kind, such as iss~ing 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". [see
F also M.L. Sethi v. R.P. Kapur & Anr., (1967) 1 SCR 520).
25. In the cas.e 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
G was filed, the Magistrate, after hearing the counsel for the
department. took cognizance of the offence and passed the ~ \
following order:
"Mr. S.A.A. Naqvi, counsel for the department is present.
Complainant is public servant. Cognizance is taken.
H Issue summons to accused under Section 18(2)(3) of
+-· S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 55
M/S. VIDEOCON INT. LTD. & ORS. [THAKKER, J.]

FERA, 73 read with Central Notification and rlw Section A
68(1) of the said Act and rlw 56 (1)(i) and rlw Section
49(3) (4) of FEMA, 1999.
Summons returnable on 7.2.2003 at 3 p.m." (emphasis
supplied)
B
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 c
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
0
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 E
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 F
~ recent decision of this Court in JapafJi 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:
"52. The matter can be looked at from different angle also. G
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. H
56 SUPREME COURT REPORTS [2008] 2 S.C.R.
-+-
.;.
A 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
B 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 Court
c 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 'litera legis'.
Connecting the provision of limitation in Section 468 of
the Code with issuing of process or taking of cognizance
D
by the Court may make it unsustainable and ultra vires
Article 14 of the Constitution".
28. The learned counsel for the respondent, on the other ~

hand, tried to distinguish Bharat Damodar Kale and Japani
E 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 "Except as provided elsewhere in this Code ... ".
F Section 49(3) of FEMA, on the other hand, starts with a non-
.I

obstante clause ("Notwithstanding anything contained in any ...,
other law for the time being in force"). It was, therefore, submitted
that the ratio laid down in the above two cases would not be
applicable to the instant case. r
G 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
H 24, 2002, well within the period prescribed by sub-section (3)
\_
f
. -+-·
S.K. SINHA, CHIEF ENFORCEMENT OFFICER v. 57
M/S. VIDEOCON INT. LTD. & ORS. [THAKKER, J.]

of Section 49 of FEMA within two years of coming into force of A
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
B
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 c
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 D
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 law.
31. For the foregoing reasons, the appeal is allowed. The E
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 F
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. G
).
32. Ordered accordingly.

R.P. Appeal allowed.

H