SC stays proceedings in Standard Chartered 1992 Fera violation case

The Supreme Court has stayed criminal proceedings against Standard Chartered Bank by the Enforcement Directorate on a complaint alleging Fera violations committed by the foreign bank in a 1992 transaction.

The case filed before a Mumbai trial court has been revived after a gap of 10 years from filing of the complaint in 2002, the bank said. A bench headed by justice HL Dattu stayed proceedings in the case before the chief metropolitan magistrate, Bombay, and sought replies from ED and the Maharashtra government.

The bank argued that some of the complaints related to transactions were carried out in 1992. The complaint, which was instituted in 2002, after ten years of the alleged repealed Foreign Exchange Regulations Act 1973 (now Foreign Exchange Management Act, 1999) violations committed by the bank, was not supported by any document, the chargesheet is yet to be framed and even after the lapse of 10 years of the filing of the complaint, the matter has not progressed, the petition stated.

Challenging the Bombay High Court judgment that rejected the bank's plea seeking quashing of the complaints against Standard Chartered Bank, Mumbai and Manchester branches, senior counsel Mukul Rohtagi argued that there was inordinate delay in filing of the complaint.

He argued that a delay of 10 years in investigation and a further delay of another 10 years in the commencement of the trial are violation of the fundamental right.

It further added that under the Banking Companies (Period of Preservation of Record) Rules, 1985, a bank is required to preserve records for a period of eight years. Since a complaint had been instituted after a period of 10 years, Standard Chartered Bank may not have any record for the accounts in respect of which the complaint had been instituted, the MNC bank stated.

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