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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework of Banks

Mehta Finance Ltd, a non-banking company, is alleged to have committed an offence punishable under the Reserve Bank of India Act, 1934. A private creditor files a police complaint and asks a Magistrate to take cognizance. Under the Act's provision on cognizance of offences, which statement is correct?

Cognizance of an offence under the RBI Act can be taken only on a written complaint by an officer of the Reserve Bank who is authorised generally or specially in writing. A private creditor's complaint or the court's own motion is not enough under section 58E.

  1. AThe court may take cognizance only on a written complaint by an officer of the Bank authorised generally or specially in writingCorrect
  2. BThe court may take cognizance on a complaint by any aggrieved depositor or creditor
  3. CThe court may take cognizance on its own motion without any complaint
  4. DThe court may take cognizance only on a complaint by the State Government

Explanation

Section 58E(1) bars any court from taking cognizance of an offence punishable under the RBI Act except on a written complaint by an officer of the Bank authorised in writing, generally or specially. A private creditor's complaint does not satisfy this. The State Government route exists only for offences under sub-section (5A) of section 58B.

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