Whether the mandate of Section 31 of the Foreign Exchange Regulation Act, 1973 is still enforceable? Isn't FERA repealed by FEMA consequently Section 31 of FERA does not exist at present.
T. Kalaiselvan, Advocate (Advocate) 29 May 2021
The latest judgment of supreme court held the referred section 31 of FERA, 1973 valid;'
Sale or gift of property by foreigner without RBI's not illegal: Supreme Court
Any sale or gift of a property by a foreigner without prior permission of the RBI would be illegal, the Supreme Court has ruled.
We hold that the condition predicated in Section 31 of the Foreign Exchange Regulation Act, 1973 of obtaining “previous” general or special permission of the RBI for transfer or disposal of immovable property situated in India by sale or mortgage by .by a person, who is not a citizen of India, is mandatory," a bench presided over by Justice A M Khanwilkar said.
""Until such permission is accorded, in law, the transfer cannot be given effect to; and for contravening with that requirement," the bench, also comprising Justices Indu Malhotra and Ajay Rastogi, added.
However, the court declared that transactions which have already become final including by virtue of the decision of the court of competent jurisdiction, need not be reopened or disturbed in any manner because of this pronouncement.
This direction is being issued in exercise of our plenary power under Article 142 of the Constitution. For, there has been a paradigm shift in the general policy of investment by foreigners in India and more particularly, the 1973 Act itself stands ...