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TMI Blog2004 (11) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... 52 and his wife Mrs. Geraldine died on 6-1-1981. Thus, due to their death, the children of Charles Bernard and Mrs. Geraldine and their descendants jointly became entitled to their share in the 3/4th portion of the property to which their parents were entitled during their life time. However, regarding the 1/4th share, the plaintiff was joint owner along with her daughter Pauline and also in equal right to her brothers and sisters for remaining 3/4th share in the house. Accordingly, the plaintiff claimed her 11/36th share in the suit property. 5. Plaintiff s brother Eric Reinboth died on 23-11-1997 in U.K. The defendant No. 1/appellant is his widow. Defendant Nos. 2 and 3 are daughters of defendant No. 1 and Eric. In the month of December, 1997 plaintiff came from Sweden to Jabalpur and stayed till 12-1-1998 in one portion of the suit house. The defendant No. 1 was threatening the plaintiff to evict her, which compelled the plaintiff to file a suit against the defendant No. 1 in the Court of IV Civil Judge Class I, Jabalpur, which was registered as Civil Suit No. 29-A/98. In the said suit, the defendant No. 1 in her written statement set up a title in favour of herself, claimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arguments of learned Senior Counsel appearing for the appellant is that section 31 of the FERA restricts holding of immovable property by a person who is not citizen of India. The plaintiff Mrs. J. Clairs being not citizen of India, she could not hold any immovable property, since no permission was ever obtained by her from the Reserve Bank of India. For ready reference section 31 is reproduced hereunder: "31. Restriction on acquisition, holding etc., of immovable property in India. (1) No person who is not a citizen of India and no company (other than a banking company) which is not incorporated under any law in force in India shall, except with the previous general or special permission of the Reserve Bank, acquire, or hold or transfer or dispose of by sale, mortgage, lease, gift settlement or otherwise any immovable property situate in India : Provided that nothing in this sub-section shall apply to the acquisition or transfer of any such immovable property by way of lease for a period not exceeding five years. (2) Any person or company referred to in sub-section (1) and requiring a special permission under that sub-section for acquiring, or holding, or transferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of FERA would be attracted and repeal of it would not affect the decision of this case. 13. In order to appreciate the rival contentions it would be appropriate to quote Preamble of the FERA: "An Act to consolidate and amend the law regulating certain payment, dealings in foreign exchange and securities, transactions indirectly affecting foreign exchange and import and export of currency for the conservation of the foreign exchange resources of the country and the proper utilization thereof in the interests of the economic development of the country." 14. Section 50 of the FERA deals with penalty which reads as under: "50. Penalty. If any person contravenes any of the provisions of this Act [other than section 13, clause ( a ) or sub-section (1) of section 18, section 18A and clause ( a ) of sub-section (1) of section 19] or of any rule, direction or order made thereunder, he shall be liable to such penalty not exceeding five times the amount or value involved in any such contravention or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement or any other officer of Enforcement not below the rank of an Assistant Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be taken to be prohibited, and no action can be maintained by the offending party on a contract which is made in contravention of the statute. If the statute, having regard to its object, purpose and scope is found to be directory, penalty may be incurred for non-compliance but the act or thing done is regarded as good." 15. In case of Smt. Janki Bai Chunilal ( supra ) this Court while dealing with provisions of C.P. Berar Money Lenders Act, 1934 has held as under: "8. In view of the authorities noticed in the last two paragraphs, the position is well-settled. When an enactment merely imposes a penalty, without declaring a contract made in contravention of it to be illegal or void, the imposition of the penalty, by itself and without more, does not necessarily imply a prohibition of the contract. In such cases, the question always is whether the Legislature intended to prohibit the contract. This must be decided upon a construction of the statute. If the object of the enactment, or one of its objects, in imposing the penalty is to protect the general public or any class thereof, it will be construed, in the absence of any other indication of contrary intention expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in preliminary objection No. 4 based on section 31 of the Foreign Exchange Regulation Act. The said provisions do not bar grant of relief of specific performance to the plaintiff and the question of permission of the Reserve Bank of India will arise, if at all, at the stage of execution of the sale deed...." (p. 50) In Piara Singh s case ( supra ) the High Court of Punjab and Haryana considered the effect of acquisition of property by non-citizen without prior permission of Reserve Bank of India and has held as under: "It is true that the section provides that without the previous permission of the Reserve Bank, a person who is not a citizen of India, cannot acquire property, but it does not provide that if someone purchases any property the title therein does not pass to him. What the Act provides is that if a person contravenes section 31 and some other sections, he can be penalized under section 50 and can also be prosecuted under section 56. However, there is no provision in the Act which makes transaction void or says that no title in the property passes to the purchaser in case there is contravention of the provisions of sub-section (1) of section 31. Section 63 con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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