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Andhra Pradesh High Court
Judges : P.A.CHOUDHARY
BEHARILAL MAUDGIL - Appellant
Versus
SECRETARY TO Government Of A.P., HOME DEPARTMENT, HYDERABAD - Respondent
Decided On : 08-29-86
FOREIGN EXCHANGE REGULATION ACT - REGISTRATION OF SOCIETY - PURCHASE OF PROPERTY BY FOREIGNER - VALIDITY - ARTICLES 19 (1) (C), 25 AND 26 OF THE CONSTITUTION - INTERPRETATION AND APPLICABILITY: 1. The registration of a society by a foreigner under the Hyderabad Societies Registration Act is not hit by Article 19 (1) (c) of the Constitution, which guarantees the right to form associations only to Indian citizens. The right to form associations is an ordinary right available to both citizens and foreigners, subject to any restrictions imposed by law. 2. The purchase of immovable property in India by a foreigner is regulated by the provisions of the Foreign Exchange Regulation Act, 1973. A foreigner cannot purchase immovable property in India without the permission of the Reserve Bank of India. 3. The provisions of Articles 25 and 26 of the Constitution, which guarantee freedom of religion and the right to manage religious affairs, do not exempt religious denominations from the operation of the Foreign Exchange Regulation Act. The right to acquire property under Article 26 is subject to the operation of law.
Fact of the Case:
The petitioner, a local businessman of Secunderabad, challenged the sale of a house in Secunderabad by Mrs. Ranji to a society called "God Has Spoken Ministries" (R. 3), which was registered under the Hyderabad Societies Registration Act and formed by one Henry Poetkar (R. 4), a Russian by birth and Canadian by naturalisation. The petitioner alleged that R. 3 was not a validly constituted legal person and that its purchase of Ranji's house was hit by the provisions of the Foreign Exchange Regulation Act.
Finding of the Court:
The court held that the registration of R. 3 by the 5th respondent and the promotion of R. 3 by R. 4 were valid acts and were not hit by Article 19 (1) (c) of the Constitution. The court also held that the purchase of Ranji's property by R. 3 was hit by the provisions of the Foreign Exchange Regulation Act, but declined to declare the sale void as Mrs. Ranji was not made a party to the writ petition.
Issues: 1. Whether the registration of a society by a foreigner under the Hyderabad Societies Registration Act is hit by Article 19 (1) (c) of the Constitution? 2. Whether the purchase of immovable property in India by a foreigner is regulated by the provisions of the Foreign Exchange Regulation Act, 1973? 3. Whether the provisions of Articles 25 and 26 of the Constitution, which guarantee freedom of religion and the right to manage religious affairs, exempt religious denominations from the operation of the Foreign Exchange Regulation Act?
Ratio Decidendi: 1. Article 19 (1) (c) of the Constitution guarantees the right to form associations only to Indian citizens. However, the right to form associations is an ordinary right available to both citizens and foreigners, subject to any restrictions imposed by law. 2. The Foreign Exchange Regulation Act, 1973 regulates the purchase of immovable property in India by foreigners. A foreigner cannot purchase immovable property in India without the permission of the Reserve Bank of India. 3. The provisions of Articles 25 and 26 of the Constitution, which guarantee freedom of religion and the right to manage religious affairs, do not exempt religious denominations from the operation of the Foreign Exchange Regulation Act. The right to acquire property under Article 26 is subject to the operation of law.
Final Decision: The court dismissed the writ petition with costs.
( 1 ) THE petitioner is a local businessman of Secunderabad, He had tenanted a house in Secunderabad belonging to one Mrs. Ranji. The said ranji voluntarily sold her house property to a society called god Has spoken Ministries (R. 3) which is registered under the Hyderabad Societies registration Act. god Has Spoken Ministries has been formed by one henry Poetkar (R. 4) who is a Russian by birth and Canadian by naturalisation and is presently in India on a Canadian passport. Now the petitionertenant seeks through this writ petition to set aside the sale of that house by the said Ranji to the third respondent. It is not the case of the petitioner that his rights as a tenant are, in any way, affected by the sale of the house by Ranji to the third respondent. His objections are wholly legal and his objections to the sale is in no way special to his rights or interests. He alleges that the third respondent is not a validly constituted legal person and its purchase of Ranji s house is hit by the provisions of the Foreign Exchange regulation Act. For that reason he says the sale of Ranji s house should be set aside.
( 2 ) ONE cannot deny that the formation of R. 3 and the purchase of the property by R. 3 are all the acts and deeds of R. 4. Earlier, Mrs. Ranji agreed by means of two agreements dated 11-7-1977 and 12-7-1977 to sell the same property to another legal person called Messrs Mennonite Brothers property Association of India (P) Limited : The said Association also owes its birth to the above mentioned Poetkar, the 4th respondent to this writ petition. On 23rd February, 1978, the third respondent-society was registered as a Society under the Hyderabad Societies Registration Act with respondent no. 4 as its Secretary and his wife as a member and a teacher and a student and one another as the other members. By an agreement dated 30-3-1978 to which the said Ranji, Poetkar, the third respondent and Messrs Mennonite brothers Property Association of India (P) Limited were all parties, it was agreed that the abovesaid property should be sold to the third respondent. Accordingly the property was sold and conveyed to the third respondent on 11-5-1978 and 11-10-1978 and the huge consideration was advanced by R. 4.
( 3 ) SOME time thereafter, the third respondent obtained from the government of Andhra Pradesh an order of exemption taking the above house property out of the purview of the Rent Control Act ; the petitioner as a tenant lost the protection of the Rent Control Act by reason of the said order of exemption made in G. O. Rt. No. 3627 dated 30-1-1980 of the government of Andhra Pradesh. The petitioner, therefore, challenged its validity in W. P. No. 5583 of 1980. This court, by its order dated 21-4-1982 upheld that challenge and quashed the Government Order of exemption. The petitioner has thus won the first round of his battle with the third and the fourth respondents. But that victory brought no peace. He has now started this second round of litigation. This time the petitioner seeks to set aside altogether the purchase of Mrs: Ranji s property bv the third respondent. This writ petition is for the issuance of such a writ directing the Government of Andhra Pradesh and its officers and the Union Government and the deputy Governor of Reserve Bank of India, to act according to law governing purchase of the immoveable property situate in India by the foreigners by holding the action of the 5th respondent, the Registrar of Societies, Andhra pradesh, registering the third respondent-Society as unconstitutional and void, and also to declare the sale deed Nos. 1329 of 1978 dated 11-5-1978 and 2540 of 1978 dated 11-10-1978 registered in favour of the third respondent as illegal and void. To this legal battle he made Mrs. Ranji no party.
( 4 ) THE manifold arguments of the petitioner in support of this writ petition may be summed up thus : his arguments:
( 5 ) THE 4th respondent is a foreigner. The 4th respondent as
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