Point of Law: Civil Law - Civil Suit - Suit for specific performance of an agreement for sale - Section 31 of FERA and no decree of specific performance can therefore be passed in favour of plaintiff. This forms crux of present application for rejection of the plaint and dismissal of suit.

JUDGMENT :

MOUSHUMI BHATTACHARYA, J.

1. This application has been filed by the defendant no. 3 in a suit for specific performance of an agreement dated 2nd January, 1989 for sale of a premises situated at No. 6, Chowringhee Lane, Calcutta-16. This application filed by the defendant no. 3, is for dismissal of the suit and rejection of the plaint under Order VII Rule 11 of The Code of Civil Procedure, 1908 (CPC) on the ground that the suit is barred by law.

2. Mr. Sudip Deb, learned counsel appearing for the defendant no. 3/applicant submits that the mother of the defendant no. 1, Mrs. Helen Wilson, since deceased, was a foreign national and failed to obtain the permission from the Reserve Bank of India under Section 31(1) of The Foreign Exchange Regulation Act, 1973 (FERA), which is a mandatory requirement. Counsel submits that the fact that Mrs. Helen Wilson was a foreign national would appear from a letter dated 14th December, 1989, which has been referred to in the plaint and further that the fact that the Reserve Bank of India has not granted any permission to Mrs. Helen Wilson save and except permitting her to hold the property would also be evident from a letter dated 8th October, 1993 which is part of the application. Counsel relies on Section 31(1) of FERA to submit that transfer of immovable property of a foreign national without prior or general or special permission of the Reserve Bank of India would be unenforceable in law and relies on Asha John Divianathan vs. Vikram Molhotra in Civil Appeal No. 9546 of 2010 in this regard. Counsel relies on Mayawanti vs. Kaushalya Devi, (1990) 3 SCC 1 in support of the proposition that specific performance of a contract can only be in relation to existence of a valid and enforceable contract. It is also submitted that although FERA was subsequently repealed, the said Act was in operation at the relevant point of time and hence required mandatory compliance of Section 31(1) of the Act in the absence of which the agreement would become void under Sections 23 and 24 of the Indian Contract Act, 1872. Counsel also refers to Section 6 of The General Clauses Act, 1897on the effect of repeal to submit that unless a contrary intention appears, repeal of a statute would not affect any right, privilege, obligation or liability accrued or incurred under the repealed statute.

3. Mr. Krishnaraj Thaker, learned counsel appearing for the plaintiff submits that Section 31 of FERA does not require the foreign national to obtain permission at the time of entering into the agreement for sale since the permission contemplated under the said provision is required to be obtained before the transfer or disposal of immovable property by execution of a registered conveyance. Counsel submits that the Foreign Exchange Regulation Act (FERA) stood repealed by the Foreign Exchange Management Act, 1999 (FEMA), Section 49(3) of which provides that no court shall take cognizance of an offence under Section 51 of the repealed Act after the expiry of two years from the date of commencement of the new Act-FEMA. Counsel relies on S.K. Sinha, Chief Enforcement Officer vs. Videocon International Ltd. (2008) 2 SCC 492 for the meaning of the expression to take “cognizance” of. Counsel submits that this application was filed by the defendant no. 3 for an alleged contravention of FERA in September 2020, which is beyond the period stipulated in Section 49(3) of FEMA. It is further submitted that a purported violation of FERA more than 21 years after its repeal cannot be considered by this Court.

4. The second limb of Mr. Thaker’s submissions is that under Section 31(1) of FERA, transfer can only take place by execution of a registered Sale Deed. Counsel relies on Rambhau Namdeo Gajre vs. Narayan Bapuji Dhotra (Dead) through LRs. (2004) 8 SCC 614 for the proposition that an agreement for sale does not create any interest of the proposed vendee in the suit property which can only be conveyed by execution of a registered Sale Deed.