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2025 Supreme(Cal) 248

IN THE HIGH COURT OF CALCUTTA
SUGATO MAJUMDAR, J.
Jagannath Marothia And Ors. - Appellant
Vs.
Norman William Wilson And Ors. - Respondent
CS/576/1990 IA NO: GA/1/1995(Old No:GA/1899/1995), GA/4/1996(Old No:GA/69/1996), GA/6/1996(Old No:GA/969/1996), GA/10/2003(Old No:GA/297/2003), GA/16/2011(Old No:GA/2431/2011), GA/23/2024
Decided On : 22-07-2025

Advocates:
Advocate Appeared:
For the Appellant : Mr. Rupak Ghosh, Adv. Mr. Varun Kothari, Adv. Mr. Nikunj Berlia, Adv. Ms. Urvashi Jain, Adv. Ms. Srija Chakraborty, Adv.
For the Respondent: Mr. Shyamal Sarkar, Sr. Adv. Mr. Sudip Deb, Sr. Adv. Mr. Vivek Basu, Adv. Mr. Pramod Kr. Bagaria, Adv. S.H. Saraf, Adv.

An agreement for sale under FERA does not constitute a transfer of property, thus not requiring prior RBI permission for enforcement, allowing the civil suit to proceed.

Headnote:(A) Foreign Exchange Regulation Act, 1973 - Section 31 - Code of Civil Procedure - Order VII Rule 11 - Preliminary issue of maintainability of suit regarding specific performance of agreement - Suit not barred under FERA as agreement does not constitute transfer of property; permission required only for execution of conveyance - Jurisdiction of civil courts upheld. (Paras 6 to 27)

(B) Agreement for Sale - Interpretation - Agreement does not result in immediate transfer of interest; therefore, Section 31 does not apply - Requirement for RBI permission addressed in the context of enforcement. (Paras 7, 19, and 27)

Facts of the case:
The suit was initiated by the deceased father of the Plaintiffs against the original Defendant for specific performance of an agreement for sale pertaining to property located at 6, Chowringhee Lane, Kolkata, which was contested on grounds related to FERA provisions.

Findings of Court:
The agreement for sale is not in contravention of FERA and does not bar jurisdiction for enforcement in civil court.

Issues: The primary issue was whether the suit was maintainable under Section 31 of the FERA, given the nature of the agreement for sale.

Ratio Decidendi: The court held that the agreement for sale did not amount to the transfer of property, thus not requiring RBI’s permission before execution, and thereby upholding the maintainability of the civil suit.

Result: Suit is not barred under Section 31 of FERA; preliminary issue decided in favor of the Plaintiff.

Table of Content
1. judgment on preliminary issue of maintainability. (Para 1 , 2)
2. plaint case regarding specific performance. (Para 3 , 4)
3. preliminary issues framed for adjudication. (Para 5 , 6)
4. arguments by plaintiff regarding fera compliance. (Para 7 , 8 , 9 , 10 , 11)
5. counterarguments by defendant regarding fera provisions. (Para 12 , 13 , 14 , 15)
6. purpose of fera and implications of agreements. (Para 17 , 18)
7. clarification on the legality of agreements under fera. (Para 19 , 20 , 21 , 22)
8. civility of suits under fera not barred. (Para 23 , 24 , 25)
9. court's opinion on suit maintainability regarding fera. (Para 26 , 27)
10. decision on preliminary issue and next steps. (Para 28 , 29 , 30)

JUDGMENT :

Sugato Majumdar, J.:

CS 576 of 1990 is taken up for passing judgment on a preliminary point as to whether the suit is barred by Section 31 of the FERA, 1973.

2. During pendency of the suit, an application was filed under Order VII Rule 11 of the Code of Civil Procedure by the Defendant, praying for rejection of the plaint. A Co-ordinate Bench, in terms of the Order dated 4th May, 2021 rejected the application itself. An appeal was preferred against the said order. The Division Bench in APOT 159 of 2021 in terms of Order dated 17th November, 2021 directed that the issue of maintainability of the suit shall be decided as a preliminary point. Accordingly, the suit is taken up for passing the judgment on preliminary issue. On 4th January, 2023, Co-Ordinate Bench framed preliminary issue and proceeded with witness action. Thereafter, the suit was taken up for hearing argument on preliminary issue,

3. The sum and substance of the plaint case is that the original Plaintiff being the deceased father of the Plaintiff nos. 1 to 3 instituted the instant suit against the original Defendant, praying for decree of specific performance of the agreement for sale dated 22nd January, 1989 in respect of premises no. 6, Chowringhee Lane, Kolkata-700016 along with other prayers. The prayers made in the plaint are decree for specific performance of the agreement; decree directing the Defendants their servants, agents and representatives and assigns to execute and register in due form of law in favour of the substituted Plaintiffs of their nominee or nominees, deed or deeds of conveyance in respect of the premises no. 6, Chowringhee Lane, Kolkata- 700016, in default, deed of conveyance may be executed by the Learned Registrar, Original Side of this Court; decree for Rs.5,00,000/-; in case, decree for specific performance of the agreement dated 2nd January, 1989 is granted, a decree for a sum of Rs.6,35,000/-, along with other prayers.

4. Originally Mrs. Helen Wilson was absolute owner seized and possessed of and/or otherwise well and sufficiently entitled to all the six storied brick built building along with annexures outhouses and others, located at 6, Chowringhee Lane, Kolkata-700016 which is the suit premises. The said Mrs. Helen Wilson executed an agreement for sale on 2nd January, 1989 with one Ratan Marothia being the original Plaintiff for sale of the suit premises. The original Plaintiff, since deceased, paid to the original Defendant Mrs. Helen Wilson, since deceased a sum of Rs.1,00,000/- as an earnest money. The said Mrs. Helen Wilson was a foreigner. Subsequently in terms of a letter dated 14th February, 1990 the original Defendant intimated the original Plaintiff that she was not interested to sell the premises and cancelled the agreement. This is the genesis of the instant suit.

5. The original Defendant contested the suit by filing written statement. On death of the original Defendant substitutions were made. Written statement was also amended as the plaint was amended. The contention of the entire written statement need not be taken into consideration at this stage. Since, the present adjudication is confined to preliminary issue of maintainability of the suit, it is enough to notice that in Para 14 (c) of the written stateme

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