Point of Law: One must assess if District Collector would obtain any right in law to declare “Gift Deed” to be invalid or illegal, even assuming that there was any violation of FERA/FEMA, while it was executed.

JUDGMENT :

DEVAN RAMACHANDRAN, J.

1. The controversy in these cases relates to a property, which is better known as ‘Alathur Estate’ at Wayanad, originally owned by late Edward Joubert Van Ingen, a man of British origin, stated to have been born and domiciled in India.

2. It transpires that late Van Ingen executed a Sale Deed, bearing No. 267/2006, of Mananthavadi SRO (herein after referred to as the ‘Gift Deed’ for short) favouring the petitioner in WP (C) No. 11/2022 - Sri. Micheal Floyid Eshwar and he had transferred the property in his name by completing mutation and Transfer of Registry.

3. However, thereafter, proceedings were initiated by the District Collector, invoking powers under the Kerala Escheat and Forfeiture Act, 1964, (hereinafter referred to as the ‘Escheat Act’ for short). This led to Ext.P11 being issued by the said Authority, finding that, even though late Van Ingen was the valid owner of the property in question, he obtained no competence to execute the “Gift Deed” in favour of Sri. Micheal Floyid Eshwar, without having obtained permission from the competent Authorities under the Foreign Exchange Regulation Act (FERA)/Foreign Exchange Management Act (FEMA).

4. While Sri. Micheal Floyid Eshwar filed an appeal against this order before the Land Revenue Commissioner; another person, namely the petitioner in W.P. (C) No. 27529/2018 - Smt. Matilda Rosamonda Gifford, claiming to be the legal heir of Van Ingen, challenged the order to the extent to which the “Escheat Act” had been applied, asserting that she is his sole legal heir.

5. The Statutory Appeal filed by Sri. Micheal Floyid Eshwar before the Land Revenue Commissioner ended in Ext.P12 order, produced along with W.P. (C) No. 11/2022, in which, the findings of the District Collector had been affirmed; and he, thereupon, filed a further Statutory Appeal, under Section 6 of the “Escheat Act” before the Government, which has now culminated in Ext.P13, order impugned in W.P. (C) No. 11/2022.

6. While so, the adjudicating Authority under the Prevention of Money Laundering Act, 2002 (PMLA Act), appears to have registered an Enforcement Case Information Report (ECIR) and to have issued an order dated 23.10.2020, arraying Sri. Micheal Floyid Eshwar as the defendant, attaching the afore said property under the provisions of the said Act on various imputations and allegations. The Government, very interestingly, has challenged that order, producing it as Ext.P5 in W.P. (C) No. 26249/2022, for the limited purpose of asserting that they are the real owners of the property; and consequently, that the proceedings aforementioned is untenable. They specifically contest the findings in the order, that Sri. Micheal Floyid Eashwar is the owner of the property in question.

7. I have heard Sri. K. Anand, learned Senior Counsel, instructed by Sri. S. Vishnu - appearing for Sri. Micheal Floyid Eashwar; Smt. Sandhya Raju - appearing for Smt. Matilda Rosamonda Gifford and the learned Special Government Pleader - Sri. S. Ranjith appearing for the State of Kerala and its functionaries.

8. Sri. K. Anand - learned Senior Counsel, explained that the modus now adopted by the State, in invoking the “Escheat Act” is by first assuming that late Van Ingen had no legal heirs at all; and then by illegally adjudicating the validity of the “Gift Deed” and finding it to be unsustainable, solely because late Van Ingen had not allegedly obtained clearance under FEMA or FERA - as the case may be, before it had been executed.

9. The learned Senior Counsel vehemently argued that, even assuming that such an allegation is tenable, the District Collector would obtain no right to adjudicate the validity of the “Gift Deed” and that it could have been done only by the competent Authority under the FEMA/FERA, if at all any such was warranted. He then argued that, as is evident from the proceedings of the Adjudicating Authority under the PMLA Act, namely Ext.P5 in W.P. (C) No. 26249/2022 filed by State of Kerala, his