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2026 Supreme(Ker) 477
IN THE HIGH COURT OF KERALA AT ERNAKULAM
BASANT BALAJI, J.
Geetha Vijayanarayanan W/O K.S Vijayanarayanan – Appellant
Versus
The District Registrar (General) District Registrar Office – Respondent
WP(C) NO. 8443 OF 2026
Decided on : 04-03-2026
For the Appellant : SHRI.K.R.PRATHISH SMT.AISWARYA M. SHRI.P.K.SREEVALSAKRISHNAN
For the Respondent: GP SRI. K.M FAISAL
The court established that a foreign national can transfer property to an Indian national without violating FEMA, provided ownership is lawful.
Headnote:Statute Analysis: The case revolves around provisions of the Foreign Exchange Management Act, 1999 (FEMA) and related regulations. Facts of the Case: The petitioner seeks to register a settlement deed transferring a 1/3rd share of property from her foreign citizen son.
Findings of Court:
The court determined that the property can be transferred back to the original Indian owner without a violation of FEMA.
Issues: The court framed the question whether a foreign national without an OCI card can transfer property in India.
Ratio Decidendi: The court held that the transfer does not constitute a commercial transaction and falls within FEMA provisions.
Result: The writ petition stands allowed, directing the 2nd respondent to accept and register the draft settlement deed without insisting on an OCI card.
| Table of Content |
|---|
| 1. facts of property acquisition and intended transfer. (Para 1 , 2) |
| 2. arguments regarding legality of the transfer under fema. (Para 3 , 4) |
| 3. court observations on fema provisions and transfer rights. (Para 6 , 7) |
| 4. ratio regarding identification and registration of settlement deeds. (Para 8 , 9) |
JUDGMENT :
BASANT BALAJI, J.
1. Petitioner and her husband are Indian citizens, and her son Dilip Panikath Vijay is a citizen of United States of America. He does not hold an Overseas Citizen of India (OCI) Card. Petitioner along with her husband has purchased Apartment No. 15 B bearing Door No. 1/457/116 of Thrissur Corporation situated in Re. Sy. Block No. 51, Re. Sy. No. 21/25 of Viyyur Village by virtue of sale deed dated 15.05.2019 bearing No.1303/2019 of Thrissur Sub Registrar Office. Subsequently, the petitioner and her husband transferred their 1/3rd right in the apartment to their son Dilip by virtue of Ext P2 settlement deed dated 05.10.2019 bearing No. 2505/2019 of Thrissur Sub Registrar Office.
2. Petitioner’s son Dilip, who is settled in USA wants to transfer his 1/3rd right in the apartment covered by Ext.P2 to the petitioner as he is not intended to settle here in Kerala. So, he has decided to execute a settlement deed in favour of the Petitioner. Thereafter, Ext P3 draft settlement deed was prepared and presented before the 2nd respondent, which was refused by the 2nd respondent on the ground that the settlor in the said deed is a Foreign Citizen and since the petitioner’s son is not having an OCI card as per the FEMA Act, the property cannot be transferred to her. Aggrieved by the action on the part of 2nd respondent in refusing to register Ext.P3 draft settlement deed, the petitioner approached this Court.
3. According to the counsel for the petitioner, the property has been acquired by the petitioner’s son from her without obtaining any amount and now, the same property is being returned to her by Ext.P3. Hence, there is no violation of FEMA Act or Foreign Exchange Management (Non- debt Instruments) Rules, 2019, and there is no prohibition to transfer. The proposed settlement merely retransfers the very same property to the original owner and does not involve any commercial transaction, sale, or exchange for consideration.
4. The counsel further submits that the property in question, which is the subject matter of Ext P3, was acquired by the petitioner’s son from his mother, who is an Indian national. Now, since the same property is being returned to the petitioner itself by means of a settlement deed, there arises no question of commercial transaction for consideration. Thus, going by the relevant provisions of the FEMA Act, 1999 as well as Rules, 2019, there is no prohibition of transfer as such.
5. Heard the counsels appearing for the petitioner as well as the respondents.
6. A perusal of section 6(5) of the FEMA Act, 1999 would show that "a person resident outside India may hold, own, transfer or invest in Indian currency, security or any immovable property situated in India if such currency, security or property was acquired, held or owned by such person when he was resident in India or inherited from a person who was resident in India." Admittedly, the property in question sought to be transferred was acquired by the petitioner, who is an Indian resident.
7. As per Regulation 4(c) of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 ( FEMA - 2000), a person of Indian origin resident outside India may acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of foreign exchange laws prevalent at the time of execution OR from a person resident in India. In this case, petitioner’s son had validly acquired the 1/3 rd undivided share in the property under Ext P2 deed from his parents, who are Indian citizens. Therefore, the title of the petitione
