1986 (8) TMI 393 - HC - Companies Law

Foreign national denied injunction for non-compliance with Foreign Exchange Regulation Act

Joaquim Mascarenhas Fiuza Versus Smt. Jaime Rebello

Joaquim Mascarenhas Fiuza Versus Smt. Jaime Rebello - [1989] 66 COMP. CAS. 349 (BOM.) Issues Involved:1. Compliance with Section 31 of the Foreign Exchange Regulation Act, 1973.2. Actual possession of the property by the petitioner.3. Grant of temporary and perpetual injunctions under the Specific Relief Act.Issue-wise Detailed Analysis:1. Compliance with Section 31 of the Foreign Exchange Regulation Act, 1973:The petitioner, a foreign national, challenged the judgment confirming the dismissal of his application for injunction. The respondents argued that the petitioner could not legally hold property in India without permission from the Reserve Bank of India (RBI) as per Section 31 of the Foreign Exchange Regulation Act, 1973 ('the Act'). The lower courts dismissed the injunction on the grounds that the petitioner did not comply with Section 31, specifically sub-section (4), which requires a declaration of holding immovable property within ninety days from the Act's commencement. The petitioner contended that Section 31 does not deprive him of his rights to property held before the Act's commencement and that non-compliance only results in a penalty under Section 50 of the Act, not deprivation of property rights. The court held that Section 31 imposes restrictions on foreigners holding property without RBI's permission or declaration, and non-compliance means the petitioner cannot be deemed to hold property in India.2. Actual Possession of the Property by the Petitioner:The courts below also dismissed the application on the grounds that the petitioner was not in actual possession of the property. The petitioner admitted that since the liberation of Goa, the property was not in his possession but was administered by various authorities, including the Military Government and the Custodian of Evacuee Properties, and finally handed over to the Sociedade dos Gauncares de Cuncolim and Veroda. The court found that the petitioner was not in actual possession and thus not entitled to an injunction.3. Grant of Temporary and Perpetual Injunctions under the Specific Relief Act:The petitioner sought mandatory and perpetual injunctions, claiming co-ownership and possession of the property. The court noted that Section 38 of the Specific Relief Act allows perpetual injunctions to prevent breaches of obligations or invasions of property rights. However, such relief is contingent on the plaintiff being in possession or seeking restoration of possession, which the petitioner did not. Therefore, the courts correctly denied the injunction on this ground as well.Conclusion:The court dismissed the revision application, upholding the lower courts' findings that the petitioner, a foreign national, did not comply with Section 31 of the Foreign Exchange Regulation Act and was not in actual possession of the property. Consequently, the petitioner was not entitled to the injunctions sought. The court also noted that the construction in question was already completed, rendering the revision application infructuous. The application was dismissed with costs.