Residence outside India depends on intention and circumstances; a stay abroad for care of a parent did not create NRI status.

A temporary foreign stay does not, by itself, make an Indian citizen a person resident outside India; the statutory test under section 2(p) depends on the purpose of travel and surrounding circumstances showing an intention to remain abroad for an uncertain period, and a stay of about seven and a half months to care for an ailing mother did not meet that standard. The Delhi HC also held that a notification under section 14 of the Foreign Exchange Regulation Act, 1973 could validly prescribe continuous stay abroad of at least one year as a condition for retaining foreign exchange held outside India, because it imposed an entitlement condition without altering the statutory definition of residence; the challenge to the notification therefore failed.

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Issues: (i) Whether a citizen of India who went abroad to look after his ailing mother for less than one year could be treated as a person resident outside India and thus claim the status of NRI for retaining foreign assets inherited abroad; (ii) whether the notification issued under section 14 of the Foreign Exchange Regulation Act, 1973, prescribing continuous stay abroad of not less than one year as a condition for retaining foreign exchange held outside India was illegal or beyond the power conferred by the statute.

Issue (i): Whether a citizen of India who went abroad to look after his ailing mother for less than one year could be treated as a person resident outside India and thus claim the status of NRI for retaining foreign assets inherited abroad.

Analysis: The expression "person resident in India" in section 2(p) excludes a citizen who has gone out of India for employment, business or any other purpose in circumstances indicating an intention to stay outside India for an uncertain period. The Court held that mere uncertainty about the duration of a foreign stay does not by itself establish an intention to stay abroad for an uncertain period. The surrounding circumstances, including the purpose of travel and the actual short duration of stay, must be considered. On the facts, the appellant had gone to U.K. only to look after his mother and returned after about seven and a half months. That did not satisfy the statutory concept of residence outside India.

Conclusion: The appellant was not entitled to be treated as a person resident outside India or as an NRI for the claimed purpose.

Issue (ii): Whether the notification issued under section 14 of the Foreign Exchange Regulation Act, 1973, prescribing continuous stay abroad of not less than one year as a condition for retaining foreign exchange held outside India was illegal or beyond the power conferred by the statute.

Analysis: Section 14 empowered the Central Government to require persons in or resident in India to sell foreign exchange by notification. The Court held that the impugned notification did not amend the statutory definition in section 2(p) or legislate anew. It merely prescribed a condition for entitlement to retain foreign exchange held abroad. The notification was therefore within the scope of the statutory power and did not enlarge or alter the definition of residence under the Act. The cited Karnataka decision was distinguished on facts and on the different statutory issue considered there.

Conclusion: The notification was valid and the challenge to it failed.

Final Conclusion: The statutory scheme was applied against the appellant, and the claim to retain foreign assets without satisfying the prescribed condition failed, leaving no ground to interfere with the dismissal of the writ petition.

Ratio Decidendi: A temporary or uncertain duration of foreign travel does not, by itself, establish an intention to stay outside India for an uncertain period; and a notification issued under section 14 may prescribe conditions for retention of foreign exchange without amending the statutory definition of residence.

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