Transfer of Indian immovable property by person of Indian origin abroad allowed for non-agricultural property sale to resident Indians

A person of Indian origin resident outside India may transfer immovable property in India by sale to a resident Indian where the property is non-agricultural and not farmhouse or plantation property. Under the FEMA property transfer regulations, such a person falls within the defined category of person of Indian origin, and the registration authority may require identity proof but cannot refuse registration merely because the transferor is not an Indian citizen if the regulatory conditions for the transfer are otherwise satisfied. The objection to execution and registration of the sale deed was therefore unsustainable, subject to production of identity proof and payment of proper stamp duty.

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Issues: Whether persons of Indian origin resident outside India were entitled to transfer non-agricultural immovable property in India by sale to a resident Indian and whether the registering authority could refuse registration on the ground that they were not Indian citizens.

Analysis: Regulation 2(c) of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 defines a person of Indian origin to include a person whose father, mother, grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955. On that definition, the petitioners fell within the expression person of Indian origin. Regulation 4(d) permits such a person resident outside India to transfer immovable property in India other than agricultural land, farmhouse or plantation property by way of sale to a person resident in India. The property in question was not agricultural, farmhouse or plantation property, and the proposed transferee was a resident Indian. The Court also noted that the registration authority could insist upon proof of identity, but that requirement did not justify refusal to receive or register the document when the substantive regulatory conditions for transfer were satisfied.

Conclusion: The objection to execution and registration of the sale deed was unsustainable, and the petitioners were entitled to have the deed accepted and registered upon production of identity proof and payment of proper stamp duty.

Ratio Decidendi: A person of Indian origin resident outside India may validly transfer non-agricultural immovable property in India by sale to a resident Indian, and registration cannot be refused on the mere ground of foreign citizenship if the regulatory conditions are otherwise met.

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