Foreign-exchange restriction does not automatically void property transfer; later regulatory permission may be considered on appeal.

A separate agreement said to cancel or qualify the sale was held unproved because the sale deed showed full payment, the alleged document had inconsistencies, no attesting witness was examined, and expert evidence was not treated as conclusive. On foreign-exchange restrictions, a breach of the prohibition on non-citizens acquiring immovable property was held not to make the purchase void or stop title from passing, since the statute provided penal consequences rather than nullity. Subsequent events, including a Reserve Bank certificate, could be considered in appeal for moulding relief, and the additional evidence was taken on record.

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Issues: (i) Whether the alleged separate agreement cancelling or qualifying the sale was proved; (ii) whether contravention of Section 31(1) of the Foreign Exchange Regulation Act, 1973 rendered the purchase void or prevented title from passing; (iii) whether the subsequent Reserve Bank certificate and additional evidence could be taken into account in appeal.

Issue (i): Whether the alleged separate agreement cancelling or qualifying the sale was proved.

Analysis: The sale deed recorded the consideration as paid in full and did not mention any deferred balance or conditional cancellation. The alleged document bore a date different from the date of execution said to support it, the attesting witness was not examined, and the handwriting expert's opinion was treated with caution because such evidence is not conclusive and the admitted and disputed signatures showed variations. On this material, the alleged agreement was not established.

Conclusion: The alleged separate agreement was not proved and the finding on this question was against the appellant.

Issue (ii): Whether contravention of Section 31(1) of the Foreign Exchange Regulation Act, 1973 rendered the purchase void or prevented title from passing.

Analysis: Section 31(1) prohibited acquisition or holding of immovable property by a non-citizen without prior permission, but the Act provided penal consequences for breach and did not declare the transaction void or provide that title would not pass. The Court also noted that the confiscation provision did not extend to a breach of Section 31(1). Accordingly, the statutory scheme did not support the appellant's contention that the plaintiffs acquired no title or possession rights.

Conclusion: The purchase was not void for breach of Section 31(1), and the challenge based on that provision failed against the appellant.

Issue (iii): Whether the subsequent Reserve Bank certificate and additional evidence could be taken into account in appeal.

Analysis: The appeal court was entitled to consider subsequent events for moulding relief, and the Reserve Bank certificate showed that the plaintiffs were authorised to hold the property. The Court therefore allowed the application for additional evidence and took the certificate on record. The further application became infructuous once the original certificate was already produced.

Conclusion: The additional evidence was rightly taken on record and the subsequent certificate supported the plaintiffs' entitlement.

Final Conclusion: The concurrent findings were upheld, the objections to title and legality of possession were rejected, and the appellant obtained no relief.

Ratio Decidendi: A statutory prohibition against acquisition of immovable property, without an express provision declaring the transaction void or denying transfer of title, does not by itself prevent title from passing or possession from being recovered, and subsequent events may be considered in appeal for moulding relief.

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