Statutory immunity for gifted Foreign Exchange Bonds applies only within Section 6 conditions, not beyond them.

Statutory immunity for gifted Foreign Exchange Bonds under Section 6(1)(a) of the 1991 Act applies only to the specific class of transfers covered by the provision, namely gifts from a non-resident Indian or overseas corporate body to a resident Indian, and only where the statutory conditions are satisfied. The protection is confined to disclosure limits expressly stated in the Act and does not extend to gifts outside that framework. The earlier view that no inquiry could ever be made into bonds received as gifts required clarification, because immunity is not blanket and cannot be enlarged beyond the statute. Inquiry remains permissible where the gift or recipient does not meet the prescribed conditions.

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Issues: (i) Whether the immunity under Section 6(1)(a) of the Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991 extends to gifts of Foreign Exchange Bonds only when the statutory requirements are satisfied; (ii) Whether the earlier view that no investigation can be made regarding bonds received as gifts required to be read down.

Issue (i): Whether the immunity under Section 6(1)(a) of the Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991 extends to gifts of Foreign Exchange Bonds only when the statutory requirements are satisfied.

Analysis: The immunity is confined to the class of persons and transactions specifically mentioned in Section 6(1)(a), namely a non-resident Indian or overseas corporate body owning the bonds and a resident Indian to whom such bonds are gifted by such non-resident Indian or overseas corporate body. The protection operates only against disclosure of the nature and source of the investment in the bonds, and the allied protections in clauses (b) and (c) also operate only within the same statutory framework. Where the gift does not satisfy the conditions stated in Section 6(1)(a), the statutory immunity is not attracted.

Conclusion: The immunity is available only when the conditions in Section 6(1)(a) are met and is unavailable where the alleged gift does not fall within that provision.

Issue (ii): Whether the earlier view that no investigation can be made regarding bonds received as gifts required to be read down.

Analysis: The earlier view could not be accepted in absolute terms because it overlooked that the immunity is not blanket in nature. The protection is limited to the extent expressly conferred by Section 6 and cannot be extended to cases where the gift or the recipient does not satisfy the statutory conditions. The prior decision therefore required clarification so that the immunity operates only within the legislative bounds.

Conclusion: Yes. The earlier view was required to be read down so that immunity exists only on compliance with Section 6.

Final Conclusion: The reference was answered by confining the immunity under the 1991 Act to the statutory conditions alone, thereby allowing inquiry where those conditions are not fulfilled, and the matters were left to be dealt with by the regular Bench in accordance with that ruling.

Ratio Decidendi: A statutory immunity must be strictly confined to the persons, transactions, and extent expressly provided by the enactment, and cannot be enlarged to cover cases outside the statutory conditions.

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