FEMA residency test bars property acquisition without RBI permission where employment abroad breaks resident status

A person who stays in India for more than 182 days in the preceding financial year but takes up employment outside India during that year does not qualify as a "person resident in India" under FEMA. As a person resident outside India, prior RBI permission is required to acquire immovable property in India, and acquisition without that permission contravenes the applicable immovable property regulations. The document states that such contravention supports penalty and confiscation under FEMA, and the challenge to the adjudication failed.

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Issues: Whether the appellant qualified as a "person resident in India" under the Foreign Exchange Management Act, 1999 for the relevant preceding financial year, and whether the purchase of immovable property in Goa without RBI permission attracted penalty and confiscation.

Analysis: The relevant test under Section 2(v) is residence in India for more than 182 days in the preceding financial year, but the definition excludes a person who has gone out of India for taking up employment outside India. The appellant had stayed in India for more than 182 days in the preceding financial year, yet the record showed that he took employment in England during March 2003 and thus ceased to satisfy the statutory definition. As a person resident outside India, he required RBI permission for acquisition of immovable property. Regulation 8 of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 prohibited such transfer without permission, and the contravention justified action under Sections 13(1) and 13(2) of the Act.

Conclusion: The appellant was not a person resident in India and the acquisition of property without RBI permission was unlawful. The penalty and confiscation were upheld.

Final Conclusion: The challenge to the adjudication failed, and the impugned orders were sustained.

Ratio Decidendi: A person who, though resident in India for more than 182 days in the preceding financial year, takes up employment outside India during that year does not qualify as a "person resident in India" and cannot acquire immovable property in India without the requisite RBI permission.

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