FERA COMPLIANCE

[hubert fernandes]

brief facts of the case is Mr 'A'(Non Resident) held the subject property (Agrilctural) till his demise , by Mrs B (Wife of Mr 'A', Resident Indian) till her Demise in 1990, Inherited by her children (NRI/PIO) and agreed to be sold to a partnership(All partners Resident of India) firm in India in the year 1993 and sold to partnership firm by a sale agreement in 1995.We note that through a court order 7 persons have been considered to be the sole heirs and successors of late Mr. 'A' and Mrs. :B'. we intend to purchase the subject property from the partnership firm. Kindly advise us whether any FERA clearances where required to be obtained by the partnership firm at the time of purchase in the year 1995. Or whether any other compliance had to be met . Assuming that the partnership firm had not complied with FERA compliancies , can it be regularized now and under what provisions ? if yes than what will be the financial implication and under what section ?

AI Summary

Non-resident Indians sold inherited property without FERA clearance; Supreme Court rules transactions violate Section 31, need regularization. A non-resident individual, Mr. A, owned agricultural property in India, which was inherited by his wife, Mrs. B, and later by their children, who are non-resident Indians or persons of Indian origin. The children sold the property to an Indian partnership firm in 1995. A query was raised about whether FERA clearances were required for this transaction and if non-compliance could be rectified. A response referenced a Supreme Court judgment indicating that property transactions by foreigners in violation of Section 31 of FERA are unenforceable. The discussion sought advice on potential regularization and financial implications.