Share allotment to non-resident paying for imported second-hand machinery: RBI approval upheld despite alleged FERA breach

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....Whether RBI's permission for allotment of shares to a non-resident against import of second-hand capital goods was legally infirm, including on an alleged FERA violation, was the dominant issue. The court held that the investment involved direct payment by the non-resident for imported machinery, with no foreign-exchange outflow by the company, and was expressly permissible on a non-repatriable basis under the applicable government directive; hence RBI's approval was valid. It further held that FERA had been repealed prior to the approval and, under FEMA, no RBI permission was required for such allotment; the "sunset" contention therefore did not arise. The intra-court appeal was dismissed - HC....