Shantanu Kemkar, J.
1. This appeal has been filed by the defendant No. 1 under Section 96 of the Civil Procedure Code against the judgment and decree dated 5-4-2002 passed in Civil Suit No. 13-A/99 by the learned XII Additional District Judge, Jabalpur.
2. On 23-2-1999, the plaintiff filed a civil suit for partition and possession of the suit property- Bungalow No. 2 Cantt. Jabalpur. During the pendency of the suit plaintiff Mrs. J. Clairs died and her legal representatives were brought on record and substituted as plaintiffs.
3. The genealogy of the parties to the suit is given as under:-
Charles, Maria______________________________________________________________|_______________________________________Charles Bernard H.A. Joesph Reinboth (Bachelor)+ Mrs Geraldine (Wife)___)____________________________________________________________________________________|_______________________________________________________________________Charles Eric Iris Aistom Merle Stanley Joan Pauline EuniceGerald (son) (daugher) (son) (daug- (son) Clairs (daug- (daug-(son) (dead) hter) (dead) (daug- hter) hter)hter)______________________|___________________________Mrs. Cheryl Ms. Leonie Brohier Mr. ChristopherBrohier Gosens Brohier
4. As per the plaint averments, Charles and Maria were having two sons Charles Bernard and H.A. Joseph. H.A. Joseph was bachelor and he died leaving behind no legal heirs. Charles Bernard died on 16-4-1952 and his wife Ms. Geraldine died on 6-1- 1981. Thus, due to their death, the children of Charles Bernard and Ms. Geraldine and their descendants jointly became entitled to their share in the 3/4th portion of the property to which their parents were entitled during their life time. However, regarding the l/4th share, the plaintiff was joint owner alongwith her daughter Pauline and also in equal right to her brothers and sister for remaining 3/4th share in the house. Accordingly, the plaintiff claimed her 1 l/36th share in the suit property.
5. Plaintiff's brother Eric Reinboth died on 23-11-1997 in U.K. The defendant No. 1/appellant is his widow. Defendant Nos. 2 and 3 are daughters of defendant No. 1 and Eric. In the month of December, 1997 plaintiff came from Sweden to Jabalpur and stayed till 12-1-1998 in one portion of the suit house. The defendant No. 1 was threatening the plaintiff to evict her, which compelled the plaintiff to file a suit against the defendant No. 1 in the Court of IV Civil Judge Class I, Jabalpur, which was registered as Civil Suit No. 29-A/98. In the said suit, the defendant No. 1 in her written statement set up a title in favour of herself, claiming herself to be the absolute owner of the entire suit property on the plea of surrender and/or adverse possession, therefore, the plaintiff filed the suit registered as Civil Suit No. 13-A/99 for partition and possession of her share.
6. The defendant No. 1 in her written statement contended that plaintiff Mrs. J. Clairs left India some 50 years back, migrated to Europe and abandoned this country for good. It was denied that Mrs. J. Clairs during all these years ever resided at 2, Cant. Jabalpur. The defendant No. 1 further denied that the plaintiffs had any share in the suit property. The main ground which was raised in the written statement was that the plaintiff Mrs. J. Clairs being not citizen of India, therefore, by operation of Section 31 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as 'FERA'), she could not hold any immovable property except with the previous permission of the Reserve Bank of India. Since no such permission was ever obtained from the Reserve Bank of India to hold the property, even if the plaintiffs had any share or interest in the suit property, they became disentitled to 'hold' the same and lost their right by operation of law. The defendant No. 1 also pleaded that subsequent Notification of Reserve Bank of India dated 26-5-1993 issued under Section 31 of FERA being not retrospective in operation does not have the effect of reviving the lost rights and is of not benefit to the plaintiffs. Accordingly the defendant No. 1 prayed for dismissal of the suit with cost.
7. On the basis of the aforesaid pleadings the Trial Court framed the following issues:-
(1) Whether the plaintiff is joint owner in the disputed property, i.e., Bungalow No. 2 Cant. Jabalpur ?
(2) Whether the plaintiff has 1 l/36th share in the disputed property ?
(3) Whether the plaintiff is entitled for partition of the disputed property by meets and bounds ?
(4) Relief and costs ?
8. After recording the evidence led by the parties the Trial Court decreed the suit and held that the plaintiffs are entitled for 1/9th share in the suit property. Against this judgment and decree the defendant No. 1 has filed this appeal.
9. Heard Shri Ravish Agrawal, learned Senior Counsel for the appellant and Shri A.D. Deoras, learned Counsel for the respondents. Perused the record of the Trial Court.
10. The only ground of challenge to the impugned judgment and decree in the arguments of learned Senior Counsel appearing for the appellant is that Section 31 of the FERA restricts holding of immovable property by a person who is not citizen of India. The plaintiff Mrs. J. Clairs being not citizen of India, she could not hold any immovable property, since no permission was ever obtained by her from the Reserve Bank of India. For ready reference Section 31 is reproduced hereunder :-
'31. Restriction on acquisition, holding etc., of immovable property in India.- (1) No person who is not a citizen of India and no company (other than a banking company) which is not incorporated under any law in force in India shall except with the previous general or special permission of the Reserve Bank, acquire, or hold or transfer or dispose of by sale, mortgage, lease, gift settlement or otherwise any immovable property situate in India :
Provided that nothing in this sub-section shall apply to the acquisition or transfer of any such immovable property by way of lease for a period not exceeding five years.
(2) Any person or company referred to in Sub-section (1) and requiring a special permission under that sub-section for acquiring, or holding, or transferring, or disposing of, by sale, mortgage, lease, gift, settlement or otherwise any immovable property situate in India may make an application to the Reserve Bank in such form and containing such particulars as may be specified by the Reserve Bank.
(3) On receipt of an application under Sub-section (2), the Reserve Bank may, after making such inquiry as it deems fit, either grant or refuse to grant the permission applied for : Provided that no permission shall be refused unless the applicant has been given a reasonable opportunity for making a representation in the matter:
Provided further that if before the expiry of a period of ninety days from the date on which the application was received by the Reserve Bank, the Reserve Bank does not communicate to the applicant that the permission applied for has been refused, it shall be presumed that the Reserve Bank has granted such permission.'
On the basis of this provision it has been contended on behalf of the appellant that Foreign nation-ale can not hold any property in India without complying Section 31 of the FERA. In support reliance has been placed on a judgment passed in the case of Joaquim v. Jaime (1986 Mh.LJ 1031).
11. Replying the aforesaid submissions learned Counsel appearing for the respondents submitted that Preamble of the FERA as also the penalty clause Section 50 if read together would make it clear that provisions contained in Section 31 of the FERA are only for protection of revenue. Learned Counsel for the respondents also referred to the book, Principles of Statutory Interpretation 8th Edition by Hon'ble G.P. Singh dealing with the topic 'Internal Aids to Construction'. He has also relied on the judgment passed in the case of Janki Bai v. Ratan Melu : AIR1962MP117 , Ajit Prashad Jain v. N.K. Widhani : AIR1990Delhi42 and Piara Singh v. Jagtar Singh . He has further drawn my attention to the Notification No. GSR 456 (E), dated 26-5-1993 of Reserve Bank of India (Exchange Control Department) published in 1993 MPLT 242 (109).
12. Before dealing with the submissions of the learned Counsel or the parties, I would like to state that the FERA has been repealed by Act No. 42/99, Foreign Exchange Management Act, 1999 (in short 'FEMA') which came into force on 29-12-1999. Counsel appearing for the parties agreed that in the present case the provisions of FERA would be attracted and repeal of it would not affect the decision of this case.
13. In order to appreciate the rival contentions it would be appropriate to quote 'Preamble' of the FERA :
'An Act to consolidate and amend the law regulating certain payment, dealings in foreign exchange and securities, transactions indirectly affecting foreign exchange and import and export of currency for the conservation of the foreign exchange resources of the country and the proper utilization thereof in the interests of the economic development of the country.'
14. Section 50 of the FERA deals with penalty which reads as under:-
'50. Penalty.- If any person contravenes any of the provisions of this Act [other than Section 13, Clause (a) or Sub-section (1) of Section 18, Section 18A and Clause (a) of Sub-section (1) of Section 19] or of any rule, direction or order made thereunder, he shall be liable to such penalty not exceeding five times the amount or value involved in any such contravention or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement or any other officer of Enforcement not below the rank of an Assistant Director of Enforcement specially empowered in this behalf by order of the Central Government (in either case hereinafter referred to as the adjudicating officer).'
On going through the provisions contained in FERA, I find that the aid of Preamble needs to be taken to understand the scope, object and purpose of the FERA, more comprehensively. Hon'ble Shri Justice G.P. Singh in his celebrated book Principles of Statutory Interpretation 8th Edition while dealing with the topic 'Internal Aids to Construction' by Preamble, at page 135 and page 136 has stated, preamble is expected to express the scope, object and purpose of the Act more comprehensively than the long title. In the words of Sir John Nicholl: 'It is to the preamble more specially that we are to look for the reason or spirit of every statute, rehearsing this, as it ordinarily does, the evils sought to be remedied, or the doubts purported to be removed by the statute, and so evidencing, in the best and most satisfactory manner, the object or intention of the Legislature in making or passing the statute itself.
In the case of A.G. v. HRH Prince Ernest Augustus of Hanover, (1957) 1 All ER 49 (HL) the subject has been explained lucidly in by the House of Lords. The decision establishes the following propositions :- the preamble being a part of the statute can be read alongwith other portions of the Act to find out the meaning of words in the enacting provisions as also to decide whether they are clear or ambiguous; the preamble in itself is not an enacting provision and is not of the same weight as an aid to construction of a section of the Act as are other relevant enacting words to be found elsewhere in the Act; the utility of preamble disminishes on a conclusion as to clarity of enacting provisions.
In order to appreciate effect of penalty clause Section 50 of the FERA it would be appropriate to refer what has been further stated while dealing with the topic 'when consequences provided by statute' by Hon'ble Shri Justice G.P. Singh in his book (supra) at Page 320 'Where the object of the Legislature in imposing the penalty is merely the protection of the revenue, the statute will not be construed as prohibiting the act in respect of which the penalty is imposed; but where the penalty is imposed with the object of protecting the public though it may also be for protection of the revenue, the act must be taken to be prohibited, and no action can be maintained by the offending party on a contract which is made in contravention of the statute. If the statute, having regard to its object, purpose and scope is found to be directory, penalty may be incurred for non-compliance but the act or thing done is regarded as good.'
15. In case of Janki Bai v. Ratan Melu (supra) this Court while dealing with provisions of C.P. & Berar Money Lenders Act, 1934 has held as under:-
'8. In view of the authorities noticed in the last two paragraphs, the position is well settled. When an enactment merely imposes a penalty, without declaring a contract made in contravention of it to be illegal or void, the imposition of the penalty, by itself and without more, does not necessarily imply a prohibition of the contract. In such cases, the question always is whether the Legislature intended to prohibit the contract. This must be decided upon a construction of the statute. If the object of the enactment, or one of its objects, in imposing the penalty is to protect the general public or any class thereof, it will be construed, in the absence of any other indication of contrary intention expressed in the statute, as implying a prohibition of the contract. On the other hand, if the object of imposing the penalty is merely the protection of the revenue, the contract will not be regarded as prohibited by implication. Although these principles are not in doubt, difficulties sometimes arise in applying them to particular cases.
10. This brings me to the main question which is whether Section 11F of the Act providing for compulsory registration of moneylenders with a penalty for its infraction was enacted with the object of protecting the general public or any class thereof. Preambles, which are integral parts of statutes, have often been regarded as important guides to construction. If an enactment is not clear, resort may be had to the preamble to explain it.......'
In Ajit Prashad Jain v. N.K. Widhani (supra), the Delhi High Court has held as under :-
'The contention of defendants is that defendant No. 2 is not a citizen of India and as such he could not transfer or dispose of by sale, settlement or otherwise any immoveable property situate in India without prior permission of the Reserve Bank of India and as such the agreement to sell is void. In support of the contention that defendant No. 2 has acquired citizenship of German Democratic Republic reliance is placed on citizenship certificate dated 17-7-1970 (Ex. D-6/1). It does appear from the said certificate that defendant No. 2 had acquired citizenship of German Democratic Republic but in my view that has no effect on the validity of the agreement in question. Section 31 of the Foreign Exchange Regulation Act on which reliance has been placed by the defendants only places a restriction on a foreign citizen on transfer or sale, mortgage, lease, gift, settlement or otherwise of any immoveable property situate in India except with the previous general or special permission of the Reserve Bank of India. The said provision do not place any restriction on entering into agreement like Ex. P.W. 2/1. The said provision also do not place an absolute bar to the transfer or sale of any property and as such it can not be said that the agreement itself will become void. It is well settled that a contract for sale by itself does not create any interest in or charge on such property (see Section 54 of the Transfer of Property Act). Thus it can not be held that the agreement is void on the objection raised in preliminary objection No. 4 based on Section 31 of the Foreign Exchange Regulation Act. The said provisions do not bar grant of relief of specific performance to the plaintiff and the question of permission of the Reserve Bank of India will arise, if at all, at the stage of execution of the sale deed.'
In Piara Singh v. Jagtar Singh (supra) the High Court of Punjab and Haryana considered the effect of acquisition of property by non citizen without prior permission of Reserve Bank of India and has held as under :-
'It is true that the section provides that without the previous permission of the Reserve Bank, a person who is not a citizen of India, can not acquire property, but it does not provide that if someone purchases any property the title therein does not pass to to him. What the Act provides is that if a person contravenes Section 31 and some other sections, he can be penalized under Section 50 and can also be prosecuted under Section 56. However, there is no provision in the Act which makes transaction void or says that no title in the property passes to the purchaser in case there is contravention of the provisions of Sub-section (1) of Section 31. Section 63 contains a provision regarding confiscation of certain properties but it does not contain any provision for confiscation if there is breach of the provisions of Sub-section (1) of Section 31. Therefore, the property purchased in contravention of Sub-section (1) of Section 31 is also not liable to confiscation. In the circumstances, it can not be held that the plaintiffs are not entitled to obtain possession of the property or recover damages for its use and occupation.'
16. In view of the aforesaid legal position, I am unable to agree with the judgment passed in the case of Joaquim v. Jaime (supra). The said judgment is not based on correct interpretation of preamble, Section 31 and Section 50 of the FERA. On the other hand taking aid from the book (supra) of Hon'ble Shri Justice G.P. Singh, I find myself in agreement with the view taken in the judgments cited on behalf of the respondents.
17. Even construing Section 31 of the FERA prohibiting to acquire or to hold the immoveable property, I find that the present case will not come within its purview. What the plaintiffs are claiming is their share through right of 'inheritance' which can not be curtailed or forbidden by Section 31 of the FERA prohibiting to 'hold' the property. Section 31 of FERA can not be stretched to the extent so as to include the prohibition to the right of inheritance. Vide Notification No. GSR 456 (E) published in 1993 MP Law Times 242 (109) a general permission has been granted by the Reserve Bank of India to foreign citizens of Indian origin to acquire by way of purchase or inheritance and dispose of by way of sale any immovable property, not being agricultural land/farm house/plantation property situated in India. The Trial Court held that the right of the plaintiff was denied in the year 1998 by the defendant No. 1 when she came in India. The Notification came into force on 15-6-1993. In such circumstances, it can not be said that the plaintiffs can not take benefits of the Notification as the same is having no retrospective effect. Since the cause of action accrued to the plaintiff in the year 1998, no question of construing the Notification of having retrospective effect or not arises. The plaintiffs are held to be entitled to get the benefit of the Notification. Even otherwise, as held above, the right accrued to the plaintiffs on the basis of 'inheritance' can not be denied by taking aid of Section 31 of the FERA.
18. The judgment and decree of the Trial Court is based on correct appreciation of evidence and application of law, and no infirmity could be pointed out and as such the same requires no interference.
19. In view of the aforesaid, the judgment and decree passed by the Trial Court is upheld. This appeal is dismissed with no orders as to costs.