As a law firm specializing in matters related to Non Resident Indians (NRI), we deem it crucial to provide an informative and detailed analysis of Section 6 of the Transfer of Property Act, 1882. This provision concerns the rules governing the transfer of property by non-resident Indians and holds significant practical implications for NRIs seeking to dispose or acquire properties in India.
Section 6 stipulates that any person, regardless of nationality or residence status, is entitled to transfer any immovable property situated in India. However, there are certain restrictions imposed on non-resident Indians under this section. Specifically, a non-resident Indian cannot transfer any immovable property situated in India without obtaining prior permission from the Reserve Bank of India (RBI).
Further elaborating on this requirement, The Foreign Exchange Management Act (FEMA) restricts NRI’s ability to repatriate sales proceeds earned through sale or lease rental income derived from such properties outside India without prior approval. The need for RBI approval must be obtained even if such funds are intended for utilization towards legitimate purposes like investment avenues available abroad or maintenance/management needs arising out of ownership interest held elsewhere.
In addition to addressing procedural requirements concerning transfers by NRIs as well as regulatory risks associated with FEMA compliance, courts have also considered various elements relevant when interpreting Section 6 cases referred before them. Some case laws have expounded on what constitutes legal ownership rights vested within an individual over specific assets qualifying under “immovable property”. Others have detailed what evidential requirements suffice when disputing claims made regarding transferability rights enforceable under substantive law frameworks present at state level jurisdictions.
To illustrate how these principles work together – In Ram Kishore Sen & Anr Vs State Of Bihar And Ors [1970 AIR 828], Apex Court had emphasized that mere possession did not amount to ownership rights where one party wished either sell or mortgage said asset(s). On the contrary instance though, in Bipin Shantilal Panchal vs. State of Gujarat & Ors. [2014 (1) GLR 562], the court determined that if a right to transfer title existed then it was an enforceable property right deserving protection under Section 6.
Another prominent case that landmarked Section 6 interpretations was Kavita Suneja and others Vs Joint Director, Directorate of Enforcement, Mumbai (2019), where holding property outside India did not exempt NRI’s from FEMA compliance nor RBI approval for any subsequent transfers or loans involving those assets present within Indian jurisdiction.
Thus, understanding the nuances of Section 6 is highly relevant to NRIs intending to dispose or acquire properties within India. While seemingly procedural in nature, adhering to these regulations enables compliance with substantive law frameworks when disputes arise over ownership rights vested within individuals across different jurisdictions while safeguarding against associated regulatory risks stemming from non-compliance..