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2018 (9) TMI 932 - AT - FEMAContravention of the provisions of the FERA Act - accepting interest free security deposit of 65 lacs from the branch office of M/s DNV located in Mumbai, as the Regional Manager of M/s DNV had taken up the flat bearing no. No.24 on 20th floor, Kanchanjunga Mumbai for 36 months which belonged to Appellant's brother and sister-in-law and who had signed a Power of Attorney dated 21.05.1987 in favor of Appellant - Held that:- It appears from the reading of agreement and fact and circumstances, it was merely a care taker agreement for 3 years. From the very wordings that the lease could be granted means that the transaction of the lease would be totally exempted from the general or special permission of RBI. The agreement had no provision for any forfeiture of the said amount or part thereof. The benefit of doubt goes in favour of the appellant because as per facts of the present case, it would be that any security deposit taken for fulfillment of the terms and conditions would not attract any general or special permission of RBI to be taken. The impugned order is not sustainable as the said caretaker agreement to be a lease agreement and likewise as security deposit as consideration, as the terms „receipts and payments‟ visualized in section 9 (1) (b) & (d) of the FERA Act means consideration. It is merely in the case of lease agreement that vested right is created in favor of lessee but in the present case no vested right is created as the said caretaker agreement is only a leave and license agreement and thus the Appellant had temporary lien over the said security deposit. The appellant had no relation with the accused person to whom the appellant has only allowed to use the property of the owner/landlord. The appellant has no criminal record for any offence or have any link and nexus with the (then tenant) directly or indirectly to criminal activities. The money paid by him never transferred outside India. Thus, there is no contravention of any provision committed by the appellant. It is stated on behalf of the respondent during hearing that payment of monthly compensation was payable at the rate of ₹ 9000/- per month but the same was not a subject matter of Memorandum. Therefore, there was no contravention of the provisions of the FERA Act. And also of the Section 9(1) (b) which stipulates in the explanation to the Section that the money has to come from outside India.
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