JUDGMENT - P.S. PATANKAR, J.:---This is a petition under section 5 of Foreign Awards (Recognition and Enforcement) Act, 1961 (hereinafter called as Act of 1961) for enforcement of the award dated 31-10-1990. The enforcement thereof is opposed by the respondents. 2. The petitioner Nos. 1 and 2 are husband and wife. Respondent Nos. 1 and 2 herein are husband and wife. All of them are Non Resident Indians (NRI) and were residing in USA (United States of America). They carried on jointly several businesses in India and in USA. The businesses were carried on through the Agency of partnership firm, Private Limited Companies, association of persons and Private Trusts. Various properties came to be acquired. 3. The disputes arose between them prior to October, 1989. It was decided that the same be referred for the arbitration of elder brother of petitioner No. 1 and respondent No. 1 for the purpose of dividing their joint businesses and properties in India and USA. The appointment was made by letter called "first submission agreement". Arbitration agreement came to be entered into between the parties on 17-11-1989 called "second submission agreement". 4. It seems that respondent Nos. 1 and 2 tried to stall the arbitration proceedings by going before the Supreme Court of the State of New York, County of Nassau, USA, but failed and order came to be passed on 12-3-1990. Thereafter parties agreed on 20-3-1990 to draw four packages of those properties and business in India and USA. Package A deals with USA properties and businesses. Package A-1 deals with US Note which provided for payment in US $ for relinquishing the share and interest in jointly held US businesses and properties. Package B deals with Indian businesses and properties. Package B-1 consists of Indian Note which provided for payment in Indian rupees paid to the party relinquishing the share and interest in jointly held Indian businesses and properties. It was agreed that one party would have to choose A and B-1 collectively or B and A-1 collectively. Respondent No. 1 was responsible for preparing the packages and first choice was to be exercised by petitioner No. 1. Accordingly petitioner No. 1 announced choice of package B and A-1. It consists of Indian businesses and properties and 3.25 million US $. The respondent Nos. 1 and 2 got businesses and properties in USA and sum of Rs. 1,21,00,000/-. Respondent No. 1 was responsible for preparing the packages and first choice was to be exercised by petitioner No. 1. Accordingly petitioner No. 1 announced choice of package B and A-1. It consists of Indian businesses and properties and 3.25 million US $. The respondent Nos. 1 and 2 got businesses and properties in USA and sum of Rs. 1,21,00,000/-. The award came to be announced on the very meeting on 20-3-1990. It was not signed by learned Arbitrator due to over sight and came to be signed on 31-10-1990, pursuant to the Courts direction to that effect. It is a non speaking award. 5. The petitioners moved the Supreme Court of the State of New York, Country of Nassau, USA by filing proceedings for confirmation of the said award. Respondent Nos. 1 and 2 moved a cross motion to set aside the said award. Cross motion of respondent Nos. 1 and 2 was rejected on 22-10-1990. The petitioners application came to be granted on 8-1-1991 and award dated 31-10-1990 came to be confirmed. The respondent Nos. 1 and 2 filed Appeals against the said order, but failed. Respondent Nos. 1 and 2 also signed some documents for implementing the award in respect of Indian businesses and properties. One of the properties is a residential flat in Urvashi, 66 L. Jagmohandas Marg, Bombay - 400 026 in a Co-operative Housing Society. The petitioners took charge of Indian businesses and properties and expressed their readiness to execute the documents to effectively transfer USA businesses and properties to respondent Nos. 1 and 2. Respondent Nos. 1 and 2 took charge of businesses and properties in USA, but declined to execute the necessary documents for transfer of Indian business and properties in favour of petitioners. 6. The respondents were not prepared to co-operate for implementation of the award which compelled the petitioners to move this petition for filing the award dated 31-10-1990 and for granting the judgment and decree in terms thereof. 7. In the petition, the petitioners expressed their willingness to file an application before the Reserve Bank of India under section 47(3) of the Foreign Exchange Regulation Act, 1973 (in short FERA) for permission under section 9 for transfer of shares of private companies from respondent Nos. 1 and 2 to the petitioners. 8. 7. In the petition, the petitioners expressed their willingness to file an application before the Reserve Bank of India under section 47(3) of the Foreign Exchange Regulation Act, 1973 (in short FERA) for permission under section 9 for transfer of shares of private companies from respondent Nos. 1 and 2 to the petitioners. 8. The main contentions raised on behalf of the respondents challenging the enforceability of the award are :- i) It is not a Foreign Award because it does not deal with differences which can be considered as a commercial in nature. ii) It cannot be considered as foreign award as it deals with difference between Indians, though NRI, and it is not between the citizens of 2 different countries i.e. one India and the other USA. iii) The award is not enforceable as it involves violation of Chapter XX C of Income Tax Act, 1961. The flat in Urvashi building is worth millions of rupees and hence enforcement of the award without necessary NOC is against public policy. iv) The Award seeks to transfer shares in Indian companies to NRI without permission of Reserve Bank of India and therefore violates Foreign Exchange Regulation Act, 1973 (FERA for short) and so against the public policy; v) The award has been made a rule of the Court in USA and therefore executable as a decree. The award has merged in foreign judgment which can only be enforced in India by a suit on foreign judgment or can be executed as a decree with leave of the Court as per Code of Civil Procedure; vi) The petitioners cannot enforce the award as they are only seeking to enforce the Indian part. 9. The learned Counsel for respondents also raised 3 more contentions :- i) The award is based on alleged settlement agreement between the parties which is procured by fraud and mis-representation by the petitioners, respondents 1 and 2 have filed the Suit No. 2878 of 1993 for declaration that it is void and it is pending in the Court; ii) The gift deed regarding Urvashi flat is not genuine gift deed or executed out of love and affection. It is a fraud on Income-tax Act and Bombay Stamp Act; iii) The minor son of respondent No. 1 by name Amish has filed the suit No. 3527 of 1994 on attaining majority and challenging the transfer of interest in Urvashi flat. The same is pending. 10. Points (i) and (ii) of para 9 stated above require me to appreciate the evidence and to go behind the settlement between the parties and the award. It is not within the scope of my enquiry. The narrow scope of enquiry is whether the award is enforceable or not under section 7 of Act of 1961 or enforcement of such an award would be contrary to the public policy of our country. These points do not fall within the scope of section 7. Further already such objections were raised before USA Court which came to be rejected. Even attempt is made by the respondent Nos. 1 and 2 by filing Suit No. 2878 of 1993 in this Court challenging the settlement agreement-Arbitration agreement-between the parties, pleading that it was brought about by fraud and mis-representation. Relief of declaration was sought after exhausting the remedies in USA and after 3 years of award, clearly as an after thought. As far as point (iii) is concerned, the said son Amish has filed the Suit No. 3527 of 1994 in this Court. Just few weeks ago, he moved an application for stay of these proceedings. But it has been rejected. It is not necessary to deal with this in this matter and it would suffice to mention that it is designed just to delay the enforcement of the award. 11. The first contention raised-it is not a Foreign Award because it does not deal with differences between the parties which can be considered as commercial in nature. It is submitted by the learned Counsel for the respondents that this cannot be called as a foreign award as it does not relate to commercial relationship between the parties. It was relating to mere domestic relationship between the parties. It is contended on behalf of the petitioners that essentially the relationship between the parties was commercial. It is immaterial that petitioner No. 1 and respondent No. 1 are brothers and that cannot make the award domestic. It was relating to mere domestic relationship between the parties. It is contended on behalf of the petitioners that essentially the relationship between the parties was commercial. It is immaterial that petitioner No. 1 and respondent No. 1 are brothers and that cannot make the award domestic. The parties wanted to resolve the disputes which arose in the course of business and wanted mainly to divide the businesses and incidentally to divide of the properties and separate for good. Lot of debate has taken place at the Bar about this point and so as I deal with it in a little detailed manner. 12. It is averred in the petition that petitioners and respondents have jointly carried on certain business in India and USA and have jointly held properties in USA and India. Several businesses were carried on by the parties in 2 countries through the agency of partnership firms, Private Limited Companies, association of persons and Private Trusts. The settlement agreement is clear in this respect. It has been averred in the affidavit-in-reply dated 16-5-1994 of respondent No. 1 that award is not on differences between the petitioners and respondents arising out of any legal relationship which can be considered as commercial under any law in force in India. The agreement dated 17-11-1989 between the parties recites that there were several assets consisting of businesses and properties jointly owned or held by the parties and that the parties desired for arbitration for dividing them. As petitioner No. 1 and respondent No. 1 are brothers, the relationship between parties is not commercial relationship and the disputes between them did not arise out of relationship which can be considered as commercial in India. The learned Counsel pointed out that there is a list of properties and businesses as Schedule A and B to the settlement agreement. The same are to be divided. There is also mention about some common property. This is based on the submission agreement which provided similarly for division and Clause 12 thereof requires that transfer documents to be executed by the parties in respect thereof. 13. I shall first peep into some historical back ground of relevant legislation. After the first world war international trade expanded to a great extent. The zeal of the parties to resolve differences arising out of such international transactions out of Courts led them to have recourse to arbitration. 13. I shall first peep into some historical back ground of relevant legislation. After the first world war international trade expanded to a great extent. The zeal of the parties to resolve differences arising out of such international transactions out of Courts led them to have recourse to arbitration. League of nations intervened and this led to signing of Protocol on Arbitration Clauses at Geneva on 24-9-1923. India was signatory to it. According to it the Arbitration agreement could be in respect of differences that may arise in connection with the contract relating to the commercial matters and to any other matter capable of settlement by Arbitration. The Protocol was followed by Convention on Execution of Foreign Awards 1927, to which India was also a party. This convention was given effect to by passing Arbitration (Protocol and Convention) Act, 1937, (hereafter called 1937 Act). In view of definition of Foreign Award contained in section 2 thereof, a foreign award could be one which is given on differences relating to the matters considered as commercial under the law enforced in India. In 1958 there was a new convention called "New York Convention on Recognition and Enforcement of Foreign Arbitral Awards". This was adopted to increase the effectiveness of arbitration in settlement of private law disputes by securing uniformity in the diverse national arbitration laws in the area of recognition and enforcement of foreign awards. This was to remedy the defects in Geneva Convention of 1927 which hampered speedy settlement of disputes. This came to be ratified by India in 1960. India has embodied the provisions of Convention in the Act of 1961. The definition of foreign award contained in section 2 is as follows :- 2. Definition-In this Act, unless the context otherwise requires, "foreign award" means an award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960- (a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the Schedule applies, and (b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made, may, by notification in the Official Gazette, declare to be territories to which the said Convention applies. The definition therefore contains 4 requirements- i) It must be an award on differences between the persons who have legal relationship with one another, such relations may be contractual or not; ii) Legal relationship must be considered as commercial under law in force in India; iii) The award must be made on or after 11-10-1960, and iv) The award must be in pursuance of an agreement in writing for arbitration to which the New York Convention applies. Thus the second requirement restricts applicability to differences arising out of legal relationships which is considered as commercial under law in India, whether the relationship is contractual or not. It is known as commercial reservation. 14. In support of this submission, the learned Counsel for the respondents first relied upon A.I.R 1965 Bom. 114 (Kamal Engineering Corporation Ltd. and others v. Societe De Traction Et DElectricite Societe Anoyme)1. This Court was called upon to decide as to whether an agreement to provide the necessary technical assistance for over head traction, electrification of Railways, tramways etc. could be considered as commercial under 1937 Act. It was held that it was a contract merely for technical assistance. It did not involve the defendant into any business with the plaintiffs. It was not in any sense commercial as there was no participation in profits between the parties. The remuneration of the defendants was for that reason described as "fees" and was only on percentage basis. The defendants have kept themselves out of any commercial relationship and it was more like relationship between a Solicitor or Advocate on one hand and client on the other. The services rendered were therefore essentially of professional character and cannot be called as a commercial. This is not the position in the present case and hence it has no application. 15. The next case relied upon is A.I.R. 1978 Bom. 104 (Indian Organic Chemicals Ltd. v. Chemtex Fibres Inc. others)2. In the said case plaintiff wanted to establish in India facilities for manufacture of 6100 MT of Plastic Staple Fibre per annum etc. The defendant No. 1 was to supply machinery. The technical know-how was supplied by the defendant No. 2 who was also to approve the machinery supplied. Defendant No. 3 stood as a guarantor for proper performance by defendant Nos. 1 and 2. 3 agreements were entered into between the parties. The defendant No. 1 was to supply machinery. The technical know-how was supplied by the defendant No. 2 who was also to approve the machinery supplied. Defendant No. 3 stood as a guarantor for proper performance by defendant Nos. 1 and 2. 3 agreements were entered into between the parties. In the said case it was held (Mridul, J.,) an agreement must be commercial not as normally understood but by virtue of provisions of law in force in India. There must be some legal provision which expressly makes provision for recognising legal relationship as commercial and in the absence of such legislative provision section 2 of 1961 Act could not be invoked. It is necessary that there must be some legal provision, which would specify or indicate that legal relationships were to be considered as commercial for the purpose of 1961 Act. First this is not the contention here. Further this view came to be over-ruled by the Division Bench of this Court in the judgment reported in A.I.R. 1983 Bom. 36 (European Grain Shipping Ltd. v. Bombay Extractions Pvt. Ltd. and others)3. It came to be held that mere use of the word under preceding the words the law in force in India would not necessarily mean that one has to find a statutory provision or a provision of law which specifically deals with the subject of particular legal relationship being commercial in nature. This phrase came to be interpreted by the Division Bench and it was held that it is not necessary that there should be a statutory provision enumerating such legal relationship for determining whether the relationship is commercial or not. It was finally held "We have no doubt that the contract in the instant case which was for the sale and purchase of a commodity, was clearly a contract which brought about legal relationship which was commercial in nature under the Indian law." It is obvious that this has no application to the facts of the present case. 16. The phrase commercial came to be considered by the Apex Court in A.I.R 1994 S.C. 1136, (R.M. Investment and Trading Co. Pvt. Ltd. v. Boeing Co. and another)4. In the said case an Indian Company by name R.M. Investment entered into an agreement with Boeing Co. of USA. R.M. Investment agreed to provide Boeing with consultancy services for sale of Boeing Air Crafts in India. Pvt. Ltd. v. Boeing Co. and another)4. In the said case an Indian Company by name R.M. Investment entered into an agreement with Boeing Co. of USA. R.M. Investment agreed to provide Boeing with consultancy services for sale of Boeing Air Crafts in India. Agreements for purchase of 2 Boeing Air Crafts came to be executed between Boeing and Air India. R.M.I. claimed commission from Boeing for the said transaction. But Boeing refused to pay. R.M.I. filed a suit in the High Court claiming compensation and remuneration for its consultancy services. The agreement contained Arbitration clause which provided that "any controversy or claim arising out of or relating to this agreement, or any breach thereof, which the parties have not been able to resolve with due diligence amicably, shall be settled by arbitration conducted in accordance with the Commercial Arbitration Rules of the American Commercial Association. In the said suit R.M.I. filed an application for injunction and interim order. Boeing moved an application under section 3 of the Act of 1961 for stay of the said suit in view of the Arbitral clause. The matter landed in Apex Court. The Apex Court observed "While construing the expression "commercial" in section 2 of the Act it has to be borne in mind that the Act is calculated and designed to subserve the cause of facilitating international trade and promotion thereof by providing for speedy settlement of disputes arising in such trade through arbitration and any expression or phrase occurring therein should receive, consistent with its literal and grammatical sense, a liberal construction"... "The expression "commercial" should, therefore, be construed broadly having regard to the manifold activities which are integral part of international trade today". It was held that the relationship between R.M.I and Boeing was commercial. The word commercial which undoubtedly, is derived from the term commerce and the term commerce is a term of largest import. It embraces every phase of commercial and business activity and intercourse including the transportation, purchase, sale, exchange of commodities and supply of information and technical assistance between subjects of different states. Even Strouds Judicial Dictionary of Words and Phrases (Fourth Edition) Volume I gives one of the meanings of commercial as "Whenever capital is to be laid out on any work and a risk run of profit or loss, it is a commercial venture". Even Strouds Judicial Dictionary of Words and Phrases (Fourth Edition) Volume I gives one of the meanings of commercial as "Whenever capital is to be laid out on any work and a risk run of profit or loss, it is a commercial venture". The learned authors Alan Redfern and Martin Hunter on Law and Practice of International Commercial Arbitration (Second Edition) say as follows :- "Thus it would be permissible to hold an arbitration between two merchants over a commercial contract which they had made in the course of their business but not, for example in respect of a contract for the separation of property made on the marriage of their children." "Yet, whilst there is no universally accepted definition of the term commercial, it has now become part of the language. It serves, for instance, to distinguish international commercial arbitrations from international arbitrations between states concerned with boundary disputes and other political issues. It also serves to distinguish them from arbitrations (which are usually but not necessarily domestic) concerned with such matters as property tenure, employment and family law." Thus the phrase used commercial relationship is in contradistinction with matrimonial or family or cultural or social or political relationship. It would not embrace that type of dispute. In the present case the parties went on doing businesses in India and USA and acquired various properties. Essentially they wanted to separate that business relationship and incidentally the properties acquired to avoid multiplicity of proceedings. As the petitioner No. 1 and respondent No. 1 are brothers would not make the relationship between them domestic or family relationship. On principle I see no difference between the two individuals joining together and entering into a commercial venture and two brothers entering into such a commercial venture. Nonetheless the relationship between the two is commercial. I find nothing to detract from holding otherwise. 17. The second point raised is it cannot be considered as foreign award as it deals with difference between Indians, though NRI and it is not between the citizens of 2 different countries i.e. one Indian and other USA. The learned Counsel for the respondents submitted that the award concerned 2 NRI, but not between citizens of 2 different countries. The properties and businesses may be in India and USA, but that is not sufficient. The learned Counsel for the respondents submitted that the award concerned 2 NRI, but not between citizens of 2 different countries. The properties and businesses may be in India and USA, but that is not sufficient. It must relate to the international trade or business which pre-supposes that the award is passed in respect of the parties who are subject to two national jurisdictions and whose rights and liabilities are governed by 2 different legal systems. It is submitted that then only it can be called as foreign award. In support of this he has relied upon certain observations from para 39 of A.I.R. 1978 Bom. 106 (cited supra). They are I therefore take the view that the concept of commercial relationship in section 2 of the 1961 Act takes within its ambit all relationship which arise out of or are ancillary and incidental to the business dealings between citizens of two States. The concept takes within its fold all legal relationships pertaining to the international trade in all its forms between the citizens of different States. (Underlining mine). It is further contended that those observations came to be approved by Division Bench in A.I.R. 1983 Bom. page 36 (cited supra). I have already pointed out what is the point involved before the Single Judge and the Division Bench. The point presently raised was not at all involved or discussed. Further the Division Bench has not cited the said passage for approving the point raised herein. In fact the Division Bench has pointed out the requirements of section 2 of 1961 Act in para 17. But it is not stated that the parties should be belonging to two different nations. In my opinion, neither before the learned Single Judge nor before the Division Bench such a question arose and therefore those observations under-lined by me cannot be created as a ratio. The question raised and decided was what is interpretation of the phrase "under the law in force in India" contained in section 2. This came to be interpreted by the Single Judge and the said interpretation was not approved by the Division Bench as pointed out above holding that the word under in a given case may require reference to a particular provision of law or may mean according to law. The first restricted meanings was accepted by Single Judge, while the Division Bench accepted the second. 18. The first restricted meanings was accepted by Single Judge, while the Division Bench accepted the second. 18. It is also to be noted that it was consensual settlement agreement between parties here. Clause No. 14 of the Arbitration agreement dated 17-11-1989 provided that the agreement shall be governed by USA Arbitration Act and judgments may be entered into by any Court having the jurisdiction thereof. 19. I have pointed out some history of legislation earlier. Section 2 of 1937 Act offered the following definition of phrase foreign award. a) in pursuance of an agreement for arbitration to which the Protocol set forth in the First Schedule applies, and b) between persons of whom one is subject to the jurisdiction of some one of such Powers as the Central Government, being satisfied that reciprocal provisions have been made, may, by notification in the Official Gazette, declare to be parties to the Convention set forth in the Second Schedule, and of whom the other is subject to the jurisdiction of some other of the Powers aforesaid, and c) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made, may, by like notification, declare to be territories to which the said Convention applies. I have already quoted section 2 of 1961 Act defining foreign award Act of 1961 repealed the Act of 1937. Thus clauses (a) and (c) in the definition of the foreign award in section 2 of Act of 1937 are retained while clause (b) is dropped. It is crystal clear that it is dropped with a view that it is not necessary now that dispute should be necessarily between the persons belonging to 2 different States. This was to bring the definition in tune with New York Convention 1958. In course of time, it was noticed that the parties belonging to the same State are having inter-se commercial relationship, carry on business in other States and acquire properties. To settle the disputes between them this distinct improvement was effected. It is only necessary that parties should belong to the States which have ratified the convention and subject to commercial reservation as stipulated by section 2. Geneva Protocol on Arbitration 1923 was followed by Convention of 1927. Convention inter-alia provided for conditions which are necessary for recognition or enforcement of a foreign arbitral award. It is only necessary that parties should belong to the States which have ratified the convention and subject to commercial reservation as stipulated by section 2. Geneva Protocol on Arbitration 1923 was followed by Convention of 1927. Convention inter-alia provided for conditions which are necessary for recognition or enforcement of a foreign arbitral award. Under Act of 1937 one of the conditions was that parties should be subject to the jurisdiction of two States. Act of 1937 was based on convention of 1927. This is precisely given go-bye by New York Convention of 1958 of which the Act of 1961 is based. 20. The learned Counsel for the respondents contended that said Clause (b) of section 2 of 1937 Act is not incorporated in section 2 of 1961 Act because it was well understood that parties should be of two different States as the Act was meant for promotion and smooth running international trade. The object clause of the Act 1961 shows that it is to facilitate smooth running and promotion of international trade or business. But it can easily be envisaged that parties belonging to one State may carry on such international business or trade in some other State and dispute may arise between them in that respect. Specifically to remedy this, the definition is suitably structured first in the New York Convention of 1958 and same is adopted in Act of 1961. If that was not so, suppose in this case the businesses are carried on by the parties in USA only and properties are also acquired only, then they would be required to come to this country only for resolution of their disputes. This requires to be eschewed. Hence I hold that it is not necessary for treating the Award as a foreign award that the parties should belong to two different states or be subject to the two different national jurisdictions. 21. Thirdly it is contended that the award is not enforceable as it involves violations of Chapter XX C of Income Tax Act, 1961. The flat in Urvashi building is worth millions of rupees, hence enforcement of the award is against Public Policy as no objection certificate is obtained from Income Tax Authorities for transfer of it. 21. Thirdly it is contended that the award is not enforceable as it involves violations of Chapter XX C of Income Tax Act, 1961. The flat in Urvashi building is worth millions of rupees, hence enforcement of the award is against Public Policy as no objection certificate is obtained from Income Tax Authorities for transfer of it. It is contended that the award is not enforceable in India inasmuch as it is against the Public Policy of India because it involves violation of Chapter XX C of the Income-tax Act, 1961. When it provides for transfer of flat situated in the building Urvashi in a Co-operative Housing Society from respondent Nos. 1 and 2 to the petitioner Nos. 1 and 2. It has been averred in affidavit in reply dated 16-5-1994 of respondent No. 1 that Urvashi flat cannot be transferred without NOC from Income-tax authorities as it is governed by Chapter XX C of the Income-tax Act, 1961. In the affidavit in rejoinder of petitioner No. 1 dated 22-12-1994, it has been pointed out that such a plea is raised designedly as the form for transfer requires signatures of both the parties. The respondents would not give such signatures in view of their resistance. It is denied that the award is violative of provisions of Income-tax Act. It is pointed out that flat stands in the name of petitioner Nos. 1 and 2 and respondent Nos. 1 and 2, effect of implementation of the award would be to delete the names of respondent Nos. 1 and 2. There is no question of transfer involved. There is no question of under valuation to avoid payment of Income-tax. It is only part of larger settlement between the parties. It is further stated that even assuming that it is necessary execution of the decree can be made subject to it and award is not vitiated on that count. The petitioners are willing to obtain such permission. 22. Section 269 UC deals with restrictions on transfer of immovable property. Section 269 UC (1) provides that no transfer of any immovable property worth more that Rs.10 lacs shall be effected unless the agreement for transfer is entered into between the Transferor and Transferee in accordance with the sub-section (2). Atleast 4 months before the intended transfer, under sub-section (3) the said agreement is required to be submitted to appropriate authority. Section 269 UC (1) provides that no transfer of any immovable property worth more that Rs.10 lacs shall be effected unless the agreement for transfer is entered into between the Transferor and Transferee in accordance with the sub-section (2). Atleast 4 months before the intended transfer, under sub-section (3) the said agreement is required to be submitted to appropriate authority. Under section 269 UD (1), the appropriate authority can order purchase of the same by Central Government as provided therein. There is first proviso to it which says that no such order shall be passed after the expiration of a period of two months from the end of the month in which the statement (form) is received by the appropriate authority (after 1-6-1993-3 months as per second proviso). Section 269 UE (1) provides that on the date of such order, the property vests in the Central Government. Section 269 UA (b) defines apparent consideration in relation to transfer by way of sale or exchange or lease. Admittedly we are concerned with "by way of exchange" i.e. 269 UA (b)(1)(ii) it is as follows :- 269UA In this Chapter, unless the context otherwise requires - (a) . . . (b) "apparent consideration"- (1) in relation to any immovable property in respect of which an agreement for transfer is made, being immovable property of the nature referred to in sub-clause (i) of Clause (d), means- (i) . . . (ii) if the immovable property is to be transferred by way of exchange- (A) in a case where the consideration for the transfer consist of a thing or things only, the price that such thing or things would ordinarily fetch on sale in the open market on the date on which the agreement for transfer is made; (B) in a case where the consideration for the transfer consists of a thing or things and a sum of money, the aggregate of the price that such thing or things would ordinarily fetch on sale in the open market on the date on which the agreement for transfer is made, and such sum; Section 269 UA (f) defines transfer. The learned Counsel for respondents emphasised is section 269 UA (f) (ii). The learned Counsel for respondents emphasised is section 269 UA (f) (ii). It is as follows :- (f) "transfer"- (i) x x x (ii) in relation to any immovable property of the nature referred to in sub-clause (ii) of clause (d) means the doing of anything (whether by way of admitting as a member of or by way of transfer of shares in a co-operative society or company or other association of persons or by way of any agreement or arrangement or in any other manner whatsoever) which has the effect of transferring or enabling the enjoyment of, such property. It is pointed out that for implementation of the award shares in the Co-operative Society of Urvashi building standing in the joint names of the parties shall be required to be transferred to the names of petitioner Nos. 1 and 2 and hence it is covered by the definition of transfer. It is not possible to accept that any exchange as such is taking place between the parties in this case. Nothing specific is transferred in consideration. There is no surrender of interest for consideration in the said flat. There is therefore no question of black money being generated. It is a part or larger settlement between the parties. The flat already stands in the name of petitioner Nos. 1 and 2 and respondent Nos. 1 and 2. The effect of implementation of the award would be the names of the respondent No. 1 and 2 would be deleted. It cannot come within the section 269 UA (f)(ii). It would be under the award of Arbitrator and judgment of the Court and not by volition of the parties. Even assuming that it amounts to transfer, the passing of the judgment in terms of the award would not be against the Public Policy of Chapter XX C. The award is passed and judgment can be given in view of section 6(1) of Arbitration Act, 1961 (sic). Even the decree following under section 6(2) can be made subject to the interested party following the procedure under Chapter XX C. 23. Further in my opinion, it will not be contrary to the Public Policy and the award cannot be said to be unenforceable in view of section 7(1)(b)(ii). It is well accepted that Public Policy is a vague term and of uncertain import. Further in my opinion, it will not be contrary to the Public Policy and the award cannot be said to be unenforceable in view of section 7(1)(b)(ii). It is well accepted that Public Policy is a vague term and of uncertain import. It is necessary to invoke it in clear and in-contestable cases of harm to the public. It is necessary to construe it strictly. In A.I.R. 1994 S.C. 860, (Renusagar Power Co. Ltd. v. General Electric Co.)5, the Apex Court while considering the provisions of FERA held that the enforcement of a foreign award would be refused on the ground and it is contrary to Public Policy if such enforcement would be contrary to (i) fundamental policy of Indian law; or (ii) the interest of India; or (iii) justice or morality. The Court should be anxious in not defeating the foreign award by finding out some defect and then equating it with the Public Policy of the country. The enforcement should not be denied on this spacious ground because the award is not acceptable to the party against whom enforcement is sought, otherwise this would be defeating the very object of New York Convention 1956 and Act of 1961. Therefore, I hold that first there is no violation of Chapter XX C of the Income-tax Act and in any case it cannot be said that the award is against the Public Policy of this country and hence uneforceable. The enforcement of the award cannot be defeated on that ground. 24. It is broadly contended by the learned Counsel for the respondents that the award is in violation of the provisions of FERA and hence against Public Policy and not enforceable. The petitioners in the petition expressed their readiness to make an application under FERA for permission if necessary : i) Under section 47(3) of execution of the decree that may be granted in terms of the award, and ii) Under section 9 for transfer of shares of private companies from respondents to the petitioners and iii) for set off regarding money payment in US $. In the affidavit in reply, it is contended that it is absolutely necessary to obtain permission N.O.C. of Reserve Bank before hand and award is not enforceable. In para 9 the allegations are particularised. In the affidavit in reply, it is contended that it is absolutely necessary to obtain permission N.O.C. of Reserve Bank before hand and award is not enforceable. In para 9 the allegations are particularised. However, in view of A.I.R. 1986 S.C. Page 1370, (L.I.C. of India v. Escorts Ltd others)6, it is very fairly conceded by the learned Counsel for the respondents that post facto sanction can be obtained in case of transfer covered under section 29. What has been pressed is that in case of transfer of shares in Indian Companies and for holding or acquiring or dispoing of foreign securities by NRI, under section 19(1)(b) read with section 19(1)(c) and section 19(5), prior permission of Reserve Bank of India is required and as the said permission is not obtained the award is against the Public Policy and void. In the affidavit in rejoinder it has been pointed out that such point was raised before State of New York, County of Nassau, USA Court and before the Court of appeals of State of New York, but was negatived and therefore the respondents cannot raise such contention. It is also pointed out that appropriate permission shall be obtained by the petitioners at an appropriate stage and in any case it cannot be said that award is against the Public Policy. The necessary permission can be secured before the execution of Award and prior permission is not necessary. In fact I find that the judgment of the Apex Court reported in A.I.R. 1986 S.C. 1370 considered the scope of section 19(1)(b) also and came to the conclusion that expression "prior permission" is not used in section 24. The expression `general and special permission does not mean prior permission. Thus provision under section 29(1)(b) and section 19(1)(b), is the same. Section 47(3) also used the phrase `permission and not `prior permission. 25. First though I am not prepared to accept the submission of the learned Counsel for the petitioners that as such a point was decided by USA Court, it cannot be raised here. The said decision is of little importance for considering whether enforcement of the award is against the Public Policy of this country or not. What I have to consider is whether the award is unenforceable because it is contrary to the Public Policy of this country. The said decision is of little importance for considering whether enforcement of the award is against the Public Policy of this country or not. What I have to consider is whether the award is unenforceable because it is contrary to the Public Policy of this country. The learned Counsel for the respondents sought to rely upon A.I.R. 1990 Bom. 170, (Algemene Bank Nederiland NV v. Satish Dayalal Choksi)7. It arose out of notice under Order 21, Rule 22 of Civil Procedure Code for leave to execute the decree of the Supreme Court of Hongkong in Bombay. It was held that for filing suit on foreign guarantee permission of Reserve Bank of India under section 26(6) of FERA (as then stood) is not necessary. What is necessary under section 47(3) of FERA is permission before taking any steps for enforcement of the judgment or order. It was held as follows : "Under Order 21, Rule 22, inter alia, where an application for execution of a foreign decree is filed under the provisions of section 44-A, leave is necessary. Therefore, before any leave can be obtained under Order 21 Rule 22, it is necessary to make an application under Order 21, Rule 11." ..... "A prior permission of the Reserve Bank or the Central Government, as the case may be, therefore required before taking any step for the enforcement of the decree, including an application under Order 21, Rule 22". In my opinion, this in fact supports the petitioners in submitting that the award or passing of the judgment thereon is not against Public Policy but only execution thereof can be subject to getting the necessary permission. Therefore decree can be passed subject to obtaining such permission under section 47(3). The same is the position in A.I.R. 1994 S.C. 860, Renusagar Power Co. Ltds case, and A.I.R. 1986 S.C. 1156, (Renusagar Power Co. Ltd. v. General Electric Co. others)8. The original contract postulated payment of interest till payment and the effect of the order of the Government of India dated August 1, 1969 was that the original Schedule of payment remained operative. However, interest was also awarded for delayed payment of installments. It was contended that payment of the same was violative of FERA and against the Public Policy. The original contract postulated payment of interest till payment and the effect of the order of the Government of India dated August 1, 1969 was that the original Schedule of payment remained operative. However, interest was also awarded for delayed payment of installments. It was contended that payment of the same was violative of FERA and against the Public Policy. Relying upon A.I.R. 1986 S.C. 1370 - it came to be held that FERA is a statute enacted for the national economic interest and the object of various provisions in the said Act is to ensure that nation does not lose foreign exchange which is very much essential for the economic survival of the nation. It came to be observed "Keeping in view of the aforesaid objects underlying FERA and the principles governing enforcement of exchange control laws followed in other countries, we are of the view that the provisions contained in FERA have been enacted to safeguard the economic interests of India and any violation of the said provisions would be contrary to the Public Policy of India as envisaged in section 7(1)(b)(ii) of the Act." It came to be held "In our view the earlier refusal by the Government to give its approval to the rescheduling of payment of installments does not in any way preclude the Government of India from considering the matter in the light of the subsequent developments and it cannot be said that merely because the Government of India had refused to give its approval to rescheduling of payment of installments it would not grant permission under section 47(3) of FERA to the enforcement of the judgment that may be passed in these proceedings." Thus it was held that enforcement of the foreign award would not involve violation of any of the provisions of FERA and hence it cannot be said that award was unenforceable in view of section 7(1)(b)(ii) of the Act of 1961. Precisely in this case also it cannot be said that the award is unenforceable in view of the provisions of FERA. Foreign award involves two aspects-recognition and enforcement. Enforcement of the judgment i.e. decree can be made subject to obtaining necessary permission under the Act. It is not necessary that prior permission ought to have been obtained as neither section 29 nor section 19 uses the phrase prior permission. Foreign award involves two aspects-recognition and enforcement. Enforcement of the judgment i.e. decree can be made subject to obtaining necessary permission under the Act. It is not necessary that prior permission ought to have been obtained as neither section 29 nor section 19 uses the phrase prior permission. In view of section 47(2) and (3) the responsibility of obtaining the permission of Reserve Bank of India before enforcement the judgment of the decree would be upon the petitioners. 26. However, the contention of the learned Counsel for the petitioners that such a permission is not at all necessary as both the parties are NRI holds no water. The learned Advocate relied upon section 19(1)(f) and section 19(5) for the purpose. These provisions speak about "person" which would obviously include `Non Resident Indian". 27. .It is next urged that the award has merged in foreign judgment. This Court in A.I.R. 1985 Bom. 332 (Pendse, J.) (Northern Sales Co. Ltd. v. Reliable Extraction Industries Pvt. Ltd.)9, relying on Russell on Arbitration, A.I.R. 1959 Bom. 414 (D.B.) and A.I.R. 1964 S.C. page 538 negatived this point. It was under section 5(1) of 1961 Act. Award was dated 10-6-1980 and order dated 10-6-1981 was passed by the Master in Chambers merely for enforcement of the award in the same manner as the judgment or order pursuant to section 26. In view of the contentions, the first question arose whether it was a judgment or merely enforcement order and secondly even if it is a judgment, does the award stand merged in the judgment. The learned Judge first held that it is only an enforcement order and not a judgment. Then he considered the second submission and came to the conclusion that the award does not merge. The learned Judge quote the following para from the Russell on Arbitration (12th Edition page 367) in support. "Merger of an award in Judgment : In English law any cause of action, whether a right of action under a contract or in respect of a tortor in respect of any other cause of action, is merged in and effect by an English Civil judgment pronounced thereon." This proposition is only another way of stating the well known rule as to res judicata and is of course an illustration of that rule of Public Policy which holds that interest reipublicae ut sit finis litium. Indeed if the proposition were not a sound one there could never be an end to any litigation. The proposition is indeed so elementary that it is impossible to find high and direct judicial authority for it. It is so ingrained in English law and that the only judicial pronouncements thereon are in cases where a possible exception to the rule is being discussed. For example questions sometimes arise as to whether and if so to what extent, strangers are bound by a judgment; or whether a judgment creditor need be content with the rate of interest applicable to a judgment debt when the deed creating the debt stipulated for a higher rate of interest until payment was actually effected. In particular English law makes this exception to the generality of the rule, that a foreign judgment is not accorded the power of merging and effecting the cause of action on which it was given. This is an insular quirk probably peculiar to English law, and is so anomalous that even the most learned writers sometimes forget it. But the doctrine of merger of a cause of action is an English judgment has never been doubted and it follows that after judgment, it is no longer open for a claimant in any jurisdiction governed by English law to sue upon the award. Though indeed, a successful action was brought on an award after a judgment had been obtained to enforce it in England in the case of (Oppenheim and Co. v. Mahomed Haneef)10, (1922) I AC 482. The Privy Council felt it necessary to explain that in order to prevent misconception it appeared desirable to add that it was not pleaded or contended at any stage of the proceedings that the award had merged in the English judgment. Quite plainly it had, and if the parties had raised the point the Privy Council would have been obliged to so hold. As the parties had not raised the point the Privy Council had to add their rider by way of self exculpation." Then it was held : "The passage unmistakably establishes that a foreign judgment is not accorded the power of merging and effacing the cause of action on which it was given under the English law. As the parties had not raised the point the Privy Council had to add their rider by way of self exculpation." Then it was held : "The passage unmistakably establishes that a foreign judgment is not accorded the power of merging and effacing the cause of action on which it was given under the English law. Therefore, even assuming that the order passed by the Master in Chambers is a judgment, still it being a foreign judgment, as far as this Court is concerned, it will not have the effect of effacing the cause of action, that is the award secured by the petitioners in their favour." In A.I.R. 1959 Bombay 414, (cited supra) one of the contentions raised was whether foreign award no longer survives after the judgment was passed in terms of the award by the Supreme Court of New York. It came to be observed : "If it is open to a party suing on a foreign judgment to rely in the alternative on the original cause of action, we should have thought that it would be equally competent to a party who has obtained foreign judgment on the award to rely on the original cause of action which in this case happens to be the award. Therefore, the award is as much a cause of action qua the foreign judgment as a contract of any other right which the party has litigated and which has resulted in a foreign judgment. Instead of going to Court on the contracts which were entered into between the parties and obtaining a decree, the parties here first went to the domestic tribunal, obtained the award and then proceeded to complete the award and make it enforceable by obtaining a judgment. Therefore, in this case, the cause of action was constituted by the award and the judgment was obtained because the plaintiffs had the award in their favour. Therefore, it would seem to us that on principle there is no reason why the plaintiffs should be debarred from relying on the award as the original cause of action which resulted in the foreign judgment being obtained." Against this appeal was preferred to the Apex Court. Judgment of the Apex Court is reported in A.I.R. 1964 S.C. 538. The majority judgment did not touch this aspect, though it was set aside on the ground of jurisdiction. Judgment of the Apex Court is reported in A.I.R. 1964 S.C. 538. The majority judgment did not touch this aspect, though it was set aside on the ground of jurisdiction. In fact minority judgment delivered by Mr. Justice Subba Rao accepted the said conclusion of the Division Bench that the award does not merge in the foreign judgment and can be made a cause of action for enforcement. The learned Advocate for the petitioners contended that in the case of A.I.R. 1985 Bom. 332, (cited supra) should not have considered this point as it was not necessary in view of finding on the first point. It is not possible to accede to this submission. Alternate submissions were advanced and hence considered in detail and decided. 28. In view of this, I hold that obtaining of judgment from USA Court by petitioners would not have the effect of effacing the cause of action for enforcement of the award or that the award has merged in the judgment. The petitioners have correctly instituted these proceedings. 29. It is lastly submitted that the petitioners cannot enforce the award as they are only seeking to enforce the part-Indian part. This is not correct. The petitioners have pointed out that they are dealing with Indian Part of the award that involves Indian businesses and properties. It has been confirmed by USA Court already and USA businesses and properties have already dealt with. They have expressed their readiness to implement the award fully by executing the necessary documents. Respondent Nos. 1 and 2 are not co-operating and raising objections since beginning to delay the proceedings. The award is implemented to a large extent as businesses and properties are in possession of the parties as provided by the award. Indian part of the award has to be implemented here. It is contended that the award is composite and the petitioners committed breach of the obligation under it and it cannot be enforced fully. It is all vague and baseless. The petitioners have expressed their readiness and willingness for implementation and only respondents are objecting. In any case this cannot be an objection under section 7 of 1961 Act to hold that the award is unenforceable. Hence I pass the following order :- The petition is granted in terms of prayers (a) and (b) of the petition. The judgment to follow in terms of the said award. In any case this cannot be an objection under section 7 of 1961 Act to hold that the award is unenforceable. Hence I pass the following order :- The petition is granted in terms of prayers (a) and (b) of the petition. The judgment to follow in terms of the said award. However, enforcement of the same or execution of the decree shall be subject to the petitioners obtaining the necessary permission under FERA as regards the enforcement part in India is concerned. No costs. The learned Advocate for the respondents prays for Certificate under Article 134-A read with Article 134(1)(c) of the Constitution of India. In my opinion, this involves substantial question of law under Foreign Awards (Recognition and Enforcement) Act, 1961 which requires consideration by the Apex Court. Hence the certificate is granted. Petition granted. *****