An Indian tribunal has imposed a penalty of 5 million INR on singer Adnan Sami for buying eight flats in Mumbai in 2003 without prior permission from the Reserve Bank of India, when he was a Pakistani national.

According to The Hindu newspaper, the singer had purchased the flats in Mumbai for a total of INR 2.53 crore without prior permission from the Reserve Bank of India (RBI). Special permission was required as he was a Pakistani national at the time of purchase.

The penalty amount has to be paid within three months of the order which was issued on September 12.

Sami said he was not aware that Pakistani nationals could not purchase immovable property in India.

The Appellate Tribunal for the Foreign Exchange Management Act (FEMA) imposed the penalty while it quashed a December 2010 order of the Enforcement Directorate Special Director (Mumbai) for confiscation of the properties.

The tribunal's directive came in response to an appeal filed by the singer against the Special Director's order to confiscate the properties and imposing 2 million INR in penalty.

“The impugned order is set aside as far as exercise of discretion under Section 13(2) of the Act. The finding arrived under Section 13(1) shall remain intact. Mr Sami shall deposit the remaining ₹40 lakh with the respondent [ED] within three months from today. As no case under Section 13(2) (about confiscation of eight flats and five parking space)...the said findings and part of the order is quashed,” the tribunal said in its ruling.

The tribunal issued the ruling after hearing Sami's lawyer as well as the lawyers representing Enforcement Directorate Special Director.

"The flats were purchased by Indian Rupees, out of monies earned in India on which Income Tax has been paid, as well as monies loaned from India banks. The loans have been duly repaid," ruled the tribunal after hearing both sides.