BHAGABATI PRASAD BANERJEE, J. ( 1 ) THIS is an appeal filed by the appellants Union of India challenging the validity of the order dated 9/01/1985 passed by the Chairman, Foreign Exchange Regulation Appellate Board in Appeals Nos. 106 and 107 of 1986 which were filed by M/s. G. A. Randarian Limited (hereinafter referred to as the 'said company'), whereby the said appeals were allowed. ( 2 ) THE only question that arose for determination by this Court is whether the respondent-company M/s. G. A. Randarian Ltd. by entering some independent transactions through their Branch Office at Dubai, (United Arab Emirates) without obtaining any permission of the Central Government violated the provisions of S. 27 (1) of the Foreign Exchange Regulation Act for which the said company was liable to pay penalty under S. 50 of the said Act. ( 3 ) THE facts of the case in brief are as follows the said company was engaged in the export of tea and applied to the Reserve Bank of India for permission to establish a Branch Office at Dubai. In the said application the said company stated, inter alia, as follows"dubai (United Arab Emirates ). The proposed branch will be set up to sell our goods directly to the retailers, thus it will be possible for us not only to realise a higher unit price but to substantially expand our exports to the West Asia/gulf region. "*** ***"we expect the proposed Dubai office to be self-supporting within two years. The recurring expenses of Rs. 125,000. 00 will be met by the increased sale of our goods in Dubai. Although the establishment of our proposed office will not result in a saving of foreign exchange which would otherwise have to be expended, it will result in more Foreign Exchange earnings for the country. " ( 4 ) ON the basis of the said application the Reserve Bank of India granted permit for recurring remittances on account of maintenance of Branch Office at Dubai and such permits were being issued on periodical basis from year to year. ( 5 ) IT is not in dispute that on the basis of such permits which were issued by the Reserve Bank of India, the said company remitted the expenses for maintaining such branch office at Dubai. Subsequently the respondent-company decided to turn the Branch Office into a trading office. ( 5 ) IT is not in dispute that on the basis of such permits which were issued by the Reserve Bank of India, the said company remitted the expenses for maintaining such branch office at Dubai. Subsequently the respondent-company decided to turn the Branch Office into a trading office. It may be mentioned that earlier the Reserve Bank of India restricted the said company for not using the Dubai Office as a Trading Office and not to give commission to any agents in the middle East Asia and the African countries. However, the respondent-company to remit commission to the Agents of the said countries and to transform the Branch Office at Dubai into a Trading Office, it applied before the Reserve Bank of India for approval of their proposal. As the matter was pending before the Reserve Bank of India, the respondent-company did not make any remittance to its Dubai Branch Office for the purpose of the office expanses there but the said office was maintained by the profits earned by the said Branch Office itself. However, the said company started remitting the commission to the Agents to those Middle East Countries as also to East Afircan Countries after obtaining permission of the Reserve Bank of India. ( 6 ) THEREAFTER certain searches were conducted in the office premises of the said company and the Directors were interrogated alleging some violation of the Foreign Exchange Regulation Act. ( 7 ) AFTER the said searches were conducted a Memorandum No. T-4/15-C/83 (SCN) dated 12-12-83 was issued upon the said company and the Managing Director alleging that they had contravened the provisions of S. 9 (1) (c) of the Foreign Exchange Regulation Act, 1973, (hereinafter referred to as the 'said Act') for acknowledging a debt, equivalent to Rs. 7,37,387. 69p. in favour of Dubai Branch as on 30-4-1982. Another Memorandum No. 11/84/scn/dd (SCN II) dated 30/01/1984 was issued to the said company alleging that they had contravened the provisions of S. 27 (1) of the said Act by associating themselves and participating in a concern outside India to wit their Dubai Branch, which was engaged in the trading activity without the permission of the Central Government. Another Memorandum No. 11/84/scn/dd (SCN II) dated 30/01/1984 was issued to the said company alleging that they had contravened the provisions of S. 27 (1) of the said Act by associating themselves and participating in a concern outside India to wit their Dubai Branch, which was engaged in the trading activity without the permission of the Central Government. Not being satisfied with the reply filed on behalf of the said company, on the basis of the materials placed before the Adjudicating Officer, the said Adjudicating Officer came to the conclusion that the charges levelled in Memorandum No. T-4/15-C/83 (CSN I) dated 1-12-83 were not established but the charges mentioned in Memorandum No. 11/84 (SCN II) dated 304-1982 under S. 27 (1) of the Foreign Exchange Regulation were fully established against the appellants and accordingly the said Adjudicating Officer imposed a penalty of Rupees 10,000/- on the said company and Rs. 1,000. 00 each on the Managing' Director and the Executive Director of the said company. ( 8 ) BEING aggrieved by and dissatisfied with the order of the said Adjudicating Officer in respect of the charges contained in Memo No. 11/84/ (SCN II) dated 30th January, 1984 under S. 27 (1), the said company preferred an appeal before the Foreign Exchange Regulation Appellate Board in Appeals Nos. 106 and 107 which were filed on 14-7-86. Both these appeals were disposed of by the said Board on 5/05/1986 by passing inter alia the following order"a perusal of the said provisions of para 21. 7 leaves no room for doubt that they applied to establishment of a subsidiary firm or company abroad and not to opening of a branch office abroad to which the provisions of para 21. 6 specifically apply. The words 'independent firms and companies abroad', do not relate to the establishment of a mere branch office abroad for which specific provisions are contained in para 21. 6 referred to above. It would, therefore, be clear that the said words 'independent firms and companies abroad' occurring in para 21. 7 would not include opening a branch merely because it is to be maintained on its own earnings. The requirement of maintenance of proper accounts of profits and losses of such a branch do contemplate the branch having its own earning. It would, therefore, be clear that the said words 'independent firms and companies abroad' occurring in para 21. 7 would not include opening a branch merely because it is to be maintained on its own earnings. The requirement of maintenance of proper accounts of profits and losses of such a branch do contemplate the branch having its own earning. The said earning may be by way of commission or even by way of the margin of profit out of the goods imported from India and then sold abroad. It is to be noted that such a branch is of an exporter. Thus, the mere fact that the appellant's branch in Dubai imported some tea from others in India also besides the appellants, could not mean that it was an independent firm or company as such for purposes of S. 27 of the Act which specifically contemplate a subsidiary firm or company, as explained in para 21. 7 of the Exchange Control Manual referred to above. Moreover, even if it could be said that the branch office in Dubai entered into some independent transactions also, which was not permitted under the permission granted by RBI for opening the branch the appellants could be proceeded with for such a contravention or breach of condition. It could not, however, mean that the branch would turn into an independent firm or company for purposes of S. 27 of the Act. Of course, in terms of the provisions of S. 73 (1) (d) such a branch office is also to be treated as a body corporate resident outside India. However, that is obviously for purposes of being included in the term 'person resident outside India. ' The said provision could not mean that such a branch office has to be treated as a subsidiary firm or company for purposes of the said para 21. 7 of the Exchange Control Manual and S. 27 of the Act. In this view of the matter, it must be held that the provisions of S. 27 of the Act were not attracted to the facts of the present case. " ( 9 ) BEING aggrieved by the said decision of the Chairman of the Foreign Exchange Regulation Appellate Board, the appellant, Union of India preferred this appeal to this Court under S. 54 of the Foreign Exchange Regulation Act, 1973. ( 10 ) MR. " ( 9 ) BEING aggrieved by the said decision of the Chairman of the Foreign Exchange Regulation Appellate Board, the appellant, Union of India preferred this appeal to this Court under S. 54 of the Foreign Exchange Regulation Act, 1973. ( 10 ) MR. R. N. Das, learned counsel appearing on behalf of the appellant contended that the said company violated the provisions of S. 27 (1) of the Foreign Exchange Regulation Act because the said company had without previous permission of the Central Government associated itself with or participated in a concern outside India and engaged in or intended to engage in activity of trading or commercial in nature outside India. It is the contention of Mr. Das that the said company by allowing the its branch office to perform trading activities had violated the provisions of S. 27 (1) of the said Act. ( 11 ) IT was submitted by Mr. Das that under the provisions of S. 27 (1) of the said Act, a restriction has been imposed upon the persons residents in India from doing trading activities outside India. According to him, if such a trading activity is being done by the firm in that event it would attract the provisions of S. 27 of the said Act and consequential penalty under S. 50 of the said Act would be attracted. It was submitted that the Chairman of the Foreign Exchange Regulation Board erred in law in holding that the provisions of S. 27 (1) of the said Act could not be applied in the facts and the circumstances of the case. ( 12 ) SECTION 27 (1) of the said Act provides as follows"27 (B) *** (1) Without prejudice to the provisions of Cl. (e) of Sub-Sec. (1) of S. 19, no person resident in India shall, without previous permission of the Central Government associate himself with, or participate in, whether as promoter or otherwise, any concern outside India engaged in, or intending to engage in any activity of a trading, commercial or industrial nature, whether such concern is a body corporate or not. (e) of Sub-Sec. (1) of S. 19, no person resident in India shall, without previous permission of the Central Government associate himself with, or participate in, whether as promoter or otherwise, any concern outside India engaged in, or intending to engage in any activity of a trading, commercial or industrial nature, whether such concern is a body corporate or not. " ( 13 ) THEREFORE, from the Section itself it is quite clear that "no person shall, without previous permission of the Central Government associate himself with, or participate in, whether as promoter or otherwise, any concern outside India engaged in, or intending to engage in any activity or a trading, commercial or industrial in nature, whether such concern is a body corporate or not. " From the language of the Section it is also clear that in order to attract the restriction contained in S. 27 (1) of the said Act, the first condition is that if a person resident in India participates himself with a foreign concern outside India, who is engaged in activity of trading or commercial and industrial in nature, in that event such a person cannot associate himself with foreign concern without obtaining permission from the Reserve Bank of India. ( 14 ) IN this context Mr. Das submitted that the words "no persons" resident in India shall without previous permission can associate or participate in any activity of a trading commercial or industrial nature, mean that any resident in India shall not engage in trading activities outside India without previous permission of the Reserve Bank of India. ( 15 ) WE are unable to accept such an interpretation of the provisions of S. 27 of the said Act as it is clearly against the languages used in the S. 27 (1) of the said Act. Further it was submitted by Mr. Das that in view of the provisions of S. 73 (1) (c) of the said Act, the said firm or branch should be treated in all respects as a body corporate where it is situated. S. 73 (1) (c) provides as follows"73 (1 ). *** (c) a firm or the branch of a firm shall be treated in all respects as if such firm or branch were a body corporate resident where it is situated. " ( 16 ) RELYING on the provisions of that Section Mr. S. 73 (1) (c) provides as follows"73 (1 ). *** (c) a firm or the branch of a firm shall be treated in all respects as if such firm or branch were a body corporate resident where it is situated. " ( 16 ) RELYING on the provisions of that Section Mr. Das submitted that the said branch office should be treated in all practical purposes a separate body corporate, resident in foreign countries and by doing trading activities through the branch office, the said company had in fact entered into trading activity with a foreign concern. We are unable to accept such an argument in view of the fact that the provisions of S. 73 of the said Act are supplementary provisions of the said Act that such a firm or a branch of company shall be a body corporate where the branch is situated is a matter of legal fiction. The purpose is clear that for the purpose of income and other statutory obligations, such a firm should be treated as a resident where it is situated. These provisions cannot come in aid to the appellants for the purpose of construing the provisions of S. 27 (1) of the said Act to hold that the head office by entering into trading activities with its branch office had associated itself or participated in any concern outside India. ( 17 ) IN this connection it may be mentioned that one cannot be said to have associated himself with a branch of a company in which he himself is a director. A branch of a Company is a part of the company and anything done by the Branch Office must be held to have been done by the company itself. Accordingly the argument of Mr. Das that the Head Office by acting through the branch office had violated the provisions of Section 27 (1) of the said Act cannot be accepted. ( 18 ) IN our view, the Chairman of the agree Foreign Exchange Regulation Appellate Board has correctly decided the issue. ( 19 ) IN this particular case, the words used in Sub-Section (1) of Section 27 are quite clear and unambiguous leaving no room for doubt in our mind. ( 18 ) IN our view, the Chairman of the agree Foreign Exchange Regulation Appellate Board has correctly decided the issue. ( 19 ) IN this particular case, the words used in Sub-Section (1) of Section 27 are quite clear and unambiguous leaving no room for doubt in our mind. Even assuming that there is any doubt regarding the provisions, even in that case, it is the principle of the legal policy that a person should not be penalised except under a law, which is clear otherwise it would be case of doubtful penalisation. Legislature never intended that a person should be penalised except under a law which must be clear and leaves no doubt. ( 20 ) ACCORDINGLY we hold from the clear meaning of the Section 27 (1) that no person resident in India had without previous permission of the Central Govt. associated himself with or participated in any concern outside India which is engaged in any trading of commercial or industrial in nature means a foreign concern and in this case it cannot be said by any stretch of imagination that head office by acting through its branch office had associated himself with any concern outside India. Accordingly we agree with the view expressed by the Chairman of the Foreign Exchange Regulation Appellate Board that the provision of Section 27 (1) of the Foreign Exchange Regulation Act, 1973 could not be invoked at all the facts and circumstances of the case. ( 21 ) IN the result the appeal fails. Accordingly the appeal is dismissed. ( 22 ) THERE will be no order as to costs. ( 23 ) PRAYER for stay of operation of this order is refused. ( 24 ) AN oral prayer has been made on behalf of the appellants for granting leave to appeal to the Supreme Court. We do not think that it is fit and proper case where such leave should be granted, in our opinion that there is no doubt that the interpretation put forth by us to Section 27 (1) is clear. Accordingly the said prayer is rejected. ( 25 ) SUHAS CHANDRA SEN, J :- I agree. Appeal dismissed.