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.";