TMI Blog1983 (5) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... s carrying on business through its branch in India having its office and factory at Devanahalli Road, off Old Madras Road, Bangalore. The Foreign Exchange Regulation Act, 1973, was brought into force during that year. Thereafter, the petitioner applied to the Reserve Bank of India for permission under section 29(2)( a ) of the Act of 1973 for carrying on its existing activities in India. After some correspondence, the Reserve Bank wrote a letter dated October 5, 1978 (annexure "A"), to the petitioner calling upon it to comply with certain conditions mentioned therein, one of them being that the Indian branch of the petitioner company should be converted into an Indian company with non-resident interest in the equity capital not exceeding 40 per cent. within a period of one 'year from the date mentioned therein (in the letter). Thereafter, the petitioner applied to the respondent as on February 19, 1980, annexure "B", to register it as a private limited company under the provisions of Part IX of the Act. In answer to this application, annexure "C" referred to above, was sent by the respondent to the petitioner. It may be useful to extract the reasons given in annexure "C" for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays, it makes no sense. He argues that no Act of Parliament of the United Kingdom has been in force in India. In particular, he lays stress on the word "or" found between the two phrases "of any Act of Parliament of the United Kingdom" and "letters patent". The words, according to him, "in force in India" go only with the words "letters patent". If the words "in force in India", he argues, were to qualify both "letters patent" and "the Act of Parliament of the United Kingdom" the same may likewise be taken as- qualifying the earlier phrases like "any Act of Parliament other than this. Act" or of any other Indian law" thus leading to absurdity. In this connection, he drew my attention to section 29 of the Act of 1973 under which the Reserve Bank has directed his client to seek registration under the Act. The Act of 1973 has placed certain restrictions on foreign companies doing business in this country. They had to seek permission of the Reserve Bank to continue to carry on the business. Accordingly, the petitioner-company sought permission, as stated above, with the Reserve Bank to continue to carry on its business. The Reserve Bank may either grant or reject permission and when gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that prior to independence, companies used to be formed in England under statutes of the Parliament of the United Kingdom and also under the letters patent, enabling those companies as full-fledged companies and as if formed in this country to establish their business here (India). He stated that since the Crown in England has paramount powers to make laws affecting its colonies including India prior to independence, the companies, thus formed without any difficulty, could have established their business in India as if they were companies registered here and like any other Indian company. According to him, in this sense, the words "any Act of Parliament of the United Kingdom or letters patent in force in India" will have to be understood. In answer to the contention of the learned counsel for the petitioner that even otherwise "being otherwise duly constituted according to law" as provided in the last part of clause ( b ), the petitioner-company is entitled to seek registration, counsel for the respondent submitted that "constituted according to law" means according to the law of this country. He also drew my attention to the provisions contained in Part II of the Act wherein p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement of this Act, in pursuance of any Act of Parliament other than this Act or of any other Indian law (including a law in force in a Part B State), or any Act of Parliament of the United Kingdom or letters patent in force in India, or being otherwise duly constituted according to law, and consisting of seven or more members, may at anytime register under this Act as an unlimited company or as a company limited by shares, or as a company limited by guarantee ; and the registration shall not be invalid by reason only that it has taken place with a view to the company's being wound up." As noted above, the argument of the learned counsel for the petitioner-company is that it is plain from the words used in clause ( b ) that a company formed in the United Kingdom, in pursuance of an Act of Parliament of that country, can seek and obtain registration under that Act. Whereas what was argued by the learned counsel for the respondent is that it is only a company (petitioner) formed in India under an Act of Parliament of the United Kingdom (if any) in force in India that can seek registration and not a company incorporated or formed outside this country. Counsel for the petitioner st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have been an adequate provision. Clause ( b ) extracted above may be seen. The words "of any Act of Parliament of the United Kingdom or letters patent in force in India" lie between two commas. As observed by the learned author, Vepa P. Sarathy, in his book, Interpretation of Statutes, at page 505, "the comma is a matter of sense and experience" and "a comma is used to mark a phrase or a clause when you think it makes the sense clearer to do so". In this sense, the words "any Act of Parliament of the United Kingdom or letters patent in force in India" form one clause. When plainly read, in the context of the entire clause ( b ), the aforesaid words only mean any company formed...... in pursuance of any Act of Parliament of the United Kingdom in force in India or letters patent in force in India. The word "or" occurring between those two sets of words indicate that the words "in force in India" qualify both "any Act of Parliament of the United Kingdom" and "letters patent". It is not clear what situation had been envisaged when this clause was drafted. India was a former colony of the British Crown. The subcontinent was annexed to and made a part of the British Empire b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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