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2020 (9) TMI 1214 - HC - Companies LawAuthorizing Serious Frauds Investigation Office (SFIO) to institute proceedings - Section 241 of the Companies Act, 2013 - HELD THAT - Since the affairs of operation of NSEL have been suspended for almost over six years, prima facie, it would be difficult to accept that a petition under Section 241 (2) of the Companies Act, 2013 would be maintainable. Mr Ahluwalia states that he requires instructions to respond to this contention. He states that he would require some time for the said purpose as the concerned officers are currently not available because two of them have been diagnosed positive for Covid-19. At the request of Mr Alhuwalia, list on 15.10.2020.
Issues:
1. Application for amending writ petition and impleading NSEL as respondent. 2. Impugning an order authorizing SFIO to institute proceedings under Companies Act, 2013. 3. Concerns regarding the functioning and suspension of NSEL. 4. Maintaining the maintainability of the petition under Section 241(2) of the Companies Act, 2013. 5. Request for time to file a counter affidavit and respond to contentions. 6. Suspension of SFIO proceedings till the next hearing date. Analysis: 1. The first issue pertains to an application seeking to amend the writ petition and include National Spot Exchange of India Limited (NSEL) as a respondent. The court allowed the application, considering the early stage of the petition and the absence of a counter affidavit, thereby accepting the amended petition. 2. The second issue involves challenging an order passed by the Central Government, empowering the Serious Frauds Investigation Office (SFIO) to initiate proceedings under Section 241 of the Companies Act, 2013. The petitioner contested that since NSEL ceased operations in 2013, and its license was terminated in 2014, there seems to be no valid reason for the government to believe that its affairs are prejudicial to public interest. The court noted the arguments and scheduled further proceedings. 3. The third issue raises concerns about the status of NSEL, which has been non-operational for over six years. The petitioner questioned the maintainability of a petition under Section 241(2) of the Companies Act, 2013, given the prolonged suspension of NSEL's operations. The respondent sought time to respond due to unforeseen circumstances, leading to an adjournment of the hearing. 4. The fourth issue revolves around the viability of the petition under Section 241(2) of the Companies Act, 2013, considering the extended suspension of NSEL's activities. The court acknowledged the complexity of the matter and granted time for the respondent to gather necessary information for a comprehensive response. 5. The fifth issue involves a request for an extension to file a counter affidavit and address the contentions raised during the proceedings. The court allowed the requested time frame for filing responses and set deadlines for subsequent actions. 6. Lastly, the sixth issue deals with the suspension of SFIO proceedings related to NSEL until the next hearing date. The court directed a halt to any ongoing proceedings and instructed the concerned parties to jointly request adjournments if necessary, ensuring a fair and orderly progression of the case. This detailed analysis encapsulates the key issues addressed in the judgment, outlining the arguments presented by the parties and the court's directives for further proceedings.
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