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TMI Blog1998 (10) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... m the said accounts, and for certain other reliefs. It is the submission of the learned Counsel that this is an unusual petition because a Government Institution is approaching the Court for such type of directions. He submits that it is the function of the SEBI or the Central Government to frame the Regulations at the earliest, if they think it necessary in the interests of investors /depositors in such Plantation Companies. He submits that, instead of moving the Central Government to frame and finalise the Regulations, they have approached this Court and, according to him, it amounts to abuse of the process of law, because this Court has issued various directions, including the direction to freeze the Bank accounts of the directors of the respondent No. 1. 3. It is true that it is for the Central Government or the State Government to pass appropriate legislation, so that investors are not duped by moon shine returns by such Plantation Companies or Savings/Investment Schemes. 4. However, it has been pointed out on behalf of the SEBI that till the Regulations or law come into force, such Companies should not permitted to exploit the situation arising because of vacuum of st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh rates of returns which are not consistent with the normal returns in such schemes; the Central Government was concerned with the high element of risks associated with such schemes and hence in order to ensure that the investors make investment in such schemes only after they are fully acquainted with or made aware of the high risk factors involved in such schemes, has felt in necessary to decide an appropriate regulatory framework for regulating entities which issue such schemes. It is prayed that, in public interest, till regulations are framed, appropriate directions be given to protect large amounts invested by middle-class people. 5. It has been also pointed out that Respondent No. 1 has floated 18 Schemes and has collected approximately Rs. 16 crores from the small investors. The Schemes are offering fanciful returns, which are highly disproportionate and commercially not viable. The Schemes are: ( i )Greenshare Plan - A ( ii ) Greenshare Plan - B ( iii )Greenshare Plan - C ( iv )Greenshare Plan - D ( v )Greenshare Plan - E ( vi ) Greenshare Plan - T ( vii )Greenshare Vegetable Unit ( viii )Greenshare Plan - G ( ix )Agroshare - 1 ( x )Greenshare Dhan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. Prima facie, it appears that Respondent No. 1 and such other Companies, which are mushrooming in the country under the corporate veil, are committing fraud by tempting middle-class persons to invest their life- long savings in the high hope of having fanciful returns, without there being any basis. Further, in agricultural production, this type of high returns are impossibility in this country, where, otherwise, the farmers of this country would have become multi-millionaires by this time. It appears that, because of these empty, false promises, investors are duped and the Company s monies are siphoned off either to sister companies or firms of the Directors or their relatives. 8. In the case of Delhi Development Authority (supra), the Apex Court has referred to the discussion on the topic of corporate veil in Palmer s Company Law and has quoted with approval the observations that Courts have shown themselves willing to lifting the veil where the device of incorporation is used for some illegal or improper purpose. The Court has also considered the concept of corporate entity and held that where the corporate character is employed for the purpose of committing illegali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this view of the matter, we pass the following order: ( a )the Commissioner of Police, Mumbai, to appoint the Deputy Commissioner of Police, Economic Offences Wing, to inquire into the various aspects of the 1st respondent Company; ( b )The Deputy Commissioner of Police is directed to hold necessary inquiry to find out the whereabouts of the 1st Respondent Compa- ny s property, both movable, and immovable; ( c )The Reserve Bank of India is directed to appoint at least three auditors with other necessary staff to carry out the inquiry and assist the Deputy Commissioner of Police in carrying out such inquiry; ( d )Respondents No. 2 to 5 are directed forthwith to state on oath in an affidavit the following: ( i )The list of their moveable and immovable properties and all assets and the location thereof; ( ii )The list of their bank accounts and the particulars thereof, including the names and addresses of the banks and the amounts therein. ( e )Respondents No. 2 to 5 and 7 are directed to furnish a list of the group companies and indicate the amounts/assets, whether mova- ble or immovable, transferred from Respondent No. 1 to its group companies or any other compan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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