9911796707
TMI Blog2018 (7) TMI 1900X X X X Extracts X X X X X X X X Extracts X X X X ..... notice that it was being branded as a shell company but that was not done in the instant case. Petitioners has referred to the averments made in the writ petition and submitted that petitioner No.1 company is an old and reputed company owning 14 Tea Estates in the State of Assam producing 11 million kgs of tea every year. It has a labour force of 20 thousand of its own. Prima facie, branding a company like the petitioner No.1 company as a shell company and thereafter initiating proceeding to prove the same virtually amounts to giving a finding first and thereafter initiating proceeding to justify the finding, like a post decisional hearing. Court is, therefore, of the view that an interim order is called for in this case. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atabase of listed shell companies with SEBI. The database comprises of 331 companies out of which 124 companies were earmarked on the basis of information received from the Income Tax department following search and seizure. At Serial No.2 in the list of 331 such companies is the petitioner No.1 company. This Court by order dated 18.05.2018 had issued notice both on the writ petition as well as on the interim prayer. Relevant portion of the order dated 18.05.2018 reads as under:- By this writ petition, the petitioners challenge the notice dated 9.6.2017 whereby necessary action was directed to be taken by the Chairman, Security Exchange Board of India (SEBI), in respect of 331 listed shell companies as per SEBI laws and regulations. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is used as a front for routing of crime tainted money into the economy. Therefore, the expression itself has an adverse consequence, penal as well as financial. Before terming the petitioner company No.1 as a shell company, notice ought to have been issued and a hearing ought to have been afforded because terming the petitioner No.1 as a shell company by itself would carry adverse consequences. On the other hand, Mr. Keyal, learned Assistant Solicitor General of India, submits that proceedings against the 331 shell companies have been initiated by the SEBI and an interim order was passed on 08.12.2017 in the case of the petitioner No.1 company wherein adverse observations have been made regarding genuineness of investments made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inistry of Corporate Affairs to have at least put the company on notice that it was being branded as a shell company but that was not done in the instant case. Learned counsel for the petitioners has referred to the averments made in the writ petition and submitted that petitioner No.1 company is an old and reputed company owning 14 Tea Estates in the State of Assam producing 11 million kgs of tea every year. It has a labour force of 20 thousand of its own. Prima facie, branding a company like the petitioner No.1 company as a shell company and thereafter initiating proceeding to prove the same virtually amounts to giving a finding first and thereafter initiating proceeding to justify the finding, like a post decisional hearing. Court is, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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