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2. The Respondent NO.1 company was incorporated on 7.10.1983 with an authorised capital of Rs. 20 crores and a paid up capital for more than Rs.19.97 crores. The company is portrayed that it was in business of financing industrial enterprises. The Central Government in exercise of its powers under Section 235 of the Companies Act had ordered investigation into the affairs of one M/s NKS Holding Pvt Ltd to Serious Fraud Investigation Office (SFIO). As per the final report submitted by SFIO it was revealed that Jain Brothers were found to be in control of NKS Holdings Pvt Ltd and the Jain Brothers were persons behind operations involving 49 shell companies whose business were financing industrial enterprises. SFIO in its report running more than 7000 pages also found that these companies are carrying out non-banking financial business without valid registration. The investigation pointed out to transactions pertaining to one M/s Jagat Projects Ltd whose shares were sold at a premium of Rs.390/- per share in January, 2009. These shares were purchased by 49 companies and were off loaded within a period spanning over a week to few months back to the nominee companies of Jagat Project. The transactions of sale of the shares in which a premium of Rs.390/- were reversed at a price of Rs.10/- per share. The entire transactions is alleged to be mere book entry no actual transfer of shares had taken place and only a commission being given to those involved in money laundering. Upon considering the report of SFIO, the Central Government accorded sanction on 29.08.2017 to the ROC to initiate winding up Company Appeal (AT) No.88 of 2019 proceedings against all 49 companies. The Respondent No.1 company is one of them.

9. Learned Senior Counsel for Respondent No.1 supports the impugned order and submits that Central Government had ordered investigation into the affairs of M/s NKS Holding PVt Ltd to the SFIO. During this investigation Respondent no.1 was never called by the investigation agency. Therefore, there was no occasion for them to represent before the investigation agency. Respondent Company when received a notice dated 07.07.2017 then only they came to know that during the investigation into the affairs of M/s NKS Holdings Pvt Ltd involvement of Respondent No.1 was found. In the notice dated 07.07.2017 some conclusions are mentioned but it is not mentioned that how the Respondent No.1 company was involved in money laundering activity and no specific allegation against Respondent No.1 company. Therefore, the Respondent No.1 in reply to the notice requested for providing copy of report of SFIO so that they may be able to give a suitable reply of the notice. However, without providing the copy of the report Respondent No.2 has accorded the sanction for initiation of winding up proceedings against the Respondent no.1. Sub Section (3) of Section 272 of Companies Act, 2013 provides that Central Government shall not accord its sanction unless the company has been given a reasonable opportunity of making representations. But no such opportunity has been given to the Respondent No.1. Learned Sr. Counsel further submits that sanction dated 29.08.2017 does not contain the material which was considered by the sanctioning authority at the time of Company Appeal (AT) No.88 of 2019 granting sanction. It shows that in a very casual manner the sanction has been granted without applying mind. It is also submitted that the sanction letter is addressed to Director, SFIO whereas the proceedings has to be initiated by ROC, Delhi. Thus the Tribunal has rightly dismissed the petition for want of proper sanction under Section 272 of Companies Act, 2013.

10. We have considered the issue of sanction.

i) Whether the Respondent company has been given a reasonable opportunity of making representation; and
ii) Whether the Central Government has accorded the sanction as per law.

11. Undisputedly the Central Government ordered investigation into the affairs of M/s NKS Holdings Pvt Ltd to SFIO and the report was submitted on 31.03.2016 to the Ministry of Corporate Affairs. It is nowhere on record that during the investigation Respondent No.1 company was noticed. Therefore, the argument advanced by the Learned Sr. Counsel of Respondent No.1 that Respondent No.1 received notice on 07.07.2017 then only they came to know that in the report involvement of Respondent No.1 was found. The SFIO's report runs in more than 7000 pages incriminating 49 companies including Respondent NO.1. The Respondent No.1 company in reply to notice dated 07.07.2017 requested for supplying the copy of such report but copy has not been supplied to Respondent No.1. That even without considering this reply which was received on 01.08.2017 by the Respondent No.2 on 29.08.2017 sanction was accorded against the Respondent No.1 Company Appeal (AT) No.88 of 2019

Sub:In the matter of M/s NKS Holdings Pvt Ltd & Ors-Issue of SCN U/s 272 (4) of the Companies Act, 2013-reg.



       Sir,


              I    am      directed   to       refer   to   the   letter   number
RD(NR).Inv/235/NKS/2017/5944 dated 11.08.2017 (copy enclosed) from RD(NR) on the subject cited above inter alia stating that complete files regarding issuance of SCNs to the companies be transferred to the O/o ROC Delhi for taking action pursuant to directions of the Ministry vide letters No.5/10/2013/CL-II dated 23.5.2017 and 15.6.2017. RD(NR) has also requested that SFIO's IOs may be directed to coordinate and assist the ROC, Delhi while finalizing and defending the winding up petition before the NCLT.