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Deepak Petrochem Limited’s Limited Liability Company Formed

Deepak Petrochem Limited’s Limited Liability Company Formed

The Limited Liabilities Company (LLC) is an entity formed by Deepak Petrochem Limited (DPL) and the Government of India. 

The company was created under the Act, 1986 to deal with certain issues related to the acquisition and distribution of petroleum and other petroleum products by the State of India under the petroleum and petroleum products (PCPs) Act, 1988. 

As per the documents filed in the case, the company was incorporated by reference to the Companies Act, 1948. 

In the same documents, the DLF also filed a registration certificate in the name of Deepak and his two sons Deepak (P) and Deepak P. Both Deepak’s sons, who were also shareholders in the company, have been named as directors of the company. 

Under the Companies and Financial Institutions (Prohibition of Money Laundering) Act (2001), the government has the power to ban or prohibit the transactions in the currency of a foreign entity, which is prohibited for two reasons: (i) it is not conducive to the public interest, and (ii) the currency is not issued or is convertible into currency which is not convertible into that currency. 

On May 1, 2018, the Bombay High Court issued notice to DLF, seeking to quash the order issued by the court. 

While DLF is seeking to contest the order, the government of India has taken action. 

DPL has now asked the High Court to direct the government to make a notice to the DLFs directors, asking them to reply to the notice within 10 days. 

According to documents filed by the DLFS, the purpose of the limited liability company is to manage and protect the interests of the State, as per the Oil & Gas Regulatory Authority of India (OGRAI) Act and the Petroleum and Chemical Act. 

“The limited liability companies were established to manage the business of the Petroleum Corporation of India Ltd.

(PCIL), to protect the State’s interests in the oil and gas sector, and to manage all the interests relating to the production and distribution by the PCIL of petroleum products in the State. 

These limited liability entities were incorporated by registered address in the presence of the Registrar General of India and the Principal Registrar of Companies. 

Since the creation of these limited liability firms, the interest of the shareholders has been protected. 

It is therefore incumbent on the government for the purpose to regulate and enforce the prohibition of money laundering, terrorist financing, arms trafficking, drug trafficking, arms procurement, arms exports, and other related matters,” said a statement issued by DLF. 

Meanwhile, the Government has issued a notification to the Central Board of Direct Taxes (CBDT) to ensure that no company in the form of a limited liability firm is formed. 

If any such company is formed, the authorities will take appropriate action to protect against such a situation. 

CBDT spokesperson Ramesh Kumar Singh said the notification has been issued in the interest to ensure proper functioning of the CBDT. 

Earlier, the HC had asked the government not to set up a new company that has an ownership of more than one company.

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