There is no statutory definition of a shell Company in any laws of India.
In Assam Company India Ltd. and Ors. vs The Union of India & Ors. Manu/GH/01542/2019 the Gauhati High Court held that there is no statutory definition of a shell Company in any laws of India. However, in popular parlance, a shell company is artificially identified with dubious activities concerning serious economic offences such as tax evasion, money laundering, benami transactions, conversion of black money into white, round tripping with host of other associated offence. No such finding has been given by the respondent except that the appellant company is not carrying out any production activities since September 2000.
The objective of the SEBI Act is to promote the development of, and to regulate the healthy growth of securities market as well as to protect the interest of the investors. It has the power to issue necessary direction if it is satisfied upon an inquiry that such direction is necessary in the interest of the investors. We are of the opinion that before branding the appellant as a shell Company it was obligatory on the part of the SEBI as well as on the part of the BSE to investigate and find out whether the appellant is a shell Company or not.
Judgement link : http://sat.gov.in/english/pdf/E2019_JO2018360.PDF