Can securities premium can be used as investment??

Sec.78(2) of CA 1956 has put certain restrictions on utilisation of Securities Premium A/c.  If you see the permitted uses you will  find that in Balance Sheet Securities Premium A/c willl be reduced and another liabillity will be created or asset side will be reduced for equivalent amount.  However, in case of investment, you are not going to reduce securities premium a/c and hence there is no restriction on this account.  You willl be making investment either out of Bank balance (assets side) or out of borrowing, but not out of securities premium  a/c.

Thanks for your reply. However, whatever money utilised from bank is actually pertains to securities premium amount only. If this fact can be established easily, will your reply still hold good??

Yes please.  This will  of course be subject to compliance of other provisions like Section 372A, RBI Act (relating to NBFC) etc.