order in the matter of ramel real estate & infrastructure limited
TRANSCRIPT
Page1of1
WTM/PS/153/ERO-IMD/FEB/2016
BEFORETHESECURITIESANDEXCHANGEBOARDOFINDIACORAM:PRASHANTSARAN,WHOLETIMEMEMBER
ORDER
Undersections11,11(4),11Aand11BoftheSecuritiesandExchangeBoardofIndia
Act,1992,
Inrespectof-
1.Ramel Real Estate and Infrastructure Limited (CIN:
U45400WB2009PLC138901,PAN:AAECR6852L)
anditsDirectors,
2.Mr.RemendraMohanSarkar(DIN:01753154,PAN:AUIPS3363G),
3.Mr.RameswarPodder(DIN:01753196,PAN:AFVPP4292B),
4.Mr.SukantaDeb(DIN:01753238,PAN:AJIPD0118R)and
5.Mr.ParthaDas(DIN:03631995,PAN:ANMPD8317J);
6.Debenturetrustee,RamelRealEstateandInfrastructureDebentureTrust
(representedbyitsTrustee,viz.Mr.SanjoyDeb).
1. SecuritiesandExchangeBoardofIndia(“SEBI”),videanex-parteinterimOrder
datedAugust06,2014(“interimorder”)primafacieobservedthatthecompany,Ramel
RealEstateandInfrastructureLimited(“theCompany”or“RREIL”)isengagedinfund
mobilizationactivityfromthepublicthroughtheofferofNon-ConvertibleDebentures
(“NCDs”)inviolationofsections56,60,73,117Band117CoftheCompaniesAct,
1956readwiththeCompaniesAct,2013andtheprovisionsoftheSEBI(Issueand
ListingofDebtSecurities)Regulations,2008(“theILDSRegulations”).Theinterim
orderalsoallegedthatthedebenturetrustee,RamelRealEstateandInfrastructure
DebentureTrust(representedbyitsTrustee,viz.Mr.SanjoyDeb)hadallegedlyfailed
tomeettheeligibilityconditionsspecifiedunderregulation7oftheSEBI(Debenture
Trustees)Regulations,1993 ("DT Regulations")and acted asan unregistered
debenturetrusteeinviolationofsection12(1)oftheSecuritiesandExchangeBoardof
Page2of2
IndiaAct,1992(“SEBIAct”).
2. Inordertoprotecttheinterestofinvestorswhohadsubscribedtosuch
securitiesofferedandissuedbytheCompanyandtopreventtheCompanyandits
directorsfrom continuingwiththeirunlawfulfundmobilizationfrom public,SEBI
issuedthefollowingdirectionsvidetheinterimorder:
“9. Inviewoftheforegoing,I,inexerciseofthepowersconferreduponme
underSections11,11(4),11Aand11BoftheSEBIActreadwiththeDebt
SecuritiesRegulationsandtheDebentureTrusteeRegulations,hereby
issuethefollowingdirections–
i. RREILshallnotmobilizefundsfrominvestorsthroughtheOfferof
NCDsorthroughtheissuanceofequitysharesoranyother
securities,tothepublicand/orinvitesubscription,inanymanner
whatsoever,eitherdirectlyorindirectlytillfurtherdirections;
ii. RREILanditsDirectors,viz.ShriRemendraMohanSarkar(DIN:
01753154),ShriRameswarPodder(DIN:01753196),ShriSukanta
Deb(DIN:01753238)andShriParthaDas(DIN:03631995),are
prohibitedfromissuingprospectusoranyofferdocumentorissue
advertisementforsolicitingmoneyfromthepublicfortheissueof
securities,inanymannerwhatsoever,eitherdirectlyorindirectly,
tillfurtherdirections;
iii. RREILanditsabovementionedDirectors,arerestrainedfrom
accessing thesecuritiesmarketand furtherprohibited from
buying,sellingorotherwisedealinginthesecuritiesmarket,either
directlyorindirectly,tillfurtherdirections;
iv. RREILshallprovideafullinventoryofallitsassetsandproperties;
v. RREIL'sabovementionedDirectorsshallprovideafullinventoryof
alltheirassetsandproperties;
vi. RREILanditsabovementionedDirectorsshallnotdisposeofany
Page3of3
ofthepropertiesoralienateorencumberanyoftheassets
owned/acquiredbythatcompanythroughtheOfferofNCDs,
withoutpriorpermissionfromSEBI;
vii. RREILanditsabovementionedDirectorsshallnotdivertanyfunds
raisedfrompublicatlargethroughtheOfferofNCDs,whichare
keptinbankaccount(s)and/orinthecustodyofRREIL;
viii. Ramel Real Estate and Infrastructure Debenture Trust
(representedbyitsTrustee,viz.Mr.SanjoyDeb)isprohibitedfrom
continuingwithhispresentassignmentasadebenturetrusteein
respectoftheOfferofNCDsofRREILandalsofromtakingupany
newassignmentorinvolvementinanynewissueofdebentures,
etc.inasimilarcapacity,from thedateofthisordertillfurther
directions.
10. Theabovedirectionsshalltakeeffectimmediatelyandshallbeinforce
untilfurtherorders”.
3. Forsakeofconvenience,theCompany,itsdirectorsRemendraMohanSarkar,
RameswarPodder,SukantaDebandParthaDas,itsdebenturetrustee,RamelReal
EstateandInfrastructureDebentureTrust(representedbyitsTrustee,Mr.SanjoyDeb)
arecollectivelyreferredtoas“thenoticees”.Theinterimorderaffordedopportunityto
thenoticeestofiletheirsubmissionsandseekanopportunityofpersonalhearing.
4. TheinterimorderwasforwardedtothenoticeesvideSEBIlettersdatedAugust
08,2014throughSpeedPostwithAcknowledgmentDue.Theinterimorderreturned
undeliveredwithrespecttoMr.RemendraMohanSarkarandMr.SukantaDeb.
Thereafter,SEBItriedtoservetheinterimorderbyhanddeliveryand/orpastingthe
sameinthelastknownaddressofnoticees.Theinterimorderwashanddeliveredon
Mr.ParthaDasandMr.SukantaDebwhichwerereceivedontheirbehalf.Theinterim
orderwaspastedonthepremisesoftheCompany,Mr.RemendraMohanSarkar,Mr.
Page4of4
RameswarPodderandRamelRealEstateandInfrastructureDebentureTrust.The
interim orderwasreceivedbytheTrustee,Mr.SanjoyDebwhofiledhisreplyvide
letterdatedAugust18,2014.
5. ThenoticeeswerealsoprovidedanopportunityofpersonalhearingonAugust
12,2015andthescheduleofthesamewasintimatedtothenoticeesvideSEBIletters
datedJuly24,2015.SEBIalsoissuedanewspapernoticedatedAugust05,2015in
TheTimesofIndiaandAnandBazarPatrikaintimatingthenoticeesregardingthe
proceedingsinitiatedvidetheinterimorderandthepersonalhearing.
6. OnAugust12,2015,exceptforMr.SanjoyDeb(thetrusteeofthedebenture
trustee),representedbyhiscounsel,Mr.NikhilSalvi,noneoftheothernoticees
appeared.They did notrequestforanotheropportunity.The Advocate who
representedMr.SanjoyDebsubmittedthatthisnoticeehadalreadyresignedfromhis
trusteepositionandrequestedforonemonth’stimeforfilingwrittensubmission.The
requestwasallowed.
7. Thereafter,videletterdated September11,2015 read with letterdated
November16,2015,theAdvocatefiledwrittensubmissionsonbehalfofMr.Sanjoy
Deb,interaliasubmittingthefollowing:
(a)Thenoticeewasavictimofanorganizedandpredeterminedfraudcommitted
uponthepublicatlargebytheCompanyanditsdirectors–R.N.Sarkar
(appearstobeareferencetoMr.RemendraMohanSarkar),R.Poddar,Parta
Das,SukantaDebandthedebenturetrust.
(b)ThoughthenoticeeisanAdvocate,heisinvolvedonlyinregistrationof
documentsattheofficeoftheDistrictSub-RegistrarinJalpaiguriandthe
surroundingareas.
(c)Sometimeintheyear2010,SukantaDeb(directoroftheCompany)approached
Page5of5
thenoticeewitharequesttostampandregistercertaindocumentspertaining
tocertainlandsallegedlypurchasedbytheCompany.Thenoticeedidthe
necessaryregistrationworkandwaspromisedmoretransactionsandincome
fromsuchstampingandregistrationofdocumentsbythesaiddirector.
(d)Thenoticeewasinformedin2012thatthebusinessoftheCompanyhadtobe
expandedandthattheCompanywouldinvesthugefundsandacquirelarge
piecesoflandwhichwouldbeentrustedtohimforregistrationpurpose.The
noticeewasalsoinformedthatsubstantialfundswouldberequiredforsuch
expansionandthattheCompanyhadissuedcapitaltothetuneofRs.5lakh.
(e)Thenoticeewasinformedthattheywouldenhancehispayment,whichatthe
relevanttimewasRs.2.5lakhperannumapproximately.Thesameisevidenced
fromtheIncomeTaxReturnfiledbythenoticee.ReturnsforFY31.03.2013and
31.03.2014weresaidtobeenclosed.(However,onperusal,itisobservedthat
thesaidReturnswereforFY2011-12and2012-13).
(f)Oninvitationfrom SukantaDeb,thenoticeevisitedthepremisesofthe
CompanyinKolkataduringDecember2011.However,hedidnotmeettheother
directors.
(g)Sometimeintheyear2012,thenoticeewasinformedthatthedirectorsofthe
Companywouldtakecareofallthelegalrequirementsforissuanceof
debenturesandthatsuchissuancewouldbecompletelyunderthecontroland
managementofthedirectorsoftheCompany.Thenoticeewasalsoinformed
thatthecomplianceofallstatutoryprovisions,mostlyundertheCompaniesAct
andSEBI,wouldbetheresponsibilityofthedirectorsandthatthenoticeewould
onlybeconcernedwiththeregistrationofdocumentsonpurchaseoflandby
theCompany.
(h)ThenoticeewasinformedbySukantaDebthattheCompanyhaddecidedto
issuedebenturesandraisefundstothetuneofRs.75croreandthesamewould
beusedforpurchasingimmovablepropertiesallovertheStateofWestBengal.
Page6of6
Thenoticeewasalsoinformedthatforsuchissuance,hewasrequiredtoactas
aTrustee,whichwasdevoidofperformanceofanylegalobligations.The
noticeewasalsoinformedthatasadebenturetrustee,hehadnoroletoactand
allissuesrelatingtoinvestments,acquisitionofimmovableproperties,and
paymentofinteresttothedebentureholderswouldbewhollyundertakenbythe
Company.Thenoticeewasalsoinformedthatforagreeingtoactasa
debenturetrustee,thenoticeewouldbepaidasumofRs.5000/-permonth.
(i)Thenoticeewasalsoinformedthatthisarrangementwastemporaryandupon
acquisitionofimmovablepropertiesandregistrationofthesame,thenoticee’s
roleasadebenturetrusteewouldceaseandtheCompanywouldappointa
‘properTrustee’.
(j)Thenoticeewasalsoinformedthatasadebenturetrustee,hewasrequiredto
actasmortgageeandthathewouldbevestedwithcertainrightswhichwould
beforsecuringtheamountspayabletowardsinterestforthedebenturestothe
subscribedpublicatlarge.Thedeedofmortgagealsomentionedthepayment
tothenoticee.Basedontherepresentation,thenoticeehadsignedtwo
documents–publictrustdatedFebruary18,2012(wherethenoticeeagreedto
actastrustee)andmortgagedeeddatedFebruary18,2012wherebythe
Companywasamortgagerandthenoticeewasthemortgagee.Thetwo
documentsweresignedbyR.M.Sarkar,whomthenoticeenevermet.
(k)ThenoticeewasneverpaidtheamountofRs.5000/-promisedtohimandwas
neverinvitedtoanymeetingsofthedirectors.Thenoticeewasnotinformedas
tothenumberofdebenturesfloated,thenumberofapplicantswhowereinvited
toparticipate,actualnumberofdebenturesissuedetc.Thenoticeewasalsonot
informedastohowthefundsweredeployedandwhataretheinvestments
madeoutofthesaidamountofRs.75crorecollectedbytheCompany.
(l)ThenoticeedidnotalsoknowwhethertheCompanyactuallydisbursedthe
interestundertheissueofdebentures.Whenfewpersonsinformedthenoticee
thattheydidnotreceiveinterest,thenoticeehadtriedtocontactthedirectors
butwaswithoutanysuccess.Thedirectorsdidnotevenrespondtotelephonic
Page7of7
callsmadebythenoticeeseekingpaymentstoinvestors.
(m) Insuchcircumstances,thenoticeevideletterdatedJuly15,2013
informedthedirectorsthathewasresigningfromthepositionasatrustee.The
samewasacceptedandtheCompanyinresponse(letterdatedJuly24,2013)
informedthatitwasgoingthroughfinancialcrisisandseveralpropertiesofthe
Companyanddirectorswereproposedtobesoldforsatisfyingtheliabilities.It
wasalsoinformedthattheCompanywasnotabletosellbecauseofthe
government’sinterference.TheCompanyalsoinformedthatasuitwasfiledin
theHighCourtofCalcuttaforsaleofpremisestoenableittopaytheinvestors.
Acopyoftheresignationletteranditsacceptanceletterwereenclosed.
(n)ConsideringtherepresentationmadebytheCompany/directors,thenoticee
shouldbetreatedasa‘rankoutsider’andbasedontheassurancesthatthe
Companywouldtakecompleteandabsoluteresponsibilityforcompliancesof
allstatutoryobligationswhicharemandatedundertheCompaniesAct/SEBI
regulations,thenoticeestoodcompletelyabsolvedofconsequencesofalleged
violations.
(o)Thenoticeeisasmalltimeadvocateandlargelyconfinedtostampingand
registrationofdocuments.Hehasbeendeliberatelyoustedandkeptawayfrom
thedeedsofthedirectorsinraisingRs.75crore.
(p)Thenoticeesubmittedthatinsuchcircumstances,invokingsections117B&
117CoftheCompaniesActagainsthimwasundulyharshandinequitableashe
hadnothingtodowiththemanagement.ThedirectorsoftheCompanywere
completelyin-chargeoftheissuanceofdebenturesandincreationofthe
debenturetrustdeedwhichwasforcoveringuptheirwrongfulactandluringthe
investorsintosubscribingtothedebentures.
(q)ThenoticeecouldhaveneversatisfiedtheeligibilityconditionsundertheDT
Regulationsastheprovisionofregulation7oftheDTRegulationsmandates
specifiedentitieseligibletoactasdebenturetrustees.Thenoticeerequested
thattheobservationsinparagraph7.3and7.8oftheinterimorderoughttobe
Page8of8
compassionatelyconsidered.Thenoticeehasalreadydisassociatedhimself
fromtheCompany.
(r)ThenoticeerequestedthatSEBIshoulddeclarethatheisinnocentandisa
victimoffraudplayedbythedirectorsoftheCompany.
8. Ihaveconsideredtheinterim order,thesubmissionsmadebythedebenture
trusteeandothermaterialavailableonrecord.TheCompanyhasnotrespondedtothe
interimorderdespitemakingapublicnotice.Therefore,Idonothavethebenefitof
furthersubmissions/documentsfromtheCompany/noticeesandhavetodecidethe
casebasedonthematerialalreadyavailableonrecord.Theinterimorderhadinter
aliaobserved/allegedthefollowing:
(a)TheofferofNCDsprimafaciequalifiedasapublicissueunderthefirstproviso
tosection67(3)oftheCompaniesAct,1956.
(b)TheCompanywasengagedinfundmobilizingactivityandviolatedthe
provisionsofsections56,60,73,117Band117CoftheCompaniesAct,1956
andtherelevantprovisionsoftheILDSRegulations.
(c)Thedebenturetrustee,RamelRealEstateandInfrastructureDebentureTrust
(representedbyitsTrustee,Mr.SanjoyDeb)hadfailedtomeettheeligibility
criteriaspecifiedundertheprovisionsoftheDTRegulationsandactedasan
unregisteredDebentureTrustee,inviolationoftheprovisionsofSEBIActread
withtheDTRegulations.
9. InotethattheCompany,videletterdatedFebruary15,2014,hadinteralia
statedthat-
a. "We had issued Secured Non–Convertible RedeemableDebenturesonPrivatePlacement("NCDs")basis.Totalamountraisedwas₹75Crores.
Page9of9
b. TheIssuebeingprivateplacement,noProspectus/RedHerringProspectus/Statement in lieu of Prospectus/InformationMemorandumhasbeenfiledwithRegistrarofCompanies(ROC).
c. TheCompanyhasnotissuedanyotherseriesofNCDsexcepttheonestatedhereinabove.
d. DateofOpening–February27,2012&DateofClosing–October18,2012.
e. NumberofApplicationformscirculated–1045f. NumberofApplicationsreceived–1045g. NumberofAllottees–1045h. DateofAllotment–October19,2012i. Sincetheissuewasprivateplacement,nopromotionalmaterial,
etc.hasbeencirculated.ThesaidNCDshadbeenofferedonlytothealreadyidentifiedinvestors."
TheallotmentinrespectoftheOfferofNCDswasmadepursuanttotheResolutionof
theCommitteeofBoardofDirectorsoftheCompanymadeonOctober18,2012.From
theabovesubmissions,itcanbenotedthattheCompanyhadcirculated1045
applicationformswithrespecttoitsofferofNCDs.Theofferforsubscriptiontothe
NCDswasopenedonFebruary27,2012andclosedonOctober18,2012. The
CompanyhadallottedNCDsto1045investorsonOctober19,2012pursuanttothe
resolutionofboardofdirectorsonOctober18,2012.TheCompanyhasalsoadmitted
thatitdidnotissueanyofferdocument/Prospectus/InformationMemorandum nor
filedthesamewiththeRoCandhasmobilizedRs.75crorethroughsuchissueof
NCDs.
10. Section67oftheCompaniesAct,1956providesnecessaryguidanceto
determinewhetheranissueofsecuritieswasmadeonprivateplacementorwasmade
tothepublic.Intermsofsection67(3),asamendedbytheCompanies(Amendment)
Act,2000,witheffectfromDecember13,2000,noofferorinvitationshallbetreatedas
madetothepublicbyvirtueofsub-sections(1)or(2),asthecasemaybe,iftheoffer
orinvitationcanproperlyberegarded,inallcircumstances– (a)asnotbeing
calculatedtoresult,directlyorindirectly,inthesharesordebenturesbecoming
availableforsubscriptionorpurchasebypersonsotherthanthosereceivingtheoffer
orinvitation;or(b)otherwiseasbeingadomesticconcernofthepersonsmakingand
receivingtheofferorinvitation.Moreimportantly,intermsofthefirstprovisotothe
Page10of10
aforesaidsection,theprovisionsofsection67(3)shallnotapplyinacasewherethe
offerorinvitationtosubscribeforsharesordebenturesismadetofiftypersonsor
more.Therefore,inacaselikethepresentone,thenumberofsubscriberstowhom
offer/allotmentismadebecomesrelevant.TheCompanyhasadmittedthatitmade
offerto1045investorsandallottedNCDstosuchinvestorsonreceiptofapplications
fromthemonOctober19,2012.TheCompanyisnotanNBFCoraPFI.Astheoffer
andallotmentofNCDswasmadetomorethan49persons,theoffermadebythe
Companybecomesa“publicissue”ofsuchsecuritiesintermsofthefirstprovisoto
section67(3)oftheCompaniesAct,1956.Inthiscontext,Ireferandrelyonthebelow
mentionedobservationmadebytheHon'bleSupremeCourtofIndiainthematterof
SaharaIndiaRealEstateCorporationLimited&Ors.Vs.SEBI(CivilAppealno.9813
and9833of2011)(hereinafterreferredtoasthe'SaharaCase'):
“......thatanyshareordebentureissuebeyondfortyninepersons,wouldbeapublic
issueattractingalltherelevantprovisionsoftheSEBIAct,regulationsframed
thereunder,theCompaniesAct,pertainingtothepublicissue.…".
11. BymakingapublicissueofNCDs,theCompanywasmandatedtocomplywith
allthelegalprovisionsthatgovernandregulatethepublicissueofsuchsecurities,
includingtheCompaniesAct,1956andtheSEBIActandregulations.Intermsof
section55AoftheCompaniesAct,1956,SEBIshalladministervariousprovisions(as
mentionedtherein)ofthesaidActwithrespecttoissueandtransferofsecuritiesby
listedcompanies,companiesthatintendtolistandalsothosecompaniesthatare
requiredtolistitssecuritieswhilemakingofferandissueofsecuritiestothepublic.
WhileexaminingthescopeofSection55AoftheCompaniesAct,1956,theHon'ble
SupremeCourtofIndiainSaharaCase,hadobservedthat:
"We,therefore,holdthat,sofarastheprovisionsenumeratedinthe
openingportionofSection55AoftheCompaniesAct,sofarasthey
relatetoissueandtransferofsecuritiesandnon-paymentofdividend
isconcerned,SEBIhasthepowertoadministerinthecaseoflisted
publiccompaniesandinthecaseofthosepubliccompanieswhich
Page11of11
intendtogettheirsecuritieslistedonarecognizedstockexchangein
India."
"SEBIcanexerciseitsjurisdictionunderSections11(1),11(4),
11A(1)(b)and11BofSEBIActandRegulation107ofICDR2009over
publiccompanieswhohaveissuedsharesordebenturestofiftyor
more,butnotcompliedwiththeprovisionsofSection73(1)bynot
listingitssecuritiesonarecognizedstockexchange".
Undersection11A oftheSEBIAct,SEBIisalsoempoweredtoregulate,by
regulations/generalorspecialorders,thematterspertainingtoissueofcapital,
transferofsecuritiesandmattersrelatedthereto.Accordingly,theCompany,having
madeapublicofferandissueofsecurities,asobservedabove,isunderthejurisdiction
ofSEBI.
12. Sections56,60,73,117Band117CoftheCompaniesAct,1956andthe
provisionsoftheILDSRegulationsarerequiredtobecompliedbyacompanymaking
apublicissueofsecurities.Regardingtheallegedviolationofsuchprovisionsofthe
CompaniesAct,1956andtheILDSRegulations,Iobservethefollowing:
(i) Intermsofsection56(1)oftheCompaniesAct,1956,everyprospectus
issuedbyoronbehalfofacompany,shallstatethemattersspecifiedin
PartIandsetoutthereportsspecifiedinPartIIofScheduleIIofthatAct.
Further,aspersection56(3)oftheCompaniesAct,1956,nooneshallissue
anyform ofapplicationforsharesinacompany,unlesstheform is
accompaniedbyabridgedprospectus,containdisclosuresasspecified.
Section2(36)oftheCompaniesActreadwithsection60thereof,mandates
acompanytoregisterits'prospectus'withtheRoC,beforemakingapublic
offer/issuingthe'prospectus'.TheCompanyhasadmittedthatitdidnot
fileanyProspectus/offerdocumentwiththeRoCandthereforehasviolated
theaforesaidprovisions.
Page12of12
(ii) Bymakingapublicissueofsecurities,theCompanyhadtocompulsorily
listsuchsecuritiesincompliancewithsection73(1)oftheCompaniesAct,
1956. ACompanymakingapublicissueofsecuritiescannotchoose
whethertolistitssecuritiesornotaslistingisamandatoryrequirement
underlawinapublicissue.Aspersection73(1)CompaniesAct,1956,a
companyisrequiredtomakeanapplicationtooneormorerecognized
stockexchangesforpermissionforthesharesordebenturestobeoffered
tobedealtwithinthestockexchange.Further,thereisnomaterialtosay
thattheCompanyhasfiledanapplicationwitharecognizedstock
exchangetoenabletheNCDstobedealtwithinsuchstockexchange.
Therefore,theCompanyhasfailedtocomplywiththisrequirement.Section
73(2)statesthat"Wherethepermissionhasnotbeenappliedunder
subsection(1)orsuchpermissionhavingbeenappliedfor,hasnotbeen
grantedasaforesaid,thecompanyshallforthwithrepaywithoutinterestall
moneysreceivedfrom applicantsinpursuanceoftheprospectus,and,if
anysuchmoneyisnotrepaidwithineightdaysafterthecompanybecomes
liabletorepayit,thecompanyandeverydirectorofthecompanywhoisan
officerindefaultshall,onandfromtheexpiryoftheeighthday,bejointly
andseverallyliabletorepaythatmoneywithinterestatsuchrate,notless
thanfourpercentandnotmorethanfifteenpercent,asmaybeprescribed,
havingregardtothelengthoftheperiodofdelayinmakingtherepayment
ofsuchmoney".
AstheCompanyfailedtomakeanapplicationforlistingofsuchsecurities,
theCompanyhadtoforthwithrepaysuchmoneycollectedfrominvestors.
Ifsuchrepaymentsarenotmadewithin8daysaftertheCompanybecomes
liabletorepay,theCompanyandeverydirectorisliabletorepaywith
interestatsuchrate.TheliabilityoftheCompanytorefundthepublicfunds
collected through offerand allotmentoftheimpugned securitiesis
continuingandsuchliabilitywouldcontinuetillrepaymentsaremade.
ThereisnorecordtosuggestthattheCompanymadetherefundsasper
law.TheHon'bleSupremeCourtofIndiaintheSaharacasehasexamined
Page13of13
section73andmadethefollowingobservations:
"Section73(1)oftheActcastsanobligationonevery
companyintendingtooffersharesordebenturestothe
publicto applyon astockexchangeforlisting ofits
securities.Suchcompanieshavenooptionorchoicebutto
listtheirsecuritiesonarecognizedstockexchange,once
theyinvitesubscriptionfrom overfortynineinvestorsfrom
thepublic.Ifanunlistedcompanyexpressesitsintention,by
conductorotherwise,toofferitssecuritiestothepublicby
theissueofaprospectus,thelegalobligationtomakean
applicationonarecognizedstockexchangeforlistingstarts.
Sub-section(1A)ofSection73givesindicationofwhatare
theparticularstobestatedinsuchaprospectus.The
consequencesofnotapplyingforthepermissionundersub-
section(1)ofSection73ornotgrantingofpermissionis
clearlystipulatedinsub-section(3)ofSection73.Obligation
torefundtheamountcollectedfromthepublicwithinterestis
alsomandatoryasperSection73(2)oftheAct.Listingis,
therefore,alegalresponsibilityofthecompanywhichoffers
securitiestothepublic,providedoffersaremadetomore
than50persons."
Theofferwasmadeduringtheyear2012andallotmentsweremadeto
1045personsonOctober19,2012.Asmentionedabove,theCompanyor
itsdirectorshavenotparticipatedintheinstantproceedings.Further,there
isnorecordtostatethattheamountsmobilizedthroughtheissueof
securitieshavebeenrefundedwithinthetimeperiodasmandatedunder
law.Accordingly,itwouldbeappropriatetolevyaninterest@15%p.a.in
termsofsection73(2)oftheCompaniesAct,1956andrule4D(which
prescribesthattheratesofinterest,forthepurposesofsub-sections(2)
and(2A)ofsection73,shallbe15percentperannum)oftheCompanies
(CentralGovernment’s)GeneralRulesandForms,1956ontheamounts
mobilizedbytheCompanythroughitsofferandissueofNCDsfrom the
Page14of14
datewhenthesamewasliabletoberepaidtilldateofactualpaymenttothe
investor.
(iii) Section117BoftheCompaniesAct,1956,prescribesthatnocompanyshall
issueaprospectusoraletterofoffertothepublicforsubscriptionofits
debentures,unlessithas,beforesuchissue,appointedoneormore
debenturetrusteesforsuchdebenturesandthecompanyhas,ontheface
oftheprospectusortheletterofoffer,statedthatthedebenturetrusteeor
trusteeshavegiventheirconsenttothecompanytobesoappointed.The
CompanyhasadmittedlynotfiledanyProspectus.Therefore,thesaid
provisionhasnotbeenfullycompliedwith.Further,appointmentof
debenturetrusteeshallbeintermsofallapplicablelaw.Section117C
stipulatesthat,whereacompanyissuesdebentures,itshallcreatea
debentureredemptionreservefortheredemptionofsuchdebentures,to
whichadequateamountsshallbecredited,fromoutofitsprofitseveryyear
untilsuchdebenturesareredeemed.Thereisnorecordtosuggestthatthis
provisionwascompliedwithasthelastbalancesheetavailableonMCA
portalpertainstoMarch2012,whichispriortoissuanceofNCDs.
(iv) AsNCDsare‘debtsecurities’intermsoftheILDSRegulations,the
CompanywasalsomandatedtocomplywiththeprovisionsoftheILDS
RegulationsinrespectofitspublicissueofNCDs.However,theCompany
failedtocomplywiththefollowingprovisionsoftheILDSRegulations.
(a)Regulation4(2)(a)–Applicationforlistingofdebtsecurities
(b)Regulation4(2)(b)– In-principleapprovalforlistingofdebt
securities
(c)Regulation4(2)(c)–Creditratinghasbeenobtained
(d)Regulation4(2)(d)–Dematerializationofdebtsecurities
(e)Regulation4(4)–AppointmentofDebentureTrustee
(f)Regulation 5(2)(b)– Disclosure requirements in the Offer
Document
(g)Regulation6–FilingofdraftOfferDocument
Page15of15
(h)Regulation7–ModeofdisclosureofOfferDocument
(i)Regulation8–AdvertisementsforPublicIssues
(j)Regulation9–AbridgedProspectusandapplicationforms
(k)Regulation12–Minimumsubscription
(l)Regulation 14 – Prohibition ofmis-statementsin theOffer
Document
(m)Regulation15–TrustDeed
(n)Regulation16–DebentureRedemptionReserve
(o)Regulation17–Creationofsecurity
(p)Regulation19–MandatoryListing
(q)Regulation26–ObligationsoftheIssuer,etc.
13. Fromtheforegoingobservations,IherebyconcludethattheCompanydidnot
complywithsections56,60,73,117Band117CoftheCompaniesAct,1956readwith
CompaniesAct,2013andtheaforesaidprovisionsoftheILDSRegulations,inrespect
ofitsofferandissuanceofNCDsasdiscussedinthisOrderandthereforeliablefor
suitableactionundertheCompaniesAct,1956,theSEBIActandtheILDSRegulations.
IalsonotethattheCompanyhadadmittedthatitmobilizedRs.75crorethrough
issuanceofNCDs.Further,asnotedfrom theinterim orderinparagraph2.4,the
CompanyhasnotprovidedfurtherdetailssoughtbySEBIsuchasname,folionumber,
PAN,contactnumber,etc.ofdebentureholders,inrelationtotheNCDsissuedbyit.
14. Theinterim orderwasissuedagainstMr.RemendraMohanSarkar(DIN:
01753154), Mr.RameswarPodder(DIN:01753196),Mr.SukantaDeb(DIN:
01753238)andMr.ParthaDas(DIN:03631995).Withrespecttotheirliability,I
observethefollowing:
(a)Asperthedetailsavailablefrom theMCAwebsite,alltheabovepersons
continuetobethedirectorsintheCompany.Mr.RemendraMohanSarkar,Mr.
RameswarPodderandMr.SukantaDebwereappointedonOctober15,2009.It
needstobenotedthattheCompanywasincorporatedonOctober15,2009.
Thus,itisseenthattheabovethreepersonsarethedirectorsfromthedateof
Page16of16
incorporationoftheCompany.
(b)Mr.ParthaDashasbeenappointedasadirectoronMarch14,2012.
(c)TheallotmentofNCDsweremadeonOctober19,2012.TheCompanyisfound
tohavecontravenedtheprovisionsofsections56,60,73,117Band117Cofthe
CompaniesAct,1956andtheILDSRegulations.Fromtheabovedetails,itcan
beinferredthatallthefourdirectorswereintheBoardoftheCompanywhenthe
CompanymadetheofferandallotmentofNCDsinviolationofthelaw.
(d)Section56(1)and56(3)readwithsection56(4)imposestheliabilityforthe
complianceofthesaidprovisions,onthecompany,everydirector,andother
personsresponsiblefortheissuanceoftheprospectus.Theliabilityfornon-
complianceofsection60oftheCompaniesActisontheCompany,andevery
personwhoisapartytothenon-complianceofissuingtheprospectusasper
thesaidsection.Further,thedirectorsofacompanywouldalsoberesponsible
forcomplyingwiththeprovisionsoftheILDSRegulations.
(e)Theliabilityofthecompanyanddirectorstorepayundersection73(2)ofthe
CompaniesAct,1956andsection27oftheSEBIAct,isacontinuingliabilityand
thesamecontinuestillalltherepaymentsaremade.Therefore,thedirectors
(irrespectiveofwhethertheycontinueorresign)whowerepresentduringthe
periodwhentheCompanymadetheofferandallottedNCDsshallbeliablefor
violationofsections56,60and73oftheCompaniesAct,includingthedefault
inmakingrefundsasmandatedtherein.Astheliabilitytomakerepayments
undersections73(2)oftheCompaniesActreadwithsection27oftheSEBIAct
isacontinuingliability,thepersonswhojointheCompany’sBoardpursuantto
theofferandallotmentofNCDsshallalsobeliableiftheCompanyandthe
concerneddirectorshavefailedtomakerefundsasmandatedunderlaw.
(f)Inviewoftheaboveobservations,Mr.RemendraMohanSarkar,Mr.Rameswar
Page17of17
Podder,Mr.SukantaDebandMr.ParthaDasshallbeliablefortheviolationsas
foundagainsttheCompanyinthisOrderaswellasformakingrefundstothe
investorsalongwithotherenforcementaction.
15. Theinterim orderhasallegedthatRamelRealEstateandInfrastructure
DebentureTrust(representedbyitsTrustee,Mr.SanjoyDeb)hasactedasthe
debenturetrusteeinrespectoftheNCDsissuedbytheCompanywithoutregistration
from SEBIasrequiredundersection12(1)oftheSEBIActanddidnotsatisfythe
eligibilityconditionstipulatedunderregulation7oftheDTRegulations.Thetrustee,
Mr.SanjoyDebhasmadeelaboratesubmissionsastohowhewasmadetobelieveby
theCompany/directorsthatalltheresponsibilitiesandcomplianceswouldbesatisfied
bythemandthatthisnoticeewouldonlyneedtoactasatemporarytrusteetillsuch
timetheCompanyfoundasuitablereplacement.Thenoticeehadalsosubmittedthat
basedontherepresentationandassurancesgivenbythedirectorsoftheCompany,he
hadsignedtwodocuments(publictrustandmortgagedeed)onFebruary18,2012.
Thenoticeealsosubmittedthatheresignedfromthepositionofthetrusteeandthe
samewasacceptedbytheCompanyonJuly24,2013.Havingconsideredthe
submissionsofthisnoticee,Inotethatanypersonwhoacceptsapositionwhich
carriescertainresponsibilities,compliancesandeligibilitycriteriaunderlawoughtto
havesatisfiedthatheiseligibleandifeligiblecarriesoutsuchresponsibilityunderfull
complianceunderlaw.Thenoticeecannotrelyontherepresentationsmadebythe
directorsorothersandtakeupanassignment.Asthisnoticeehasnotexerciseddue
diligencewhileacceptingthepositionasdebenturetrustee,nolenientviewcanbe
takenafternoticingviolationoflaw.Inthepresentcase,thedebenturetrustee(andits
trusteeMr.SanjoyDeb)arenotregisteredas‘debenturetrustees’withSEBIas
requiredundersection12(1)oftheSEBIAct.Further,theydonotsatisfythefollowing
conditionsunderregulation7oftheDTRegulations.Thisregulationprescribesthat
onlyascheduledbankcarryingoncommercialactivityorapublicfinancialinstitution
withinthemeaningofsection4AoftheCompaniesAct,1956oraninsurance
companyorabodycorporateshouldactasadebenturetrustee.Accordingly,Ramel
Page18of18
RealEstateandInfrastructureDebentureTrust(representedbyitsTrustee,Mr.
SanjoyDeb)arefoundtohaveviolatedsection12(1)oftheSEBIActandregulation7
oftheDTRegulations.Inviewoftheseobservations,itcanbesaidthattheprovisions
ofsection117BoftheCompaniesAct,1956havenotbeencompletelycompliedwith.
16. Fortheabovereasons,I,inexerciseofthepowersconferreduponmeunder
section19oftheSecuritiesandExchangeBoardofIndiaAct,1992readwithsections
11(1),11(4),11Aand11Bthereofandregulation28oftheSEBI(IssueandListingof
DebtSecurities)Regulation,2008herebyissuethefollowingdirections:
(a)RamelRealEstate& InfrastructureLimited and itsdirectors/promoters
includingMr.RemendraMohanSarkar,Mr.RameswarPodder,Mr.Sukanta
DebandMr.ParthaDas,jointlyandseverally,shallforthwithrefundthemoney
collectedbytheCompanythroughtheissuanceofNon-ConvertibleDebentures
(whichhavebeenfoundtobeissuedincontraventionofthepublicissuenorms
stipulatedundertheCompaniesAct,1956andtheILDSRegulations),tothe
investorsincludingthemoneycollectedfrom investors,tilldate,pending
allotmentofsecurities,ifany,withaninterestof15%perannumcompounded
athalfyearlyintervals,from thedatewhentherepaymentsbecamedue(in
termsofSection73(2)oftheCompaniesAct,1956)totheinvestorstillthedate
ofactualpayment.
(b)TherepaymentstoinvestorsshallbeeffectedonlyincashthroughBank
DemandDraftorPayOrder.
(c)TheCompany/itspresentmanagementarepermittedtoselltheassetsofthe
Companyonlyforthesolepurposeofmakingtherefundsasdirectedaboveand
deposittheproceedsinanEscrowAccountopenedwithanationalisedBank.
(d)TheCompany,itsdirectorsandotherpersonsnamedabove,shallissuepublic
notice,inalleditionsoftwoNationalDailies(oneEnglishandoneHindi)andin
Page19of19
onelocaldaily(inBengali)withwidecirculation,detailingthemodalitiesfor
refund,includingdetailsofcontactpersonsincludingnames,addressesand
contactdetails,withinfifteendaysofthisOrdercomingintoeffect.
(e)Aftercompletingtheaforesaidrepayments,theCompanyshallfileacertificate
ofsuchcompletionwithSEBI,withinaperiodofthreemonthsfromthedateof
thisOrder,fromtwoindependentpeerreviewedCharteredAccountantswhoare
inthepanelofanypublicauthorityorpublicinstitution.Forthepurposeofthis
Order,a peerreviewed Chartered Accountantshallmean a Chartered
Accountant,whohasbeencategorizedsobytheInstituteofChartered
AccountantsofIndia("ICAI").
(f)RamelRealEstate& InfrastructureLimited and itsdirectors/promoters
includingMr.RemendraMohanSarkar,Mr.RameswarPodder,Mr.Sukanta
DebandMr.ParthaDas,arealsodirectedtoprovideafullinventoryofalltheir
assetsandpropertiesanddetailsofalltheirbankaccounts,demataccounts
andholdingsofshares/securities,ifheldinphysicalform.
(g)Incaseoffailureofthecompany,RamelRealEstate&InfrastructureLimited
and itsdirectors/promotersincluding Mr.Remendra Mohan Sarkar,Mr.
RameswarPodder,Mr.SukantaDebandMr.ParthaDas,,incomplyingwiththe
aforesaiddirections,SEBI,ontheexpiryofthethreemonthsperiodfrom the
dateofthisorder,-
a)shallrecoversuchamountsinaccordancewithsection28AoftheSEBI
Actincludingsuchotherprovisionscontainedinsecuritieslaws.
b)mayinitiateappropriateactionagainsttheCompany,itspromoters/
directorsand thepersons/officerswho arein default,including
adjudicationproceedingsagainstthem,inaccordancewithlaw.
c)wouldmakeareferencetotheStateGovernment/LocalPolicetoregister
acivil/criminalcaseagainsttheCompany,itspromoters,directorsand
itsmanagers/personsin-chargeofthebusinessanditsschemes,for
Page20of20
offencesoffraud,cheating,criminalbreachoftrustandmisappropriation
ofpublicfunds;and
d)wouldalsomakeareferencetotheMinistryofCorporateAffairs,to
initiatetheprocessofwindingupoftheCompany.
(h)RamelRealEstate&InfrastructureLimitedisdirectednotto,directlyor
indirectly,accessthecapitalmarketbyissuingprospectus,offerdocumentor
advertisementsolicitingmoneyfromthepublicandarefurtherrestrainedand
prohibitedfrom buying,sellingorotherwisedealinginthesecuritiesmarket,
directlyorindirectlyinwhatsoevermanner,fromthedateofthisOrdertillthe
expiryof4yearsfromthedateofcompletionofrefundstoinvestorsasdirected
above.
(i)Mr.RemendraMohanSarkar,Mr.RameswarPodder,Mr.SukantaDebandMr.
ParthaDasarerestrainedfrom accessingthesecuritiesmarketandfurther
prohibitedfrom buying,sellingorotherwisedealinginthesecuritiesmarket,
directlyorindirectlyinwhatsoevermanner,withimmediateeffect.Theyarealso
restrainedfromissuingprospectus,offerdocumentoradvertisementsoliciting
moneyfrom thepublicandassociatingthemselveswithanylistedpublic
companyandanypubliccompanywhichintendstoraisemoneyfromthepublic,
oranyintermediaryregisteredwithSEBI.Theabovedirectionsshallcomeinto
forcewithimmediateeffectandshallcontinuetobeinforcefromthedateof
thisOrdertilltheexpiryof4yearsfromthedateofcompletionofrefundsto
investors,asdirectedabove.
(j)Fortheviolations(i.e.actedasdebenturetrusteewhentheywerenoteligibleto
actasdebenturetrusteesandactedsowithoutregistrationfrom SEBI)
committed by RamelRealEstate and Infrastructure Debenture Trust
(representedbyitsTrustee,Mr.SanjoyDeb),theyareherebyrestrainedfrom
acting as an intermediary,accessing the securities marketand further
Page21of21
restrained from buying,selling ordealing in securities,in anymanner
whatsoever,foraperiodof4years.
17. Theabovedirectionsshallcomeintoforcewithimmediateeffect.
18. ThisOrderiswithoutprejudicetoanyaction,includingadjudicationand
prosecutionproceedingsthatmightbetakenbySEBIinrespectoftheaboveviolations
committedbytheCompany,itspromoters,directorsincludingformerdirectorsand
otherkeypersons.
19. CopyofthisOrdershallbeforwardedtotherecognisedstockexchangesand
depositoriesforinformationandnecessaryaction.
20. AcopyofthisOrdershallalsobeforwardedtotheMinistryofCorporate
Affairs/concernedRegistrarofCompanies,fortheirinformationandnecessaryaction
withrespecttothedirections/restraintimposedaboveagainsttheCompanyandthe
individuals.
PRASHANTSARANWHOLETIMEMEMBER
SECURITIESANDEXCHANGEBOARDOFINDIA
Date:February08th,2016Place:Mumbai