Final order in the matter of JSV Developer India Limited

WTM/PS/161/IMD/WRO-ILO/FEB/2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under sections 11(1), 11B and 11(4) of the Securities and Exchange Board of India Act, 1992 read with regulation 65 of the SEBI (Collective Investment Schemes) Regulations, 1999 In respect of - 1. JSV Developer India Limited (PAN–AACCJ1577A; CIN- U45201MP2009PLC021807) and its Directors, 2. Mrs. Vijay LaxmiKathait (PAN-ALLPK5580D; DIN-02548164), 3. Mr. Bhupendra Singh Kathait (PAN-BAQPK6090R; DIN-02772241) and 4. Mr.Dinesh HemrajTembhare (PAN-AJZPT6223E; DIN - 03386158)

Date of hearing: May 21, 2015 Appearance: Ms. KrantiAnandS.S., Advocate, Ms. L. M. Jenkins, Advocate, Mr. Vijay Kumar Kamat, Advocate, Mr. Suresh Tale, Director and Mr. ParthaSarathyDey, Representative appeared for the Company. Other noticees did not appear. For SEBI: Mr. Piyush Gupta, Regional Director, WRO, Dr. Deepali Dixit, Assistant General Manager and Mr. T. Vinay Rajneesh, Assistant General Manager Date of hearing: August 21, 2015 Appearance: Ms. KrantiAnand S.S., Advocate, Ms. L. M. Jenkins, Advocate, Mr. ParthaSarathyDey and Mr. YogeshwarBisem for noticee, Mr. Dinesh Tembhare. Mrs. Vijay Laxmi Kathait and Mr. Bhupendra Singh Kathaitdid not appear. For SEBI: Dr. AnithaAnoop, Deputy General Manager, Dr. Deepali Dixit, Assistant General Manager and Mr. T. Vinay Rajneesh, Assistant General Manager

1. The Hon‟ble High Court of Madhya Pradesh vide its order dated July 13, 2012, in the matter of Dharmvir Singh &Anrs. Vs. Union of India &Ors. [W.P. No. 3332/2010] had directed various authorities including the Securities and Exchange Board of India (“SEBI”) to take appropriate action against various companies, as prayed for in the said petition, including JSV Developer India Limited (“the Company” or “JSV Developer”)in accordance with law.Pursuant to an enquiry, SEBI, vide ex-parte interim Order dated July 31, 2014 (“the interim order”), prima facie observed that the fund mobilization activity of the company, JSV Developer India Limited (“the Company” or “JSV Developer”) is a Collective Investment Scheme in terms of section 11AA of the Securities and Exchange Board of India Act, 1992 (“the SEBIAct”). It was alleged that the Company did not obtain a certificate of registration as required under section 12(1B) of the SEBI Act and regulation 3 of the SEBI (Collective Investment Schemes) Regulations, 1999 (“the CIS Regulations”) and also contravened regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 ("the PFUTP Regulations").

2. In order to protect the interest of investors who had subscribed to such schemes launched and carried out by the Company and also to prevent the Company and its directors from further carrying with their fund mobilization activity in the nature of CIS without registration from SEBI, the Company, JSV Developer India Ltd. and its Directors, Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait and Mr. Dinesh HemrajTembhare were directed: “8. ……….. a. not to collect any fresh money from investors from its existing "Association"/scheme; b. not to launch any new "Association"/scheme/plan or float any new companies to raise fresh moneys; c. not to dispose of any of the properties or alienate the assets of the existing "Association"/scheme; d. not to divert any funds raised from public at large, kept in bank account(s) and/or in the custody of the company; e. to immediately submit the full inventory of the assets owned by JSV out of the amounts collected from the "joint venture associates"/investors under its existing " Association "/schemes; f. to furnish all the information sought by SEBI, including, i. scheme wise list of investors and their contact numbers and addresses, ii. the details of amount mobilized and refunded till date, iii. financial statements for the last three years duly certified by the statutory auditor.

g. to provide explanation regarding the denial of certification by the Auditor, as detailed paragraph No. 3 of this order.

The above directions/restrictions came into force with immediate effect and are to be in force till further orders.

3. The interim order advised the Company and its directors to file their response and also to indicate whether they wish to avail personal hearing. For convenience, the Company and its directors Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait and Mr. Dinesh HemrajTembhare, are collectively referred as „noticees’.

4. The Company, after seeking time for making its submissions, filed the same vide letter dated September 30, 2014, wherein inter alia the following submissions were made:

(a) The reply was filed on behalf of the Company and its directors. (b) The Company was incorporated in the year 2009 inter alia for the purpose of urban land development and plot construction as set out in its MoA and AoA. (c) The Company obtained a three year license in 2009 from IRDA to be the corporate agent for soliciting and procuring insurance business of life insurance on behalf ofSBI Life Insurance Company Limited. (d) The Company was in the business of selling urban land which already was in the ownership of the Company and developing the same by way of urban development projects. (e) The agreements for sale of land were purely agreements for consideration. Such consideration was payable either in lump sum or through monthly payments spread across fixed number of years – 3, 5, 6, 7.6, 9.6, 10 or 11 years as per terms of the agreement. (f) The sale agreements executed with prospective customers were normal property transactions wherein the possession was to be handed over to the prospective customers after substantial payment was handed over to the Company. The properties would remain in the possession of the Company till such substantial payments were made by the customers and when the possession was handed over the registered sale deed was to be executed by Company and buyer.

(g) During the processes of sale of land to the customers, the Company became aware that the country‟s economy had suffered terribly as a result of which the realty and property markets had taken a turn for the worse and Company would suffer tremendous losses if they were to continue to sell the lands to the customers as previously agreed. The customers had also approached the Company and informed that they did not want to continue making payments towards land as the property/land developments were suffering losses. In order to avoid losses, the Company decided to bring its business to a close and to return all payments made by customers. The Company therefore closed all business in the year 2012 and began to return all the monies to the customers, which were given by each of the prospective customers as earnest money towards the purchase of properties. (h) The Company had successfully paid back all payments to its customers till date and there is not a single complaint which has been filed by any of its customers. From the records of the Company, it requires only one more financial year to refund all payments made by its customers.

The Company has adhered to a very strict payback facilitation process. (i) The properties referred to as assets of alleged schemes are the ownership properties of the Company and directors and therefore their constitutional legal rights of dealing with their own properties cannot be precluded. There has never been any property which has been purchased by the Company using the payments of customers. As the Company is closing the business, it does not have any desire of parting with possession of its ownership lands, but will continuously strive to return all payments of all their customers. (j) The Company is returning and refunding the amounts in order of the „insurance claims‟ which include payment amounts of customers with a stipulated quantum of interest, in accordance with the insurance policy. The Company is expecting to close all its business accounts on a good and sound professional note. (k) The Company and directors were never involved in any „mobilization of funds‟, „investment schemes‟, „pooling of funds‟ or „collective investment schemes‟ which have been invested in property or which has been used to buy further properties as hasbeen falsely alleged.

(l) As the Company is neither broker/sub-broker it does not fall under the purview of SEBI. (m) The Company fell squarely within the provisions of section 11AA (3)(iii), which is an exception. Therefore, the Company cannot be said to be carrying on any CIS scheme as falsely alleged by SEBI. (n) The Company is the owner of the land and whatever payments/amount were given by the proposed customer/purchasers of lands was purely based on payment terms. Consideration was always the essence of the sale of land contracts being proposed. The alleged investments as mentioned by SEBI are not deposit monies but were earnest/part payments towards the purchase of land, which were to be returned if the development project did not take off as planned. Thus, it cannot be held that the said monies were raised by the Company and directors for purchase of any land as the land put up for sale already stood in the name of the Company and directors. (o) SEBI has not provided the CBI inquiry report, Order of the Hon‟ble Madhya Pradesh High Court (Gwalior Bench) in the matter of Dharmvir Singh and another vs. UoI and others {W.P.

No. 3332/2010 (PIL)} on which SEBI has relied upon for the purposes of making the allegations and observations in the interim order. (p) In the business of buy/sale of land/plot, if the buyer chose to terminate/withdraw from the agreement midway for any reason whatsoever, the Company could either refund the amount already paid by the purchaser or refuse to refund. The latter not being a good business practice, the Company has always chosen to refund all monies to such purchasers. (q) The Company requested, without prejudice to its rights and contentions, in the interest of customers, that it should be permitted to complete the entire cycle of refunding all the payments in a systematic manner, in accordance with the insurance policies and close the Company once payments have been refunded completely. In case, SEBI find it necessary, an independent auditor may be appointed to ensure that payments are being refunded and for checking the accounts periodically. (r) The Company requested for a personal hearing.

5. SEBI, vide letter dated February 23, 2015, forwarded a copy of the publicly available Order of the Hon‟ble High Court of Madhya Pradesh and also informed the Company that the CBI report mentioned in the interim order was part of the Order of the Hon‟ble High Court.

6. An opportunity of personal hearing was fixed on April 30, 2015 and the same was communicated to the noticees vide SEBI letter dated March 18, 2015. The noticees were afforded time upto March 29, 2015 to furnish complete information as sought in the enquiry and also directed in the interim order. Although the notice for personal hearing sent to the Company returned undelivered, the legal counsel for the Company who filed reply was informed of the hearing. The personal hearing was later rescheduledto May 21, 2015, when the counsel represented the Company and the present directors of the Company and submitted that the persons mentioned as directors of the Company in the interim order had resigned and that the counsel was not representing them. The counsel made a request for copies of documents relied on in the proceedings and also the liberty to file written submissions within a period of 10 days after receipt of such documents. The request was allowed. The Company was advised to forward proof regarding the resignation of the noticee directors as submitted by it. One Mr. Suresh Tale was also present in the hearing, who was stated to be the present director of the Company.

7. SEBI had forwarded the copies of documents relied in the matter vide its letter dated May 27, 2015. While acknowledging the receipt of documents, the counsel for Company after seeking time, made submissions vide an undated letter (received in SEBI on July 07, 2015). The following were the submissions made therein:

(a) The advocates do not represent the earlier directors who have resigned or discontinued as their interest are independent and different from that of the Company. (b) The Order of the Hon‟ble Madhya Pradesh High Court does not mention the specific authorities who are at liberty to take action. Further, the Order was not on merits. (c) The interim order passed by SEBI was without reasoning and verbatim quoted the provisions of the CIS Regulations. (d) The Company was never a party before the proceedings in the High Court and that the petitioner (Mr. Dharmvir Singh) is not a customer of the Company and therefore had no locus in the said writ petition against the Company. (e) SEBI has violated the Order of the High Court and conducted examination/enquiry without following due process of law, without adhering to the principles of natural justice and without filing any investigation report. (f) The interim order refers to the correspondence between the Company and the SEBI Indore office. The information was also sought by the Indore Office of SEBI. Therefore, the present matter before the SEBI office at Mumbai is beyond jurisdiction and the proceedings are non-est and the Mumbai office cannot try or dispose of the present proceedings against the Company. Therefore, even the interim order is ultra vires and void ab-initio. (g) SEBI has gone ahead and conducted an investigation in a clandestine manner, where the Company was never informed of any investigation. SEBI has also not informed the details of the investigation officer, place of investigation, duration of investigation and the process of investigation that was carried out and under whose instructions.

(h) On one hand SEBI sent letters to the Company seeking information and on the other hand conducted search at the registered office of the Company, without disclosing any reasons for such search and without giving the detailed list of documents seized. (i) The investigation officer never issued a show cause notice to the Company nor called the Company or its present directors for any clarification before passing the interim order. (j) The non-issuance of SCN and depriving the Company of opportunity of hearing is incurable. (k) Even when SEBI forwarded the documents pursuant to the hearing, there was no investigation report either of SEBI or other government agency. Further, these documents forwarded by SEBI are incomplete and also irrelevant. The same do not disclose any liabilities of the Company under section 11AA of the SEBI Act or any other provisions of SEBI as alleged. (l) It was submitted by the company that the Hon‟ble High Court of Madhya Pradesh had directed that the authorities of the organizations (of the government and the various investigative agencies) are at liberty to take appropriate action in accordance with the law, however, SEBI has violated the said directions of the High Court of M.P.

(m) Company submitted that after the hearing on May 21, 2015, SEBI provided the list of documents and copies of all the documents relied upon by SEBI in the present matter wherein there is no inquiry/investigation report either of SEBI or any other government agency. Therefore, on these grounds itself, the impugned ex-parte ad-interim order dated July 31, 2014 deserves to be set aside at the threshold. (n) There was no urgency to pass the interim order and no case was made out for stopping the business of the Company as there was no apprehension of loss of assets/monies of the Company and no complaints from any of the customers. (o) The Company contended that definition of „business‟ was not provided in any Act or SEBI Act or any rules and regulations. The business of the Company is simply to sell land or parts thereof, which are owned by the Company and if desired by the purchaser, to develop the same and sell in parts such developed portions by demarcating the plots. (p) The Company is entitled, under its MoA and AoA, to raise monies by sale of assets for the purpose of achieving its business objectives by way of selling its own assets and properties and for the same, the Company has to maintain its books of accounts.

The interim order was therefore erroneous as it restrained the Company from performing the acts for furtherance of its business. (q) The Company sold its assets to the purchasers as per the payment terms contractually agreed by them and therefore it cannot be said that the sale for achieving the business objectives of the Company was any scheme, as alleged by SEBI.

The counsel for Company submitted that the interim order deserves to be set-aside as the same being ultra vires, void ab initio and requested that the matter be dismissed in the interest of justice and equity.

8. As the counsel for Company submitted that they do not represent the other noticees (i.e. Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait and Mr. Dinesh HemrajTembhare), another opportunity of personal hearing was afforded on July 10, 2015. The schedule of personal hearing was informed vide notices dated May 29, 2015 and a public notice dated June 30, 2015 was also issued in Hindi and English Dailies. It is also noted from the India Post (tracking system) that the above said notices were delivered on all the three noticees. Thereafter, vide letter dated June 10, 2015, the counsel for the Company (i.e. M/s. Jurisperitus) informed that they represent Mr. Dinesh HemrajTembhare and informed that this noticee was in hospital and not in a position to attend the hearing. The said noticee, vide letter dated July 01, 2015 also informed his inability to attend the hearing on July 10, 2015 and requested for another opportunity to be held in SEBI office at Mumbai. The counsel, Ms. Angeline Rodrigues,for the noticee Ms. Vijay Lakshmi Kathait, also requested for adjournment, vide email dated July 08, 2015, on the ground that the said noticee is very sick and bed-ridden and her legal representative could attend the hearing in Mumbai. Therefore, another opportunity of personal hearing was afforded to all the three noticees on August 21, 2015 and the same was communicated to the noticees, Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait and Mr. Dinesh HemrajTembhare and the advocates of Mrs. Vijay Laxmi Kathait and Mr. Dinesh HemrajTembhare, vide SEBI letters and email dated July 16, 2015. The said letters were delivered on such noticees.

9. In the personal hearing held on August 21, 2015, Mr. Dinesh HemrajTembhare was represented by his advocates, who made oral submissions. They requested for copies of documents relied in the matter and for liberty to file written submissions on receipt of such documents. The request was allowed. However, Mrs. Vijay Laxmi Kathait and Mr. Bhupendra Singh Kathait failed to appear.

10. SEBI,vide letter dated August 24, 2015 forwarded the documents as requested to M/s. Jurisperitus(law firm) representing Mr. Dinesh HemrajTembhareand the same was delivered on September 07, 2015, as per the postal tracking system. However, no submissions were filed till date. As adequate opportunities including personal hearings were afforded to all the noticeesfor filing their response, I consider it necessary to proceed further in the matter on merits.

11. I have considered the interim order, the submissions made by the Company and the material available on record. The Company is alleged to have launched and operated collective investment scheme without registration from SEBI, as required under section 12(1B) of the SEBI Act and regulation 3 of the CIS Regulations. Such conduct is also alleged to be in violation of regulation 4(2)(t) of the PFUTP Regulations. Before proceeding on the merits of case, I consider it necessary to deal with certain objections raised by the Company. The same are dealt with herein below:

(a) The Company has contended that the Hon‟ble High Court of Madhya Pradesh in Dharmvir Singh Vs. UoI, has not specifically mentioned the authorities who are at liberty to take action. On perusal of the said Order of the Hon‟ble High Court, it is clearly mentioned by the Hon‟ble High Court that interest of justice would be served if copy of the order be sent to UoI, RBI, State of M.P., Ministry of Home, Ministry of Finance and SEBI and that the authorities of the organizations are at liberty to take appropriate action in accordance with law. Therefore, it is incorrect to say that specific authorities were not mentioned. Further, the Hon‟ble High Court had granted liberty to take appropriate action in accordance with law. The interim order was passed by SEBI in exercise of powers under sections 11, 11(4) and 11B of the SEBI Act and the CIS Regulations. Therefore, this argument does not carry merit.

(b) The Company had contended that the petitioner in the writ petition was not its customer and had no locus. The Company also contended that it was not a party to the proceeding. These contentions too are without merit. The said writ petition was a public interest litigation seeking order of enquiry against various companies including the noticee Company alleging that the various companies in the State of M.P. had cheated the public under the garb of schemes. The Hon‟ble High Court had directed authorities including SEBI to take appropriate action under law. To institute a PIL, the petitioner need not be a customer. The scope of locus standiis always widened in a PIL.

(c) The Company has also contended that the interim order is ultra vires and void ab initio as the enquiry was conducted by the Indore office of SEBI and the matter was now before the Mumbai office of SEBI. This argument is again without merit. SEBI, through its various departments and offices, conducts enquiry. In case of orders under section 11/11B of the SEBI Act, the same are passed by the Competent Authority of the Board as may be delegated under section 19 of the SEBI Act read with the SEBI (Delegation of Powers) Order. Further, the present quasi-judicial proceedings are pursuant to the interim order, which is also considered as a show cause notice.

(d) The Company has also contended that SEBI did not inform the name of the investigation officer and the process of investigation that was carried on. In this regard, it needs to be appreciated that the enquiry/examination that was carried out in the present matter was not an investigation as provided under section 11C of the SEBI Act. The matter was an enquiry based on the records collected by SEBI as mentioned in the interim order. Section 11(4) read with section 11(1) and 11B of the SEBI Act provides that SEBI may by an order for reasons to be recorded in writing, in the interest of investors or securities market, take measures, as mentioned therein, either pending investigation or inquiry. Therefore, the non-mentioning of the details as contended by the Company would not create any deficiency in the proceedings. Further, in view of the powers under sections 11(1), 11(4) and 11B of the SEBI Act, as upheld by the Hon‟ble Supreme Court, Hon‟ble High Courts and the Hon‟ble Securities Appellate Tribunal in a plethora of cases, SEBI could issue interim ex-parte orders in the interest of investors and securities market, pending enquiry or investigation or on completion of such enquiry, afford an opportunity of hearing to such persons. Additionally, copies of all the records relied upon by SEBI have also been provided to the Company in compliance with the principles of natural justice.

(e) The Company has contended that there was no urgency for passing an interim order. In this regard, I note that the interim order has recorded the reasons for issuing preventive and remedial directions against the Company and directors. The following paragraph from the interim order is necessary to be referred to in this regard:

“7. In the instant case, the Chartered Accountant has denied having signed the "Independent Auditors' Report" in respect of the Balance Sheet (2012-2013) submitted to SEBI by JSV Developer as mentioned in paragraph No. 3 above. In view of this disturbing fact, it is difficult to accept the submission made by JSV Developers that it had stopped raising funds from the public since October 1, 2012. Protecting the interests of investors is the first and foremost mandate for SEBI. Under the circumstances, SEBI has to take immediate steps to prevent activities of companies or entities defrauding investors and damaging the orderly development of the securities market. In order to ensure that JSV Developer and its directors/promoters do not collect further funds under its schemes and to safeguard the assets/property acquired by JSV Developer and its promoters/directors from the funds of the investing public until full facts and materials are brought and final decision is taken in the matter, it becomes necessary for SEBI to take urgent preventive action by way of this interim measure. In the light of the same, I find no other alternative but to take recourse through an interim measure against JSV Developer and its promoters/directors.”

In view of the circumstances, as mentioned in the interim order, I agree that an interim order was necessary in order to protect the interest of investors who had subscribed to the schemes of the Company and also necessary to restrain the diversion of funds and alienation of Company‟s property. Accordingly, suitable directions were passed vide the interim order. It is relevant to note that though the Company, in its submissions, stated that it has refunded the monies to its customers and requires one financial year for fully paying all customers, it has not produced any verifiable document or proof regarding such claim.

(f) The Company in its submissions has stated that on the one hand SEBI asked for information and on the other hand it had inspected its premises and seized documents. In this regard, I am apprised that although SEBI officials visited the office of the Company to ascertain whether the Company was available in its registered office address, they did not seize any document from any of the offices of the Company.

12. The Company, in its submissions, has admitted that it accepted monies from customers in either lump sum or monthly payment plans. As mentioned in the interim order, the Company had forwarded copies of the Brochure, Allotment Letter, Joint Venture Agreement etc. I have perused such documents and observe the following: (a) Brochure: The variousBrochures, used by the Company for representation of its business and schemes and also for solicitation/subscription by public, mentions of the Plans launched by the Company. The Company has represented that it would give land and issue allotment letter. In case, the customer does not wish to take land, the Company would return the money with interest. The Company further represented that „payment on time is its specialty‟. In case of instalment payment plan, the land is allotted after 36 months and in one-time payment plan, the land is allotted after 18 months. The Company would use the money of the investors for purchasing the lands and investing in related business. The Company also stated that in case of accident, 50% (if handicapped/partial disability) or 100% (death and permanent disability) of the accidental benefit would be paid as per the rules to the successor with an upper limit of payment as₹ 1.75 lakh. In case of non-payment of instalments, the Company would repay the amount paid with simple interest as per company‟s rule. In case of lump sum plans, after one year, 50% or after in three years 60% loan/advance can be taken. In case of instalment plans, the 60% of amount deposited for three years can be taken as loan. Under any of the plans, the deposited amount would not lapse.

(b) The Company has, in various Brochures, mentioned numerous payment plans. They are – InstallmentPlans: (i) 1 year Regular Plan No. 101 (ii) 2 year Regular Plan No.102 (iii) 3 year Regular Plan No. 103/3 year Joint Venture Regular Plan No. 103 (iv) 3 year Joint Venture (Plan No. 3) (v) 4 year Regular Plan No. 104 (vi) 5 year Regular Plan No. 105/5 year Joint Venture Regular Plan No. 105 (vii) 5 year Joint Venture (Plan No. 5) (viii) 6 years Regular Plan No. 106/6 year Joint Venture Regular Plan No. 105 (ix) 6 year Joint Venture MIP Plan No. 12 (x) 6.3 year Regular Plan No. 107 (xi) 7.6 year Regular Plan No. 108/7.6 year Joint Venture Regular Plan No. 108 (xii) 10 year Regular Plan No. 109/10 year Joint Venture Regular Plan No. 109 (xiii) 11 year Joint Venture (Plan No. 9) (xiv) 12.6 year Regular Plan No. 110 (xv) 15 year Regular Plan No. 111 (xvi) Money Back Plan No. 112 (instalment 15 years) (xvii) Money Multiplier Plus Plan No. 501 (instalment 3 years)

All the above plans are instalment plans.

Lump sum payment plans – 1 year, 2 years, 3 years, 4 years, 5 years, 6 years, 8 years, 9.6 years, 11 years, 16 years, 3 year MIP plan and 6 year MIP plan.

As illustration, one plan each from instalment and lumpsum payment plans are reproduced below: 3 year Regular Plan No. 103 Unit Consideration Installments Estimated Accident Value MLY. QLY. HLY. YLY. Real. Value Benefit 36 3600 100 295 580 1150 4500 3600 72 7200 200 590 1160 2300 9000 7200 108 10800 300 885 1740 3450 13500 10800 144 14400 400 1180 2320 4600 18000 14400 180 18000 500 1475 2900 5750 22500 18000 360 36000 1000 2950 5800 11500 45000 36000

9.6 year (plan No. 8) Unit Consideration Estimated Accident Value Real. Value Benefit 10 1000 3000 1500 50 5000 15000 7500 100 10000 30000 15000 200 20000 60000 30000 500 50000 150000 75000 1000 100000 300000 150000

The features are similar for the other plans mentioned in the Brochure.

Agreement: The Company executed an agreement with the customer known as the Application cum Agreement for Joint Venture Association. The interim order has referred to the following clauses of the agreement:  “Whereas the Company is carrying on the business of Real estate Promoters, Developers and project management association including Civil, Mechanical, Electrical, Colonizer, builders, developers & all other type erection…….

 Whereas the Company is hereby authorized to enter into Agreement to borrow, to raise money or secure the payment of money or receive money by way of Joint Venture or otherwise in such manner as the Company may determine, and further authorized to contribute in the joint venture or otherwise employ the money belonging or entrusted to the Company in movable or immovable properties or in securities or in such other manner as may be deemed expedient.

 Whereas the Company has Prepared Joint Venture plans to borrow or raise the money, to raise money to secure the payment of money and Prepared Joint Venture plans including the installment, payment plans described in plan so also one time payment plan for various period in pursuance of rules and regulations made there of including the expected sum payable on expiry of the said term and also consisting of the accidental compensation under the joint venture ship agreement to the associate as per the rules and regulations in respect thereof as described in rule book, in connection with the joint venture plan certificate issued to the associate.

 Whereas the Company is issuing the certificate to enable the Company to raise the finance under the joint ventureship described in the plan 3 YEAR joint venture ( Plan No.-3) 5 YEAR Joint Venture ( Plan No.5), 11 YEAR joint Venture ( Plan No.9), 6 YEAR joint Venture ( Plan No.6, 9.6 YEAR joint Venture ( Plan no.8), 3 YEAR joint Venture Regular Plan no.- 103, 5 YEAR joint Venture Regular Plan no.- 105, 6 YEAR joint Venture Regular Plan no.106, 7.6 YEAR joint Venture Regular Plan no.108, 10 YEAR Joint Venture Regular Plan 109, 6 YEAR joint Venture MIP Plan no.12, hereinafter described and the party of the Second part came to know about the contribution in said plan and agreed to enter in the joint venture agreement with the Company and to join him in Joint Venture with a view to carry out and complete the said finance raising object as Joint Venture.

 The Party of the Second Part have contributed with the Company the sum of Rs…… onwards Rs. …only of the …… certificate in project date …….and on completion of the term of Joint Venture agreement the sum assured is payable to the extent of Rs…… and the party of the second part will contribute such further amounts as may be desired by him from time to time for carrying out the said work and the amounts will be treated as a participation made by him to the particular plan of the Company repayable to the party of the Second part as per the terms and conditions of the joint venture certificate. (Clause 2)

 That irrespective of the profit and losses suffered by the Company, the Company hereby undertake and assure to the party of the Second part to pay the amount of investment as per the category and on completion of the term of Joint Venture subject to the fulfillment of terms and conditions or as the case may be otherwise. (Clause 3)

 All the tangible and intangible assets of the Company including the goodwill, stock in trade, benefit of business licenses and permits, benefits of contracts entered etc. will be in the name of the Company and the property of the Company shall be used by the Company exclusively for the business of the Company and the Joint Venture shall have such the limited rights with such restrictions as may be described so that such rights shall not affect adversely on the title and interest in connection therewith. (Clause 7)

 On completion of the term of the joint venture agreement, the associate will be entitled to withdraw/renew the said certificate amount and the said Company will permit, towards repayment of the certificate amount or renew the said certificate as per the Company’s Rules and Regulations, terms and conditions mentioned in certificate and terms of the agreement. (Clause 8)

 That through this agreement the Company has being collateral secured for realization of amount of said as agreed, issued letter of allocation of land with a ration of Rs. ……. of participation equal to ….. sqft of land depending upon market price of land by Ready Reckoner of Government but this ration can be changed /altered solely at the discretion of management depending upon promotion the cost /value of lands at the time of agreement. Further the Company reserves the right of area of allocation depending on availability of land at the time agreement. The Company has issued separately the letter of allocation of land annexed here with this agreement.(Clause 13)

 It is further agreed by and between the parties that in case the Company is unable to repay the due return of participation of the in that event only the Company would help the Associate /Joint Venturer to dispose off the allocated land ate the written request of Associates, through process of law.(Clause 14)  The Joint Venturer shall continue his /its participation till the completion as per the certificate of the Joint Venture or if by any chance the said Joint Venture is cancelled for any reason, till the cancellation of such certificates.(Clause 17)  It is agreed by & between the parties that this agreement for Joint Venture Associate and can be treated as the associate in the particular project of construction for which the allocation letter is issued, till the completion of term of Joint Ventureship with the party of first part. Once repayment of participation is made to the associate then this agreement alongwith allocation letter will be automatically cancelled.”(Clause 19) (c) As per the interim order, after executing the aforesaid agreement, the Company issues a Registration Letter to the investor. This letter mentions - date of commencement, plan no.

and term, consideration value, mode of payment (monthly, quarterly etc), number of instalments, instalment amount, name of the customer and address, name of nominee and relation with customer, expected value on expiry of agreement, date of last payment. This certificate also stated that 10% will be paid extra as bonus at the end of term if the registration certificate is not lapsed. Surprisingly, this certificate does not mention the details or location or size of the land that is to be sold. This letter also states "…..the person described in schedule hereto in response to the “Application cum Agreement is registered for the developed/agriculture based land unit(s).

(d) Following terms and conditions are noted from the "Registration Letter", “Allotment of land shall be made after receiving payment in case of lump sum payment within 18 month and in case of regular installment plan after receiving 60% payment within 90 days……

In case JSV Developer India Ltd. commits breach of agreement by not allotting the said land unit in favour of the applicant in the manner agreed to…….it shall refund the amount paid by the customers with simple interest @2.5% per annum......”

(e) Allotment of land units, as collateral, to the investors, are made by issuing a "Letter of Allotment of Land Units". It is observed that the said allotment is made, in case of One-time Payment Plans within 18 months after receiving lump sum amount and in case of Installment Plans, within 90 days after the receipt of 60% of the payment. Following clause are noted in the said "Letter of Allotment of Land Units",  …the Land Units booked by you vide your application….alloted to you by JSV …as per details given below….  However JSV DEVELOPER INDIA LIMITED reserves the right to change the location of this allotment, and allot you an alternate site at any other place.  The Sale deed in respect of Land Unit(s), allotted to you shall be executed and registered shortly.”

(f) The Company has stated that it has mobilized ₹23.25 crore from 48,260 investors till September 30, 2012.

13. In order to hold a scheme or activity as a CIS, the said scheme has to satisfy the conditions mentioned under section 11AA of the SEBI Act. The said provision is reproduced below for reference: “Collective investment scheme. 11AA. (1) Any scheme or arrangement which satisfies the conditions referred to in sub-section (2) or sub-section (2A) shall be a collective investment scheme: Provided that any pooling of funds under any scheme or arrangement, which is not registered with the Board or is not covered under sub-section (3), involving a corpus amount of one hundred crore rupees or more shall be deemed to be a collective investment scheme. (2) Any scheme or arrangement made or offered by any person under which,— (i) the contributions, or payments made by the investors, by whatever name called, are pooled and utilized for the purposes of the scheme or arrangement; (ii) the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable, from such scheme or arrangement; (iii) the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors; (iv) the investors do not have day-to-day control over the management and operation of the scheme or arrangement (2A) Any scheme or arrangement made or offered by any person satisfying the conditions as may be specified in accordance with the regulations made under this Act.

(3) Notwithstanding anything contained in sub-section (2) or sub-section (2A), any scheme or arrangement— (i) made or offered by a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912) or a society being a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any State; (ii) under which deposits are accepted by non-banking financial companies as defined in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934); (iii) being a contract of insurance to which the Insurance Act, 1938 (4 of 1938), applies; (iv) providing for any Scheme, Pension Scheme or the Insurance Scheme framed under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952); (v) under which deposits are accepted under section 58A of the Companies Act, 1956 (1 of 1956); (vi) under which deposits are accepted by a company declared as a Nidhi or a mutual benefit society under section 620A of the Companies Act, 1956 (1 of 1956); (vii) falling within the meaning of Chit business as defined in clause (d) of section 2 of the Chit Fund Act, 1982 (40 of 1982);

(viii) under which contributions made are in the nature of subscription to a mutual fund; (ix) such other scheme or arrangement which the Central Government may, in consultation with the Board, notify,] shall not be a collective investment scheme”.

14. From the foregoing features of the scheme/plans operated by the Company, it is to be seen whether the four conditions under section 11AA(2) of the SEBI Act are attracted. The first condition is that the contributions or payments made by the investors by whatever name called are pooled and utilized for the purposes of the scheme or arrangement. The Company has stated that it collects money from public through its various schemes under an agreement (joint venture association), purportedly for the development and maintenance of landand further submitted that it would use the money of the investors for purchasing the lands and investing in related business. The Company states that in case its customer does not wish to take land, it would return the money with interest. The Company further states land units are offered as collateral to the investors who apply for the schemes through any one of its payment plans. The Company has not produced sale deeds to prove that it engages in real estate business. All the sale deeds produced are with respect to the ownership of lands by Company or directors (eg.

Mrs. Vijay Laxmi Kathait). As per the agreement, the “Associates”/investors shall not have any right or liability on any assets of the company and their rights are restricted only for their participation till the expiry of the term agreed as per the payment plans. As the land units serve only as collateral for repayment of the assured amount, theinvestor does not have the right to claim possession over the land units. It is also observed from the various clauses of the agreement, that JSV Developer would employ the money entrusted to it in movable or immovable properties or securities or in such other manner as may be deemed expedient and once repayment of participation money is made to theinvestor, the agreement along with the “Letter of Allotment of Land Units” will be automatically cancelled. The interim order has observed “It is further noted that although, JSV Developer collected `23.25 crores from “Associates”/investors till September 30, 2012, the cost of land allotted (as per the balance sheet as at March 31, 2012) is only `1.21 crores. It is also relevant to note that JSV Developer, in its letter dated January 21, 2014 admitted that all the properties are in the name of JSV Developer and no land has been transferred or registered in the name of any “Associates”/investor.”The Company has also submitted that the agreements for sale of land were purely agreements for „consideration‟.

It is also noticed that the unit of land mentioned in the plan is as small as 12 units (no measure is mentioned though, however it is assumed as sq.ft. given the amount of consideration). From the above, it becomes clear that the Company does not undertake any real estate business and is involved in „schemes‟ which collects money and also assures repayment, where the land is kept as collateral. In view of the foregoing, I find that the Company pools the funds collected from the investors and utilizes for the scheme operated by it. Accordingly, the above first condition is satisfied.

15. The second condition under section 11AA(2) of the SEBI Act is that the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable from such scheme or arrangement. I refer to the following clauses of the Agreement, executed between the Company and its customer:

 Whereas the Company is hereby authorized to enter into Agreement to borrow, to raise money or secure the payment of money or receive money by way of Joint Venture or otherwise in such manner as the Company may determine, and further authorized to contribute in the joint venture or otherwise employ the money belonging or entrusted to the Company in movable or immovable properties or in securities or in such other manner as may be deemed expedient.

 Whereas the Company has Prepared Joint Venture plans to borrow or raise the money, to raise money to secure the payment of money and Prepared Joint Venture plans including the installment, payment plans described in plan so also one-time payment plan for various period in pursuance of rules and regulations made there of including the expected sum payable on expiry of the said term and also consisting of the accidental compensation under the joint venture ship agreement to the associate as per the rules and regulations in respect thereof as described in rule book, in connection with the joint venture plan certificate issued to the associate.  Whereas the Company is issuing the certificate to enable the Company to raise the finance under the joint ventureship described in the plan 3 YEAR joint venture ( Plan No.-3) 5 YEAR Joint Venture ( Plan No.5), 11 YEAR joint Venture ( Plan No.9), 6 YEAR joint Venture ( Plan No.6, 9.6 YEAR joint Venture ( Plan no.8), 3 YEAR joint Venture Regular Plan no.- 103, 5 YEAR joint Venture Regular Plan no.- 105, 6 YEAR joint Venture Regular Plan no.106, 7.6 YEAR joint Venture Regular Plan no.108, 10 YEAR Joint Venture Regular Plan 109, 6 YEAR joint Venture MIP Plan no.12, hereinafter described and the party of the Second part came to know about the contribution in said plan and agreed to enter in the joint venture agreement with the Company and to join him in Joint Venture with a view to carry out and complete the said finance raising object as Joint Venture.  The Party of the Second Part have contributed with the Company the sum of Rs…… onwards Rs. …only of the …… certificate in project date …….and on completion of the term of Joint Venture agreement the sum assured is payable to the extent of Rs…… and the party of the second part will contribute such further amounts as may be desired by him from time to time for carrying out the said work and the amounts will be treated as a participation made by him to the particular plan of the Company repayable to the party of the Second part as per the terms and conditions of the joint venture certificate. (Clause 2)

 That irrespective of the profit and losses suffered by the Company, the Company hereby undertake and assure to the party of the Second part to pay the amount of investment as per the category and on completion of the term of Joint Venture subject to the fulfillment of terms and conditions or as the case may be otherwise. (Clause 3)

The Company promises the customer that whether or not it receives profits or suffers losses, the Company would pay the amount of investment and that the „sum assured‟ is payable at the end of the term. As seen above, the Company had promised return/profits in its various plans (be it instalment or lump sum plans). As illustration, in the 10 year instalment plan, a customer paying ₹100/- as monthly instalment would receive ₹24000/- as estimated real value with bonus of 15%. The customer also gets accident benefit of ₹21000/-. In lump sum plan, a customer paying ₹1000/-in 16 year plan would receive ₹7500 as estimated real value and ₹1500 as accidental benefit. JSV Developer promises to repay the consideration amount paid by the investor along with simple interest, in case of breach of agreement by JSV Developer. Therefore, I find that the second condition under section 11AA(2)(ii) of the SEBI Act is also satisfied.

16. The third and fourth conditions under section 11AA(2) are that the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors, and the investors do not have day-to-day control over the management and operation of the scheme or arrangement. The following clauses of the agreement entered into between the Company and customer would indicate that the customer/investor has only limited rights and has to comply with the terms and conditions imposed by the Company.

 The Company will look after financial side of the participation as well as look after the administration of the Company and its said business and the party of the second part will have limited rights with such restrictions as may be described so that such rights shall not affect adversely on the shares or share capital of the company or to interfere the company or the management and the policies of the company or/otherwise the board of directors will have sole and absolutely discretionary powers as per the Company law.(Clause 4)

 All the tangible and intangible assets of the Company including the goodwill, stock in trade, benefit of business licenses and permits, benefits of contracts entered etc. will be in the name of the Company and the property of the Company shall be used by the Company exclusively for the business of the Company and the Joint Venture shall have such the limited rights with such restrictions as may be described so that such rights shall not affect adversely on the title and interest in connection therewith. (Clause 7)

 On completion of the term of the joint venture agreement, the associate will be entitled to withdraw/renew the said certificate amount and the said Company will permit, towards repayment of the certificate amount or renew the said certificate as per the Company’s Rules and Regulations, terms and conditions mentioned in certificate and terms of the agreement. (Clause 8)

The customerdoes not have any right or role in the management of the scheme or funds or propertymanaged under the schemes. The Company could, as per its decision and convenience, employ the funds collected from the investors in movable or immovable properties or securities or in such manner as may be deemed expedient. The interim order has observed “Clause 4 of the agreement stipulates that the JSV Developer will look after financial side of the participation as well as the administration of the company and its said business. Further, it is noted from Clause 7 of the agreement, that the property of JSV Developer is used exclusively for the business and the “Joint Venture Associates”/investors do not have any right, title and interest in connection therewith. The allotment of units of land is only for the purpose of “collateral security” and the plot specified to be allotted in the certificate is liable to be altered at the instance of JSV Developer. Further, investors have been offered restricted rights over the units of land and control over the management and policies of the company. This implies that the “Joint Venture Associates”/investors do not have any say in the day to day control over the management and operation of the scheme or arrangement”.From the above, it is clear that the conditions under section 11AA(2)(iii) and (iv) of the SEBI Act are satisfied by the „schemes‟ of the Company.

17. The Company has contended that its „schemes‟ are exempted as they are contracts of insurance. The Company at one hand contends that it is engaged in sale of lands through payment plans mentioned in its scheme related documents and on the other hand the same are said to be contracts of insurance. Though the Company claims to be a corporate agent of SBI Life Insurance, the schemes in question are undoubtedly not insurance schemes. The Company would therefore not be covered under section 11AA(3)(iii) of the SEBI Act or under any of the exemptions under section 11AA(3).

18. From the above discussion, I conclude that the schemes offered by the Company with a promise of returns satisfy all the four conditions specified in Section 11AA (2) of the SEBI Act and therefore qualify as a Collective Investment Scheme as defined under the said section read with the CIS Regulations. At this juncture, it is important to note that the Hon‟bleSupreme Court in the matter of PGF Limited vs. UoI and another (ref. MANU/SC/0247/2013, has observed – "…..the Parliament thought it fit to introduce Section 11AA in the Act in order to ensure that any such scheme put to public notice is not intended to defraud such gullible investors and also to monitor the operation of such schemes and arrangements based on the regulations framed under Section 11AA of the Act."

The requirement of registration and regulation of collective investment schemes as mandated under section 11(2)(c) and 12 of the SEBI Act therefore assumes much importance.

The Hon'ble Supreme Court further observed "Inasmuch as the said Section 11AA seeks to cover, in general, any scheme or arrangement providing for certain consequences specified therein vis-a-vis the investors and the promoters…….,”. The Hon‟ble Supreme Court further observed - "A reading of sub-Section (3) of Section 11AA also throws some light on this aspect, wherein it is provided that those institutions and schemes governed by sub-clause (i) to (viii) of sub-Section (3) of Section 11AA will not fall under the definition of collective investment scheme. ........... Therefore, by specifically stipulating the various ingredients for bringing any scheme or arrangement under the definition of collective investment scheme as stipulated under sub- Section (2) of Section 11AA, when the Parliament specifically carved out such of those schemes or arrangements governed by other statutes to be excluded from the operation of Section 11AA, one can easily visualize that the purport of the enactment was to ensure that no one who seeks to collect and deal with the monies of any other individual under the guise of providing a fantastic return or profit or any other benefit does not indulge in such transactions with any ulterior motive of defrauding such innocent investors and that having regard to the mode and manner of operation of such business activities announced, those who seek to promote such schemes are brought within the control of an effective State machinery in order to ensure proper working of such schemes."

19. To carry out the activity of CIS and mobilize public funds from such schemes, it is mandatory under law to obtain a certificate of registration from SEBI. Section 12(1B) of the SEBI Act mandates that no person, shall sponsor or cause to be sponsored or carry on or caused to be carried on any CIS unless it obtains a certificate of registration from SEBI in accordance with the CIS Regulations. Regulation 3 of the CIS Regulations provides that no person other than a Collective Investment Management Company which has obtained a certificate under the said regulations shall carry on or sponsor or launch a 'collective investment scheme'. A person can launch or sponsor or cause to sponsor a collective investment scheme only if it is registered with SEBI as a Collective Investment Management Company. Therefore, the launching/ floating/ sponsoring/ causing to sponsor any 'collective investment scheme' by any 'person' without obtaining the certificate of registration in terms of the provisions of the CIS Regulations is in contravention of section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations. The Company does not have a certificate of registration as mandated under law and has launched CIS without obtaining certificate of registration from SEBI, thereby contravening the provisions of section 12(1B) of the SEBI Act and regulation 3 of the CIS Regulations. Therefore, having concluded that the activities of the Company are CIS in terms of section 11AA of the SEBI Act and that the same were carried out without obtaining registration from SEBI, suitable enforcement action should necessarily follow in the interest of investors.

20. I also note that in terms of regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and includes illegal mobilization of funds by sponsoring or causing to be sponsored or carrying on or causing to be carried on any collective investment scheme by any person. This provision in the above Regulations has been brought into effect from September 06, 2013. Accordingly, it could be held that by mobilizing public funds through CIS without obtaining registration from SEBI as required under section 12(1B) of the SEBI Act read with regulation 3 of the CIS Regulations, after the provision coming into force, the Company has contravened the above provision. . 21. Therefore, having concluded that the activities of the Company are CIS in terms of section 11AA of the SEBI Act and that the same were carried out without obtaining registration from SEBI, suitable enforcement action should necessarily follow in the interest of investors. In view of such unregistered CIS activities carried on by the Company, it becomes necessary to issue suitable directions in the interest of investors and the securities market. In this regard, regulation 65 provides for various directions by SEBI. The said provision is reproduced below for reference:

“65. The Board may, in the interests of the securities market and the investors and without prejudice to its right to initiate action under this Chapter, including initiation of criminal prosecution under section 24 of the Act, give such directions as it deems fit in order to ensure effective observance of these regulations, including directions:

(a) requiring the person concerned not to collect any money from investors or to launch any [collective investment scheme]; (b) prohibiting the person concerned from disposing of any of the properties of the [collective investment scheme] acquired in violation of these regulations; (c) requiring the person concerned to dispose of the assets of the [collective investment scheme] in a manner as may be specified in the directions; (d) requiring the person concerned to refund any money or the assets to the concerned investors along with the requisite interest or otherwise, collected under the [collective investment scheme]; (e) prohibiting the person concerned from operating in the capital market or from accessing the capital market for a specified period.”

As the Company is carrying out unregistered CIS activities, it becomes necessary to direct the Company to wind up the CIS and refund its investors‟ money or assets along with requisite interest along with other necessary directions. The present directors of the Company along with the dates of appointment, as available in the MCA portal is mentioned below:

DIN/DPIN/PAN Full Name Present residential address Designation Date of Appointment 3, LOVE LOCK PLACE, 06811145 RAJAT SHUVRO DE BALLYGUNG, KOLKATA, 700019, Director 24/02/2015 West Bengal, INDIA GALASHIYA DAKSHIN PARA, 06812965 SUKANTA MAJHI MATIAGACHA, KOLKATA, Director 12/08/2014 700135, West Bengal, INDIA KHAIRBODI P.O RAJENDRA GUMADHAWADA, TH.TIRORA, 07407765 Director 09/01/2016 NARAYAN BHALE GONDIYA, 441911, Maharashtra, INDIA

Though the present directors are not noticees under the interim order, they, constituting the board of directors would be responsible for winding up the schemes, found to be CIS in this order and for making repayments as ordered herein below.

I note that the interim order was issued against the Company, Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait and Mr. Dinesh HemrajTembhare. Though the Company was advised to produce proof regarding their resignation, such details have not been submitted yet. These noticees have not filed their response with documents despite affording various opportunities of personal hearing. As mentioned above, the directors as mentioned in the interim order are not shown as directors in the MCA portal and a new board of directors in in place. Regarding the liability of the above persons, I note that – (a) In terms of section 291 of the Companies Act, 1956, the board of directors of a company shall be entitled to exercise all such powers and do all such acts and things as the company is authorized to exercise and do. Therefore, the board of directors shall be responsible for the conduct of the business of a company and liable for any non-compliance of law and such liability shall devolve on individual directors. Accordingly, a director who is part of a company‟s board shall be responsible and liable for all acts carried out by a company unless exemptions are provided. The present case involves a Company that has mobilized public funds from gullible investors through its unregistered collective investment schemes. In this regard, the following observations made by the Hon‟ble High Court of Madras in MadhavanNambiar vs Registrar of Companies (2002 108 Comp Cas 1 Mad) are important to note: “13. …. A director either full time or part time, either elected or appointed or nominated is bound to discharge the functions of a director and should have taken all the diligent steps and taken care in the affairs of the company.

14. In the matter of proceedings for negligence, default, breach of duty, misfeasance or breach of trust or violation of the statutory provisions of the Act and the rules, there is no difference or distinction between the whole-time or part time director or nominated or co-opted director and the liability for such acts or commission or omission is equal. So also the treatment for such violations as stipulated in the Companies Act, 1956.” (b) The Company was incorporated in the year 2009 and has commenced the activity of unregistered CIS thereafter. The individuals named in the interim order as directors were the directors for the period mentioned against each of them in the table below: S. No. Name of the Directors Date of Appointment* Date of Cessation* 1. Mrs. Vijay Laxmi Kathait 09/04/2009 25/06/2014 2. Mr.Bhupendra Singh Kathait 15/04/2011 24/02/2015 3. Mr. Dinesh HemrajTembhare 28/01/2011 28/04/2015

*the dates of appointment and cessation are taken from the records (companies in which a person is/was a director) available in the MCA portal.

From the above details, it can be concluded that the noticees, Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait and Mr. Dinesh HemrajTembharewere in the board of the Company during the launchand subsequent operation of the unregistered collective investment schemes, as found in this Order. They are therefore responsible for the violations committed by the Company, as found above, irrespective of whether or not they continue as directors in the Company.

22. The interim order has also made the following observation: “ 7. In the instant case, the Chartered Accountant has denied having signed the "Independent Auditors' Report" in respect of the Balance Sheet (2012-2013) submitted to SEBI by JSV Developer as mentioned in paragraph No. 3 above….” Therefore, the said Balance Sheet cannot be relied upon. The Company has also not made any submissions in this regard.

23. In view of the foregoing, in the interest of investors and the securities market, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 and Sections 11(1), 11B and 11(4) thereof and regulation 65 of the SEBI (Collective Investment Schemes) Regulations, 1999, hereby issue the following directions:

a. JSV Developer India Limited, Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait, Mr. Dinesh HemrajTembhareMr. RajatShuvro De, Mr.SukantaMajhi and Mr. Rajendra Narayan Bhaleshall abstain from collecting any money from the investors or launch or carry out any Collective Investment Schemes including the scheme which have been identified as a Collective Investment Scheme in this Order.

b. JSV Developer India Limited and its present management including Mr. RajatShuvro De, Mr.SukantaMajhiand Mr. Rajendra Narayan Bhaleshall wind up the existing Collective Investment Schemes and refund through „Bank Demand Draft‟ or „PayOrder‟, the moneycollected by the said company under the schemes with returns which are due to its investors as per the terms of offer within a period of three months from the date of this Order and thereafter within a period of fifteen days, submit a winding up and repayment report to SEBI in accordance with the SEBI (Collective Investment Schemes) Regulations, 1999, including the trail of funds claimed to be refunded, bank account statements indicating refund to the investors and receipt from the investors acknowledging such refunds.

In case the Company has made refunds as claimed in its submission, it shall produce the proof for such repayment as directed above and also submit a certificate from Chartered Accountant as directed in sub-paragraph (d) below.

c. JSV Developer India Limited, its promoters and others concerned including RajatShuvro De SukantaMajhiand Rajendra Narayan Bhale, shall not alienate or dispose off or sell any of the assets of the Company except for the purpose of making refunds to its investors as directed above.

d. After completing the aforesaid repayments in terms of sub-paragraph (b) above, the Company shall file a certificate of such completion with SEBI, within a period of 15 days, from two independent peer reviewed Chartered Accountants who are in the panel of any public authority or public institution. For the purpose of this Order, a peer reviewed Chartered Accountant shall mean a Chartered Accountant, who has been categorized so by the Institute of Chartered Accountants of India („ICAI‟).

e. JSV Developer India Limited, Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait, Mr. Dinesh HemrajTembhare, Mr. RajatShuvro De, Mr.SukantaMajhiand Mr. Rajendra Narayan Bhaleare also directed to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/ securities, if held in physical form.

f. JSV Developer India Limited, Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait and Mr. Dinesh HemrajTembhareare restrained from accessing the securities market and are prohibited from buying, selling or otherwise dealing in securities market for a period of 4 years.

g. In the event of failureby JSV Developer India Limited, Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait and Mr. Dinesh HemrajTembhare, RajatShuvro De SukantaMajhiand Rajendra Narayan Bhale,to comply with the above directions, the following actions shall follow:

- JSV Developer India Limited, Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait and Mr. Dinesh HemrajTembhare, shall remain restrained from accessing the securities market and would further be prohibited from buying, selling or otherwise dealing in securities, even after the period of 4 years of restraint imposed in sub-paragraph (f) above, till all the Collective Investment Schemes of the Companyare wound up and all the monies mobilized through such schemes are refunded to its investors with returns which are due to them. - SEBI shall initiate appropriate proceedings against the present directors Mr. RajatShuvro De, Mr. SukantaMajhi and Mr. Rajendra Narayan Bhalefor appropriate directions including directions restraining them from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities. - SEBI would make a reference to the State Government/ Local Police to register a civil/ criminal case against the Company, its promoters, directors and its managers/ persons in-charge of the business and its schemes, for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and - SEBI would make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company. - SEBI would make a reference to the Ministry of Corporate Affairs to restrain above-mentioned noticee directors from being directors in other companies. - SEBI shall initiate attachment and recovery proceedings under the SEBI Act and rules and regulations framed thereunder against the Company and others responsible.

24. This order shall come into force with immediate effect.

25. This Order shall be without prejudice to the right of SEBI to initiate prosecution proceedings under Section 24 and adjudication proceedings under Chapter VIA of the Securities and Exchange Board of India Act, 1992 against the Company, by JSV Developer India Limited, Mrs. Vijay Laxmi Kathait, Mr. Bhupendra Singh Kathait, Mr. Dinesh HemrajTembhare, Mr. RajatShuvro De, Mr.SukantaMajhi and Mr.Rajendra Narayan Bhaleincluding other persons who are in default, for the violations as found in this Order.

26. Copy of this Order shall be forwarded to the stock exchanges and depositories for necessary action.

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

Date: February 18th, 2016 Place: Mumbai