Interim order cum Show Cause Notice in the matter of BNP Real Estate and Allied Limited

WTM/PS/55/WRO-ILO/SEPT/2015 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under Sections 11(1), 11(4), 11A(1)(b) and 11B of the Securities and Exchange Board of India Act, 1992 read with Regulation 107 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 In the matter of BNP Real Estate and Allied Limited In respect of: 1. BNP Real Estate and Allied Limited [PAN: AADCB2189H], 2. Mr. Sanjeev Kumar Purwansi [PAN: AQQPP3214P], 3. Mr. Munendra Kumar [PAN: ATVPK1011B], 4. Mr. Mukesh Kumar Sharma [PAN: BCKPS7359M], 5. Mr. Mahesh Paliwal [PAN: BBIPP4520L], 6. Mr. Santosh Sharma [DIN: 02643085], 7. Mr. Raghvendra Singh Narwaria [PAN: ADPPN6255N], 8. Ms. Surekha Sharma [PAN: BNUPS4121C], 9. Mr. Umesh Narwaria[PAN: ACOPN4971B], 10. Mr. Ravindra Singh [PAN: BHAPS1632N], 11. Mr. Kunver Singh [PAN: BOUPS2175H], 12. Mr. Kishori Sharma [PAN: BDVPS3534A], 13. Mr. Padam Singh Narwaria [PAN: ACOPN4986E], 14. Mr. Gyanesh Rawat [DIN: 01498588], 15. Mr. Devendra Kumar Sharma [DIN: 03346208] and 16. Mr. Gyanesh Sharma [DIN: 02498403].

1. Securities and Exchange Board of India (hereinafter referred to as 'SEBI') had received an e-mail dated December 06, 2014 from a complainant enclosing therewith a copy of the certificate issued by one BNP Real Estate and Allied Limited (hereinafter referred to as 'BNP' or 'the Company'). Having received the complaint, SEBI initiated a preliminary examination and asked BNP vide letter dated December 30, 2014, to inter alia furnish the following information/ documents: a. Copies of the Memorandum and Articles of Association of the Company. b. Details of the past and present directors of the Company. c. Brochures pertaining to the schemes/ offers made available to the public. d. Copies of the application forms required to be submitted by investors/ applicants to participate in the schemes.

e. Sample copies of the regulations letter and allotment letter issued to the investors who had subscribed to the schemes. f. Sample copies of the agreement letter/ contract required to be entered into by the investor/ applicant under the schemes. g. Details of the scheme wise amounts mobilised by the Company along with the number of investors under the scheme. h. Name and address of all investors who had put in their money with the Company. i. List of all branches with their address. j. Name and Address of agents and details of commission paid for each financial year from start till date. k. Certified copy of the audited financial statement for the Financial Year 2007-08 to 2013-14. Copy of detailed trial balance for 2013-14. l. Copy of the Income Tax Return filed by the Company for the Financial Year 2007-08 to 2013-14. m. Details of regulatory approvals obtained by the Company, etc. n. Details of any other similar schemes floated by the Company or/ and group/associate company(ies). o. Details regarding the relation of the Company with BNP India Developers and Infrastructure Limited.

BNP was advised to provide the above required information and the documents latest by January 07, 2015.

2. The Company vide its letter dated January 15, 2015 replied through its director namely Mr. Mukesh Kumar Sharma and submitted that for incorporation of the Company, he along with Mr. Mahesh Paliwal, Mr. Gyanesh Sharma, Ms. Kishori Sharma, Mr. Sanjeev Kumar Purvanshi, Mr. Munendra Kumar and Ms. Surekha Sharma had approached one Mr. Vinay Choudhary for assistance. They said that Vinay Choudhary had advised these that for forming a Company, twelve (12) persons are required and had also suggested the names of rest of the five (5) names namely Mr. Raghvendra Singh Narwariya, Mr. Umesh Narwariya, Mr. Ravindra Singh, Mr. Padam Singh Narwariya and Mr. Kunver Singh. Mr. Mukesh Kumar Sharma vide his letter had also claimed that the said five (5) persons namely Mr. Raghvendra Singh Narwariya, Mr. Umesh Narwariya, Mr. Ravindra Singh, Mr. Padam Singh Narwariya and Mr. Kunver Singh had started collecting money and issued forged certificates bearing the name of the Company and the pre-printed signatures of Ms. Surekha Sharma. Further, it was said that Vinay Choudhary had later got two more companies, which had similar names namely BNP India Developers and Infrastructure Limited and BNP Insurance and Investment Service India Limited and had collected monies from the gullible investors.

Vide this letter, the Company also submitted the details like the copies of the Memorandum and Articles of Association of the Company, list of the past and present directors of the Company, copy of scheme chart (brochure) for offering redeemable preference shares, copy of the application form for investment in preference share, details of scheme wise amount mobilized with total number of shareholder/ applicant, certified copy of the audited financial statement for the Financial Year 2007-08 to 2013-14 and trial balance up to January 02, 2015, copies of the Income Tax Return filed by the Company for the Financial Year 2007-08 to 2013-14, details of the other associate company, etc.

3. In the meantime, SEBI received certain other investor complaints against the Company. SEBI vide its letter dated January 30, 2015, while forwarding the copy of the complaints to the Company had also sought certain explanation on its issue of preference shares and equity shares. The Company was also asked to submit the letter of offers made to the allottees of the equity shares, date-wise receipt of money towards equity shares along with mode of payment, evidence of payments, source of the funds invested by allottees, etc. BNP was advised to provide the above said details and the documents latest by February 10, 2015.

4. The Company vide its letter dated February 10, 2015, sought an extension of seven (7) days for submitting the reply and the documents. Later the Company vide its letter dated February 18, 2015, submitted the reply to the SEBI letter and provided the explanation to the queries of SEBI. It was said that the main business of the Company is dealing in real estate by purchasing and selling of properties. For the said purpose, it had collected money from small investors and it shared the profit among the shareholder. The Company also submitted that the certificates attached with the investor complaints prima facie do not belong to it as the certificates were issued during the year 2007, when the management of the Company was controlled by Raghvendra Singh Narwaria, Kunver

Singh Narwaria, Padam Singh Narwaria, Umesh Singh Narwaria and Ravindra Singh Narwaria. Further, it was said that these five persons had issued forged joint venture certificate to various investors and had collected money.

5. SEBI vide its letter dated April 15, 2015, had forwarded the details of the fresh investor complaints to the Company for explanation and sought the complete investor details to be furnished by April 24, 2015 and also ‘filled in application’ of 10 investors of each scheme offered by the Company on sample basis. The Company vide its letter dated April 24, 2015 sought five (5) days’ time to submit the details as asked by SEBI. Vide another letter dated April 29, 2015, the Company denied receiving funds from the complainants and submitted that it had not propagated any investment scheme to deceive any person or public and it had issued only equity and preference shares to the genuine investors after following the rules and regulation as formed by the State Government and the Government of India.

6. On perusal and examination of the documents as submitted by BNP, the information obtained from the ‘MCA-21’ portal maintained by Ministry of Corporate Affairs (MCA), the complaints received, etc., the following are the prima facie observations made by SEBI in its examination with respect to the money mobilization activities by the Company through the issue of ‘Redeemable Preference Share’ with an option to convert into equity shares (hereinafter referred to as ‘convertible RPS’) and ‘equity shares’:

a. Background: BNP was incorporated on May 17, 2007. The CIN of BNP is U45200MP2007PLC019536 and its registered office is at: M-7, Trishul Apartment, 5- Sanghi Colony, A.B. Road, Indore- 452001.

b. Objects as per the Memorandum of Association of the Company: “A. Main objects … 1. To carry on the business of sale and purchase of property, acquisition of land, building, civil and electric contract, construction contracts for infrastructure development …. … B. Ancillary to the attainment of the main objects of the Company are: … 14A. To borrow or raise money with or without security or to receive money on deposit at interest or otherwise, in such a manner as the Company may think fit and in particular by the issue of debentures or debenture stock perpetual or otherwise including debenture or debenture stock convertible into shares of this or any other company and in security of any such moneys to be borrowed, ...”

c. Details of Promoters and Directors: From the documents submitted by the Company, it is noted that the subscribers to its Memorandum of Association were Mr. Raghvendra Singh, Ms. Surekha Sharma, Mr. Umesh Narwaria, Mr. Ravindra Singh, Mr. Munendra Kumar, Mr. Sanjeev Kumar Purwansi, Mr. Mukesh Kumar Sharma, Mr. Kunwar Singh, Mr. Kishori Sharma, Mr. Padam Singh Narwaria, Mr. Gyanesh Rawat and Mr. Mahesh Paliwal.

As per the details available on MCA-21 portal, the present directors of the Company are Mr. Sanjeev Kumar Purwansi, Mr. Munendra Kumar, Mr. Mukesh Kumar Sharma, Mr. Santosh Sharma and Mr. Mahesh Paliwal.

As per the details submitted by the Company, its past directors were Mr. Raghvendra Singh Narwaria, Ms. Surekha Sharma, Mr. Umesh Narwariya, Mr. Ravindra Singh, Mr. Kunver Singh, Ms. Kishori Sharma, Mr. Padam Singh Narwariya, Mr. Devendra Kumar Sharma, Mr. Gyanesh Rawat and Mr. Gyanesh Sharma.

d. Fund raising by the Company through the issue of RPS and equity shares. i. The document/ details submitted by the Company shows that it had issued RPS with an option to convert the same as well as the accrued interest into equity shares of ₹10/- and equity shares, on various dates. Both these securities are being discussed below in seriatim. - From the information furnished by BNP in its replies (including the reply dated February 18, 2015) and the return of allotment (Form 2), the following table has been compiled regarding the allotment of RPS with an option to convert into equity shares (convertible RPS) and amount mobilised: Table 1 Year of Number of allottees Number of Amount (₹) allotment As per As per preference shares Company Form 2 2008-09 29 29 3,52,600 35,26,000 2009-10 252 252 4,55,946 45,59,460 2011-12 1,806* 1,806 45,46,000 4,54,60,000 2012-13 12 12 25,00,000 2,50,00,000 2013-14 896 894 20,00,000 2,00,00,000 2,995 2993 98,54,546 9,85,45,460

* The money appears to be collected during the financial years 2010-11 and 2011-12. However, the preference shares were allotted in 2011-12. - I have seen the details of allotment and I note that BNP had made continuous allotment of RPS, as detailed hereunder: Table 2 Date of allotment No. of Amount No. of allottees preference mobilized (₹) As per As per shares allotted Company Form 2 2009-10 25/3/2010 24,649* 2,46,490 16 16 26/3/2010 90,800 9,08,000 49 49 27/3/2010 71,003 7,10,030 49 49 28/3/2010 93,483 9,34,830 49 49 30/3/2010 77,011 7,70,110 49 49 31/3/2010 99,000 9,90,000 40 40 2011-12 23/11/2011 74,000 7,40,000 48 48 24/11/2011 1,34,000 13,40,000 44 44 25/11/2011 79,500 7,95,000 20 20 26/11/2011 61,500 6,15,000 45 45 27/11/2011 72,000 7,20,000 46 46 28/11/2011 63,500 6,35,000 45 45 29/11/2011 71,900 7,19,000 41 41 30/11/2011 79,000 7,90,000 45 45 01/12/2011 75,050 7,50,500 39 39 02/12/2011 99,350 9,93,500 38 38 03/12/2011 1,01,500 10,15,000 39 39 04/12/2011 59,650 5,96,500 47 47 05/12/2011 58,050 5,80,500 40 40 06/12/2011 87,500 8,75,000 49 49 07/12/2011 73,000 7,30,000 34 34 08/12/2011 91,200 9,12,000 49 49 09/12/2011 64,200 6,42,000 49 49 10/12/2011 70,500 7,05,000 45 45 11/12/2011 70,500 7,05,000 46 46 12/12/2011 66,000 6,60,000 45 45 13/12/2011 63,750 6,37,500 44 44 14/12/2011 69,250 6,92,500 47 47 15/12/2011 61,450 6,14,500 44 44 16/12/2011 56,350 5,63,500 27 27 17/12/2011 70,400 7,04,000 46 46 21/12/2011 1,27,500 12,75,000 49 49 22/12/2011 1,46,300 14,63,000 49 49 23/12/2011 1,42,300 14,23,000 49 49 24/12/2011 1,07,500 10,75,000 49 49 25/12/2011 1,39,000 13,90,000 48 48 26/12/2011 1,50,000 15,00,000 48 48 27/12/2011 1,28,000 12,80,000 49 49 28/12/2011 1,38,000 13,80,000 49 49 29/12/2011 1,33,500 13,35,000 49 49 02/1/2012 1,16,350 11,63,500 49 49 03/1/2012 1,51,000 15,10,000 49 49 04/1/2012 1,40,200 14,02,000 49 49

05/1/2012 57,250 5,72,500 25 25 06/1/2012 6,93,000 69,30,000 44 44 07/1/2012 1,59,000 15,90,000 48 48 08/1/2012 1,44,000 14,40,000 41 41 2013-14 10/2/2014 1,26,425 12,64,250 49 49 11/2/2014 74,555 7,45,550 47 47 12/2/2014 98,875 9,88,750 47 47 13/2/2014 1,17,750 11,77,500 50 48 14/2/2014 84,400 8,44,000 49 49 15/2/2014 1,12,605 11,26,050 48 48 17/2/2014 1,00,325 10,03,250 48 48 18/2/2014 94,175 9,41,750 48 48 19/2/2014 98,675 9,86,750 47 47 20/2/2014 79,160 7,91,600 46 46 21/2/2014 85,755 8,57,550 48 48 22/2/2014 1,14,115 1,141150 47 47 24/2/2014 79,555 7,95,550 46 46 25/2/2014 1,30,715 13,07,150 47 47 26/2/2014 97,535 9,75,350 47 47 27/2/2014 99,445 9,94,450 47 47 28/2/2014 1,43,450 14,34,500 48 48 01/3/2014 1,17,150 11,71,500 45 45 03/3/2014 1,45,335 14,53,350 42 42 - From the above, it is noted that BNP had made a continuous allotment of RPS to 17, 49, 49, 49, 49 and 40 investors on March 25, 2010, March 26, 2010, March 27, 2010, March 28, 2010, March 30, 2010 and March 31, 2010 respectively, aggregating to 252 investors and an amount of ₹45,59,460 had been collected. Similarly, the Company had made another continuous allotment from November 23, 2011 to January 08, 2012 and an amount of ₹4,54,60,000 had been collected.

In view of the above, it can be said that the Company had made continuous allotments of RPS, in various tranches and had attempted to retain the number of investors to below 50, in order to circumvent the provisions of the Companies Act, 1956.

- From the sample application form for allotment of RPS as submitted by the Company, it is noted that the Company had offered various schemes for issuing RPS, the same have been reproduced below: Table 3 a. Option-1 3 Years @ 9.26% (p.a) b. Option-2 5 Years @ 8.13% ( p.a)

c. Option-3 6 Years @ 9.20% (p.a) d. Option-5 8 Years @ 5.46% (p.a) e. Option-6 1 Year @ 5.83 % f. Option-7 4 Years @ 11.85% (p. a) g. Option-A 3 Years @ 9.14% h. Option-B 6 Years @ 12.25% i. Option-C 8.5 Years @ 11.38% j. Option-D 11 years @ 13.43% - From the terms and conditions attached with the application form for RPS, the following is noted:  An applicant can apply for minimum of 4 RPS (₹10/- per RPS). For any additional RPS, the applicant can procure the same after paying ₹100/- per additional RPS per month for a period of 60 months. Payment option for the same were weekly, monthly, quarterly, half yearly.  The period of the RPS will be minimum for 12 months and maximum for 132 months.  The payments could be made by cash.  The RPS holder can enjoy the facility of converting to fully paid up equity share of ₹10/- against the RPS value and its accrued interest, on completion of term.  If an RPS holder makes the payment for a minimum period of 36 months, he can avail a secured loan equivalent to 50% of the total amount deposited.

- From the material available and as per the details collated in the ‘table 1’ above, it can be seen that the Company was issuing convertible RPS, thereby mobilizing funds, in a regular and sustained manner. The Company along with its submissions had also provided the scheme wise details of the amount mobilised by the issuance of such RPS. The same have been reproduced below: Table 4 Scheme 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Total Name Amount AllotteAmount (₹) AllotteAmouAllottAmount (₹) AllotteAmount (₹) Allott Amount (₹) AllottAmount (₹) Allott (₹) es es nt (₹) ees es ees ees ees Plan D Year 11 0 0 12,27,000 76 0 0 2,86,69,500 1,061 1,36,54,500 49,21,500 200 4,84,72,500 1,349 Plan A Year 03 0 0 10,000 1 0 0 4,75,000 4 40,22,600 0 0 45,07,600 5 Plan 2 Year 05 35,13,100 28 1,220,540 75 0 0 50,000 1 6,25,600 38,70,000 253 92,79,240 357 Plan 3 12,900 2 11,94,480 77 0 0 1,55,19,000 710 66,72,300 12 1,11,57,000 476 3,45,55,680 1,265

Year 06 Plan 4 Year 6.25 0 0 1,66,840 17 0 0 0 0 0 0 0 1,66,840 17 Plan 5 Year 8 0 0 7,00,600 17 0 0 0 0 0 11,500 1 7,12,100 18 Plan C Year 8.25 0 0 40,000 2 0 0 7,46,500 30 25,000 40,000 2 8,51,500 34 The figures in the table above are prima facie inconsistent with the RPS details as submitted by the Company.

- From the records available, it appears that the Company had paid commission at the rate of about 10% to its agents, on the collection of amounts from the investors. However, the Company in its replies has mentioned that commission paid were only 1.5% to 2% and the said 10% commission is paid on the sale of product. It is seen that the Company in its reply has not mentioned about the ‘product’ in which it deals.

ii. In addition to the above, the Company had also issued equity shares. The Company vide the special resolution dated March 20, 2010 had inter alia approved the allotment of 1,09,151 equity shares to 178 persons. As per the ‘Form 2’, the allotment of equity shares was as under: Table 5 S.No. Date of allotment No. of shares No. of allottees 1. 22/03/2010 27,330 49 2. 23/03/2010 30,224 49 3. 24/03/2010 26,928 49 4. 25/03/2010 24,669* 32 Total 1,09,151 179 As the persons to whom equity shares allotted were shown as 179, which prima facie was not as per the resolution, SEBI had sought an explanation from the Company. The Company in its reply had explained the discrepancy and submitted that one entry was wrongly repeated and there were 179 allottees. The details in ‘table 5’ above shows that the Company had made continuous allotment of equity shares to 49, 49, 49 and 32 investors on March 22, 2010, March 23, 2010, March 24, 2010 and March 25, 2010 respectively, aggregating to 179 investors. It can be said that the Company had always retained the number of investors below 50, in order to circumvent the provisions of the Companies Act, 1956.

e. Capital structure of the Company w.r.t. preference shares: A perusal of the balance sheets of the Company, revealed discrepancies/ mismatch in figures between the amount collected from the issue of RPS and those reported in the balance sheets. The details of the preference shares as reported in the respective balance sheets are as under: Table 6 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Paid-up Preference share 0 35,26,000 80,85,460 80,85,460 5,35,45,460 7,39,90,760 9,11,12,660 capital (₹) Number of preference 0 3,52,600 8,06,546 8,06,546 53,54,546 73,99,076 91,11,266 shares Redeemed or bought 2,87,810 back (no. of preference shares) Share application money 1,97,99,000 73,25,600 received (₹) pending allotment 7. Having considered the above, I proceed further with the matter. The issue for determination in the instant matter is whether the offer and issuance of RPS and equity shares made by the Company, as mentioned above, was on 'private placement' or a 'public issue'. In terms of Section 67(3), no offer or invitation shall be treated as made to the public by virtue of sub-sections (1) or (2), as the case may be, if the offer or invitation can properly be regarded, in all circumstances – (a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or (b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation. In terms of the proviso to the aforesaid section, the provisions of Section 67(3) shall not apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more. Therefore, if an offer of securities is made to fifty or more persons, it would be deemed to be a public issue, even if it is of domestic concern or proved that the shares or debentures are not available for subscription or purchase by persons other than those receiving the offer or invitation. The number of persons to whom the shares/ debentures have been allotted becomes relevant to judge whether an issue of shares is made to public or made on a private placement basis.

8. Further, from the details of allotment of RPS and equity shares made by BNP over the period, it is observed that BNP had made allotments to 49 or less than 49 persons (as noted from the table 1 and 5 above) and that the same was done in order to circumvent the provisions of first proviso to Section 67(3) of the Companies Act, 1956. Further, the allotments were made on continuous dates or in short intervals and that the aggregate number of investors to whom such offer and subsequent allotment was made exceeds 49.

9. Considering the regular occurrence of the series of convertible RPS and equity share allotments, it appears that the method adopted by BNP (i.e. of making allotment through multiple allotments) is a device intended to give a picture that each allotment was a separate offer and purportedly done on private placement basis. In view of the same, the aforesaid offer of convertible RPS and equity shares made by BNP has to be construed as a single offer. In view of the same, it is alleged that BNP had made public issue of convertible RPS and equity shares between March 2009 and March 2014. During this period, the Company had issued 1,09,151 equity shares to 179 investors and 98,54,546 convertible RPS to 2,993 investors and had prima facie mobilized around ₹9.85 crore from convertible RPS. I note that the company has not claimed to be a non-banking financial company or a public financial institution within the meaning of Section 4A of the Companies Act, 1956 and therefore, is not covered under the second proviso to Section 67(3) of the Companies Act, 1956. Considering the facts and circumstances of the case, it is alleged that the offers made by the Company were public in nature, thereby making such offer and subsequent issuance a 'public issue' of convertible RPS and equity share.

10. Having prima facie observed that the Company had made a public issue of convertible RPS and equity shares between March 2009 and March 2014, the Company was under an obligation to comply with the Companies Act, 1956 read with Companies Act, 2013, SEBI Act, 1992 (hereinafter referred to as 'SEBI Act'), the SEBI (Disclosure and Investor Protection) Guidelines 2003 (hereinafter referred to as 'DIP Guidelines') read with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (hereinafter referred to as 'ICDR Regulations') which regulate the public issue of equity shares. The Hon'ble Supreme Court of India in the matter of Sahara India Real Estate Corporation Limited & Ors. Vs. SEBI (Civil Appeal no. 9813 and 9833 of 2011) (hereinafter referred to as the 'Sahara Case'), had observed that: "… after 13.12.2000, any offer of securities by a public company to fifty persons or more will be treated as a public issue under the Companies Act, even if it is of domestic concern or it is proved that the shares or debentures are not available for subscription or purchase by persons other than those receiving the offer or invitation. … 90. ... ... that any share or debenture issue beyond forty nine persons, would be a public issue attracting all the relevant provisions of the SEBI Act, regulations framed thereunder, the Companies Act, pertaining to the public issue. …" [Emphasis supplied]

11. Having observed that the convertible RPS and equity shares issued by BNP are in the nature of public issue, the Company was required to comply with provisions of the Companies Act, 1956 and other relevant statutory provisions as applicable. I note that in the case of any public issue of securities, the relevant provisions of the Companies Act, 1956 inter alia Sections 60 read with Section 2(36) [corresponding provision is section 2(70) of the Companies Act, 2013, notified on September 12, 2013], 56(1), 56(3) [corresponding provision is section 33(1) of the Companies Act, 2013, notified on September 12, 2013] and Section 73 [corresponding provision is section 40 of the Companies Act, 2013] thereof needs to be complied with. In terms of Section 60 read with the Section 2(36) of the Companies Act, 1956, a company needs to file a prospectus with respect to its public issue with the RoC. Further, in terms of Section 60B(2) of the Companies Act, 1956, a Company inviting subscription by an information memorandum is bound to file a prospectus prior to the opening of the subscription lists, at least three days before the opening of the offer. While Section 60B(3) stipulates that the 'Information Memorandum' shall carry the same obligations as are applicable in case of prospectus. Section 60B(9) requires the Company to file a final prospectus with SEBI/ RoC. As per Section 2(36) of the Companies Act, 1956, 'prospectus' means any document described or issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares in a body corporate. As per the information available on record and also admitted by the Company, it did not file any prospectus/ information memorandum with respect to the said issues of convertible RPS and equity shares and had also prima facie not complied with the above discussed provisions of the Companies Act, 1956.

12. By issuing convertible RPS and equity shares to more than 49 persons, the Company had to compulsorily list such securities in compliance with Section 73 of the Companies Act, 1956, in order to ensure that the subscribers to the shares have a facility to approach a stock exchange for having their holdings converted into cash whenever they desire. The same also provides liquidity and exit opportunity to the investors. As per Section 73(1) and (2) of the Companies Act, 1956, a company is required to make an application to one or more recognised stock exchanges for permission for the shares or debentures to be offered to be dealt with in the stock exchange and if permission has not been applied for or not granted, the company is required to forthwith repay with interest all moneys received from the applicants. From the material available on record, the Company, does not appear to have done so and thus, contravened the said provisions. It neither made an application seeking listing permission nor refunded the amounts on account of such failure. The Company had also not complied with the provisions of Section 73(3) of the Companies Act, 1956 as it had not kept the amounts received from investors in a separate bank account and failed to repay the same in accordance with Section 73(2) of the Companies Act, 1956. In view of the above, it is alleged that the Company had contravened the provisions of the Companies Act, 1956, which regulates the public issue of securities, including Sections 2(36), 56(1), 56(3) and 73 of the Companies Act, 1956, in respect of its collection of public funds towards the issue of equity shares.

13. I now discuss the regulatory powers and the jurisdiction of SEBI on the company that raise funds, by issue of securities, from the public. In this regard, I refer to the Section 55A of the Companies Act, 1956. In terms of the relevant provisions of the said section, the provisions contained in Sections 55 to 58, 59 to 81 (including Sections 68A, 77A and 80A), 108, 109, 110, 112, 113, 116, 117, 118, 119, 120, 121, 122, 206, 206A and 207 of the Companies Act, 1956, in so far as they relate to the issue and transfer of securities shall be in the case of listed public companies and in the case of those public companies which intend to get their securities listed on any recognised stock exchange in India, be administered by SEBI. The terms 'securities' as per Section 2(h) of the Securities Contracts (Regulation) Act, 1956 includes 'shares'. I observe that Sections 56, 60, 67 and 73 of the Companies Act, 1956 are included in the list of the sections as mentioned in Section 55A of the Companies Act, 1956, and therefore, such sections are to be administered by SEBI.

14. As per the provisions of Section 55A of the Companies Act, 1956, the administrative authority on the subjects relating to public issue of securities is SEBI. For this purpose, SEBI can exercise the jurisdiction under Sections 11(1), 11A, 11B and 11(4) of the SEBI Act read with Section 55A of the Companies Act, 1956, over companies who issue equity shares to fifty persons or more, but fail to comply with the applicable provisions of the aforesaid statutes. Therefore, in addition to the compliance with the provisions of the Companies Act, 1956, the Company was mandated to comply with the applicable provisions of the ICDR Regulations.

15. I note that SEBI had framed the DIP Guidelines in exercise of the powers conferred upon itself under the SEBI Act. The Hon'ble Supreme Court in Sahara Case has observed that: "DIP Guidelines had statutory force since they were framed by SEBI in exercise of its powers conferred on it under Sections 11 and 11A of the SEBI Act. Powers have been conferred on SEBI to protect the interests of the investors in securities and regulate the issue of prospectus, offer documents or advertisement soliciting money through the issue of prospectus. Section 11 of the Act, it may be noted has been incorporated, evidently to protect the interests of investors whose securities are legally required to be listed. DIP Guidelines were implemented by SEBI with regard to the listed and unlisted companies, which made public offer, until it was replaced by ICDR 2009". The DIP Guidelines were applicable to all public issues by listed and unlisted companies. I note that the ICDR Regulations (which came into effect from August 26, 2009) had replaced the DIP Guidelines and all public issues are now required to comply with the ICDR Regulations. The DIP Guidelines (as applicable at the relevant time) operated as reasonable safeguards for the investors who subscribed or intended to subscribe in the public issues of securities. In this regard, I observe that BNP has not complied with the following clauses of DIP Guidelines: - Clause 2.1.1 (filing of offer document) - Clause 2.1.4 (application for listing) - Clause 2.1.5(issue of securities in dematerialized form), - Clause 2.8. (means of finance), - Clause 4.1 (promoters contribution in a public issue by unlisted companies), - Clause 4.11 (lock-in of minimum specified promoters contribution in public issues), - Clause 4.14 (lock-in of pre-issue share capital of an unlisted company) - Clause 5.3.1 (memorandum of understanding), - Clause 5.3.3 (due diligence certificate) - Clause 5.3.5 (undertaking) - Clause 5.3.6 (list of promoters group and other details) - Clause 5.4 (appointment of intermediaries) - Clause 5.6 (offer document to be made public) - Clause 5.6A (Pre-issue Advertisement) - Clause 5.7 (despatch of issue material) - Clause 5.8 (no complaints certificate) - Clause 5.9 (mandatory collection centres and Clause 5.9.1.(minimum number of collection centres)

- Clause 5.10 (authorised collection agents) - Clause 5.12.1 (appointment of compliance officer), - Clause 6.0 (contents of offer documents) - Clause 6.1 to Clause 6.15 (contents of prospectus) - Clause 6.16 to Clause 6.34 (contents of abridged prospectus) including Clause 6.17.13 - Clause 8.3 (Rule 19(2)(b) of SC(R) Rules, 1957) - Clause 8.8.1 (Opening & closing date of subscription of securities) - Clause 9 (guidelines on advertisements by issuer company) The ICDR Regulations operates as reasonable safeguards for the investors who subscribe or intended to subscribe in the public issues of securities. In this regard, I observe that BNP has not complied inter alia with the following clauses of the provisions of ICDR Regulations: - Application for listing of specified securities on one or more recognized stock exchange (Regulation 4(2)(d)), - Appointment of merchant banker and other intermediaries (Regulation 5), - Filing of draft offer document with SEBI and the designated stock exchange and RoC (Regulation 6), - Obtaining in-principle approval from the recognized stock exchanges in which the specified securities are to be listed (Regulation 7), - Satisfy the conditions of initial public offer (Regulation 25 and 26), - Lock-in of specified securities held by promoters and persons other than promoters (Regulation 36 and 37) - Keeping the public issue open for the specified period (Regulation 46), - Pre issue advertisement for public issue (Regulation 47) - Manner of disclosures in the offer documents (Regulation 57) - Refrain from offering any incentive to any person making application for allotment of specified securities (Regulation 59). - Issuer to appoint compliance officer who would be responsible for monitoring the compliance of securities laws and for redressal of investors' grievances.

(Regulation 63) 16. I note that the Company had allegedly commenced allotment of convertible RPS and equity shares to the public since March 2009. The promoters/ directors of the Company are Mr. Raghvendra Singh, Ms. Surekha Sharma, Mr. Umesh Narwaria, Mr. Ravindra Singh, Mr. Munendra Kumar, Mr. Sanjeev Kumar Purwansi, Mr. Mukesh Kumar Sharma, Mr. Kunwar Singh, Mr. Kishori Sharma, Mr. Padam Singh Narwaria, Mr. Ganesh Rawat, Mr. Santosh Sharma, Mr. Devendra Sharma and Mr. Mahesh Paliwal. As per Regulation 2(1)(za) of the ICDR Regulations, the term 'promoter' includes; 'the person or persons who are instrumental in the formulation of a plan or program pursuant to which specified securities are offered'. In view of the same, it is alleged that the above stated promoters/ directors of the Company being the persons in-charge of and responsible to the Company for the conduct of the business, are responsible under Section 27(2) of the SEBI Act, for the contraventions committed by the Company in its offer and issue of convertible RPS and equity shares.

17. In the light of the above, I find that there is no other alternative but to take recourse through an ex-parte interim action against BNP and its directors, for preventing them from further carrying on with its fund mobilizing activity under the ‘offer of convertible RPS and equity shares’ or any other securities. Further, the interest of the investors also need to be protected to ensure that public funds are not diverted and misappropriated. In the absence of such preventive action, irreparable loss and damage could be caused to shareholders and investors at large.

18. Accordingly, I, in exercise of the powers conferred under Sections 11(1), 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992 read with Section 19 thereof and Regulation 107 read with Regulation 111 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, hereby issue the following directions:

a. The Company, BNP Real Estate and Allied Limited [PAN: AADCB2189H], its promoters and directors namely Mr. Sanjeev Kumar Purwansi [PAN: AQQPP3214P], Mr. Munendra Kumar [PAN: ATVPK1011B], Mr. Mukesh Kumar Sharma [PAN: BCKPS7359M], Mr. Mahesh Paliwal [PAN: BBIPP4520L], Mr. Santosh Sharma [DIN: 02643085], Mr. Raghvendra Singh Narwaria [PAN: ADPPN6255N], Ms. Surekha Sharma [PAN: BNUPS4121C], Mr. Umesh Narwaria[PAN: ACOPN4971B], Mr. Ravindra Singh [PAN: BHAPS1632N], Mr. Kunver Singh [PAN: BOUPS2175H], Mr. Kishori Sharma [PAN: BDVPS3534A], Mr. Padam Singh Narwaria [PAN: ACOPN4986E], Mr. Gyanesh Rawat [DIN: 01498588], Mr. Devendra Kumar Sharma [DIN: 03346208] and Mr. Gyanesh Sharma [DIN: 02498403] are restrained from mobilizing funds through the issue of convertible RPS and equity shares or through any other form of securities, to the public and/ or invite subscription, in any manner whatsoever, either directly or indirectly till further directions.

b. The Company, its promoters and directors are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, till further orders.

c. The Company, its promoters and directors shall not dispose off any of the properties or alienate the assets of the Company or dispose off any of their properties or alienate their assets.

d. The Company, its promoters and directors shall not divert any funds raised from public at large through the issuance of the impugned equity shares, kept in its bank accounts and/ or in the custody of the Company without prior permission of SEBI until further orders.

e. The Company, its promoters and directors are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities in any manner whatsoever, either directly or indirectly, till further directions.

f. The Company, its promoters and directors shall co-operate with SEBI and shall furnish all the documents.

g. The Company, its promoters and directors are 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.

19. The above directions shall come into force with immediate effect and shall continue to be in force till further directions.

20. BNP Real Estate and Allied Limited, its promoters and directors namely Mr. Sanjeev Kumar Purwansi, Mr. Munendra Kumar, Mr. Mukesh Kumar Sharma, Mr. Mahesh Paliwal, Mr. Santosh Sharma, Mr. Raghvendra Singh Narwaria, Ms. Surekha Sharma, Mr. Umesh Narwaria, Mr. Ravindra Singh, Mr. Kunver Singh, Mr. Kishori Sharma,Mr. Padam Singh Narwaria, Mr. Gyanesh Rawat, Mr. Devendra Kumar Sharma and Mr. Gyanesh Sharma are advised to show cause as to why suitable directions/ prohibitions, under the Sections 11(1), 11(4), 11A and 11B of the SEBI Act read with 73(2) of the Companies Act, 1956 and the ICDR Regulations, including the following, should not be taken/ imposed against them:

a. directing them jointly and severally to refund the money collected through the issue of equity shares that are impugned in this Order, along with interest at 15% per annum from the date when the refunds became due to the investors till the date of repayment; b. directing them not to issue prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, for an appropriate period; c. directions restraining them from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period; d. directing them and other companies in which their directors hold substantial or controlling interest, to not access the capital market for an appropriate period.

21. BNP Real Estate and Allied Limited, its promoters and directors namely Mr. Sanjeev Kumar Purwansi, Mr. Munendra Kumar, Mr. Mukesh Kumar Sharma, Mr. Mahesh Paliwal, Mr. Santosh Sharma, Mr. Raghvendra Singh Narwaria, Ms. Surekha Sharma, Mr. Umesh Narwaria, Mr. Ravindra Singh, Mr. Kunver Singh, Mr. Kishori Sharma,Mr. Padam Singh Narwaria, Mr. Gyanesh Rawat, Mr. Devendra Kumar Sharma and Mr. Gyanesh Sharma may file their replies/ submissions within a period of 21 days from the date of receipt of this Order and may also indicate whether they desire to avail an opportunity of personal hearing in the matter.

22. This Order is without prejudice to the right of SEBI to take any other action including prosecution proceedings under Section 24 of the SEBI Act and Section 621 of the Companies Act, 1956 read with the relevant provisions of the Companies Act, 2013 and adjudication proceedings under the SEBI Act, against BNP Real Estate and Allied Limited, its promoters and directors namely Mr. Sanjeev Kumar Purwansi, Mr. Munendra Kumar, Mr. Mukesh Kumar Sharma, Mr. Mahesh Paliwal, Mr. Santosh Sharma, Mr. Raghvendra Singh Narwaria, Ms. Surekha Sharma, Mr. Umesh Narwaria, Mr. Ravindra Singh, Mr. Kunver Singh, Mr. Kishori Sharma,Mr. Padam Singh Narwaria, Mr. Gyanesh Rawat, Mr. Devendra Kumar Sharma and Mr. Gyanesh Sharma, in accordance with law.

Date : September 29th, 2015 PRASHANT SARAN Place : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA