Interim Order in the matter Nicer Green Housing & Infrastructure Developers

WTM/SR/CIS-NRO/36/07 /2014

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI CORAM: S. RAMAN, WHOLE TIME MEMBER ORDER Under Sections 11, 11B and 11(4) of the Securities and Exchange Board of India Act, 1992 read with Regulations 65 of the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 and Regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, in the matter of M/s. Nicer Green Housing and Infrastructure Developers Limited (CIN U45200PB2007PLC030879) and its Directors, viz. Mr. Pipal Singh Sidhu (DIN- 00751858), Mr. Ranjit Singh (DIN-00922498), Ms. Surinder Kaur (DIN-00922478) and Mr. Karanjit Singh (DIN – 02986346).

1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") received a complaint dated May 30, 2011 from an investor of M/s Nicer Green Forest Limited (hereinafter referred to as “NGFL”) alleging that "instead of redeeming his investment, NGFL has issued a receipt of M/s Nicer Green Housing and Infrastructure Developers Limited (hereinafter referred to as "NGHIDL") stating that NGFL is closed". SEBI had vide Order dated March 12, 2013 directed NGFL to wind up its existing Collective Investment Schemes and refund the money collected by it under the scheme(s) with returns due to its investors as per the terms of the offer. NGFL, was found operating 'collective investment scheme' ("CIS") in contravention of the SEBI (Collective Investment Schemes) Regulations, 1999 (hereinafter referred to as " CIS Regulations").

2. In order to ascertain whether or not NGHIDL was carrying on activities of 'collective investment scheme' or is being used by NGFL and its management to flout and circumvent the aforesaid Order issued by SEBI against NGFL, as a matter of preliminary inquiry, SEBI vide letter dated June 17, 2011, sought the following information from NGHIDL viz.- i. Brochure pertaining to NGHIDL's schemes/projects, ii. Application forms that are required to be submitted by the investors/applicants to participate in NGHIDL's schemes/projects, iii. Sample agreements, if any, that are required to be entered into by the investors/applicants with the company at the time of joining the schemes/projects, iv. Balance Sheets and Profit and Loss Accounts of NGHIDL since incorporation as filed with the concerned Registrar of Companies ("RoC"), v. Annual Returns of NGHIDL since incorporation as filed with the concerned RoC, vi. Details of the past and present directors of NGHIDL, vii. Details of funds mobilized under various schemes.

3. However, no information was received from NGHIDL, reminders were issued vide letters dated October 18, 2011 and March 07, 2012. SEBI, vide another letter dated October 18, 2011, also sought information from RoC, Punjab, Himachal Pradesh and Chandigarh regarding latest registered office address of NGHIDL, details of past and present directors of NGHIDL including the period of directorship of each director, copies of Annual Returns, Form No. 32, Balance Sheets and Board Resolutions, etc. In response, RoC, vide letter dated January 18, 2012 provided the following details/information in respect of NGHIDL: a) Form 18 filed with RoC since incorporation b) Form 32 filed with RoC since incorporation c) Balance Sheet as on March 31, 2010

4. Subsequently, NGHIDL replied vide letter dated March 20, 2012 and made submissions as under: a) The Company is engaged primarily into the business of purchase and sale of land. b) The Company does not undertake any scheme/arrangement falling within the ambit of Section 11AA of SEBI Act. c) The Company enters into an agreement with its investors to sell its pre-owned land at mutually decided consideration and the transaction of sale is completed after receiving the full consideration and transfer of title to the name of respective customer. d) The company do enter into an agreement to sell with its investors and not in practice of issuing certificates in respect of sale of land. e) No brochure or pamphlet is used to promote or solicit business of the Company.

5. It is noted that the aforesaid letter was received without any annexure mentioned therein. Hence, vide letter dated March 28, 2012 SEBI advised NGHIDL to submit the documents immediately. On April 13, 2012, NGHIDL submitted the following documents mentioned in the letter dated March 20, 2012 : - i. Memorandum of Association (MoA) and Articles of Association (AoA), ii. Format of the agreement between NGHIDL and customer, iii. Balance sheet and Profit and Loss Account for the year ended March 31, 2011, iv. Details of Directors.

6. As the information provided by NGHIDL was inadequate, SEBI vide letter dated June 18, 2012, advised NGHIDL to furnish details of scheme wise amount mobilized, sample copies of Agreement, names of customers, details of buy back option, if any, given to the customer, details of the rate at which the plot is sold, details of location of the land of NGHIDL, details of the various payment plans, etc.

7. In response, NGHIDL replied vide letter dated June 28, 2012 and submitted as under: a) NGHIDL is engaged in the business of purchase or sale of land and its development as per the main object clause of MoA, hence it does not issue brochures, rule books, registration letters etc to solicit business. b) The property is sold at prevailing rates in the market commensurate with circle rates of the State where land is situated. c) NGHIDL executes an agreement to sell property with its customer immediately once it receives the token amount in terms of the said agreement. d) NGHIDL operates and holds property at various places. e) The customers are at liberty either to pay whole amount at one time or to pay the sale consideration in pre-determined installments in terms with the agreement. f) NGHIDL reserves no right of buy back of land from customers. Once land is sold and ownership is transferred to the buyer, NGHIDL does not control or interfere in right/entitlement/interest/ benefit/ownership of customers in any manner. g) NGHIDL issues allotment letter to every customer/buyer of land having mention of area of land, including marking for identification. h) NGHIDL does undertake necessary development work before bringing the land to saleable conditions. NGHIDL does agriculture upon land till it is offered for sale to customers in order to utilize idle land.

8. NGHIDL sought time to submit details of land held by it. Subsequently, vide letters dated July 09, 2012 and July 18, 2012, NGHIDL submitted copies of sale deeds of land owned by it and the list of allottees to whom the land has been allotted by NGHIDL.

9. Meanwhile, SEBI received several complaints from investors, wherein it was alleged that NGHIDL has not repaid the investors the amount due to them on maturity. The complainants have enclosed copies of certificates wherein it is shown that the customer is promised a higher amount on maturity under a buy back agreement (repurchase of plot).

10. SEBI vide letter dated January 13, 2014 advised NGHIDL to submit copies of allotment letter, details of past/present directors of NGHIDL, provide clarification as to whether it offers buy back plans as alleged by the complainants, the repurchase price for the land allotted, amounts realized from the sale of produce from the land, details of payment plans of NGHIDL, etc.

11. In response, NGHIDL, vide letter dated January 28, 2014, requested time for submitting the information. Thereafter, vide letter dated February 17, 2014, NGHIDL furnished the list of present Directors, copies of four allotment letters and made the following submissions:

a) "NGHIDL had allotted land to its customers and such allotted land is developed by it for the benefit of the customers as the undeveloped land is not suitable for agricultural purposes. The Customer has an option not to opt for development of land and such option is provided at the time of making an application to the Company. Where the Customer does not exercise such option, then the clause in the Agreement is suitably modified and the Customer will not have to pay development charges specified under the payment plan. b) When the land allotted to the Customer becomes ready for use, then the same is put to use for the benefit of the Customer by sale of produce from the land and or marketing services for sale of developed plot. c) NGHIDL reserves no right of buy back of land from its customers. Once land is sold and ownership is transferred to buyer, NGHIDL does not restrict or control or interfere in right/entitlement/benefit/ownership of customers in any manner."

12. As NGHIDL's reply dated February 17, 2014 did not cover all the points mentioned in SEBI's letter dated January 13, 2014, SEBI continued to send reminders seeking the information not already provided. Vide letter dated May 10, 2014, NGHIDL made the following submissions and sought time to submit the complete information:

a) The Company has collected `31.71 crores against sale of agricultural land from Customers till March 31, 2011.

b) The Company had handed over the original title deeds to its custodial services Company, M/s. Skynet Land Developers Pvt Ltd. c) As per the agreement executed by the Customers, they are free to have title deed in his/her name registered after making payment of all dues and registration charges. d) The Company has settled accounts of 17,771 customers by refunding of `27.48 crores. e) The Custodian is taking consents of remaining customers either to deposit the registration charges with the Company and get registered land in his/her name or Company will arrange to sell the land on his/her behalf and refund the amount.

13. I have carefully considered the materials available on record, the various complaints received by SEBI along with the documents contained therein, correspondences exchanged between SEBI and NGHIDL, and information received from RoC, submissions made by NGHIDL etc. In this context, the issue for determination is whether the mobilization of funds by NGHIDL under the scheme of "purchase and development of agricultural land under 'Cash Down Payment Plan (CDPP)/ Installment Payment Plan(IPP)" fall under the ambit ‘collective investment scheme’ provided in Section 11AA of the SEBI Act, 1992 (hereinafter referred to as "SEBI Act").

14. On an examination of the materials available on record, it is observed : a) NGHIDL (CIN: U45200PB2007PLC030879) was incorporated on February 08, 2007 and has its registered office at Guru Ram Dass Nagar, Near Anaj Mandi, Old Zira Road, Ferozpur City, Punjab - 152002.

b) As per the Memorandum of Association, one of the main objects of the Company is “To carry on the business of real estate and properties including purchase of real estate and development of land/premises/building/housing, creation of plots….”

c) Mr.Pipal Singh Sidhu and Mr.Ranjit Singh are Directors of the Company since incorporation till date. Ms. Surinder Kaur was also appointed as Director of the Company at the time of incorporation and subsequently ceased to be the Director of the Company with effect from November 30, 2010. Mr. Karanjit Singh was appointed as Director of the Company on November 30, 2010 and is currently one of the Directors of the Company. It is noted that one of the Directors, Mr. Pipal Singh Sidhu is also a Director of NGFL.

d) The following are noted from the Balance Sheet of NGHIDL: i. NGHIDL has shown inventory (land at cost) to the tune of `13.12 crores during FY 2010-2011. "The Chartered Accountant has remarked in the Notes to Accounts that the Company purchased land from the collections made from customers". ii. Advances from creditors of NGHIDL have increased from `48.49 crores as on March 31, 2010 to `66.70 crores as on March 31, 2011. iii. NGHIDL paid Commission expenses to the tune of ` 2.05 crores and `3.23 crores during FY2009-2010 and FY2010-2011, respectively. iv. NGHIDL provided an unsecured loan of `3.76 crores to M/s. Sky Net Land Developers Pvt Ltd during FY2010-2011. M/s. Sky Net Land Developers Pvt Ltd acts as a custodial services company for NGHIDL and holds the original trustee deeds executed between NGHIDL and the customer. v. NGHIDL provided advance for ‘Property & Others’ to the tune of `31.71 crores during FY2010-2011. vi. NGHIDL provided loan of `20.96 lakh to M/s. NGHI India Ltd and `20 lakh to M/s. Nicer Paper Mills Ltd (group companies having common Directors). vii. NGHIDL provided loan of `2 lakh to the Director, Mr.Pipal Singh Sidhu.

e) From the Copy of the ‘Application Form’ and ‘Agreement’, following aspects are noted: i. Applications are invited for purchase of plot and its development under the Cash down payment plan or Installment Payment Plan.

ii. Following clauses are noted in the “Application Form”, “Payment according to the payment plan(s) has to be made by cheque/demand draft/money order/banker’s cheque/cash, separately for each application. The Company reserves the right to, prospectively, discontinue, change, amend or modify any of the rules/regulations and plans and introduce new plans at any time at its sole discretion with or without any notice.

iii. The investors are required to make payment as per the payment schedule opted after executing the Agreement with NGHIDL and the said agreement is considered as a confirmation from the customers for booking and development of plot to be purchased by NGHIDL. Following are the clauses noted in the “Agreement”:

AND Whereas the Company organizes the sale of undeveloped agricultural land of different sizes, to prospective buyers and undertakes, at option of the Customer, the development of the same. AND Whereas the Company has made arrangements for purchasing/procuring the land with clear and marketable title and with possession, which forms a part of the various plans launched by the Company. AND Whereas the Company, by means of an Application, which is the basis of this Agreement and which contains the salient terms and condition of the various Plan, has/have expressed his/her/their desire of buying the said agricultural land and also opted to have the same developed by the Company. AND Whereas the Company has agreed to arrange for the sale of the PLOT in favour of the Customer and to develop the same at its expense, by undertaking various development activities, in which the Company possesses the requisite expertise and skill. AND Whereas the Plan shall mean cash down payment plan (CDPP), and installment payment plan (IPP). SALE OF PLOTS The land shall be allotted in name of Customer, in case of Cash Down Payment Plan after completion of nine months from the date of agreement and in Installment Payment Plans after having receipt of 50% of the Consideration amount of the plot and development charges within the period of 270 days. DEVELOPMENT OF LAND The Customer has exercised the option to get the Plot developed by the Company and this Agreement shall be construed as a confirmation thereof. SALE OF PRODUCE Unless specifically otherwise directed by the Customer, the Company shall be responsible for arranging the sale of the produce, if any, out of the plot, on behalf of the Customer. For the purposes of arranging the sale of the produce, as aforesaid, the Company shall have the sole discretion to decide as to whether the produce shall be sold in the wholesale market and/or in the semi-wholesale market, and/or to one or more marketing Company, or may decide to sell it to any other market which the Company may consider appropriate for the sale of a particular grade of the produce.

SALE PRICE The task of sale of the produce, undertaken by the Company, shall be subject to the condition that depending upon the grade of the produce harvested from the plot, market conditions and other relevant factors, the Company may decide to sell the produce at such price which it may deem fit and reasonable in the circumstances prevailing at that point of time. It shall be the endeavour of the Company to sell the product at the best prevailing prices and terms. The Customer shall accept the net sale proceeds, so obtained by the Company from the sale of the said produce, as final and no dispute shall be raised in respect of the same.

iv. Upon execution of the Agreement, it appears that investors are issued a receipt which entitles the customer/holder for certain square yards of plot after a certain period or the customer/holder is entitled to a higher amount at the end of the period. Following are noted in a receipt enclosed with a complaint received by SEBI.

Received with thanks from …. a sum of rupees 10,00,000 under company’s for 2 years on the terms and conditions printed overleaf. He will be allotted/transferred a plot of 5000square yards on maturity of the period of repurchase the plot for `12,30,000.

f) From the letter of allotment and list of allottees submitted by NGHIDL, it is noted that: i. NGHIDL reserves the right to change the location of allotment and allot an alternative site. ii. It is stated that the sale deed in respect of the said allotment shall be executed shortly. It indicates that the sale deed has not been executed yet. It is noted that these applications were submitted to the Company during 2008 and 2009, and the Agreement is dated in 2011.

g) As noted from the preceding paragraphs, NGHIDL invites customers/investors to apply for ‘purchase and development of agricultural land under Cash Down Payment Plan/ Installment Payment Plan’. The investors apply with application monies in cash/ cheque/ demand draft/ money order. NGHIDL reserves right to discontinue, change, amend or modify the plan and introduce new plans at any time at its sole discretion. The investors have to execute an agreement on the basis of the application at the time of making payment of application money. The agreement states that the consideration paid by the customer is towards purchase and development of the plot by NGHIDL. Upon execution of the agreement, a receipt is issued to the investor wherein buy back option at a pre specified price is mentioned.

h) It is observed from the application form that customers are given the option to get the plot developed, whereas, the agreement states that the customer has exercised the option to get the plot developed by NGHIDL and that the agreement shall be construed as confirmation. The overall security of the plot shall, however, be the responsibility of NGHIDL till the expiry of the development period of the Plan opted by the customer. NGHIDL undertakes to irrigate it, plant saplings, crops, trees and use fertilizers, pesticides on the crops and plants. NGHIDL also undertakes to arrange for the sale of produce from such land on behalf of the customer. It also decided where to sell the produce(in whole sale market or in semi-wholesale market), the price at which the same is to be sold depending upon the grade of the produce and thereafter give the net sale proceeds to the customer. The customer has no role to play and merely accept the sale proceeds and raise no dispute in this regard.

i) NGHIDL, vide its letter dated June 28, 2012 (referred in para 7 (g) of this order) has stated that it issues allotment letter to every customer/buyer of land mentioning the area of land, including markings for identification. However, we find that this is not the case. For instance, it is noted from receipt no. 18853 dated September 26, 2009 issued to one Ms. Bimala Devi that the allotment/transfer of a plot of 5000 square yards does not have any identification of plot. NGHIDL has not yet clarified these discrepancies/ contradictions till date.

15. In view of above, the details of purchase, sale and development of land/plot by NGHIDL have to be considered in light of the provisions of Section 11AA of the SEBI Act. The aforesaid Section 11AA, which provides for the conditions to determine whether a scheme or arrangement is a ‘collective investment scheme’ reads as follows: (1) Any scheme or arrangement which satisfies the conditions referred to in sub-section (2) shall 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;

16. In the context of the aforementioned Section 11AA (1) and (2) of the SEBI Act, the Scheme offered by NGHIDL is examined as under: (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;

NGHIDL mobilize funds from customers/investors for the purchase of agricultural land/plot and undertakes to develop the land forming part of various plans offered by it. The contribution or investment made by a customer/investor is in accordance with the various payment plans offered by NGHIDL viz., Cash Down Payment Plan (CDPP) or Installment Payment Plan (IPP). As per the submissions of NGHIDL vide letter dated May 10, 2014, it has collected `31.71 crores against sale of agricultural land from Customers till March 31, 2011. It is noted from the balance sheet for the FY 2010-2011 that Advances from creditors of NGHIDL have increased from `48.49 crores as on March 31, 2010 to `66.70 crores as on March 31, 2011. It is observed from Notes to the Accounts and Annexure forming Part of the Balance Sheet that “The Company purchased land from the collections made from customers, which are shown as stock of the Company.” In view of the above, I, find that the instant scheme fully satisfies the first condition stipulated in Section 11AA (2) (i) of the SEBI Act.

(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;

The payments collected from the customer/investors are being utilized by NGHIDL towards the various Plans. It is observed that customers/investors apply for ‘purchase and development of agricultural land under Cash Down Payment Plan/ Installment Payment Plan’. An expected return/realizable value is indicated against each receipt issued by the Company. For instance, Certificate/receipt dated September 26, 2009 issued to a customer contains a repurchase price of the plot for `12.30 lakh at the end of the term of two years, which is higher than the invested amount of `10 lakh, and the estimated return is seen to be `2.30 lakh. Similarly, another certificate/receipt dated September 26, 2009 contains a repurchase price of the plot for `18.45 lakh at the end of the term of two years, which is substantially higher than the invested amount of `13 lakh, and the estimated return is `5.45 lakh. It is submitted by NGHIDL that as per the terms of the scheme, the customer/investor is entitled to receive an estimated amount at the end of the contract period. In light of the above, it is observed that the investment is made with a view to earn profit/return, derived from such scheme or plan. I, therefore, find that the instant scheme satisfies the second condition stipulated in Section 11AA (2) (ii) of the SEBI Act.

(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 operations of the scheme or arrangement

As per the Agreement between NGHIDL and the Customer/investor, it is stated that “…NGHIDL has agreed to arrange for the sale of the Plot in favour of the customer and to develop the same at its expense, by undertaking various development activities. Para 5 of the Agreement reads “The overall security of the plot shall, however, be the responsibility of the Company till the expiry of the development of plan opted for by the customer.” Para 6 of the Agreement reads “The Company shall provide such irrigation as it deems appropriate….” Para 7 of the Agreement reads “The Company shall… use necessary fertilizers, pesticides, etc, as it may deem appropriate.”Para 9 of the Agreement reads, “The Company shall be responsible for arranging the sale of the produce, if any, out of the plot, on behalf of the Customer. The Company shall have the sole discretion to decide as to whether the produce shall be sold in the wholesale market and ….” Para 10 of the Agreement reads “The Company may decide to sell the produce at such price which it may deem fit and reasonable…The Customer shall accept the net sale proceeds…as final ….” As per the terms of the scheme, NGHIDL has the right to develop the plot in consultation with experts. NGHIDL may employ its own technical experts, advisor, and such personnel as it may consider necessary. NGHIDL shall have the sole discretion to decide as to how to sell the said produce. It is noted that the customer is not provided with the details of the plot/land to be purchased, except for the square yards that the customer is purchasing. This clearly indicates that the customer/investors do not, at any stage manage the contribution, property or investment forming part of the scheme. Therefore, it is clear that the investors do not have day to day control over the arrangement and operation of the scheme offered by NGHIDL. I, therefore, find that the instant scheme satisfies the conditions stipulated in Section 11AA (2) (iii) and (iv) of the SEBI Act.

17. It is noted from the contentions raised by NGHDIL, it is carrying out purchase and sale of agricultural land and not CIS activities. In this context, it is relevant to refer to the observations of the Hon'ble Supreme Court of India in the matter of P.G.F Limited & Ors. vs. UOI & Anr. (MANU/SC/0247/2013), wherein the Hon’ble Court had occasion to adjudge on a scheme having features similar to the instant Scheme of "Purchase and development of plot”, as a 'collective investment scheme' under Section 11AA of the SEBI Act. The Hon'ble Supreme Court of India had observed : “A conspectus consideration of the scheme of development of the land purchased by the customers at the instance of the PGF Limited and the promised development under the agreement disclose that there was wholesale uncertainty in the transactions to the disadvantage of the investor’ concerned. ……....................... Apart from the sale consideration, which is hardly 1/3rd of the amount collected from the customers, the remaining 2/3rd is pooled by the PGF Limited for the so called development/improvement of the land sold in multiples of units to different customers. Such pooled funds and the units of lands are part of such scheme/arrangement under the guise of development of land............. In these circumstances, the conclusion of the Division Bench in holding that the nature of activity of the PGF Limited under the guise of sale and development of agricultural land did fall under the definition of collective investment scheme under Section 2(ba) read along with Section 11AA of the SEBI Act was perfectly justified and hence, we do not find any flaw in the said conclusion. … We therefore hold that Section 11AA of the SEBI Act is constitutionally valid."

18. The features of the schemes offered by NGHIDL as discussed in the preceding paragraphs, shows that the activity of fund mobilization by NGHIDL under its ‘scheme(s)/plan(s)’ with a resultant promise of returns, prima facie falls within the ambit of 'collective investment scheme' as defined under Section 11AA of the SEBI Act. Therefore, I am of the view that NGHIDL is engaged in the mobilization of funds from public under its schemes ‘purchase and development of agricultural land under Cash Down Payment Plan/ Installment Payment Plan’, which is in the nature of a ‘collective investment scheme’ as defined in Section 11AA of the SEBI Act.

19. I note that in terms of Section 12(1B) of the SEBI Act, "no person shall sponsor or cause to be sponsored or cause to be carried on a 'collective investment scheme' unless he obtains a certificate of registration from the Board in accordance with the regulations”. Regulation 3 of the SEBI (Collective Investment Schemes) Regulations, 1999 (hereinafter referred to as "CIS Regulations") also prohibits carrying on CIS activities without obtaining registration from SEBI. 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. In this regard, I note that NGHIDL has not obtained any Certificate of Registration under the CIS Regulations for its fund mobilizing activity from the public, under the scheme offered by it.

20. It is noted from the submissions of NGHIDL that it has not submitted the full list of customers/investors who have applied for the schemes or the amount of funds mobilized from the customers/investors till date. NGHIDL has merely submitted list of 1191 customers to whom allotments were made, without giving details of funds mobilized from these customers. NGHIDL has also not submitted the names of customers who have not opted for development plan. It has not submitted details of repurchase of land/plot from the customers. I note that NGHIDL has not submitted complete information/clarifications sought by SEBI. In these circumstances, I find that reasonable opportunity has been afforded to NGHIDL to respond to SEBI but it has failed to respond adequately. When considered in the context of the abovementioned prima facie finding, the inescapable conclusion is that non-submission of the above mentioned information to SEBI is nothing but an attempt to conceal the true nature and operation of the fund mobilizing activity of NGHIDL.

21. SEBI has also received complaints that NGFL (group company) is substituting the certificates issued to its investors with the bonds of NGHIDL. It is noted from the records that Mr. Pipal Singh is the Promoter and Managing Director of NGFL against whom directions were issued by SEBI on November 09, 2010. Mr. Pipal Singh is also the promoters/directors of NGHI Developers India Limited (hereinafter referred to as "NGHI"), against whom directions were issued by SEBI on July 09, 2012. NGHI was incorporated by Mr. Pipal Singh, Mr. Bakshish Singh and others on March 13, 2010 when the proceedings initiated by SEBI against NGFL were on-going. Further, the Head office of NGHI and NGHIDL are observed to be the same. These facts suggest that NGFL, NGHI and NGHIDL are related to each other and appear that NGHIDL is being used by Mr. Pipal Singh as a vehicle to flout and circumvent the earlier Order dated March 12, 2013 issued by SEBI against NGFL.

22. I also find that the fund mobilizing activity of NGHIDL through its ‘purchase and development of agricultural land under Cash Down Payment Plan/ Installment Payment Plan’, prima facie, amounts to a fraudulent practice in terms of Regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 ("PFUTP Regulations").

23. Protecting the interests of investors is the first and foremost mandate for SEBI and therefore, steps have to be taken in the instant matter to ensure that only legitimate investment activities are carried on by NGHIDL and no investors are defrauded. From the material available on record, it is observed that Mr. Pipal Singh (DIN-00751858), Mr. Ranjit Singh (DIN-00922498) and Mr. Karanjit Singh (DIN – 02986346) are the present Directors/ persons in charge of the business of NGHIDL. Further, it is noted that Ms. Surinder Kaur was also appointed as Director of the Company at the time of incorporation and subsequently ceased to be the Director of the Company with effect from November 30, 2010. In this regard, it is a prima facie assumption that Ms. Surinder Kaur was also involved in the fund mobilizing activity carried out by NGHIDL during the period of directorship in NGHIDL. In order to safeguard the assets/property acquired by NGHIDL and its promoters/directors using the funds collected from the investing public until full facts and materials are brought and final decision is taken in the matter, it is incumbent on SEBI to take preventive action by way of an immediate measure. In the light of the above, I find no other alternative but to take recourse to an interim order against NGHIDL and its past and present Directors for preventing them from further carrying on with its existing fund mobilizing activity by launching 'collective investment scheme', without obtaining registration from SEBI in accordance with law.

24. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11(1), 11B and 11(4) of the SEBI Act read with CIS Regulations and PFUTP Regulations, hereby direct NGHIDL (CIN: U45200PB2007PLC030879) and its Directors, viz., Mr. Pipal Singh (DIN-00751858), Ms. Surinder Kaur (DIN-00922478), Mr. Ranjit Singh (DIN- 00922498) and Mr. Karanjit Singh (DIN – 02986346): • not to collect any fresh money from investors under its existing scheme; • not to launch any new schemes or plans or float any new companies and raise fresh moneys; • to immediately submit the full inventory of the assets owned by NGHIDL; • not to dispose of any of the properties or alienate the assets of the existing scheme;

• not to divert any funds raised from public at large, kept in bank account(s) and/or in the custody of the company; • not to substitute the Certificates issued by NGFL with its bonds or any other instruments by whatsoever name called; • to furnish all the information/details sought by SEBI within 15 days from the date of receipt of this order, including, i. Details of amount mobilized and refunded till date, ii. Scheme wise list of investors and their contact numbers and addresses

25. The above directions shall take effect immediately and shall be in force until further orders in this regard.

26. This order is without prejudice to the right of SEBI to take any other or further action that is deemed fit to be initiated against NGHIDL and its Directors/ Promoters.

27. The prima facie observations contained in this Order are made on the basis of the material available on record. In this context, NGHIDL and its abovementioned Directors may, within 21 days from the date of receipt of this Order, file their reply, if any, to this Order and may also indicate whether they desire to avail themselves an opportunity of personal hearing on a date and time to be fixed on a specific request made in that regard.

S RAMAN Date: July 28, 2014 WHOLE TIME MEMBER Place: Mumbai SECURITIES AND EXCHANGE BOARD OF INDIA