Nicer Green Housing Infrastructure ... vs Sebi

Order Reserved: 30.7.2021 Date of Decision:09.8.2021

Appeal No.377 of 2021

1.

Nicer Green Housing Infrastructure Developers Ltd.

2. Pipal Singh

3. Ranjit Singh

4. Surinder Kaur

5. Karanjit Singh Sadar Colony, Near Gupta Petrol Pump, Firozepur City, Punjab-152002. ...Appellants

Versus

Securities and Exchange Board of India SEBI Bhavan, Plot No.C-4A, 'G' Block, Bandra Kurla Complex, Bandra (E), Mumbai. ...Respondent

Mr. J. S. Saluja, Advocate for the Appellants.

Mr. Mustafa Doctor, Senior Advocate with Ms. Nidhi Singh, Ms. Aditi Palnitkar and Ms. Riddhi Pawar, Advocates i/b. Vidhii Partners for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer Justice M.T. Joshi, Judicial Member

Per: Justice Tarun Agarwala, Presiding Officer 2

1. The present appeal has been filed by the appellants

challenging the order dated 18th January, 2021 passed

by the Adjudicating Officer ('AO' for short) imposing

a penalty of Rs.70 lakhs to be paid jointly and

severally by the appellants for violating the provisions

of Section 12(1B) of the Securities and Exchange

Board of India Act, 1992 (hereinafter referred to as the

'SEBI Act') and Regulation 3 of the Securities and

Exchange Board of India (Collective Investment

Schemes) Regulations, 1999 (hereinafter referred to as

the 'CIS Regulations').

2. The facts leading to the filing of the present appeal

is, that certain complaints were received by Securities

and Exchange Board of India (hereinafter referred to

as 'SEBI') against the Company for not repaying the

investors the amount that became due upon maturity.

Upon examination and enquiry it was found that the

activity of fund mobilization by the appellant no.1

Company under its schemes/plans with a resultant 3

promise of returns fell within the ambit of collective

investment scheme as defined under Section 11AA of

the SEBI Act.

3. Accordingly, the WTM passed an ex-parte interim

order dated 28th July, 2014 restraining the appellants

from mobilizing any funds from the public and also

issued a show cause directing the appellants to show

cause as to why appropriate orders should not be

passed against them for violating the CIS Regulations.

After giving an opportunity of hearing, the WTM

passed a final order dated 9th November, 2015

directing the appellants to wind up the collective

investment scheme and refund the money collected

with returns which are due to the investors as per the

terms of offer within a period of three months from

the date of the order. The appellants were further

restrained from accessing the securities market and

from launching any scheme for a period of four years.

The said final order was challenged before this 4

Tribunal in appeal no.86 of 2017 wherein the

appellants showed their willingness to comply with

the order of the WTM and refund the money that was

collected. Accordingly, this Tribunal passed an order

dated 13th November, 2017 disposing of the appeal by

permitting the appellants to make a representation

which if made would be considered by SEBI.

4. Thereafter, the representation of the appellants was

duly considered by the respondent and, by an order

dated 1st June, 2018 the appellants' representation was

rejected. The appellants accordingly preferred appeal

no.307 of 2018 which was dismissed by this Tribunal

by an order dated 25th February, 2019 with the

following observation;

"4. Having heard the learned counsel for the appellants and upon perusal of the memo of appeal and the impugned order, we find that no proof has been filed either before SEBI or even before this Tribunal to show that the appellants had refunded a sum of Rs. 27.48 crore and that they are ready and willing to pay the balance amount in a time bound manner. In the absence of any evidence being filed, we are of the opinion 5

that there is no infirmity in the order passed by SEBI disposing of their representations.

5. The appeal lack merit and is dismissed summarily."

5. A review application no.3 of 2019 was also

dismissed by this Tribunal on 27th June, 2019.

Thereafter, civil appeal no.7017-7018 of 2020 was

preferred by the appellants before the Supreme Court

of India which was also dismissed by judgment dated

2nd September, 2019.

6. Thus, the order of the WTM holding that the

activity of fund mobilization by the appellant

Company under its schemes/plans were collective

investment schemes as defined under Section 11AA of

the SEBI Act has become final.

7. The AO issued a show cause notice dated 12th

November, 2020 calling upon the appellants to show

cause as to why an enquiry should not be held and

penalty should not imposed against them under

Section 15D(a) of the SEBI Act for the alleged 6

violations of running a collective investment scheme.

The AO on the same lines as that of the WTM found

that the appellants were running a collective

investment scheme without obtaining registration

under Section 11AA of the SEBI Act and,

accordingly, by the impugned order has imposed a

penalty of Rs.70 lakhs.

8. We have heard the learned counsel for the parties

at some length.

9. The fact that the appellants were running a

collective investment scheme without obtaining a

registration is no disputed. The fact that before this

Tribunal the appellants made a submission that they

will refund the amount which they collected under the

scheme to the investors is also not disputed. This

Tribunal accordingly passed an order directing the

appellants to make a representation. Till date the

amount has not been refunded to the investors inspite 7

of the order becoming final up to the stage of the

Supreme Court.

10. Thus, there is no equity in favour of the appellants

for any kind of relief. The appeal fails and is

dismissed with no order as to costs.

11. The present matter was heard through video

conference due to Covid-19 pandemic. At this stage it

is not possible to sign a copy of this order nor a

certified copy of this order could be issued by the

registry. In these circumstances, this order will be

digitally signed by the Private Secretary on behalf of

the bench and all concerned parties are directed to act

on the digitally signed copy of this order. Parties will

act on production of a digitally signed copy sent by

fax and/or email.

Justice Tarun Agarwala Presiding Officer

Justice M.T. Joshi Judicial Member RAJALA Digitally signed

09.8.2021 by

KSHMI RAJALAKSHMI NAIR H

Date: 2021.08.09 RHN H NAIR 14:13:22 +05'30'