Order in respect of G–LIFE INDIA DEVELOPERS AND COLONIZERS LIMITED, GIRIRAJ PANDEY and 06 others in the matter of G–LIFE INDIA DEVELOPERS AND COLONIZERS LIMITED.

WTM/GM/IMD/20/2018–19 SECURITIES AND EXCHANGE BOARD OF INDIA INTERIM ORDER CUM SHOW CAUSE NOTICE UNDER SECTIONS 11(1), 11(4), 11B AND 11AA OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH REGULATION 65 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (COLLECTIVE INVESTMENT SCHEMES) REGULATIONS, 1999 AND REGULATION 11 OF THE SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO SECURITIES MARKET) REGULATIONS, 2003. IN THE MATTER OF G–LIFE INDIA DEVELOPERS AND COLONIZERS LIMITED – COMPANY CIN PAN 1. G–LIFE INDIA DEVELOPERS AND U70101MP2010PLC024268 AADCG9560H COLONIZERS LIMITED DIRECTOR DIN PAN 2. GIRIRAJ PANDEY 03201749 BIPPP0583D 3. DEEPAK SHARMA 03631493 BLQPS6267P 4. SIRAJ ALI 07393639 AKRPA6259Q 5. MANOJ KUMAR PANDEY 05122877 ANDPP4284F 6. PRAMOD KUMAR PANDEY 03222416 BSHPP0251N 7. SUNIL KUMAR SHARMA 03201760 DRZPS9894D 8. PAPPU PAWAR 07061188 BVEPP1224K

BACKGROUND –

1.1 Securities and Exchange Board of India (“SEBI”) took suo moto notice of a newspaper article appearing in the ‘Patrika’ on July 3, 2013 (Indore Edition), wherein it was reported that fund mobilising activity was carried out by G–Life India Developers and Colonizers Limited (“G–Life India”) under the garb of a real estate business. The article also reported that the District Administration, Indore, had filed a charge sheet in the District Court against G–Life India, pursuant to complaints received by that Authority against the Company.

1.2 G–Life India is a company incorporated under the Companies Act, 1956 on September 7, 2010. The registered office address of G–Life India is at 105, 106, 1st Floor, Kanchan Sagar near Industries House, A. B. Road, Palasiya, Indore, M. P. – 474001.

Order in the matter of G–Life India Developers and Colonizers Limited

1.3 As a matter of preliminary enquiry in order to ascertain whether or not G–Life India was carrying on ‘Collective Investment Schemes’ in terms of Section 11AA of the SEBI Act, 1992 (“SEBI Act”),

A. SEBI, vide letters dated July 5, 2013 and February 8, 2014, requested the Collector and District Magistrate, Gwalior to share details viz. brochures, samples of Agreements executed by G–Life India with investors, etc.

B. Further, vide letters dated October 31, 2013 and February 12, 2014, SEBI advised G–Life India and its Directors, i.e. Giriraj Pandey, Deepak Sharma and Manoj Kumar Pandey, to submit the following information – i. Memorandum and Articles of Association of the Company as filed with the Registrar of Companies (“RoC”). ii. Details of the past and present Directors of the company. Details should contain name, address, PAN and contact details (Email/fax/contact no.) of the Directors. iii. Brochures pertaining to the schemes/offers which were made available to the public. iv. Copies of Application Forms that are required to be submitted by investors/applicants to participate in the Schemes. v. Sample copies of the Allotment Letter, etc. issued to the investors who subscribed to the Schemes. vi. Sample copies of the Agreement Letter/Contract required to be entered into by investor/applicant under the Schemes. vii. Details of the scheme wise amount mobilized by the company till date along with the number of investors under the Schemes. viii. Certified copy of Audited Financial Statement for the FY 2009–10, 2010–11 and 2011–12. ix. Copy of Income Tax Return filed by the company for the last three years. x. Details of the regulatory approvals obtained by the company, if any, for provision of accidental death/disability benefits to investor, under Schemes. xi. Details of any other similar Scheme(s), if any, floated by the company or its group/associates company.

1.4 SEBI did not receive any reply from the Collector and District Magistrate, Gwalior.

1.5 However, vide a reply dated February 25, 2014, G–Life India submitted the following information to SEBI – i. Memorandum and Articles of Association of the Company as filed with the RoC. ii. List of shareholders filed with RoC. iii. Income Tax Return for the Financial Year 2010–11 and 2011–12. iv. Auditor’s Report; Balance Sheet and Profit and Loss Account for 2010–11 and 2011–12.

1.6 Vide the abovementioned letter dated February 25, 2014, G–Life India also informed SEBI that the matter in respect of action taken by the Collector of Indore for amount mobilized from investors was pending before the District Court, Gwalior.

1.7 Thereafter, SEBI sought the following additional information from G–Life India and its Directors vide letter dated February 26, 2014 – i. Name & address of the investors/depositors. ii. Nature of deposit made by these persons with the company. iii. Copy of Application, Agreement and Registration Certificate in respect of the investors. iv. The details of plan in which the investors have deposited their money. v. Details, if any, of Reserve Bank of India (“RBI”) approvals to the company for accepting deposits as NBFC. vi. Copy of the FIR, Charge–sheet and Order passed, if any, by District Court, Gwalior.

1.8 During the intervening period, SEBI received a complaint on November 19, 2014, inter alia alleging that G–Life India was raising money illegally through Fixed Deposit, Recurring Deposit and Insurance without complying with SEBI/RBI norms. The complainant therein also alleged that G–Life India had mobilized over ₹500 Crores and was also operating in the name of G Life Properties Private Limited and Green Vihar Developers and Colonizers Limited, both of whom were registered with the RoC–Rajasthan.

1.9 SEBI received another complaint on December 6, 2014, wherein the complainant had forwarded a copy of the ‘Certificate of Allocation’ dated February 17, 2011, issued by G–Life India to an investor prima facie evidencing investment under the ‘Scheme’ offered by the Company.

1.10 Subsequently, on December 10, 2014, SEBI officials visited the branch office of G–Life India at 3rd Floor, Muskan Plaza, Ashwini Nagar, Sunder Nagar, Mahadev Ghat Road Near Dena Bank, Raipur, Chhattisgarh and obtained inter alia the following documents pertaining to the activities of the Company, viz. – (a) Copy of a brochure evidencing Schemes involving plots of land offered by G–Life India. (b) Copies of Certificates evidencing allocation of plots under the Schemes, issued by G– Life India to investors. (c) Sample copy of Instalment Payment Receipt.

1.11 During the abovementioned visit, SEBI officials prima facie observed that a Group Company i.e. Green Vihar Developers and Coloniser Limited having registered office at Udaipur, Rajasthan, was also mobilizing funds from the public.

1.12 Thereafter, SEBI vide letter dated December 17, 2014, advised G–Life India to provide the following information – (a) Details of past and present Directors. (b) Brochures pertaining to the Schemes/offers which were made available to the public. (c) Copies of Applications Forms required to be submitted by investors/applicants to participate in the Schemes. (d) Copies of Rule Book. (e) Sample copies of the Allotment Letter/Certificate issued to the investors who subscribed to the Schemes. (f) Sample copies of the Agreement Letter/Contract required to be entered into by investor/applicant under the Schemes. (g) Details of the scheme wise amount mobilized by the company till date along with the number of investors under the Schemes. (h) Certified copy of Audited Financial Statement for the FY 2012–13 and 2013–14. Further, detailed trial balance from April 2014 onwards till date of submission of data. (i) Explanation for the incorrect details recorded in the Balance Sheet as on March 31, 2011. (j) Certified copy of the bank book (with narrations) and cash book from January 2011 onwards. List of all the past and present bank accounts. (k) List of the all branches with their address across India. (l) Commission structure of the agents/business associates.

(m) Whether agents are paid directly by the company or they deduct their commission from money mobilized and deposit net amount to the company on behalf of investors? (n) Complete details of all the properties acquired by the company from the money of investors held in its name or in the name of any other person. (o) List of all the group companies and nature of activities of these companies including Green Vihar Developers and Coloniser Limited. (p) Details of any other similar scheme(s), if any, floated by the company or its group/ associate company or companies in which its Directors are also Directors including Green Vihar Developers and Coloniser Limited. (q) Details of Circulars issued by the Company. (r) Details of the regulatory approvals obtained by the Company, if any, for provision of accidental death/disability benefits to investor, under its schemes. (s) Details of action taken by Collector of Indore against the company including details such as copy of FIR, Charge–sheet and Order passed by the Court. (t) Copy of Income Tax Return filed by the Company for the FY 2012–13 and 2013– 14.

1.13 On its website i.e. http://glifeindia.com, G–Life India stated that it was listed on BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”). In view of the aforesaid, SEBI also made a reference to BSE and NSE vide letters dated January 7, 2015.

1.14 Vide a letter dated February 3, 2015, G–Life India replied to SEBI inter alia as under – (i) “The company is engaged mainly in two businesses i.e. trading of agricultural produce and another is developing of real estate which involve developing of agricultural land, residential and commercial properties. The company purchased one land for the first time of an amount of Rs.1,61,135/– on December 31, 2010 for real estate purpose and has shown it as an inventory in the balance sheet of FY 2010–11. The above said land was purchased by company from its own fund. Thereafter, the company purchased several other lands for real estate purposes and started taking booking from relatives and close friends. When the company tried to develop the said property, it was found that it needed various licenses and permission from various authorities and accordingly applied for the same. The company got colonizers license in the year 2014. (ii) Further, booking amount cannot be treated as sale proceeds until and unless sale deed is registered or the possession of the plot is given to the prospective customers; hence, treated as liabilities in the books of the company.

The lands are not purchased after collecting the amount of the booking for the particular projects. The booking is accepted at specific rates; it is not floating in nature. As per the terms of the booking, it is clearly mentioned that the company will deliver the said land/plot/unit and will not retain the possession. There is nothing written in the terms that the contribution or the booking amount will lead to generation of any profit/income/produce or property to the company and any scheme. The company will not manage the land /property on behalf the customer. Our clients’ responsibility is only for the development of the land/property and to deliver to the customer after the registration of the sale deed and till the delivery of the possession /registration of the sale deed, the customer will have no say regarding the control/ management/development of the said land/property in any manner. The customers of the company have all the rights to know about the development of the booked plot/property by visit/inspect the specific property allotted to them. The company have further ensured their customers that in case they want to exit before the delivery of the possession/registration of the sale deed, the company has offered to assist their customers in reselling the subject property but nothing has been said to buy back the property at all.

The provisions of Section 11AA of the SEBI Act with regard to Collective Investment Scheme are not attracted /cannot be applied to the company, in any manner at all. (iii) The PAN number of the company is AADCG9560H. The list of past and present directors has been provided. (iv) A copy of the application form/agreement required to be submitted by applicants has been provided. Further, copy of the Allocation Letter/Certificate to customers has been provided. There is no Rule Book and contracts with the customers is solely governed by the Agreement for the plot registration. (v) The names and details of the amount taken as loan and advances from the applicant, who have booked the property with the company is clearly reflected in the balance sheet of the company and there is no other loan or investment taken from any person. (vi) The copies of the balance sheet for the FY 2011–12 and 2012–13 have been provided. (vii) The list of all banks are there in the balance sheet. Out of these, three accounts with Bank Of India, Axis Bank and ICICI bank have been freezed by the Collector’s Order dated 04.05.2013.

HDFC bank account has never been operated since the day of incorporation of the company. (viii) The company has no branch. However, company has business associates who market their product, that too as soft launch of the project of developing colony at Indore 19, Sankeswar City, Opp. Arvindo Hospital, Ujjain Road, Indore (M.P). They don’t have any commission structure rather their business associates are paid remuneration which includes everything after deducting TDS. (ix) There is no property which has been acquired from any outside money rather the company purchased property from the company’s own fund. The certified copies of sale deed requires further time of at least a month. (x) The company has nothing to do with M/s Green Vihar Developers and Colonizers Limited, rather they are in negotiation stage with them to develop the properties of our client, which is at very elementary stage. Regarding other group of companies, the details are there in the company’s profile except M/s Green Vihar Developers & Colonizers Ltd as stated above. (xi) There is no scheme ever floated by the company except the present one wherein the company after getting registration with the Municipal Council, Indore as registered colonizers have started the development of the colony against which the people known to the company have booked and made advances with the company, which are clearly disclosed in the balance sheet and with the IT returns.

(xii) There is no circular issued as such and the present circular (i.e. Circular No. 15 vide which 10% bonus is paid by the Company) was only made out but has never been circulated anywhere.”

1.15 Subsequent to receipt of reply from G–Life India, vide letters dated July 5, 2015; August 26, 2015 and September 18, 2015, SEBI, while making a reference to the newspaper article dated July 3, 2013 (refer to paragraph 1.1 at page 1) once again requested the Collector and District Magistrate, Indore, to provide information such as copy of Brochures, sample Agreement, etc. in respect of the activities carried out by the Company. However, no information has been received by SEBI till date.

FINDINGS –

2.1.1 Upon an examination of the information provided by G–Life India, the following is observed –

A. The ‘Certificate of Allocation’ contains details such as –

 Registration no. and date of commencement;  Payment Plan No. & Term;  Consideration Plot Size;  Expiry date of Agreement;  Amount of Instalment payable.

B. G–Life India inter alia offered ‘Instalment Payment Plan’ and ‘Cash Down Payment Plan’ to the public/prospective investors as under –

TABLE I – INSTALMENT PAYMENT PLAN (DEVELOPMENT AGREEMENT TERM – 60 MONTHS) PLAN CODE NO. G5 – 60 MONTHS/5 YEARS. PLOT COST DEVELOPMENT TOTAL PARTICIPATION VALUE REALISABLE SIZE OF & OTHER COST MARKET VALUE (IN SQ. PLOT CHARGES (IN ₹) MONTHLY QUARTERLY HALF YEARLY OF LAND AT THE YARDS) YEARLY END OF THE AGREEMENT 120 2160 3840 6000 100 295 585 1150 8400 240 4320 7680 12000 200 590 1170 2300 16800 360 6480 11520 18000 300 885 1755 3450 25200 480 8640 15360 24000 400 1180 2340 4600 33600 600 10800 19200 30000 500 1475 2925 5750 42000 1200 21600 38400 60000 1000 2950 5850 11500 84000

TABLE II – CASH DOWN PAYMENT PLAN (DEVELOPMENT AGREEMENT TERM 108 MONTHS) PLAN CODE NO. D3(C) – 108 MONTHS/ 9 YEARS PLOT SIZE COST OF PLOT DEVELOPMENT & TOTAL COST REALISABLE MARKET VALUE OF LAND (IN SQ. YARDS) OTHER CHARGES (IN ₹)# AT THE END OF THE AGREEMENT 1000 18000 32000 50000 150000 2000 36000 64000 100000 300000 3000 54000 96000 150000 450000 4000 72000 128000 200000 600000 1000 18000 32000 50000 150000 5000 90000 160000 250000 750000 # THE SAID VALUE IS TENTATIVE VALUE OF LAND; ACTUAL VALUE OF LAND MAY VARY AT TIME OF EXPIRY OF AGREEMENT AND OTHER LEGALITY WHICH MAY AFFECT TO SALE OF DEVELOPMENT PLOTS. ADDITIONAL BONUS AND ADDITIONAL DEATH/NATURAL DEATH COMPENSATION AS PER APPLICABLE CIRCULAR. C. G–Life India stated that funds are collected for particular projects and bookings are accepted at specific rates; however, no documentary evidence pertaining to details of investor and allotment of lands/properties has been furnished to SEBI. Further, vide letter February 26, 2014, SEBI had sought details of names & addresses of the investors/depositors and details of allotments of plots to such investors from G–Life India; however, no information was furnished by the Company.

D. G–Life India failed to provide documentary evidence to SEBI to support its contention that properties were acquired from its own funds rather than from funds collected from investors.

E. Although G–Life India has contended that it does not have any branch, the same is prima facie unsustainable since physical verification of the Raipur branch of the Company was conducted by SEBI on December 10, 2014.

F. G–Life India’s contention that it does not have any commission structure rather its business associates are paid remuneration is also unsustainable since its Balance Sheets indicate that huge amounts were paid towards commissions. For example, an amount of ₹31,91,417 was shown paid as commissions during the FY 2012–13. Further, an analysis of the aforementioned Balance Sheets also reveals that commissions amounted to the highest expense amongst the total expense of the Company.

G. The denial of the Company about its association with Green Vihar Developers and Colonizers Limited also does not hold true as the ‘Company Profile’ provided in its Annual Report clearly includes the aforementioned Company as part of its Group Companies.

H. G–Life India contended that no Scheme was floated other than that which was registered with the Municipal Council, Indore as Colonizers. However, neither the sample ‘Agreement’ nor the sample ‘Allocation Letter’ mentions that money was taken for the aforesaid Scheme at Indore.

I. The sample ‘Agreement’ clearly mentions at page 7 that: “The first party (the company) is engaged in the business of real estate and the development of various lands including the commercial, residential, industrial and agricultural land at various places in India. And the first party organizes the sale of undeveloped lands of different sizes at different parts of India, to its prospective buyers and undertakes, at option of the buyer, the development of the same.” Further, the sample ‘Agreement’ seeks “preference of State” for which purchase of plot and development was sought.

J. From the terms and conditions of the ‘Certificate of Allocation’, it is observed that G– Life India clearly assured that land will be allotted to investors.

K. G–Life India reiterated that no Circular has been issued by the Company. However, from the copy of ‘Certificate of Allocation’ issued to one, Nira Lal Nishad (which was obtained during the physical verification of the Company’s branch office conducted by SEBI on December 10, 2014), it is observed that ‘10% bonus will be paid according to Circular No. 15.’

2.1.2 Financial statements of G–Life India for the Financial Years 2010–11, 2011–12, 2012–13, 2013–14 and 2014–15 were obtained from the Ministry of Corporate Affairs website i.e. MCA21 Portal, details of which are reproduced below – TABLE III – DETAILS OF BALANCE SHEET AND PROFIT & LOSS A/C SR. NO. PARTICULARS FY 2010–11 FY 2011–12 FY 2012–13 FY 2013–14 FY 2014–15 PARTICULARS OF PROFIT & LOSS STATEMENT 1. GROSS REVENUE FROM OPERATIONS – 153,70,000 30,683,878 3,32,01,388 2,74,36,794 2. OTHER INCOME (COMMISSIONS) – 3,20,793 25,289 12,90,974 14,94,726 3. *PURCHASE OF STOCK IN TRADE 1,61,135 144,37,447 4,45,89,617 58,72,795 29,35,000 4. COMMISSION PAID – 10,26,336 31,91,417 43,77,021 47,90,823 LIABILITIES 5. LONG TERM BORROWINGS (FROM OTHER PARTIES) 31,70,015 73,83,291 65,49,736 65,95,146 70,18,843 6. OTHER NON-CURRENT LIABILITIES (ADVANCE FROM CUSTOMERS/ ADVANCE – – AGAINST LAND ) 32,14,473 6,92,70,996 13,17,03,800 ASSETS 7. LONG TERM LOANS & ADVANCES 8,44,000 6,22,000 94,83,100 2,68,23,000 7,99,16,390 8. INVENTORIES AT THE END OF THE PERIOD (LAND) 1,61,135 30,46,030 2,77,55,478 2,97,28,273 3,26,63,273 *INCLUDES LAND AND LAND DEVELOPMENT CHARGES.

TABLE IV – LIST OF SHAREHOLDERS AS ON MARCH 31, 2015 (NOMINAL VALUE PER SHARE – ₹10) – AS SUBMITTED VIDE FORM NO. MGT – 7 FOR FY 2014–15 NAME OF SHAREHOLDER TYPE OF SHARE NO. OF SHARES HELD 1. GIRIRAJ PANDEY 4,00,000 2. DEEPAK SHARMA 40,000 3. SUNEEL KUMAR SHARMA 2,000 4. MANOJ SINGH TIWARI EQUITY 2,000 5. SUDHIR SHARMA 2,000 6. PAPPY PANWAR 2,000 7. DHARMENDRA MEWAFA 2,000 TOTAL 4,50,000

2.1.3 The following is noted from the Balance Sheets of G–Life India for the Financial Years 2010–11, 2011–12, 2012–13, 2013–14 and 2014–15:

i. Balance Sheet as on March 31, 2011 mentioned a list of 36 persons from whom the company has taken unsecured loan (deposits) ₹31,70,015. However, G–Life India had admittedly acquired land worth ₹1,61,135 (reflected as inventory) during the FY 2010–11.

ii. The unsecured loan /long term borrowing increased to ₹73,83,291 on March 31, 2012. The inventory of G–Life India increased to ₹30,46,030 as on March 31, 2012. During the aforesaid FY, G–Life India paid commissions of ₹10,26,336.

iii. The unsecured loan/long term borrowing increased to ₹65,49,736 on March 31, 2013. Further, advance from customers was shown as ₹3,21,74,473. Thus, total borrowing was ₹3,87,24,209. The inventory of G–Life India increased to ₹2,77,55,478 as on March 31, 2013. During the aforesaid FY, G–Life India paid commission of ₹31,91,417. Subsequently, during the FY 2013–14 and 2014–15, significant rise in other non-current Liabilities (advance from customers/ advance against Land) was noted.

iv. However, in the Financial Statements, details regarding properties/land acquired from the money of investors were not provided by G–Life India.

2.1.4 The details of funds mobilized by G–Life India as on March 31, 2015 (Liabilities at point 5 and 6 of Table III i.e. Long Term Borrowings (from other parties) and Other non-current Liabilities (advance from customers/ advance against Land ), are provided as under –

TABLE V – AMOUNT MOBILIZED AS ON MARCH 31, 2015 FINANCIAL YEAR AMOUNT IN ₹ 1. 2010–11 31,70,015 2. 2011–12 73,83,291 3. 2012–13 97,64,209 4. 2013–14 7,58,66,142 5. 2014–15 13,87,22,643 TOTAL 23,49,06,300

2.1.5 SEBI subsequently received multiple complaints during the period from November 2014 to September 2017, against by G–Life India alleging illegal fund mobilization.

2.1.6 The details of the ‘Scheme’ offered by G–Life India have to be considered in light 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 subsection (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 the exemptions from Collective Investment Schemes 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 company under which, (i) the contributions, or payments made by the investors, by whatever name called, are pooled and utilized solely 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.”

2.1.7 In the context of the abovementioned Section 11AA of the SEBI Act, the ‘Scheme’ offered by G–Life India is examined as under – (i) The contributions, or payments made by the investors, by whatever name called, are pooled and utilized solely for the purposes of the scheme or arrangement.

a. From the sample ‘Allocation Letter’ in respect of the ‘Scheme’ of allotment of land offered by G–Life India, it is noted that the “General Terms and Conditions” mentioned therein provide that: “The land shall be provisionally allocated in the name of customers, in the case of Cash Down Payment Plan (CDPP) after receipt of full plan amount, within a reasonable period generally not exceeding 270 days and in the case of Installment Payment Plan (IPP), with a reasonable period generally not exceeding 270 days after the receipt of at least 50% of the total amount of installments. Subject to the foregoing, land ownership shall be transferred to the customer with a reasonable period after allotment.”

b. It is therefore prima facie observed that funds have been mobilized from the public through ‘Instalment Payment Plan’ or ‘Cash Down Payment Plan’ towards the purchase and allotment of land, which was neither identifiable nor distinguishable at the time of execution of the ‘Agreement’ between G–Life India and its investors or upon payment of the consideration amount by such investors.

c. Further, from the Balance Sheet of G–Life India, it is observed that an entry under the head ‘Advance from Customers/Advance against Land’ under the head ‘Other Non- Current Liabilities’ has been recorded for the Financial Years 2012–13, 2013–14 and 2014–15. In addition, an entry under the head ‘Long Term Borrowings (From Other Parties)’ has been recorded for the Financial Years 2010–11, 2011–12, 2012–13, 2013–14 and 2014–15. It prima facie appears that the aforesaid entries represent the funds mobilized from the investors under the aforementioned ‘Scheme’ of allotment of land during the aforesaid Financial Years, which appear to have been utilised for the purpose of purchase of land, land development activities. It is noted that as per details obtained by SEBI (reproduced at Table V of page 11), as on March 31, 2015, G–Life India had mobilized an amount of ₹23,49,06,300 from the public/investors under the aforementioned ‘Scheme’ of allotment of land.

d. Upon a consideration of the aforementioned, I prima facie find that the contributions/payments made by the investors were pooled and utilized solely for the purpose of the ‘Scheme’ of allotment of land as offered by G–Life India.

(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.

a. As reproduced at Table I and II of this Order (refer to pages 7 and 8), under the ‘Scheme’ of allotment of land offered by G–Life India, an investor may opt for inter alia an ‘Instalment Payment Plan’ or ‘Cash Down Payment Plan’, which would entitle him to a ‘Realisable Market Value of the land’ at the end of the Development Agreement Term of either 60 months or 108 months.

b. The ‘Realisable Market Value of the land’ is considerably higher than the amount invested by such investor. For example, for an investment amount of ₹6000 under the ‘Instalment Payment Plan’ invested over a period of 60 months, an investor will receive a ‘Realisable Market Value of the land’ of ₹8400.

c. In addition, Clause 1(c) of the ‘Agreement’ states: “However, the second party (customer) shall be free to forego the land in the name of the first party by taking the estimated profit from second party, without any further charges as above said, which option shall be chosen by the second party on their own and can be informed through their estate agent in writing or by verbal communication, whether telephonically or otherwise.”

d. Further, from the copy of ‘Certificate of Allocation’ issued to one, Nira Lal Nishad (which was obtained during the physical verification of the Company’s branch office conducted by SEBI on December 10, 2014), it is observed that ‘10% bonus will be paid according to Circular No. 15.’

e. Upon a consideration of the aforementioned, I prima facie find that the contributions/payments made by the investors towards the ‘Scheme’ of allotment of land as offered by G–Life India, was with a view to receive profit, whether movable or immovable, from such ‘Scheme’.

(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.

a. Clause 5 of ‘Agreement’ states: “… The overall security of the plot shall, however, be the responsibility of the first party till the expiry of the development period of the plan opted for by the second party. The plot cannot, in any other manner be sold, assigned, mortgaged, pledged or alienated without obtaining NO DUES CERTIFICATE, from the first party in case of instalment payment plans till payment of the consideration attributable to the cost of land and execution of the registered sake deed.”

b. Clause 8 of ‘Agreement’ states: “The first party shall employ its own technical experts, advisors and such other personnel, as it may consider necessary, for the purpose of carrying out its obligation as per this agreement and shall pay their fees/ salary/ wages and the entire expenses incidental thereto.”

c. Upon a consideration of the aforementioned, I prima facie find that the contributions/payments made by the investors towards the ‘Scheme’ of allotment of land, is managed on behalf of such investors by G–Life India. Further, I prima facie find that such investors do not have day–to–day control over the management and operation of the aforementioned ‘Scheme’.

2.1.8 In this context, it may be relevant to refer to the observations made by the Hon’ble Supreme Court of India in P.G.F. Limited & Ors. Vs. UOI & Anr. (MANU/SC.0247/2013), wherein it observed: “... Sub-section (2) of Section 11AA, which defines a collective investment scheme disclose that it is not restricted to any particular commercial activity such as in a shop or any other commercial establishment or even agricultural operation or transportation or shipping or entertainment industry etc. The definition only seeks to ascertain and identify any scheme or arrangement, irrespective of the nature of business, which attracts investors to invest their funds at the instance of someone else who comes forward to promote such scheme or arrangement in any field and such scheme or arrangement provides for the various consequences to result therefrom.”

2.1.9 Upon a consideration of the preceding paragraphs 2.1.6–2.1.7 and having regard to the observations of the Hon’ble Supreme Court, I prima facie find that the ‘Scheme’ of allotment of land as offered by G–Life India satisfies the four requirements of a ‘Collective Investment Schemes’ as defined in Section 11AA of the SEBI Act, viz. – (i) There was pooling of contributions; (ii) Contributions were made with a view to receive assured realisable value; (iii) The contributions were managed on behalf of the investors, and (iv) The investors did not have day to day control over the management of the ‘Scheme’.

2.1.10 Section 12(1B) of the SEBI Act states that: “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.” Further, Regulation 3 of the SEBI (Collective

Investment Schemes) Regulations, 1999 (hereinafter referred to as “CIS Regulations, 1999”) also prohibits carrying on ‘Collective Investment Schemes’ activities without obtaining Certificate of Registration from SEBI.

2.1.11 I note that G–Life India has not obtained any Certificate of Registration from SEBI under the CIS Regulations, 1999. I therefore, find that the ‘Scheme’ of allotment of land has been carried out by G–Life India in contravention of Section 12(1B) of the SEBI Act read with Regulation 3 of the CIS Regulations, 1999.

2.1.12 I also find that the fund mobilizing activity of G–Life India through the ‘Scheme’ of allotment of land post September 2013 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, 2003”).

2.1.13 As per information available on the MCA21 Portal, the details of the present and past Directors of G–Life India, including the dates of appointment/cessation as Directors, are as under: TABLE VI – DETAILS OF THE PRESENT AND PAST DIRECTORS OF G–LIFE INDIA NAME OF CAPACITY DIN PAN RESIDENTIAL ADDRESS DATE OF DATE OF THE PERSON APPT. CESSATION 1. GIRIRAJ BIPPP0583D WARD NO. 2, PURANA BUS STAND, 07.09.2010 DIRECTOR N. A. PANDEY 3201749 PACHORE RAJGARH, M.P. – 465683 2. DEEPAK 3631493 BLQPS6267P BADLIPURA, SARANGPUR, 24.11.2011 N. A. DIRECTOR SHARMA RAJGARH, M.P. – 465697 3. 7393639 AKRPA6259Q C/O BASANTI LAL NAGAR, WARD - 05.01.2016 N. A. SIRAJ ALI DIRECTOR 8, BUDE BALAJI, GUNA, M.P. – 473001 4. MANOJ 5122877 ANDPP4284F VILLAGE ALISIRIYA, TEHSIL 24.11.2011 05.01.2015 KUMAR DIRECTOR KALAPIPAL, SHAJAPUR – 465001, PANDEY M.P. 5. PRAMOD 3222416 BSHPP0251N PURANA BUS STAND, PACHORE, 07.09.2010 01.12.2011 KUMAR DIRECTOR RAJGARH, M.P. – 465683 PANDEY 6. SUNIL 3201760 DRZPS9894D KACHNARIYA, RAJGARH, M.P. – 07.09.2010 01.12.2011 KUMAR DIRECTOR 465674 SHARMA 7. PAPPU 7061188 BVEPP1224K H. NO. 415, GOVIND NAGAR 05.01.2015 05.01.2016 DIRECTOR PAWAR COLONY, INDORE, M.P. – 452001

2.1.14 I note that the persons at serial nos. 1–3 of Table VI are the present Directors and continue to be responsible for the affairs of G–Life India. The persons at serial nos. 4–7 of Table VI are the past Directors of G–Life India. As Directors, the aforementioned entities are liable for the alleged contraventions by G–Life India.

2.1.15 As per information available with SEBI, G–Life India prima facie mobilized an amount of ₹23,49,06,300 under the ‘Scheme’ of allotment of land as on March 31, 2015. G–Life India has not provided any details to SEBI regarding the amount of money mobilized under the ‘Scheme’ of allotment of land. 2.1.16 Protecting the interests of investors is the first and foremost mandate for SEBI and therefore, steps have to be taken to ensure that G–Life India does not collect further funds under the ‘Scheme’ of allotment of land or any other Schemes and no investors are defrauded. Further, in order to safeguard the assets/property acquired by G–Life India and its Directors using the funds collected from the investing public until full facts and materials are brought on record and a final decision is taken in the matter, it is incumbent on SEBI to take preventive action by way of an immediate measure. 2.1.17 In light of the aforesaid and as G–Life India failed to submit complete details/information as sought by SEBI, I find no other alternative but to take recourse through an Interim Order against G–Life India and its Directors for preventing them from further carrying on with its existing fund mobilizing activity by launching ‘Collective Investment Scheme’ without registration from SEBI in accordance with law.

ORDER –

3.1 In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19 read with Sections 11(1), 11(4), 11B and 11AA of the SEBI Act read with Regulation 65 of the CIS Regulations, 1999 and Regulation 11 of PFUTP Regulations, 2003, hereby direct G–Life India and its Directors, viz. Giriraj Pandey, Deepak Sharma, Siraj Ali, Manoj Kumar Pandey, Pramod Kumar Pandey, Sunil Kumar Sharma and Pappu Pawar – (i) Not to collect any fresh money from investors under its existing Scheme; (ii) Not to launch any new scheme/plan or float any new companies/firm to raise fresh moneys; (iii) Not to dispose of any of the properties or alienate the assets obtained directly or indirectly through the money raised by G–Life India under its existing Scheme; (iv) Not to divert any funds raised from public at large, kept in bank account(s) and/or in the custody of G–Life India; (v) To immediately submit a full inventory of the assets owned by G–Life India out of the amounts collected from the investors under its existing Scheme; (vi) To furnish all the information sought by SEBI, including – a. Copies of all the relevant documents issued by the company viz. Application Form, Agreement, Certificate of Allocation, Allocation Letter, etc.;

b. Scheme–wise list of investors and their contact numbers and addresses, including –  List of investors to whom land has been allotted and has got registered and  List of investors who have been refunded. c. Details of amount mobilized and refunded till date; d. Details of amount refunded till date along with the details of mode of payment, duly certified by a Chartered Accountant;

3.2 The above directions shall take effect immediately and shall be in force until further orders.

3.3 The preliminary findings contained in paragraphs 2.1.7–2.1.17 of this Order are made on the basis of the information obtained from MCA21 Portal and other relevant material on record. G–Life India and the abovenamed Directors (collectively referred to as “Noticees”) are hereby called upon to show cause as to why suitable directions/prohibitions under Sections 11, 11(4), 11B and 11AA of the SEBI Act read with Regulation 65 of the CIS Regulations, 1999 and Regulation 11 of the PFUTP Regulations, 2003, should not be issued/imposed, including the following directions, viz. – i. G–Life India and its Directors, viz. Giriraj Pandey, Deepak Sharma, Siraj Ali, Manoj Kumar Pandey, Pramod Kumar Pandey, Sunil Kumar Sharma and Pappu Pawar, to wind up the existing Collective Investment Scheme and to refund the money collected under the Scheme with returns which are due to investors as per the terms of offer of the said Scheme, supported by a Winding up and Repayment Report (in accordance with the CIS Regulations, 1999) to the satisfaction of SEBI (to be submitted to SEBI within 7 days of completion of the refund); and ii. The Noticees to be restrained/prohibited from accessing the securities market and buying, selling or otherwise dealing in securities in any manner whatsoever, directly or indirectly, for a period of four years from the date of effecting the refund.

3.4 The Noticees may, within 21 days from the date of receipt of this Interim Order–cum–Show Cause Notice, file their respective 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.

3.5 This Order is without prejudice to any other action that SEBI may initiate under securities laws, as deemed appropriate.

3.6 A copy of this Order shall also be forwarded to the Local Police/State Government for their information.

Place: Mumbai G. MAHALINGAM Date: May 30, 2018 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA