Order in respect of Mangalam Agro Products Limited

WTM/PS/02/ERO/APR/2015 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under Sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992 In respect of Mangalam Agro Products Limited its Directors, namely, Mr. Kamolesh Kumar Ghosh, Mr. Ujjal Sikder and Mr. Tapan Kumar Dey; and its Debenture Trustees, namely, Mangalam Institute of Development and Research (through its Settlor viz. Mr. Madhusudhan Chatterjee) and Ms. Chandani Mohta Date of hearing : August 22, 2014 Appearance : For noticees : Ms. Chandani Mohta, appeared in-person. No appearance or representation for the other noticees For SEBI : Ms. Soma Majumder, General Manager, Mr. T. Vinay Rajneesh, Assistant General Manager and Ms. Nikki Agarwal, Assistant Manager Date of hearing : September 26, 2014 For noticees : none appeared

1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") passed an ex-parte interim Order dated May 30, 2014 (hereinafter referred to as "the interim order") in the matter of Mangalam Agro Products Limited (hereinafter referred to as "the Company"). This Order was issued against the Company, its directors Mr. Kamolesh Kumar Ghosh, Mr. Ujjal Sikder and Mr. Tapan Kumar Dey and its Debenture Trustees, Mangalam Institute of Development and Research (through its Settlor viz. Mr. Madhusudhan Chatterjee) and Ms. Chandani Mohta (collectively referred to as "the noticees"). The interim order inter alia observed/alleged that - a) The Company had made an offer and allotted Secured Non-Convertible Debentures ("NCDs") to around 4820 investors during the Financial Year 2011-2012 and mobilized Rs.11 crores. b) The Company had made a series of offers (totaling 107 offers) and allotments during the period January 2011 to June 2012.

c) The series of offers were done in pursuance of Resolutions dated March 01, 2011 (approval for issue of 50,00,000 NCDs @ Rs.10/-) and November 15, 2011 (approval for issue of 6,00,000 NCDs @ Rs.100/-). d) The Company had represented that it allotted NCDs to less than 49 persons under each such offer. e) The series of offers (of NCDs) and allotments made in tranches by the Company, as mentioned, above, during 2011-2012, as per approval of two resolutions, resulted in the allotment of NCDs to approximately 4820 investors, indicating that the offer and allotment of NCDs were made to more than 40 persons. f) The series of offers and allotments made by the Company to less than to 49 persons in each of such allotments, was alleged by SEBI to be a device adopted to circumvent the provisions of section 67(3) of the Companies Act, 1956. As the aggregate number of investors (to whom the offers and allotments were made) were more than 49, the offer of NCDs made by the Companies Act, 1956 was alleged to be a public issue' of such securities in terms of the first proviso to section 67(3) of the Companies Act, 1956 read with section 55A thereof, made without complying with - (i) sections 56(1) & (3), 60 [read with section 2(36)], 73, 117B and 117C of the Companies Act, 1956; and (ii) the relevant provisions of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 ("the ILDS Regulations"). g) The amount mobilized by the Company i.e., Rs.11 crores, was indicated in the Balance Sheet for 2011-2012 under the head "Non-current Liabilities: Long Term Borrowing". h) It was also alleged that the Debenture Trustees, Mangalam Institute of Development and Research (through its settlor, Mr. Madhusudhan Chatterjee) and Ms. Chandani Mohta, appointed by the Company, have contravened section 12(1) of the SEBI Act as they are not registered with SEBI. The above persons were also alleged to have not satisfied the eligibility criteria laid down under regulation 7 of the SEBI (Debenture Trustees) Regulations, 1999 ("the DT Regulations").

2. In view of the above findings and allegations, SEBI, in order to protect the interest of investors who had subscribed to the securities issued by the Company and to ensure that the funds mobilized/assets are not diverted, the following directions were issued: "...........

8. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11, 11(4), 11A and 11B of the SEBI Act read with the Debt Securities Regulations and the Debenture Trustee Regulations, hereby issue the following directions – i. MAPL shall not mobilize funds from investors through the issue of Secured Non–Convertible Debentures or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions; ii. MAPL and its Directors, viz. Shri Kamolesh Kumar Ghosh, Shri Ujjal Sikder and Shri Tapan Kumar Dey, 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; iii. Mangalam Institute of Development and Research (through its Settlor viz. Shri Madhusudhan Chatterjee) and Chandani Mohta are prohibited from continuing with their present assignment as debenture trustees in respect of the issue of Secured Non–Convertible Debentures of MAPL and also from taking up any new assignment or involvement in any new issue of debentures, etc. in a similar capacity, from the date of this order till further directions. 9. The above directions shall take effect immediately and shall be in force until further orders.

10. The prima facie observations contained in this Order are made on the basis of the material available on record i.e. correspondences exchanged between SEBI and MAPL alongwith the documents contained therein, information obtained from MCA21 Portal, Order of the Hon’ble Kolkata High Court dated May 6, 2014. In this context, MAPL and its abovementioned Directors; its Debenture Trustees, viz. Mangalam Institute of Development and Research (through its Settlor viz. Shri Madhusudhan Chatterjee) and Chandani Mohta 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. 11. This Order is without prejudice to the right of SEBI to take any other action that may be initiated against MAPL and its abovementioned Directors; its Debenture Trustees, viz. Mangalam Institute of Development and Research (through its Settlor viz. Shri Madhusudhan Chatterjee) and Chandani Mohta, in accordance with law."

3. The interim order advised the noticees to file their replies and to indicate whether they desire to avail themselves an opportunity of personal hearing. As per the information available from 'India Post', it is noted that the copies of the interim order were delivered upon Mr. Tapan Kumar Dey,

Mangalam Institute of Development and Research, its settlor Mr. Madhusudhan Chatterjee and Ms. Chandani Mohta.

4. An opportunity of personal hearing was afforded to the noticees on August 22, 2014. On this day, Ms. Chandani Mohta appeared in-person and made submissions. She orally submitted that she had accepted to act as the debenture trustee in view of the consideration offered by the Company. No written reply was received from Ms. Chandani Mohta. In respect of the other noticees for whom deliveries of the notices informing the hearing schedule could not be done, SEBI attempted to get the notices hand-delivered/pasted. The notice was hand-delivered at the registered office address of the company. Whereever, delivery could not be done, attempts were made to get the notices pasted. Notice was pasted at the address of Mr. Kamolesh Kumar Ghosh. The address of the director, Mr. Ujjal Sikder could not be located and on local enquiries it was learnt that the said address is incorrect. Though the interim order could be delivered on Mr. Tapan Kumar Dey, the hearing notice could not be delivered as the same returned. Attempts to hand deliver/paste the hearing notice to the director, Mr. Tapan Kumar Dey also failed as he was not found at the address available with SEBI.

5. Another opportunity of personal hearing was afforded on September 26, 2014 for those noticees who did not appear in the previous personal hearing. The hearing notice was sent through hand delivery to the Company at its registered address. However, as it was noted that the Company was not present at its registered address, SEBI inquired in the locality regarding the same. It was learnt that the Company had shifted its premises to a nearby location. However, in this location, there were no personnel to accept the notices. Hence, the notice was pasted. It is also noticed that SEBI had pasted the notices at the last address of noticee, Mr. Kamolesh Kumar Ghosh and delivered to the neighbour of Mr. Tapan Kumar Dey. Further, the address of Mr. Ujjal Sikder could not be located and was learnt later that the same was incorrect. The notice was hand delivered on Mangalam Institute of Development and Research and Mr. Madhusudhan Chatterjee. In the personal hearing held on September 26, 2014, none of the noticees appeared.

6. As mentioned in paragraph 11 of the interim order, the Hon'ble Calcutta High Court had vide Order dated May 06, 2014 in C.A. No. 304/2014 (in the matter of Mangalam Agro Products Limited) had appointed a Special officer to take possession of the assets, properties and bank accounts of the Company. The Company was restrained from dealing with, disposing of, alienating, encumbering and/or creating third party interest in respect of its assets and properties without leave of the Court and to be dealt with only in the usual course of business. I note that two more Orders were passed by the Hon'ble High Court. Vide Order dated June 05, 2014, the Court had mentioned the interim order passed by SEBI and further directions were passed in pursuance of the directions issued vide Order dated May 06, 2014. Vide Order dated June 10, 2014, the Hon'ble High Court, after hearing the Company, had inter alia directed the Central Government to appoint an agency preferably the Serious Frauds Investigation Office (SFIO) to investigate into the affairs of the Company. The Hon'ble Court also directed that the Special Officer appointed vide its Order dated May 06, 2014 shall stand discharged once Central Government appoints SFIO.

7. In view of the above, it can be inferred that the Company having appeared before the Hon'ble High Court, and wherein the interim order was also referred to dealing with the money mobilization through issue of debentures, was aware of the proceedings before SEBI, but chose not to participate. Though the interim orders and notices were served on Mangalam Institute of Development and Research and Mr. Madhusudhan Chatterjee, they failed to submit reply and appear in the personal hearing.

8. I also note that Mr. Tapan Kumar Dey vide letter dated October 17, 2014 (received in SEBI on October 28, 2014) inter alia made the following submissions: a. He was innocent in the matter. b. Mr. Sikder was his friend and wanted this noticee to work as a financial consultant for the Company for arranging funds. c. The noticee had given his personal details, address proof, PAN card etc for incorporating the same in the Fee Protection Agreement. d. He could not arrange for loans due to the adverse notes in the balance Sheets and irregularities carried out by the directors of the Company. In view of the same, Mr. Sikder warned him of severe action. e. The Company fraudulently made him a director and he never attended any board meetings. f. He never took any sitting fees/reimbursement of expenses. g. He was not a signatory of any bank account of the Company. h. He was also not aware of any case pending in the Calcutta High Court. i. He never consented to become a director and did not sign the RoC documents. He never provided digital signature and does not hold any equity shares of the Company. As per RoC records, his consent to work as a director was filed on November 26, 2013. However, the irregularities in the NCD issues by the Company and debenture trustees happened prior to December 2013. j. As he was not in the board of the Company, he was not in any manner related to the Company. Hence, he requested that his name be dropped from the proceedings. k. He wanted to file a case of 'cheating' against the Company and its directors and made several attempts to meet them personally to collect records. However, they were absconding from Kolkata and therefore he was not able to take action against them.

9. I have considered the interim order, the submissions made by the concerned noticees and other material available on record. The allegation against the Company is that it had made an offer and issued debentures and the same was in the nature of a 'public issue' in terms of the first proviso to section 67(3) of the Companies Act, 1956 and such public issue was done in contravention of the public issue norms as stipulated under section 56, 60, 73, 117B and 117C of the Companies Act, 1956 and the provisions of the ILDS Regulations. In order to determine whether an offer is made to the public or done through private placement, the criteria laid down under section 67 of the Companies Act, 1956 needs to be applied. Accordingly, it would be important to refer to the provisions of section 67(1) and (3) of the Companies Act, 1956. "67. (1) Any reference in this Act or in the articles of a company to offering shares or debentures to the public shall, subject to any provision to the contrary contained in this Act and subject also to the provisions of sub-sections (3) and (4), be construed as including a reference to offering them to any section of the public, whether selected as members or debenture holders of the company concerned or as clients of the person issuing the prospectus or in any other manner. (2) ... (3) No offer or invitation shall be treated as made to the public by virtue of sub-section (1) or sub-section (2), as the case may be, if the offer or invitation can properly be regarded, in all the 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 … Provided that nothing contained in this sub-section shall apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more: Provided further that nothing contained in the first proviso shall apply to non-banking financial companies or public financial institutions specified in section 4A of the Companies Act, 1956 (1 of 1956).”

In terms of the first proviso to section 67(3), any offer or invitation to subscribe for shares or debentures made to 50 persons or more is construed to be an offer made to the public. The interim order has alleged that during the year 2011-2012, the Company had, in pursuance of its offer of NCDs, made offer and allotted NCDs (50 lakh NCDs of Rs.10/- and 6 lakh NCDs of Rs.100/-) to approximately 4820 investors/persons. The Company had allegedly mobilized Rs.11 crores through these allotments of NCDs. The number of investors i.e., approximately 4820 as alleged in the interim order was as per the material furnished by the Company to SEBI. However, the Hon'ble High Court of Calcutta in the Order dated June 10, 2014, had inter alia observed that "... It is in the financial year 2012-2013 that Rs.11 crore has been realised by the applicant company from the public at large. The number of debenture holders aggregates to about 80,000 while the number that finds mention in the payment schedule is only 8227. Admittedly, the number is beyond fifty. Therefore it required compliance with section 73 of the 1956 Act....". The interim order had already alleged that the series of allotments claimed to have been done by the Company is only to circumvent the provisions of section 67(3). Further, as the Company had admittedly made offer and issued debentures to more than 50 persons, the same became a 'public issue' of such securities in terms of first proviso to section 67(3). The Company is not a NBFC or a public financial institution to claim any exemption under this provisions.

10. In view of the foregoing, it would be in accordance with the law laid down under the first proviso to section 67(3) of the Companies Act, 1956 to include all the allotments done by the Company under the same Resolution. Accordingly, the offer and allotment of NCDs made to more than 50 persons by the Company thereby mobilizing Rs.11 crore is definitely a 'public offer of NCDs'. By making a public issue of NCDs, the Company was mandated to comply with all the legal provisions that govern and regulate such public issue of NCDs, including the Companies Act, 1956 and the SEBI Act and regulations. In this context, I refer and rely on the below mentioned observation made by 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'): ... ... 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. …"

11. As alleged in the interim order, the Company was mandated to comply with the provisions of sections 56, 60 and 73 of the Companies Act, 1956 in respect of its offer and issue of NCDs. In terms of section 56(1) of the Companies Act, 1956, every prospectus issued by or on behalf of a company, shall state the matters specified in Part I and set out the reports specified in Part II of Schedule II of that Act. Further, as per section 56(3) of the Companies Act, 1956, no one shall issue any form of application for shares in a company, unless the form is accompanied by abridged prospectus, contain disclosures as specified. Section 2(36) of the Companies Act read with section 60 thereof, mandates a company to register its 'prospectus' with the RoC, before making a public offer/ issuing the 'prospectus'. As recorded in the interim order, the Company has admitted that it did not issue any Prospectus, Advertisement or other promotional material for issuing NCDs. The interim order has also alleged that the Company did not comply with sections 117B and 117C of the Companies Act, 1956. The relevant portion of the said sections are reproduced below for reference:

"117B. APPOINTMENT OF DEBENTURE TRUSTEES AND DUTIES OF DEBENTURE TRUSTEES (1) No company shall issue a prospectus or a letter of offer to the public for subscription of its debentures, unless the company has, before such issue, appointed one or more debenture trustees for such debentures and the company has, on the face of the prospectus or the letter of offer, stated that the debenture trustee or trustees have given their consent to the company to be so appointed..." "117C. LIABILITY OF COMPANY TO CREATE SECURITY AND DEBENTURE REDEMPTION RESERVE (1) Where a company issues debentures after the commencement of this Act, it shall create a debenture redemption reserve for the redemption of such debentures, to which adequate amounts shall be credited, from out of its profits every year until such debentures are redeemed."

There is no material on record to arrive at a finding that such provisions had been complied with by the Company. Accordingly, the Company is found liable for the contravention of sections 117B and 117C of the Companies Act, 1956.

12. Further, by issuing NCDs to more than 50 persons, the Company had to compulsorily list such securities in compliance with section 73 of the Companies Act, 1956. As per section 73(1) and (2) of the Companies Act, 1956, a company is required to make an application to one or more recognized 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. The Company has contravened the said provisions as it has neither made an application seeking listing permission nor refunded the amounts on account of such failure. For this failure the directors of the Company, being the 'officers in default' are also liable. The Company has also not complied with the provisions of section 73(3) as it has not kept the amounts received from investors in a separate bank account and failed to repay the same in accordance with section 73(2) as observed above. Accordingly, I find the Company liable for not complying with the provisions of section 73 of the Companies Act in respect of its offer and issue of NCDs.

13. The interim order has also alleged that the Company has not complied with the provisions of the ILDS Regulations in respect of its issue of NCDs to the public. In terms of the ILDS Regulations, 'debt securities' are 'non-convertible debt securities which create or acknowledge indebtedness, and include debenture…'. The NCDs are debentures which are non-convertible in nature and acknowledge debt. Accordingly, the ILDS Regulations would be applicable for the offer and issue of NCDs made by the Company. I therefore find the Company liable for contravening the following provisions of the ILDS Regulations : i. Regulation 4(2)(a) – Application for listing of debt securities ii. Regulation 4(2)(b) – In-principle approval for listing of debt securities iii. Regulation 4(2)(c) – Credit rating has been obtained iv. Regulation 4(2)(d) – Dematerialization of debt securities v. Regulation 4(4) – Appointment of Debenture Trustee vi. Regulation 5(2)(b) – Disclosure requirements in the Offer Document vii. Regulation 6 – Filing of draft Offer Document viii. Regulation 7 – Mode of disclosure of Offer Document ix. Regulation 8 – Advertisements for Public Issues x. Regulation 9 – Abridged Prospectus and application forms xi. Regulation 12 – Minimum subscription xii. Regulation 14 – Prohibition of mis-statements in the Offer Document xiii. Regulation 15 – Trust Deed xiv. Regulation 16 – Debenture Redemption Reserve xv. Regulation 17 – Creation of security xvi. Regulation 19 – Mandatory Listing xvii. Regulation 26 – Obligations of the Issuer, etc.

14. I also note the following observations from the interim order: ".... i. It is interesting to note that while the Offer of NCDs was made "pursuant to the resolution passed in the meeting of the Board of Directors of the company held on March 1, 2011", MAPL, had admittedly made a series of offers under the Offer of NCDs during the period January 2011 to June 2012, which would indicate that it had made an unauthorized issuance of NCDs even before the Board's approval on March 1, 2011.

ii. In its letter dated December 23, 2013, MAPL submitted that it has not issued any NCDs post March 2012. However, as per the details of debenture holders provided by that company, it is observed that in certain cases the date of offer and allotment was after March 2012. Moreover, on examining the copy of debenture certificate as attached with the complaint forwarded by the RBI, it is also observed that the date of application therein was July 10, 2012 and the maturity date was July 10, 2017. iii. It is observed that in large number of cases, the maturity dates of the debentures pertain to the financial year 2012-13. However, from the unaudited Balance Sheet as on March 31, 2013 (obtained from the MCA21 Portal), it is observed that the company has not redeemed any NCDs during the financial year 2012-13. The Compliance Certificate submitted by the relevant Company Secretary also records that MAPL has not redeemed any NCDs during the financial year 2012-13. Therefore, it prima facie appears that the company has defaulted in its re-payment obligations. iv. Further, from the Audited Balance Sheet as on March 31, 2013 (obtained from the MCA21 Portal), it is noted that the company had issued two types of NCDs, viz. 5000000 NCDs @ `10 and 600000 NCDs @ `100, aggregating `11 Crores.

However, as per the details of debenture holders provided by MAPL vide letter dated December 23, 2013, the face value of all the debentures was `100 each. Accordingly, the information reflected in the Audited Balance Sheet of MAPL as on March 31, 2013, is inconsistent with the record of debenture holders maintained by that company. v. From the Audited Balance Sheet for the year ending March 31, 2013 (obtained from the MCA21 Portal), it is observed that there was a significantly high Debt–Equity ratio i.e. 109:1. Such a high Debt– Equity ratio is prejudicial to the interest of the debenture holders and may significantly hamper the ability of the company to fulfill its obligation of redeeming the debentures on maturity especially since in the instant matter, there already appears to have been a default in the redemption of NCDs by MAPL during the financial year 2012-13 (paragraph 7.11(iii) above). vi. It is also observed that there has been a change in the Auditors of the company. The company submitted unaudited Balance Sheet and Profit & Loss Accounts for the year ended March 31, 2013 (vide its letter dated December 23, 2013), to SEBI, which were not signed by any Auditor and only signed by the Directors; only the name of an Auditor (without signature) was printed.

However, from the filings made by MAPL with the ROC, it is observed that a new Auditor has been appointed by that company, who has audited the Balance Sheet and Profit & Loss Accounts for the year ended March 31, 2013. However, no such Audited Balance Sheet and Profit & Loss Accounts for the year ended March 31, 2013, has been submitted by MAPL to SEBI. vii. From the Audited Balance Sheet of MAPL as on March 31, 2012, it is observed that the company received deposits and advances against its products aggregating to `29.55 Crores and ₹4.82 Crores respectively and the Auditor had also certified in the Companies (Auditors' Report) Order, 2003, that MAPL had complied with the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from public. Further, on examining the unaudited (but signed by Directors of MAPL) Balance Sheet as on March 31,

2013 (submitted by the company vide their letter dated December 23, 2013), it is observed that the amount of deposits and advances was `33.28 Crores and `19.32 Crores respectively. However, on examining the Audited Balance Sheet for the year ended March 31, 2013 (obtained from the MCA21 Portal), it is observed that there are no amounts due against deposits and advances. In addition, in the Audit Report submitted by the new Auditor of MAPL, it has been stated that MAPL has not accepted any deposits from the public."

15. The interim order was issued to the directors of the Company alleging them to be responsible for the violations committed by the Company. It is noted that Mr. Kamolesh Kumar Ghosh and Mr. Ujjal Sikder were appointed as directors on May 18, 2009 and continue to be the directors. Therefore, they were the directors during the period when the impugned offer and allotment of securities were made by the Company. They have not taken any steps to remedy their action in offering and allotting securities in contravention of the applicable law. I, accordingly, find them responsible for the violations committed by the Company and also for the default in making repayments in accordance with section 73(2).

Mr. Tapan Dey was appointed on November 11, 2013 as the director. I note that he has not exercised necessary diligence while taking charge of directorship in the Company. He has contended that he was fraudulently made as a director. However, he seems to have not taken any action against the Company/its other directors for the same. It is very surprising to note that even after the interim order was passed making allegations, he chose not to act. The very inaction by him against the previous management (for violating the public issue norms as stipulated under the Companies Act, 1956 and the ILDS Regulations while making the offer and issuing the impugned securities), even after the receipt of the SEBI Order, leads one to conclude on a possible collusion with the Company and its management. Even after receiving the interim order, he has not taken any steps to remedy the situation to safeguard the interests of the investors in NCDs issued by the Company.

In view of the above observations, I hold Mr. Kamolesh Kumar Ghosh, Mr. Ujjal Sikder and Mr. Tapan Kumar Dey to be 'officers in default' and hence responsible for the violations and default in repayments to the investors. Accordingly, the Company and directors shall be jointly and severally liable for making the refunds. In view of the foregoing, the natural consequence of not adhering to the norms governing the issue of securities to the public and making repayments as directed under section 73(2) of the Companies Act, 1956 is to direct the Company, its directors Mr. Kamolesh Kumar Ghosh, Mr.

Ujjal Sikder and Mr. Tapan Kumar Dey to refund the monies to such investors in accordance with section 73(2).

16. The interim order has observed that Mangalam Institute of Development and Research (through its Settlor viz. Mr. Madhusudhan Chatterjee) and Ms. Chandani Mohta were appointed as debenture trustees by the Company and that they were not registered with SEBI to act in that capacity in contravention of section 12(1) of the SEBI Act. As mentioned above, the said Institute and Chandani Mohta did not file any written submissions. Section 12(1) of the SEBI Act mandates that "No… trustee of trust deed … shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained from the Board in accordance with the regulations made under this Act. " It is a fact that the above entity/person are not registered with SEBI in the capacity as a 'Debenture Trustee'. This conduct is therefore in contravention of section 12(1) of the SEBI Act, as alleged. The above persons are also not eligible to act as debenture trustees in terms of regulation 7 of the DT Regulations.

17. As stated above, in terms of the directions of the Hon'ble High Court of Calcutta, the Central Government vide Order dated July 17, 2014 had appointed the SFIO to investigate into the affairs of the Company. The Hon'ble High Court vide Order dated June 10, 2014 directed that upon appointment of the agency (SFIO), the assets and properties of which possession had been taken by the Special Officer shall be handed over to the agency including the bank accounts.

18. In view of the foregoing, I, in exercise of the powers conferred upon me under section 19 of the Securities and Exchange Board of India Act, 1992 read with sections 11(1), 11(4), 11A and 11B thereof hereby issue the following directions: (a) The Company, Mangalam Agro Products Limited (PAN- AAGCM0547H; CIN - U01400WB2009PLC135152), its promoters and directors including Mr. Kamolesh Kumar Ghosh ( PAN- AKQPG9925L; DIN- 02492074), Mr. Ujjal Sikder (PAN- CDUPS3451C; DIN- 02528616) and Mr. Tapan Kumar Dey (PAN- AHPPD9308L; DIN- 03363185), jointly and severally, shall forthwith refund the money collected by the Company through the issuance of Secured Non-Convertible Redeemable Debentures (which have been found to be issued in contravention of the public issue norms stipulated under the Companies Act, 1956 and the SEBI (Issue and Listing of Debt Securities) Regulations, 2008), to the investors including the money collected from investors, till date, pending allotment of NCDs, if any, with an interest of 15% per annum compounded at half yearly intervals, from the date when the repayments became due (in terms of Section 73(2) of the Companies Act, 1956) to the investors till the date of actual payment.

(b) The repayments to investors shall be effected only in cash through Bank Demand Draft or Pay Order.

(c) The Company, Mangalam Agro Products Limited and its promoters and directors shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily (in Bengali) with wide circulation, detailing the modalities for refund, including details of contact persons including names, addresses and contact details, within fifteen days of this Order coming into effect.

(d) After completing the aforesaid repayments, the Company shall file a certificate of such completion with SEBI from two independent peer reviewed Chartered Accountants who are in the panel of any public authority or public institution. For the purpose of this Order, a peer reviewed Chartered Accountant shall mean a Chartered Accountant, who has been categorized so by the Institute of Chartered Accountants of India ("ICAI").

(e) The Company, is directed not to, directly or indirectly, access the capital market by issuing prospectus, offer document or advertisement soliciting money from the public and is restrained from accessing the securities market for the purposes of raising funds and prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, from the date of this Order till the expiry of 4 years from the date of completion of refunds to investors, made to the satisfaction of SEBI, as directed above.

(f) The directors Mr. Kamolesh Kumar Ghosh, Mr. Ujjal Sikder and Mr. Tapan Kumar Dey are restrained from accessing the securities market and would be further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly in whatsoever manner, from the date of this Order till the expiry of 4 years from the date of completion of refunds to investors, made to the satisfaction of SEBI, as directed above. They are also restrained from associating themselves, with any listed public company and any public company which intends to raise money from the public, or any intermediary registered with SEBI, for a period of 4 years.

(g) Mangalam Institute of Development and Research (through its Settlor viz. Mr. Madhusudhan Chatterjee) and Chandani Mohta, who were engaged by the Company as its debenture trustee in contravention of law, shall not offer themselves to be engaged as a debenture trustees or in any capacity as an intermediary in the securities market, without obtaining a certificate of registration to undertake that assignment as required under law. Further, they are restrained from accessing the securities market and also prohibited from buying, selling or dealing in securities, in any manner whatsoever, for a period of 4 years.

(h) The above directions shall come into force with immediate effect.

19. In case of failure of the company, Mangalam Agro Products Limited, its promoters and directors including Mr. Kamolesh Kumar Ghosh, Mr. Ujjal Sikder and Mr. Tapan Kumar Dey to comply with the aforesaid directions, SEBI - a) shall recover such amounts in accordance with section 28A of the SEBI Act including such other provisions contained in securities laws. b) may initiate appropriate action against the Company, its promoters/ directors and the persons/ officers who are in default, including adjudication proceedings against them, in accordance with law. c) would make a reference to the State Government/ Local Police to register a civil/ criminal case against the Company, its promoters, directors and its managers/ persons in-charge of the business and its schemes, for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and d) would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company.

20. This Order is without prejudice to any action, including adjudication and prosecution proceedings, that might be taken by SEBI in respect of the above violations committed by the Company, its promoters, directors and other key persons. SEBI may also initiate further action including prosecution proceedings against Mangalam Institute of Development and Research and Ms. Chandani Mohta for acting as unregistered debenture trustees and for their failure to protect the interest of the debenture holders.

21. This Order and the directions passed above shall be read harmoniously with the Order dated June 10, 2014 passed by the Hon'ble Calcutta High Court.

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

23. A copy of this Order shall also be forwarded to the Ministry of Corporate Affairs/concerned Registrar of Companies, for their information and necessary action with respect to the directions/restraint imposed above against the Company and the individuals.

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

Date : April 06, 2015 Place: Mumbai