Order in the matter of Adel Landmarks Limited (earlier known as Era Landmarks Limited)

WTM/GM/EFD/31 /2019-20 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under Sections 11(1), 11(4) and 11B of 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, in respect of Final Order dated October 07, 2015 in the matter of Adel Landmarks Ltd.("ALL")

In respect of: Sr. Noticees PAN No. Category : Company 1. Adel Landmarks Limited AABCE4642C (earlier known as Era Landmarks Limited) Directors 2. Sumit Bharana AGYPB3210A 3. Arvind Kumar Birla ACTPB5365J 4. Manisha Bharana BCGPB5514B 5. Rakesh Kumar Gupta AAAPG4298A 6. Rashmi Bharana AHCPB9343C 7. Sanjay Chawla AAGPC0832Q The aforesaid entities are hereinafter referred to by their respective names or collectively as “the Noticees”.

1. SEBI had passed a Final order dated October 07, 2015 (hereinafter referred to as "SEBI Final order") against the Noticees concluding that the noticee company i.e. Adel Landmarks Ltd. (also referred to as "the company") was engaged in fund mobilising activity from the public by floating/sponsoring/launching collective investment schemes as defined in section 11AA of the SEBI Act. Accordingly, the noticee company and its noticee directors namely, Rakesh Kumar Gupta, Sumit Bharana and Arvind Kumar Birla were directed to wind up the CIS and refund the money collected by the company under the scheme with returns which are due to its investors as per the terms of offer within a period of three

Order in the matter of Adel Landmarks Ltd.

months from the date of the Order. Further, inter alia, the noticee directors namely Rakesh Kumar Gupta, Sumit Bharana and Arvind Kumar Birla and former directors namely, Rashmi Bharana, Sanjay Chawla and Manish Bharana were restrained from accessing the securities market and were prohibited from buying, selling or otherwise dealing in the securities market for a period of 4 years.

2. The aforesaid noticees filed an appeal against the Final Order before the Hon'ble Securities Appellate Tribunal. The Hon'ble SAT in its order dated December 07, 2017, remanded the matter back to SEBI permitting the appellants to make a representation to SEBI within a period of 8 weeks from the date of the Order "setting in detail the name and the quantum of amount already refunded and the mode and the manner in which the balance amount would be refunded."

3. Accordingly, the noticee company filed a representation dated February 14, 2018, in which they claimed that monies were raised towards allotment of plots, of which some monies were refunded through allotment of immovable properties and the remaining amounts were refunded through cheques/demand drafts. Certain other repayments, were also pending from the company's side for which the noticee company sought 12 months time.

4. An opportunity of hearing was granted to the noticees on July 17, 2018 by the Whole Time Member, wherein the representatives of the noticee company - Advocates Rajesh Ranjan and Neeraj Matta appeared and reiterated the content of the written submissions dated February 14, 2018. After granting the opportunity of personal hearing to the noticees, SEBI issued an email dated July 26, 2018 to the noticee company informing it that details regarding the Scheme and the refunds made to the investors need to be submitted by the noticees. Specifically, the noticee company was asked to provide investor-wise details i.e. amount raised from the investor, amount refunded and details of the flat/plot sold to the investors. Sample documents of sale deeds, transaction details where monies were refunded and details of plots/flats remaining unsold were asked to be submitted. The noticees were also asked to furnish proof of refunds or sale of flats/plots by way of a certificate from a practising Chartered Accountant. The noticee company replied to the aforesaid email vide letter dated August 23, 2018. The submissions made therein included lists of persons to whom plots were allotted, flats sold and refunds made.

Copies of certain number of bank certificates towards refund of monies and a CA certificate dated August 23, 2018 were also submitted. The submissions given in tabular form reflects the number of investors who have been repaid/allotted property and to what extent such repayment has taken place. The aforesaid CA certificate submitted by the noticee company records the existence of certificates of payment made through certain cheques/DDs. The aforesaid written submissions dated August 23, 2018 also recorded at para C therein that the noticees are organising bank certificates in respect of certain additional payments and would be furnishing the same shortly. However no additional proof in the form of bank certificates as undertaken was provided by the noticee company. Subsequently, in response to SEBI's reminder email dated February 26, 2019, vide email dated March 07, 2019, the Noticee informed SEBI that - (i) Corporate Insolvency Resolution Process has been initiated against the Company in pursuance of the orders of Principal Bench of the Hon'ble National Company Law Tribunal, (ii) the Board of Directors of the Company stood suspended and (iii) fifteen days additional time was sought for compiling the updated payment status and providing relevant information.

A copy of the NCLT order dated December 05, 2018 (“NCLT Order”) was attached in the noticee company's email dated March 7, 2019. It is noted that vide the said NCLT order, inter alia, a moratorium has been declared in terms of section 14 of the Insolvency and Bankruptcy Code. Vide email dated June 04, 2019, SEBI directed the company to file the Winding up and Repayment Report ("WRR") in accordance with CIS regulations along with a CA certificate clearly certifying whether each of the investors from whom money was received by the company was repaid or allotted/sold property or flat, in accordance with the directions of the SEBI Final Order dated October 07, 2015. To this, the representative of the company replied vide his email dated June 25, 2019 that he was finding it extremely difficult to compile the data and sought 8 weeks additional time for compiling the updated payment status and providing relevant information as required. The email also recorded that the same is being sent in his personal capacity and not on behalf of the company.

5. I note that in compliance with SAT's direction of December 07, 2017, several opportunities have already been offered to the noticee company to provide information regarding repayment to the investors of the illegal CIS. However, I also note that in terms of the NCLT Order, the company’s Board is currently suspended and therefore the submission made by the representative of the company that they are currently finding it difficult to provide any additional information within the timeline specified by SEBI, cannot be faulted with.

6. I have perused the data provided by the noticee company. The amounts raised for sale/allotment of flats was not regarded as an illegal collective investment scheme by the SEBI Final Order. Relevant extracts of the SEBI Final Order in this context are as follows: "18... SEBI in its examination has found that the pre-booking of plots by ALL in Gurgaon and collection of funds from its customers for allotment of plots is the “Scheme” which is in general alleged to be a CIS. Therefore, limiting the scope of such arrangement to only one of the Company’s proposed projects cannot be accepted.... 21. In the light of the above observations, it is to be tested whether the alleged Scheme by the Company of ‘pre-booking of plots’ qualify as a CIS in terms of section 11AA(2) of the SEBI Act. ... 24. In view of the above, the Scheme of the Company for pre-booking of plots is in the nature of a Collective Investment Scheme as all the four conditions specified under section 11AA (2) of the SEBI Act are satisfied. Therefore, I find that the Company is engaged in the fund mobilising activity from the public by floating/ sponsoring/ launching 'collective investment schemes' as defined in section 11AA of the SEBI Act."

Therefore, in terms of the SEBI Final Order, my examination is limited to the amount repaid for non-allotment of plots. As noted earlier, reply filed by the noticee company in August of 2018, states in a tabular form the number of investors who have been repaid/allotted property and to what extent such repayment has taken place. The gross figure claimed to have been repaid largely relates to the figure estimated in the SEBI Final Order. Meanwhile, SEBI had instructed the company to provide a WRR along with a CA certificate for bringing the current proceedings to a logical conclusion, since the number of investors from whom money was raised by the noticee company could not be otherwise independently verified. At the same time, procuring this information as well as the WRR supported by a CA certificate from the noticee company, at this juncture in light of the recent NCLT order, may not be possible in the near future. In the circumstances, it would be appropriate to invite claims for any unpaid dues on the company's collective investment scheme through a newspaper publication. This would be in furtherance of the direction of the Hon'ble SAT contained in its order dated December 07, 2017 i.e. to ascertain that the entire dues outstanding to the investors of the company's collective investment scheme have been repaid.

7. In view of the above, I, in exercise of the powers conferred upon me under sections 11(1), 11B and 11(4) of the SEBI Act and regulation 65 of the SEBI(Collective Investment Schemes) Regulations, 1999, hereby direct as follows:

(i) The noticee company and its directors namely Rakesh Kumar Gupta, Sumit Bharana and Arvind Kumar Birla shall cause to effect a newspaper publication in one widely circulated newspaper, in English and Hindi each, inviting complaints/claims from any investor in respect of the collective investment schemes (carried on in the current name of the noticee company or in any other name it was previously known) that are still outstanding within a period of one month from the date of this Order. The newspaper publication shall also contain an advisory, informing the investor to forward a copy of such complaints/claims, with the superscription “Complaints/Claims in the Matter of Adel Landmarks Ltd.”, to SEBI at the following address:

The Regional Director Northern Regional Office 5th Floor, Bank of Baroda Building, 16, Sansad Marg, New Delhi - 110001, Delhi E-mail : sebinro@sebi.gov.in As noted in the foregoing paragraphs, the SEBI Final Order had concluded that the collective investment scheme pertains to the monies mobilized towards allotment of plots. Accordingly it is clarified that only a complaint pertaining to collection of money by Adel Landmarks Ltd. in the context of allotment of plots shall be considered as a valid complaint for the purpose of these directions. A period of one month from the date of the advertisement shall be provided to complainants for submitting any complaint as stated aforesaid. The noticee company and the aforesaid directors shall submit to SEBI a Compliance Report along with information on complaints received and monies refunded, within a period of three months from the date of this Order.

(ii) In the event the company fails to carry out the directions at sub-paragraph (i) above or the complaints received reveal that the company has failed to pay all dues to investors, the directions passed in paragraph 29 of the SEBI Final Order dated October 07, 2015 shall stand confirmed and the noticee company and its directors, namely Rakesh Kumar Gupta, Sumit Bharana and Arvind Kumar Birla shall be jointly and severally liable to wind up its existing collective investment schemes and refund the money collected by it under the schemes with returns which are due to the investors as per the terms of offer within a period of three months from the date of this Order.

(iii) In the event that there are no complaints regarding failure to pay dues to investors and upon receipt of the Compliance Report as directed in sub-paragraph (i) above, the directions in the SEBI Final Order shall stand disposed of. However, the noticees shall be prohibited from accessing the securities market and restrained from buying, selling or dealing in the securities market for a period of 4 years with effect from the date of the aforesaid Compliance Report submitted to SEBI.

8. A copy of this Order shall be forwarded to - (i) all the recognised stock exchanges and registered depositories for necessary compliance with the above directions; and (ii) the Ministry of Corporate Affairs for information.

DATE: August 19, 2019 G. MAHALINGAM PLACE: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

9.