Order in the matter of Angela Agrotech Limited

WTM/PS/171/IMD-ERO/MAR/2016 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 – 1. Angela Agrotech Limited (PAN: AAJCA6822C) and its Directors, 2. Mr. Atikulla Hossain (PAN: ADYPH1080N; DIN: 03583076), 3. Mr. Bablu Mia (PAN: BYKPM1104Q; DIN: 06519493), 4. Mr. Rajiv Ranjan Singh (PAN: ATRPS8363A; DIN: 06528168), 5. Mr. Birju Kumar Sharma (PAN: BDJPS3387K; DIN: 05168775), 6. Mr. Samir Keshari (PAN: BVLPK1203Q; DIN: 03583075), 7. Mr. Mohammed Rafique Khan (PAN: AJDPK8465D; DIN: 05168776) and 8. Mr. Mohammed Sajjad Akhtar (PAN: AYGPA0956M; DIN: 03633258)

Date of hearing: September 04, 2015 Appearance - Ms. Sayanti Mukherjee, Advocate appeared for Mr. Mohammed Rafique Khan. Other noticees failed to appear. For SEBI – Mr. Prasanta Mahapatra, General Manager, Mr. T. Vinay Rajneesh, Assistant General manager and Ms. Nikki Agarwal, Assistant Manager.

1. Securities and Exchange Board of India (“SEBI”), vide an ex-parte interim order dated April 21, 2015 (“the interim order”) prima facie observed that the company, Angela Agrotech Limited (“the Company” or “AAL”) is engaged in fund mobilization activity from the public through its offer and issuance of Redeemable Preference Shares (”RPS”) and violated sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013. In order to protect the interest of investors and to prevent the Company and its promoters and directors, from continuing to mobilize public funds in contravention of law, SEBI issued the following directions:

“7. 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, hereby issue the following directions– i. AAL (PAN: AAJCA6822C) shall forthwith cease to mobilize funds from investors through the Offer of Redeemable Preference Shares 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. AAL and its present Directors, viz. Shri Atikulla Hossain (PAN: ADYPH1080N; DIN: 03583076), Shri Bablu Mia (PAN: BYKPM1104Q; DIN: 06519493) and Shri Rajiv Ranjan Singh (PAN: ATRPS8363A; DIN: 06528168), 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. The past Directors of AAL, viz. Shri Birju Kumar Sharma (PAN: BDJPS3387K; DIN: 05168775), Shri Samir Keshari (PAN: BVLPK1203Q; DIN: 03583075), Shri Mohammed Rafique Khan (PAN: AJDPK8465D; DIN: 05168776) and Shri Mohammed Sajjad Akhtar (PAN: AYGPA0956M; DIN: 03633258), 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; iv.

AAL and its abovementioned past and present Directors, are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions; v. AAL shall provide a full inventory of all its assets and properties; vi. AAL's abovementioned past and present Directors shall provide a full inventory of all their assets and properties; vii. AAL and its abovementioned present Directors shall not dispose of any of the properties or alienate or encumber any of the assets owned/acquired by that company through the Offer of Redeemable Preference Shares, without prior permission from SEBI; viii. AAL and its abovementioned present Directors shall not divert any funds raised from public at large through the Offer of Redeemable Preference Shares, which are kept in bank account(s) and/or in the custody of AAL; ix. AAL and its abovementioned past and present Directors shall co-operate with SEBI and shall furnish all information/documents sought vide letters dated April 8, 2014 and April 16, 2014. 8. The above directions shall take effect immediately and shall be in force until further orders. ……………”

2. The interim order advised the Company and its directors (both present and past, as named therein) to show cause as to why suitable directions/prohibitions under sections 11(1), 11(4), 11A and 11B of the SEBI Act including the following, should not be taken/imposed against them i. Directing them jointly and severally to refund money collected through the Offer of Redeemable Preference Shares along with interest, if any, promised to investors therein;

ii. Directing them to not issue 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, for an appropriate period;

iii. Directions restraining them from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period.

3. The copies of the interim order were forwarded to the noticees vide SEBI letters dated April 22, 2015. The interim orders were delivered to Mr. Atikulla Hossain and Mr. Bablu Mia. The noticees were afforded an opportunity of personal hearing on September 04, 2015 and this schedule was informed to the noticees vide SEBI letters dated August 10, 2015. As the interim orders were not served on few noticees, SEBI also made a public notice in the Times of India dated August 31, 2015 (edition – Bihar and Jharkhand), Hindusthan dated August 31, 2015 (edition - Bihar and Jharkhand), the Times of India and Anandbazar Patrika both dated September 03, 2015, regarding the proceedings initiated vide the interim order and the personal hearing fixed on September 04, 2015,

4. On the date of the personal hearing, noticee, Mr. Mohammed Rafique Khan was represented by Ms. Sayanti Mukherjee, Advocate. The Advocate undertook to file the vakalat and requested for copies of the interim order and the hearing notice. SEBI was directed to provide copies of the same. As further requested by the Advocate, liberty was granted to file written submissions along with documents, if any, on or before September 28, 2015. The other noticees did not appear despite public notice regarding the proceedings and the hearing date in newspapers.

5. I note that noticee, Mr. Bablu Mia, vide letter dated September 04, 2015 inter alia made the following submissions- (a) He was initially appointed as an agent of the Company. After few days of his working in the Company as an agent, he was informed on August 13, 2011 that the management had confirmed his ‘RM’ post for the district of South Dinajpur and North Dinajpur. Thereafter, the Company, on January 01, 2012 appointed him as Regional Manager in North Bengal by issuing an appointment letter. (b) During his tenure as RM, the board of directors of the Company comprised of Mr. Samir Keshri (Chairman/Whole Time Director), Mohammad Sajjad Aktar (Managing Director), Atikulla Hossain (Director), Birju Kumar Sharma (Additional Director), Mohammad Rafique Khan (Additional Director) and Rajib Ranjan Singh (Additional Director). (c) He sent his resignation letter dated March 10, 2013 to the Chairman and the same was accepted on that date. During his tenure as agent or RM, he never handled the company’s monies or appropriated public money. Whenever he received commission as an agent from the Company, he had distributed the same to the sub-agents. (d) Surprisingly, he came to know from the Company that on February 05, 2014 he was appointed as a director. He was also appointed as director in Angela Finvest Mutual Benefit Limited, Angela Holiday Inn Limited and Angela Educon Limited. However, Mr. Keshri (Chairman) had assured him that these were because of a printing mistake. (e) Till today, the Company has not expunged his name from the board of directors though he already resigned on March 10, 2013.

6. Mr. Birju Kumar Sharma, vide an undated letter (received in SEBI on September 18, 2015) submitted as follows- (a) The delay in submitting his response was because he saw the public notice issued by SEBI only on September 08, 2015. (b) His entire submissions made vide letter dated May 06, 2014 (in response to SEBI notice dated April 16, 2014) were not mentioned in the interim order. He also provided a detailed reply on August 25, 2014, which was also not taken note of. (c) He did not give his consent at any point in time to become a director in the Company. His appointment as a director was a mischievous act of the Managing Director, Chairman and other active directors of the Company for which the noticee had taken action against them. (d) As he had no knowledge that he was made a director, he had no occasion to take part in any of the Company’s affairs. He did not take part in any meeting of the Company and did not sign in any minutes and was therefore not concerned with the acts and deeds of the Company.

(e) The minutes and proceedings of the Company is available with Mr. Samir Keshri, the Chairman and authorized director of the Company and this noticee does not have any documents. (f) He is not a beneficiary of the Company. (g) He has submitted his bank account details vide reply dated August 25, 2014. (h) From the records of the MCA, the noticee is shown to have been appointed as a director in the Company on September 15, 2012. The Company was incorporated in the year 2011, which indicates that he was ‘not on board of directors’. (i) When the noticee came to know that he was inducted as a director, he had confronted the managing director, chairman and other directors and asked them to remove his name. Thereafter, the noticee was relieved from the post of director with effect from October 30, 2013. An intimation in this regard was also sent to the RoC on December 09, 2013. (j) Other submissions: i. Section 55A of the Companies Act is not attracted as per the decision in the Sahara case as the same is applicable in case of those public companies which intend to get their securities listed on a recognized stock exchange. ii. Section 67 of the Companies Act is also not attracted as it is not clear whether in view of section 67(1) & (2), the shares of the Company come under such category. iii. During 2012-13, RPS were issued to 24 persons, which is less than 50. Similarly, the debentures are issued to 32 persons during 2013-14. Therefore, section 67 does not apply. iv. Therefore, section 73 of the Companies Act too does not apply to the case. v. No RPS or debenture was ever issued under the signature of this noticee. (k) In view of his submissions, the noticee requested that he should not be made liable for the acts and deeds of the Company. The noticee also submitted that Mr. Samir Keshri, managing director of the Company has assured the investors and staff in writing on January 07, 2014 that he is solely responsible for repayment of dues of the Company. (l) The noticee requested that he should be exonerated from the present proceedings.

7. Mr. Rajiv Ranjan Singh, vide his submissions received on September 18, 2015, submitted as follows– (a) He came to know about the present proceedings through the newspaper notice dated August 31, 2015 on September 10, 2015. (b) He was not a director of the Company. He too is an investor/consumer of the Company and has deposited (fixed deposit) in the Company, which has not yet been returned by the Company. (c) He came to know that he was made an additional director in the Company on March 15, 2013 for which the noticee did not give any consent nor signed in any papers to become an additional director. (d) He sent a legal notice on March 18, 2015 to the board of directors of the Company stating that he was made a director after forging his signature. He also called upon them to remove his name failing which he would initiate action. (e) He also vide another letter dated March 18, 2015 informed the RoC regarding his appointment and requested RoC to take proper action. (f) The noticee also filed a criminal case against the Company and its directors. (g) This noticee too made other submissions similar to that of noticee, Mr. Birju Kumar Sharma.

8. Noticee Mr. Mohammad Rafique Khan, through his counsel, vide letter dated October 14, 2015 filed his written submissions. The following are the submissions made therein: (a) In or about July 2011, at the request of the promoter-directors of the Company, the noticee agreed to purchase certain shares of the Company. Subsequently, during 2012, he was appointed as a director of the Company. (b) Though he was appointed as a director, the noticee did not receive any notice for meetings and therefore did not have the opportunity to attend meetings of the board. (c) The noticee was not involved in the decision making process of the Company at any point of time. The day to day affairs were managed by Samir Keshri, Atikulla Hossain and Sajjad Akhatar who were the whole time directors and managing director of the Company.

(d) Due to his ill health and personal reasons, the noticee had sent his resignation letter dated January 28, 2013 to the Company’s board. As no reply was sent, he sent another letter dated March 19, 2013. Both the letters were received by the Company. (e) As per Form-32, the noticee had resigned w.e.f April 10, 2013. (f) As he was not engaged in the day to day affairs of the Company, he is not able to give any information pertaining the Company’s business and or activities. Therefore, personal appearance of the noticee would not serve any purpose. (g) The noticee requested SEBI to dispense with personal appearance and discharge him from the proceedings.

9. The interim order has alleged that the Company made a public issue of RPS without complying with the norms mandated under the Companies Act, 1956. Therefore, the first question to be determined is whether the Company made a public issue of RPS. As per the interim order, the Company had issued RPS to investors during financial years 2012-13 and 2013-14. The following portion is relevant to note:

iv. “From the material available on record, it is observed that AAL issued "Redeemable Preference Shares" ("Offer of Redeemable Preference Shares") to investors during the Financial Years 2012–13 and 2013–14, details of which are provided below –

Type of Year No. of persons to Total Amount Security whom preference (₹ in Lakhs) shares were allotted Redeemable 2012– 24 54.23 Preference 13 Shares 2013– 64 161.00 14 Total *88 ^215.23 *^No. of allottees and amount raised are taken from the documents submitted with the complaints received by SEBI, however actual no. of allottees and amount mobilized could be much more than the above indicated figures. v. From the material available on record, it is observed that AAL issued Debentures to investors during the Financial Year 2013–14, details of which are provided below –

Type of Year No. of persons to Total Amount Security whom debentures (₹ in Lakhs) were allotted Debentures 2013– *32 ^6.32 14 *^No. of allottees and amount raised are taken from the documents submitted with the complaints received by SEBI, however actual no. of allottees and amount mobilized could be much more than the above indicated figures.

a. Under the Offer of Redeemable Preference Shares, it is observed that during the Financial Years 2012–13 and 2013–14, AAL allotted redeemable preference shares to a total of 88 individuals/investors and mobilized an amount of ₹215.23 Lakhs (Table at paragraph 3(iv) of page 4). The number of investors to whom allotments were made under the Offer of Redeemable Preference Shares during the Financial Year 2013–14 alongwith the amount mobilized therein, would prima facie indicate that the number of persons to whom such Offer was made, was above the limit of forty–nine persons as prescribed under the first proviso to Section 67(3) of the Companies Act, 1956.

b. However, it is noted that the number of allottees and amount raised under the Offer of Redeemable Preference Shares for the Financial Years 2012–13 and 2013–14, have only been taken from the documents submitted with the complaints received by SEBI, against AAL (since no details were available in respect of such Offer on the MCA21 Portal). Therefore, the actual number of allottees and amount mobilized by AAL under such Offer could be much more than the figures indicated in the Table at paragraph 3(iv) of page 4.

c. Similarly, it is observed that AAL issued Debentures to investors during the Financial Year 2013– 14, details of which have only been taken from the documents submitted with the complaints received by SEBI, against AAL. Therefore, the actual number of allottees and amount mobilized by AAL in respect of the aforesaid issue of Debentures could be much more than the figures indicated in the Table at paragraph 3(v) of page 4. ………”

10. The interim order has clearly mentioned that the numbers of allottees were mentioned from the details submitted by the complainants to SEBI. The Company has not submitted the relevant data in this regard, despite a specific direction in the interim order to co-operate with SEBI and furnish information/material sought vide SEBI letters dated April 8th and 16th, 2014. In the absence of complete information from the Company/its directors, I am also constrained to consider the material already on record. To ascertain whether an issue of securities is a 'public issue' or done on 'private placement', a reference to section 67(3) of the Companies Act, 1956 needs to be made: 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 section 67(3), as amended by the Companies (Amendment) Act, 2000, with effect from December 13, 2000, no offer or invitation shall be treated as made to the public by virtue of sub-sections (1) or (2), as the case may be, if the offer or invitation can properly be regarded, in all 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. More importantly, in terms of the first proviso to the aforesaid section, the provisions of section 67(3) shall not apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more. Therefore, the number of subscribers becomes relevant to judge whether an issue of shares are for public or on a private placement basis, in the light of the above said provision. Therefore, if an offer of securities are made to fifty or more persons, it would be deemed to be a public issue. Non-Banking Financial Companies (NBFCs) and Public Financial Institutions (PFIs) are exempted only from the first proviso to section 67(3). Therefore, NBFC or PFI do not have any restriction on the number of allottees as imposed on a company which is not an NBFC or PFI.

However, such companies also need to prove that its offer falls either under clause (a) or (b) of section 67(3) to claim such issuance to be a private placement. The Company is neither an NBFC nor a PFI.

11. As per the observation made in the interim order, the Company had issued RPS to atleast 24 investors during FY 2012-13 and to 64 persons during FY 2013-14. It is also noted that SEBI is in receipt of complaints on a continuous basis in the matter. When the preference share certificates attached to these complaints are counted, it is observed that RPS has been issued to 57 more persons during 2012-13 and to a further 29 persons during 2013-14. From the above details, it is inferred that the Company had issued – (a) RPS to atleast 81 persons during 2012-2013; and (b) RPS to atleast 93 persons during 2013-2014.

The Company had failed to submit any information regarding its offer and issue of RPS during the relevant period. Further, the details provided by the complainants indicate that the Company had issued RPS to atleast 174 persons during the aforesaid period. In view of the above observations, I consider such allotments to be made pursuant to a single offer and therefore conclude that the Company made a public issue of RPS during FY 2012-13 and 2013-14 in terms of first proviso to section 67(3) of the Companies Act, 1956.

12. By making a public issue of RPSs, the Company was mandated to comply with all the legal provisions that govern and regulate public issue of such securities, including the Companies Act, 1956 and the SEBI Act and regulations. In this regard, I note that in terms of section 55A of the Companies Act, 1956, SEBI shall administer various provisions (as mentioned therein) of the said Act with respect to issue and transfer of securities by listed companies, companies that intend to list and also those companies that are required to list its securities while making offer and issue of securities to the public. While examining the scope of Section 55A of the Companies Act, 1956, the Hon'ble Supreme Court of India in Sahara Case, had observed that: "We, therefore, hold that, so far as the provisions enumerated in the opening portion of Section 55A of the Companies Act, so far as they relate to issue and transfer of securities and non-payment of dividend is concerned, SEBI has the power to administer in the case of listed public companies and in the case of those public companies which intend to get their securities listed on a recognized stock exchange in India."

" SEBI can exercise its jurisdiction under Sections 11(1), 11(4), 11A(1)(b) and 11B of SEBI Act and Regulation 107 of ICDR 2009 over public companies who have issued shares or debentures to fifty or more, but not complied with the provisions of Section 73(1) by not listing its securities on a recognized stock exchange".

Under section 11A of the SEBI Act, SEBI is also empowered to regulate, by regulations/general or special orders, the matters pertaining to issue of capital, transfer of securities and matters related thereto. Accordingly, the Company, having made a public offer and issue of securities, as observed above, is under the jurisdiction of SEBI.

13. Mr. Rajiv Ranjan Singh and Mr. Birju Kumar Sharma had contended that section 55A of the Companies Act, 1956 is not applicable and the Company had allotted shares to less than 49 persons. These submissions do not carry any merit in the light of observations made in the previous paragraphs.

14. The interim order has alleged that the Company failed to comply with sections 56, 60 and 73 of the Companies Act, 1956. In this regard, I observe the following: a. 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'. There is no Prospectus produced by the Company with respect to its offer of RPS. Accordingly, I find that the Company has failed to comply with sections 56 and 60.

b. By making a public issue of RPS, the Company had to compulsorily list such securities in compliance with section 73(1) of the Companies Act, 1956. As per section 73(1) 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. There is no material to say that the Company has filed an application with a recognized stock exchange to enable the RPSs to be dealt with in such stock exchange. Therefore, the Company has failed to comply with this requirement.

c. Section 73(2) states that "Where the permission has not been applied under subsection (1) or such permission having been applied for, has not been granted as aforesaid, the company shall forthwith repay without interest all moneys received from applicants in pursuance of the prospectus, and, if any such money is not repaid within eight days after the company becomes liable to repay it, the company and every director of the company who is an officer in default shall, on and from the expiry of the eighth day, be jointly and severally liable to repay that money with interest at such rate, not less than four per cent and not more than fifteen per cent, as may be prescribed, having regard to the length of the period of delay in making the repayment of such money".

As the Company failed to make an application for listing such securities, the Company had to forthwith repay such money collected from investors. If such repayments are not made within 8 days after the Company becomes liable to repay, the Company and every director is liable to repay with interest at such rate. The liability of the Company to refund the public funds collected through offer and allotment of the impugned RPSs is continuing and such liability would continue till repayments are made. There is no record to suggest that the Company made the refunds as per law. SEBI is also in receipt of complaints from investors alleging non-payment of amounts under the RPS.

The Hon'ble Supreme Court of India in the Sahara case has examined section 73 and made the following observations: "Section 73(1) of the Act casts an obligation on every company intending to offer shares or debentures to the public to apply on a stock exchange for listing of its securities. Such companies have no option or choice but to list their securities on a recognized stock exchange, once they invite subscription from over forty nine investors from the public. If an unlisted company expresses its intention, by conduct or otherwise, to offer its securities to the public by the issue of a prospectus, the legal obligation to make an application on a recognized stock exchange for listing starts. Sub-section (1A) of Section 73 gives indication of what are the particulars to be stated in such a prospectus. The consequences of not applying for the permission under sub-section (1) of Section 73 or not granting of permission is clearly stipulated in sub-section (3) of Section 73. Obligation to refund the amount collected from the public with interest is also mandatory as per Section 73(2) of the Act. Listing is, therefore, a legal responsibility of the company which offers securities to the public, provided offers are made to more than 50 persons."

In view of the above observations, I find that the Company has not complied with the mandate under section 73(2) of the Companies Act, 1956.

d. Section 73(3) states that - All moneys received as aforesaid shall be kept in a separate bank account maintained with a Scheduled Bank 1 [until the permission has been granted, or where an appeal has been preferred against the refusal to grant such. permission, until the disposal of the appeal, and the money standing in such separate account shall, where the permission has not been applied for as aforesaid or has not been granted, be repaid within the time and in the manner specified in sub-section (2)]; and if default is made in complying with this sub-section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to fifty thousand rupees.”. As found above, the Company had not applied and obtained listing permission. The Company is therefore in non-compliance with this provision also.

e. As the amounts mobilized through the issue of securities have not been refunded within the time period as mandated under law, it would therefore be appropriate to levy an interest @ 15% p.a. as provided for under section 73(2) of the Companies Act, 1956 read with rule 4D (which prescribes that the rates of interest, for the purposes of sub-sections (2) and (2A) of section 73, shall be 15 per cent per annum) of the Companies (Central Government’s) General Rules and Forms, 1956, on the amounts raised by the Company through its offer and issuance of RPS, including Rs.215.23 lakh (as alleged in the interim order) due to be repaid by the Company. As stated above, the liability of the Company to refund the public funds collected through offer and allotment of the impugned RPSs is continuing and such liability would cease only if the repayments are made in accordance with the relevant provisions of law.

15. In view of the above observations, I conclude that the Company made a public issue of RPS during FY 2012-13 and 2013-14 and failed to comply with the provisions of sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013.

16. The interim order was issued against Atikulla Hossain, Bablu Mia, Rajiv Ranjan Singh, Birju Kumar Sharma, Samir Keshari, Mohammed Rafique Khan and Mohammed Sajjad Akhtar. As per the information available in the MCA portal, the following persons are the present directors in the Company:

Present residential Date of IN/DPIN/PAN Full Name address Designation Appointment VILL GAYESHPUR, PS 05/02/2014 ATIKULLA (date of original 03583076 ENGLISHBAZAR, MALDA, Director HOSSAIN appointment was on 732101, West Bengal, INDIA 26.07.2011) JAHANGIRPUR JAHANGIR PUR GANGARAMPUR, 06519493 BABLU MIA Director 05/02/2014 DAKHSIN DINAJPUR, DAKHSIN, 733124, West Bengal, INDIA SECTOR 6/D, BOKARO STEEL RAJIV CITY, SECTOR 6 CHAS, Additional 06528168 RANJAN 15/03/2013 BOKARO, 827006, Jharkhand, director SINGH INDIA The period of directorship of the other persons are mentioned below:

Noticee Date of appointment Date of resignation Birju Kumar Sharma 09.01.2012 19.11.2013 Samir Keshari 26.07.2011 21.02.2014 Mohammed Rafique 09.01.2012 10.04.2013 Khan Mohammed Sajjad 09.01.2012 21.02.2014 Akhtar

From the above details, it can be noted that the seven persons (present and past directors), were in the board of the Company during the period (i.e. FY 2012-2014) when the Company made the impugned offer and issue of securities. It is already concluded above that the Company made a public issue of RPS during FY 2012-13 and 2013-14 and failed to comply with the provisions of sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013.

In view of the above, I observe the following with respect to the liability of directors, both past and present: (i) In terms of section 291 of the Companies Act, 1956, the board of directors of a company shall be entitled to exercise all such powers and do all such acts and things as the company is authorized to exercise and do. Therefore, the board of directors shall be responsible for the conduct of the business of a company and liable for any non-compliance of law and such liability shall trickle down to individual directors. (ii) Accordingly, a director who is part of a company’s board shall be responsible and liable for all acts carried out by a company unless exemptions are provided. (iii) With respect to the culpability of a director for breach of law by a company, I refer to and rely on the following observations made by the Hon’ble High Court of Madras in Madhavan Nambiar vs Registrar Of Companies (2002 108 Comp Cas 1 Mad): “13. It may be that the petitioner may not be a whole-time director, but that does not mean he is exonerated of the statutory obligations which are imposed under the Act and the rules and he cannot contend that he is an ex officio director and, therefore, he cannot be held responsible. There is substance in the contention advanced by Mr. Sridhar, learned counsel since the petitioner a member of the Indian Administrative Service and in the cadre of Secretary to Government when appointed as a director on the orders of the Government to a Government company or a joint venture company, he is expected not only to discharge his usual functions, but also take such diligent care as a director of the company as it is expected of him not only to take care of the interest of the Government, but also to see that the company complies with the provisions of the Companies Act and the rules framed thereunder. Therefore, the second contention that the petitioner cannot be proceeded against at all as he is only a nominee or appointed director by the State Government, cannot be sustained in law. A director either full time or part time, either elected or appointed or nominated is bound to discharge the functions of a director and should have taken all the diligent steps and taken care in the affairs of the company.

14. In the matter of proceedings for negligence, default, breach of duty, misfeasance or breach of trust or violation of the statutory provisions of the Act and the rules, there is no difference or distinction between the whole-time or part time director or nominated or co-opted director and the liability for such acts or commission or omission is equal. So also the treatment for such violations as stipulated in the Companies Act, 1956. 15. Section 5 of the Companies Act defines the expression "officer who is in default". The expression means either (a) the managing director or managing directors; (b) the whole-time director or whole-time directors; (c) the manager; (d) the secretary; (e) any person in accordance with whose directions or instructions the board of directors of the company is accustomed to act; (f) any person charged by the board with the responsibility of complying with that provision; (g) any director or directors who may be specified by the board in this behalf or where no director is so specified, all the directors. 16. Section 29 of the Companies Act provides the general power of the board and …………... Therefore it follows there cannot be a blanket direction or a blanket indemnity in favour of the petitioner or other directors who have been nominated by the Government either ex officio or otherwise. Hence the second point deserves to be answered against the petitioner. 17. As regards the first contention, it is contended by Mr. Arvind P. Datar, learned senior counsel appearing for the petitioner that the company or its board had resolved that Thiagaraj S. Chettiar shall be the director in charge of the company of all its day-to-day affairs and, therefore, the petitioner, an ex officio chairman and director, cannot be expected to attend to the affairs on a day-to-day basis. This contention though attractive cannot be sustained as a whole. There may be a delegation, but ultimately it comes before the board and it is the board and the general body of the company which are responsible.” {Emphasis supplied} A person cannot assume the role of a director in a company in a casual manner. The position of a ‘director’ in a public company/listed company comes along with responsibilities and compliances under law associated with such position, which have to be fulfilled by such director or face the consequences for any violation or default thereof.

(iv) Section 56(1) and 56(3) read with section 56(4) imposes the liability for the compliance of the said provisions, on the company, every director, and other persons responsible for the issuance of the prospectus. The liability for non-compliance of section 60 of the Companies Act is on the Company, and every person who is a party to the non-compliance of issuing the prospectus as per the said section.

(v) The liability of the company and directors to repay under section 73(2) of the Companies Act, 1956 and section 27 of the SEBI Act, is a continuing liability and the same continues till all the repayments are made. Such liability is a joint and several liability on them. Therefore, the directors (irrespective of whether they continue or resign) who were present during the period when the Company made the offer and allotted RPSs shall be liable for violation of sections 56, 60 and 73 of the Companies Act, including the default in making refunds as mandated therein. As the liability to make repayments under sections 73(2) of the Companies Act read with section 27 of the SEBI Act is a continuing liability, the persons who join the Company’s Board pursuant to the offer and allotment of RPSs shall also be liable if the Company and the concerned directors have failed to make refunds as mandated under law.

(vi) Noticees, Bablu Mia, Birju Kumar Sharma and Rajiv Ranjan Singh have disputed the fact that they are the directors. Bablu Mia has stated that as per the Company his name was mentioned as a director because of ‘printing mistake’. However, his name has not been removed till, though he was appointed on February 05, 2014. Birju Kumar Sharma and Rajiv Ranjan Singh have submitted that they have not consented to become directors and their signatures were forged and then were made as directors. These persons have not informed SEBI of any action taken by them and whether a competent forum had decided their claim regarding forgery, even after the passing of the interim order. However, they are at liberty to pursue remedies available under law.

With respect to Birju Kumar Sharma, I note that as per his letter dated May 06, 2014 (response to SEBI’s letter seeking information regarding raising of funds by Company through RPS), he has clearly stated that he was inducted in the Company as ‘Honorary Director’ from 2012 and has resigned on October 30, 2013. The resignation letter dated October 30, 2013 enclosed with the reply states that due to his pre-occupation elsewhere, he was not in a position to devote his time to the affairs of the Company and therefore resigned from the Company. Therefore, in view of the noticee’s own submissions made earlier, his claim now that ‘he never knew his appointment as a director in the Company’ and ‘he never consented to act as a director’, lacks credibility.

In view of the same, I am constrained to decide their liability based on the documents available in the MCA regarding their directorship.

(vii) As per the “Register of directors, managing directors, manager and secretary etc”, available in the MCA, Mr. Atikulla Hossain was originally appointed on July 26, 2011. He has been appointed in the current designation on February 05, 2014. Mr. Atikulla Hossain, vide letter dated May 24, 2014 has submitted that he was no more part of the Company and had tendered his resignation on June 26, 2013. However, the MCA portal indicates otherwise as mentioned above.

(viii) In view of the foregoing, I hereby find Atikulla Hossain, Bablu Mia, Rajiv Ranjan Singh, Birju Kumar Sharma, Samir Keshari, Mohammed Rafique Khan and Mohammed Sajjad Akhtar liable, for the violations committed by the Company as found in this Order and also for committing default in making refunds in terms of section 73(2) of the Companies Act, 1956.

17. 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) Angela Agrotech Limited and its directors (past and present) Atikulla Hossain, Bablu Mia, Rajiv Ranjan Singh, Birju Kumar Sharma, Samir Keshari, Mohammed Rafique Khan and Mohammed Sajjad Akhtar, jointly and severally, shall forthwith refund the money collected by the Company through the issuance of Redeemable Preference Shares (which have been found to be issued in contravention of the public issue norms stipulated under the Companies Act, 1956), to the investors including the money collected from investors, till date, pending allotment of securities, 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/its present management are permitted to sell the assets of the Company only for the sole purpose of making the refunds as directed above and deposit the proceeds in an Escrow Account opened with a nationalised Bank.

(d) Angela Agrotech Limited and its directors (past and present) Atikulla Hossain, Bablu Mia, Rajiv Ranjan Singh, Birju Kumar Sharma, Samir Keshari, Mohammed Rafique Khan and Mohammed Sajjad Akhtar shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily 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.

(e) After completing the aforesaid repayments, the Company shall file a certificate of such completion with SEBI, within a period of three months from the date of this Order, 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").

(f) Angela Agrotech Limited and its directors (past and present) Atikulla Hossain, Bablu Mia, Rajiv Ranjan Singh, Birju Kumar Sharma, Samir Keshari, Mohammed Rafique Khan and Mohammed Sajjad Akhtar are also directed to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/securities, if held in physical form.

(g) In case of failure of Angela Agrotech Limited and its directors (past and present) Atikulla Hossain, Bablu Mia, Rajiv Ranjan Singh, Birju Kumar Sharma, Samir Keshari, Mohammed Rafique Khan and Mohammed Sajjad Akhtar in complying with the aforesaid directions, SEBI, on the expiry of the three months period from the date of this order, - 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. e) would also make a reference to the Ministry of Corporate Affairs to flag the names of notice directors in its database so that information may be perused by RoC or any other regulatory authority.

(h) Angela Agrotech Limited is directed not to, directly or indirectly, access the capital market by issuing prospectus, offer document or advertisement soliciting money from the public and are further restrained 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 as directed above.

(i) Atikulla Hossain, Bablu Mia, Rajiv Ranjan Singh, Birju Kumar Sharma, Samir Keshari, Mohammed Rafique Khan and Mohammed Sajjad Akhtar are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, with immediate effect. They are also restrained from issuing prospectus, offer document or advertisement soliciting money from the public and 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. The above directions shall come into force with immediate effect and shall continue to be in force from the date of this Order till the expiry of 4 years from the date of completion of refunds to investors, as directed above.

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

18. 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 including former directors and other key persons.

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

20. 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: March 01st, 2016 Place: Mumbai