Order in the matter of Basil International Limited, in respect of Mr. Jayanta Kumar Basu[SAT Appeal No.26 /2017]

WTM/RKA/EFD/DRA-2/193/2016 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER UNDER SECTIONS 11(1), 11(4), 11A AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 IN THE MATTER OF BASIL INTERNATIONAL LIMITED IN RESPECT OF MR. JAYANTA KUMAR BASU. 1. Mr. Jayanta Kumar Basu had filed an appeal (Appeal No. 321/2015) before Hon’ble Securities Appellate Tribunal (“SAT”) against the order of SEBI dated February 06, 2015 in the matter of Basil International Limited (the company), whereby Basil International Limited and its Directors including Mr. Jayanta Kumar Basu were directed to refund the investors the monies collected from them through issuance of Redeemable Preference Shares ("RPS") as ordered therein. Vide order dated March 28, 2016, upon consideration Hon’ble SAT quashed the said order qua Mr. Jayanta Kumar Basu (the appellant) and inter alia observed the following: "2. Counsel for SEBI fairly states that although the appellant has taken conflicting views relating to his status as Director of the Company, in view of various documents produced for the first time in this appeal, it would be just and proper to set aside the impugned order with liberty to SEBI to pass fresh order on merits and in accordance with law.

3. Accordingly, the impugned order dated 6th February, 2015 is quashed and set aside. Appellant is at liberty to file an application before SEBI with relevant documents on which he would like to rely upon, within a period of two weeks from today. After two weeks from today, SEBI shall consider such application, if any, filed by the appellant and pass fresh order on merits after giving an opportunity of hearing to the appellant." 2. Pursuant to the directions of Hon’ble SAT, Shri Jayanta Kumar Basu filed an application dated April 7, 2016 stating, inter alia, the following: "Shri Manindra Kumar Basu had made the undersigned sign on a few forms and documents and collected specimen signature of the undersigned for statements, returns, etc. This was around the middle of 2011… Shri Manindra Kumar Basu had told the undersigned that he would give the undersigned work relating to civil engineering. Shri Manindra Kumar Basu had informed the undersigned that one of the companies of which he was a director, i.e. Basil International Limited, required certain civil engineering drawings. The undersigned had readily agreed to make these drawings/ estimates and Order in respect of Mr. Jayanta Kumar Basu accordingly, he had done so.

The undersigned received minor remuneration of about Rs. 30 – 40 thousand in cash for making such drawings/ estimates. Suddenly on or around 28th June, 2012, some persons representing the Sales Tax authorities visited the residence of the undersigned in connection with matters pertaining to Basil International Limited. The undersigned was extremely surprised since he had no connection with the management of the Company. On 29th June, 2012, the undersigned visited the Deputy Commissioner of Commercial Taxes at his office in order to inform him that the undersigned was not connected in any manner with such aforesaid company. After the Sales Tax authorities visited the residence of the undersigned with matters pertaining to Basil International Limited, the undersigned went and confronted Shri Basu. Shri Basu assured the undersigned that there would be no problems in future and this was a minor issue that would be sorted out…. It is in such circumstances, that on the advice of Shri Manindra Kumar Basu, the undersigned wrote a letter to the Deputy Commissioner of Commercial Taxes disclaiming any knowledge of the Company or its business.

This letter was, in fact, prepared by Shri Manindra Kumar Basu which met with the approval of the undersigned. The undersigned thereafter from time to time insisted upon Shri Manindra Kumar Basu that he should not be shown as a Director. Accordingly, Shri Basu told the undersigned to give a resignation letter in the undersigned's own hand writing and he himself dictated the letter. The undersigned thereafter was under the impression that there would be no further issue on this score. However, in August, 2013, the undersigned received a notice from the Securities and Exchange Board of India which the undersigned has now misplaced. This purported to be a show cause notice. The undersigned accordingly gave a response dated 25th September, 2013. The undersigned attended the hearing and informed the Securities and Exchange Board of India of the present matter. The undersigned has also recorded his contention in a letter dated 3rd July, 2014 issued to the Learned Whole Time Member of the Securities and Exchange Board of India. Immediately thereafter the undersigned also received a notice from the Hon'ble Justice Shyamal Sen Commission in connection with the Company.

The undersigned also issued letters to the persons then named as Directors of the Company in the portal of the Ministry of Corporate Affairs. In September, 2014, a FIR was lodged by the undersigned against the Directors of the Company (as Shri Manindra Kumar Basu was reported to have died by then). This was followed up by a petition before the Criminal Court. The undersigned has also instituted following further proceedings:-

 The undersigned has filed a writ petition in the Hon'ble High Court at Calcutta for expeditious progression of the criminal proceeding.  The undersigned has also instituted a suit in the Civil Court for cancellation of the purported letter of appointment and for removal of the appellant's name. In the said circumstances it is evident that:-  The undersigned has never had any connection with the Company and was not aware of its business.  The undersigned has never participated in the business of the Company in any manner whatsoever.  The undersigned has never consented to be a Director of the Company.  The Form 32 which is uploaded in the portal of the Ministry of Corporate Affairs encloses a document where the signature of the undersigned is forged. This is the consistent case of the undersigned from the beginning.

3. An opportunity of personal hearing was provided to Mr. Basu on May 30, 2016 by the then concerned WTM, to which vide his letter dated May 25, 2016, he submitted that he was going through extreme financial crisis and would not be in a position to travel to Mumbai. Thereafter on June 14, 2016, another opportunity of hearing was given to him by the then WTM, to which vide letter dated June 9, 2016, Mr. Basu sought an adjournment and requested to give a prior notice of at least 20 days before the scheduled hearing. After the then concerned WTM's tenure in SEBI came to an end; the matter was brought before me for granting another opportunity of personal hearing to Mr. Basu. A final opportunity of personal hearing was given to Mr. Basu on October 6, 2016 when Mr. Rishikesh Vyas, authorised representative of Mr. Basu appeared and made submissions. Further, Mr Jayanta Kumar Basu, vide letter dated October 18, 2016 made inter alia the following written submissions in the matter:

"I would further like to place on record that I had a few times met one Manindra Kumar Basu, a Chartered Accountant by profession (now stated to have died) through an acquaintance for the limited purpose of taking his advice in some tax matter. During this time Late Manindra Kumar Basu had asked me to sign certain papers and documents including some blank papers in order to facilitate taxation work. In utmost good faith I had done this as I am not a technical person in matters relating to Taxation and Corporate laws. For the first time around June 28, 2012 at the time when some Sales Tax officials/persons visited my residence in reference to the matter pertaining to Basil, I came to know about the fraud committed on me. Immediately I had confronted Manindra Kumar Basu who I knew was having connection with Basil. He had assured to me that there was some confusion and miscommunication and the existing issue was a very trivial one and he would look into that matter and get the same sorted out.

In all my communications on record with SEBI and Sales Tax authorities I have clearly stated that I was never ever in control or management of the Company. As I was harassed for no fault of mine coupled with pressure on my family also, I followed up religiously with Late Manindra Kumar Basu. He advised me that I should sign on a resignation letter so that my association with Basil which is getting reflected only on paper due to some miscommunication will come to an end. Accordingly, I had signed such letter of resignation in good faith. It is very crucial to note the following points which are very essential and crucial for you to understand my position and stand which clearly demonstrates how I have been duped and my conduct during entire controversy: a) Entire case against me is initiated on the basis of alleged Directorship of mine in Basil, in this reference place on record once again that neither I have consented to becoming a Director of Basil nor I have issued or signed any communication or consent letter in this reference. b) I would request you to be kind in appreciating the fact that I have never ever acted on the basis of alleged Directorship in Basil. c) As a natural co-relation to the aforesaid i.e. me not being a Director I have not attended any meeting of the Board of Directors of Basil or any committee thereof. d) It is a matter of fact that I have never ever had any financial transaction with any of Basil's Directors or their relatives or business associates or partners. e) I have never ever benefited from any of the resources of the Company. f) The only reason because of which I am suffered to face this hardship is because of the fact that the Directors of Basil in connivance with Manindra Kumar Basu have forged my signature and subsequently reported the same by way of filing 'Form 32' with the Registrar of Companies. You may well appreciate that as matter of fact none of my family members are Directors or are in control of the Company. Neither have I benefited from Basil - financially or otherwise - as a Director. Thus, there was no need for me to be associated with Basil."

4. I have considered the reply/submissions of Mr. Basu, the allegations against him in the interim order cum show cause notice dated May 16, 2013 and other material on record. The question for consideration before me is whether in the facts and circumstances of the case, any directions need to be issued against Mr. Basu and if so, what should be the nature of the directions. 5. I note that SEBI had first issued a letter dated March 29, 2012 to the company and its directors including Mr. Basu seeking information about the various scheme(s) and plan(s) of Basil International Limited. However, no reply was received from him at that time. Thereafter, SEBI issued an interim order dated May 16, 2013 inter alia against

Mr. Basu. In reply Mr. Basu vide his letter dated September 20, 2013 submitted that he had ceased to be a director in the company with effect from February 01, 2013 and since then he did not have any connection with the company. It was also submitted that he was neither involved nor signed any papers related to the business of the company and was not aware that the company was mobilising the funds from the public by issuing RPS. Mr. Basu in his submissions admitted of knowing the directors of the company namely Mr. Manindra Kumar Basu and his daughter Ms. Monami Basu. However, he denied of signing on the consent letter attached with Form 32. He also submitted that he never agreed to be a director in the Company. 6. SEBI upon considering his submissions vide order dated February 06, 2015 noted that Mr. Basu has not submitted the proof of having ceased to be a director in the company and he was being shown as one of present directors of the company on MCA-21 Portal. The said order also noted that Mr. Basu has not informed whether he approached MCA/ ROC and Police for the purposes of excluding his name from the list of the directors of the company. Taking note of the same, he was found liable for the acts of the company.

7. I noted that along with his application dated April 07, 2016, Mr. Basu has submitted a copy of the FIR dated October 20, 2014 lodged before the Belighata Police Station and the complaint filed on September 22, 2014 before the Learned Additional Chief Judicial Magistrate at Sealdah. He has also filed the copy of the complaint filed before the Registrar of Companies, Delhi and Haryana. He has also relied upon a copy of writ petition claimed to have been filed by him before the Hon'ble High Court at Calcutta seeking directions to the respective authorities to investigate the offences as mentioned in the FIR dated October 20, 2014. 8. These documents do not show at this stage the veracity of the allegations and contentions of Mr. Basu. Further, as per MCA-21 Portal, Mr. Basu became director of Basil International Limited on August 01, 2011 and still continues to be director of the company. I therefore, find that the claims made by Mr. Basu cannot be considered on face value at this stage.

9. 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 following direction qua Mr. Jayant Kumar Basu.

(a) Mr. Jayanta Kumar Basu (DIN - 02827066) jointly and severally along with the Company, Basil International Limited (CIN - U17225DL1997PLC087010) and its other promoters and present directors, including Mr. Manindra Kumar Basu (DIN - 02388658), Mr. Susanta Kumar Jana (DIN - 05110167), Mr. Mohammed Afaque Ahmed (DIN - 05110815), Mr. Nirmalendu Bhowmik (DIN - 06933727), (as directed by SEBI order dated February 06, 2016 in the matter of Basil International Limited) 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), with returns that were promised by the Company to its investors. In case of delay in making the repayments, Mr. Jayanta Kumar Basu shall be liable to return the money collected from its investors with an interest of 15% per annum compounded at half yearly intervals, from the date of this Order till the date of actual payment. The above directed interest on the delayed payments shall be over and above the returns that are due to its investors of such instruments.

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

(c) Mr. Jayanta Kumar Basu, (the noticee who still continues as a director in the Company as per records) is restrained from accessing the securities market and is further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, with immediate effect. He is also restrained from associating himself with any listed public company and any public company which intends to raise money from the public, with immediate effect. The above directions shall continue to be in force for a further period of 4 years on completion of the repayments, as directed above.

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

(e) In case of failure to comply with the aforesaid directions, SEBI shall take appropriate action against Mr. Jayanta Kumar Basu, including launching of prosecution proceedings, adjudication proceedings and recovery proceedings, in accordance with law.

10. Copy of this Order shall be forwarded to the recognised stock exchanges and depositories for information and necessary action. 11. 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.

Sd/- DATE: November 01, 2016 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA