Order in the matter of Garima Homes and Farm Houses Limited

WTM/PS/40/EFD/MAY/2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 and regulation 65 of the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 In the matter of Garima Homes and Farm Houses Limited In respect of: 1. Garima Homes and Farm Houses Limited [PAN: AAECG2270P] 2. Mr. Shivram Kushwah [PAN: BDGPK0032E], 3. Mr. Banabarilal Lodhi [PAN: ACAPL9691A], 4. Mr. Balkishan Kushwah [DIN: 02338533], 5. Mr. Banwari Lal Kushwah [DIN: 01829943], 6. Mr. Bijendra Pal Singh [DIN: 01781312] and 7. Mr. Jitendra Kumar [PAN: DGXPK9360P]. Date of hearings: August 07, 2015 and January 19, 2016 For Company: Mr. A.K. Bansal, Advocate For SEBI: Mr. Pradeep Kumar, Assistant General Manager and Mr. Ankit Bhansali, Assistant General Manager

1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’), vide ex-parte interim Order dated February 03, 2015 (hereinafter referred to as ‘the interim order’), prima facie observed that Garima Homes and Farm Houses Limited (hereinafter referred to as ‘the Company’ or ‘Garima’) is engaged in fund mobilization activities from the public, which falls within the ambit of Collective Investment Scheme (hereinafter referred to as ‘CIS’) in terms of Section 11AA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’). It was alleged that the Company did not obtain a certificate of registration as required under Section 12(1B) of the SEBI Act and Regulation 3 of the SEBI (Collective Investment

Schemes) Regulations, 1999 (hereinafter referred to as ‘CIS Regulations’) prior to the launch and operation of such schemes. The Company was also alleged to have contravened Regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’).

2. The interim order was issued in order to protect the interest of investors to ensure that the Company and its directors do not collect further funds under its schemes/ plans and to safeguard the assets/ acquired by Garima and its directors from the funds of the investing public. This Order directed Garima and its past and present directors, namely, Mr. Shivram Kushwah, Mr. Banabarilal Lodhi, Mr. Balkishan Kushwah, Mr. Banwari Lal Kushwah, Mr. Bijendra Pal Singh and Mr. Jitendra Kumar (hereinafter collectively referred to as ‘noticees’): “14. 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 read with CIS Regulations and PFUTP Regulations, hereby direct … (i) not to collect any fresh money from investors under its existing schemes; (ii) not to launch any new schemes or plans or float any new companies to raise fresh moneys; (iii) to immediately submit the full inventory of the assets including land obtained through money raised by Garima; (iv) not to dispose of or alienate any of the properties/assets obtained directly or indirectly through money raised by Garima; (v) not to divert any fund raised from public at large which are kept in bank account(s) and/or in the custody of Garima. (vi) to furnish all the information/documents sought by SEBI vide letter dated January 22, 2014, within 15 days from the date of receipt of this order, including: i. Scheme wise list of investors and their contact numbers and addresses; ii. PAN of the aforementioned Directors and iii. Details of agents along with address, money mobilized and commission paid.” 3. The aforesaid directions came into force with immediate effect and the noticees were advised to file their reply within a period of twenty one (21) days from the date of receipt of the interim order and also seek an opportunity of personal hearing.

4. The interim order was forwarded to the noticees vide SEBI letters dated February 11, 2015. The letter forwarded to the Company, Mr. Banabarilal Lodhi, Mr. Bijendra Pal

Singh, Mr. Shivram Kushwah, Mr. Balkishan Kushwah and Mr. Jitendra Kumar had returned undelivered. Thereafter, SEBI vide its letter dated April 10, 2015, attempted to deliver the interim order to the Company at its head office in Delhi, with an advice to deliver the order to the directors of the Company. However, the said letter could not be delivered as the Company was not found operating at the address available. Before proceeding further, SEBI intimated the passing of the interim order vide the public notice in various newspapers inter alia ‘Navbharat Times’, ‘Charhdikala’ and ‘Times of India’ on April 18, 2015.

5. Thereafter, SEBI proceeded further and granted an opportunity of personal hearing to the noticees on August 07, 2015. The scheduled date was communicated vide SEBI letter dated July 27, 2015. On the date fixed, one Mr. A.K. Bansal, Advocate appeared as authorized representative of the Company and requested for a copy of the interim order and time for submitting the reply thereof. The request of the advocate was considered and the matter was adjourned to September 07, 2015. In the meantime, a copy of the interim order was provided to the advocate of the Company.

6. The advocate of the Company vide his e-mail dated September 04, 2015, requested for an adjournment of personal hearing fixed for September 07, 2015. The request was considered and another opportunity of personal hearing was granted to the noticees on September 21, 2015. In the meantime, a reply to the interim order was submitted by the Company, vide letter dated September 04, 2015. An opportunity of inspection of the documents was also provided to the noticees on October 01, 2015. The same had to be rescheduled to November 16, 2015, on the request of the advocate. On completion of the inspection, another opportunity of personal hearing was granted to the noticees on January 15, 2016. The advocate for the Company vide e-mail dated January 07, 2016, while citing his suffering from ailments and medical treatment requested for postponement of personal hearing and requested for personal hearing at Northern Regional Office of SEBI at New Delhi. The request of the advocate was considered and a last and final opportunity of personal hearing was granted on January 19, 2016. On the date fixed Mr. A.K. Bansal, Advocate appeared for the Company and submitted the written submissions dated January 19, 2016, which were taken on record.

7. Thereafter, as the directors of the Company had not entered their appearance for the personal hearing, one more opportunity of personal hearing was granted to these on February 29, 2016. The date of hearing was also communicated vide the public notice in the newspapers namely ‘Dainik Bhaskar’, ‘Rajasthan Partrika’, ‘Navbharat Times’ and ‘Times of India’ all dated February 18, 2016. The directors of the Company were advised that in case they fail to appear for the personal hearing before SEBI on the aforesaid date, then the matter would be proceeded ex-parte on the basis of the material available on record. On the date fixed, no one had appeared for the directors of the Company. Considering that reasonable opportunity to the directors had already been afforded for making submissions in the matter, I am inclined to proceed further with the matter, on the basis of merits of the case.

8. The submissions made by the authorized representative of the Company vide letters dated September 04, 2015 and January 19, 2016, are as under:

a. The persons named as directors of the Company is not correct. As per the records only Mr. Shivram Kushwah, Mr. Banwari Lal Kushwah and Mr. Jitendra Kumar are the director of the Company. Therefore, the names of other persons may be deleted. b. The information received from the complainant was without any substance. SEBI has not disclosed the name, address and identity of the complainant. The complainant may be a fictitious person having no legally valid documents. Therefore the alleged documents are forged and fabricated by someone for extorting money illegally from the Company and these are liable to be discarded. Further, a request to cross-examine the complainant was also made c. SEBI had asked the Company to furnish certain information, in absence of such information how SEBI concluded that the Company is carrying the activities of a CIS. d. It has not been mentioned in the interim order that at what time, date and place the alleged CIS was carried out and by whom.

e. From the financial statements as downloaded from the ‘MCA-21’ portal do not mean that the Company has mobilized money under CIS. The figures appearing in the interim order are beyond the factual facts and are imaginary without any cogent evidences. f. The Company has not mobilized funds under CIS and whatever done, was within the ambit of laws and within the due course of its ordinary business. The Company does not fall in the ambit of Section 11AA of the SEBI Act and it has not carried any scheme which may be called as CIS. No activity of illegal mobilization of funds was operated by the Company, in any manner, whatsoever.

9. I have considered the interim order, the submissions made and the material available on record. Before proceeding further, let me deal with the submission of the Company/ its advocate regarding the request to cross-examine the complainant. I note that the information from the complainant was only a trigger point for preliminary inquiry and thereafter SEBI had issued a letter dated May 05, 2014 to the Company asking it to submit the relevant detail. As the letter had returned undelivered, the details were asked vide an e-mail dated June 30, 2014. Thereafter, vide letter dated July 07, 2014, such details were also asked from the Company (at its head office in Delhi) and other noticees. It is important to note that all these letters and e-mail have remained unanswered. In the meantime, SEBI collected other relevant details about the Company and its schemes. While analyzing such details it was prima facie revealed that the Company is mobilizing funds from the public under its various schemes. I note that SEBI as a regulatory body, analyses the information available on record and takes appropriate steps in the interest of investors. In the present case, SEBI received certain information and in order to examine the veracity of such information, the information was asked from the Company. The Company, by its own volition, did not submit the documents and SEBI was constrained to conduct examination on the basis of information available. It is now not open for the Company to make such contentions as they themselves have never co-operated with SEBI. In view of the same, in my opinion there is no need of cross examination of the complainant by the Company.

It is important to note that even after entering appearance for the personal hearing through the advocate, Garima has failed to submit the documents as asked vide various SEBI letters and the interim order. The Company and its directors have maintained silence on the nature of business undertaken and have not submitted even a single document till date. Such non-cooperation/ non-submission of information to regulatory authority needs to be taken seriously.

The advocate of the Company has contended that complainant is a fictitious person and the documents submitted by him are forged and fabricated for extorting money. I note that the advocate of the Company has merely made the submissions in the reply and has not produced any documents to show the difference between its document and the documents available on record. Further, no list of investors has been produced by the Company to show that that the complainant is a fictitious person. In view of the same, the contention of the advocate regarding denial of the documents available on record, cannot be accepted. I also note that the Company has also not intimated any steps/ action taken by them against the alleged forgery. Further, it is noted that the Company has failed to co-operate with SEBI and is now making frivolous contentions which are not backed by any evidence/ proof. In absence of any documents/ evidences contradicting the material available with SEBI, it cannot be said that these documents are forged.

At this stage, I note that same set of directors of the Company are also directors in one Garima Real Estate & Allied Limited, which has also been found to be operating a CIS without registration from SEBI. The same indicates that these persons are habitual in illegally mobilizing funds from the investors in different names.

10. The following are the observations from the interim order: “… a) GHFL(CIN: U70109PB2011PLC035012) was incorporated on April 29, 2011 having its registered office at Pandwala Road, Mubarkpur, Tehsil Dera Bassi, Mohali, Punjab. Its present Directors are Mr. Shivram Kushwah (DIN: 02338542), Mr. Banabarilal Lodhi (DIN: 01759136), Mr. Balkishan Kushwah (DIN: 02338533),

Mr. Banwari Lal Kushwah (DIN: 01829943), Mr. Bijendra Pal Singh (DIN: 01781312) and Mr. Jitendra Kumar (DIN: 06719377). b) As per the MoA of GHFL, its main objects are: “ to carry on the business of purchase, sale, take on lease and acquire land to develop, construct and build houses for residential and commercial use, flats, residential colonies, malls, hotels, industrial plots, residential plots, farm houses and to acquire, allot, assign, lease, sell, improve, manage, develop and deal with property of all kinds including land and building in India and abroad.” c) As per the brochures, schemes offered by GHFL were lump sum payment scheme viz., "Ek Musht Yojana (CDPP), Scheme No. G-2" and instalment payment scheme viz., "Kisht Bhugtan Yojna (RIPP), Scheme No. A-1 for 5 years". As per these schemes, GHFL offered investment in plot of land of sizes from 800 sq. ft. onwards. GHFL offers an exit option to the applicants after the expiry of terms of the respective plans with a refund of 'estimated realizable value' as per the opted plans. If the applicant/investor opts to continue with the plan at the end of 15 years (term) he/she needs to make payment of specified amount for effecting registration of plot.

The details in respect of Scheme G-2 and Scheme A-1 are illustrated as under:- Scheme G-2 Plot Area in Total Payment Payment Payment Accident unit no. Sq.ft deposit after 6 after 9 after 11 Compensation amount yrs. yrs. yrs. 1 1200 15000 30000 45000 60000 22500 2 2400 30000 60000 90000 120000 45000 3 3600 45000 90000 135000 180000 67500 4 4800 60000 120000 180000 240000 90000 5 6000 75000 150000 225000 300000 112500 6 7200 90000 180000 270000 360000 120000 7 8400 105000 210000 315000 420000 120000 8 9600 120000 240000 360000 480000 120000 9 10800 135000 270000 405000 540000 120000 10 12000 150000 300000 450000 600000 120000 11 13200 165000 330000 495000 660000 120000 12 14400 180000 360000 540000 720000 120000 13 15600 195000 390000 585000 780000 120000 14 16800 210000 420000 630000 840000 120000 15 18000 225000 450000 675000 900000 120000 16 19200 240000 480000 720000 960000 120000 17 20400 255000 510000 765000 1020000 120000 18 21600 270000 540000 810000 1080000 120000 19 22800 285000 570000 855000 1140000 120000 20 24000 300000 600000 900000 1200000 120000 Scheme No. A-1 Installment Payment scheme (RIPP) Time limit 5 years Plot Area in Total Mtly Qtly Half Yrly Payment on Accidental Unit sq. ft Deposit Yrly Maturity Compensati No Amount After 5 yrs on 1 800 6600 120 345 680 1320 9500 9900 2 1200 13200 240 690 1360 2640 19000 19800 3 1600 19800 360 1035 2040 3960 28500 29700

4 2000 26400 480 1380 2720 5280 38000 39600 5 2400 33000 600 1725 3400 6600 47500 49500 6 2800 39600 720 2070 4080 7920 57000 59400 7 3200 46200 840 2415 4760 9240 66500 69300 8 3600 52800 960 2760 5440 10560 76000 79200 9 4000 59400 1080 3105 6120 11880 85500 89100 10 4400 66000 1200 3450 6800 13200 95000 99000 11 4800 72600 1320 3795 7480 14520 104500 108900 12 5200 79200 1440 4140 8160 15840 114000 118800 13 5600 85800 1560 4485 8840 17160 123500 120000 14 6000 92400 1680 4830 9520 18480 133000 120000 15 6400 99000 1800 5175 10200 19800 142500 120000 16 6800 105600 1920 5520 10880 21120 152000 120000 17 7200 112200 2040 5865 11560 22440 161500 120000 18 7600 118800 2160 6210 12240 23760 171000 120000 19 8000 125400 2280 6555 12920 25080 180500 120000 20 8400 132000 2400 6900 13600 26400 190000 120000 …”

11. With respect to the documents of the Company, the interim order has observed as under: “… d) The applicants/investors who are interested in the aforesaid scheme of GHFL are made to execute an "Application form along with an Agreement" with GHFL. Upon execution of the same, GHFL issues a 'Registration letter' and Advance Receipt cum Acceptance letter'. As per the terms and conditions attached to a sample application form the following are noted: i. "Garima arranges for sale of property in favour of the customer and to develop and maintain the same by rendering various services. ii. Garima agrees to sell the plot to customer and to develop and maintain the plot. iii. The customer shall be entitled for allotment of the property and subsequent transfer of title and possession in his favour by registered sale deed within such period after receipt of full consideration in case of cash down payment plan... iv. Garima undertakes to carry out the necessary works by conducting survey, demarcation clearing and other related jobs/works on behalf of the customer. v. Garima shall procure and install bore wells, open bells and other water points and install motors, pump sets and other facilities main pipelines, electrical required for the development of the property. vi.

Garima has the rights to develop and maintain the said property in consultation with experts and customer shall not ordinarily interfere with the mode of development and maintenance of the said property..." e) On perusal of the 'Registration letter' dated December 26, 2012 issued by GHFL to one Mr. Bhuvneshwar Prasad Shriwas, it is observed that there is another scheme offered by GHFL viz., Plan G3-5. The plot size is mentioned as 800 sq. ft. and payment plan comprises of 20 quarterly instalments and term period of the plan is 5 years. Further, the expected cost of the plot if the customer opts to exit is given as ₹17,100/-. The aspect of registration of plot or handing over possession of plot to customer is nowhere mentioned in the 'Registration letter'. f) On perusal of balance sheet and other financial statements of GHFL as downloaded from MCA21 portal, it was observed that approximately ₹13.56 crores were shown under the head 'current liabilities' as on March 31, 2013. Approximately, ₹9.02 crores were shown as 'short term loans and advances' and fixed assets are only ₹16.88 lakh.” 12. Now I proceed to deal with the characteristics of the impugned plans/ schemes floated and carried on by the Company against the four conditions under Section 11AA(2) of the SEBI Act as alleged in the interim order.

For concluding whether a scheme is a CIS or not, all the four conditions under Section 11AA(2) of the SEBI Act should be satisfied. i. The first condition is that the contributions, or payments made by the investors, by whatever name called, are pooled and utilized for the purposes of the scheme or arrangement. In this regard, I note as under: - The Company had accepted contribution/ investments of the investors/ customers in accordance with its various plans/ schemes. - The Company does not identify the plot of land in the application form. The registration form of the Company states that ‘… GARIMA is in the process of making arrangements/ has made arrangements for purchasing/ procuring the land’. - The registration letter also does not identify the plot of land though it finds mention of the plot size. - It is observed from the interim order that about ₹13.56 crores were the current liabilities of the Company, as on March 31, 2013. Further, ₹9.02 crore were shown as ‘short term loans and advances’ and fixed assets of the Company are only ₹16.88. The Company has not contended such figures. - The Company has also not contended the allegation of the interim order that “… The 'Registration letter' issued to the applicant/ investor and the 'Terms and Conditions' forming part of the said certificate does not indicate the ownership aspect of the plot/land under the schemes offered by GHFL. … The aspect of registration of plot or handing over possession of plot to customer is nowhere mentioned in the 'Registration letter'.

It is noted that even after receipt of full consideration in Scheme G2 (lump-sum payment plan), GHFL is not transferring the plot of land in favour of the investor.”

These facts show that the Company pools the investment made by the customers, for carrying out the overall plan/ scheme. Thus, satisfying the first condition as stipulated in Section 11AA(2)(i) of the SEBI Act.

ii. The second condition is that the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable from such scheme or arrangement. As discussed above, the investors/ customers had made payments towards the plans/ schemes promoted by the Company. The plans of the Company itself assured the investors/ customers of ‘expected cost of plot if the customer opts to exit on the date of exit option opted by him’ at the end of the term of the plan which meant nothing but profits. Further, the investors/ customers were also promised ‘accidental compensation’ which were also in the nature of benefits. Considering the same, it is concluded that the customers/ investors had made the contribution/ payment to the Company with a view to earn profits/ income/ property/ return on the initial investments that may accrue to them as applicable, thus attracting the second condition as stipulated in Section 11AA(2)(ii) of the SEBI Act.

iii. The third and fourth conditions under Section 11AA(2) of the SEBI Act are being discussed together. The said conditions are that the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors and the investors do not have day to day control over the management and operation of the scheme or arrangement. In this regard, I note that the payments/ investments made by the customers/ investors were retained by the Company (as seen from its financial statements), who in turn manages these on behalf of the customers/ investors during the term of the plan. From the documents available on record, it is noted that the development was an integral part of the plan/ schemes of the Company. Further, from the available details it can be said that the customers/ investors also did not manage their investments in the plans/ schemes rather the investments were managed and utilized by the Company, which in the end offered ‘expected cost of plot’.

In view of the above, it can be concluded that the plans/ schemes of the Company satisfies the third and fourth conditions under Section 11AA (2) of the SEBI Act also.

13. From the discussion above, it is evident that the Company solicits investments from its customers in its scheme of purchase of plot. The scheme of the Company in taking monies from its customers/ investors and promising them estimated value at the end of the contract definitely fall within the ambit of Section 11AA of the SEBI Act. As all the four conditions specified under Section 11AA(2) of the SEBI Act are satisfied in the present facts of the case, the schemes/ plans promoted, launched, carried on and operated by the Company are in the nature of CIS in terms of Section 11AA(1). While proceeding further, I place my reliance on the observations of the Hon'ble Supreme Court, made in the matter of PGF Limited & Ors. Vs. Union of India & Anrs. (Civil Appeal No. 6572 of 2004): “42. … ... .. as per the agreement between the customer and the PGF Limited, it is the responsibility of the PGF Limited to carry out the developmental activity in the land and thereby the PGF Limited undertook to manage the scheme/arrangement on behalf of the customers. Having regard to the location of the lands sold in units to the customers, which are located in different states while the customers are stated to be from different parts of the country it is well-neigh possible for the customers to have day to day control over the management and operation of the scheme/arrangement. In these circumstances, the conclusion of the Division Bench in holding that the nature of activity of the PGF Limited under the guise of sale and development of agricultural land did fall under the definition of collective investment scheme under Section 2(ba) read along with Section 11AA of the SEBI Act was perfectly justified and hence, we do not find any flaw in the said conclusion. ... .... 53. … therefore, hold that Section 11AA of the SEBI Act is constitutionally valid. We also hold that the activity of … the sale and development of agricultural land squarely falls within the definition of collective investment scheme under Section 2(ba) read along with Section 11AA (ii) of the SEBI Act ...” Therefore, having concluded that the activities of the Company are CIS, in terms of Section 11AA of the SEBI Act, I proceed further with the matter.

14. Section 12(1B) of the SEBI Act mandates that no person, shall sponsor or cause to be sponsored or carry on or caused to be carried on any CIS unless it obtains a certificate of registration from SEBI in accordance with the CIS Regulations. The Company has clearly failed to do so. Regulation 3 of the CIS Regulations provides that no person other than a Collective Investment Management Company which has obtained a certificate under the said regulations shall carry on or sponsor or launch a 'CIS'. A person can launch or sponsor or cause to sponsor a CIS only if it is registered with SEBI as a Collective Investment Management Company. Therefore, the launching/ floating/ sponsoring/ causing to sponsor any ‘collective investment scheme’ by any ‘person’ without obtaining the certificate of registration in terms of the provisions of the CIS Regulations is in contravention of Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations.

15. Further, in terms of Regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and includes illegal mobilization of funds by sponsoring or causing to be sponsored or carrying on or causing to be carried on any CIS by any person. This provision in the above Regulations has been brought into effect from September 06, 2013. Accordingly, it could be held that by mobilizing public funds through CIS without obtaining registration from SEBI as required under Section 12(1B) of the SEBI Act read with Regulation 3 of the CIS Regulations, the Company has contravened the above said provision.

16. Liability of the Directors: I note that the interim order was issued against the Company and its directors namely Mr. Shivram Kushwah, Mr. Banabarilal Lodhi, Mr. Balkishan Kushwah, Mr. Banwari Lal Kushwah, Mr. Bijendra Pal Singh and Mr. Jitendra Kumar. The details of the appointment and resignations of the directors of the Company are as under:

Name Date of Appointment Date of Cessation Mr. Shivram Kushwah 29/04/2011 Continuing as director Mr. Banabarilal Lodhi 06/06/2011 Continuing as director Mr. Balkishan Kushwah 29/04/2011 02/04/2012 Mr. Banwari Lal Kushwah 29/04/2011 02/04/2012 Mr. Bijendra Pal Singh 02/04/2012 28/10/2013 Mr. Jitendra Kumar 23/10/2013 Continuing as director It is noted that Mr. Shivram Kushwah, Mr. Banabarilal Lodhi and Mr. Jitendra Kumar are the present director of the Company. The noticees namely Mr. Shivram Kushwah, Mr. Balkishan Kushwah and Mr. Banwari Lal Kushwah are also the signatories to the Memorandum of Association and Articles of Association of the Company.

It is noted that the noticees namely Mr. Balkishan Kushwah, Mr. Banwari Lal Kushwah and Mr. Bijendra Pal Singh had resigned from the Company on the dates as mentioned in the table above. I note that such resignations does not absolve these from the charges levelled in the interim order, in the light of the incorporation of the Company on April 29, 2011 and commencement of the schemes in the period during which they were the directors of the Company. Therefore, I have no hesitation in holding that the Company and its directors namely Mr. Shivram Kushwah, Mr. Banabarilal Lodhi, Mr. Balkishan Kushwah, Mr. Banwari Lal Kushwah, Mr. Bijendra Pal Singh and Mr. Jitendra Kumar were engaged in the illegal fund mobilising activity by floating/ sponsoring/ launching, unregistered/ unauthorised CIS, as defined in the Section 11AA of the SEBI Act. In view of the above findings and observations made in this Order and the violations committed by the Company, it becomes necessary for SEBI to issue appropriate directions in order to protect the interest of investors and also to secure the interest of the securities market.

17. In view of the foregoing, in the interest of investors and the securities market, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 and Sections 11(1), 11B and 11(4) thereof and regulation 65 of the SEBI (Collective Investment Schemes) Regulations, 1999, hereby issue the following directions:

a. Garima Homes and Farm Houses Limited [PAN: AAECG2270P], Mr. Shivram Kushwah [PAN: BDGPK0032E], Mr. Banabarilal Lodhi [PAN: ACAPL9691A], Mr. Balkishan Kushwah [DIN: 02338533], Mr. Banwari Lal Kushwah [DIN: 01829943], Mr. Bijendra Pal Singh [DIN: 01781312] and Mr. Jitendra Kumar [PAN: DGXPK9360P] shall abstain from collecting any money from the investors or launch or carry out any Collective Investment Schemes including the scheme which have been identified as a Collective Investment Scheme in this Order.

b. Garima Homes and Farm Houses Limited, Mr. Shivram Kushwah, Mr. Banabarilal Lodhi, Mr. Balkishan Kushwah, Mr. Banwari Lal Kushwah, Mr. Bijendra Pal Singh and Mr. Jitendra Kumar shall wind up the existing Collective Investment Schemes and refund through ‘Bank Demand Draft’ or ‘Pay Order’, the money collected by the said company under the schemes with returns which are due to its investors as per the terms of offer within a period of three months from the date of this Order and thereafter within a period of fifteen days, submit a winding up and repayment report to SEBI in accordance with the SEBI (Collective Investment Schemes) Regulations, 1999, including the trail of funds claimed to be refunded, bank account statements indicating refund to the investors and receipt from the investors acknowledging such refunds.

c. Garima Homes and Farm Houses Limited/ 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. After completing the aforesaid repayments in terms of sub-paragraph (b) above, the Company shall file a certificate of such completion with SEBI, within a period of 15 days, 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. Garima Homes and Farm Houses Limited, Mr. Shivram Kushwah, Mr. Banabarilal Lodhi, Mr. Balkishan Kushwah, Mr. Banwari Lal Kushwah, Mr. Bijendra Pal Singh and Mr. Jitendra Kumar 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.

f. Garima Homes and Farm Houses Limited, Mr. Shivram Kushwah, Mr. Banabarilal Lodhi, Mr. Balkishan Kushwah, Mr. Banwari Lal Kushwah, Mr. Bijendra Pal Singh and Mr. Jitendra Kumar are restrained from accessing the securities market and are prohibited from buying, selling or otherwise dealing in securities market for a period of four (4) years.

g. In the event of failure by Garima Homes and Farm Houses Limited, Mr. Shivram Kushwah, Mr. Banabarilal Lodhi, Mr. Balkishan Kushwah, Mr. Banwari Lal Kushwah, Mr. Bijendra Pal Singh and Mr. Jitendra Kumar to comply with the above directions, the following actions shall follow: - Garima Homes and Farm Houses Limited, Mr. Shivram Kushwah, Mr. Banabarilal Lodhi, Mr. Balkishan Kushwah, Mr. Banwari Lal Kushwah, Mr. Bijendra Pal Singh and Mr. Jitendra Kumar shall remain restrained from accessing the securities market and would further be prohibited from buying, selling or otherwise dealing in securities, even after the period of four (4) years of restraint imposed in sub-paragraph (f) above, till all the Collective Investment Schemes of the Company are wound up and all the monies mobilized through such schemes are refunded to its investors with returns which are due to them. - SEBI 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;

- SEBI would also make a reference to the Ministry of Corporate Affairs, to initiate appropriate action as deemed fit against the Company, Garima Homes and Farm Houses Limited. - SEBI would make a reference to the Ministry of Corporate Affairs to restrain the abovementioned noticee directors from being directors in other companies. - SEBI shall initiate attachment and recovery proceedings under the SEBI Act and rules and regulations framed thereunder against the Company and others responsible.

18. This order shall come into force with immediate effect.

19. This Order shall be without prejudice to the right of SEBI to initiate prosecution proceedings under Section 24 and adjudication proceedings under Chapter VIA of the Securities and Exchange Board of India Act, 1992 against Garima Homes and Farm Houses Limited, Mr. Shivram Kushwah, Mr. Banabarilal Lodhi, Mr. Balkishan Kushwah, Mr. Banwari Lal Kushwah, Mr. Bijendra Pal Singh and Mr. Jitendra Kumar including other persons who are in default, for the violations as found in this Order.

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

DATE : May 19th, 2016 PRASHANT SARAN PLACE : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA