Order in the matter of Golden Life Agro India Limited

ORDER Under sections 11(1), 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992

In respect of (1) Golden Life Agro India Limited, its Directors, namely, (2) Mr. Tipu Sultan, (3) Mr. Biswanath Mondal, (4) Mr. Subhas Sarkar, (5) Mr. Nirjal Pal, (6) Mr. Swapan Sadhukhan, (7) Mr. Chandan Debnath and (8) Mr. Uttam Chakraborty and its Debenture Trustees, namely, (9) Mrs. Jyotsna Sadhukhan and (10) Mrs. Jharna Sarkar

Date of hearing : July 08, 2014 Mr. Bichitra Nanda Muni, Advocate appeared on behalf of all the noticees For Securities and Exchange Board of India : Ms. Anitha Anoop, Deputy General Manager, Mr. Prasenjit Dey, Assistant General Manager and Mr. T. Vinay Rajneesh, Assistant General Manager

1. Securities and Exchange Board of India ("the SEBI") had conducted an enquiry into the business activities of the company, Golden Life Agro India Limited (hereinafter referred to as "the Company" or "GLAIL") pursuant to the receipt of the copy of the Order dated July 15, 2013 passed by the Hon'ble High Court of Calcutta ("the Hon'ble High Court") in the matter of Golden Life Agro India Ltd. vs. State of West Bengal [W. P. No. 16338 (W) of 2013], wherein it was directed:

"Let the matter appear three weeks hence for independent reports to be filed by the State, the Reserve Bank of India and the SEBI into the business conducted by the petitioner company (GLAIL) and its legitimacy."

2. The abovementioned W. P. No. 16338 (W) of 2013 was filed by the Company challenging the Notification issued vide Order No. 1650(19) by the Inspector General Registration, State of West Bengal, "banning the execution and registration of Deed of Conveyance and/or any way transfer the properties of the listed companies.".

3. In the course of the examination, SEBI vide its letters dated July 22, 2013 issued to the Company and its Advocate, inter alia stated "It has come to our notice that you (GLAIL) are raising funds from public by issuing Non-Convertible Redeemable Secured Debentures (hereinafter referred to as "NCDs") ostensibly by way of private placement. No Prospectus or DRHP or statement in lieu of prospectus or information memorandum (was) filed with (SEBI)", and sought the following information/documents :

i. Copy of Prospectus/Red Herring Prospectus/Statement in lieu of Prospectus/Information Memorandum filed with ROC for issuance of NCDs. ii. Copy of the Memorandum and Articles of Association of the company; iii. Audited Balance Sheet and Profit & Loss Account of the company for the last 3 years; iv. Name, addresses and occupation of all the promoters/directors of the company; v. Names and details of the Key Managerial Personnel of the company; vi. Other information in respect of every series of NCDs issued by the company, viz. – a. Date of opening and closing of the subscription list; b. Details regarding the number of application forms circulated inviting subscription; c. Details regarding the number of applications received; d. Details regarding the number of allottees and list of such allottees; e. Number of NCDs allotted and value of such allotment against each allottee's name. f. Details regarding subscription amount raised; g. Date of allotment of NCDs; h. Copies of the minutes of Board/Committee meeting in which the resolution has been passed for allotment; i. Date of dispatch of NCDs; j. Details of the total number of applicants for each of GLAIL's scheme besides the list of final allottee; k. Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of NCDs. l. Terms and conditions of the issue of NCDs. 4. Though the letter issued to the Company returned undelivered, the Advocate of the Company, Mr. T. Talukder, vide reply dated August 6, 2013, while forwarding a copy of the Audited Balance Sheet and Profit & Loss Account for the year ended March 31, 2012 along with a Compact Disc containing details of NCDs issued by GLAIL, inter alia had submitted the following – i. "Copy of Prospectus – No copy filed with ROC as the issue of debenture is on Private Placement.

ii. Date of opening and closing – Date of opening 27.12.2010 and date of closing 31.03.2013. iii. Details regarding the number of applications – No application form circulated to the general public. The application form provided only to the intended subscribers without any right to pass on the offer to any other person to whom the offer was not made directly." 5. The Hon'ble High Court vide Order dated August 06, 2013 passed in the abovementioned matter [i.e., in W. P. No. 16338 (W) of 2013], had directed as under: "Let the matter appear three weeks hence to establish comprehensive reports or affidavits to be filed by the Finance Department of the Government of West Bengal, Reserve Bank of India and the SEBI on the functioning of the petitioner company (GLAIL), the legitimacy of its business and the persons from whom money may have been obtained by the petitioner company. The petitioner company should also indicate a comprehensive list of all its assets and properties.

There will be an order of injunction restraining the petitioner company from dealing with or disposing or alienating any of its fixed assets without the previous leave of Court."

6. Thereafter, in compliance with the Order dated August 06, 2013 of the Hon'ble High Court, SEBI submitted an 'Examination Report' on the activities of the Company, in the hearing held in the matter on September 2, 2013. On the said date, while disposing of the W. P. No. 16338 (W) of 2013, the Hon'ble High Court made the following observations/directions: "SEBI has filed a report, following the representations made by the petitioner company. The report indicates violation of several provisions including the company having resorted to obtaining funds from the public without either applying for mandatory listing or having its offer documents vetted by the appropriate authorities. In view of what appears from the SEBI report, the appropriate authorities are directed to take steps in accordance with law against the petitioner and particularly the officers of the petitioner company responsible for the multiple defaults. There will be an order of injunction restraining the petitioner company from dealing with or disposing of or alienating or encumbering any of its assets without the previous leave of the SEBI and the SEBI leave should not be granted without an Executive Director of SEBI approving the same.

It will be open to the petitioners to cause all of any of their assets or properties to be sold under the aegis of SEBI under any asset sale committee that may be set up by SEBI for the purpose of refund of money which appears to have been illegally obtained from the depositors. Both the SEBI and the ROC should monitor the activities of the petitioner company and ensure strict compliance of this order." 7. In the meanwhile, SEBI had also sought explanations/clarification from M/s. C K Jain & Company, Chartered Accountants (the Auditors of the Company) regarding the 'Audit Report for the year ended March 31, 2013' and also from Neha Kedia (the Company Secretary of the Company) regarding the 'Compliance Certificate for the year ended March 31, 2013'. Pursuant to submission of 'Examination Report' to the Hon'ble High Court and upon receipt of the abovementioned replies from Auditors and Company Secretary, SEBI had vide letter dated October 25, 2013, sought clarification and also advised GLAIL to submit rectified copies of Annual Account and Annual Report of the company for the year ended March 31, 2012 and also the annual account for the year 2012–13, in view of inter alia the following – "Auditor's report for the year 2011 – 2012, auditor has certified that the company has not issued any debentures during the year.

As per the Audited Balance Sheet of your company for the year 2011-2012, it was noticed that the company had issued debentures for ₹11,90,62,085. It is observed that such issuance on more than once occasion to more than 49 persons without following SEBI Regulations and without filing any offer document with SEBI, prima facie, is in contravention of SEBI Act, 1992 and Regulations made thereunder. … Page 34 of the report for the same year; practicing company secretary has certified that there was no redemption of preference shares or debentures during the financial year. But as per Audited Balance Sheet for the year 2011-2012, there is a redemption of debentures in the same year for an amount of `2,50,16,855. … we had taken up the matter with your auditor as well as the company secretary … it was replied by your auditor that the company did issue debentures in the year 2011 – 12 for an amount of `12,19,64,355 and confirmed that they had already submitted the rectified report to the management. … However it is noticed that you had not filed the rectified report through your advocate on August 6, 2013, although the same was available with you … Further, as per debenture details given by you, it was observed that the company has also issued debentures in the year 2009 – 2010 for an amount of `5000 but as per the submissions made by you and MCA portal, date of incorporation of the company is September 15, 2010. If that be so, please clarify as to how the company has issued debentures prior to its incorporation."

8. A copy of the abovementioned letter dated October 25, 2013, which was returned to SEBI as undelivered, was subsequently forwarded to the Company's Advocate, Mr. T. Talukder on November 22, 2013, in accordance with the request made by him vide letter dated October 28, 2013. However, the Company (through its advocate) failed to respond to this letter. Thereafter, SEBI issued a public advisory in several leading national and regional newspapers on November 27, 2013, cautioning investors against the illegal mobilization of funds by GLAIL. In response to the abovementioned public advisory issued by SEBI, the Company vide letter dated December 27, 2013, while stating that it had instructed its Advocate to challenge the Order of the Hon'ble High Court dated September 2, 2013 [in W. P. No. 16338 (W) of 2013], inter alia requested SEBI to not make any such further publication. SEBI vide letter dated January 10, 2014, while acknowledging the receipt of GLAIL's letter dated December 27, 2013, advised it to the submit the following information/documents: i. Certified copies of Balance Sheet, P&L and Cash Flow Statement of the company for the last three years i.e. 2010–11, 2011–12 & 2012–13; ii.

Details of all the movable and immovable assets of GLAIL. 9. A copy of the abovementioned letter dated January 10, 2014, which returned undelivered, was subsequently forwarded to the Mr. B. N. Muni, Advocate on February 10, 2014, in accordance with the request made by the Company vide letter dated December 27, 2013. However, GLAIL (through its advocate) has not responded to the abovementioned letter.

10. Thereafter, SEBI on considering the material available on record i.e. correspondences exchanged between SEBI and the Company, the documents contained therein; information obtained from the 'MCA 21 Portal'; the Examination Report submitted to the Hon'ble High Court; replies received from the Company's Auditors and the Company Secretary, the documents available on record, SEBI came to a prima facie observation that the Company is engaged in fund mobilizing activity from the public through its offer of Non-Convertible Redeemable Secured Debentures ("NCDs") which were done in contravention of the provisions of sections 56, 2(36) read with 60, 73, 117B and 117C of the Companies Act, 1956 read with the Companies Act, 2013 and the various provisions of the SEBI (Issue and Listing of Debt Securities), Regulations, 2008 ("the Debt Securities Regulations"). In view of such prima facie violations committed by the Company, its directors and debenture trustees, and in order to protect the interest of investors and to ensure only legitimate fund raising activities are carried on by the Company, SEBI vide an ex-parte interim

Order dated May 15, 2014 ("the SEBI Order") had issued the following directions against the Company and its directors :

".......... 14. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11, 11(4), 11A and 11B of the SEBI Act read with the Debt Securities Regulations and the Debenture Trustee Regulations, hereby issue the following directions – i. GLAIL shall not mobilize funds from investors through the issue of Non–Convertible Redeemable Secured Debentures or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions; ii. GLAIL and its Directors, viz. Shri Tipu Sultan, Shri Biswanath Mondal, Shri Subhas Sarkar, Shri Nirjal Pal, Shri Swapan Sadhukhan, Shri Chandan Debnath and Shri Uttam Chakraborty, 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. GLAIL and its abovementioned Directors shall not dispose of any of the properties or alienate or encumber any of the assets owned/acquired by that company through the issue of Non–Convertible Redeemable Secured Debentures, without prior permission from SEBI, in consonance with the Order of the Hon'ble Kolkata High Court passed on September 2, 2013 in W. P. No. 16338(W) of 2013; iv.

GLAIL and its abovementioned Directors shall not divert any funds raised from public at large through the issue of Non–Convertible Redeemable Secured Debentures, which are kept in bank account(s) and/or in the custody of GLAIL; v. Smt. Jyotsna Sadhukhan and Smt. Jharna Sarkar are prohibited from continuing with their present assignment as debenture trustees in respect of the issue of Non–Convertible Redeemable Secured Debentures of GLAIL and also from taking up any new assignment or involvement in any new issue of debentures, etc. in a similar capacity, from the date of this order till further directions." 11. The SEBI Order has also observed that the Company was incorporated on September 15, 2010 with the Registrar of Companies, Kolkata, West Bengal. The Directors of the Company are Mr. Tipu Sultan, Mr. Biswanath Mondal, Mr. Subhas Sarkar, Mr. Nirjal Pal, Mr. Swapan Sadhukhan, Mr. Chandan Debnath and Mr. Uttam Chakraborty. The Company had invited subscription for NCDs of `2546 lakhs in accordance with its schemes/plans.

(i) As per Scheme I (Multiplier Non-Convertible Redeemable Secured Debenture) under Plan A, 36 debentures are issued for a price of Rs.3600/- and the redemption value is Rs.4230/- after a period of 15 months+ 1 day. Similarly, under this Plan, the Company has solicited subscriptions for issue of 48 debentures (issue price: Rs.4800/-; redemption value - Rs.6315/-; and redemption period - 27 months + 1 day), 36 debentures (issue price - Rs.3600/-; redemption value - Rs.5238/-; and redemption period : 39 months + 1 day) and 60 debentures (issue price - Rs.6000/-; redemption value - Rs.10410/-; and redemption period - 63 months + 1 day).

(ii) As per Scheme II, the Company has three plans - Plan B, C and D. The issue price (for minimum 10 debentures) under such plans is Rs.1000/- and the redemption value changes as per the redemption period. For example, under Plan B, the redemption value is Rs.1500/- for a 3 years redemption period; and Rs.2000/- for a 4.5 years redemption period. Under Plan C, the redemption value is Rs.3000/- for 7 years redemption period and Rs.6000/- for a 10 years redemption period. For plan C, the redemption periods are 12 years (Rs.10000/-) and 15 years (Rs.14000/-).

(iii) Under Scheme III and Plan E, the Company solicits a minimum subscription of Rs.50,000/-with 'Dividend payable monthly' and the rate of such 'dividend' varies as per the redemption period. For redemption period of 1 year +1 day, the rate is 12%; for 3 years it is 13%; for 5 years it is 14% and for 10 years, the rate is 15%. The brochure/solicitation material also mentions that a maturity bonus of 1.5% for 5 years and 2% for 10 years is available for this plan.

(d) The Company had issued NCDs on several occasions since incorporation, to a large number of investors, details of which are reproduced below: Type of No. of Total Amount Year subscribers Security (` in Crores) to the Issue *2009-10 NCDs 1 0.0005 2010-11 NCDs 4998 2.31 2011-12 NCDs 19904 8.91 2012-13 NCDs 12 0.0855 Total 24915 11.30 (approx.)

* (seems to be a typographical error by the company, as the company was incorporated on Sept 15, 2010, i.e., during FY 2010-2011)

(e) As the Company had offered and allotted NCDs to more than 49 investors during the financial years 2010-2011 and 2011-2012, the issue of NCDs was a public issue in terms of first proviso to section 67(3) of the Companies Act, 1956.

(f) The SEBI Order had also observed from the provisional balance sheet of the Company for the year 2012-2013, that Debentures issued by the Company was for `22.50 Crores and the application money received on such Debentures was `7.70 Crores. The SEBI Order has alleged that the Company failed to comply with the requirements specified for public issue of securities as provided under section 56, section 60 read with section 2(36), section 73 of the Companies Act, 1956 read with the provisions of the Debt Securities Regulations.

(g) The SEBI Order had further observed that the Company had failed to provide information/documents to SEBI in respect of its issuance of NCDs to the public, as advised by SEBI during the preliminary examination. The Company was also alleged to have provided incomplete and contradictory information with respect to its offer of NCDs for the period 2012- 2013. The relevant observation from the SEBI Order is mentioned below :

"13.12 In addition, I note that GLAIL submitted incomplete and contradictory information in respect of the "Offer of NCDs" for the period 2012–13, wherein while submitting to SEBI that the amount raised during the period was `0.0855 Crores, it was however, observed from the provisional balance sheet for that financial year (as submitted by GLAIL in W. P. No. 16338 (W) of 2013), that the Debentures issued by that company was `22.50 Crores and the application money received on such Debentures was `7.70 Crores ............ I find that more than a reasonable opportunity has been afforded to GLAIL to respond to SEBI and its refusal do so, when considered in light of the abovementioned prima facie finding at paragraphs 13.1–13.11, leads me to believe that such refusal to submit the information sought was only to conceal the true nature and operation of the fund mobilising activity by way of the "Offer of NCDs".

(h) The SEBI Order further observed that the Company had appointed Mrs. Jyotsna Sadhukhan and Mrs. Jharna Sarkar as its Debenture Trustees with respect to its issue of NCDs and that the said individuals have prima facie failed to meet the eligibility criteria specified under the SEBI (Debenture Trustees) Regulations, 1993 ("the DT Regulations). Therefore, the Debenture Trustees were alleged to have acted as unregistered Debenture Trustees in violation of section 12(1) of the Securities and Exchange Board of India Act, 1992 ("the SEBI Act") and regulation 7 of the DT Regulations.

12. The directions issued vide the SEBI Order came into immediate effect from the date of the Order. The SEBI Order advised the Company, its directors and debenture trustees that they may file their reply and avail an opportunity of personal hearing. For the sake of convenience, the Company, its directors and debenture trustees are collectively referred to as "the noticees".

13. Thereafter, the Company vide letter dated June 04, 2014 sought extension of time for filing its reply. In this regard, the noticees were afforded an opportunity of personal hearing on July 08, 2014 and the same was communicated vide SEBI's letter dated June 23, 2014.

14. In the personal hearing held on the scheduled date, Mr. Bichitra Nanda Muni, Advocate appeared for the noticees and requested permission to file written submissions with respect to the observations and allegations contained in the SEBI Order. This request was allowed. Thereafter, the learned Advocate filed written submissions vide letter dated July 12, 2014, wherein the following submissions were inter alia made: a) The Company has obtained 'charge creation certificate' for the amount of Rs.25,46,00,000/- from the concerned Registrar of Companies regarding its privately placed debentures. b) The Hon'ble High Court of Calcutta vide Order dated September 02, 2013 has observed "It will be open to the petitioners to cause all or any of their assets or properties to be sold under the aegis of SEBI under any asset sale committee that may be set up by SEBI for the purpose of refund of money which appears to have been illegally obtained from the depositors. Both SEBI and Registrar of Companies, West Bengal, should monitor the activities of the petitioner company and ensure strict compliance of this order. " This portion of the Hon'ble High Court's was not taken into consideration in the SEBI Order. c) The request made by Company/Advocate vide letter dated December 27, 2013 for formation of 'sale committee' and the name of members was not answered.

d) In pursuance of the Hon'ble High Court's Order, the Company claims to provide the list of its assets (immovable) along with photo-copy of sale deeds. (Annexure 'C' of this reply). e) The valuation report of the cold storage and other such assets of the Company were stated to be placed as Annexure 'D' of the reply. f) The audited balance sheet for the year ended on March 31, 2013 was annexed as Annexure 'E'. g) The Company undertook that it does not mobilize any funds from investors by further issuance of equity shares or any other securities or by way of any invitation from public, either directly or indirectly, or through any unsecured loans. h) The Company and its directors undertook not to issue any prospectus or any offer documents or issue advertisements soliciting money from public by issue of any sort of securities either directly or indirectly. i) The Company and its directors further undertook that they would not divert, dispose, alienate and encumber any assets and properties of the Company. j) The Debenture Trustees of the Company undertook that they will not involve any such new assignment or involvement in any new issue of debentures till further orders.

The Company has submitted that it has provided substantial assets vide annexures 'C' and 'D' for earlier redemption of total unpaid debentures and accordingly it is desirable that SEBI treats the matter as closed and no action be contemplated against the Company or its directors. Vide letter dated July 24, 2014, the Company has submitted that it is engaged in fulfilling its commitment made towards the customers and is trying its utmost effort for disposing its assets and make payments.

15. Thereafter, vide letter dated November 03, 2014, the Company stated that since the filing of the writ petition before the Hon'ble Calcutta High Court (i.e., W.P. 16338 of 2013), the Company is not collecting money from the general public. The Company reiterated that it has submitted the list of its assets and requested SEBI to speed up the formation of the 'Asset Sale Committee' in compliance with the directions of the Hon'ble Calcutta High Court. The Company undertook to provide information and documents if sought by SEBI. The Company also stated that in order to prove its bonafide intention in making payments to its creditors and to comply with the Order of the Calcutta High Court and to assist the SEBI/Asset Sale Committee, it is willing to make a suitable newspaper advertisement in leading dailies. The Company also forwarded a letter dated November 17, 2014 requesting SEBI to form the 'Asset Sale Committee'.

16. I have perused the observations and allegations made in the SEBI Order, the submissions made by the Company/noticees and other material available on record. The allegation against the noticees are that - (a) the Company had issued NCDs to the public {in terms of the first proviso to section 67(3) of the Companies Act, 1956} without complying with the public issue norms laid down under sections 56, 60 read with 2(36) and 73 of the Companies Act, 1956 (read with section 465 of the Companies Act, 2013) and the other requirements specified under the Debt Securities Regulations; (b) The directors of the Company namely Mr. Tipu Sultan, Mr. Biswanath Mondal, Mr. Subhas Sarkar, Mr. Nirjal Pal, Mr. Swapan Sadhukhan, Mr. Chandan Debnath and Mr. Uttam Chakraborty, are responsible for the above alleged violations; and (c) The Debenture Trustees, namely, Mrs. Jyotsna Sadhukhan and Mrs. Jharna Sarkar did not meet the eligibility criteria as they were not registered as Debenture Trustees with SEBI, as required under section 12(1) of the SEBI Act and regulation 7 of the DT Regulations.

17. I have perused the reference/letter dated January 24, 2014 from the Office of Registrar of Companies (West Bengal) to SEBI, wherein, it is stated that as per Form-20B (Form for filing annual return by a company having a share capital with the RoC) dated August 14, 2012 in respect of Annual Return of the Company for the year ended March 31, 2012, the indebtedness of the Company is shown as Rs.11,29,99,400/-. The Company had informed RoC that it has raised/issued debentures of Rs.11,29,99,400/- till March 31, 2012 from 24,915 allottees. In view of the same, RoC had inferred that debentures were issued to large number of persons thereby violating public issue norms governed by SEBI.

18. I have perused the Balance Sheet of the Company for the financial year 2012-2013, wherein the Company has stated that as at March 31, 2013, its Long Term Borrowing (Note:3) i.e., Non- Convertible Debenture was Rs.16,22,41,930/- (Rs.16 crores approx.). This amount stood at Rs.9,40,45,230/- as on March 31, 2012. The Company has also stated that the "above Non Convertible debentures have been issued at an effective interest rate of 14% p.a....".

19. The Company, as per the SEBI Order, is alleged to have offered and issued securities i.e., NCDs during the financial years 2010-2011, 2011-2012 and 2012-2013 to 24,915 investors and raised approximately 11.30 crores from the public. The SEBI Order has stated that the Company had issued NCDs to 12 investors during 2012-2013 and raised Rs.85,500/-. However, as per the Balance Sheet which has now been filed, it is seen that the Company has raised Rs.6,81,96,700/-during 2012-2013. The Balance Sheet does not disclose the number of allottees. However, going by the past trends, it is likely that this substantial amount too might have been raised from more than 49 investors. The noticees have not asserted that this amount was raised from less than 50 investors. Further, the latest Balance Sheet i.e., for the period 2013-2014 is not available on the MCA website. Therefore, SEBI is not able to ascertain the amount collected by the Company from the public by issuing the NCDs during the financial year 2013-2014 and thereafter.

20. Considering the above, it can be observed that the Company by issuing NCDs to more than 49 investors during the financial years - 2010-2011, 2011-2012 and 2012-2013 had made a public issue of NCDs by virtue of first proviso to section 67(3) of the Companies Act, 1956. Section 67 of the Companies Act, 1956, reads as under :

"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).”

A reading of the above, makes it clear that in terms of the first proviso to section 67, 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. In this case, the Company had issued and allotted NCDs during the above said financial years to investors who are substantially in excess of 49. Therefore, the offer and issue of NCDs by the Company cannot be said to be a 'private placement', as contended by the Company. By virtue of the above provision, the issue of NCDs by the Company is a public issue of such securities. In this context, I refer and rely on the below mentioned observation made by the Hon'ble Supreme Court of India in the matter of Sahara India Real Estate Corporation Limited & Ors. Vs. SEBI (Civil Appeal no. 9813 and 9833 of 2011) (hereinafter referred to as the 'Sahara Case'): ... ... that any share or debenture issue beyond forty nine persons, would be a public issue attracting all the relevant provisions of the SEBI Act, regulations framed thereunder, the Companies Act, pertaining to the public issue. …"

21. As it is found that the Company has issued NCDs to the public during FY-2010-2011, 2011- 2012 and 2012-2013, it was supposed to comply with public issue norms as prescribed under the Companies Act, 1956 including sections 56, 60 [read with section 2(36)] and 73 of the Companies Act, 1956. 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'. Further, by issuing NCDs to more than 50 persons, the Company had to compulsorily list such securities in compliance with section 73 of the Companies Act, 1956. As per section 73(1) and (2) of the Companies Act, 1956, a company is required to make an application to one or more recognized stock exchanges for permission for the shares or debentures to be offered to be dealt with in the stock exchange and if permission has not been applied for or not granted, the company is required to forthwith repay with interest all moneys received from the applicants. The Company appears to have contravened the said provisions as it has neither made an application seeking listing permission nor refunded the amounts on account of such failure. The Company has also not complied with the provisions of section 73(3) as it has not kept the amounts received from investors in a separate bank account and failed to repay the same in accordance with section 73(2) as observed above. The Company has admittedly did not comply with the above said provisions of law.

22. In terms of section 55A of the Companies Act, 1956, sections 55 to 58, 59 to 81 (including Sections 68A, 77A and 80A), 108, 109, 110, 112, 113, 116, 117, 118, 119, 120, 121, 122, 206, 206A and 207, so far as they relate to the issue and transfer of securities shall be in the case of listed public companies and in the case of those public companies which intend to get their securities listed on any recognized stock exchange in India, be administered by SEBI. Accordingly, under sections 11 and 11A of the SEBI Act, SEBI could regulate inter alia the issue of capital by companies and the contents of prospectus for such issue. Whenever a company which raises capital from the public through issue of securities, it has to comply with the SEBI Act and the rules, regulations and guidelines framed thereunder in addition to the provisions of the Companies Act. This position has been strongly reiterated by the Hon'ble Supreme Court also in the Sahara case.

23. The Company had issued NCDs. SEBI has framed the Debt Securities Regulations in order to govern and regulate the issuance of debt securities including debentures. As alleged in the SEBI Order, the Company has contravened the following provisions of the Debt Securities as it did not comply with the same in respect of its issuance of NCDs during the relevant years: Regulation 4(2)(a) – Application for listing of debt securities Regulation 4(2)(b) – In-principle approval for listing of debt securities Regulation 4(2)(c) – Credit rating has been obtained Regulation 4(2)(d) – Dematerialization of debt securities Regulation 4(4) – Appointment of Debenture Trustee Regulation 5(2)(b) – Disclosure requirements in the Offer Document Regulation 6 – Filing of draft Offer Document Regulation 7 – Mode of disclosure of Offer Document Regulation 8 – Advertisements for Public Issues Regulation 9 – Abridged Prospectus and application forms Regulation 12 – Minimum subscription Regulation 14 – Prohibition of mis-statements in the Offer Document Regulation 15 – Trust Deed Regulation 16 – Debenture Redemption Reserve Regulation 17 – Creation of security

Regulation 19 – Mandatory Listing Regulation 26 – Obligations of the Issuer, etc. 24. I also note that Mr. Tipu Sultan, Mr. Biswanath Mondal, Mr. Subhas Sarkar, Mr. Nirjal Pal, Mr. Swapan Sadhukhan, Mr. Chandan Debnath and Mr. Uttam Chakraborty are the directors of the Company. There has been no dispute regarding this fact from anyone of the individuals. These individuals were the first subscribers to the Company's Memorandum of Association, executed on September 06, 2010. They, therefore, are also the promoters of the Company. These directors are responsible for the above contraventions committed by the Company in not adhering to the public issue norms stipulated under the Companies Act, as alleged in the SEBI Order. The RoC reference dated January 24, 2014 has given the following details with respect to the directors:

Sr.No. Name and Address Date of Remarks Father's Name Appointment 1 Subhas Sarkar, S/o Subhash Mayanguri, 15/09/2010 Kunjalal Sarkar Jalpaiguri, West Bengal 735224 2 Biswanath Mondal, Somra Madhyapara, 15/09/2010 Resigned w.e.f S/o Gobindo Mauja Somra JL No. 3, 01/10/2012 Chandra Mondal Somra 2 No. Balagrah, West Bengal 712123 3 Swapan Sadukhan At-AModghata, GP 15/09/2014 Resigned w.e.f S/o Rabindranath Mogra-1, PS Mogra, 01/10/2012 Sadhukhan Dist. Hoogly, Mogra, West Bengal 712502 4 Niraj Pal, S/o Vill Sripurbazar PO, 15/09/2014 Resigned w.e.f Niranjan Pal Sripurbazar, Hoogly, 01/10/2012 West Bengal 712514 5 Uttam At Purba Tarapur, 15/09/2014 Chakraborty S/o Pashimpara, Mouja, Kamalakanta Tarapura District Nadia, Chakraborty Ranaghat, West Bengal 741201 6 Tipu Sultan, S/o Barui Para, Kalna, 15/09/2014 Appointed as MD Haidar Ali Burdwan, West Bengal w.e.f 0/104/2011 713409 7 Chandan Debnath At- Dakshin Para 15/09/2014 S/o Priyalal (AmtalaSomira, Debnath Sukhariya, Balagarh Dist. Hooghly, West Bengal 712123

Though a few directors, namely Mr. Biswanath Mondal, Mr. Swapan Sadhukhan and Mr. Nirjal Pal have resigned from their position as directors, they would be liable for the contravention committed by the Company for the period during which they were the directors. Further, it is noted that all the above persons are the promoters of the Company, wherein Mr. Tipu Sultan (Managing Director) holds 15.79% and the others hold 14.04% each in the Company's equity capital.

The RoC reference has also stated the following : ".................. 6) The Balance Sheet of the company for the year ended 31/03/2012 shows that the amount of issued Debentures Rs. 940.95 lac, Other Long Term Liabilities Rs. 89.97 lac, Other Current Liabilities Rs.195.91 lac, Trade Payables Rs. 4.65 lac. Whereas the Tangible Assets Rs. 759.49 lac, Long Term Loans and Advance Rs. 173.00 lac, Inventories Rs. 36.41 lac, Non current Assets Rs. 59.71 lac, Other Current Assets Rs. 11. 5 0 lac and Cash and Equivalents Rs. 125.60 lac. This indicates that almost entire amount of assets of the company are made from borrowed and loaned money either from the issue of Debentures or from Current Liabilities. 7) In regard to the amount of issued Debentures of Rs. 940.45 as on 31/03/2012, neither, any list of debenture holders available nor any Debenture Redemption Reserved (DRR) has been created. This is an alarming fact that the company has no provisions for repayment of borrowed money collected by issue of Debentures. .........." 25. As regards the Debenture Trustees, Mrs. Jyotsna Sadhukhan and Mrs. Jharna Sarkar, I note that the SEBI Order has alleged that they are not registered as debenture trustees as required under section 12(1) of the SEBI Act and the DT Regulations. In this regard, I have perused the copy of the Extract of Minutes of the Extra Ordinary General Meeting of the Board of Directors of the Company held at its registered office of December 10, 2010, wherein the Board had unanimously decided to appoint Mrs. Jyotsna Sadhukhan and Mrs. Jharna Sarkar as debenture trustees for issue of various series of secured debentures of the Company. The board had authorized Mr. Tipu Sultan, Managing Director of the Company to inter alia take all steps for the execution of the debenture trust deed and creation of charge in favour of the debenture trustees from time to time. I have also perused the Deed of Trust executed on December 10, 2010 between the aforesaid debenture trustees and the Company. In the written submissions filed pursuant to the personal hearing, the Debenture Trustees of the Company undertook that they will not involve any such new assignment or involvement in any new issue of debentures till further orders.

26. To perform the functions or act as a debenture trustee, SEBI has, under section 12(1) read with section 11(2)(b) of the SEBI Act, mandated that a trustee (in respect of debentures) who is associated with the securities market shall buy, sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained from SEBI in accordance with the regulation made under the SEBI Act. SEBI has also framed the DT Regulations, prescribing the conditions, responsibilities and obligations of a debenture trustee. Chapter II thereof deal with 'Registration of Debenture Trustees'. Regulation 3 prescribes about the manner of making an application for registration, regulation 5 states that such application should conform to requirements and regulation 6A deals with criteria for fit and proper person. Further, regulation 7 stipulates that only (i) a schedule bank carrying on commercial activity or (ii) a public financial institution within the meaning of section 4A of the Companies Act, 1956 or (iii) an insurance company or (iv) body corporate shall be entitled to act as a debenture trustee. The individuals who are appointed by the Company are natural persons and do not satisfy the eligibility conditions prescribed under the DT Regulations. Therefore, Mrs. Jyotsna Sadhukhan and Mrs. Jharna Sarkar have contravened the provisions of section 12(1) of the SEBI Act and the DT Regulations, as alleged vide the SEBI Order.

27. Therefore, in view of the violations committed by the Company, its directors and the persons appointed as debenture trustees and in order to safeguard the interest of investors who had invested in the Company and also the integrity of the securities market, I deem it appropriate to pass a direction against the Company to repay the monies collected against issue of NCDs or against promise to allot NCDs (monies which are kept pending allotment) and other attendant directions. I also note that the Hon'ble High Court of Calcutta vide Order dated September 02, 2013 in W.P. 16338(W) of 2013 - Golden Life Agro India Limited and others vs. State of Bengal and others had observed/directed the following : "............ There will be an order of injunction restraining the petitioner company from dealing with or disposing of or alienating or encumbering any of its assets without previous leave of the SEBI and the SEBI leave should not be granted without an Executive Director of SEBI approving the same. It will be open to the petitioners to cause all or any of their assets or properties to be sold under the aegis of SEBI under any asset sale committee that may be set up by SEBI for that purpose of refund of money which appears to have been illegally obtained from the depositors. Both SEBI and the Registrar of Companies, West Bengal, should monitor the activities of the petitioner company and ensure strict compliance of this order. ................"

In this respect, I also note the following remark made by the RoC vide its reference dated January 24, 2014 to SEBI - "This indicates that almost entire amount of assets of the company are made from borrowed and loaned money either from the issue of Debentures or from Current Liabilities". As there is no bar or restraint on SEBI in passing of this Order and considering the above observations, it would be in the interest of investors that the Company liquidates its assets and properties for the sole purpose of making the repayments as directed below. However, any sale of assets by the Company for the purpose of refunds to its investors shall be done under the aegis of the Asset Sale Committee constituted by SEBI pursuant to the aforesaid directions of the Hon'ble High Court of Calcutta.

28. In view of the foregoing, I in exercise of the powers conferred under section 19 of the Securities and Exchange Board of India Act, 1992 read with sections 11(1), 11A, 11B and 11(4) thereof and regulation 28 of the Debt Securities Regulations, hereby issue the following directions :

(i) Golden Life Agro India Limited (CIN - U01403WB2010PLC153027, PAN – AADCG9933C), its Directors and promoters, namely, Mr. Tipu Sultan (DIN - 02417223, PAN – AVJPS0723J), Mr. Biswanath Mondal (DIN – 03188599), Mr. Subhas Sarkar (DIN – 03034180, PAN – APNPS2689K), Mr. Nirjal Pal (DIN – 03034193, PAN – AQOPP4638B), Mr. Swapan Sadhukhan (DIN – 03188592, PAN – BYHPS5176F), Mr. Chandan Debnath (DIN – 03188595, ATZPD5725F) and Mr. Uttam Chakraborty (DIN – 03188597), shall jointly and severally, forthwith refund the money collected by the Company through its illegal and irregular offer and allotment of NCDs including the money collected from investors, till date, pending allotment of securities, if any, with interest of 15% per annum from the date of receipt of money from the investors till the date of repayment.

(ii) As the Hon'ble Calcutta High Court had vide Order dated September 02, 2013 restrained the Company from disposing of or alienating or encumbering any of its assets without previous leave of the SEBI and has also directed the Company/petitioners to cause all or any of their assets or properties to be sold under the aegis of SEBI under any Asset Sale Committee that may be set up by SEBI for the purpose of refunding of money to the depositors, the Company is directed to handover all the original documents of the properties and peaceful possession of the properties and the possession of saleable movable assets and an inventory of all its assets, to such Asset Sale Committee. The Company shall thereafter arrange for sale of its assets under the aegis of such Asset Sale Committee in compliance with the directions of the Hon'ble High Court for making the above directed refunds to the investors.

(iii) The proceeds of such sale shall be kept with an Escrow Agent who shall preferably be a Scheduled Commercial Bank or an Asset Reconstruction Company ('ARC') or an institution of standing, as may be decided by the Asset Sale Committee, who would release the funds to the debenture holders/investors with the supervision of the Asset Sale Committee.

(iv) The Asset Sale Committee shall cause a public notice to be issued, in all editions of two National Dailies (one English and one Hindi) with wide circulation and also a vernacular daily (Bengali language), 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.

(v) Golden Life Agro India Limited, its Directors and promoters, namely, Mr. Tipu Sultan, Mr. Biswanath Mondal, Mr. Subhas Sarkar, Mr. Nirjal Pal, Mr. Swapan Sadhukhan, Mr. Chandan Debnath and Mr. Uttam Chakraborty are 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.

(vi) Mr. Tipu Sultan, Mr. Biswanath Mondal, Mr. Subhas Sarkar, Mr. Nirjal Pal, Mr. Swapan Sadhukhan, Mr. Chandan Debnath and Mr. Uttam Chakraborty are restrained from associating themselves, as a director or a promoter, with any listed public company and any public company which intends to raise money from the public, from the date of this Order till expiry of 4 years from the date of completion of refunds to investors as directed above.

(vii) Mrs. Jyotsna Sadhukhan and Mrs. Jharna Sarkar shall not offer themselves to be engaged as debenture trustees or in any capacity as an intermediary in the securities market, without obtaining a certificate of registration to undertake that assignment as required under law. Further, these individuals are restrained from accessing the securities market and are further restrained from buying, selling or dealing in securities, in any manner whatsoever, for a period of 4 years.

29. The above directions shall come into force with immediate effect.

30. This Order shall be without prejudice to any further action that may be initiated by SEBI, in accordance with law, against the Company and its directors/promoters for the violations as observed in this Order.

31. Copies of this Order shall be served on the recognised stock exchanges and depositories for information and necessary action.

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA Date : January 07, 2015 Place: Mumbai