Order in the matter of I-Nova Solutions Limited

WTM/PS/174/ERO/IMD/MAR/2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992 In respect of – 1. I-Nova Solutions Limited (CIN: U72300WB2007PLC113182) and its Directors, 2. Mr. Jayanta Chakrabarty (PAN: ACRPC5911B; DIN: 01177808), 3. Mr. Rajib Mukherjee (PAN: ALLPM6767C; DIN: 01177878), 4. Mr. Tushar Kanti Chakraborty (PAN: AEXPT4244C; DIN: 02705209) and 5. Mr. Tapan Pal (PAN: CERPP5289K; DIN: 01177934).

Date of hearing: September 04, 2015 Appearance: Of noticees: Mr. Rajib Mukerjee appeared along with his Advocates M/s. Susanta Dutta and Mr. Hindol Nandi. Mr. Tapan Pal appeared in-person. Other noticees failed to appear. For SEBI: Mr. Prasanta Mahapatra, General Manager, Mr. T. Vinay Rajneesh, Assistant General Manager and Ms. Nikki Agarwal, Assistant Manager.

1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”), vide an ex-parte interim Order dated March 31, 2015 (hereinafter referred to as "the interim order") had observed that the company, I-Nova Solutions Limited (hereinafter referred to as "INSL" or "the Company") was prima facie engaged in fund mobilizing activity from the public, by making offer and issuing Redeemable Preference Shares (hereinafter referred to as "RPSs") and allegedly violated the provisions of sections 56, 60 read with section 2(36), 73 of the Companies Act, 1956 read with the Companies Act, 2013 and the provisions of the SEBI (Disclosure and Investor Protection) Guidelines, 2000 (“DIP Guidelines”) read with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“ICDR Regulations”).

2. In order to protect the investors who have subscribed to the impugned offer and issue of RPS and to ensure that the Company and its directors are restrained from carrying on with their fund mobilizing activity, SEBI had issued the following directions: 7. “In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11, 11(4), 11A and 11B of the SEBI Act and Clause 17 of the DIP Guidelines read with Regulation 111 of the ICDR Regulations, hereby issue the following directions – i. INSL shall forthwith cease to mobilize funds from investors through the Offer of Redeemable Preference Shares or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions; ii. INSL and its present Directors, viz. Shri Jayanta Chakrabarty (PAN: ACRPC5911B; DIN: 01177808), Shri Rajib Mukherjee (PAN: ALLPM6767C; DIN: 01177878) and Shri Tushar Kanti Chakraborty (PAN: AEXPT4244C; DIN: 02705209) alongwith its past Director, viz. Shri Tapan Pal (PAN: CERPP5289K; DIN: 01177934), 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. INSL and its abovementioned past and present Directors, are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions; iv. INSL shall provide a full inventory of all its assets and properties; v. The abovementioned past and present Directors of INSL shall provide a full inventory of all their assets and properties; vi. INSL and its abovementioned present Directors shall not divert any funds raised from public at large through the Offer of Redeemable Preference Shares, which are kept in bank account(s) and/or in the custody of INSL. vii. INSL and its abovementioned past and present Directors shall, within 21 days from the date of receipt of this Order, provide SEBI with all relevant and necessary information, as sought vide SEBI letters dated November 26, 2013, December 20, 2013 and January 30, 2014.

8. The above directions shall take effect immediately and shall be in force until further orders. …..”

3. The interim order has also mentioned that the Hon'ble Calcutta High Court vide Order dated August 18, 2014 in Writ Petition No. 22502 (W) of 2014 (Shantanu Ghosh vs. Union of India), had directed as follows "Let no step be taken by the Company or its Directors to alienate and/or transfer, diversify the asset of the companies mentioned in paragraph 1of the petition”.

4. The interim order advised the Company and its present Directors, namely, Mr. Jayanta Chakrabarty, Mr. Rajib Mukherjee and Mr. Tushar Kanti Chakraborty (alongwith its past Director, Mr. Tapan Pal (collectively referred to as “the noticees”) to show cause as to why suitable directions/prohibitions under sections 11(1), 11(4), 11A and 11B of the SEBI Act including the following, should not be taken/imposed against them: i. Directing them jointly and severally to refund money collected through the Offer of Redeemable Preference Shares along with interest, if any, promised to investors therein;

ii. Directing them to not issue prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, for an appropriate period;

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

5. SEBI forwarded the interim order vide letter dated April 01, 2015 to the noticees. The said letters sent to Company, Mr. Jayanta Chakrabarty, Mr. Rajib Mukherjee and Mr. Tushar Kanti Chakraborty returned undelivered. Mr. Tapan Pal, vide his letter dated April 23, 2015, submitted that he resigned from the Company on January 16, 2009. He enclosed copies of Form-32 (evidencing resignation on January 16, 2009), resignation letter dated January 16, 2009 and the Identity Card issued by the election Commission of India.

6. The noticees were afforded an opportunity of personal hearing on September 04, 2015 and this schedule was informed to the noticees vide SEBI letters dated August 11, 2015. As the interim orders were not served on a few noticees, SEBI also made a public notice in the Times of India and Anandbazar Patrika dated September 03, 2015, regarding the proceedings initiated vide the interim order and the personal hearing fixed on September 04, 2015.

7. On September 04, 2015, Noticee, Mr. Rajib Mukherjee appeared along with his advocates Mr. Susanta Dutta and Mr. Hindol Nandi. The Advocates requested time for filing Written Submissions. Liberty was granted to file written submissions within a period of three weeks. Noticee, Mr. Tapan Pal appeared in person. He submitted that he resigned from the company and filed Form- 32. The other noticees failed to appear despite public notice regarding the proceedings and the hearing date in newspapers. The hearing was concluded.

8. Mr. Hindol Nandi, Advocate for Mr. Rajib Mukherjee, vide letter dated September 26, 2015, sought further time to file written submissions on the ground that he was not able to collect the documents. Though, his request was accepted and additional time was granted, no written submissions were filed till date. The other noticees too did not file their response, till date, to the interim order despite the public notice and opportunity.

9. I have considered the interim order, the submissions and material from Mr. Rajib Mukherjee and other material available on record. The interim order has alleged that the Company has made a public issue of RPS without complying with the public issue norms as stipulated under sections 56, 60 and 73 of the Companies Act, 1956 read with Companies Act, 2013 and DIP Guidelines read with the ICDR Regulations.

10. In respect of the charges made in the interim order, I refer to the following portions from the interim order for reference: i. INSL was incorporated on February 7, 2007, with the ROC, Kolkata, West Bengal with CIN as U72300WB2007PLC113182. INSL's Registered Office is at 88A, Sarat Bose Road, 3rd Floor, Kolkata–700026, West Bengal, India.

ii. The Directors of INSL are Jayanta Chakrabarty, Shri Rajib Mukherjee and Shri Tushar Kanti Chakraborty.

iii. Shri Tapan Pal, who was earlier a Director in INSL, has since resigned.

iv. INSL issued "Redeemable Preference Shares" ("Offer of Redeemable Preference Shares") to a large number of investors during the Financial Years 2007–08, 2008–09 and 2009–10, details of which are provided below -

Year Type of Security No. of persons to Total whom RPS were Amount allotted (₹ in Crores) 2007 – 08 750 0.69 Redeemable Preference Shares 2008 – 09 3393 3.05 2009 – 10 148 0.09

Total 4291 3.83

11. To ascertain whether an issue of securities is a 'public issue' or done on 'private placement', a reference to section 67(3) of the Companies Act, 1956 needs to be made: 67. (1) Any reference in this Act or in the articles of a company to offering shares or debentures to the public shall, subject to any provision to the contrary contained in this Act and subject also to the provisions of sub-sections (3) and (4), be construed as including a reference to offering them to any section of the public, whether selected as members or debenture holders of the company concerned or as clients of the person issuing the prospectus or in any other manner. (2) ... (3) No offer or invitation shall be treated as made to the public by virtue of sub-section (1) or sub-section (2), as the case may be, if the offer or invitation can properly be regarded, in all the circumstances- (a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or (b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation … Provided that nothing contained in this sub-section shall apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more: Provided further that nothing contained in the first proviso shall apply to non-banking financial companies or public financial institutions specified in section 4A of the Companies Act, 1956 (1 of 1956).

In terms of section 67(3), as amended by the Companies (Amendment) Act, 2000, with effect from December 13, 2000, no offer or invitation shall be treated as made to the public by virtue of sub-sections (1) or (2), as the case may be, if the offer or invitation can properly be regarded, in all circumstances – (a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or (b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation. More importantly, in terms of the first proviso to the aforesaid section, the provisions of section 67(3) shall not apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more. Therefore, the number of subscribers becomes relevant to judge whether an issue of shares are for public or on a private placement basis, in the light of the above said provision. Therefore, if an offer of securities are made to fifty or more persons, it would be deemed to be a public issue. Non-Banking Financial Companies (NBFCs) and Public Financial Institutions (PFIs) are exempted only from the first proviso to section 67(3). Therefore, NBFC or PFI do not have any restriction on the number of allottees as imposed on a company which is not an NBFC or PFI. However, such companies also need to prove that its offer falls either under clause (a) or (b) of section 67(3) to claim such issuance to be a private placement. The Company is not an NBFC or PFI.

12. The Company has made offer and allotted RPS to more than 49 persons during the FY 2007- 08, 2008-09 and 2009-10 and has mobilized a total of Rs.3.83 crore from investors. Therefore, in terms of the first proviso to section 67(3), the Company has definitely made a public issue of such securities. The Company has not disputed the observations made in this regard in the interim order and has also not provided information and relevant material sought by SEBI during inquiry. By making a public issue of RPSs, the Company was mandated to comply with all the legal provisions that govern and regulate public issue of such securities, including the Companies Act, 1956 and the SEBI Act and regulations. In this regard, I note that in terms of section 55A of the Companies Act, 1956, SEBI shall administer various provisions (as mentioned therein) of the said Act with respect to issue and transfer of securities by listed companies, companies that intend to list and also those companies that are required to list its securities while making offer and issue of securities to the public. While examining the scope of Section 55A of the Companies Act, 1956, the Hon'ble Supreme Court of India in Sahara Case, had observed that: "We, therefore, hold that, so far as the provisions enumerated in the opening portion of Section 55A of the Companies Act, so far as they relate to issue and transfer of securities and non-payment of dividend is concerned, SEBI has the power to administer in the case of listed public companies and in the case of those public companies which intend to get their securities listed on a recognized stock exchange in India." " SEBI can exercise its jurisdiction under Sections 11(1), 11(4), 11A(1)(b) and 11B of SEBI Act and Regulation 107 of ICDR 2009 over public companies who have issued shares or debentures to fifty or more, but not complied with the provisions of Section 73(1) by not listing its securities on a recognized stock exchange".

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

13. The interim order has alleged that the Company failed to comply with sections 56, 60 and 73 of the Companies Act, 1956. In this regard, I observe the following: a. In terms of section 56(1) of the Companies Act, 1956, every prospectus issued by or on behalf of a company, shall state the matters specified in Part I and set out the reports specified in Part II of Schedule II of that Act. Further, as per section 56(3) of the Companies Act, 1956, no one shall issue any form of application for shares in a company, unless the form is accompanied by abridged prospectus, contain disclosures as specified. Section 2(36) of the Companies Act read with section 60 thereof, mandates a company to register its 'prospectus' with the RoC, before making a public offer/ issuing the 'prospectus'. There is no Prospectus produced by the Company with respect to its offer of RPS. Accordingly, I find that the Company has failed to comply with sections 56 and 60.

b. By making a public issue of RPS, the Company had to compulsorily list such securities in compliance with section 73(1) of the Companies Act, 1956. As per section 73(1)

Companies Act, 1956, a company is required to make an application to one or more recognized stock exchanges for permission for the shares or debentures to be offered to be dealt with in the stock exchange. There is no material to say that the Company has filed an application with a recognized stock exchange to enable the RPSs to be dealt with in such stock exchange. Therefore, the Company has failed to comply with this requirement.

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

As the Company failed to make an application for listing such securities, the Company had to forthwith repay such money collected from investors. If such repayments are not made within 8 days after the Company becomes liable to repay, the Company and every director is liable to repay with interest at such rate. The liability of the Company to refund the public funds collected through offer and allotment of the impugned RPSs is continuing and such liability would continue till repayments are made. There is no record to suggest that the Company made the refunds as per law. SEBI is also in receipt of complaints from investors alleging default in payments. The Hon'ble Supreme Court of India in the Sahara case has examined section 73 and made the following observations: "Section 73(1) of the Act casts an obligation on every company intending to offer shares or debentures to the public to apply on a stock exchange for listing of its securities. Such companies have no option or choice but to list their securities on a recognized stock exchange, once they invite subscription from over forty nine investors from the public. If an unlisted company expresses its intention, by conduct or otherwise, to offer its securities to the public by the issue of a prospectus, the legal obligation to make an application on a recognized stock exchange for listing starts. Sub-section (1A) of Section 73 gives indication of what are the particulars to be stated in such a prospectus. The consequences of not applying for the permission under sub-section (1) of Section 73 or not granting of permission is clearly stipulated in sub-section (3) of Section 73. Obligation to refund the amount collected from the public with interest is also mandatory as per Section 73(2) of the Act. Listing is, therefore, a legal responsibility of the company which offers securities to the public, provided offers are made to more than 50 persons."

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

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

e. As the amounts mobilized through the issue of securities have not been refunded within the time period as mandated under law, it would therefore be appropriate to levy an interest @ 15% p.a. as provided for under section 73(2) of the Companies Act, 1956 read with rule 4D (which prescribes that the rates of interest, for the purposes of sub-sections (2) and (2A) of section 73, shall be 15 per cent per annum) of the Companies (Central Government’s) General Rules and Forms, 1956, on the amounts raised by the Company through its offer and issuance of RPS, including Rs.3.83 crore (as alleged in the interim order) due to be repaid by the Company. As stated above, the liability of the Company to refund the public funds collected through offer and allotment of the impugned RPSs is continuing and such liability would cease only if the repayments are made in accordance with the relevant provisions of law.

f. SEBI had issued the DIP Guidelines in exercise of powers under sections 11 and 11A of the SEBI Act. The Guidelines mandates disclosures to the public when a company proposes to make public offer of securities as applicable during the relevant point in time. Though the DIP Guidelines are presently rescinded, the action for any non-compliance of such Guidelines are protected in terms of regulations 111 of the ICDR Regulations. Therefore, the Company was under a statutory mandate to comply with the DIP Guidelines in respect of its offer and issue of RPS. However, it had failed to comply with the following provisions of the DIP Guidelines read with regulation 111(2) of the ICDR Regulations: a. Clause 2.1.1. – (Filing of offer document) b. Clause 2.1.4 – (Application for listing) c. Clause 2.1.5 – (Issue of securities in dematerialized form), d. Clause 2.8 – (Means of finance), e. Clause 4.1 – (Promoters contribution in a public issue by unlisted companies), f. Clause 4.11 – (Lock-in of minimum specified promoters contribution in public issues), g. Clause 4.14 – (Lock-In of pre-issue share capital of an unlisted company) h. Clause 5.3.1 – (Memorandum of understanding), i. Clause 5.3.3 – (Due Diligence Certificate) j. Clause 5.3.5 – (Undertaking), k. Clause 5.3.6 – (List Of Promoters Group And Other Details), l. Clause 5.4 – (Appointment of intermediaries) m. Clause 5.6 – (Offer document to be made public) n. Clause 5.6A – (Pre-issue Advertisement) o. Clause 5.7 – (Despatch of issue material) p. Clause 5.8 – (No complaints certificate) q. Clause 5.9 – (Mandatory collection centres including Clause 5.9.1 (Minimum number of collection centres) r. Clause 5.10 – (Authorised Collection Agents) s. Clause 5.12.1 – (Appointment of compliance officer) t. Clause 5.13 – (Abridged prospectus)

u. Clause 6.0 – (Contents of offer documents) v. Clause 8.3 – (Rule 19(2)(b) of SC(R) Rules, 1957) w. Clause 8.8.1 – (Opening & closing date of subscription of securities) x. Clause 9 – (Guidelines on advertisements by Issuer Company) y. Clause 10.1 – (Requirement of credit rating) z. Clause 10.5 – (Redemption)

14. In view of the above observations, I conclude that the Company made a public issue of RPS during FY 2007 to 2010 and failed to comply with the provisions of sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013 and the above stated provisions of the DIP Guidelines read with the ICDR Regulations.

15. The interim order has also observed that “From the information available on the 'MCA 21 Portal', it is observed that INSL has not filed its Annual Accounts for the Financial Years 2012–13 and 2013–14 and its Annual Returns for the Financial Years 2011–12, 2012–13 and 2013–14, with the ROC, Kolkata”. Even as on date, the last balance sheet that has been filed is for the FY 2011-2012.

16. As per information available in the MCA portal, the following are the present directors of the Company: (a) Mr. Rajib Mukherjee and Mr. Jayanta Chakrabarty were appointed on February 07, 2007 (from date of incorporation of the Company) and still continue as directors of the Company. (b) Mr. Tushar Kanti Chakraborty was appointed on January 01, 2009 and still continues as a director. (c) As per the ‘Register of directors, managing directors, manager and secretary etc’ obtained from the RoC, Kolkata, Mr. Tapan Pal was a director in the Company from February 07, 2007 till January 16, 2009. (d) All the above persons were the directors in the Company’s board when the impugned offer and issue of RPS made during 2007-08, 2008-09 and 2009-10. (e) The Company has been found to have violated sections 56, 60 and 73 of the Companies Act, 1956 and the DIP Guidelines with respect to its public offer and issue of securities during Financial Years 2007-08, 2008-09 and 2009-10.

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

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

(iii) The Company and its directors are also responsible for complying with the DIP Guidelines read with the ICDR Regulations. As the said provisions have not been complied with, they are liable for the consequences of such non-compliance.

(iv) In view of the above observations, the fact that Mr. Tapan Pal subsequently resigned from the Company would not extinguish his liability.

(v) Accordingly, for the reasons mentioned above, Mr. Rajib Mukherjee, Mr. Jayanta Chakrabarty (Managing Director), Mr. Tushar Kanti Chakraborty and Mr. Tapan Pal are liable, as directors of the Company, for the violation of sections 56, 60 and 73 of the Companies Act, 1956 as found in this Order and would also be liable to make refunds in terms of section 73(2) of the Companies Act read with section 27 of the SEBI Act, as ordered herein.

17. I also note that the Hon'ble High Court at Calcutta vide Order dated August 18, 2014 in Writ Petition No. 22502 (W) of 2014 (Shantanu Ghosh vs. Union of India), had directed the Company and its directors as follows "Let no step be taken by the Company or its Directors to alienate and/or transfer, diversify the asset of the companies mentioned in paragraph 1of the petition.". Normally in deemed public issue matters, while directing the Company and persons concerned to make repayments, SEBI, in the interest of investors, grants liberty to the Company for selling its assets for the only purpose of making refunds to the investors. However, such liberty would not be available in this case, in view of the restraint imposed by the Hon’ble High Court.

18. 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 and the SEBI (Disclosure and Investor Protection) Guidelines, 2000 read with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, hereby issue the following directions:

(a) I-Nova Solutions Limited and its directors Mr. Rajib Mukherjee, Mr. Jayanta Chakrabarty (Managing Director), Mr. Tushar Kanti Chakraborty including Mr. Tapan Pal (former director), 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 and the DIP Guidelines), to the investors including the money collected from investors, till date, pending allotment of securities, if any, with an interest of 15% per annum compounded at half yearly intervals, from the date when the repayments became due (in terms of Section 73(2) of the Companies Act, 1956) to the investors till the date of actual payment.

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

(c) The Company/its present management are permitted to sell the assets of the Company only for the sole purpose of making the refunds as directed above and deposit the proceeds in an Escrow Account opened with a nationalised Bank.

However, in view of the restraint order passed by the Hon’ble High Court at Calcutta, vide Order dated August 18, 2014 in Writ Petition No. 22502 (W) of 2014 (Shantanu Ghosh vs. Union of India), the liberty as above shall be suspended, till a suitable dispensation is obtained from the Hon’ble High Court. SEBI shall therefore bring this Order to the notice of the Hon’ble High Court and seek permission for implementation of the direction in the interest of investors and/or for suitable orders.

(d) I-Nova Solutions Limited and its directors Mr. Rajib Mukherjee, Mr. Jayanta Chakrabarty (Managing Director), Mr. Tushar Kanti Chakraborty including Mr. Tapan Pal shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily with wide circulation, detailing the modalities for refund, including details of contact persons including names, addresses and contact details, within fifteen days of this Order coming into effect.

(e) After completing the aforesaid repayments, the Company shall file a certificate of such completion with SEBI, within a period of three months from the date of this Order, from two independent peer reviewed Chartered Accountants who are in the panel of any public authority or public institution. For the purpose of this Order, a peer reviewed Chartered Accountant shall mean a Chartered Accountant, who has been categorized so by the Institute of Chartered Accountants of India ("ICAI").

(f) I-Nova Solutions Limited, Mr. Rajib Mukherjee, Mr. Jayanta Chakrabarty, Mr. Tushar Kanti Chakraborty and Mr. Tapan Pal are also directed to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/securities, if held in physical form.

(g) In case of failure of I-Nova Solutions Limited, Mr. Rajib Mukherjee, Mr. Jayanta Chakrabarty, Mr. Tushar Kanti Chakraborty and Mr. Tapan Pal in complying with the aforesaid directions, SEBI, on the expiry of the three months period from the date of this order, - a) shall recover such amounts in accordance with section 28A of the SEBI Act including such other provisions contained in securities laws. b) may initiate appropriate action against the Company, its promoters/ directors and the persons/ officers who are in default, including adjudication proceedings against them, in accordance with law. c) would make a reference to the State Government/ Local Police to register a civil/ criminal case against the Company, its promoters, directors and its managers/ persons in-charge of the business and its schemes, for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and d) would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company. e) would also make a reference to the Ministry of Corporate Affairs to flag the names of notice directors in its database so that information may be perused by RoC or any other regulatory authority.

(h) I-Nova Solutions Limited is directed not to, directly or indirectly, access the capital market by issuing prospectus, offer document or advertisement soliciting money from the public and are further restrained and prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, from the date of this Order till the expiry of 4 years from the date of completion of refunds to investors as directed above.

(i) I-Nova Solutions Limited, Mr. Rajib Mukherjee, Mr. Jayanta Chakrabarty, Mr. Tushar Kanti Chakraborty and Mr. Tapan Pal are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, with immediate effect. They are also restrained from issuing prospectus, offer document or advertisement soliciting money from the public and associating themselves with any listed public company and any public company which intends to raise money from the public, or any intermediary registered with SEBI. The above directions shall come into force with immediate effect and shall continue to be in force from the date of this Order till the expiry of 4 years from the date of completion of refunds to investors, as directed above.

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

19. This Order is without prejudice to any action, including adjudication and prosecution proceedings that might be taken by SEBI in respect of the above violations committed by the Company, its promoters, directors including former directors and other key persons.

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

21. A copy of this Order shall also be forwarded to the Ministry of Corporate Affairs/concerned Registrar of Companies, for their information and necessary action with respect to the directions/restraint imposed above against the Company and the individuals.

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA Date: March 02nd, 2016 Place: Mumbai