Order in the matter of Life Care Real Developers Limited[SAT Appeal No.:275/2016]

WTM/PS/99/NRO/DEC/2015 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 the matter of Life Care Real Developers Limited In respect of: 1. Life Care Real Developers Limited [PAN: AABCL8415G], 2. Mr. Arshad Hussain [PAN: AAVPH7486C], 3. Ms. Shiba Pravin [PAN: ATOPP9889R], 4. Mr. Mohd. Seraj Lari [PAN: AEKPL9354C], 5. Mr. Rajneesh Chandra Shukla [PAN: BHCPS8238J], 6. Mr. Yogendra Pratap Shahi [PAN: ATBPS3325E], 7. Mr. Mohammad Aftab Alam [PAN: ANIPA3040P] and 8. Mr. Mohd Gani [PAN: BIGPG0523B]. Date of hearing: May 08, 2015, May 22, 2015 and June 25, 2015 Appearance: For Noticees: Mr. Arshad Hussain, Director Mr. Mohd. Seraj Lari, Director, Mr. Rakesh Khanna, Chartered Accountant. For SEBI: Mr. Mohd. Atif Alvi, Deputy General Manager, Mr. Pradeep Kumar, Assistant General Manager, Mr. Yogesh Dudi, Assistant General Manager.

1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’), vide an ex-parte interim Order dated September 29, 2014 (hereinafter referred to as ‘the interim order’) had observed that the company, Life Care Real Developers Limited (hereinafter referred to as ‘LCRDL’ or ‘the Company’) is prima facie engaged in fund mobilising activity from the public, by making offer and issuing Redeemable

Preference Shares (hereinafter referred to as ‘RPS’) and had allegedly violated the provisions of Sections 56, 60 (read with Section 2(36)), 67, 73 of the Companies Act, 1956 read with the Companies Act, 2013. In order to protect the interest of investors and to ensure that only legitimate fund raising activities are carried on by the Company and its directors, SEBI had issued the following directions: “… … 19. In view of the foregoing, I, in exercise of powers conferred upon me under Sections 11, 11 (4), 11A and 11B of the SEBI Act, hereby issue the following directions: a) LCRDL shall not mobilize funds from investors through the issue of RPS or through the issue of equity shares or any other securities, to the public and/ or invite subscription, in any manner whatsoever, either directly or indirectly till further orders; b) LCRDL and its Directors viz., Mr. Arshad Hussain (DIN: 02843064), Mr. Mohammad Aftab Alam (DIN: 06427105), Mr. Mohd Gani (DIN: 06659533) including its past Directors, Ms. Shiba Pravin (DIN: 02843035), Mr. Mohd Seraj Lari (DIN: 03098219), Mr. Rajneesh Chandra Shukla (DIN: 02064767), Mr. Yogendra Pratap Shahi (DIN: 03453495), 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; c) LCRDL and the 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; d) LCRDL and its abovementioned past and present Directors shall provide a full inventory of all its assets and properties; e) LCRDL and its present Directors shall not dispose of any of the properties or alienate or encumber any of the assets owned/ acquired by that company through the issue of RPS, without prior permission from SEBI; f) LCRDL and its present Directors shall not divert any funds raised from the public at large through the issue of RPS, which are kept in bank account(s) and/ or in the custody of LCRDL; g) LCRDL and its 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 September 09, 2013 and December 09, 2013. 20. The above directions shall take effect immediately and shall be in force until further orders. … 22. This Order is without prejudice to the right of SEBI to take any other action that may be initiated against LCRDL and its abovementioned past and present Directors, in accordance with law.” 2. The interim order observed that the prima facie observations made therein were on the basis of the documents received from RoC, Delhi, information obtained from the 'MCA 21 Portal' and the complaint received by SEBI.

The interim order advised the Company and its directors (past and present) that they may file their replies within 21 days from the date of receipt of the order and also to seek an opportunity of personal hearing.

3. The interim order forwarded to the Company and its directors (namely Mr. Arshad Hussain, Ms. Shiba Pravin, Mr. Mohd. Seraj Lari, Mr. Rajneesh Chandra Shukla, Mr. Yogendra Pratap Shahi, Mr. Mohammad Aftab Alam, Mr. Mohd Gani) was delivered except to Mr. Mohd. Seraj Lari and Mr. Yogendra Pratap Shahi. The Company vide its letter dated October 21, 2014, submitted that they are in the process of collecting/ compiling the submissions and documents and requested for more time for submitting the reply. Vide this letter, the Company had also sought for an opportunity of personal hearing. As no reply was received, SEBI issued a reminder letter dated December 11, 2014. Thereafter, the Company through its authorized representative namely Mr. Rakesh Khanna, Chartered Accountant submitted certain documents/ details vide letter dated December 19, 2014.

4. Before proceeding further with the matter, an opportunity of personal hearing was granted to the Company and its directors on May 08, 2015 and the same was communicated vide letters dated April 07, 2015. As the hearing letter issued to Mr. Rajneesh Chandra Shukla had returned undelivered, the date of hearing was communicated to him vide e-mail dated April 07, 2015. On the date of personal hearing, directors of LCRDL namely Mr. Arshad Hussain (appeared for himself, his wife Ms. Shiba Pravin, Mohd. Aftab Alam, Mohd. Gani) and Mr. Mohd. Seraj Lari appeared along with Mr. Rakesh Khanna, Chartered Accountant and made oral submissions. During the course of personal hearing, they were asked to submit the copy of the complete ‘issue register’ containing the list of allottees with addresses within a period of one week. The director of the Company namely Mr. Arshad Hussain also undertook to submit the letter of authority from other directors namely Ms. Shiba Pravin, Mohd. Aftab Alam and Mohd. Gani. However, no such information was submitted. Later, the Company vide its letter dated November 26,

2015, again requested for ten days’ time for submitting the details. Though the requested time has elapsed, the Company has failed to submit the document/ information as sought during the course of personal hearing.

As the other directors namely Mr. Rajneesh Chandra Shukla and Mr. Yogendra Pratap Shahi had failed to turn up for the personal hearing, another opportunity of personal hearing was granted to these on May 22, 2015. On the date fixed, both these directors failed to turn up for the personal hearing. As the hearing letter issued to Mr. Rajneesh Chandra Shukla for the hearing date i.e. May 22, 2015, had returned undelivered, SEBI granted last and final opportunity of personal hearing to Mr. Rajneesh Chandra Shukla on June 25, 2015. SEBI also issued a public notice dated June 21, 2015, in the newspaper with respect to the proceedings against Mr. Rajneesh Chandra Shukla initiated vide the interim order. However, he remained absent for the personal hearing.

Considering that reasonable opportunities have already been afforded to the directors of the Company for making the submissions in the matter and failure of these in replying to the interim order, I proceed further in the matter on the basis of the material available on record.

5. I have considered the interim order, the submissions of the noticees, the documents furnished and the material available on record. The following are the observations from the interim order: “… a) LCRDL was incorporated on August 06, 2010 with RoC, Delhi with CIN U70200DL2010PLC20677, having its registered office at 306, 3rd Floor, Vardhman City - 2 Plaza, Asaf Ali Road, Delhi - 110 002. b) The present Directors of LCRDL are Mr. Arshad Hussain (DIN: 02843064), Mr. Mohammad Aftab Alam (DIN: 06427105) and Mr. Mohd Gani (DIN: 06659533). c) Ms. Shiba Pravin (DIN: 02843035), Mr. Mohd. Seraj Lari (DIN: 03098219), Mr. Rajneesh Chandra Shukla (DIN: 02064767) and Mr. Yogendra Pratap Shahi (DIN: 03453495), Directors of LCRDL resigned from the Board on November 15, 2011, November 30, 2012, July 31, 2013 and December 30, 2011 respectively. d) LCRDL held its Annual General Meetings on September 30, 2011, September 29, 2012 and July 31, 2013.

e) The following are noted from the Annual Returns and Form 23 of LCRDL filed with the RoC Delhi: i. As per Form 23AC, the capital structure of LCRDL during the respective financial years are as under:

2010-11 ( ) 2011-12 ( ) 2012-13 ( ) Issued, subscribed and paid up capital 1,22,26,000 3,76,06,000 4,25,22,000 Equity share capital 5,00,000 5,00,000 5,00,000 Preference share capital 1,17,26,000 3,71,06,000 4,20,22,000 ii. As per Form 23AC, the share capital raised by issue of RPS during the respective financial year are as under : 2012-13 2010-11 ( ) 2011-12 ( ) ( ) Private placement/ other private 1,17,26,000 2,55,66,000 51,58,000 placement of preference shares iii. The disclosure in the notes to the relevant balance sheets of LCRDL provide the following details with regard to the redeemable preference shares issued by LCRDL: Particulars 2010-11 2011-12 2012-13 Shares outstanding at the beginning of the year - 11,72,600 37,10,600 Shares issued during the year 11,72,600 25,56,600 5,15,800 Shares bought back during the year - 18,600 24,200 Shares outstanding at the end of the year 11,72,600 37,10,600 42,02,200 iv. The details of allotment made by issue of RPS such as number of allottees and amount raised etc. as noted from the MCA21 portal is tabulated as under: 2010-11 2011-12 2012-13 Date of No. of Amount Date of No. of Amount Date of No. of Amount Allotment Allottees ( ) Allotment Allottees ( ) Allotment Allottees ( ) 31/10/2010 78 6,38,000 31/05/2011 300 35,87,000 20/07/2012 19 1,16,000 30/11/2010 135 12,61,000 30/09/2011 372 28,37,000 10/08/2012 33 1,90,500 31/03/2011 327 22,18,000 30/11/2011 67 5,35,000 20/08/2012 34 2,13,000 20/01/2012 40 3,79,000 30/09/2012 25 4,03,000 20/02/2012 39 1,95,000 31/10/2012 34 4,70,500 20/03/2012 48 1,95,000 30/11/2012 19 2,19,000 31/12/2012 26 2,55,000 31/01/2013 34 3,11,000

28/02/2013 45 5,31,000 30/03/2013 21 1,55,000 Total 540 41,17,000 Total 866 77,28,000 Total 290 28,64,000 v. It is noted from the audited balance sheets mentioned at para 8 (e) (ii) above that LCRDL had raised an amount of 4,24,50,000/- by issue of RPS during the financial years 2010-11 ( 1,17,26,000/-), 2011-12 ( 2,55,66,000/-) and 2012-13 ( 51,58,000/-). However, as per the details of allotments mentioned at para 8(e)(iv), LCRDL had allotted RPS to 1696 persons and raised an amount of 1,47,09,000/-. The difference in the amounts, 4,24,50,000/- and 1,47,09,000/- appears to be most likely on account of incomplete filling up of details by LCRDL with RoC, Delhi. In any case there is no ambiguity whatsoever in the fact that LCRDL had allotted RPS to at least 1,696 persons during the financial years 2010-11(540), 2011-12 (866) and 2012- 13(290), as can be seen from the filings made by the Company itself. …”

6. I note that the Company and its directors have not disputed the observations on the allegations made against these in the interim order. The interim order alleged that the Company had issued and allotted RPS during the Financial Years 2010-11, 2011-12 and 2012-13 and had raised 4,24,50,000 from atleast 1,696 persons/ investors, without complying the ‘public issue’ norms stipulated under Sections 56, 60 read with Section 2(36) and 73 of the Companies Act, 1956. The interim order had also alleged that the Company, by issuing shares to more than 49 persons, had made a public issue of RPSs in terms of the first proviso to Section 67(3) of the Companies Act, 1956. It has also been noted from the ‘Form 23AC’ inter alia submitted by the Company vide its letter dated December 19, 2014, that the Company had raised an amount of 12,77,000 under the head ‘other private placement’ of preference shares during the financial year 2013-14.

7. In order to ascertain whether an issue of securities is a 'public issue' or done on 'private placement', it is necessary to make a reference to Section 67(3) of the Companies Act, 1956, which 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).” 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 conclude whether an issue of shares are for public or on a private placement basis. In view of the same, if an offer of securities are made to fifty or more persons, it would be deemed to be a public issue.

8. The Hon'ble Supreme Court of India in the matter of Sahara India Real Estate Corporation Limited & Others Vs. SEBI and another (Civil Appeal Nos. 9813 and 9833 of 2011; decided on August 31, 2012) (‘the Sahara case’) had inter alia held that - “Section 67(1) deals with the offer of shares and debentures to the public and Section 67(2) deals with invitation to the public to subscribe for shares and debentures and how those expressions are to be understood, when reference is made to the Act or in the articles of a company. The emphasis in Section 67(1) and (2) is on the “section of the public”. Section 67(3) states that no offer or invitation shall be treated as made to the public, by virtue of subsections (1) and (2), that is to any section of the public, if the offer or invitation is 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 otherwise as being a domestic concern of the persons making and receiving the offer or invitations. Section 67(3) is, therefore, an exception to Sections 67(1) and (2).

If the circumstances mentioned in clauses (1) and (b) of Section 67(3) are satisfied, then the offer/invitation would not be treated as being made to the public. The first proviso to Section 67(3) was inserted by the Companies (Amendment) Act, 2000 w.e.f. 13.12.2000, which clearly indicates, nothing contained in Sub-section (3) of Section 67 shall apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more. … Resultantly, if an offer of securities is made to fifty or more persons, it would be deemed to be a public issue, even if it is of domestic concern or proved that the shares or debentures are not available for subscription or purchase by persons other than those received the offer or invitation. … I may, therefore, indicate, subject to what has been stated above, in India 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. …” 9. In the present matter, it is noted from that the Company had made continuous allotments of RPS on various dates during the financial years 2010-11, 2011-12, 2012-13.

The interim order has observed that “… number of allotments made under the RPS issue along with the amount raised therein, when viewed in light of failure on the part of LCRDL and its Directors to submit relevant information to SEBI, would prima facie indicate that the issue of RPS was a public issue of securities”. I note that the Company vide its letter dated December 19, 2014 has submitted certain documents i.e. Memorandum and Articles of Association, directors details, annual returns and financial statements, income tax returns, etc. However, the Company has failed to file the details of the investors. The Company has also failed to submit the copy of the ‘issue register’ containing the list of allottees with addresses as sought during the course of personal hearing dated May 08, 2015. Therefore, the present proceedings are being proceeded with the material available on record. Considering the number of persons from whom monies were mobilised by the Company by issuing RPSs, which is definitely more than 49 persons, it can be concluded that the Company had made a public issue of RPS in terms of the first proviso to Section 67(3) of the Companies Act, 1956 where the “offer” or “invitation to subscribe for shares or debentures’ is made to fifty persons or more, then it has to be construed as a public offer.

10. By making a public issue of RPS, as discussed above, 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 context, I refer and rely on the below mentioned observation made by the Hon'ble Supreme Court of India in the matter of 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. …” 11. In view of the above observations, by virtue of Section 55A(a) and (b), the SEBI has jurisdiction and would govern the issue of RPS as the same was clearly made to more than 49 persons. As alleged in the interim order, the Company was mandated to comply with the provisions of Sections 56, 60, 67 and 73 of the Companies Act, 1956, in respect of its offer and issue of RPS. 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'.

12. The interim order has alleged that the Company failed to comply with Section 73 of the Companies Act, 1956, in respect of its issuance of RPS. By issuing RPS to more than 49 persons, the Company had to compulsorily list such securities in compliance with Section 73(1) of the Companies Act, 1956. As per Section 73(1) 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. There is no material on record to say that the Company has filed an application with a recognised stock exchange to enable the RPS to be dealt with in such exchange. Therefore, the Company has failed to comply with this requirement.

13. Section 73(2) of the Companies Act, 1956 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 RPS, 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 of the Company, who is an officer in default, is jointly and severally liable to repay with interest at such rate. There is no material on record to say that the Company has complied with the provisions of Section 73(3).

14. I note that the Company had mobilized 4,37,27,000 (i.e. 4,24,50,000 as per the interim order and 12,77,000 as per ‘Form 23AC’ during the financial year 2013-14) from the public under its offer and issue of RPS and in doing so it has failed to comply with the provisions of the Companies Act, 1956. The details taken from the ‘MCA 21’ portal and the correspondence of the Company are sufficient to substantiate the charges.

15. The interim order was issued against the directors of the Company namely Mr. Arshad Hussain, Ms. Shiba Pravin, Mr. Mohd. Seraj Lari, Mr. Rajneesh Chandra Shukla, Mr. Yogendra Pratap Shahi, Mr. Mohammad Aftab Alam and Mr. Mohd Gani.

a. The details of their appointment and resignations are as under: Name Date of Appointment Date of Cession Mr. Arshad Hussain August 06, 2010 - Mr. Mohammad Aftab Alam October 25, 2012 - Mr. Mohd Gani July 31, 2013 - Ms. Shiba Pravin August 06, 2010 November 15, 2011 Mr. Mohd. Seraj Lari August 06, 2010 November 30, 2012 Mr. Rajneesh Chandra Shukla September 01, 2010 July 31, 2013 Mr. Yogendra Pratap Shahi May 20, 2011 December 30, 2011 b. I note that the Company had commenced the offer and issuance of RPS from 2010- 2011 and continued with it till the financial year 2012-13 (the last date of allotment being March 30, 2013). Section 56 of the Companies Act, 1956 imposes the liability for the compliance, on the company, every director, and persons responsible for the issuance of the prospectus. The liability of the Company to repay under Section 73(2) of the Companies Act, 1956 read with Section 27 of the SEBI Act, is continuing and the same continues till all the repayments are made to the investors/ public. Therefore, the directors who were present during the period when the Company had made the offer and allotted RPS shall be liable for violation of Sections 56, 60 and 73 of the Companies Act, 1956 including the default in making refunds as mandated therein. As the liability to make repayments under Section 73(2) of the Companies Act read with Section 27 of the SEBI Act is a continuing liability, the persons who joined the Company’s Board pursuant to the offer and allotment of RPS shall also be liable if the Company and the concerned directors have failed to make refunds, as mandated under the discussed provisions of law.

c. It is noted that Mr. Arshad Hussain, Mr. Mohammad Aftab Alam, Ms. Shiba Pravin, Mr. Mohd. Seraj Lari, Mr. Rajneesh Chandra Shukla and Mr. Yogendra Pratap Shahi were the directors of the Company at the time of impugned issue and allotment of RPS. Mr. Arshad Hussain and Mr. Mohammad Aftab Alam continue to the directors of the Company. I note that these persons have not responded the interim order. Considering the same, it can be concluded that Mr. Arshad Hussain, Mr. Mohammad Aftab Alam, Ms. Shiba Pravin, Mr. Mohd. Seraj Lari, Mr. Rajneesh Chandra Shukla and Mr. Yogendra Pratap Shahi are liable, jointly and severally, for making refunds to the investors as mandated under Section 73(2) of the Companies Act, 1956 read with Section 27 of the SEBI Act.

d. I note that Mr. Mohd Gani was appointed as director of the Company on July 31, 2013 i.e. after the available dates of impugned issues. He is also one of the present directors of the Company. I note that he has not submitted any reply to the interim order inspite of due intimation about it. It is observed that he has not exercised necessary diligence after becoming the director in the Company. The inaction by him against the management (for violating the public issue norms as stipulated under the Companies Act, 1956), even after the receipt of the interim order, leads one to conclude on a possible collusion with the Company and its management. Mohd Gani has also not taken any steps to remedy the violations committed. As discussed earlier, the liability to refund is a continuous liability and would be discharged only when the repayments are done. Therefore, I hold Mohd Gani liable for the same.

16. These persons being the directors at the time of impugned issues and allotment are liable for repayment. The liability of the Company and its directors to repay under Section 73(2) read with Sections 11, 11B and 27 of the SEBI Act is continuing and such liability continues till all the repayments are made. Therefore, the directors who joined subsequent to the impugned public issuance are also responsible for not making the refund, if the Company does not repay the money collected. It can therefore be concluded that all these persons being the persons in-charge of and responsible to the Company for the conduct of the business, are responsible for the contraventions committed by the Company as found above. For such violations, appropriate directions need to be issued to the above directors.

17. I note that Life Care Real Developers Limited, Mr. Arshad Hussain, Ms. Shiba Pravin, Mr. Mohd. Seraj Lari, Mr. Rajneesh Chandra Shukla, Mr. Yogendra Pratap Shahi, Mr. Mohammad Aftab Alam and Mr. Mohd Gani were required to provide full inventory of the assets and properties within 21 days from the date of receipt of interim order. However, no such details have been filed till date. In view of the discussion above, appropriate action in accordance with law needs to be initiated against the Company and the directors/ promoters in charge of the affairs of the Company during the relevant period.

18. Therefore, 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 and 11B thereof hereby issue the following directions:

a. The Company, Life Care Real Developers Limited [PAN: AABCL8415G], Mr. Arshad Hussain [PAN: AAVPH7486C], Ms. Shiba Pravin [PAN: ATOPP9889R], Mr. Mohd. Seraj Lari [PAN: AEKPL9354C], Mr. Rajneesh Chandra Shukla [PAN: BHCPS8238J], Mr. Yogendra Pratap Shahi [PAN: ATBPS3325E], Mr. Mohammad Aftab Alam [PAN: ANIPA3040P] and Mr. Mohd. Gani [PAN: BIGPG0523B] jointly and severally, shall forthwith refund the money collected by the Company through the issuance of Redeemable Preference Shares (which have been found to be issued in contravention of the public issue norms stipulated under the Companies Act, 1956), to the investors including the money collected from investors, till date, pending allotment of RPS, 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 and the above directors 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. The Company and the above directors 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 on 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 and its directors 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. In case of failure of Life Care Real Developers Limited, Mr. Arshad Hussain, Ms. Shiba Pravin, Mr. Mohd. Seraj Lari, Mr. Rajneesh Chandra Shukla, Mr. Yogendra Pratap Shahi, Mr. Mohammad Aftab Alam and Mr. Mohd Gani in complying with the aforesaid directions, SEBI, on expiry of three months from the date of this Order - i. shall recover such amounts in accordance with section 28A of the SEBI Act including such other provisions contained in securities laws. ii. 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. iii. 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 iv. would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company.

g. The Company is directed not to, directly or indirectly, access the capital market by issuing prospectus, offer document or advertisement soliciting money from the public and is 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 four years from the date of completion of refunds to investors, made to the satisfaction of SEBI, as directed above.

h. The directors of Life Care Real Developers Limited namely Mr. Arshad Hussain, Ms. Shiba Pravin, Mr. Mohd. Seraj Lari, Mr. Rajneesh Chandra Shukla, Mr. Yogendra Pratap Shahi, Mr. Mohammad Aftab Alam and Mr. Mohd Gani are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, with immediate effect. They are also restrained from associating themselves with any listed public company and any public company which intends to raise money from the public, with immediate effect. This restraint shall continue to be in force for a further period of four years on completion of the repayments, as directed above.

i. 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 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.

DATE : December 09, 2015 PRASHANT SARAN PLACE : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA