Order in the matter of Mass Infra Realty Limited

WTM/PS/10/ERO/APR/2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under sections 11(1), 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992 In the matter of Mass Infra Realty Limited In respect of: 1. Mass Infra Realty Limited [PAN: AAGCM7419N], 2. Mr. Ashok Halder [PAN: AEDPH4898E], 3. Mr. Tapan Kumar Samanta [PAN: BCVPS0411F], 4. Mr. BideshBasu [PAN: AWKPB6801G], 5. Mr. Pratap Kumar Biswal [PAN: AITPB3875F], 6. Mr. Samir Kumar Mandal [PAN: AZXPM4025B], 7. Mr. Dilip Kumar Chakraborty [PAN: AFNPC6695P], 8. Mr. Kundal Manna [PAN: AVKPM2947F], 9. Mr. SubodhMondal [PAN: BWXPM1173N], 10. Mr. Sumeet Kumar Bhagat[PAN: AGRPB6998B], 11. Mr.SwadeshBasu[PAN: ANMPB7097H], 12. Ms.MahfuzaKhatun[PAN: ARDPK4799A], 13. Mr. Ajay Kumar Mahapatra[PAN: AEZPM0434K], 14. Mr.Mukhaleshur Ali Mir [PAN: BEMPM2216M], 15. Debenture Trust Suraksha and 16. Mass Debenture Trust(represented by its trustee Mr. Bhabani Shankar Biswal). _ Date of Hearing: September 03, 2015 Appearances: Mr. TriptimoyTalukder, Advocate appeared for the Company; Mr. Ajay Kumar Mahapatra, Ms. MahfuzaKhatun and Mr. Mukhaleshur Ali Mir appeared in person. For SEBI: Mr. PrashantaMahapatra, General Manager; Mr. N. Murugan, Assistant General Manager; Mr. T. Vinay Rajneesh, Assistant General Manager and Ms. Nikki Agarwal, Assistant Manager. Date of Hearing: November 23, 2015 Appearances: Mr. TriptimoyTalukder, Advocate appeared for Mr. Bhabani Shankar Biswal, trustee of Mass Debenture Trust

For SEBI:Mr. PrashantaMahapatra, 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-parteinterim Order dated December 04, 2014 (hereinafter referred to as ‘the interim order’) had observed that the company, Mass Infra Realty Limited (hereinafter referred to as ‘Mass’ or ‘the Company’) is prima facie engaged in fund mobilising activity from the public, by making offer and issuing Non-Convertible Redeemable Debentures (hereinafter referred to as ‘NCD’) and had allegedly violated the provisions of Sections 56, 60 [read with Section 2(36)], 73, 117B and 117C of the Companies Act, 1956 and the relevant provisions of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (hereinafter referred to as ‘the ILDS Regulations’). The interim order also alleged that Debenture Trust Suraksha and Mass Debenture Trusthad allegedly failed to meet the eligibility conditions specified under the SEBI (Debenture Trustees) Regulations, 1993 (hereinafter referred to as ‘DT Regulations’) and acted as an unregistered debenture trustee in violation of Section 12(1) of the SEBI Act, 1992 (hereinafter referred to as ‘SEBI Act’).

2. In order to protect the investors who have subscribed to the impugned offer and issue of NCDs and to prevent the Company from further carrying on with its fund mobilizing activity under the offer of NCDs, SEBI had issued the following directions: “… … 9. 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. MIRL shall not mobilize funds from investors through the Offer of NCDs 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. MIRL and its present Directors, viz. Shri Ashok Halder (DIN: 03382051; PAN: AEDPH4898E), Shri Tapan Kumar Samanta (DIN: 03382135; PAN: BCVPS0411F), Shri Samir Kumar Mandal (DIN: 06980776; PAN: AZXPM4025B), Shri Dilip Kumar Chakraborty (DIN: 06368719; PAN: AFNPC6695P), Shri Kundal Manna (DIN: 05250026; PAN: AVKPM2947F) and Shri SubodhMondal (DIN: 06956650), 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.

The past Directors of MIRL, viz. Shri Pratap Kumar Biswal (DIN: 00608810; PAN: AITPB3875F), Shri SwadeshBasu (DIN: 03535561; PAN: ANMPB7097H), Shri BideshBasu (DIN: 03534617; PAN: AWKPB6801G) and Shri Sumeet Kumar Bhagat (DIN: 03294268; PAN: AGRPB6998B) alongwith its past Promoters/Directors, viz. Shri MahfuzaKhatun (DIN: 03083865; PAN: ARDPK4799A), Shri Ajay Kumar Mahapatra (DIN: 00664668; PAN: AEZPM0434K) and Shri Mukhaleshur Ali Mir (DIN: 03150015; PAN: BEMPM2216M), 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; iv. MIRL and its abovementioned past and present Directors and Promoters, 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; v. MIRL shall provide a full inventory of all its assets and properties; vi. MIRL's abovementioned past and present Directors and Promoters shall provide a full inventory of all their assets and properties; vii.

MIRL and its abovementioned 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 Offer of NCDs, without prior permission from SEBI; viii. MIRL and its abovementioned present Directors shall not divert any funds raised from public at large through the Offer of NCDs, which are kept in bank account(s) and/or in the custody of MIRL; ix. MIRL and its abovementioned present Directors shall furnish complete and relevant information (as sought by SEBI letters dated March 12, 2013; March 26, 2013; May 30, 2013 and July 4, 2013), within 21 days from the date of receipt of this Order. x. The Debenture Trustees, viz. Debenture Trust Suraksha and Mass Debenture Trust, are prohibited from continuing with their assignment as debenture trustees in respect of the Offer of NCDs of MIRL 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. 10. The above directions shall take effect immediately and shall be in force until further orders. … … 10. This Order is without prejudice to the right of SEBI to take any other action that may be initiated against MIRL and its abovementioned past and present Directors and Promoters;its Debenture Trustees, viz. Debenture Trust Suraksha and Mass Debenture Trust, in accordance with law.” 3. The interim order observed that the prima facie observations made therein were on the basis of the information/ documents obtained from the ‘MCA-21’ portal, correspondences exchange between SEBI and the Company along with the documents contained therein and the complaint dated January 05, 2014. The interim order advised the Company and its directors to file their replies within 21 days from the date of its receipt and also seek an opportunity of personal hearing.

4. The copy of the interim order wasforwarded to the Company, its directors namelyMr. Ashok Halder, Mr. Tapan Kumar Samanta, Mr. BideshBasu, Mr. Pratap Kumar Biswal,Mr. Samir Kumar Mandal, Mr. Dilip Kumar Chakraborty, Mr. Kundal Manna, Mr. SubodhMondal, Mr. Sumeet Kumar Bhagat, Mr. SwadeshBasu,Mr. MahfuzaKhatun, Mr. Ajay Kumar Mahapatra, Mr. Mukhaleshur Ali Mirand its Debenture Trustees namely Debenture Trust Suraksha and Mass Debenture Trust(represented by its trustee Mr. Bhabani Shankar Biswal)vide letters dated December 05, 2014. The said lettersissued to Mr. Ashok Halder, Mr. Tapan Kumar Samanta, Mr. Pratap Kumar Biswal, Ms. MahfuzaKhatun,Debenture Trust Suraksha and Mass Debeture Trusthad returned undelivered. The copies of the above mentioned letters of these were forwarded to the Company for onward delivery to the respective persons.

5. Mr. Ajay Kumar Mahapatra vide his letter dated December 17, 2014 replied to the interim order and requested for an opportunity of personal hearing.The Company vide its letter dated December 18, 2014 while requesting for an opportunity of personal hearing replied to the interim order.Ms. MahfuzaKhatunand Mr. Mukhaleshur Ali Mir vide respective letter dated December 28, 2014 and February 03, 2015, replied to the interim order and requested for withdrawal of the directions. Ms. MahfuzaKhatun vide another letter, received by SEBI on April 08, 2015 while intimating the correct address, requested for withdrawal of all the directions and release of the demat account.

6. Thereafter, an opportunity of personal hearing was granted to the Company, its directors and debenture trustees on September 03, 2015. The scheduled date was communicated vide SEBI letter dated July 27, 2015. The date of hearing was notified in the newspapers namely ‘Ananda Bazar Patrika’ and ‘Times of India’ both dated September

03, 2015. The Company and its directors were advised that in case they fail to appear for the personal hearing before SEBI on the aforesaid date, then the matter would be proceeded ex-parteon the basis of material available on record. On the date fixed, Mr. Ajay Kumar Mahapatra, Ms. MahfuzaKhatun, Mr. Mukhaleshur Ali Mir appeared in-person and made submissions. On behalf of the Company, Mr. TriptimoyTalukder, Advocate appeared and requested for a time of one week for filing the written submissions. The requested time was granted to the Company, however, till date no written submissions have been filed.

7. In the meantime, SEBI received a letter dated September 28, 2015 from one Mr.Bhabani Shankar Biswal, trustee of Mass Debenture Trust,intimating thereby his inability to appear for the personal hearing on September 03, 2015. Vide this letter he also requested for a further opportunity of personal hearing. The request of Mr.Bhabani Shankar Biswal was considered and one more opportunity of personal hearing was granted to him on November 23, 2015. On the date fixed,Mr. TriptimoyTalukder, Advocateappeared as authorised representative of Mr.Bhabani Shankar Biswal and submitted a compact disc (CD) said to be containing a list of debenture holders. However, the CD had to be returned to the representative as the same was found to be broken. The representative was granted liberty to submit another CD and details regarding the claimed refunds within fifteen days. I note that even after expiry of the time granted, Mr.Bhabani Shankar Biswal has not submitted the details.

Other entities/ persons had failed to appear for the personal hearing. Considering the reasonable opportunities to the Company, its directors and the debenture trustees already afforded for making submissions in the matter, I am inclined to proceed further with the matter, on the basis of material available on record.

8. The submissions made by the Company, its directors and the trustee of the Mass Debenture Trust, in brief, are as under: a. The Company vide its letter dated December 18, 2014,has submitted as under:

- The NCDs issued by it were on private placement basisand was to its associates without publication of any advertisementand the provision of the Companies Act, 1956 and rules made thereunder, were duly complied with. - The Company was incorporated on September 01, 2010 and a charge on immovable properties was created in favor of Registrar of Companies, West Bengal. - On September 06, 2011 and August 23, 2011, the charge was modified and NCDs were issued. - The Company had obtained necessary permissions from the Registrar of Companies, West Bengal to issue NCDs against the charge created.

b. The submissions of Ms. MahfuzaKhatun and Mr. Mukhaleshur Ali Mir made vide respective letters dated December 28, 2014 and February 03, 2015, in brief, are as under: - Ms. MahfuzaKhatunand Mr. Mukhaleshur Ali Mir became the promoter-directors of the Company on September 01, 2010. Ms. MahfuzaKhatun is now a school teacher and Mr. Mukhaleshur Ali Mir is running a small grocery shop in a remote village. - On request of Mr. Ajay Kumar Mahapatra, his wife and daughter, they both had agreed to form a company for carrying on the business of civil construction. On realizing his other motives behind the formation of the Company, they had resigned from the Board of Directors. - All the documents of the Company were kept at the registered office of the Company which was the residence of Mr. Ajay Kumar Mahapatra. They had not seen the other directors as named in the interim order. - Ms. MahfuzaKhatunand Mr. Mukhaleshur Ali Mir had tendered their resignations from the post of directorship on November 08, 2010and October 05, 2010 respectively. The tenure of directorship of Mr. Mukhaleshur Ali Mir in the Company was only one month and four days. - They had not attended any board meeting of the Company. No share of the Company was ever allotted in their favour.Further, the Company had started issuance of NCDs after their resignation from the Company.

c. Mr. Ajay Kumar Mahapatra vide his letter dated December 17, 2014 submitted as under: - He is not a present director of the Company. He had disassociated himself from the activities of the Company since January 2011. In view of the same, any change in the Board of Directors or the activities of the Company are being done without his consent. - His resignation letter was forwarded to Mr. Pratap Kumar Biswal (Managing Director of the Company) through the Board of Directors of the Company. However, the same was not filed with the Registrar of Companies. As he was not able to file the resignation using his own digital signatures, a request was made by him to Mr. Pratap Kumar Biswal, in this regard. Thereafter, the resignation was updated with the Registrar of Companies. - He was neither involved in any activity in contravention of the rules of any statutory body nor mobilized any deposit, preference share, debentures from the public or private persons on behalf of the Company. He had not given any consent for any such activity of the Company till the time he was the director of the Company.

d. Mr. Bhabani Shankar Biwal, trustee of Mass Debenture Trust vide his letters dated December 13, 2014 and September 28, 2015 submitted as under: - He was assigned the job of trustee in Mass Debenture Trust.As he is the only earning member of the family, he thought it a good job for having additional salary. - After formation of the trust, it was told by the directors of the Company that the activities of the trust had not started and once there will be any activity, he will be informed and the job will start. As he was working in a private organization and had to travel frequently, it was not possible to track the activities of the Company and Mass Debenture Trust. - When he came to know that some money transaction activities are going on within the Company, he immediately tried to contact the directors. However, it was found that the directors had already resigned and the new directors didn’t answer him.

Thereafter, he tendered his resignation and conveyed same to the Registrar of Companies on October 01, 2014. - Except for signing the trust deed, he was never a part of the Trust or the organization. He had not received a single rupee in the capacity of a trustee. Any monetary transaction done by the Company was by the directors within their personal capacity.

9. I have considered the interim order, the submissions of the Company and the persons who have repliedand the material available on record. The interim order had observed/alleged the following: “… i. MIRL was incorporated on September 1, 2010, with the ROC, Kolkata, West Bengal with CIN No. as U45400WB2010PLC152714. MIRL has its Registered Office at 113 Park Street, 3rd Floor, Kolkata–700016, West Bengal, India. ii. The present Directors in MIRL are Shri Ashok Halder, Shri Tapan Kumar Samanta, Shri Samir Kumar Mandal, Shri Dilip Kumar Chakraborty, Shri Kundal Manna and Shri SubodhMondal. iii. Details obtained from the MCA 21 Portal indicate thatShri Pratap Kumar Biswal, Shri SwadeshBasu, Shri BideshBasu, Shri Sumeet Kumar Bhagat, Shri MahfuzaKhatun, Shri Ajay Kumar Mahapatra and Shri Mukhaleshur Ali Mir, who were earlier Directors in MIRL, have since resigned. iv. Further, MIRL has submitted that Shri MahfuzaKhatun, Shri Ajay Kumar Mahapatra and Shri Mukhaleshur Ali Mir were also its Promoters. v. From the material available on record, it is observed that MIRL issued Secured Non–Convertible Redeemable Debentures ("NCDs")in accordance with the following terms and conditions contained in the brochure i.e. "Offer of NCDs": a. "The applicant who is an Indian citizen over the age of 18 years will be eligible for subscription. b. The offer is being made on a private placement basis and cannot be accepted by any person other than to whom it has been offered. c. Use different application forms for different schemes. d. Size of the Issue: 205 Crore, with an option to retain oversubscription to be decided by Board of Directors. e. Authority of the Issue: The debentures are being issued pursuant to the meeting of Board of Directors of the Company held on 23–08–2011. f. Allotment of NCDs will be made within 60 days from the date of receipt of application. g. Security: The NCDs is being secured by equitable mortgage of assets (Movable and Immovable)." SCHEME –I: CUMULATIVE DEPOSIT PLAN A B C D E F

Issue Price ( ) 1000 1000 1000 1000 1000 1000 Min. 10 NCDs Redemption Period 12 Months 36 Months 60 Months 90 Months 132 Months 180 Months Redemption Value 1150 1500 2000 3500 5500 10000

SCHEME – II: NON–CUMULATIVE DEPOSIT PLAN G H I J Issue Price ( ) Min. 250 NCDs 25000 25000 25000 25000 Redemption Period 18 Months 36 Months 72 Months 108 Months Monthly Redemption Benefit 250 300 344 406 Redemption % 12 14.4 16.5 19.5 #Bonus % NIL Nil 2 4 #Bonus will be given after maturity on Principal Amount only. vi. As per information submitted by MIRL, details of NCDs issued are provided below – Year Security Amount Raised No. of Allottees ( in Crores) (Approx) 2011 – 12 Non – Convertible Secured 4.34 2016 2012 – 13 Redeemable Debenture 14.20 7536 2013 – 14 19.36 4704 Total 37.90 14256 …” 10. Having considered the above, it is now necessary to determine whether the Company had made a public issue as alleged in the interim order and if so, whether the Company had complied with the public issue norms. The liability of the directors of the Company also needs to be determined as they have also been alleged in the interim order.

11. Forascertaining whether an issue of securities is a ‘public issue’ or done on ‘private placement’ basis 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).” As perSection 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 firstproviso 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 decidewhether an issue of shares are made for public or done on a private placement basis, in the light of the above said provision. 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.

12. The Hon'ble Supreme Court of India in the matter of Sahara India Real Estate Corporation Limited & Others Vs. SEBIand 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. …” 13. I note from the interim order that the Company had offered and allotted NCDs during the financial years2011-12, 2012-13 and 2013-14 and had raised 37.90 crore (approximately).

As per the interim order, the Company had allotted NCDs to about 14,256 persons. Following are the details of allotment, as submitted by the Company to SEBI, along with its letter dated May 26, 2014: S.No. Date of allotment No. of allottees Amount ( ) 1 05/10/2011 48 696000 2 15/10/2011 48 1234500 3 25/10/2011 48 1340500 4 31/10/2011 48 1305000 5 02/11/2011 48 2040000 6 12/11/2011 48 776000 7 18/11/2011 48 952000 8 24/11/2011 48 560000 9 30/11/2011 48 873600 10 03/12/2011 48 705000 11 12/12/2011 48 621000 12 16/12/2011 48 628000 13 20/12/2011 48 610000 14 26/12/2011 48 928600 15 29/12/2011 48 1555000 16 31/12/2011 48 802200 17 09/01/2012 48 1299000 18 10/01/2012 48 2518000 19 16/01/2012 48 758000 20 20/01/2012 48 572000 21 23/01/2012 48 2408500 22 27/01/2012 48 501000

23 31/01/2012 48 1218200 24 31/01/2012 48 398000 25 06/02/2012 48 642000 26 13/02/2012 48 658000 27 20/02/2012 48 1466500 28 23/02/2012 48 548200 29 27/02/2012 48 1300000 30 29/02/2012 48 802000 31 29/02/2012 48 950500 32 06/03/2012 48 1092000 33 12/03/2012 48 1890000 34 14/03/2012 48 1943000 35 20/03/2012 48 1119500 36 21/03/2012 48 605000 37 23/03/2012 48 658000 38 24/03/2012 48 1238200 39 29/03/2012 48 637000 40 31/03/2012 48 1130000 41 31/03/2012 48 773000 42 02/04/2012 48 610000 43 09/04/2012 48 947500 44 17/04/2012 48 619000 45 21/04/2012 48 727500 46 26/04/2012 48 514000 47 30/04/2012 48 2319000 48 30/04/2012 48 519500 49 02/05/2012 48 916000 50 02/05/2012 48 1931000 51 04/05/2012 48 801000 52 04/05/2012 48 812500 53 05/05/2012 48 474000 54 05/05/2012 48 1018000 55 07/05/2012 48 531000 56 10/05/2012 48 735400 57 12/05/2012 48 1090500 58 12/05/2012 48 580000 59 15/05/2012 48 804000 60 18/05/2012 48 628000 61 21/05/2012 48 594000 62 26/05/2012 48 1087500 63 30/05/2012 48 556000 64 31/05/2012 48 1012000 65 02/06/2012 48 1110000 66 07/06/2012 48 982000 67 12/06/2012 48 637500 68 08/06/2012 48 606000 69 21/06/2012 48 675000 70 26/06/2012 48 505500 71 28/06/2012 48 1300000 72 30/06/2012 48 407000 73 30/06/2012 48 940000

74 06/07/2012 48 682000 75 12/07/2012 48 1009000 76 16/07/2012 48 873500 77 21/07/2012 48 596000 78 25/07/2012 48 1366500 79 28/07/2012 48 524500 80 31/07/2012 48 720500 81 31/07/2012 48 537000 82 01/08/2012 48 1157700 83 01/08/2012 48 566100 84 03/08/2012 48 491600 85 03/08/2012 48 458600 86 06/08/2012 48 343400 87 06/08/2012 48 340200 88 07/08/2012 48 413680 89 07/08/2012 48 324990 90 08/08/2012 48 331785 91 08/08/2012 48 463600 92 09/08/2012 48 375500 93 13/08/2012 48 1003500 94 16/08/2012 48 383800 95 22/08/2012 48 864000 96 27/08/2012 48 700500 97 29/08/2012 48 449500 98 31/08/2012 48 517500 99 31/08/2012 48 696500 100 31/08/2012 48 622000 101 04/09/2012 48 608000 102 10/09/2012 48 922000 103 14/09/2012 48 603500 104 17/09/2012 48 949000 105 21/09/2012 48 477500 106 24/09/2012 48 894000 107 26/09/2012 48 586000 108 28/09/2012 48 898000 109 29/09/2012 48 488500 110 29/09/2012 48 331000 111 01/10/2012 48 906000 112 06/10/2012 48 1178600 113 10/10/2012 48 641500 114 12/10/2012 48 2069500 115 17/10/2012 48 840000 116 20/10/2012 48 478500 117 25/10/2012 48 1414500 118 27/10/2012 48 1962500 119 30/10/2012 48 987000 120 31/10/2012 48 1052000 121 31/10/2012 48 538000 122 03/11/2012 48 520000 123 07/11/2012 48 775000

124 09/11/2012 48 2043500 125 10/11/2012 48 760500 126 16/11/2012 48 837000 127 20/11/2012 48 899000 128 22/11/2012 48 1380000 129 24/11/2012 48 640500 130 27/11/2012 48 1514000 131 29/11/2012 48 663000 132 30/11/2012 48 719000 133 30/11/2012 48 3918500 134 30/11/2012 48 898000 135 03/12/2012 48 447500 136 07/12/2012 48 844500 137 10/12/2012 48 1184000 138 13/12/2012 48 1110000 139 17/12/2012 48 1339500 140 21/12/2012 48 576000 141 25/12/2012 48 818500 142 27/12/2012 48 2774000 143 29/12/2012 48 1190000 144 31/12/2012 48 892500 145 31/12/2012 48 1070600 146 01/01/2013 48 452000 147 01/01/2013 48 487000 148 03/01/2013 48 942000 149 08/01/2013 48 1343100 150 11/01/2013 48 998000 151 15/01/2013 48 1301500 152 17/01/2013 48 1352500 153 21/01/2013 48 901700 154 22/01/2013 48 494400 155 24/01/2013 48 675000 156 24/01/2013 48 639000 157 28/01/2013 48 1595900 158 29/01/2013 48 562000 159 31/01/2013 48 746000 160 31/01/2013 48 1840500 161 31/01/2013 48 1360500 162 01/02/2013 48 392500 163 01/02/2013 48 509500 164 01/02/2013 48 440000 165 08/02/2013 48 1812500 166 11/02/2013 48 643000 167 12/02/2013 48 1476500 168 14/02/2013 48 566000 169 18/02/2013 48 2125500 170 19/02/2013 48 894000 171 22/02/2013 48 764000 172 25/02/2013 48 853000 173 27/02/2013 48 972000 174 28/02/2013 48 1291000 175 28/02/2013 48 1632500

176 01/03/2013 48 906000 177 01/03/2013 48 442500 178 02/03/2013 48 655000 179 09/03/2013 48 1668000 180 11/03/2013 48 1069500 181 12/03/2013 48 858100 182 13/03/2013 48 943000 183 14/03/2013 48 873000 184 16/03/2013 48 1315500 185 18/03/2013 48 788500 186 19/03/2013 48 894000 187 21/03/2013 48 752000 188 23/03/2013 48 1009000 189 25/03/2013 48 1064000 190 26/03/2013 48 1092500 191 30/03/2013 48 1498400 192 30/03/2013 48 1401000 193 01/04/2013 48 1279500 194 01/04/2013 48 1570000 195 02/04/2013 48 412500 196 02/04/2013 48 489200 197 03/04/2013 48 373000 198 04/04/2013 48 761000 199 06/04/2013 48 1034000 200 10/04/2013 48 1913000 201 11/04/2013 48 1201000 202 13/04/2013 48 598700 203 17/04/2013 48 1505000 204 19/04/2013 48 6987500 205 23/04/2013 48 1206000 206 25/04/2013 48 841700 207 29/04/2013 48 1369000 208 30/04/2013 48 2294600 209 30/04/2013 48 393000 210 09/05/2013 48 1381700 211 16/05/2013 48 853500 212 22/05/2013 48 1551200 213 25/05/2013 48 1161890 214 29/05/2013 48 2125500 215 31/05/2013 48 1542000 216 31/05/2013 48 1457000 217 01/06/2013 48 810900 218 01/06/2013 48 991145 219 03/06/2013 48 690700 220 03/06/2013 48 1164320 221 08/06/2013 48 923000 222 10/06/2013 48 4363000 223 14/06/2013 48 1632000 224 19/06/2013 48 1656500 225 22/06/2013 48 1641500 226 26/06/2013 48 1487000 227 29/06/2013 48 999700

228 29/06/2013 48 785200 229 01/07/2013 48 1152900 230 08/07/2013 48 2583000 231 16/07/2013 48 1541000 232 22/07/2013 48 1714400 233 25/07/2013 48 2102500 234 30/07/2013 48 2486750 235 31/07/2013 48 1462000 236 31/07/2013 48 566000 237 08/08/2013 48 5528300 238 17/08/2013 48 1921000 239 23/08/2013 48 1019500 240 29/08/2013 48 954000 241 31/08/2013 48 2771000 242 31/08/2013 48 1937400 243 03/09/2013 48 690625 244 03/09/2013 48 4320200 245 09/09/2013 48 1299000 246 13/09/2013 48 1121500 247 18/09/2013 48 1774500 248 23/09/2013 48 3489500 249 25/09/2013 48 1234000 250 27/09/2013 48 2509000 251 30/09/2013 48 1557400 252 30/09/2013 48 1227100 253 01/10/2013 48 404000 254 01/10/2013 48 1927000 255 04/10/2013 48 6634500 256 10/10/2013 48 1385500 257 17/10/2013 48 967700 258 22/10/2013 48 2470150 259 25/10/2013 48 2159600 260 29/10/2013 48 2797500 261 31/10/2013 48 3616900 262 31/10/2013 48 2097600 263 01/11/2013 48 697000 264 01/11/2013 48 2285000 265 12/11/2013 48 4098650 266 18/11/2013 48 2193500 267 23/11/2013 48 2328500 268 28/11/2013 48 2921000 269 30/11/2013 48 4411000 270 30/11/2013 48 794600 271 02/12/2013 48 3730000 272 09/12/2013 48 3771090 273 14/12/2013 48 2546120 274 19/12/2013 48 1974010 275 23/12/2013 48 2536350 276 27/12/2013 48 2398000 277 31/12/2013 48 1769000 278 31/12/2013 48 572600 279 01/01/2014 48 703800

280 01/01/2014 48 2745000 281 08/01/2014 48 3369000 282 11/01/2014 48 1703500 283 16/01/2014 48 1952100 284 21/01/2014 48 2024100 285 27/01/2014 48 2415140 286 31/01/2014 48 2353300 287 31/01/2014 48 729800 288 01/02/2014 48 1085000 289 01/02/2014 48 613900 290 03/02/2014 48 837900 291 03/02/2014 48 3462800 292 05/02/2014 48 3758000 293 12/02/2014 48 1883300 294 15/02/2014 48 1893600 295 17/02/2014 48 1600150 296 18/02/2014 48 1595600 297 21/02/2014 35 1840000 14,243 378952545

The Company has claimed that the NCDs were issued on private placement basis and to its associates only. From the above series of NCD allotment, it is observed that the Company in order to escape the liability had restricted the number of allottees to less than 49 persons. From the above table, it is noted that the Company had allotted NCDs to more than 48 persons on one day or on consecutive days. I note that the Company has not submitted the details to show that all the allotments were out of different offers. In the absence of ‘date of resolutions for offer’ and the proximity in the dates of allotment of NCDs, it can be presumed that all these tranches of allotment of NCDs were out of a single offer to more than 49 persons. Further, the Company has failed to adduce any evidence to show that the issue was a domestic concern of the members of the Company. Thus on the face of it, the issue made by the Company cannot be considered as a private placement. Considering the same, it is held that the Company had made an offer and allotted NCDs to more than 49 persons, thereby making a public issue of NCDs (in terms of the first proviso to Section 67(3) of the Companies Act, 1956) during the period alleged in the interim order.

14. By making a public issue of NCDs, 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 Saharacase: “... ... 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. …” 15. In view of the above observations, by virtue of Section 55A(a) and (b), the SEBI has jurisdiction and would govern the issue of NCDs as the same was made to more than 49 persons. 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.

16. Sections 56, 60, 73, 117B and 117C of the Companies Act, 1956 and the provisions of the ILDS Regulations are required to be complied with by a company making a public issue of securities.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’.

17. The interim order has alleged that the Company had failed to comply with Section 73 of the Companies Act, 1956, in respect of its issuance of NCDs. By issuing NCDs 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) 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 NCD to be dealt with in such exchange. Therefore, the Company has failed to comply with this requirement.

18. 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 NCDs, the Company had to forthwith repay such money collected from the 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, become 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 such provision.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.” 19. Section 117B of the Companies Act, 1956, prescribes that no company shall issue a prospectus or a letter of offer to the public for subscription of its debentures, unless it has, before such issue, appointed one or more debenture trustees for such debentures and the company has, on the face of the prospectus or the letter of offer, stated that the ‘debenture trustee’ or trustees have given their consent to the company to be so appointed. The Company has admittedly not filed any prospectus. Therefore, the said provision has not been fully complied with. Further, appointment of ‘debenture trustee’ shall be in terms of all applicable law. Section 117C of the Companies Act, 1956, stipulates that, where a company issues debentures, it shall create a debenture redemption reserve for the redemption of such debentures, to which adequate amounts shall be credited, from out of its profits every year until such debentures are redeemed. There is no record to suggest that this provision was complied with by the Company.

20. As the NCDs are ‘debt securities’in terms of the ILDS Regulations, the Company was also mandated to comply with the provisions of the ILDS Regulations in respect of its public issue of NCDs. However, the Company has failed to comply with the following provisions of the ILDS Regulations. i. Regulation 4(2)(a) – Application for listing of debt securities ii. Regulation 4(2)(b) – In-principle approval for listing of debt securities iii. Regulation 4(2)(c) – Credit rating has been obtained iv. Regulation 4(2)(d) – Dematerialization of debt securities v. Regulation 4(4) – Appointment of Debenture Trustee vi. Regulation 5(2)(b) – Disclosure requirements in the Offer Document vii. Regulation 6 – Filing of draft Offer Document viii. Regulation 7 – Mode of disclosure of Offer Document ix. Regulation 8 – Advertisements for Public Issues x. Regulation 9 – Abridged Prospectus and application forms xi. Regulation 12 – Minimum subscription xii. Regulation 14 – Prohibition of mis-statements in the Offer Document xiii. Regulation 15 – Trust Deed xiv. Regulation 16 – Debenture Redemption Reserve xv. Regulation 17 – Creation of security xvi. Regulation 19 – Mandatory Listing xvii. Regulation 26 – Obligations of the Issuer, etc.

From the foregoing, it is concluded that the Company has failed to comply with the provisions of Sections 56, 60 (read with Section 2(36), 73, 117B and 117C of the Companies Act, 1956 read with Companies Act, 2013 and the aforesaid provisions of the ILDS Regulations, in respect of its offer and issuance of NCDs, as discussed in this Order and liable for suitable action under the Companies Act, 1956, the SEBI Act and the ILDS Regulations.

21. The interimorder has alleged that the Company had created a charge for an amount of 200 crore on August 01, 2011 and appointed one ‘Debenture Trust Suraksha’ as its ‘debenture trustee’. The said charge was modified and increased to 205 crore on August 23, 2011, with a corresponding change in the ‘debenture trustee’ from ‘Debenture Trust Suraksa’to ‘Mass Debenture Trust’. The interim order has also alleged that the ‘debenture trustees’namely Debenture Trust Suraksha and Mass Debenture Trust had acted without registration from SEBI as required under Section 12(1) of the SEBI Act. In this regard, I note that these trusts arenot registered with SEBI to perform the functions of a ‘debenture trustee’ in the capital market. Further, it does not satisfy the following conditions under Regulation 7 of the DT Regulations: "no person should act as a debenture trustee unless he is either – i. a scheduled 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." From the above, it is seen that Debenture Trust Suraksha and Mass Debenture Trustdoesnot satisfy the eligibility conditions stipulated under Regulation 7 of the DT Regulations.Mr. Bhabani Shankar Biswal, trustee of Mass Debenture Trust has stated that when he came to know about the money transaction activities of the Company, he had attempted to contact the directors of the Company. Later on, he had tendered his resignation and had conveyed the same to the Registrar of Companies on October 01, 2014. It has also been said by him that except for signing the trust deed, he was never a part of the trust and had not received any money in the capacity of a trustee. I have considered the submissions of Mr. Bhabani Shankar Biwal and find no merits in the same as he also does not satisfy the eligibility conditions stipulated under Regulation 7 of the DT Regulations.

I note that the debenture trustees have not disputed the allegations on merits.In view of the same, I am inclined to conclude that Debenture Trust Suraksha and Mass Debenture Trust(represented by its Trustee, viz.Bhabani Shankar Biwal)have violated Section 12(1) of the SEBI Act and Regulation 7 of the DT Regulations. In view of these observations, it can be said that the provisions of Section 117B of the Companies Act, 1956, have not been completely complied with.

22. At this stage, I note from the interim order that the balance sheet of the Company for the year ended March 31, 2012 shows an amount of 10.59 crore as ‘share application money pending allotment’ for preference shares. Further, it is noted that the Company had created a charge of 200 crore on August 01, 2011 for its issue of NCDs. However, the balance sheet for the year ended March 31, 2012, shows the value of all fixed assets of the Company as only 40.12 lakh. I note that the Company has given no explanation to theseobservations made in the interim order.

23. Liability of directors:I note that the interim order was issued against the directors of the Company namely Mr. Ashok Halder, Mr. Tapan Kumar Samanta, Mr. BideshBasu, Mr. Pratap Kumar Biswal,Mr. Samir Kumar Mandal, Mr. Dilip Kumar Chakraborty, Mr. Kundal Manna, Mr. SubodhMondal, Mr. Sumeet Kumar Bhagat, Mr. SwadeshBasu, Ms. MahfuzaKhatun, Mr. Ajay Kumar Mahapatra and Mr.Mukhaleshur Ali Mir.

a. The details of the appointment and resignations of the directors of the Company are as under: Name Date of Appointment Date of Cessation Mr. Ashok Halder 29/01/2011 12/12/2014 Mr. Tapan Kumar Samanta 29/01/2011 15/12/2014 Mr. BideshBasu 04/11/2013 23/08/2014 Mr. Pratap Kumar Biswal 19/11/2010 30/11/2013 Mr. Samir Kumar Mandal 01/10/2013 12/04/2015 Mr. Dilip Kumar Chakraborty 01/10/2013 12/04/2015 Mr. Kundal Manna 01/10/2013 12/04/2015 Mr. SubodhMondal 23/08/2014 12/12/2014 Mr. Sumeet Kumar Bhagat 06/12/2010 17/10/2011 Mr. SwadeshBasu 04/11/2013 23/08/2014 Ms. MahfuzaKhatun 01/09/2010 29/01/2011 Mr. Ajay Kumar Mahapatra 01/09/2010 22/02/2013 Mr.Mukhaleshur Ali Mir 01/09/2010 05/10/2010 Mr. JanakBhagat 08/04/2015 17/07/2015 Mr. Pradeep Kumar Behera 08/04/2015 Continuing as director Mr. Ravendra Singh 08/04/2015 Continuing as director b. As per Section 291 of the Companies Act, 1956, the board of directors of a company shall be entitled to exercise all such powers and do all such acts and things as the company is authorized to exercise and do. Therefore, the board of directors being responsible for the conduct of the business of a company will be held liable for any non-compliance of law and such liability is also on the individual directors. In this regard, refer to the order of Hon’ble High Court of Madras in the matter of MadhavanNambiarVs. Registrar of Companies [2002 108 Comp Cas 1 Mad] wherein it was observed that “13. … A director either full time or part time, either elected or appointed or nominated is bound to discharge the functions of a director and should have taken all the diligent steps and taken care in the affairs of the company.

14. In the matter of proceedings for negligence, default, breach of duty, misfeasance or breach of trust or violation of the statutory provisions of the Act and the rules, there is no difference or distinction between the whole-time or part time director or nominated or co-opted director and the liability for such acts or commission or omission is equal. So also the treatment for such violations as stipulated in the Companies Act, 1956.”.

I note that the position of a ‘director’ in a public company/ listed company comes along with responsibilities and compliances under law, which have to be fulfilled by such director or face the consequences for any violation or default thereof.

c. I note that the Company had commenced the issuance of NCDs from October 05, 2011 and continued with its money mobilization activity till February 21, 2014.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 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.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 had made the offer and allotted NCDs 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.

d. From the table above and as per the available records, it is noted that Mr. Ashok Halder, Mr. Tapan Kumar Samanta, Mr. BideshBasu, Mr. Pratap Kumar Biswal,Mr. Samir Kumar Mandal, Mr. Dilip Kumar Chakraborty, Mr. Kundal Manna, Mr. Sumeet Kumar Bhagat, Mr. SwadeshBasu and Mr. Ajay Kumar Mahapatrawere the directors of the Company at the time of impugned issues and allotment of NCDsand were responsible for the affairs of the Company, at the relevant point of time.These persons arenot acting as directors of the Company any more.

The directors namely Mr. Ajay Kumar Mahapatrain his submissions has stated that he had disassociated himself from the activities of the Company since January 2011 and he was neither involved in any activity of contravention of the rules nor mobilized any deposits from the public or private persons on behalf of the Company. In this regard, I note that he was the director of the Company during the period when the Company had offered and issued NCDs and as per the available details had resigned on February 22, 2013.

None of the other directors have replied to the interim order. Taking note of the reasons and observations above, it can be concluded that the directors namely Mr. Ashok Halder, Mr. Tapan Kumar Samanta, Mr. BideshBasu, Mr. Pratap Kumar Biswal,Mr. Samir Kumar Mandal, Mr. Dilip Kumar Chakraborty, Mr. Kundal Manna, Mr. Sumeet Kumar Bhagat, Mr. SwadeshBasu and Mr. Ajay Kumar Mahapatraare responsible for the violations committed by the Company and areliable, jointly and severally, for making refunds along with interest to the investors as mandated under Section 73(2) of the Companies Act, 1956 read with Section 27 of the SEBI Act. I also note that the directors of the Company namely Mr. Pratap Kumar Biswal, Mr. Tapan Kumar Samanta,Mr. Ajay Kumar Mahapatra and Mr. Ashok Halder were also the trustees of ‘Debenture Trust Suraksha’.

e. I note that Mr.SubodhMondalwas appointed as director of the Company on August 23, 2014 i.e. after the last available date of allotment of NCDs. He is also one of the present directors of the Company. 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 while making the offer and issuing the NCDs), leads one to conclude on a possible collusion with the Company and its management. Further,

Mr.SubodhMondalhas also not taken any steps to remedy the violations committed. Accordingly, I hold him responsible for the same.

f. Ms.MahfuzaKhatun and Mr.Mukhaleshur Ali Mirhad resigned from the Company on January 29, 2011 and October 05, 2010 respectively. These persons vide respective letters have submitted that they had become the directors of the Company on the request of Mr. Ajay Kumar Mahapatra, his wife and daughter. Further, on realising the other motives, they had resigned from the board of directors of the Company. It has also been said that all the documents were kept at the residence of Mr. Ajay Kumar Mahapatra and during their tenure as directors, they had not attended any board meeting of the Company. Ms.MahfuzaKhatun and Mr.Mukhaleshur Ali Mir have also said that the Company had started issuance of NCDs after their resignation from the Company.

The details perused from ‘MCA-21’ portal shows that Ms.MahfuzaKhatun and Mr.Mukhaleshur Ali Mir had resigned from the Company on and January 29, 2011 andOctober 05, 2010, i.e. prior to the first date of allotment of impugned NCDs i.e. October 05, 2011.As also stated earlier, the Company has not provided the date of resolution for the offer of NCDs. In the absence of any other material to show the involvement of Ms.MahfuzaKhatun and Mr.Mukhaleshur Ali Mirin the offer and allotment of NCDs, I am inclined to give the benefit of doubt to them. In view of the same, the interim directions against these are liable to be revoked and they be discharged from the present proceedings.

g. Mr. Pradeep Kumar Behera and Mr. Ravendra Singh are the present directors of the Company having been appointed on April 08, 2015(i.e. after the last available year of impugned issue of NCDs).Further Mr. JanakBhagat became the director of the Company on April 08, 2015 (i.e. after the passing of the interim order) and has resigned from the post on July 17, 2015. Therefore, they are deemed to be aware of the proceedings against the Company.

However, they are not the noticees in the interim order. Being the directors of the Company, they too may be liable for making refunds in terms of Section 73(2) of the Companies Act read with Section 27 of the SEBI Act. SEBI is therefore advised to examine role of Mr. Pradeep Kumar Behera, Mr. Ravendra Singhand Mr. JanakBhagat, and initiate appropriate action against them, in accordance with law, including issuance of a show cause notice calling upon them to show cause as to why, suitable directions including the following should not be imposed upon them: i. directing them jointly and severally to refund the money collected through the issue of NCDs (as found to be unauthorisedly issued in this Order), along with interest at 15% per annum from the date when the refunds became due to the investors till the date of repayment; ii. directing them not to 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. directions restraining them from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period; iv. directing them and other companies in which they are directors/promoters holding substantial or controlling interest, to not access the capital market for an appropriate period.

24. I note that the Company and its directors were required to provide full inventory of the assets and properties for compliance with the directions in the interim order. However, no details have been submitted by these, till date.

25. 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.

26. 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 and 11B thereof hereby issue the following directions:

a. The Company,Mass Infra Realty Limited [PAN: AAGCM7419N],Mr. Ashok Halder [PAN: AEDPH4898E], Mr.Tapan Kumar Samanta [PAN: BCVPS0411F], Mr. BideshBasu [PAN: AWKPB6801G], Mr. Pratap Kumar Biswal [PAN: AITPB3875F], Mr. Samir Kumar Mandal [PAN: AZXPM4025B], Mr. Dilip Kumar Chakraborty [PAN: AFNPC6695P], Mr. Kundal Manna [PAN: AVKPM2947F], Mr. SubodhMondal [PAN: BWXPM1173N], Mr.Sumeet Kumar Bhagat [PAN: AGRPB6998B], Mr. SwadeshBasu [PAN: ANMPB7097H] andMr. Ajay Kumar Mahapatra [PAN: AEZPM0434K]jointly and severally, shall forthwith refund the money collected by the Company through the issuance ofNon-Convertible Redeemable Debentures(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 NCD, 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/ or its present management is 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 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 shall file a report of such completion of repayment with SEBI, within a period of three months from the date of this order, certified by 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. Mass Infra Realty Limited,Mr. Ashok Halder, Mr.Tapan Kumar Samanta, Mr.BideshBasu, Mr.Pratap Kumar Biswal, Mr. Samir Kumar Mandal, Mr.Dilip Kumar Chakraborty, Mr.Kundal Manna, Mr.SubodhMondal, Mr.Sumeet Kumar Bhagat, Mr.SwadeshBasu andMr. Ajay Kumar Mahapatraare 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 Mass Infra Realty Limited,Mr. Ashok Halder, Mr.Tapan Kumar Samanta, Mr.BideshBasu, Mr.Pratap Kumar Biswal, Mr. Samir Kumar Mandal, Mr.Dilip Kumar Chakraborty, Mr.Kundal Manna, Mr.SubodhMondal, Mr.Sumeet Kumar Bhagat, Mr.SwadeshBasu andMr. Ajay Kumar Mahapatrato comply with the aforesaid directions, SEBI, on the expiry of the three months period 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 appropriate action as deemed fit.

h. Mass Infra Realty Limitedis 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 offour (4)years from the date of completion of refunds to investors, made to the satisfaction of SEBI, as directed above.

i. The directors namely Mr. Ashok Halder, Mr.Tapan Kumar Samanta, Mr.BideshBasu, Mr.Pratap Kumar Biswal, Mr. Samir Kumar Mandal, Mr.Dilip Kumar Chakraborty, Mr.Kundal Manna, Mr.SubodhMondal, Mr.Sumeet Kumar Bhagat, Mr.SwadeshBasu andMr. Ajay Kumar Mahapatraarerestrained 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 offour (4)years on completion of the repayments, as directed above.

j. Debenture Trust Suraksha, Mass Debenture Trustand Bhabani Shankar Biswalshall 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, they 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 four (4) years.

k. For the reasons stated above in this Order, the directions imposed on Ms.MahfuzaKhatun [PAN: ARDPK4799A] andMr.Mukhaleshur Ali Mir [PAN: BEMPM2216M], vide the interim order dated December 04, 2014,are revoked and the proceedings against these is disposed of.

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

27. This Order is withoutprejudice 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.

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

29. 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.

30. As mentioned in paragraphs 23(g) of this Order, SEBI shall take appropriate action, in accordance with law, in respect of the persons concerned.

DATE :April25th, 2016 PRASHANT SARAN PLACE : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA