Order in the matter of Micro Leasing and Funding Limited

WTM/PS/200/ERO-BLO/MAR/2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under Sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992 In the matter of Micro Leasing and Funding Limited In respect of: 1. Micro Leasing and Funding Limited [PAN: AAECM7687C], 2. Mr. Upendra Nath Mishra [PAN: AHDPM1535G], 3. Mr. Durga Prasad Misra [PAN: AATPM7049N; DIN: 00627749], 4. Mr. Bijoy Kumar Routray [PAN: AIBPR3316B], 5. Mr. Durga Prasad Shadangi [PAN: AZAPS2983D], 6. Mr. Kali Prasad Mishra [PAN: ANZPM6759L] and 7. Ms. Banaja Pattnaik [PAN: AGTPP2815R]. Date of Hearing: November 23, 2015 Appearances: For Noticees: Mr. Durga Prasad Shadangi appeared in person For SEBI: Mr. T. Vinay Rajneesh, Assistant General Manager, Mr. Ranjan Meher, Assistant General Manager and Ms. Nikki Agarwal, Assistant Manager. 1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’), vide an ex-parte interim Order dated November 21, 2014 (hereinafter referred to as ‘the interim order’) had observed that the company, Micro Leasing and Funding Limited (hereinafter referred to as ‘Micro’ or ‘the Company’) is prima facie engaged in fund mobilising activity from the public, through the Offer of 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. 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: “… … 6. 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, hereby issue the following directions – i. MLFL shall not mobilize funds from investors through the Offer of Redeemable Preference Shares or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions; ii.

MLFL and its present Directors, viz. Shri Upendra Nath Mishra (PAN: AHDPM1535G; DIN: 01733091), Shri Bijoy Kumar Routray (PAN: AIBPR3316B; DIN: 02382909) and Shri Durga Prasad Shadangi (PAN: AZAPS2983D; DIN: 06585224) alongwith it past Directors, viz. Shri Durga Prasad Misra (PAN: AATPM7049N; DIN: 00627749), Shri Kali Prasad Mishra (PAN: ANZPM6759L; DIN: 00577580) and Smt. Banaja Pattnaik (PAN: AGTPP2815R; DIN: 01690637), 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. MLFL and its abovementioned Directors, are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions; iv. MLFL shall provide a full inventory of all its assets and properties; v. The abovementioned Directors of MLFL shall provide a full inventory of all their assets and properties; vi. MLFL 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 Redeemable Preference Shares, without prior permission from SEBI; vii.

MLFL and its abovementioned present Directors shall not divert any funds raised from public at large through the Offer of Redeemable Preference Shares, which are kept in bank account(s) and/or in the custody of MLFL. 7. The above directions shall take effect immediately and shall be in force until further orders. … … 9. This Order is without prejudice to the right of SEBI to take any other action that may be initiated against MLFL and its abovementioned Directors, in accordance with law.” 2. The interim order observed that the prima facie observations made therein were on the basis of the correspondences exchanged between SEBI and the Company alongwith the documents contained therein and the information obtained from the Registrar of Companies (RoC). 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.

3. The interim order was forwarded to the Company and its directors namely Mr. Upendra Nath Mishra, Mr. Durga Prasad Misra, Mr. Bijoy Kumar Routray, Mr. Durga Prasad Shadangi, Mr. Kali Prasad Mishra and Ms. Banaja Pattnaik vide letters dated November 21, 2014. The letter issued to the Company, Mr. Upendra Nath Mishra, Mr. Bijoy Kumar Routray and Mr. Durga Prasad Shadangi had returned undelivered. Thereafter, attempts were made to deliver the interim order by pasting on the last known addresses of these persons.

4. The matter was proceeded further and an opportunity of personal hearing was granted to the Company and its directors on June 26, 2015. The scheduled date was communicated vide SEBI’s letter dated May 15, 2015 and these letters were also uploaded on the website maintained by SEBI. The date of hearing was also communicated vide the public notice in the newspapers namely ‘Times of India’ (West Bengal Edition) (June 21, 2015), ‘Times of India’ (Bhubaneswar Edition) (June 25, 2015) and local vernacular newspaper (June 21, 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-parte on the basis of material available on record.

In the meantime, Mr. Durga Prasad Mishra, Mr. Upendra Mishra and Mr. Kali Prasad Mishra vide common letter dated June 24, 2015, submitted that the office of the Company has been under lock and key by the Crime Branch Police of Orissa and they are not in position to find out the record/ documents. In the absence of such documents, it will not be practical to reply to the interim order. It was submitted that they are approaching appropriate Court for the release of the office of the Company and requested for two months’ time for filing reply. Further, Mr. Durga Prasad Sadangi vide his letter dated June 29, 2015, requested for another date of hearing on the ground that on June 26, 2015, there was ‘bandh’ in Odisha and therefore he was not able to attend the hearing. This request was considered and another opportunity was afforded on September 15, 2015. The date of hearing was later postponed to September 24, 2015 and November 23, 2015 due to certain administrative exigencies. On the date fixed i.e. November 23, 2015, Mr. Durga Prasad Sadangi appeared in person. On his request a copy of the interim order was furnished to him and he was allowed a period of one month to file the written submissions/ response to the interim order along with the documents, if any.

Considering that reasonable opportunities to the Company and its directors had already been afforded for making submissions in the matter, I am inclined to proceed further with the matter, on the basis of merits of the case.

5. I have considered the interim order and the material available on record. The following are the observations from the interim order: “… i. MLFL was incorporated on August 11, 2006, with the ROC, Odisha with CIN No. as U65921OR2006PLC008904. MLFL's Registered Office is at Plot No. 320 B, Sahid Nagar, Bhubaneswar – 751010, Odisha, India. ii. The present Directors in MLFL are Shri Upendra Nath Mishra, Shri Bijoy Kumar Routray and Shri Durga Prasad Shadangi. iii. Shri Kali Prasad Mishra, Shri Durga Prasad Misra and Smt. Banaja Pattnaik, who were earlier Directors in MLFL, have since resigned. iv. From the application form in respect of the issue of Redeemable Preference Shares ("Offer of Redeemable Preference Shares") by MLFL, it is observed that the terms and conditions included the following: a. "Who can Buy: (a) Adult Individuals, either single or jointly (not exceeding three), resident in India (b) Parents/Guardians on behalf of minors, (c) Registered Partnership Firms/Trusts, (d) Companies, (e) Domestic and Public Sector Undertakings registered in India, (f) Registered Societies, Association of Persons, body of Individuals, Clubs, etc. (g) Such other individuals, institutions, body corporate, etc. as may be allowed under the provisions of law of the land and as decided by the management of MLFL from time to time." v. MLFL issued "Cumulative Redeemable Preference Shares" ("Offer of Redeemable Preference Shares") to a large number of investors during the Financial Years 2010– 11, 2011–12 and 2012–13, details of which are provided below - Type of Year Date of No. of No. of persons to Total Amount Security Allotment preference whom preference (₹) shares allotted shares were allotted

Cumulative 2010–11 16.12.2010 1532112 20587 15,32,11,200 Redeemable 2011–12 31.03.2012 2630 29 2,63,000 Preference 2012–13 16.05.2012 590171 3103 5,90,17,100 Shares 20.06.2012 1186625 4137 11,86,62,500 03.10.2012 2494914 22406 24,94,91,400 Total 5806452 50262 58,06,45,200 …”

6. 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.

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. 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. I now place my reliance on the order of 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. I note that the Company had submitted the extract of minutes of meetings of Board of Directors and from the same it was noted that it had offered and allotted RPS to a total of 50,262 allottees (i.e.

20,587 allottees as on December 16, 2010; 29 allottees as on March 31, 2012; 3,103 allottees as on May 16, 2012; 4,137 allottees as on June 20, 2012 and 22,406 allottees as on October 03, 2012) and had raised ₹58,06,45,200. The Company has not denied the allotment of RPS. Considering the same, it is held that the Company had made an offer and allotted RPSs to more than 49 persons, thereby making a public issue of RPSs (in terms of the first proviso to Section 67(3) of the Companies Act, 1956) during the financial years 2010-11, 2011-12 and 2012-13 as alleged in the interim order.

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), 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 further alleged that the Company had failed to comply with Section 73 of the Companies Act, 1956, in respect of its issuance of RPS. By issuing RPSs 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 RPSs, 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) of the Companies Act, 1956.

14. From the foregoing, I conclude that the Company has failed to comply with the provisions of Sections 56, 60, 73 of the Companies Act, 1956 read with the Companies Act, 2013 in respect of its offer and issuance of RPSs, as discussed in this Order. The Company shall therefore be liable to make refunds as per the mandate under Section 73(2) of the Companies Act, 1956 and also for regulatory action for committing the above violations.

15. Liability of Directors: The interim order was issued against the directors of the Company namely Mr. Upendra Nath Mishra, Mr. Durga Prasad Misra, Mr. Bijoy Kumar Routray, Mr. Durga Prasad Shadangi, Mr. Kali Prasad Mishra and Ms. Banaja Pattnaik. a. The details of their appointment and resignations are as under: Name Date of Appointment Date of Cession Mr. Upendra Nath Mishra 11/08/2006 Continuing as director Mr. Durga Prasad Misra 04/09/2009 14/05/2010 Mr. Bijoy Kumar Routray 13/05/2013 25/11/2013 Mr. Durga Prasad Shadangi 13/05/2013 Continuing as director Mr. Kali Prasad Mishra 11/08/2006 13/05/2013 Ms. Banaja Pattnaik 11/08/2006 13/05/2013 Ms. Minati Samal 18/11/2013 Continuing as director b. I note that the Company had offered and issued RPS in the financial years 2010-11, 2011-12 and 2012-13 (the date of first allotment being December 16, 2010 and the last available date being October 03, 2012). 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. From the table above, it is noted that Mr. Upendra Nath Mishra, Mr. Durga Prasad Misra, Mr. Kali Prasad Mishra and Ms. Banaja Pattnaik were the persons responsible for the affairs of the Company during the time of impugned issue and allotments of RPSs. Mr. Upendra Nath Mishra, Mr. Durga Prasad Misra and Mr. Kali Prasad Mishra vide a common letter dated June 24, 2015 had submitted that the office of the Company is under lock and key by the Crime Branch, Orissa Police and they are not having access to the records/ documents of the Company. I note that considerable time has elapsed since then and these persons have till date not submitted any reply/ documents. I note that Mr. Durga Prasad Misra, Mr. Kali Prasad Mishra and Ms. Banaja Patnaik were also the subscribers to the Memorandum of Association of the Company.

Mr. Upendra Nath Mishra continue to be the director of the Company. Mr. Durga Prasad Misra had resigned on May 14, 2010. Mr. Kali Prasad Mishra and Ms. Banaja Pattnaik had resigned from the Company on May 13, 2013, i.e. after the last available date of allotment of RPSs. Notwithstanding the above, I note that these persons were responsible for the affairs of the Company, at the relevant point of time and responsible for the violations committed by the Company and liable, jointly and severally, for making refunds along with the interest 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. Bijoy Kumar Routray, Mr. Durga Prasad Shadangi and Ms. Minati Samal are the present directors of the Company.

Mr. Bijoy Kumar Routray and Mr. Durga Prasad Shadangi were appointed as director of the Company on May 13, 2013 i.e. after the last available date of allotment of RPSs.

It is observed that Mr. Bijoy Kumar Routray and Mr. Durga Prasad Shadangi have not exercised necessary diligence after becoming the directors in the Company. The inaction by these against the management (for violating the public issue norms as stipulated under the Companies Act, 1956 while making the offer and issuing the RPSs), leads one to conclude on a possible collusion with the Company and its management. Further, Mr. Bijoy Kumar Routray and Mr. Durga Prasad Shadangi have also not taken any steps to remedy the violations committed. Accordingly, I hold these persons to be responsible for the same.

Ms. Minati Samal was appointed as a director of the Company on November 18, 2013. However, she is not the noticee in the interim order. Being a director in the Company, she 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 Ms. Minati Samal, and initiate appropriate action against her, in accordance with law, including issuance of a show cause notice calling upon her to show cause as to why, suitable directions including the following should not be imposed upon her: i. directing her jointly and severally to refund the money collected through the issue of RPSs (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 her 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 her from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period; iv. directing her and other companies in which she is director/ promoter holding substantial or controlling interest, to not access the capital market for an appropriate period.

16. I note that the Company and its directors namely Mr. Upendra Nath Mishra, Mr. Durga Prasad Misra, Mr. Bijoy Kumar Routray, Mr. Durga Prasad Shadangi, Mr. Kali Prasad Mishra and Ms. Banaja Pattnaik were required to provide full inventory of the assets and properties within 21 days from the date of receipt of the interim order. However, the Company and its directors have not submitted full inventory of the assets and properties.

17. 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, Micro Leasing and Funding Limited [PAN: AAECM7687C] its directors namely Mr. Upendra Nath Mishra [PAN: AHDPM1535G], Mr. Durga Prasad Misra [PAN: AATPM7049N; DIN: 00627749], Mr. Bijoy Kumar Routray [PAN: AIBPR3316B], Mr. Durga Prasad Shadangi [PAN: AZAPS2983D], Mr. Kali Prasad Mishra [PAN: ANZPM6759L] and Ms. Banaja Pattnaik [PAN: AGTPP2815R] 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/ or its present management are permitted to sell the assets of the Company only for the sole purpose of making the refunds as directed above and deposit the proceeds in an Escrow Account opened with a nationalised Bank.

d. The Company and its present management 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 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. Micro Leasing and Funding Limited, Mr. Upendra Nath Mishra, Mr. Durga Prasad Misra, Mr. Bijoy Kumar Routray, Mr. Durga Prasad Shadangi, Mr. Kali Prasad Mishra and Ms. Banaja Pattnaik are also directed to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/ securities, if held in physical form.

g. In case of failure of the Company, Micro Leasing and Funding Limited, its directors including Mr. Upendra Nath Mishra, Mr. Durga Prasad Misra, Mr. Bijoy Kumar Routray, Mr. Durga Prasad Shadangi, Mr. Kali Prasad Mishra and Ms. Banaja Pattnaik 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 appropriate action as deemed fit. v. would also make a reference to the Ministry of Corporate Affairs to flag the names of notice directors in its database so that information may be perused by RoC or any other regulatory authority.

h. Micro Leasing and Funding Limited is directed not to, directly or indirectly, access the capital market by issuing prospectus, offer document or advertisement soliciting money from the public and 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 (4) years from the date of completion of refunds to investors, made to the satisfaction of SEBI, as directed above.

i. The directors of the Company namely Mr. Upendra Nath Mishra, Mr. Durga Prasad Misra, Mr. Bijoy Kumar Routray, Mr. Durga Prasad Shadangi, Mr. Kali Prasad Mishra and Ms. Banaja Pattnaik 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 (4) years on completion of the repayments, as directed above.

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

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

22. As mentioned in paragraphs 15(d) of this Order, SEBI shall take appropriate action, in accordance with law, in respect of the persons concerned.

DATE : March 31, 2016 PRASHANT SARAN PLACE : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA