Order in the matter of Progress Cultivation Limited

WTM/PS/194/IMD-ERO/MAR/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 respect of – 1. Progress Cultivation Limited (PAN: AAFCP0825N) and its Directors, 2. Mr. Souvik Mistry (DIN: 02566012, PAN: AKWPM4694A), 3. Mr. Bikash Howlader (DIN: 02566016,PAN: ABYPH4184M), 4. Mr. Ajoy Das (DIN: 05221652, PAN: AKTPD7363C), and 5. Mr. Avinash Chandra Verma (DIN: 06914429)

Date of hearing: September 04, 2015 Appearance: Mr. Subhajit Das, Company Secretary appeared for the Company, Mr. Bikash Howlader, Souvik Mistry and Ajoy Das. For SEBI: Mr. Prasanta Mahapatra, General Manager, Mr. T. Vinay Rajneesh, Assistant General Manager and Ms. Nikki Agarwal, Assistant Manager. Date of hearing: October 01, 2015 – None of the noticees appeared.

1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”), vide an ex-parte interim Order dated August 14, 2014 (hereinafter referred to as "the interim order") had observed that the company, Progress Cultivation Limited (hereinafter referred to as "PCL" or "the Company") was prima facie engaged in fund mobilizing activity from the public through its offer and issue of Redeemable Preference Shares (hereinafter referred to as "RPSs") and allegedly violated the provisions of sections 56, 60 read with section 2(36), 73 of the Companies Act, 1956 read with the Companies Act, 2013.

2. In order to protect the investors who have subscribed to the impugned offer and issue of RPS and to ensure that the Company and its directors are restrained from carrying on with their fund mobilizing activity, SEBI had issued the following directions:

i. “PCL shall not mobilize funds from investors through the Issue of RPS 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. PCL and its Directors, viz. Shri Souvik Mistry (DIN: 02566012), Shri Bikash Howlader (DIN: 02566016) and Shri Ajoy Das (DIN: 05221652), 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. PCL 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. PCL shall provide a full inventory of all its assets and properties; iv. PCL's abovementioned Directors shall provide a full inventory of all their assets and properties; v. PCL and its abovementioned Directors shall not dispose of any of the properties or alienate or encumber any of the assets owned/acquired by that company through the Issue of RPS, without prior permission from SEBI; vi. PCL and its abovementioned Directors shall not divert any funds raised from public at large through the Issue of RPS, which are kept in bank account(s) and/or in the custody of PCL; vii. PCL and its abovementioned Directors shall, within 21 days from the date of receipt of this Order, provide SEBI with all relevant and necessary information, as sought vide SEBI letter dated April 8, 2014, in respect of the Issue of RPS.”

3. The interim order came into force with immediate effect. The interim order contained prima facie observations made on the basis of the correspondences exchanged between SEBI and PCL alongwith the documents contained therein and the information obtained from the 'MCA 21 Portal’. The interim order had advised the Company and its directors, Mr. Bikash Howlader, Souvik Mistry and Ajoy Das (collectively referred to as “the noticees”) to file their replies and also to inform whether they desire to avail an opportunity of personal hearing.

4. The copies of the interim order were forwarded to the noticees vide SEBI letters dated August 14, 2014. Mr. Souvik Mistry, vide letter dated September 10, 2014, while acknowledging the interim order passed against him had submitted that he had resigned from the Company on July 08, 2014 and had filed necessary form with the ROC on July 22, 2014. He further stated that he was no more a director in the Company and requested SEBI to lift the restrictions imposed on him. He enclosed copies of Form DIR-12 which mentioned that this noticee resigned w.e.f July 08, 2014.

5. The Company, vide letter dated September 04, 2014 submitted the reply to the interim order, wherein the following was stated:

(a) As per the directions in the interim order, the Company was not mobilizing funds from investors by any means and that the Company/its directors have not and shall not issue any prospectus or any offer document soliciting money from the public. It was also stated that the noticees shall not deal in the securities market. (b) The Company submitted a list of assets and stated that as the directors have not acquired any assets out of the funds of the Company, providing their assets details was immaterial. (c) The Company/directors undertook – i. That they would not dispose or alienate or encumber any of the assets of the Company acquired through issue of RPS. ii. That they would not divert funds raised from public through issue of RPS. (d) The Company also submitted that it had already provided (vide its letter dated April 24, 2014) the documents sought by SEBI vide letter dated April 08, 2014.

Though Company had stated that it already provided information, it is noted that the Company had provide only copies of MoA, AoA, audited annual accounts of the Company for the previous three years and name, address and occupation of all the promoters/directors of the Company.

6. One Samir Das, stating to be a former director of the Company had informed SEBI vide letter dated June 11, 2015 regarding the attempt of the Company to alienate/encumber the factory premises with plant and machinery and other such rights of the Company. Pursuant to the same, SEBI had vide letter dated July 16, 2015, advised the noticees to strictly comply with the directions issued vide the interim order and were cautioned that violation of the same would render them liable for legal consequences.

7. The noticees were afforded an opportunity of personal hearing on August 03, 2015. SEBI had intimated the schedule of the personal hearing vide letters dated July 21, 2015 to the noticees. However, these letters, except for Mr. Ajoy Das, had returned undelivered. However, the Company vide its letter dated August 31, 2015 stated that the noticees are in the process of collecting necessary documents and requested further time of 21 days to appear before SEBI and make submissions. In the interest of natural justice, this request was allowed. The noticees were afforded another opportunity of hearing on September 04, 2015 and were informed of the same vide SEBI letters dated August 24, 2015. SEBI also made a public notice in newspapers in the Times of India and Anandbazar Patrika dated September 03, 2015, regarding the proceedings initiated vide the interim order and the personal hearing fixed on September 04, 2015.

8. On the date of personal hearing (i.e. September 04, 2015), the noticees were represented by Mr. Subhajit Das, Company Secretary. The representative undertook to file authority letters from the directors. The representative sought for adjournment as he was engaged on short notice. The request was accepted and the final opportunity of personal hearing was fixed on October 01, 2015.

9. On October 01, 2015, SEBI received a facsimile message from Mr. Subhajit Das, Company Secretary, who had appeared for the noticees in the hearing held on September 04, 2015. In this letter, the representative had stated the following:

(a) The Company had authorized him to appear in the hearing. As the directors did not submit separate authorization letters, he had made a declaration in the previous hearing that he would forward the authorization letters same on that day itself. However, pursuant to the hearing on September 04, 2015, none of the directors had turned up and took note of the subsequent procedures to be followed. (b) Despite making repeated reminders, the noticees did not furnish any document or record with which he could appear in the hearing scheduled on October 01, 2015. (c) The representative had indicated that in view of the above conduct of the noticees, he had dispensed himself from the instant case and that he does not hold any kind of relation or access to any information pertaining to the Company and any of its directors. He therefore requested SEBI not to treat him as a defaulter.

10. As adequate opportunities have been afforded to the noticees, I deem it proper to close further opportunities and proceed with the matter on merits. The interim order had alleged that the Company, in pursuance of its fund mobilizing activity from the general public, had made a public issue of RPS without complying with the provisions of sections 56, 60 and 73 of the Companies Act, 1956. The interim order had relied upon the submissions/documents of the Company to SEBI and the information available on the MCA-21 portal. The following observations from the interim order are relevant to note: i. PCL was incorporated on March 25, 2009, with the ROC, Kolkata, West Bengal with CIN No. as U01400WB2009PLC134240. PCL's Registered Office is at Moon Sun Apartment, Flat – D, 2nd Floor, Kolkata–700052, West Bengal, India.

ii. The Directors in PCL are Shri Souvik Mistry, Shri Bikash Howlader and Shri Ajoy Das.

iii. PCL issued "Redeemable Preference Shares" ("Issue of RPS") to a large number of investors during the Financial Years 2009–10, 2010–11 and 2011–12, details of which are provided below - Year Type of Security No. of persons Total Amount to whom RPS (₹ in Crores) were allotted 2009 – 10 Preference Shares 248 0.25

2010 – 11 Preference Shares 1524 1.61

2011 – 12 Preference Shares 143 0.22

Total 1915 2.07*

* As per Form-2 filed by the Company with the RoC. However, as per the Balance Sheet as on March 31, 2013, the Company has a preference share capital of Rs.2,22,64,100/- (i.e. 2,22,641 preference shares of Rs.100/- each). This indicates that the figures as per Form-2 and the Balance sheet have not been reconciled. Accordingly, the figure from the Balance Sheet has been considered.

In this regard, I also note the following observation made in the interim order: “From the Balance Sheets for the year ended March 31, 2011 and March 31, 2012, it is observed that the preference share capital was `2.01 Crores and `2.22 Crores respectively. However, as per Form 2 (filed by PCL with the ROC, Kolkata), it is observed that an amount of `1.86 Crores and `2.07 Crores has been indicated as preference share capital for the Financial Years 2010–11 and 2011–12, respectively. It therefore appears that PCL has submitted contradictory information in respect of its preference share capital”.

Further, the following table indicates the preference share capital of the Company along with the preference share application money pending allotment collected by it: Preference Share capital Preference Share application money pending allotment. As per Balance Rs.2,22,64,100/- Rs.7,09,48,300/- Sheet as on March 31, 2013 As per Balance Rs.2,22,64,100/- Rs.4,06,35,900/-. Sheet as on March 31, 2012 As per Balance Rs.2,00,77,600/- Rs.2,57,40,500/-. Sheet as on March 31, 2011 As per Balance Rs.25,00,000/- -- Sheet as on March 31, 2010

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

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

12. As can be seen, the Company had made offer and allotted – (i) RPS to 248 persons during 2009-2010; (ii) RPS to 1524 persons during 2010-2011; and (iii) RPS to 143 persons during 2011-2012.

The same would prove that the Company had made offer and allotted RPS to more than 49 persons during each of the above said financial years. Further, as per the Balance Sheet as on March 31, 2013, the Company had raised around Rs.2,22,64,100/- through issuance of such securities. Therefore, in terms of the first proviso to section 67(3), the Company has definitely made a public issue of RPS. The Company has not disputed the allegations and observations made in the interim order.

13. The interim order had, on the basis of the information contained in the Balance Sheets for the year ended March 31, 2011, March 31, 2012 and March 31, 2013, observed that the Company had mobilized huge amounts as “share application money pending allotment” for an unduly long period of time. The details are as under:

SHARE APPLICATION MONEY (`) KIND OF SECURITIES 2010–11 2011–12 2012–13 EQUITY SHARES NIL 53,00,000 1,69,66,000 PREFERENCE SHARES 2,57,40,500 4,06,35,900 7,09,48,300

14. From the above paragraphs, I note that – (a) the Company had raised a sum of Rs.2,22,64,100/- through issue and allotment of RPS and had also mobilized a further Rs.7,09,48,300/- as of March 2013 as ‘share application money pending allotment’. It could therefore be said that the Company had mobilized a total of Rs.9,32,12,400/- in respect of its public offer and issue of RPS till March 2013.

(b) the equity share capital of the Company as on March 31, 2011 was Rs.5,00,000/- and the same increased to Rs.45,00,000/- during FY 2011-2012. As per Form-2, 40,000 equity shares of Rs.100/- each were allotted on November 03, 2011 to 6 persons including Souvik Mistry, Bikash Howlader and Sohini Mistry. However, as mentioned in paragraph 13 above, the Company had collected approximately Rs.1,69,66,000/- crore towards equity share application money pending allotment, as on March 31, 2013. The amount mobilized as ‘share application money pending allotment’ indicates prima facie that the Company may have made a public offer of equity shares in violation of public issue norms. SEBI is therefore advised to examine the same and initiate action as deemed fit.

15. By making a public issue of RPSs, the Company was mandated to comply with all the legal provisions that govern and regulate public issue of such securities, including the Companies Act, 1956 and the SEBI Act and regulations. In this regard, I note that in terms of section 55A of the Companies Act, 1956, SEBI shall administer various provisions (as mentioned therein) of the said Act with respect to issue and transfer of securities by listed companies, companies that intend to list and also those companies that are required to list its securities while making offer and issue of securities to the public. While examining the scope of Section 55A of the Companies Act, 1956, the Hon'ble Supreme Court of India in Sahara Case, had observed that: "We, therefore, hold that, so far as the provisions enumerated in the opening portion of Section 55A of the Companies Act, so far as they relate to issue and transfer of securities and non-payment of dividend is concerned, SEBI has the power to administer in the case of listed public companies and in the case of those public companies which intend to get their securities listed on a recognized stock exchange in India." " SEBI can exercise its jurisdiction under Sections 11(1), 11(4), 11A(1)(b) and 11B of SEBI Act and Regulation 107 of ICDR 2009 over public companies who have issued shares or debentures to fifty or more, but not complied with the provisions of Section 73(1) by not listing its securities on a recognized stock exchange".

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

16. The interim order has alleged that the Company failed to comply with sections 56, 60 and 73 of the Companies Act, 1956. In this regard, I observe the following:

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

b. By making a public issue of RPS, the Company had to compulsorily list such securities in compliance with section 73(1) of the Companies Act, 1956. As per section 73(1) Companies Act, 1956, a company is required to make an application to one or more recognized stock exchanges for permission for the shares or debentures to be offered to be dealt with in the stock exchange. There is no material to say that the Company has filed an application with a recognized stock exchange to enable the RPSs to be dealt with in such stock exchange. Therefore, the Company has failed to comply with this requirement.

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

As the Company failed to make an application for listing such securities, the Company had to forthwith repay such money collected from investors, through allotment of RPS and also those kept in the Company’s possession pending allotment. If such repayments are not made within 8 days after the Company becomes liable to repay, the Company and every director is liable to repay with interest at such rate. The liability of the Company to refund the public funds collected through offer and allotment of the impugned RPSs is continuing and such liability would continue till repayments are made. There is no record to suggest that the Company made the refunds as per law. Further, SEBI is in receipt of complaints from investors alleging default by the Company in making repayments.

The Hon'ble Supreme Court of India in the Sahara case has examined section 73 and made the following observations: "Section 73(1) of the Act casts an obligation on every company intending to offer shares or debentures to the public to apply on a stock exchange for listing of its securities. Such companies have no option or choice but to list their securities on a recognized stock exchange, once they invite subscription from over forty nine investors from the public. If an unlisted company expresses its intention, by conduct or otherwise, to offer its securities to the public by the issue of a prospectus, the legal obligation to make an application on a recognized stock exchange for listing starts. Sub-section (1A) of Section 73 gives indication of what are the particulars to be stated in such a prospectus. The consequences of not applying for the permission under sub-section (1) of Section 73 or not granting of permission is clearly stipulated in sub-section (3) of Section 73. Obligation to refund the amount collected from the public with interest is also mandatory as per Section 73(2) of the Act. Listing is, therefore, a legal responsibility of the company which offers securities to the public, provided offers are made to more than 50 persons."

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

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

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

17. In view of the above observations, I conclude that the Company made a public offer of RPS during FY 2009-2010 to 2012-2013 and had mobilized funds atleast to the tune of Rs.9,32,12,400/- (i.e. preference shares of Rs.2,22,64,100/-+ preference share application money pending allotment of Rs.7,09,48,300/- as on March 31, 2013) by either issuing RPS or retaining the monies pending allotment of RPS, and had failed to comply with the provisions of sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013.

18. The interim order has been issued against the Company’s directors, Mr. Bikash Howlader, Souvik Mistry and Ajoy Das.

As per the “Register of directors, managing directors etc” dated December 04, 2014 maintained by the RoC, West Bengal, I note the following:

(a) Bikash Howlader was appointed as a director on March 25, 2009 and still continues to be a director. (b) Souvik Mistry was appointed as a director on March 25, 2009 and resigned on July 08, 2014. (c) Ajoy Das was appointed as a director on April 26, 2013 and continues to be a director. (d) In addition to Bikash Howlader and Ajoy Das, Avinash Chandra Verma is a present director having been appointed on July 05, 2014.

The Company has been found to have violated sections 56, 60 and 73 of the Companies Act, 1956 with respect to its public offer and issue of RPS during FY 2009-2010 to 2012-2013. In the light of the above facts, I observe the following:

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

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

(iii) In view of the above reasons and observations, Mr. Bikash Howlader and Souvik Mistry are liable, as directors of the Company, for the violation of sections 56, 60 and 73 of the Companies Act, 1956 as found in this Order and would also be liable to make refunds in terms of section 73(2) of the Companies Act read with section 27 of the SEBI Act, as ordered herein.

(iv) Ajoy Das (irrespective of whether he resigned or continues) shall be liable for making refunds in terms of section 73(2) of the Companies Act, 1956 read with section 27 of the SEBI Act along with interest as ordered herein along with other enforcement directions.

(v) Avinash Chandra Verma is one of the present directors of the Company and is therefore deemed to be aware of the proceedings against the Company. However, he is not a noticee in the interim order. Being a director in the Company, he 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.

I also note from the “Register of directors, managing directors etc” dated December 04, 2014 that Sohini Mistry (director from 25.03.2009 to 26.04.2013) and Samir Das (director from 24.05.2013 to 05.08.2013) were the past directors who are not covered under the interim order. Sohini Mistry appears to have been in the board of directors of the Company during the period when the offer and issuance of RPSs were made and has allegedly defaulted in making repayments. Samir Das, who became a director during the year 2013, has allegedly defaulted in making repayments and seems to have not taken any steps for remedying the violations by reporting the same to the regulatory authority.

SEBI is therefore advised to examine role of Avinash Chandra Verma, Sohini Mistry and Samir Das, 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: a. directing them jointly and severally to refund the money collected through the issue of RPS (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; b. 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; c. directions restraining them from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period; d. 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.

19. I also note that the directors have not furnished information regarding their assets inspite of a specific direction in the interim order. The Company has submitted that as the directors have not acquired any assets out of the funds of the Company, providing the details of their assets was immaterial. In this regard, the noticees should appreciate that the liability to repay under section 73(2) of the Companies Act, 1956 read with section 27 of the SEBI Act is a joint and several liability. Therefore, even if the directors have not acquired assets from Company’s funds, SEBI is empowered under law to attach and recover their properties to satisfy the dues to the investors.

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

(a) Progress Cultivation Limited and its directors, Mr. Bikash Howlader, Mr. Souvik Mistry and the former director, Mr. Ajoy Das, 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 securities, if any, with an interest of 15% per annum compounded at half yearly intervals, from the date when the repayments became due (in terms of Section 73(2) of the Companies Act, 1956) to the investors till the date of actual payment.

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

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

(d) Progress Cultivation Limited and its directors shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily with wide circulation, detailing the modalities for refund, including details of contact persons including names, addresses and contact details, within fifteen days of this Order coming into effect.

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

(f) Progress Cultivation Limited and its directors, Mr. Bikash Howlader, Mr. Souvik Mistry and the former director, Mr. Ajoy Das 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 Progress Cultivation Limited and its directors, Mr. Bikash Howlader, Mr. Souvik Mistry and the former director, Mr. Ajoy Das in complying 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 action against the Company and directors 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) Progress Cultivation Limited is directed not to, directly or indirectly, access the capital market by issuing prospectus, offer document or advertisement soliciting money from the public and are further restrained and prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, from the date of this Order till the expiry of 4 years from the date of completion of refunds to investors as directed above.

(i) Mr. Bikash Howlader, Mr. Souvik Mistry and Mr. Ajoy Das are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, with immediate effect. They are also restrained from issuing prospectus, offer document or advertisement soliciting money from the public and associating themselves with any listed public company and any public company which intends to raise money from the public, or any intermediary registered with SEBI. The above directions shall come into force with immediate effect and shall continue to be in force from the date of this Order till the expiry of 4 years from the date of completion of refunds to investors, as directed above.

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

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

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

23. 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.

24. As mentioned in paragraphs 14(b) and 18(v) of this Order, SEBI shall take appropriate action, in accordance with law, in respect of the persons concerned.

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA Date: March 22nd, 2016 Place: Mumbai