ORDER IN THE MATTER OF RAMEL REAL ESTATE & INFRASTRUCTURE LIMITED

WTM/PS/153/ERO-IMD/FEB/2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992, In respect of - 1. Ramel Real Estate and Infrastructure Limited (CIN: U45400WB2009PLC138901, PAN: AAECR6852L) and its Directors, 2. Mr. Remendra Mohan Sarkar (DIN: 01753154, PAN:AUIPS3363G), 3. Mr. Rameswar Podder (DIN: 01753196, PAN: AFVPP4292B), 4. Mr. Sukanta Deb (DIN: 01753238, PAN: AJIPD0118R) and 5. Mr. Partha Das (DIN: 03631995, PAN: ANMPD8317J); 6. Debenture trustee, Ramel Real Estate and Infrastructure Debenture Trust (represented by its Trustee, viz. Mr. Sanjoy Deb).

1. Securities and Exchange Board of India (“SEBI”), vide an ex-parte interim Order dated August 06, 2014 (“interim order”) prima facie observed that the company, Ramel Real Estate and Infrastructure Limited (“the Company” or “RREIL”) is engaged in fund mobilization activity from the public through the offer of Non-Convertible Debentures (“NCDs”) in violation of sections 56, 60, 73, 117B and 117C of the Companies Act, 1956 read with the Companies Act, 2013 and the provisions of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (“the ILDS Regulations”). The interim order also alleged that the debenture trustee, Ramel Real Estate and Infrastructure Debenture Trust (represented by its Trustee, viz. Mr. Sanjoy Deb) had allegedly failed to meet the eligibility conditions specified under regulation 7 of the SEBI (Debenture Trustees) Regulations, 1993 ("DT Regulations") and acted as an unregistered debenture trustee in violation of section 12(1) of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”).

2. In order to protect the interest of investors who had subscribed to such securities offered and issued by the Company and to prevent the Company and its directors from continuing with their unlawful fund mobilization from public, SEBI issued the following directions vide the interim order:

“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. RREIL 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. RREIL and its Directors, viz. Shri Remendra Mohan Sarkar (DIN: 01753154), Shri Rameswar Podder (DIN: 01753196), Shri Sukanta Deb (DIN: 01753238) and Shri Partha Das (DIN: 03631995), 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 directions; iii. RREIL 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. RREIL shall provide a full inventory of all its assets and properties; v. RREIL's abovementioned Directors shall provide a full inventory of all their assets and properties; vi. RREIL 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 Offer of NCDs, without prior permission from SEBI; vii. RREIL and its abovementioned 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 RREIL; viii. Ramel Real Estate and Infrastructure Debenture Trust (represented by its Trustee, viz. Mr. Sanjoy Deb) is prohibited from continuing with his present assignment as a debenture trustee in respect of the Offer of NCDs of RREIL 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”.

3. For sake of convenience, the Company, its directors Remendra Mohan Sarkar, Rameswar Podder, Sukanta Deb and Partha Das, its debenture trustee, Ramel Real Estate and Infrastructure Debenture Trust (represented by its Trustee, Mr. Sanjoy Deb) are collectively referred to as “the noticees”. The interim order afforded opportunity to the noticees to file their submissions and seek an opportunity of personal hearing.

4. The interim order was forwarded to the noticees vide SEBI letters dated August 08, 2014 through Speed Post with Acknowledgment Due. The interim order returned undelivered with respect to Mr. Remendra Mohan Sarkar and Mr. Sukanta Deb. Thereafter, SEBI tried to serve the interim order by hand delivery and/ or pasting the same in the last known address of noticees. The interim order was hand delivered on Mr. Partha Das and Mr. Sukanta Deb which were received on their behalf. The interim order was pasted on the premises of the Company, Mr. Remendra Mohan Sarkar, Mr. Rameswar Podder and Ramel Real Estate and Infrastructure Debenture Trust.The interim order was received by the Trustee, Mr. Sanjoy Deb who filed his reply vide letter dated August 18, 2014.

5. The noticees were also provided an opportunity of personal hearing on August 12, 2015 and the schedule of the same was intimated to the noticees vide SEBI letters dated July 24, 2015. SEBI also issued a newspaper notice dated August 05, 2015 in The Times of India and Anand Bazar Patrika intimating the noticees regarding the proceedings initiated vide the interim order and the personal hearing.

6. On August 12, 2015, except for Mr. Sanjoy Deb (the trustee of the debenture trustee), represented by his counsel, Mr. Nikhil Salvi, none of the other noticees appeared. They did not request for another opportunity. The Advocate who represented Mr. Sanjoy Deb submitted that this noticee had already resigned from his trustee position and requested for one month’s time for filing written submission. The request was allowed.

7. Thereafter, vide letter dated September 11, 2015 read with letter dated November 16, 2015, the Advocate filed written submissions on behalf of Mr. Sanjoy Deb, inter alia submitting the following:

(a) The noticee was a victim of an organized and predetermined fraud committed upon the public at large by the Company and its directors – R. N. Sarkar (appears to be a reference to Mr. Remendra Mohan Sarkar), R. Poddar, Parta Das, Sukanta Deb and the debenture trust.

(b) Though the noticee is an Advocate, he is involved only in registration of documents at the office of the District Sub-Registrar in Jalpaiguri and the surrounding areas.

(c) Sometime in the year 2010, Sukanta Deb (director of the Company) approached the noticee with a request to stamp and register certain documents pertaining to certain lands allegedly purchased by the Company. The noticee did the necessary registration work and was promised more transactions and income from such stamping and registration of documents by the said director.

(d) The noticee was informed in 2012 that the business of the Company had to be expanded and that the Company would invest huge funds and acquire large pieces of land which would be entrusted to him for registration purpose. The noticee was also informed that substantial funds would be required for such expansion and that the Company had issued capital to the tune of Rs.5 lakh.

(e) The noticee was informed that they would enhance his payment, which at the relevant time was Rs.2.5 lakh per annum approximately. The same is evidenced from the Income Tax Return filed by the noticee. Returns for FY 31.03.2013 and 31.03.2014 were said to be enclosed. (However, on perusal, it is observed that the said Returns were for FY 2011-12 and 2012-13).

(f) On invitation from Sukanta Deb, the noticee visited the premises of the Company in Kolkata during December 2011. However, he did not meet the other directors.

(g) Sometime in the year 2012, the noticee was informed that the directors of the Company would take care of all the legal requirements for issuance of debentures and that such issuance would be completely under the control and management of the directors of the Company. The noticee was also informed that the compliance of all statutory provisions, mostly under the Companies Act and SEBI, would be the responsibility of the directors and that the noticee would only be concerned with the registration of documents on purchase of land by the Company.

(h) The noticee was informed by Sukanta Deb that the Company had decided to issue debentures and raise funds to the tune of Rs.75 crore and the same would be used for purchasing immovable properties all over the State of West Bengal. The noticee was also informed that for such issuance, he was required to act as a Trustee, which was devoid of performance of any legal obligations. The noticee was also informed that as a debenture trustee, he had no role to act and all issues relating to investments, acquisition of immovable properties, and payment of interest to the debenture holders would be wholly undertaken by the Company. The noticee was also informed that for agreeing to act as a debenture trustee, the noticee would be paid a sum of Rs.5000/- per month.

(i) The noticee was also informed that this arrangement was temporary and upon acquisition of immovable properties and registration of the same, the noticee’s role as a debenture trustee would cease and the Company would appoint a ‘proper Trustee’.

(j) The noticee was also informed that as a debenture trustee, he was required to act as mortgagee and that he would be vested with certain rights which would be for securing the amounts payable towards interest for the debentures to the subscribed public at large. The deed of mortgage also mentioned the payment to the noticee. Based on the representation, the noticee had signed two documents – public trust dated February 18, 2012 (where the noticee agreed to act as trustee) and mortgage deed dated February 18, 2012 whereby the Company was a mortgager and the noticee was the mortgagee. The two documents were signed by R. M. Sarkar, whom the noticee never met.

(k) The noticee was never paid the amount of Rs.5000/- promised to him and was never invited to any meetings of the directors. The noticee was not informed as to the number of debentures floated, the number of applicants who were invited to participate, actual number of debentures issued etc. The noticee was also not informed as to how the funds were deployed and what are the investments made out of the said amount of Rs.75 crore collected by the Company.

(l) The noticee did not also know whether the Company actually disbursed the interest under the issue of debentures. When few persons informed the noticee that they did not receive interest, the noticee had tried to contact the directors but was without any success. The directors did not even respond to telephonic calls made by the noticee seeking payments to investors.

(m) In such circumstances, the noticee vide letter dated July 15, 2013 informed the directors that he was resigning from the position as a trustee. The same was accepted and the Company in response (letter dated July 24, 2013) informed that it was going through financial crisis and several properties of the Company and directors were proposed to be sold for satisfying the liabilities. It was also informed that the Company was not able to sell because of the government’s interference. The Company also informed that a suit was filed in the High Court of Calcutta for sale of premises to enable it to pay the investors. A copy of the resignation letter and its acceptance letter were enclosed.

(n) Considering the representation made by the Company/directors, the noticee should be treated as a ‘rank outsider’ and based on the assurances that the Company would take complete and absolute responsibility for compliances of all statutory obligations which are mandated under the Companies Act/SEBI regulations, the noticee stood completely absolved of consequences of alleged violations.

(o) The noticee is a small time advocate and largely confined to stamping and registration of documents. He has been deliberately ousted and kept away from the deeds of the directors in raising Rs.75 crore.

(p) The noticee submitted that in such circumstances, invoking sections 117B & 117C of the Companies Act against him was unduly harsh and inequitable as he had nothing to do with the management. The directors of the Company were completely in-charge of the issuance of debentures and in creation of the debenture trust deed which was for covering up their wrongful act and luring the investors into subscribing to the debentures.

(q) The noticee could have never satisfied the eligibility conditions under the DT Regulations as the provision of regulation 7 of the DT Regulations mandates specified entities eligible to act as debenture trustees. The noticee requested that the observations in paragraph 7.3 and 7.8 of the interim order ought to be compassionately considered. The noticee has already disassociated himself from the Company.

(r) The noticee requested that SEBI should declare that he is innocent and is a victim of fraud played by the directors of the Company.

8. I have considered the interim order, the submissions made by the debenture trustee and other material available on record. The Company has not responded to the interim order despite making a public notice. Therefore, I do not have the benefit of further submissions/documents from the Company/noticees and have to decide the case based on the material already available on record. The interim order had inter alia observed/alleged the following:

(a) The offer of NCDs prima facie qualified as a public issue under the first proviso to section 67(3) of the Companies Act, 1956.

(b) The Company was engaged in fund mobilizing activity and violated the provisions of sections 56, 60, 73, 117B and 117C of the Companies Act, 1956 and the relevant provisions of the ILDS Regulations.

(c) The debenture trustee, Ramel Real Estate and Infrastructure Debenture Trust (represented by its Trustee, Mr. Sanjoy Deb) had failed to meet the eligibility criteria specified under the provisions of the DT Regulations and acted as an unregistered Debenture Trustee, in violation of the provisions of SEBI Act read with the DT Regulations.

9. I note that the Company, vide letter dated February 15, 2014, had inter alia stated that- a. "We had issued Secured Non–Convertible Redeemable Debentures on Private Placement ("NCDs") basis. Total amount raised was ₹75 Crores. b. The Issue being private placement, no Prospectus/Red Herring Prospectus/Statement in lieu of Prospectus/Information Memorandum has been filed with Registrar of Companies (ROC). c. The Company has not issued any other series of NCDs except the one stated herein above. d. Date of Opening – February 27, 2012 & Date of Closing – October 18, 2012. e. Number of Application forms circulated – 1045 f. Number of Applications received – 1045 g. Number of Allottees – 1045 h. Date of Allotment – October 19, 2012 i. Since the issue was private placement, no promotional material, etc. has been circulated. The said NCDs had been offered only to the already identified investors." The allotment in respect of the Offer of NCDs was made pursuant to the Resolution of the Committee of Board of Directors of the Company made on October 18, 2012. From the above submissions, it can be noted that the Company had circulated 1045 application forms with respect to its offer of NCDs. The offer for subscription to the NCDs was opened on February 27, 2012 and closed on October 18, 2012. The Company had allotted NCDs to 1045 investors on October 19, 2012 pursuant to the resolution of board of directors on October 18, 2012. The Company has also admitted that it did not issue any offer document/Prospectus/Information Memorandum nor filed the same with the RoC and has mobilized Rs.75 crore through such issue of NCDs.

10. Section 67 of the Companies Act, 1956 provides necessary guidance to determine whether an issue of securities was made on private placement or was made to the public. 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, in a case like the present one, the number of subscribers to whom offer/allotment is made becomes relevant. The Company has admitted that it made offer to 1045 investors and allotted NCDs to such investors on receipt of applications from them on October 19, 2012. The Company is not an NBFC or a PFI. As the offer and allotment of NCDs was made to more than 49 persons, the offer made by the Company becomes a “public issue” of such securities in terms of the first proviso to section 67(3) of the Companies Act, 1956. 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 India Real Estate Corporation Limited & Ors. Vs. SEBI (Civil Appeal no. 9813 and 9833 of 2011) (hereinafter referred to as the '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. By making a public issue of NCDs, the Company was mandated to comply with all the legal provisions that govern and regulate the public issue of such securities, including the Companies Act, 1956 and the SEBI Act and regulations. 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.

12. Sections 56, 60, 73, 117B and 117C of the Companies Act, 1956 and the provisions of the ILDS Regulations are required to be complied by a company making a public issue of securities. Regarding the alleged violation of such provisions of the Companies Act, 1956 and the ILDS Regulations, I observe the following:

(i) 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'. The Company has admitted that it did not file any Prospectus/offer document with the RoC and therefore has violated the aforesaid provisions.

(ii) By making a public issue of securities, the Company had to compulsorily list such securities in compliance with section 73(1) of the Companies Act, 1956. A Company making a public issue of securities cannot choose whether to list its securities or not as listing is a mandatory requirement under law in a public issue. 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. Further, there is no material to say that the Company has filed an application with a recognized stock exchange to enable the NCDs to be dealt with in such stock exchange. Therefore, the Company has failed to comply with this requirement. 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 of such securities, the Company had to forthwith repay such money collected from investors. If such repayments are not made within 8 days after the Company becomes liable to repay, the Company and every director is liable to repay with interest at such rate. The liability of the Company to refund the public funds collected through offer and allotment of the impugned securities 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. 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."

The offer was made during the year 2012 and allotments were made to 1045 persons on October 19, 2012. As mentioned above, the Company or its directors have not participated in the instant proceedings. Further, there is no record to state that the amounts mobilized through the issue of securities have been refunded within the time period as mandated under law. Accordingly, it would be appropriate to levy an interest @ 15% p.a. in terms of section 73(2) of the Companies Act, 1956 and 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 mobilized by the Company through its offer and issue of NCDs from the date when the same was liable to be repaid till date of actual payment to the investor.

(iii) 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 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 as the last balance sheet available on MCA portal pertains to March 2012, which is prior to issuance of NCDs.

(iv) As 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 failed to comply with the following provisions of the ILDS Regulations. (a) Regulation 4(2)(a) – Application for listing of debt securities (b) Regulation 4(2)(b) – In-principle approval for listing of debt securities (c) Regulation 4(2)(c) – Credit rating has been obtained (d) Regulation 4(2)(d) – Dematerialization of debt securities (e) Regulation 4(4) – Appointment of Debenture Trustee (f) Regulation 5(2)(b) – Disclosure requirements in the Offer Document (g) Regulation 6 – Filing of draft Offer Document (h) Regulation 7 – Mode of disclosure of Offer Document (i) Regulation 8 – Advertisements for Public Issues (j) Regulation 9 – Abridged Prospectus and application forms (k) Regulation 12 – Minimum subscription (l) Regulation 14 – Prohibition of mis-statements in the Offer Document (m) Regulation 15 – Trust Deed (n) Regulation 16 – Debenture Redemption Reserve (o) Regulation 17 – Creation of security (p) Regulation 19 – Mandatory Listing (q) Regulation 26 – Obligations of the Issuer, etc.

13. From the foregoing observations, I hereby conclude that the Company did not comply with sections 56, 60, 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 therefore liable for suitable action under the Companies Act, 1956, the SEBI Act and the ILDS Regulations. I also note that the Company had admitted that it mobilized Rs.75 crore through issuance of NCDs. Further, as noted from the interim order in paragraph 2.4, the Company has not provided further details sought by SEBI such as name, folio number, PAN, contact number, etc. of debenture holders, in relation to the NCDs issued by it.

14. The interim order was issued against Mr. Remendra Mohan Sarkar (DIN: 01753154), Mr. Rameswar Podder (DIN: 01753196), Mr. Sukanta Deb (DIN: 01753238) and Mr. Partha Das (DIN: 03631995). With respect to their liability, I observe the following:

(a) As per the details available from the MCA website, all the above persons continue to be the directors in the Company. Mr. Remendra Mohan Sarkar, Mr. Rameswar Podder and Mr. Sukanta Deb were appointed on October 15, 2009. It needs to be noted that the Company was incorporated on October 15, 2009. Thus, it is seen that the above three persons are the directors from the date of incorporation of the Company.

(b) Mr. Partha Das has been appointed as a director on March 14, 2012.

(c) The allotment of NCDs were made on October 19, 2012. The Company is found to have contravened the provisions of sections 56, 60, 73, 117B and 117C of the Companies Act, 1956 and the ILDS Regulations. From the above details, it can be inferred that all the four directors were in the Board of the Company when the Company made the offer and allotment of NCDs in violation of the law.

(d) 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. Further, the directors of a company would also be responsible for complying with the provisions of the ILDS Regulations.

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

(f) In view of the above observations, Mr. Remendra Mohan Sarkar, Mr. Rameswar Podder, Mr. Sukanta Deb and Mr. Partha Das shall be liable for the violations as found against the Company in this Order as well as for making refunds to the investors along with other enforcement action.

15. The interim order has alleged that Ramel Real Estate and Infrastructure Debenture Trust (represented by its Trustee, Mr. Sanjoy Deb) has acted as the debenture trustee in respect of the NCDs issued by the Company without registration from SEBI as required under section 12(1) of the SEBI Act and did not satisfy the eligibility condition stipulated under regulation 7 of the DT Regulations. The trustee, Mr. Sanjoy Deb has made elaborate submissions as to how he was made to believe by the Company/directors that all the responsibilities and compliances would be satisfied by them and that this noticee would only need to act as a temporary trustee till such time the Company found a suitable replacement. The noticee had also submitted that based on the representation and assurances given by the directors of the Company, he had signed two documents (public trust and mortgage deed) on February 18, 2012. The noticee also submitted that he resigned from the position of the trustee and the same was accepted by the Company on July 24, 2013. Having considered the submissions of this noticee, I note that any person who accepts a position which carries certain responsibilities, compliances and eligibility criteria under law ought to have satisfied that he is eligible and if eligible carries out such responsibility under full compliance under law.

The noticee cannot rely on the representations made by the directors or others and take up an assignment. As this noticee has not exercised due diligence while accepting the position as debenture trustee, no lenient view can be taken after noticing violation of law. In the present case, the debenture trustee (and its trustee Mr. Sanjoy Deb) are not registered as ‘debenture trustees’ with SEBI as required under section 12(1) of the SEBI Act. Further, they do not satisfy the following conditions under regulation 7 of the DT Regulations. This regulation prescribes that only a scheduled bank carrying on commercial activity or a public financial institution within the meaning of section 4A of the Companies Act, 1956 or an insurance company or a body corporate should act as a debenture trustee. Accordingly, Ramel Real Estate and Infrastructure Debenture Trust (represented by its Trustee, Mr. Sanjoy Deb) are found to 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.

16. For the above reasons, I, in exercise of the powers conferred upon me under section 19 of the Securities and Exchange Board of India Act, 1992 read with sections 11(1), 11(4), 11A and 11B thereof and regulation 28 of the SEBI (Issue and Listing of Debt Securities) Regulation, 2008 hereby issue the following directions:

(a) Ramel Real Estate & Infrastructure Limited and its directors/promoters including Mr. Remendra Mohan Sarkar, Mr. Rameswar Podder, Mr. Sukanta Deb and Mr. Partha Das, jointly and severally, shall forthwith refund the money collected by the Company through the issuance of Non-Convertible Debentures (which have been found to be issued in contravention of the public issue norms stipulated under the Companies Act, 1956 and the ILDS Regulations), 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) The Company, its directors and other persons named above, shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily (in Bengali) 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) Ramel Real Estate & Infrastructure Limited and its directors/promoters including Mr. Remendra Mohan Sarkar, Mr. Rameswar Podder, Mr. Sukanta Deb and Mr. Partha 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 the company, Ramel Real Estate & Infrastructure Limited and its directors/promoters including Mr. Remendra Mohan Sarkar, Mr. Rameswar Podder, Mr. Sukanta Deb and Mr. Partha Das, in complying with the aforesaid directions, SEBI, on the expiry of the three months period from the date of this order, - a) shall recover such amounts in accordance with section 28A of the SEBI Act including such other provisions contained in securities laws. b) may initiate appropriate action against the Company, its promoters/ directors and the persons/ officers who are in default, including adjudication proceedings against them, in accordance with law. c) would make a reference to the State Government/ Local Police to register a civil/ criminal case against the Company, its promoters, directors and its managers/ persons in-charge of the business and its schemes, for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and d) would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company.

(h) Ramel Real Estate & Infrastructure 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. Remendra Mohan Sarkar, Mr. Rameswar Podder, Mr. Sukanta Deb and Mr. Partha 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) For the violations (i.e. acted as debenture trustee when they were not eligible to act as debenture trustees and acted so without registration from SEBI) committed by Ramel Real Estate and Infrastructure Debenture Trust (represented by its Trustee, Mr. Sanjoy Deb), they are hereby restrained from acting as an intermediary, accessing the securities market and further restrained from buying, selling or dealing in securities, in any manner whatsoever, for a period of 4 years.

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

18. 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.

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

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

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA Date: February 08th, 2016 Place: Mumbai