Order in the matter of Sampriti Projects Limited

WTM/PS/178/ERO/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 Sampriti Projects Limited In respect of: 1. Sampriti Projects Limited [PAN: AALCS5520M], 2. Mr. Manas Biswas [PAN: AJDPB9583B], 3. Mr. Md. Obay Dul Islam [PAN: AANPI7704G], 4. Mr. Shyamal Kumar Mitra [PAN: AQDPM7488B], 5. Mr. Kaushik Dhar [PAN: AILPD7952R], 6. Ms. Sonali Islam [PAN: AANPI7705H], 7. Mr. Nazrul Islam Gazi [PAN: ARCPG5694H], 8. Mr. Rajib Kumar Saha [DIN: 01534716] and 9. Mr. Sheikh Alamgir Kabir [PAN: AHRPK5233D]. 1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’), vide an ex-parte interim Order dated November 28, 2014 (hereinafter referred to as ‘the interim order’) had observed that the company, Sampriti Projects Limited (hereinafter referred to as ‘Sampriti’ 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 and the SEBI (Disclosure and Investor Protection) Guidelines 2003 (hereinafter referred to as ‘DIP Guidelines’) read with the SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009 (hereinafter referred to as ‘ICDR Regulations’). 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: “… …

7. 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 and Clause 17 of the DIP Guidelines read with Regulation 111 of the ICDR Regulations, hereby issue the following directions– i. SPL shall not mobilize any fresh 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. SPL and its present Directors, viz. Shri Manas Biswas (DIN: 01534712; PAN: AJDPB9583B), Shri Md. Obay Dul Islam (DIN: 01535532; PAN: AANPI7704G) and Shri Shyamal Kumar Mitra (DIN: 03603107; PAN: AQDPM7488B) alongwith it past Directors, viz. Shri Kaushik Dhar (DIN: 0153602; PAN: AILPD7952R), Smt. Sonali Islam (DIN: 01535548; PAN: AANPI7705H), Shri Nazrul Islam Gazi (DIN: 01554003; PAN: ARCPG5694H), Shri Rajib Kumar Saha (DIN: 01534716) and Shri Sheikh Alamgir Kabir (DIN: 01659849; PAN: AHRPK5233D), 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.

SPL 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. SPL shall provide a full inventory of all its assets and properties; v. The abovementioned Directors of SPL shall provide a full inventory of all their assets and properties; vi. SPL 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. SPL 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 SPL; viii. SPL and its present Directors shall furnish complete and relevant information in respect of the Offer of Redeemable preference shares (as sought by SEBI letters/ e – mail dated March 1, 2012; March 2, 2012; May 21, 2014 and May 26, 2014), within 21 days from the date of receipt of this Order.

8. The above directions shall take effect immediately and shall be in force until further orders. … 10. This Order is without prejudice to the right of SEBI to take any other action that may be initiated against SPL and its abovementioned past and present Directors in accordance with law.”

2. The interim order observed that the prima facie observations made therein were on the basis of the correspondences exchanged between SEBI and Sampriti and the information/ documents obtained from ‘MCA 21’ portal. 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. Manas Biswas, Mr. Md. Obay Dul Islam, Mr. Shyamal Kumar Mitra, Mr. Kaushik Dhar, Ms. Sonali Islam, Mr. Nazrul Islam Gazi, Mr. Rajib Kumar Saha and Mr. Sheikh Alamgir Kabir vide SEBI letter dated November 28, 2014. The letters issued to Mr. Shymal Kumar Mitra, Mr. Kaushik Dhar, Mr. Nazrul Islam Gazi and Mr. Rajib Kumar Saha had returned undelivered. SEBI vide its letter dated February 19, 2015, forwarded the undelivered letters along with that of Ms. Sonali Islam to the Company for onward delivery to the respective persons.

4. In the meantime, Mr. Md. Obay Dul Islam while writing on behalf of the Company, vide letter dated December 17, 2014, had submitted that the Company is adhering to the conditions as mentioned in the interim order. It was also submitted that the Company is not accepting any type of deposit and it shall intimate action plan for redemption of the preference share.

5. Thereafter, SEBI proceeded further and granted an opportunity of personal hearing to the Company and its directors on September 03, 2015. The scheduled date was communicated vide SEBI letter dated August 17, 2015. The date of hearing was also communicated vide the public notice in the newspapers namely ‘Ananda Bazar Patrika’ and ‘Times of India’ both dated September 03, 2015. The Company and its directors were advised that in case they fail to appear for the personal hearing before SEBI on the aforesaid date, then the matter would be proceeded ex-parte on the basis of the material available on record. Mr. Md. Obay Dul Islam and Ms. Sonali Islam vide respective letters both dated August 24, 2015, replied to the hearing letter and requested inter alia their exemption from the personal appearance.

On the date fixed, no one had appeared either for the Company or for its directors. Considering the reasonable opportunities already afforded for making submissions in the matter, I am inclined to proceed further with the matter.

6. The submissions made by Mr. Md. Obay Dul Islam vide his letter dated August 24, 2015, is given below: - The Company is not functioning since the financial turmoil faced by the State of West Bengal after the fall out of ‘SARDA’. All the offices of the Company have been closed. - No business has been taken up since then except repayment to the investors, in his personal capacity. - Further, there is no activity in the Company from the date of the interim order. All other directors of the Company are not attending the office. - He was under the custody for nearly two months, which had exhausted his health.

7. Ms. Sonali Islam vide her letter dated August 24, 2015, submitted as under: - She had resigned from the board of directors of the Company on August 01, 2012. The interim order and the notice are beyond the period of her tenure as director. - After resignation, she does not have any knowledge and any information about the activities of the Company. - She does not possess any documents, records of the Company.

8. I have considered the interim order and the material available on record. The following are the observations from the interim order: “… i. SPL was incorporated on August 1, 2007, with the ROC, Kolkata, with CIN No. as U70101WB2007PLC117557. SPL's Registered Office is at 10, Taki Road, 3rd Floor, Bidhan Park Champadali, Barasat, Kolkata – 700124, West Bengal, India. ii. The present Directors in SPL are Shri Manas Biswas, Shri Md. Obay Dul Islam and Shri Shyamal Kumar Mitra. iii. Shri Kaushik Dhar, Smt. Sonali Islam, Shri Nazrul Islam Gazi, Shri Rajib Kumar Saha and Shri Sheikh Alamgir Kabir, who were earlier Directors in SPL, have since resigned.

iv. From the application form in respect of the issue of Redeemable Preference Shares ("Offer of Redeemable Preference Shares") by SPL, it is observed that the terms and conditions included the following: Redeemable Preference Shares Category – A (Single Investment Plan) Redemption Period 3 Years 5 Years 7 Years 10 Years Minimum Share Issue (10 x 100) 1000 and Multiples Annual Yield on Investment 15% 16% 17% 19%

Redeemable Preference Shares Category – B (Term Investment Plan) Redemption Period 3 Years 5 Years 7 Years 10 Years Minimum Share Issue (3 x 100) 50000 and Multiples Annual Yield on Investment 15% 16% 17% 19%

Redeemable Preference Shares Category – C (Flexible Investment Plan) Redemption Period 1 Year 2 Years 3 Years 5 Years Minimum Share Issue (500 x 100) 300 and Multiples Annual Yield on Investment 13% 14% 15% 17% v. SPL issued Redeemable Preference Shares to a large number of investors during the Financial Years 2007–08 to 2012–13, details of which are provided below - Type of Year No. of persons to whom Redeemable Total Security Preference Shares were allotted Amount (₹) 2 007–08 189 13, 64, 900 Redeemable 2008–09 936 70,96,100 Preference 2009–10 1,541 1,50,07,300 Shares 2010–11 2,184 2,28,80,000 2011–12 1,481 1,64,85,200 2012–13 648 1,02,19,900 Total 6,979 7,30,50,700 …” 9. 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.

10. 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. 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. …” 11. The interim order has alleged that the Company had issued and allotted RPS during the financial years 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13.

It has also been alleged that the Company had raised ₹7,30,50,700 from at least 6,979 persons/ investors, without complying with the ‘public issue’ norms stipulated under Sections 56, 60 read with Section 2(36) and 73 of the Companies Act, 1956. The interim order had also alleged that the Company, by issuing shares to more than 49 persons, had made a public issue of RPS in terms of the first proviso to Section 67(3) of the Companies Act, 1956.

With regard to the allotment of RPS, I have perused the available ‘Form 2’ and note the details of allotment as under:

Year No. of Allottees No. of Shares Total Amount (₹) 2007-08 190 13,659 13,65,900 2008-09 942 70,961 70,96,100 2009-10 1,521 1,50,073 1,50,07,300 2010-11 2,200 2,17,884 2,17,88,400 2011-12 2,991 2,82,853 2,82,85,300 2012-13 653 34,195 34,19,500 Total 8,497 7,69,625 7,69,62,500 The above stated number of allottees and shares are more than that of the number as stated in the interim order. The break-up of above allotments are as under: Date of Allotment No. of Allottees No. of Shares Amount (₹) 15/12/2007 55 5,809 5,80,900 29/03/2008 135 7,850 785,000 21/04/2008 59 3,235 323,500 30/06/2008 94 4,353 4,35,300 05/11/2008 150 10,340 10,34,000 15/12/2008 242 16,680 16,68,000 29/01/2009 223 19,435 19,43,500 31/03/2009 174 16,918 16,91,800 25/05/2009 190 20,129 20,12,900 30/06/2009 103 9,052 9,05,200 31/07/2009 108 12,760 12,76,000 31/08/2009 173 27,165 27,16,500 30/09/2009 152 14,561 14,56,100 31/10/2009 78 11,830 11,83,000 30/11/2009 187 12,888 12,88,800 31/12/2009 101 7,740 7,74,000 31/01/2010 234 19,387 19,38,700 03/03/2010 195 14,561 14,56,100 03/04/2010 139 16,514 16,51,400 10/05/2010 145 13,430 13,43,000 02/06/2010 158 11,651 11,65,100 03/07/2010 191 16,095 16,09,500 31/08/2010 342 38,082 38,08,200 27/09/2010 159 15,121 15,12,100 10/11/2010 365 31,766 31,76,600 30/11/2010 165 14,705 14,70,500 04/12/2010 184 15,896 15,89,600 31/01/2011 352 44,624 44,62,400 09/05/2011 380 38,575 38,57,500 20/05/2011 210 19,815 19,81,500 20/06/2011 213 19,578 19,57,800 20/07/2011 477 52,099 52,09,900 16/09/2011 167 21,392 21,39,200 16/10/2011 668 70,876 70,87,600 07/12/2011 624 27,006 27,00,600 08/02/2012 252 33,512 33,51,200 10/05/2012 653 34,195 34,19,500

Total 8,497 7,69,625 7,69,62,500

From the above, it is noted that the Company had allotted 7,69,625 RPS to at least 8,497. I note that the number of persons to whom RPS were allotted clearly exceeded 49. I note that the Company and its directors have not replied to the interim order on merits. Considering the number of persons from whom monies were mobilised by the Company by issuing RPSs, it can be concluded that the Company had made a public issue of RPSs in terms of the first proviso to Section 67(3) of the Companies Act, 1956 where the ‘offer’ or ‘invitation to subscribe for shares or debentures’ when made to fifty persons or more, then it has to be construed as a public offer.

12. 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. …” 13. 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’.

14. 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.

15. 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).

16. The Company was also mandated to comply with the provisions of DIP Guidelines, while issuing RPS. The interim order has stated that the Company failed to comply with the following clauses: “… a) Clause 2.1.1. – (Filing of offer document) b) Clause 2.1.4 – (Application for listing) c) Clause 2.1.5 – (Issue of securities in dematerialized form), d) Clause 2.8 – (Means of finance), e) Clause 4.1 – (Promoters contribution in a public issue by unlisted companies), f) Clause 4.11 – (Lock-in of minimum specified promoters contribution in public issues), g) Clause 4.14 – (Lock-In of pre-issue share capital of an unlisted company) h) Clause 5.3.1 – (Memorandum of understanding), i) Clause 5.3.3 – (Due Diligence Certificate) j) Clause 5.3.5 – (Undertaking), k) Clause 5.3.6 – (List Of Promoters Group And Other Details), l) Clause 5.4 – (Appointment of intermediaries) m) Clause 5.6 – (Offer document to be made public) n) Clause 5.6A – (Pre-issue Advertisement) o) Clause 5.7 – (Despatch of issue material) p) Clause 5.8 – (No complaints certificate) q) Clause 5.9 – (Mandatory collection centers including Clause 5.9.1 (Minimum number of collection centres) r) Clause 5.10 – (Authorised Collection Agents) s) Clause 5.12.1 – (Appointment of compliance officer) t) Clause 5.13 – (Abridged prospectus) u) Clause 6.0 – (Contents of offer documents) v) Clause 8.3 – (Rule 19(2)(b) of SC(R) Rules, 1957) w) Clause 8.8.1 – (Opening & closing date of subscription of securities) x) Clause 9 – (Guidelines on advertisements by Issuer Company) y) Clause 10.1 – (Requirement of credit rating) z) Clause 10.5 – (Redemption) As per Regulation 111(1) of the ICDR Regulations, the DIP Guidelines, "shall stand rescinded".

However, Regulation 111(2) of the ICDR Regulations, provides that: “(2) Notwithstanding the repeal under sub-section (1) of the repealed enactments,— (a) anything done or any action taken or purported to have been done or taken including observation made in respect of any draft offer document, any enquiry or investigation commenced or show cause notice issued in respect of the said Guidelines shall be deemed to have been done or taken under the corresponding provisions of these regulations; (b) any offer document, whether draft or otherwise, filed or application made to the Board under the said Guidelines and pending before it shall be deemed to have been filed or made under the corresponding provisions of these regulations.” …” From the foregoing, I conclude that the Company had failed to comply with the provisions of Sections 56, 60, 73 of the Companies Act, 1956 read with the Companies Act, 2013 and the aforesaid provisions of the DIP Guidelines, 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.

17. Liability of Directors: The interim order was issued against the directors of the Company namely Mr. Manas Biswas, Mr. Md. Obay Dul Islam, Mr. Shyamal Kumar

Mitra, Mr. Kaushik Dhar, Ms. Sonali Islam, Mr. Nazrul Islam Gazi, Mr. Rajib Kumar Saha and Mr. Sheikh Alamgir Kabir.

a. The details of their appointment and resignations are as under: Name Date of Appointment Date of Cessation Mr. Manas Biswas 01/08/2007 Continuing as director Mr. Md. Obay Dul Islam 01/08/2007 Continuing as director Mr. Shyamal Kumar Mitra 01/08/2012 Continuing as director Mr. Kaushik Dhar 01/08/2007 25/03/2013 Ms. Sonali Islam 01/08/2007 01/08/2012 Mr. Nazrul Islam Gazi 01/08/2007 25/03/2013 Mr. Rajib Kumar Saha 01/08/2007 05/03/2008 Mr. Sheikh Alamgir Kabir 01/08/2007 05/03/2008 b. I note that the Company had commenced the offer and issuance of RPS from 2007- 2008 (the date of allotment being December 15, 2007) and continued with it in the financial years 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13. 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. Manas Biswas, Mr. Md. Obay Dul Islam, Mr. Kaushik Dhar, Ms. Sonali Islam, Mr. Nazrul Islam Gazi, Mr. Rajib Kumar Saha and Mr. Sheikh Alamgir Kabir were the directors of the Company at the time of impugned issues and allotment of RPSs and were responsible for the affairs of the Company at the relevant point of time. Mr. Manas Biswas and Mr. Md. Obay Dul Islam continue to be the directors of the Company. Mr. Kaushik Dhar, Ms. Sonali Islam, Mr. Nazrul Islam Gazi, Mr. Rajib Kumar Saha and Mr. Sheikh Alamgir Kabir had resigned from the Company on March 25, 2013, August 01, 2012, March 25, 2013, March 05, 2008 and March 05, 2008 respectively. None of these except Mr. Md. Obay Dul Islam and Ms. Sonali Islam have replied to the interim order.

While proceeding further, I also place reliance on the order of Hon’ble High Court of Madras in the matter of Madhavan Nambiar Vs. Registrar of Companies [2002 108 Comp Cas 1 Mad] wherein it was observed that “In the matter of proceedings for negligence, default, breach of duty, misfeasance or breach of trust or violation of the statutory provisions of the Act and the rules, there is no difference or distinction between the whole-time or part time director or nominated or co-opted director and the liability for such acts or commission or omission is equal. So also the treatment for such violations as stipulated in the Companies Act, 1956.”

In view of the discussion, it can be concluded that Mr. Manas Biswas, Mr. Md. Obay Dul Islam, Mr. Kaushik Dhar, Ms. Sonali Islam, Mr. Nazrul Islam Gazi, Mr. Rajib Kumar Saha and Mr. Sheikh Alamgir Kabir are responsible for the violations committed by the Company and liable, jointly and severally, for making refunds along with interest to the investors as mandated under Section 73(2) of the Companies Act, 1956 read with Section 27 of the SEBI Act.

d. I note that Mr. Shyamal Kumar Mitra was appointed as a director of the Company on August 01, 2012 i.e. after the last available impugned issue of RPSs. He is also one among the present directors of the Company. It is observed that he had not exercised necessary diligence after becoming the director in the Company. The inaction by him against the management (for violating the public issue norms as stipulated under the Companies Act, 1956), leads one to conclude on a possible collusion with the Company and its management. Mr. Shyamal Kumar Mitra has also not taken any steps to remedy the violations committed. I note that the liability to refund is a continuous liability and would be discharged only when the repayments are done. Accordingly, I hold him responsible for the same.

e. I also note that Mr. Manas Biswas, Mr. Md. Obay Dul Islam, Mr. Kaushik Dhar, Ms. Sonali Islam, Mr. Nazrul Islam Gazi, Mr. Rajib Kumar Saha and Mr. Sheikh Alamgir Kabir were also the subscribers to the Memorandum of Association and Articles of Association of the Company.

18. I note that the Company and its directors namely Mr. Manas Biswas, Mr. Md. Obay Dul Islam, Mr. Shyamal Kumar Mitra, Mr. Kaushik Dhar, Ms. Sonali Islam, Mr. Nazrul Islam Gazi, Mr. Rajib Kumar Saha and Mr. Sheikh Alamgir Kabir were required to provide full inventory of the assets and properties within 21 days from the date of receipt of the interim order. However, no such details have been filed till date.

19. 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.

20. 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, Sampriti Projects Limited [PAN: AALCS5520M], its directors namely Mr. Manas Biswas [PAN: AJDPB9583B], Mr. Md. Obay Dul Islam [PAN: AANPI7704G], Mr. Shyamal Kumar Mitra [PAN: AQDPM7488B], Mr. Kaushik Dhar [PAN: AILPD7952R], Ms. Sonali Islam [PAN: AANPI7705H], Mr. Nazrul Islam Gazi [PAN: ARCPG5694H], Mr. Rajib Kumar Saha [DIN: 01534716] and Mr. Sheikh Alamgir Kabir [PAN: AHRPK5233D] 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. If the Company, Sampriti Projects Limited and/ or the directors have repaid the investors as claimed by it, the Company may include such repayment in the report to be submitted under para 20(f), provided the Company has met with the criteria laid down under para 20(b) and it pays 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.

f. 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’).

g. In case of failure of the Company, Sampriti Projects Limited, its directors including Mr. Manas Biswas, Mr. Md. Obay Dul Islam, Mr. Shyamal Kumar Mitra, Mr. Kaushik Dhar, Ms. Sonali Islam, Mr. Nazrul Islam Gazi, Mr. Rajib Kumar Saha and Mr. Sheikh Alamgir Kabir in complying with the aforesaid directions, SEBI, on expiry of three months from the date of this Order, - i. shall recover such amounts in accordance with section 28A of the SEBI Act including such other provisions contained in securities laws. ii. may initiate appropriate action against the Company, its promoters/ directors and the persons/ officers who are in default, including adjudication proceedings against them, in accordance with law. iii. would make a reference to the State Government/ Local Police to register a civil/ criminal case against the Company, its promoters, directors and its managers/ persons in-charge of the business and its schemes, for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and iv. would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company. 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. The Company, Sampriti Projects 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. Manas Biswas, Mr. Md. Obay Dul Islam, Mr. Shyamal Kumar Mitra, Mr. Kaushik Dhar, Ms. Sonali Islam, Mr. Nazrul Islam

Gazi, Mr. Rajib Kumar Saha and Mr. Sheikh Alamgir Kabir 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.

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 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.

DATE : March 02nd, 2016 PRASHANT SARAN PLACE : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA