Order in the matter of Sunheaven Agro India Limited and its directors[SAT Appeal No.:101/2018]

WTM/PS/62/ERO/IMD/OCT/2015 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 Sunheaven Agro India Limited In respect of: 1. Sunheaven Agro India Limited [CIN: U01400WB2009PLC138649], 2. Mr. Suranjan Mondal [PAN: ARVPM0151E], 3. Mr. Kashi Nath Chanda [PAN: AGHPC3011C], 4. Mr. Mrityunjay Bar [PAN: AMDPB4850A], 5. Mr. Pijush Kanti Jana [PAN: AFOPJ5148P], 6. Mr. Madhab Chandra Das [PAN: AHXPD5528L], 7. Mr. Khokon Biswas [PAN: AIYPB1370J], 8. Mr. Provash Bala [PAN: AUTPB3478J], 9. Mr. Kanai Lal Pramanik [DIN: 02744054] and 10. Mr. Ganesh Dam [PAN: ADUPD3470E] Date of Hearing: April 22, 2015 Appearance: For Noticees: 1. Mr. Bichitra Nanda Muni, Advocate for Sunheaven Agro India Limited, Mr. Madhav Chandra Das, Mr. Khokon Biswas, Mr. Provash Bala, Mr. Kanai Lal Pramanik and Mr. Ganesh Dam 2. Mr. Kalicharan Maity, authorized representative of Mr. Pijush Kanti Jana and Mr. Suranjan Mondal For SEBI: Ms. Soma Majumdar, General Manager, Mr. N. Murugan, Assistant General Manager, Ms. Nikki Agarwal, Assistant Manager.

1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’), vide an ex-parte interim Order dated November 20, 2014 (hereinafter referred to as ‘the interim order’) had observed that the company, Sunheaven Agro India Limited (hereinafter referred to as ‘Sunheaven’ or ‘the Company’) is prima facie engaged in fund mobilising activity from the public, by making offer and issuing Redeemable Preference Shares (hereinafter referred to as ‘RPS’) and had 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. In order to protect the investors who have subscribed to the impugned offer and issue of RPS and to prevent the Company from further carrying on with its fund mobilizing activity under the offer of RPS, SEBI had issued the following directions: “… … 6. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11, 11(4), 11A and 11B of the SEBI Act, hereby issue the following directions- i. SHAIL shall not mobilize funds from investors through the Offer of Redeemable Preference Shares or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions; ii.

SHAIL and its present Directors, viz. Shri Madhab Chandra Das, Shri Khokon Biswas, Shri Provash Bala, Shri Kanai Lal Pramanik and Shri Ganesh Dam including its past Directors, viz. Shri Suranjan Mondal, Shri Kashi Nath Chanda, Shri Mrityunjay Bar and Shri Pijush Kanti Jana, 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. SHAIL 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. SHAIL shall provide a full inventory of all its assets and properties; v. SHAIL's abovementioned Directors shall provide a full inventory of all their assets and properties; vi. SHAIL and its 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.

SHAIL and its 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 SHAIL; viii. SHAIL shall furnish complete and relevant information in respect of preference shares (as sought by SEBI letters dated July 30, 2013 and January 31, 2014), within 21 days from the date of receipt of this Order. 7. The above directions shall take effect immediately and shall be in force until further orders. … 9. This Order is without prejudice to the right of SEBI to take any other action that may be initiated against SHAIL 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 information obtained from the 'MCA 21 Portal' and the documents received from the complainants. The interim order advised the Company and its directors that they may file their replies within 21 days from the date of receipt of the order and also to seek an opportunity of personal hearing.

3. The interim order was forwarded to the Company and its directors, Mr. Suranjan Mondal, Mr. Kashi Nath Chanda, Mr. Mrityunjay Bar, Mr. Pijush Kanti Jana, Mr. Madhab Chandra Das, Mr. Khokon Biswas, Mr. Provash Bala, Mr. Kanai Lal Pramanik and Mr. Ganesh Dam (hereinafter collectively referred to as the ‘noticees’) vide letter dated November 20, 2014. The letters issued to the Company and its directors, Mr. Suranjan Mondal, Mr. Madhab Chandra Das, Khokon Biswas, Mr. Provash Bala, Mr. Kanai Lal Parmanik and Mr. Ganesh Dam had returned undelivered.

4. The noticee namely Mr. Kashi Nath Chanda vide his letter dated December 04, 2014, submitted his reply which was taken on record. As no other reply was received, SEBI proceeded further and granted an opportunity of personal hearing to the Company and its directors on April 22, 2015, the same was communicated vide the public notice dated April 14, 2015 in the newspaper namely ‘Anand Bazar Patrika’ and on April 15, 2015 in the newspaper namely ‘Times of India’. The Company and its directors were advised that in case they fail to appear before SEBI on the aforesaid date, then the matter would be proceeded ex-parte on the basis of material available on record. On the date of personal hearing, Mr. Bichitra Nanda Muni, Advocate appeared for Sunheaven Agro India Limited and its directors namely Mr. Madhab Chandra Das, Mr. Khokon Biswas, Mr. Provash Bala, Mr. Kanai Lal Pramanik and Mr. Ganesh Dam and had submitted the reply dated April 22, 2015. The same was taken on record.

On the date of hearing, one Mr. Kalicharan Maity also appeared as authorized representative of Mr. Pijush Kanti Jana and Mr. Suranjan Mondal. During the course of personal hearing, he had filed a copy of the reply dated July 14, 2014, of the noticee namely Mr. Pijush Kanti Jana and Form 32 pertaining to Mr. Suranjan Mondal.

Other noticees namely Mr. Kashi Nath Chandra and Mr. Mrityunjay Bar had failed to turn up for the personal hearing. SEBI, in the meantime, had received a letter dated April 28, 2015 from one Mr. Subhasis Chakraborty, advocate, who while writing on behalf of the noticee namely Mr. Kashi Nath Chandra requested for another opportunity of personal hearing and a time of 30 days for submitting the information regarding the entire affairs. As no further details were received from the said noticee even after the 30 days and considering the reasonable opportunities already afforded to the Company and its directors for making the submissions in the matter, the matter is being proceeded further as against the noticees on the basis of the material available on record.

5. The submissions of the noticees, in brief are as under: i. The Company vide its letter dated April 22, 2015, through its advocate, filed the list and copies of the title deeds of the properties owned by it and submitted as under: a. The Company has complied with the directions contained in the interim order. b. The Company has already stopped all activities of mobilizing funds through the issuance of RPS since March 31, 2013. c. The Company has repaid an amount of ₹4,27,10,600 out of the total amount of ₹11,99,99,900 and has submitted the Form SH-7 with the Registrar of Companies, West Bengal. d. The Company requested SEBI to lift the embargo as mentioned in the interim order regarding disposal/ sale of the properties and sought time for completion of the redemption process.

ii. Mr. Kashi Nath Chanda vide his letter dated December 04, 2014 and another letter received by SEBI on April 28, 2015 (through Mr. Subhasis Chakraborty, advocate), submitted as under:

a. He had deposited ₹5,50,000 with the Company and had become an agent of the said Company. He had also given a loan of ₹2,50,000 to the Company. b. By misrepresentation/ false statement he became the director of the Company. Later on becoming aware of the activities of the Company, he had resigned on January 15, 2013. His resignation was accepted on January 29, 2013. c. He had no financial share in the Company.

6. Thereafter, SEBI also received a letter dated April 22, 2015, from one Mr. Subhasis Chakraborty, advocate writing on behalf of ‘Investors and Agents of Sunheaven Agro India Group of Companies’ alleging therein that the chairman, directors and executives of the Company had raised funds illegally on the basis of business of ponzi schemes. Vide this letter, the said advocate also submitted the details of the group companies of Sunheaven Agro India Limited and requested to initiate appropriate action against these.

7. I have considered the interim order, the submissions of the Company, Mr. Kashi Nath Chanda and the material available on record. The following are the observations from the interim order: “… i. SHAIL was incorporated on October 1, 2009, with the ROC, Kolkata, with CIN No. as U01400WB2009PLC138649. SHAIL has its Office at 36/1 Jessore Road, Champadali More, Barasat, Kolkata–700124, West Bengal, India. ii. The present Directors in SHAIL are Shri Madhab Chandra Das, Shri Khokon Biswas, Shri Provash Bala, Shri Kanai Lal Pramanik and Shri Ganesh Dam. iii. Shri Suranjan Mondal, Shri Kashi Nath Chanda, Shri Mritynjay Bar and Shri Pijush Kanti Jana, who were earlier Directors in SHAIL, have since resigned. iv. Form 2 (Form for Return of Allotment – filed by SHAIL with the ROC in accordance with the provisions of the Companies Act, 1956, for the Financial Years 2009–10, 2010–11, 2011–12 and 2012–13), revealed that the company issued and allotted Redeemable Preference Shares ("Offer of Redeemable Preference Shares"), details of which are provided below- Year Date of Type of No. of No. of persons to Total Amount allotment Security Securities whom issued (₹) Issued (Approximate) 2009- 10 15.01.2010 60700 56 607000 29.03.2010 246550 **10 2465500 2010-11 07.05.2010 238900 161 2389000

21.06.2010 194900 218 1949000 21.08.2010 348830 402 3488300 06.10.2010 165520 184 1655200 25.11.2010 202440 205 2024400 29.12.2010 304780 259 3047800 30.12.2010 Preferenc 202440 205 2024400 2011-12 25.05.2011 e Shares 845310 659 8453100 20.06.2011 of ₹10 578160 413 5781600 25.06.2011 178400 227 1784000 15.09.2011 396750 291 3967500 08.12.2011 1154910 713 11549100 16.02.2012 1186940 456 11869400 22.02.2012 1190490 836 11904900 27.03.2012 1077140 884 10771400 2012-13 05.06.2012 1131370 791 11313700 20.11.2012 381155 237 3811550 22.08.2012 908595 575 9085950 Total 1,09,94,280 7,772 10,99,42,800 **On 29.03.2010, the company filed scanned copy of only one page of list of preference shareholders which consist of 10 persons. 13100 preference shares were allotted to those 10 persons. The details pertaining to allotment of the remaining preference shares i.e. 2452400 (2465500-13100) were not available on the MCA 21 Portal. v. From the Balance Sheet filed by SHAIL with the ROC, Kolkata, it is observed that the company also collected ₹0.55 Crores through share application money (pending allotment) during the Financial Years 2009–10 and 2010–11. …”

8. I note that the Company has not disputed the observations and the allegations made against it and its directors in the interim order. The interim order alleged that the Company had issued and allotted RPS to about 7,772 individuals/ investors and had mobilized funds amounting to about ₹10.99 crore during the financial years 2009-10, 2010-11, 2011-12 and 2012-13, without complying the ‘public issue’ norms as stipulated under Sections 56, 60 read with Section 2(36) and 73 of the Companies Act, 1956. Further, the Company was also found to have collected ₹0.55 crore as share application money (pending allotment) during the financial years 2009-10 and 2010- 11. The interim order had also alleged that the Company, by issuing shares to more than 49 persons, had made a public issue of RPSs in terms of the first proviso to Section 67(3) of the Companies Act, 1956. It has also been noted from the ‘Form 2’ that the allotment of RPS had happened during the Financial Years 2009-10, 2010-11, 2011-12 and 2012-13.

9. 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.

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 decide 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.

10. The 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. It can be seen that the number of persons to whom RPS were allotted clearly exceeded 49. Therefore, considering the number of persons from whom monies were mobilised by the Company by issuing RPSs, which is definitely more than 49 persons, it can be concluded that the Company had made a public issue of RPS in terms of the first proviso to Section 67(3) of the Companies Act, 1956.

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), the SEBI has jurisdiction and would govern the issue of RPS as the same was 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 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 has alleged that the Company failed to comply with Section 73 of the Companies Act, 1956 in respect of its issuance of RPS. By issuing RPS to more than 49 persons, the Company had to compulsorily list such securities in compliance with Section 73(1) of the Companies Act, 1956. As per Section 73(1) Companies Act, 1956, a company is required to make an application to one or more recognized stock exchanges for permission for the shares or debentures to be offered to be dealt with in the stock exchange. There is no material on record to say that the Company has filed an application with a recognised stock exchange to enable the 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 RPS, 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. Further, there is no material on record to say that the Company has complied with the provision of Section 73(3) and has kept the moneys received in a separate bank account maintained with a Scheduled Bank.

16. I note that the Company had mobilized about ₹11.54 crore (i.e. ₹10.99 + ₹0.55 crore) from atleast 7,772 persons under its offer and issue of RPS and in doing so it has failed to comply with the provisions of the Companies Act, 1956. The details taken from the ‘MCA 21’ portal and the correspondence of the Company are sufficient to substantiate the charges.

17. Liability of the directors: I note that the interim order was issued against the directors of the Company, namely Mr. Suranjan Mondal, Mr. Kashi Nath Chanda, Mr. Mrityunjay Bar, Mr. Pijush Kanti Jana, Mr. Madhab Chandra Das, Mr. Khokon Biswas, Mr. Provash Bala, Mr. Kanai Lal Pramanik and Mr. Ganesh Dam.

a. The details of the appointment and resignations of the directors of the Company are as under: Name Date of Appointment Date of Cession Mr. Madhab Chandra Das 01/10/2009 - Mr. Khokon Biswas 01/10/2009 - Mr. Provash Bala 28/05/2010 - Mr. Kanai Lal Pramanik 01/10/2009 - Mr. Ganesh Dam 01/10/2009 -

Mr. Suranjan Mondal 28/09/2012 29/01/2013 Mr. Kashi Nath Chanda 28/09/2012 29/01/2013 Mr. Mrityunjay Bar 28/09/2012 29/01/2013 Mr. Pijush Kanti Jana 19/05/2014 03/11/2014 Mr. Mangol Bhattacharjee 15/09/2014 - b. I note that the Company had commenced the offer and issuance of RPS from 2009- 2010 and continued with its money mobilization activity till the financial year 2012-13 (November 20, 2012 being the last allotment as per the details available on record). Sections 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) read with Sections 11, 11B and 27 of the SEBI Act, is a 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 read with Sections, 11, 11B and 27 of the SEBI Act, 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. The noticees namely Mr. Madhab Chandra Das, Mr. Khokon Biswas, Mr. Kanai Lal Pramanik and Mr. Ganesh Dam were appointed as the directors of the Company on October 01, 2009 and these continue to be the directors in the Company. Mr. Provash Bala was appointed as a director of the Company on May 28, 2010 and he also continues to be a director of the Company. As noted from the table above, these persons were present in the Company at the relevant time, when the discussed violations were committed. These noticees have failed to make refunds to the investors when such securities were not listed in terms of the Section 73 of the Companies Act, 1956 read with Section 27 of the SEBI Act.

d. Further, the noticees namely Mr. Suranjan Mondal, Mr. Kashi Nath Chanda and Mr. Mrityunjay Bar were appointed as the directors of the Company on September 28, 2012 and had resigned on January 29, 2013. It can be seen that these persons were also the directors of the Company at the relevant time, when the violation of the public issue norms were committed by the Company. These noticees have also failed to make any refunds to the investors as required under Section 73(2) of the Companies Act, 1956 read with Section 27 of the SEBI Act. Therefore, these persons are liable for the violations committed during the respective tenure as directors and for making repayments of moneys collected under the offer and issue of RPS.

e. The noticee, Mr. Pijush Kanti Jana was appointed as the directors of the Company on May 19, 2014 i.e. after the dates of the impugned public issue and had resigned on November 03, 2014. I note that he has failed to exercise necessary diligence after becoming director in the Company. Further, he did not make any attempt to report the wrongdoings of the Company to the appropriate authorities. Further, he had also not taken any steps to remedy the violations committed. The inaction by him against the management (for violating the public issue norms as stipulated under the Companies Act, 1956, while making the offer and issuing the preference shares), suggests possible collusion with the Company and its management. Therefore, I hold Mr. Pijush Kanti Jana to be responsible for the affairs of the Company and liable for the contraventions found against the Company and also for the consequences of such violations.

f. I note that Mr. Mangol Bhattacharjee was appointed as director of the Company on September 15, 2014 i.e. after the impugned issues. He has not exercised necessary diligence after becoming director in the Company. The very inaction by him against the management (for violating the public issue norms as stipulated under the Companies Act, 1956 while making the offer and issuing the preference shares), even after the receipt of the interim order, leads one to conclude on a possible collusion with the Company and its management. Further, Mr. Mangol Bhattacharjee has also not taken any steps to remedy the violations committed. Therefore, I hold Mr. Mangol Bhattacharjee also to be responsible for the affairs of the Company and hence liable for the contraventions found against the Company and for the consequences of such violations. SEBI is advised to issue a show cause notice to him for further appropriate directions in case the Company and directors fail to refund the amounts collected from investors against offer and/ or allotment of RPS.

18. In view of the discussion above, it can be concluded that all these persons being the persons in-charge of and responsible for the conduct of the business of the Company, are responsible for the contraventions committed by the Company as found above. For such violations, appropriate directions need to be issued to the above directors.

19. Moreover, Sunheaven Agro India Limited was required to provide full inventory of the assets and properties which have not been provided despite a direction in the interim order to provide the same within 21 days from the date of receipt of interim order. The Company has submitted copies of only eleven sale deeds, which were executed in the year 2011 and a valuation report of land. No other detail has been submitted by the Company.

20. In view of the above, appropriate action in accordance with law needs to be initiated against the Company and the directors in charge of the affairs of the Company during the relevant period. Further, I also note that one ‘Investors and Agents of Sunheaven Agro India Group of Companies’ through Mr. Subhasis Chakraborty, Advocate while submitting the details of the group companies of the Sunheaven has alleged that such companies are collecting moneys since 2009 and assuring the refunds with high returns.

21. In view of the foregoing, I, in exercise of the powers conferred upon me under section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11 and 11B thereof hereby issue the following directions:

a. The Company, Sunheaven Agro India Limited [CIN: U01400WB2009PLC138649], Mr. Suranjan Mondal [PAN: ARVPM0151E], Mr. Kashi Nath Chanda [PAN: AGHPC3011C], Mr. Mrityunjay Bar [PAN: AMDPB4850A], Mr. Pijush Kanti Jana [PAN: AFOPJ5148P], Mr. Madhab Chandra Das [PAN: AHXPD5528L], Mr. Khokon Biswas [PAN: AIYPB1370J], Mr. Provash Bala [PAN: AUTPB3478J], Mr. Kanai Lal Pramanik [DIN: 02744054], Mr. Ganesh Dam [PAN: ADUPD3470E] and Mr. Mangol Bhattacharjee 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/ its present management is permitted to sell the assets of the Company only for the sole purpose of making the refunds as directed above and deposit the proceeds in an Escrow Account opened with a nationalised Bank.

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

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

f. Sunheaven Agro India Limited and its directors Mr. Suranjan Mondal, Mr. Kashi Nath Chanda, Mr. Mrityunjay Bar, Mr. Pijush Kanti Jana, Mr. Madhab Chandra Das, Mr. Khokon Biswas, Mr. Provash Bala, Mr. Kanai Lal Pramanik, Mr. Ganesh Dam and Mr. Mangol Bhattacharjee 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 Sunheaven Agro India Limited and its directors Mr. Suranjan Mondal, Mr. Kashi Nath Chanda, Mr. Mrityunjay Bar, Mr. Pijush Kanti Jana, Mr. Madhab Chandra Das, Mr. Khokon Biswas, Mr. Provash Bala, Mr. Kanai Lal Pramanik, Mr. Ganesh Dam and Mr. Mangol Bhattacharjee, to comply with the aforesaid directions SEBI, on the expiry of the three months period from the date of this order,- i. shall recover such amounts in accordance with Section 28A of the SEBI Act including such other provisions contained in securities laws. ii. may initiate appropriate action against the Company, its promoters/ directors and the persons/officers in charge, 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.

h. The Company 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. The Company is restrained from accessing the securities market for the purposes of raising funds with immediate effect.

i. Sunheaven Agro India Limited and its directors Mr. Suranjan Mondal, Mr. Kashi Nath Chanda, Mr. Mrityunjay Bar, Mr. Pijush Kanti Jana, Mr. Madhab Chandra Das, Mr. Khokon Biswas, Mr. Provash Bala, Mr. Kanai Lal Pramanik and Mr. Ganesh Dam 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.

22. SEBI is advised to issue a show cause notice to Mr. Mangol Bhattacharjee for any further direction that would be appropriate in case the Company and its directors fail to refund the amounts collected from the investors against the offer and/ or allotment of RPS.

23. 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.

24. SEBI may examine the role of the group companies of Sunheaven Agro India Limited, in the light of the letter dated April 22, 2015 from the ‘Investors and Agents of Sunheaven Agro India Group of Companies’.

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

26. 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 : October 08, 2015 PRASHANT SARAN Place : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA