Order in the matter of VINAYAK HOMES & REAL ESTATE LIMITED

WTM/GM/IMD/81/2018–19 SECURITIES AND EXCHANGE BOARD OF INDIA INTERIM ORDER CUM SHOW CAUSE NOTICE UNDER SECTIONS 11(1), 11(4), 11B AND 11AA OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH REGULATION 65 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (COLLECTIVE INVESTMENT SCHEMES) REGULATIONS, 1999 AND REGULATION 11 OF THE SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO SECURITIES MARKET) REGULATIONS, 2003. IN THE MATTER OF VINAYAK HOMES & REAL ESTATE LIMITED. NOTICEE(S) CIN PAN COMPANY 1. VINAYAK HOMES & REAL ESTATE U70101MP2010PLC024267 AADCV4004B LIMITED DIRECTORS / PROMOTERS DIN PAN 2. YOGENDRA BISAY 02664008 AFQPB2353A 3. JITENDRA BISAY 00128091 AFZPB2659A 4. KALU SINGH VERMA 03397048 NA 5. PHOOL CHAND BISAY 00128087 NA 6. YUVRAJ 07113606 AKYPY9430C

BACKGROUND –

1. Securities and Exchange Board of India (“SEBI”) received a letter dated July 10, 2015 from Police Station-in-Charge, Champa, Dist-Champa Janjgir, Chhatisgarh, informing about the registration of an FIR against Vinayak Homes & Real Estate Limited (hereinafter referred to as “VHREL” / “the company”) in respect of illegal mobilization of money from public by the company by promising high returns on investment in real estate. Thereafter, SEBI received multiple complaints and references of similar nature against the company.

2. VHREL is a company incorporated under the Companies Act, 1956 on September 07, 2010. The registered office address of VHREL is at ‘203, Khandelwal Complex, 3/3 Pipliya Kumar, T T Nagar, Dewas Naka, Indore, Madhya Pradesh, 452010’.

3. As a matter of preliminary enquiry, in order to ascertain whether VHREL was involved in any fund raising activity by running schemes in the nature of ‘Collective Investment Schemes’ in terms of Section 11AA of the SEBI Act, 1992 (“SEBI Act”), letters dated April 06, 2016 Order in the matter of Vinayak Homes & Real Estate Limited were issued to the company and its directors, namely Phool Chand Bisay, Jitendra Bisay and Yuvraj, seeking the following information and documents:

i. Memorandum and Articles of Association of the company. ii. Details of past and present directors of the company. iii. Brochures pertaining to the company’s schemes / offers issued to the public. iv. Copies of application forms for participation in the scheme by investors v. Sample copies of certificates, registration letter and allotment letter issued to investors. vi. Sample copies of agreement letter / contract under the scheme. vii. Details of the scheme wise amount mobilized till date, along with the number of investors under the scheme, in prescribed format. viii. Certified copies of audited financial statements for FYs 2010-11 to 2014-15. ix. Income Tax returns of the company for last three years. x. Details of any other similar scheme(s), if any, floated by the company or its group / associate company. xi. List of properties acquired by the company with the funds mobilized under the scheme, in the prescribed format.

4. All the above-mentioned letters, except that sent to Yuvraj, were duly delivered to the said Noticees. Reminder letters dated April 28, 2016 were also issued to the said Noticees. The said letters, except that sent to the company, returned undelivered. However, no response whatsoever was received from the company and its directors. A physical verification of the registered address of the company was carried on June 30, 2016. Though the office was found to be located at the said address, it was found to be closed at that time. A final reminder letter dated August 09, 2017 was issued to the company and its present and past directors, namely Yogendra Bisay, Jitendra Bisay, Kalu Singh Verma, Phool Chand Bisay and Yuvraj. However, all the letters returned undelivered.

5. In the meantime, in the absence of any information from the company and its directors, SEBI issued letters dated December 13, 2016 to the Janjgir Champa Police Station, the auditor of the company as well as to one of the complainants, seeking various documents pertaining to fund mobilization activities of the company. A reminder letter dated July 25, 2017 was also sent to the auditor. However, no response was received in respect of any of the letters.

OBSERVATIONS AND FINDINGS –

6. Upon an examination of the documents provided by the Officer-in-Charge, Janjgir Champa Police Station, the following is observed – (a) From the copy of Application Form issued by the company, it is noted that the same pertains to a scheme for purchase of plots and development of the same under ‘Cash Down Payment Plan or ‘Installment Payment Plan’. The same contains the following opening line: “I hereby apply to you for purchase of plot (s) and development and maintenance of the same under your Cash Down Payment Plan/Installment Payment Plan as per details given below.”

(b) The Application Form provides for mentioning inter alia the following:  Plan No.  Name of Plan  No. of Plot (s)  Area (Sq.Yds.)  Term (Years)  Total Consideration (First Instalment)(Rs.)  Expiry Date of Agreement (c) The Application Form mentions inter alia the following clause under ‘General Terms and Conditions’: The land shall be allotted in the name of Customer, in case of Cash Down Payment Plans, after receipt of full payment within a reasonable period generally not exceeding 365 days, and in case of Instalment Payment Plans, after receipt of 60% of total instalments. Subject to the foregoing, the land ownership would be ordinarily transferred in the name of customer within a reasonable period after allotment.

(d) From the copy of sample ‘Agreement’ as contained in the Application Form, it is noted that the same inter alia states the following: (i) That VHREL is engaged in the business of real estate and development and maintenance of agricultural land at various places. (ii) That VHREL organises the sale of agricultural land of different sizes to prospective buyers and undertakes the development and maintenance of the same. (iii) That the customer, by means of an application, has expressed his/her desire to buy the said agricultural land and has requested the company to arrange for the sale of the said agricultural land in his/her favour, and develop and maintain the same by rendering various services.

(iv) That the company has agreed to arrange for the sale of agricultural land in favour of the customer and to develop and maintain the same by various services.

(e) The sample ‘Agreement’ mentions inter alia the following clauses:

(i) The customer shall be entitled for allotment of agricultural land and subsequent transfer of title and possession of the same in his favour by means of registered sale deed, within such period, after receipt by VHREL of full consideration in case of Cash Down Payment Plans and after receipt of 50% of the consideration in case of Instalment Payment Plans, as provided in the Application Form. (ii) Since fragmentation into smaller size of plot(s)/land may not be practicable, feasible or permissible under relevant revenue laws, the Customer shall have the requisite share along with other allottees/transferees in a particular piece of land and VHREL shall execute/procure execution and registration of sale deed ensuring the title and interest of allottees/transferees in the joint holding with other customers. Accordingly, symbolic possession of the plots shall be handed over to the customer immediately after registration of the relevant sale deed so as to enable the company to implement the Agreement. The right, title and interest of the customer to the land shall remain inviolate, subject to the reciprocal rights and obligations of the customer and the company. (iii) VHREL shall have the right to develop and maintain the agricultural land in consultation with agro-consultants and experts and the customer shall not ordinarily interfere with the method and mode of development and maintenance of the land. (iv) The company shall employ its own employees to carry out development and maintenance of the land and bear the expenses. (v) The company shall be responsible for arranging sale of produce, if any, out of the said land which shall be accepted by the customer. (vi) The customer shall be the owner in possession of the land at all times.

(f) It is noted that though the sample Application Form and the Agreement contained therein purportedly pertains to sale, development and maintenance of land, the same does not contain any provision for mentioning the particulars of the plot of land being offered, for example-location, Survey no. etc.

(g) It is further noted that the company has issued certificates titled as “Registration Letter’ to the applicants which inter alia states that the company, subject to regular payment of subscriptions, shall pay to the certificate holder the amount due under the ‘Registration Letter’. The ‘Registration Letter’ contains inter alia the following details;

 Name & Address of the person  Registration no. and date of commencement  Plan No. & Term  Agreed Cost of Product  Period of Time  Mode of Payment  Expected Cost of Product at End of Term  Amount of Instalment  Date of Last Instalment  Date of Expiry of Term  Instalment Due Date  Expected Sum Payable  Distributor’s Code  Receipt No. and date (h) The copy of certificate also has ‘First Payment Receipt’ attached to it.

(i) It is noted that the abovementioned certificate issued to the investors, which is titled as ‘Registration Letter’, does not contain any detail whatsoever pertaining to allotment/sale of plot of land to the investor. Rather, it refers to payment of ‘Expected Sum Payable’ which appears to be the return on investment payable to the investor at the end of the term.

(j) From the copies of documents titled as ‘Plan Book’ issued by the company and other similar documents which have been forwarded to SEBI by the Officer-in-Charge, Janjgir Champa Police Station, it is observed that the same contain inter alia the following Tables: TABLE 1 (Special Mansoon Offer 6 & 1/2 year) Amount MIS-12 RIP-7 Maturity 7050 5300 1750 20500 10625 8000 2625 30750 14100 10600 3500 41000 21250 16000 5250 61500 28300 21300 7000 82000 35350 26600 8750 102500

42500 32000 10500 123000 49450 37200 12250 143500 56500 42500 14000 164000 63500 47800 15750 184500 70600 53100 17500 205000 77650 58400 19250 225500 84700 63700 21000 246000 91750 69000 22750 266500 98800 74300 24500 287200 105850 79600 26250 307500 112900 84900 28000 328000 162250 122000 40250 471000 218650 164400 54250 635500 268100 201600 66500 779000 324500 244000 80500 943000 381000 286500 94500 1107000 437500 329000 108500 1271000 486750 366000 120750 1414500 543150 408400 134750 1578500 649000 488000 161000 1886000 705500 530500 175000 2050000 754750 567500 187250 2193500 811250 610000 201250 2357500 887750 652500 215250 2521500 917000 689500 227500 2665000 973500 732000 241500 2829000 1022750 769000 253750 2972500

Sample Tables under RIP, LPP & MIS Plans TABLE 2 RIP- 7 (6.6 year) MLY QLY HYL YIY Cost of Unit Cost of PC Unit ADC Risk* 77 225 440 875 6000 10250 9000 154 450 880 1750 12000 20500 18000 231 675 1320 2625 18000 30750 27000 308 900 1760 3500 24000 41000 36000 385 1125 2200 4375 30000 51250 45000 770 2250 4400 8750 60000 102500 90000 *ADC appears to be denoting Accidental Death Claim

TABLE 3 RIP- 4 (5 year) MLY QLY HYL YIY Cost of Unit Cost of PC Unit ADC Risk 100 295 585 1150 6000 8600 9000 200 590 1170 2300 12000 17200 18000 300 885 1755 3450 18000 25800 27000 400 1180 2340 4600 24000 34400 36000 500 1475 2925 5750 30000 43000 45000 1000 2950 5850 11500 60000 86000 90000 2000 5900 11700 23000 120000 172000 100000 3000 8850 17550 34500 180000 258000 100000 4000 11800 23400 46000 240000 344000 100000 5000 14750 29250 57500 300000 430000 100000

TABLE 4 LPP- 15 (12 year) Amount of Payable Amount ADC Risk Cover. consideration 5000 20000 5000 10000 40000 10000 15000 60000 15000 20000 80000 20000 25000 100000 25000 30000 120000 30000 35000 140000 35000 40000 160000 40000 45000 180000 45000 50000 200000 50000 TABLE 5 MIS-12 (6 year) Amount of Payable Every Year ADC Risk Cover consideration 10000 3300 5000 15000 4950 10000 20000 6600 15000 25000 8250 20000 30000 9900 25000 35000 11550 30000 40000 13200 35000 45000 14850 40000 50000 16500 45000 55000 18150 50000

TABLE 6 MIS- 14 ( 6 year) Amount of Payable Every Monthly ADC Risk Cover consideration 10000 274 5000 15000 411 10000 20000 548 15000 25000 685 20000 30000 822 25000 35000 959 30000 40000 1096 35000 45000 1233 40000 50000 1370 45000 55000 1507 50000 (k) Apart from the above Tables, the Plan Book also contains other similar Tables pertaining to plans named as ‘RIP’, ‘LPP’ and ‘MIS’ for varied amounts and terms. Though the term RIP is not defined in the available documents, it appears to be denoting a recurring investment plan where the investment has to be made in monthly, quarterly, half-yearly or yearly instalments and where the maturity amount is paid at the end of the term. Similarly, LPP and MIS, though not defined, seem to be denoting lump-sum payment plan and monthly income scheme where money has be invested as a lump-sum amount in one tranche but the benefits are paid monthly (under MIS) or as a lump-sum amount at the end of the term.

(l) From the details contained in the Application Form, the sample Agreement and the copies of certificates (titled as ‘Registration Letters’) issued by the company to the investors and the abovementioned Tables pertaining to the plans/schemes of the company, which are available on record, it is noted that the company has collected funds from the public during the FYs 2011-12, 2012-13, 2013-14, 2014-15 and 2015- 16 under various plans under its ‘Schemes’ referred to as scheme for purchase, development and maintenance of plot(s) of land. The various plans offered under the ‘Scheme’ provided the options of investing money in monthly/quarterly/half-yearly/yearly instalments or as lump-sum payment and had varied tenures, like 3 years, 4 years, 5 years, 5 ½ years, 6 years, 6 ½ years, 8 years and 9 years, 12 years. It is noted that the certificates issued by the company in respect of the investments made under instalment plans (RIP Plans) mention ‘Expected Cost of Product at End of Term’ and ‘Expected Sum Payable’ (identical amounts are mentioned against both entries) which appear to be the maturity amount (inclusive of return on investment) payable to the investor at the end of the term. Similarly, the Tables pertaining to MIS and LPP Plans (which appear to be Monthly Income Scheme Plan and Lump-sum Payment / Cash Down Payment Plan where the money apparently has to be invested as lump-sum amount outright) refer to ‘Payable Every Year’ / ‘Payable Every Month’ and ‘Payable Amount’ which appear to be the yearly/ monthly / lump-sum returns being offered to the investors on the invested amount. It is noteworthy that none of the certificates contain any reference to allotment / sale of plots of land.

(m) It is noted that while SEBI has received a large number of complaints against the company from investors, all such complaints pertain only to non-payment of maturity amount/returns on investments to investors by the company and do not make any reference to any allotment / sale of plot(s) of land by the company.

(n) It is noted that though the ‘Application Form’ issued by the company is purportedly meant for a scheme for purchase, development and maintenance of agricultural plots of land, it prima facie appears that the company has used the said scheme merely as a money mobilization scheme offering returns to the investors on the invested amount.

7. Various documents including financial statements filed by the company with Registrar of Companies were accessed through the MCA21 portal. It is noted from the balance sheet of the company for Financial Year (FY) 2014-15 that the company had a current liability of Rs.1,30,35,000/- (as on March 31, 2012), Rs.3,37,69,937/- (as on March 31, 2013), Rs.4,27,29,937/- (as on March 31, 2014), Rs.2,17,36,248/- (as on March 31, 2015), on account of ‘Advance Against Land Booking’. Further, the copies of Certificates issued by the company, which are available on record, pertain to FYs 2011-12, 2012-13, 2013-14, 2014-15 and 2015-16 indicating fund mobilization by the company during all these FYs.

8. From the above, it prima facie appears that the company has mobilized huge funds from public under its scheme pertaining to purchase, development and maintenance of plot(s) of land.

9. The details of the ‘Schemes’ offered by the company have to be considered in light of Section 11AA of the SEBI Act. The aforesaid Section 11AA, which provides for the conditions to determine whether a scheme or arrangement is a ‘Collective Investment Scheme’, reads as follows: “Collective investment scheme. (1) Any scheme or arrangement which satisfies the conditions referred to in subsection (2) or sub-section (2A) shall be a collective investment scheme: Provided that any pooling of funds under any scheme or arrangement, which is not registered with the Board or is not covered under sub-section (3), involving a corpus amount of one hundred crore rupees or more shall be deemed to be a collective investment scheme.

(2) Any scheme or arrangement made or offered by any person under which,- (i) the contributions, or payments made by the investors, by whatever name called, are pooled and utilized for the purposes of the scheme or arrangement; (ii) the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable from such scheme or arrangement; (iii) the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors; (iv) the investors do not have day to day control over the management and operation of the scheme or arrangement.”

10. In the context of the abovementioned Section 11AA of the SEBI Act, the ‘Scheme’ offered by the company is examined as under – (i) The contributions, or payments made by the investors, by whatever name called, are pooled and utilized for the purposes of the scheme or arrangement.

a. From the copies of Certificates issued by the company, which are available on record, it is noted that the company has collected funds from general public under various plans under its Schemes which purportedly pertain to purchase, development and maintenance of plot(s) of land. The amounts have been collected in instalments or as lump-sum amount. It is noted that under the said scheme, the company appears to have offered returns mentioned as ‘Expected sum payable’ in the certificates pertaining to instalment plans or the ‘Payable Amount’ mentioned in the Tables in respect of the plans pertaining to lump-sum payment.

b. As mentioned in above paras, the sample Agreement issued by the company provides that since fragmentation into smaller size of plot(s)/land may not be practicable, feasible or permissible under relevant revenue laws, the customer shall have the requisite share along with other allottees/transferees in a particular piece of land and VHREL shall execute/procure execution and registration of sale deed ensuring the title and interest of allottees/transferees in the joint holding with other customers. Accordingly, symbolic possession of the plots shall be handed over to the customer immediately after registration of the relevant sale deed so as to enable the company to implement the Agreement. c. Further, from balance sheets of the company filed with RoC, it is observed that the company had mobilized a sum of Rs.4,27,29,937/- as on March 31, 2014 and Rs.2,17,36,248/- as on March 31, 2015, as advance against land booking.

d. Upon a consideration of the aforementioned, I prima facie find that the contributions/payments made by the investors were pooled and utilized for the purposes of the ‘Scheme’ pertaining to purchase, development and maintenance of plot(s) of land.

(ii) The contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable from such scheme or arrangement.

a. On perusal of the certificates issued by the company as well as the Tables pertaining to various plans offered by the company, it appears that the investors had invested money in the scheme to get a return on his investment. From the certificates issued by the company in respect of the investments made under instalment plans (RIP Plans), it is found that the same mention ‘Expected Cost of Product at End of Term’ and ‘Expected Sum Payable’ (identical amounts are mentioned against both entries) which appear to be the maturity amount (inclusive of return on investment) payable to the investor at the end of the term. Similarly, the Tables pertaining to MIS and LPP Plans (which appear to be Monthly Income Scheme Plan and Lump-sum Payment / Cash Down Payment Plan where the money apparently has to be invested as lump-sum amount outright) refer to ‘Payable Every Year’ / ‘Payable Every Month’ and ‘Payable Amount’ which appear to be the yearly/ monthly / lump-sum returns being offered to the investors on the invested amount.

b. For example, on perusal of the copy of the certificate issued to an investor, it is noted that under a plan of R-04 which is for a term of 5 years, the investor had invested Rs.46000/- as first yearly instalment beginning on 28/02/2014 in respect of a total investment of Rs.240000 over 5 years, which is mentioned in the certificate as ‘Agreed Cost of Product’. As per the certificate, the term is to expire on 28.02.2019 upon which the investor is supposed to get the amount of Rs.3,44,000/- as ‘Expected Cost of the Product at End of Term’ / ‘Expected sum payable’ mentioned in the certificate. It is noted that the figures mentioned above tally with the Plan details given in the Table 3 above. Thus, it is clear that the investors’ contributions or payments towards such scheme, as mentioned in above paragraphs, were made with an intention to earn profit/ income.

c. Upon a consideration of the aforementioned, I prima facie find that the contributions/payments made by the investors towards the ‘Schemes’ pertaining to purchase, development and maintenance of plot(s) of land, as offered by the company, were with a view to receive profit or income.

(iii) The property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors. (iv) The investors do not have day to day control over the management and operation of the scheme or arrangement.

a. As stated in the above paras, the Agreement forming part of the Application Form pertaining to the scheme of purchase, development and maintenance of plot(s) of land contained inter alia the following clauses:

 Since fragmentation into smaller size of plot(s)/land may not be practicable, feasible or permissible under relevant revenue laws, the Customer shall have the requisite share along with other allottees/transferees in a particular piece of land and VHREL shall execute/procure execution and registration of sale deed ensuring the title and interest of allottees/transferees in the joint holding with other customers. Accordingly, symbolic possession of the plots shall be handed over to the customer immediately after registration of the relevant sale deed so as to enable the company to implement the Agreement. The right, title and interest of the customer to the land shall remain inviolate, subject to the reciprocal rights and obligations of the customer and the company.  VHREL shall have the right to develop and maintain the agricultural land in consultation with agro-consultants and experts and the customer shall not ordinarily interfere with the method and mode of development and maintenance of the land.  The company shall employ its own employees to carry out development and maintenance of the land and bear the expenses.  The company shall be responsible for arranging sale of produce, if any, out of the said land which shall be accepted by the customer. b. Upon a consideration of the aforementioned, I prima facie find that the contributions / payments made by the investors towards the ‘Scheme’ pertaining to purchase, development and maintenance of plot(s) of land are managed on behalf of such investors by the company. Further, I prima facie find that such investors do not have day–to–day control over the management and operation of the aforementioned ‘Scheme’.

11. In this context, it may be relevant to refer to the observations made by the Hon’ble Supreme Court of India in P.G.F. Limited & Ors. Vs. UOI & Anr. (AIR2013SC3702), wherein it observed: “... Sub-section (2) of Section 11AA, which defines a collective investment scheme disclose that it is not restricted to any particular commercial activity such as in a shop or any other commercial establishment or even agricultural operation or transportation or shipping or entertainment industry etc. The definition only seeks to ascertain and identify any scheme or arrangement, irrespective of the nature of business, which attracts investors to invest their funds at the instance of someone else who comes forward to promote such scheme or arrangement in any field and such scheme or arrangement provides for the various consequences to result therefrom.”

12. Upon a consideration of the preceding paragraphs and having regard to the observations of the Hon’ble Supreme Court, I prima facie find that the ‘Scheme’ pertaining to purchase, development and maintenance of land as offered by the company satisfies the four requirements of a ‘Collective Investment Schemes’ as defined in Section 11AA of the SEBI Act, viz. – (i) There was pooling of contributions; (ii) Contributions were made with a view to receive assured realisable value; (iii) The contributions were managed on behalf of the investors, and (iv) The investors did not have day to day control over the management of the ‘Scheme’.

13. Section 12(1B) of the SEBI Act states that: “no person shall sponsor or cause to be sponsored or cause to be carried on a ‘collective investment scheme’ unless he obtains a certificate of registration from the Board in accordance with the regulations.” Further, Regulation 3 of the SEBI (Collective Investment Schemes) Regulations, 1999 (hereinafter referred to as “CIS Regulations, 1999”) also prohibits carrying on ‘Collective Investment Schemes’ activities without obtaining Certificate of Registration from SEBI.

14. I note that the company has not obtained any Certificate of Registration from SEBI under the CIS Regulations, 1999. I therefore, find that the ‘Scheme’ pertaining to purchase, development and maintenance of plot(s) of land has been carried out by the company in contravention of Section 12(1B) of the SEBI Act read with Regulation 3 of the CIS Regulations, 1999.

15. I also find that the fund mobilizing activity of the company through the ‘Scheme’ pertaining to purchase, development and maintenance of plot(s) of land post September 2013 prima facie amounts to a fraudulent practice in terms of Regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (“PFUTP Regulations, 2003”).

16. As per information available on the MCA21 Portal, the details of the present and past directors / promoters of the company are as under: TABLE 7 – DETAILS OF THE PRESENT AND PAST DIRECTORS / PROMOTERS OF VHREL NAME OF THE PERSON DIN PAN 1 Yogendra Bisay 02664008 AFQPB2353A 2 Jitendra Bisay 00128091 AFZPB2659A 3 Kalu Singh Verma 03397048 NA 4 Phool Chand Bisay 00128087 NA 5 Yuvraj 07113606 AKYPY9430C

17. I note that the persons at serial nos. 1, 2, 4 & 5 of Table 7 are the present directors of the company and continue to be responsible for the affairs of the company. They have also acted as directors during the period of fund mobilization. The person at sl. no. 3 of Table 7 above has acted as a director of the company in the past and had resigned from the directorship on 30/09/2011. However, since the material available on record contains certificates dated 30/09/2011 issued by the company to the investors, it prima facie appears that he was holding directorship in the company during the period of fund mobilization. Further, the persons at sl. nos. 1 and 2 of Table 7 are also the promoters of the company. As directors and promoters of the company, the aforementioned persons are liable for the alleged contraventions by the company.

18. As per the Balance Sheets of the company filed with RoC, the company has prima facie mobilized amounts of Rs.4,27,29,937/- as on March 31, 2014 and Rs.2,17,36,248/- as on March 31, 2015,- under the ‘Scheme’ pertaining to purchase, development and maintenance of plot(s) of land. However, since the company has collected funds even after the said financial year, the exact amount of funds mobilized by the company till date is yet to be ascertained. 19. Protecting the interests of investors is the first and foremost mandate for SEBI and therefore, steps have to be taken to ensure that the company does not collect further funds under its ‘Schemes’ or any other Schemes and no investors are defrauded. Further, in order to safeguard the assets/property acquired by the company and its directors /promoters using the funds collected from the investing public until full facts and materials are brought on record and a final decision is taken in the matter, it is incumbent on SEBI to take preventive action by way of an immediate measure.

20. In light of the aforesaid and as the company has failed to submit the details/information as sought by SEBI, I find no other alternative but to take recourse through an interim order against the company and its directors /promoters for preventing them from further carrying on with its existing fund mobilizing activity by launching ‘Collective Investment Scheme’ without registration from SEBI in accordance with law.

ORDER –

21. In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19 read with Sections 11(1), 11(4), 11B and 11AA of the SEBI Act read with Regulation 65 of the CIS Regulations, 1999 and Regulation 11 of PFUTP Regulations, 2003, hereby direct VHREL and its directors / promoters, viz., Yogendra Bisay, Kalu Singh Verma, Jitendra Bisay, Phool Chand Bisay and Yuvraj,– (i) Not to collect any fresh money from investors under its existing Scheme; (ii) Not to launch any new scheme/plan or float any new companies/firm to raise fresh moneys; (iii) Not to dispose of any of the properties or alienate the assets obtained directly or indirectly through the money raised by VHREL under its existing Scheme; (iv) Not to divert any funds raised from public at large, kept in bank account(s) and/or in the custody of VHREL; (v) To immediately submit a full inventory of the assets owned by VHREL out of the amounts collected from the investors under its existing Scheme; (vi) To furnish all the information sought by SEBI, including – a. Copies of all the relevant documents issued by the company viz. Application Form, Agreement, Certificate of Allocation, Allocation Letter, etc.; b. Scheme–wise list of investors and their contact numbers and addresses, including –  List of investors to whom land has been allotted and has got registered and  List of investors who have been refunded. c. Details of amount mobilized till date; d. Details of amount refunded till date along with the details of mode of payment, duly certified by a Chartered Accountant;

22. The above directions shall take effect immediately and shall be in force until further orders.

23. The preliminary findings contained in paragraphs 12 to 22 of this Order are made on the basis of the information obtained from MCA21 Portal and other relevant material on record. VHREL and the above-named directors / promoters (collectively referred to as “Noticees”) are hereby called upon to show cause as to why suitable directions/prohibitions under Sections 11, 11(4), 11B and 11AA of the SEBI Act read with Regulation 65 of the CIS Regulations, 1999 and Regulation 11 of the PFUTP Regulations, 2003, should not be issued/imposed, including the following directions, viz. – i. VHREL and its directors and promoters, viz. Yogendra Bisay, Kalu Singh Verma, Jitendra Bisay, Phool Chand Bisay and Yuvraj, to wind up the existing Collective Investment Scheme and to refund the money collected under the Scheme with returns which are due to investors as per the terms of offer of the said Scheme, supported by a Winding up and Repayment Report (in accordance with the CIS Regulations, 1999) to the satisfaction of SEBI (to be submitted to SEBI within 7 days of completion of the refund); and ii. The Noticees to be restrained/prohibited from accessing the securities market and buying, selling or otherwise dealing in securities in any manner whatsoever, directly or indirectly, for a period of four years from the date of effecting the refund.

24. The Noticees may, within 21 days from the date of receipt of this Interim Order–cum–Show Cause Notice, file their respective reply, if any, to this Order and may also indicate whether they desire to avail themselves an opportunity of personal hearing on a date and time to be fixed on a specific request made in that regard.

25. This Order is without prejudice to any other action that SEBI may initiate under securities laws, as deemed appropriate.

26. A copy of this Order shall also be forwarded to the Local Police/State Government for their information.

Place: Mumbai G. MAHALINGAM Date: December 24, 2018 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA