Order in the matter of Weird Industries Ltd

UNDER SECTIONS 11, 11(4), 11A AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992, IN THE MATTER OF WEIRD INDUSTRIES LIMITED (U74120WB2008PLC123790) AND ITS DIRECTORS, VIZ. SHRI CHAND MOHAN GHOSH (DIN: 02013676; PAN: AJFPG5051P), SHRI RAMPROSAD MONDAL (DIN: 05115858; PAN: ASPPM3388N), SHRI GOPAL DALAPATI (DIN: 01742768; PAN: AEFPD9926H), SHRI SAHAJAHAN KHAN (DIN: 02013659; PAN: AGRPK0125D), SHRI SANJAY KUMAR DAS (DIN: 02016573; PAN: AGUPD3964E), SHRI JADUNATH JENA (DIN: 03169961; PAN: ANUPJ8465D), SHRI MOHAMMED ARIFF BILLA (DIN: 02738772; PAN: ADRPB8958J), SHRI BHABAGRAHI BEHERA (DIN: 05113111; PAN: ASWPB3847N), SHRI SACHIN KUMAR THAKUR (DIN:06560350; PAN:AJUPT3341C), SHRI PRADIP GHOSH (DIN: 07294435; PAN:BQUPG5084K) ) AND SHRI SK ASADUL (DIN: 07294436); ITS DEBENTURE TRUSTEE, VIZ. SHRI. HARI PADA SETH.

Date of hearing: March 11, 2015 and April 23, 2015 Appearance For Noticees Advocate Kalicharan Maity Advocate Bichitra Nanda Muni Mr. Ashok Kumar Agarwal

For Securities and Exchange Ms. AnithaAnoop, General Manager Ms. Soma Majumdar, General Manager Board of India Mr. N Murugan, Deputy General Manager Mr. T.Vinay Rajneesh, Assistant General Manager Mr. Prasenjit Dey Assistant General Manager

1.1 Weird Industries Limited (WIL) having its Office at Bhagyalaxmi Building, Howrah Amta Road, Post Office–Dasnagar, Kolkata–711105, West Bengal, India, was incorporated on March 7, 2008, with the Registrar of Companies ( ROC), Kolkata. 1.2 On receipt of information about collection of money by WIL and subsequent enquiry by SEBI, it was observed that WIL had issued:- a. Redeemable Preference Shares, to 2053 persons in the year 2008-09 and 2009- 2010 ("hereafter referred to as RPS") and collected an amount of Rs. 3.45 crore and b. Non–Convertible Debentures during 2009-10 and 2010-11 and had mobilized an amount of Rs. 14.00 crores ("hereafter referred to as offer of NCDs") 1.3 As the above said RPS and offer of NCDs were found prima facie in violation of respective provisions of the SEBI Act, 1992 ("SEBI Act"), the Companies Act, 1956, SEBI (Disclosure and Investor Protection) Guidelines, 2000 ("DIP Guidelines") read with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("ICDR Regulations"), SEBI (Issue and Listing of Debt Securities), Regulations, 2008 ("Debt Securities Regulations"), SEBI passed an interim order dated September 15, 2014 and issued directions mentioned therein against WIL and its Directors, Shri Chand Mohan Ghosh, Shri Ramprosad Mondal, Shri Gopal Dalapati, Shri Sahajahan Khan, Shri Sanjay Kumar Das, Shri Jadunath Jena, Shri Mohammed Ariff Billa and Shri Bhabagrahi Behera; its Debenture Trustee, viz. Shri. Hari Pada Seth. 2.1 Prima facie findings/allegations: In the said interim order, the following prima facie findings/allegation were recorded. WIL has made an RPS to 2053 number of persons in total during 2008-09 and 2009-10 and raised an amount of Rs. 3.45 crore through allotment as shown in the following table:-

Type of Date of No. of No. of Total Amount Year Security Allotment securities alottees (in Crores) 2008 – 09 Redeemable 28.08.2008 4,28,950 358 0.43 Preference 2009 – 10 31.07.2009 30,21,450 1,695 3.02 Shares TOTAL 34,50,400 2,053 3.45

2.2 WIL had made an offer and issuance of NCDs in accordance with the following terms and conditions. a. "The offer is being made on a private placement basis and cannot be accepted by any person other than to whom it has been offered. Further, the offer cannot be transferred or renounce in anyone's favour. b. The application can be made for a minimum amount of ₹1000 and in multiples of ₹1000 thereafter. c. As the issue for NCDs is on private placement basis, no prior approval/rating is required from Government/SEBI and other statutory authorities. d. The debentures are being issued pursuant to the resolution passed at a meeting of Board of Directors of the Company at its meeting held on May 25, 2009. e. Size of the Issue: ₹5 Crore, with an option to retain oversubscription to be decided by Board of Directors. f. Allotment of NCDs will be made within 60 days from the date of receipt of application. g. Security: The NCDs will be secured by mortgage of assets, water plant to register of the company. h. Who Can Invest: Individuals, Trusts, Corporate Bodies, Minors (through Guardians), Institutions, Mutual Funds, HUFs and Co-operative Bodies." 2.3 WIL offered NCDs with varying periods of redemption as shown below in respect of different amounts under different schemes MULTIPLIER SECURED DEBENTURE PLAN A B C D E Redemption Period 2 Years 4 Years 7 Years 10 12 11 11 11 Years Years Months Months Months Amount Payable per 100 100 100 100 100 Debenture Minimum No. of 10 10 10 10 10 Debenture Redemption Value 1500 2000 4000 6000 10000 Annualised Yield on 15 16 17.20 18.33 19.66 Investments (%)

REGULAR INCOME SECURED DEBENTURE PLAN MINIMUM Redemption Annualised Payable Period Yield on Investment RA Debenture Amount (₹) 3 Years 15.50% Monthly 250 25000 11 Months

2.4 WIL had also issued NCDs of Rs. 100 each during 2009-10 and 2010-11 and had mobilized an amount of Rs. 14.00 crore as shown in the following table.

Total Amount (₹ in Year Type of Security Date of Allotment Crores) Non–Convertible 25.05.2009 and 2009 – 10 6.9 Debentures of ₹100 31.10.2009

Non–Convertible 2010 – 11 Details Not Available 7.1 Debentures of ₹100 TOTAL 14

2.5 WIL had also created a charge of Rs. 5.00 crore for the issue of Debentures. WIL appointed Shri. Hari Pada Seth as Debenture Trustees who is not registered as debenture trustee for the Offer of NCDs by that company. 2.6 The above RPS and offer of NCDs and pursuant allotment were deemed public issues of securities under the first proviso to Section 67(3) of the Companies Act, 1956. Accordingly, the resultant requirement under Section 60, Section 56(1) and 56(3), Sections 73(1),(2) and (3) of the Companies Act were not complied with by WIL in respect of RPS and offer of NCDs. WIL also failed to comply with relevant provisions of DIP Guidelines read with ICDR Regulations. WIL also failed to comply with Section 117B, 117C of the Companies Act, 1956 and relevant provisions of Debt Securities Regulations mentioned in the interim order. Shri. Hari Pada Seth appointed as debenture trustees have violated Section 12(1) of SEBI Act. 2.7 In view of the prima facie findings on the violations, the following directions were issued in the said interim order dated September 15, 2014with immediate effect. i. WIL shall not mobilize funds from investors through the Offer of Preference Shares and Offer of NCDs or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions; ii.

WIL and its present Directors, viz. Shri Chand Mohan Ghosh and Shri Gopal Dalapati including its past Directors, viz. Shri Ramprosad Mondal, Shri Sahajahan Khan, Shri Sanjay Kumar Das, Shri Jadunath Jena, Shri Mohammed Ariff Billa and Shri Bhabagrahi Behera, 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. WIL 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. WIL shall provide a full inventory of all its assets and properties; v. WIL's abovementioned Directors shall provide a full inventory of all their assets and properties; vi. WIL 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 Preference Shares and Offer of NCDs, without prior permission from SEBI; vii.

WIL and its present Directors shall not divert any funds raised from public at large through the Offer of Preference Shares and Offer of NCDs, which are kept in bank account(s) and/or in the custody of WIL; viii. WIL shall furnish complete and relevant information in respect of both preference shares and NCDs (as sought by SEBI letters dated November 2, 2012; July 9, 2013 and February 7, 2014), within 21 days from the date of receipt of this Order. ix. Shri. HariPada Seth is prohibited from continuing with his present assignment as a debenture trustee in respect of the Offer of NCDs of WIL and also from taking up any new assignment or involvement in any new issue of debentures, etc. in a similar capacity, from the date of this order till further directions. 2.8 Vide the said interim order WIL and its abovementioned Directors and the person acting as Debenture trustee, were given the opportunity to file their reply, within 21 days from the date of receipt of the said interim Order. The order further stated that the concerned persons may also indicate whether they desired to avail an opportunity of personal hearing on a date and time to be fixed on a specific request made in that regard.

3.1 Service of interim order: The copy of the said interim order was sent to the above mentioned entities by SEBI’s letter dated September 15, 2014. The copies of order sent to Shri Bhabagrahi Behera, Shri Gopal Dalapati, Shri Jadunath Jena and Shri Sanjay Kumar Das were delivered. However, the copies of order sent to the company, Shri Chand Mohan Ghosh, Shri Sahajahan Khan and Shri Mohammed Ariff Billa were returned undelivered. There is nothing on record to suggest whether the delivery of copy of interim order was complete in so far as Shri Ram Prosad Mondal and Shri Hari Pada Seth are concerned. However, I note that the representatives of these two had appeared before me during the personal hearing held on April 23, 2015. 4.1 Opportunity of Hearing and submissions: SEBI vide letters dated February 6, 2015 and February 27, 2015, intimated that the entities will be given an opportunity of being heard on March 11, 2015 at the time and the venue mentioned therein. 4.2 Mr. Kalicharan Maity appeared on behalf of Shri Gopal Dalapati and Shri Sanjay Kumar Das and Mr. Bichitra Nanda Muni appeared on behalf Shri Jadunath Jena and Shri Bhabagrahi Behera on March 11, 2015 and made submissions for their clients and submitted documents to support their case that their clients had resigned as directors in the concerned period of preference shares and NCDs.

4.3 Mr. Bichtra Nanda Muni was required to produce the proof of date of joining of the director Mr. Jadunath Jana. On this, Mr. Bichtra Nanda Muni sought 10 days’ time for filing the same. 4.4 Since some of the entities did not appear on the said date another opportunity of hearing was scheduled on April 23, 2015. SEBI vide letter dated March 23, 2015, the entities were communicated that they will be given an opportunity of hearing on April 23, 2015. Thereafter, SEBI vide notification dated April 14, 2015, published in newspaper Ananda Bazar Patrika and notification dated April 15, 2015 published in newspaper Times of India, the Company and its directors and debenture trustee, were notified that they will be given the final opportunity of being heard on April 23, 2015 at the time and the venue mentioned therein. 5.1 Hearing on April 23, 2015: Mr. Kalicharan Maity appeared, on behalf of Shri Ramprosad Mondal, Shri Gopal Dalapati, Shri Sanjay Kumar Das and made representations and filed documents showing the date of resignation of the respective directors. 5.2 Mr. Bichitra Nanda Muni appeared for their clients, Shri Jadunath Jena, Shri Bhabagrahi Behera and made submissions for their clients and submitted documents arguing that their clients had resigned as directors in the concerned period of preference shares and NCDs.

5.3 Mr. M. A Billa appeared in person, and submitted that he was director only for a month. He was directed to file documents in proof of the same. 5.4 Mr. Ashok Kumar Agarwal represented Mr. Haripada Seth reiterating his submissions made vide letter dated October 8, 2014 to SEBI. 5.5 Shri Haripada Seth vide his reply dated October 8, 2014 to SEBI, made the following submissions stating that:- a) He was appointed as Debenture trustee on June 30, 2009. WIL vide letter dated September 30, 2009 confirmed that the issue for which charge was created had been abandoned and requested for the return of original title deeds deposited with him for creation of charge. b) On that basis he had returned the title deeds. Pursuant to that he filed Form 17. c) Thereafter, certificate of satisfaction of charge was issued by the competent Authority. The same has been taken on record for general public view in MCA 21 portal. d) Therefore, he had ceased to be Debenture Trustee of WIL on September 30, 2009. e) He has taken no remuneration as debenture trustee f) He cannot be held responsible for acting as debenture trustee, since the said issue of NCDs were abandoned. g) He was never informed by the company that the NCDs are offered to public.

He has not given any consent to act as debenture trustee to any public issue. Therefore, Debenture Trustee Regulations are not applicable to him. In view of this, SEBI has no jurisdiction over him. Therefore, proceedings against him should be dropped. h) The dates shown in the interim order as dates of allotment of NCDs are actually date of Board Resolutions approving the issue of NCDs. i) It is observed from MCA 21 Portal, the company had subsequently created charge to secure the issue of NCDs on October 31, 2009 with Mr. Masrur Ahmed as the Debenture Trustee.

5.6 I have considered the allegations, and material on record, documents downloaded from MCA 21 Portal', submissions and replies given by the entities. On perusal of the same, the following questions arise for consideration. Each question is dealt with separately under a suitable heading. 1. Whether the company came out with the RPS and Offer of NCDs ? 2. If so, whether the said issues of RPS and NCDs are in violation of Section 60, Section 56(1) and 56(3), Sections 73(1) (2) (3) of the Companies Act, 1956 and DIP Guidelines read with ICDR Regulations mentioned in the interim order and whether the Offer of NCDs is in violation of Section 117C of Companies Act and relevant provisions of the Debt Securities Regulations mentioned in the interim order? 3. Whether WIL has appointed Shri Hari Pada Seth who is not a registered entity to act as Debenture Trustee for the offer of NCDs, in violation of Section 117B, of the Companies Act, 1956 and whether Shri Hari Pada Seth has violated Section 12(1) of SEBI Act? 4. If the findings on question No.2 and 3 are found in the affirmative, who are liable for the violations committed?

6.1 Whether the company came out with the RPS and Offer of NCDs?: I have perused the interim order dated September 15, 2014 for the allegation of RPS and Offer of NCDs and material on record. Neither the company nor the directors disputed the said issuance. However, Shri Hari Pada Seth disputed the issuance of NCDs alleged to be issued pursuant to the board meeting held on May 25, 2009. 6.2 As regards the NCDs, I find from the extracts of the minutes of the Board of Directors held on May 25, 2009, that the Board had approved the issuance of NCDs though stated to be on private placement for an amount of Rs. 5 crore on terms ranging from 18 months to 15 years at the interest not exceeding 24 percent per annum. 6.3 I also find from the Extracts of the Minutes of Board of Directors held on October 1, 2009, that the Board had approved the issuance of NCDs though stated to be on private placement for an amount of Rs. 15 crore on terms ranging from 18 months to 15 years at the interest not exceeding 24 percent per annum. 6.4 In the above said Board Resolutions, Shri Sanjay Kumar Das is authorised to finalise the matter and sign digitally all the forms to be filed with ROC.

Shri Chand Mohan Ghose and Shri Bikash Karmakar were authorized to sign the debenture certificates on behalf of the Board. The Board also resolved to create securities in favour of debenture trustees. On perusal of the Minutes of the EGM held on May 25, 2009, the Board of Directors are authorized to create mortgage or charge in favour of the trustee of the debenture holders. 6.5 I perused the letter dated September 30, 2009 written by the Company to the Debenture Trustee, Shri Haripada Seth produced by him. The said letter states that the issue for which charge was created vide Trust deed dated June 30, 2009 had been abandoned and requested for the return of original title deeds deposited with him for creation of charge. It is noted that the letter dated September 30, 2009 has been uploaded as an attachment in Form 17. The perusal of the Trust deed and the letter dated June 30, 2009 written by the company to Shri Hari Pada Seth shows that the creation of charge covered in the said Trust deed is in respect of NCDs amounting to Rs. 5 crores resolved to be issued vide Board Resolution dated May 25, 2009. However, no form 2(return of allotment) has been filed in respect of this issue.

In view of the letter dated June 30, 2009 stating the abandonment of this issue and coupled with lack of further material on record to show that any NCDs were issued pursuant to Board Resolution dated May 25, 2009 for issuance of NCDs for an amount of Rs. 5 crores, it is difficult to conclude whether NCDs were issued or not pursuant to the Board Resolution dated May 25, 2009. 6.6 However, I find from the balance sheet of the company as on March 31, 2011 and Form 10, that the company had issued NCDs of Rs.100 each during 2009-10 and 2010-11 and had mobilized an amount of Rs.14.00 crore. Therefore, it is clear that NCDs worth Rs. 14 crore were issued pursuant to Board Resolution dated October 1, 2009. 6.7 As regards the RPS, on perusal of the Form 2 (Return of Allotment) filed in respect of the allotment of redeemable preference shares on 28.08.2008, I find that during 2008- 09, allotment was made to 371 persons instead 358 persons as mentioned in the interim order and an amount Rs. 0.43 crore was collected by the Company. 6.8 On perusal of the Form 2 filed in respect of the allotment of redeemable preference shares on July 31, 2009, I find that during 2009-10 allotment was made to 1695 persons and an amount Rs. 3.02 crore was collected by the Company.

Thereby, the company collected a total amount of Rs. 3.45 crore in total from 2066 persons. I further find from the Balance Sheet for the Financial Year 2009–10, that WIL collected Rs. 20.50 Lakhs towards share application money for redeemable Preference Shares in that Financial Year.

7.1 If so, whether the said issues of RPS and NCDs are in violation of Section 60, Section 56(1) and 56(3), Sections 73(1) (2) (3) of the Companies Act, 1956 and DIP Guidelines read with ICDR Regulations mentioned in the interim order and whether the Offer of NCDs is in violation of Section 117C of Companies Act and relevant provisions of the Debt Securities Regulations mentioned in the interim order? 7.2 The provisions alleged to have been violated and mentioned in this issue for consideration, are applicable to the offer made to the public. Therefore, the primary question that arises for consideration is whether the issues of preference shares and issue of NCDs covered in Issue No 1 are public issues. At this juncture, reference may be made to section 67(1) & (3) of the Companies Act, 1956: "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)any reference in this Act or in the articles of a company to invitations to the public to subscribe for shares or debentures shall, subject as aforesaid, be construed as including a reference to invitations to subscribe for them extended 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. (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).” 7.3 The following observations of the Hon'ble Supreme Court of India in Sahara India Real Estate Corporation Limited & Ors.Vs.

SEBI (Civil Appeal no. 9813 and 9833 of 2011)(hereinafter referred to as the 'Sahara Case'), while examining the scope of Section 67 of the Companies Act, 1956, are worth consideration:- "84. 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. 85. 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, after 13.12.2000, any offer of securities by a public company to fifty persons or more will be treated as a public issue under the Companies Act, even if it is of domestic concern or it is proved that the shares or debentures are not available for subscription or purchase by persons other than those receiving the offer or invitation…..” 7.4 Section 67(3) provides for situations when an offer is not considered as offer to public.

As per the said sub section, if the offer is one which is not 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 {(section 67(3)(a)}, or, if the offer is the domestic concern of the persons making and receiving the offer {(section 67(3)(b)}, the same are not considered as public offer. Under such circumstances, they are considered as private placement of shares and debentures. It is noted that as per the first proviso to Section 67(3) Companies Act, 1956, the public offer and listing requirements contained in that Act would become automatically applicable to a company making the offer to fifty or more persons. 7.5 In the instant case, as found in Issue No.1, the redeemable preference shares were issued to fifty or more persons, the same is considered as deemed public issue. 7.6 As far as the NCDs are concerned, neither the company nor the directors disputed the allegation that NCDs were issued to fifty or more persons. Further WIL has not provided details of NCDs to Registrar of Companies despite collecting Rs. 4.00 crores, which is around 4 times the money collected by way of RPS from 2053 number of persons.

In view of this, adverse inference is taken that NCDs were issued to fifty or more persons and accordingly the said issuance is deemed as public issue. 7.7 In view of the above, I hold that the impugned issues are deemed to be public issues and therefore, such issues are mandated to comply with the 'public issue' norms as prescribed under the Companies Act, 1956. 7.8 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, containing 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'. As per the aforesaid Section 2(36), “prospectus” means any document described or issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares in, or debentures of, a body corporate.

7.9 Neither the Company nor the directors produced any record to show that WIL had issued Prospectus containing the disclosures mentioned in section 56(1) of the Companies Act, 1956, or filed a Prospectus with ROC or issued application forms accompanying the abridged prospectus. Therefore, I find that, WIL and the persons responsible for the failure to issue prospectus, has not complied with Section 56(1), 56(3) and 60 of the Companies Act, 1956. 7.10 Further, by issuing RPS and NCDs to more than forty nine persons, as stated above, WIL had to compulsorily list such securities in compliance with section 73 of the Companies Act, 1956. As per section 73(1) and (2) of the Companies Act, 1956, every company intending to offer shares or debentures to the public for subscription by the issue of a prospectus, is required to make an application, before such offer, 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 and if permission has not been applied for or not granted, the company is required to forthwith repay with interest all moneys received from the applicants.

7.11 The allegation of non-compliance of the above provisions were not denied by the company or directors. I find that no records have been submitted to indicate that it has made an application seeking listing permission from stock exchange nor refunded the amounts on account of such failure. Thus, WIL has contravened the said provisions. WIL or the directors have not provided any records to show that the amount collected by WIL are kept in a separate bank account. Therefore, I find that WIL has also not complied with the provisions of section 73(3) as it has not kept the amounts received from investors in a separate bank account and failed to repay the same in accordance with section 73(2) as observed above. 7.12 Further as regards the violation of Debt Securities Regulations, it may be seen that therein the word, 'debt securities' has been defined as 'non-convertible debt securities which create or acknowledge indebtedness, and include debenture'. In view of the finding that WIL has made a public issue of debt securities, the Debt Securities Regulations is also applicable to the instant offer of NCDs.

Therefore, I find that the Company has violated the following provisions of the aforesaid Regulations, which contain inter alia conditions for public issue and listing of debt securities, viz. i. Regulation 4(2)(a) – Application for listing of debt securities ii. Regulation 4(2)(b) – In-principle approval for listing of debt securities iii. Regulation 4(2)(c) – Credit rating has been obtained iv. Regulation 4(2)(d) – Dematerialization of debt securities v. Regulation 4(4) – Appointment of Debenture Trustee vi. Regulation 5(2)(b) – Disclosure requirements in the Offer Document vii. Regulation 6 – Filing of draft Offer Document viii. Regulation 7 – Mode of disclosure of Offer Document ix. Regulation 8 – Advertisements for Public Issues x. Regulation 9 – Abridged Prospectus and application forms xi. Regulation 12 – Minimum subscription xii. Regulation 14 – Prohibition of mis-statements in the Offer Document xiii. Regulation 15 – Trust Deed xiv. Regulation 16(1) – Debenture Redemption Reserve xv. Regulation 17 – Creation of Security xvi. Regulation 19 – Mandatory Listing xvii. Regulation 26 – Obligations of the Issuer, etc. 7.13 As regards the allegation of violation of section 117C of the Companies Act, 1956, it may be seen that the said provision mandates the company to create a debenture redemption reserve for the redemption of such debentures, to which every year, adequate amounts should be credited out of its profits, until such debentures are redeemed.

None of the noticees denied this allegation. There is no material on record to show that such debenture reserve was created. Therefore, I hold that the company has violated section 117C of the Companies Act, 1956. 7.14 I note that the jurisdiction of SEBI over various provisions of the Companies Act, 1956 including the above mentioned, in the case of public companies, whether listed or unlisted, when they issue and transfer securities, flows from the provisions of Section 55A of the Companies Act, 1956. While examining the scope of Section 55A of the Companies Act, 1956, the Hon'ble Supreme Court of India in Sahara Case, had observed that: "We, therefore, hold that, so far as the provisions enumerated in the opening portion of Section 55A of the Companies Act, so far as they relate to issue and transfer of securities and non-payment of dividend is concerned, SEBI has the power to administer in the case of listed public companies and in the case of those public companies which intend to get their securities listed on a recognized stock exchange in India." " SEBI can exercise its jurisdiction under Sections 11(1), 11(4), 11A(1)(b) and 11B of SEBI Act and Regulation 107 of ICDR 2009 over public companies who have issued shares or debentures to fifty or more, but not complied with the provisions of Section 73(1) by not listing its securities on a recognized stock exchange" 7.15 In this regard, it is pertinent to note that by virtue of Section 55A of the Companies Act, SEBI has to administer Section 67 of that Act, so far as it relates to issue and transfer of securities, in the case of companies who intend to get their securities listed.

7.16 In the instant case, WIL has issued RPS to 358 persons on August 28, 2008, which are deemed to be public issue, when the DIP guidelines were in force. 7.17 SEBI had framed the DIP Guidelines in exercise of the powers conferred upon itself by the SEBI Act. In the words of the Hon'ble Supreme Court in the matter of Sahara Companies," DIP Guidelines had statutory force since they were framed by SEBI in exercise of its powers conferred on it under Sections 11 and 11A of the SEBI Act. Powers have been conferred on SEBI to protect the interests of the investors in securities and regulate the issue of prospectus, offer documents or advertisement soliciting money through the issue of prospectus. Section 11 of the Act, it may be noted has been incorporated, evidently to protect the interests of investors whose securities are legally required to be listed. DIP Guidelines were implemented by SEBI with regard to the listed and unlisted companies, which made public offer, until it was replaced by ICDR 2009". The DIP Guidelines were applicable to all public issues by listed and unlisted companies.

7.18 When the DIP Guidelines were repealed and the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("the ICDR Regulations") were notified with effect from August 28, 2009, the Company was mandated to comply with such regulations with respect to its capital issues made thereafter. Therefore, in addition to the provisions of the Companies Act, WIL was also mandated to comply with the provisions of DIP Guidelines till such time they were in force.

7.19 Therefore, WIL has not complied with the provisions of the DIP Guidelines in respect of its allotment made August 28, 2008, including 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 f. companies), g. Clause 4.11 (lock-in of minimum specified promoters contribution in h. public issues), i. Clause 4.14 (lock-in of pre-issue share capital of an unlisted company), j. Clause 5.3.1(memorandum of understanding), k. Clause 5.3.3 (due diligence certificate), l. Clause 5.3.5 (undertaking), m. Clause 5.3.6 (list of promoters group and other details), n. Clause 5.4 – appointment of intermediaries, o. Clause 5.6 (offer document to be made public) p. Clause 5.6A (Pre-issue Advertisement), q. Clause 5.7 - dispatch of issue material, r. Clause 5.8 – no complaints certificate, s. Clause 5.9 – mandatory collection centres and Clause 5.9.1.(minimum t. number of collection centres), u. Clause 5.10 – authorized collection agents, v. Clause 5.12.1. (appointment of compliance officer), w. Clause 5.13 – abridged prospectus, x. Clause 6.0 – contents of offer documents – Clause 6.1 to Clause 6.15 (contents of prospectus), Clause 6.16 to Clause 6.34 (contents of abridged prospectus) including Clause 6.17.13 and Clause 41.6 – rating for the proposed debentures/preference shares issue, if any, obtained from credit rating agencies, y. Clause 8.3 (Rule 19(2)(b) of SC(R) Rules, 1957), z. Clause 8.8.1 (Opening & closing date of subscription of securities), aa. Clause 9 – guidelines on advertisements by issuer company, and bb. Clause 10.1 (Requirement of credit rating).

7.20 In view of the forgoing findings, I am of the view that WIL is engaged in fund mobilizing activity from the public, through the offer and issuance of NCDs and RPS and has contravened the provisions of sections 56, 60 and 73 and through the issuance of NCDs has contravened section 117C of the Companies Act, 1956 and the above provisions of DIP guidelines. 8.1 Whether WIL has appointed Shri Hari Pada Seth who is not a registered entity to act as Debenture Trustee for the offer of NCDs, in violation of Section 117B, of the Companies Act, 1956 and whether Shri Hari Pada Seth has violated Section 12(1) of SEBI Act? 8.2 I have perused the information downloaded by SEBI from the MCA 21 Portal. On perusal of the extracts of the minutes of the Board of directors dated May 25, 2009, I find that Board has approved creation of securities in favour of the trustees of debenture holders on the terms and conditions to be mutually agreed between the trustees and the Company. Shri Sanjay Kumar Das had been authorized to do necessary acts in this behalf. On perusal of the extracts of the minutes of the EGM dated May 25, 2009, I find that the Board had been authorized to create of equitable mortgage in favour of the trustee of debenture holders.

From the copy of the trust deed, downloaded from MCA 21 Portal, executed by Shri Hari Pada Seth, I find that Shri Hari Pada Seth had agreed to act as debenture trustee. Further one of the terms in the Trust deed states that the Company shall create equitable mortgage for securing the issue of series debentures for a value of Rs. 5 crore. The Company vide its letter dated June 30, 2009 sent to Shri Hari Pada Seth confirms that the Company’s Managing director Shri Sanjay Kumar Das had deposited with Shri Hari Pada Seth tittle deeds on June 30, 2009 in respect of the property mentioned therein. The letter further clearly states that the said title deeds are deposited to create equitable mortgage for securing the issue of series debentures for a value of Rs. 5 crore. Further Form 17(which is required to be filed in discharge of charge) has also been filed by the Company which mentions Shri Hari Pada Seth as the charge holder. Therefore, I find that WIL has appointed Shri. Hari Pada Seth as Debenture Trustee for the Offer of NCDs by that company. 8.3 Under section 117B of the Companies Act, 1956 no company shall issue a prospectus or a letter of offer to the public for subscription of its debentures, unless the company has, before such issue, appointed one or more debenture trustee for such debentures and the company has, on the face of the prospectus or the letter of offer, stated that the debenture trustee or trustee have given their consent to the company to be so appointed.

8.4 By virtue of Section 12(1) of the SEBI Act " No trustee of trust deed … shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained from the Board in accordance with the regulations made under this Act". By virtue of Reg. 7 of the SEBI (Debenture Trustees) Regulations, 1993, only a scheduled bank carrying on commercial activity or, a public financial institution within the meaning of section 4A of the Companies Act, 1956 or, an insurance company or, a body corporate alone are eligible to get a certificate of registration as Debenture Trustee. Shri Hari Pada Seth is not eligible to obtain a certificate of registration since he does not satisfy the eligibility criteria mentioned in Reg. 7 of the SEBI (Debenture Trustees) Regulations, 1993. Neither did this noticee claim that they had received certificate of registration issued by SEBI. Instead, Shri Hari Pada Seth admitted that debenture trust deed was executed by him. The stipulation under section 117B of the Companies Act,1956 that the appointment of trustee is mandated even before actual creation of debentures, clearly lends credence to the view that the prohibition on the debenture trustee under section 12 (1) of the SEBI Act, steps in on the date of appointment as debenture trustee.

The subsequent abandonment of the issuance of debenture has no relation to his initial liability under section 12 (1) of SEBI Act, since by execution of the Trust deed with consent for acting as trustee, such person falls within the preventive sweep of Section 12(1) of SEBI Act. 8.5 In view of above, I find that Shri Hari Pada Seth has dealt in the impugned NCDs as debenture trustee, without having a certificate of registration as Debenture Trustee in violation of Section 12(1) of the SEBI Act, 1992. Since the company has appointed the said entity who does not have a certificate of registration, the appointment of the same is in violation of section 117B of the Companies Act, 1956. 8.6 As regards the submission of Shri Hari Pada Seth in his reply that the company had subsequently created charge to secure the issue of NCDs on October 31, 2009 with Mr. Masrur Ahmed as the Debenture Trustee, SEBI may, on enquiry, proceed in respect of him in accordance with law. 9.1 If the findings on question No.2 and 3 are found in the affirmative, who are liable for the violations committed? 9.2 Section 56(1) and 56(3) read with section 56(4) imposes the liability for the compliance of the said provisions, on the company, every director, and other persons responsible for the issuance of the prospectus.

The liability for non-compliance of Section 60 of the Companies Act, 1956 is on the company, and every person who is a party to the non-compliance of issuing the prospectus as per the said section. 9.3 As far as the liability for non-compliance of section 73 of Companies Act, 1956 is concerned, as stipulated in section 73(2) of the said Act, the company and every director of the company who is an officer in default shall, from the eighth day when the company becomes liable to repay, 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 if the money is not repaid forthwith. 9.4 SEBI, as per section 27(2) of the SEBI Act, has the powers to proceed against directors of such companies. In cases of financial fraud, the role of directors in prevention of the same is of utmost importance. They are required to take diligent measures in preventing the same. They are also required not to be neglectful in the affairs of the company which results in the violation of various laws such as deemed public issue in violation of law.

In deemed public issue in violation of law, money is collected from innocent, ill-informed and gullible public, without the Company giving the statutory protection available to those investors under the law such as, full and necessary disclosures about the company, an exit opportunity by way of listing of the shares. The purpose of refund in such cases as per law, is to protect the investors who have parted their money without having any opportunity of exit and without full disclosures about the Company which deprives their informed consent. 9.5 Reference may also be made to the ratio of the Hon’ble High court of Madras in Madhavan Nambiar vs Registrar Of Companies (2002 108 Comp Cas 1 Mad) which observed “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”.

9.6 SEBI also has powers under section 11 and 11B of the SEBI Act to pass direction of refund along with interest. The Hon’ble Bombay High court in B.P.Plc (Formerly B.P.Amoco Plc) vs SEBI, (2002 (4) Bom CR 79), held that that SEBI has powers to award interest in exercise its power under section 11 and 11B of SEBI Act, as stated below:- “Applying the principles regarding award of interest as has been held by the Apex Court in Secretary, Irrigation Department vs. G.C.Roy (supra) to the effect "a person deprived of the use of money to which he is legitimately entitled to has a right to be compensated for the deprivation, call it by any name. It may be called "interest, compensation or damages," the investors are entitled to be compensated by way of interest for delayed payment. Under these circumstances we find no substance that there is no power to award such an interest.” 9.7 As far as the liability for non-compliance of DIP Guidelines read with the ICDR Regulations, the company and the concerned directors are responsible for the violations. 9.8 In view of the provisions of law and facts, I find that WIL and its Directors, Shri Ramprosad Mondal, Shri Gopal Dalapati, Shri Sanjay Kumar Das, Shri Jadunath Jena, Shri Mohammed Arif Billa, Shri Bhabagrahi Behera, Shri Chand Mohan Ghosh, Shri Sachin Kumar Thakur, Shri Pradip Ghosh and Shri SK Asadul, its Debenture Trustee, viz. Shri Haripada Seth, are responsible for the non-compliance of the above mentioned provisions.

9.9 In the above context of law, I find from the available information as per extract of “Register of directors, managing directors, manager and secretary, etc” the details of the appointment and resignation of all the directors as given in the Table below. Directors Date of appointment Date of cessation Shri Ramprosad Mondal 21/04/2013 10/06/2014 Shri Gopal Dalapati 30.06.2008 04/03/2013 Shri Sahajahan Khan 27/03/2008 30/06/2008 Shri Sanjay Kumar Das 01/12/2008 09/11/2011 Shri Jadunath Jena 01/03/2013 23/04/2013 Shri Mohammed Arif Billa 29/07/2009 30/09/2009 Shri Bhabagrahi Behera 09/11/2011 10/06/2014 Shri Chand Mohan Ghosh 27/03/2008 Continuing Shri Sachin Kumar Thakur 26/05/2014 Continuing Shri Pradip Ghosh 21/09/2015 Continuing Shri SK Asadul 21/09/2015 Continuing

9.10 Shri Gopal Dalapathi vide letter dated April 23, 2015 submitted the Form 32 in order to show that he has resigned as director with effect from March 04, 2013. It was also submitted that he joined the company on June 30, 2008. It was also submitted that he was not associated with the Company thereafter. On perusal of the Form 32, I find that Shri Gopal Dalapathi has joined as director on June 30, 2008 and resigned w.e.f. March 04,2013. 9.11 Shri Sahajahan Khan submitted vide letter dated March 30,2015 that he had resigned from the Company on June 30, 2008. He enclosed the copy of Form 32 in support of his submission on the date of appointment and cessation from the Company. He submitted referring to the finding in the interim order that the allotment was made from August 28, 2008 and he has resigned before the said date on June 30, 2008. On perusal of the Form 32, I find that Shri Sahajahan Khan had resigned on June 30, 2008. No material is available in respect of the date of resolution in respect of the allotment dated August 28, 2008. Therefore, I give the benefit of doubt to Shri Sahajahan Khan and hold that there is no material available on record showing that he was involved in the Board Resolution which resulted in the deemed public issue in violation of law.

9.12 Shri Sanjay Kumar Das through the authorized representative submitted the Form 32 filed by the company before Registrar of Companies. On perusal of the same, I find that he has given his consent to act as director of WIL vide letter dated February 27, 2008 to Registrar of Companies if incorporated. WIL was incorporated on March 7, 2008. Further, I find from Form 32 that he resigned from the directorship with effect from November 09, 2011. It was further submitted vide letter dated April 23, 2015 at the time of hearing, that he was appointed as director on March 7, 2008. 9.13 Shri Mohammed Ariff Billa submitted a reply vide his letter dated September 19, 2014 stating that he joined in the company as director on July 29, 2009 and resigned on September 29, 2009. On perusal of the Form 32 enclosed by him, I observe that he joined in the company as director on July 29, 2009 and resigned on September 29, 2009. 9.14 As regards Shri Chand Mohan Ghosh, I have perused the Form 32 filed by the company in respect of Shri Chand Mohan Gosh. As per that, he has joined the company as director on February 27, 2008 and continues to be so till date.

9.15 Therefore, I hold that the Company, Shri Gopal Dalapathi, Shri Sanjay Kumar Das, Shri Mohammed Ariff Billa, Shri Chand Mohan Ghosh acting as directors are responsible for the issue of RPS and NCDs in violation of law and regulations and hence co-extensively responsible along with the Company for making refunds along with interest.

9.16 The liability of the company to repay under section 73(2) read with sections 11, 11B and 27(2) of the SEBI Act, is continuing and such liability continues till all the repayments are made. Therefore, the directors who joined subsequent to the impugned public issuance are also responsible for making the refund, if the company does not repay the money collected, as mandated in section 73(2) of the Companies Act, 1956 read with sections 11, 11B and 27(2) of the SEBI Act. 9.17 Regarding Shri Ramprasad Mondal, it was submitted that he joined as director on April 21, 2013 and resigned as director w.e.f. June 10, 2014. He also submitted the copy of Resignation letter dated June 10, 2014 sent to the Company. The same had been part of the form 12 filed by the Company in MCA 21 Portal. He submitted that he is no more associated with the Company. I have perused the Form 32 filed by the company in respect of Shri Ramprasad Mondal. As per the same he has joined as the director of the company on April 21, 2013. The perusal of form 12 shows that Shri Ramprasad Mondal resigned as director w.e.f. June 10, 2014. 9.18 As regards Shri Jadunath Jena, I have perused the letters dated March 11, 2015 and April 23, 2015 submitted at the time of hearing by the authorised representative of Shri Jadunath Jena.

It was submitted that Shri Jadnunath Jena was appointed on March 01, 2013 and resigned with effect from April 23, 2013. On perusal of Form 32 relating to Shri Jadnunath Jena, I find that he was director of WIL with effect from March 01, 2013 and resigned with effect from April 23, 2015. 9.19 As regards Shri Bhabagrahi Behera, I have perused the letter dated March 11, 2015 and letter dated April 23, 2015 submitted at the time of hearings by the authorised representative of Shri Bhabagrahi Behera. It was submitted that he joined as director of the company with effect from November 09, 2011 and resigned as director w.e.f. June 10, 2014. I find from the perusal of Form 32 of Shri Bhabagrahi Behera that he was director of WIL with effect from November 09, 2011 and resigned as director from WIL with effect from June 10, 2014. 9.20 Shri Ramprosad Mondal, Shri Jadunath Jena and Shri Bhabagrahi Behera who joined as directors subsequent to the impugned issue, have not exercised necessary diligence while taking charge of directorship in the Company. The very inaction by them against the previous management (for violating the public issue norms as stipulated under the Companies Act, 1956), even after passing of the interim order, leads one to conclude on collusion at their end with the Company and its previous management.

Further, these directors have also not taken any step to remedy the violations committed. Therefore, I hold that Shri Ramprosad Mondal, Shri Jadunath Jena and Shri Bhabagrahi Behera, are co-extensively responsible along with the Company for making refunds along with interest. 9.21 Subsequent to the passing of the interim order, it has come to the knowledge of SEBI that Shri Sachin Kumar Thakur with effect from May 26, 2014, Shri Pradip Ghosh and Shri SK Asadul, both with effect from September 21, 2015, have become directors of WIL. These directors who have joined subsequent to the impugned issues are also responsible for refund along with interest under section 73(2) of the Companies Act, 1956 read with section 27(2) of the SEBI Act and hence liable for the contraventions found against the Company and also for the consequences of such violations. SEBI is advised to issue a show cause notice to Shri Sachin Kumar Thakur, Shri Pradip Ghosh and Shri SK Asadul, for any further directions as deemed appropriate by SEBI. 9.22 In view of the foregoing, the natural consequence of not adhering to the norms governing the issue of securities to the public and making repayments as directed under section 73(2) of the Companies Act, 1956, is to direct the WIL and its Directors, Shri Chand Mohan Ghosh, Shri Ramprosad Mondal, Shri Gopal Dalapati, Shri Sanjay Kumar Das, Shri Jadunath Jena, Shri Mohammed Ariff Billa, Shri Bhabagrahi Behera, Shri Sachin Kumar Thakur, Shri Pradip Ghosh and Shri SK Asadul to refund the monies collected through issuance of RPS and NCDs, with interest to such investors.

In view of the violations committed by the Company, its directors, and the unregistered debenture trustee, to safeguard the interest of the investors who had subscribed to such RPS and NCDs, issued by the Company and to further ensure orderly development of securities market, it also becomes necessary for SEBI to issue appropriate directions against the Company and the other noticees. 10.1 In view of the foregoing observations and findings, I in exercise of the powers conferred under section 19 of the Securities and Exchange Board of India Act, 1992 read with sections 11(1), 11(4), 11A and 11B thereof, hereby issue the following directions: a) The Company, namely, Weird Industries Limited and its directors viz and its Directors, Shri Chand Mohan Ghosh, Shri Ramprosad Mondal, Shri Gopal Dalapati, Shri Sanjay Kumar Das, Shri Jadunath Jena, Shri Mohammed Ariff Billa, Shri Bhabagrahi Behera, Shri Sachin Kumar Thakur, Shri Pradip Ghosh and Shri SK Asadul, shall forthwith refund the money collected by the Company through the issuance of RPS and NCDs, including the money collected from investors, till date, pending allotment of securities, if any, with an interest of 15% per annum compounded at half yearly intervals, from the date when the repayments became due to the investors till the date of actual payment. b) The repayments and interest payments to investors shall be effected only through Bank Demand Draft or Pay Order. c) Weird Industries Limited and its present management is permitted to sell the assets of the Company only for the sole purpose of making the repayments including interest, as directed above and deposit the proceeds in an Escrow Account opened with a nationalized Bank. d) The Company, namely, Weird Industries Limited and its directors viz and its Directors, Shri Chand Mohan Ghosh, Shri Ramprosad Mondal, Shri Gopal Dalapati, Shri Sanjay Kumar Das, Shri Jadunath Jena, Shri Mohammed Ariff Billa, Shri Bhabagrahi Behera, Shri Sachin Kumar Thakur, Shri Pradip Ghosh and Shri SK Asadul, shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily (in Bengali) with wide circulation, detailing the modalities for refund, including details of contact persons including names, addresses and contact details, within fifteen days of this Order coming into effect. e) After completing the aforesaid repayments, Weird Industries Limited and its directors viz and its Directors, Shri Chand Mohan Ghosh, Shri Ramprosad Mondal, Shri Gopal Dalapati, Shri Sanjay Kumar Das, Shri Jadunath Jena, Shri Mohammed Ariff Billa, Shri Bhabagrahi Behera, Shri Sachin Kumar Thakur, Shri Pradip Ghosh and Shri SK Asadul, shall, file a report of such completion 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) Weird Industries Limited and its directors viz and its Directors, Shri Chand Mohan Ghosh, Shri Ramprosad Mondal, Shri Gopal Dalapati, Shri Sanjay Kumar Das, Shri Jadunath Jena, Shri Mohammed Ariff Billa, Shri Bhabagrahi Behera, Shri Sachin Kumar Thakur, Shri Pradip Ghosh and Shri SK Asadul, are 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 Weird Industries Limited and its directors viz and its Directors, Shri Chand Mohan Ghosh, Shri Ramprosad Mondal, Shri Gopal Dalapati, Shri Sanjay Kumar Das, Shri Jadunath Jena, Shri Mohammed Ariff Billa, Shri Bhabagrahi Behera, Shri Sachin Kumar Thakur, Shri Pradip Ghosh and Shri SK Asadul, to comply with the aforesaid directions, SEBI, on the expiry of the three months period from the date of this order, a) shall recover such amounts in accordance with section 28A of the SEBI Act including such other provisions contained in securities laws. b) may initiate appropriate action against the Company, its promoters/directors and the persons/officers who are in default, including adjudication proceedings against them, in accordance with law. c) would make a reference to the State Government/ Local Police to register a civil/ criminal case against the Company, its promoters, directors and its managers/ persons in-charge of the business and its schemes, for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and d) would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company. h) Weird Industries Limited and its directors viz and its Directors, Shri Chand Mohan Ghosh, Shri Ramprosad Mondal, Shri Gopal Dalapati, Shri Sanjay Kumar Das, Shri Jadunath Jena, Shri Mohammed Ariff Billa and Shri Bhabagrahi Behera, are directed not to, directly or indirectly, access the securities market, by issuing prospectus, offer document or advertisement soliciting money from the public and are further restrained and prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, from the date of this Order, till the expiry of four (4) years from the date of completion of refunds to investors as directed above.

The above said directors are also restrained from associating themselves with any listed public company and any public company which intends to raise money from the public, or any intermediary registered with SEBI from the date of this Order till the expiry of four (4) years from the date of completion of refunds to investors. i) Shri. Hari Pada Seth, is restrained from acting as any intermediary, accessing the securities market and further restrained from buying, selling or dealing in securities, in any manner whatsoever, directly or indirectly, for a period of four (4) years. j) The above directions shall come into force with immediate effect. 10.2 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. 10.3 Copy of this Order shall be forwarded to the recognised stock exchanges and depositories for information and necessary action. 10.4 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 21st, 2015 PRASHANT SARAN Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA