Order passed in Infinity Realcon Limited

UNDERSECTIONS11,11(4),11AAND11BOFTHESECURITIESANDEXCHANGEBOA RDOFINDIAACT,1992, IN THE MATTER OF INFINITY REALCON LIMITED (PAN: AACCI0782Q) AND ITS DIRECTORS, VIZ. SHRI PRABIR KUMAR MUKHERJEE (DIN: 02548910; PAN: AZNPM2736R), SHRI PRANAB MUKHERJEE (DIN: 02548924; PAN: ALKPM1231A), SHRI SOUMEN MALLICK (DIN: 02548937; PAN: AEEPM1985N), SHRI SANJOY KUMAR MAITI (DIN: 03020095; PAN: APQPM8659A), SHRI SUJIT MITRA (DIN: 03028519; PAN: AJNPM1411D), SHRI PRALAY KUMAR SAW (DIN: 03020064; PAN: BBJPS6343H), SHRI BHASKAR BANERJEE (DIN: 02646193; PAN: AOAPB8772N), SHRI SARBARI MUKHERJEE (DIN: 02703365; PAN: AYVPM1890P) AND SHRI PARTHA PROTIM MUKHERJEE (DIN: 06467917; PAN: BZLPM2567D); ITS DEBENTURE TRUSTEE, VIZ. INFINITY REALCON DEBENTURE TRUST (THROUGH ITS TRUSTEE VIZ. SHRI CHINMOY GUHA THAKURTA) Date of hearing: April 22, 2015 Appearance

For Noticees Mr. SaikatBasu, Advocate

For SEBI Ms. Soma Majumdar, Deputy General Manager Mr. N. Murugan, Deputy General Manager Mr. T.Vinay Rajneesh, Assistant General Manager Ms. Nikki Agarwal, Assistant Manager

1.1 Infinity Realcon Limited (IRL) having its office at 176, A.J.C. Bose Road, 4th Floor, Kolkata –700014, West Bengal, India, was incorporated on April 22, 2009, with the Registrar of Companies (ROC), Kolkata, West Bengal with CIN No. as U74900WB2009PLC134683. 1.2 Securities and Exchange Board of India ("SEBI") received complaints from investors alleging wrongful issue of preference shares/debenture by IRL. 1.3 On enquiry by SEBI, it was observed that IRL had made an offer and issued Redeemable Preference Shares ("offer ofRPSs") for Rs. 19,31,58,950/-. It was also observed that the IRL had offered/issued Secured Non–Convertible Redeemable Debentures (offer of NCDs), with the issue size of Rs. 50 crore. 1.4 As the above said offer of Offer of RPS and NCDs were found prima facie in violation of respective provisions of the SEBI Act, 1992 ("SEBI Act"), the Companies Act, 1956, (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 January 7, 2015 and issued directions mentioned therein against IRL and its Directors, viz., Shri Prabir Kumar Mukherjee, Shri Pranab Mukherjee, Shri SoumenMallick, Shri Sanjoy Kumar Maiti, Shri SujitMitra, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee, Shri Sarbari Mukherjee and Shri ParthaProtim Mukherjee and its Debenture Trustee, viz Infinity Realcon Debenture Trust (through its Trustee viz. Shri ChinmoyGuhaThakurta). 2.1 Prima facie findings/allegations: In the said interim order, the following prima facie findings/allegation were recorded. IRL had made an offer and issued Redeemable Preference Shares during the Financial Years 2009–10 to 2012–13 and allotted Redeemable Preference Shares to a total of 24,718 individuals/investors and mobilized funds amounting to approximately Rs. 19.32 Crores as shown below:- Table 1 Financial Year No. of Allottees Amount (Rs.) (Approximate) (Approximate) 5,424 3,61,85,800 2009 – 10

Financial Year No. of Allottees Amount (Rs.) (Approximate) (Approximate) 13,436 10,84,76,950 2010 – 11 5,095 4,18,14,300 2011 – 12 763 66,81,900 2012 – 13 Total 24,718 19,31,58,950

2.2 It was also alleged that IRL also made an offer and issuance of Secured Non– Convertible Redeemable Debentures ("offer ofNCDs") and raised an amount of Rs. 1 Crore as on March 31, 2012. As observed in para 5 (vi) of the interim order,NCDs were issuedunder different schemes with varying periods of redemption and redemption value. 2.3 IRL created charge for an amount of Rs.50 Crores towards the Offer of NCDs. IRL appointed, Infinity Realcon Debenture Trust (through its Trustee viz. Shri ChinmoyGuhaThakurta), an unregistered entity, as Debenture Trustee for the Offer of NCDs by that Company. 2.4 The above offer of RPS and 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 IRL in respect of offers of RPS and NCDs. IRL also failed to comply with the relevant provisions of the ICDR Regulations, Section 117B, 117C of the Companies Act, 1956 and relevant provisions of the Debt Securities Regulations, 2008 mentioned in the interim order.

Infinity Realcon Debenture Trust (through its Trustee viz. Shri ChinmoyGuhaThakurta),appointed as debenture trustee had violated Section 12(1) of SEBI Act. 2.5 In view of the prima facie findings on the violations, the following directions were issued in the said interim order dated January 7, 2015with immediate effect. i. IRL shall not mobilize any fresh funds from investors through the Offer of Redeemable 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. IRL and its present Directors, viz. Shri Prabir Kumar Mukherjee, Shri Pranab Mukherjee and Shri SoumenMallick, including its past Directors, viz. Shri Sanjoy Kumar Maiti, Shri SujitMitra, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee, Shri Sarbari Mukherjee and Shri ParthaProtim Mukherjee, 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.

IRL and its abovementioned past and present 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. IRL shall provide a full inventory of all its assets and properties; v. IRL's abovementioned past and present Directors shall provide a full inventory of all their assets and properties; vi. IRL and its abovementioned present Directors shall not dispose of any of the properties or alienate or encumber any of the assets owned/acquired by that company through the Offer of Redeemable Preference Shares and Offer of NCDs, without prior permission from SEBI; vii. IRL and its abovementioned present Directors shall not divert any funds raised from public at large through the Offer of Redeemable Preference Shares and Offer of NCDs, which are kept in bank account(s) and/or in the custody of IRL; viii. IRL and its abovementioned past and present Directors, shall furnish complete and relevant information (as sought vide SEBI letters dated January 30, 2014; March 11, 2014 and March 24, 2014; August 4, 2014 and August 8, 2014), within 21 days from the date of receipt of this Order. ix.

Infinity Realcon Debenture Trust (through Shri ChinmoyGuhaThakurta), is prohibited from continuing with its present assignment as a debenture trustee in respect of the Offer of NCDs of IRL 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. 2.6 Vide the said interim order, IRL and its abovementioned Directors and other person acting as Debenture trustee were given the opportunity to file their replies, 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 January 8, 2015. The copies of interim order, were sent through speed post acknowledgement due. The copies of interim order sent toShri Prabir Kumar Mukherjee, Shri Pranab Mukherjee, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee and Shri Sarbari Mukherjee returned undelivered with postal remarks as ‘Insufficient Address’, ‘Continuous 3 days door locked’, ‘Addresse moved’, ‘Not Claimed’ and ‘Insufficient Address’ respectively.

The copy of interim order sent to Shri SoumenMallick and Shri ParthaProtim Mukherjee were delivered. The status of interim orders sent to Shri Sanjoy Kumar Maiti and Shri SujitMitra is not ascertainable. However, the same did not come back undelivered. The copy of interim order sent to Infinity Realcon Debenture Trust and ChinmoyGuhaThakurata returned undelivered with postal remarks ‘Refused’. Hence, attempts of hand-delivery/pasting were made where orders have not been delivered. Notices informing passing of Interim Order were pasted at the addresses of the company, Shri Pranab Mukherjee, Shri Bhaskar Banerjee, Infinity Realcon Debenture Trust and Shri ChinmoyGuhaThakurata. The addresses of Shri Prabir Kumar Mukherjee and Shri Sarbari Mukherjee taken from MCA portal 21 could not be located. The interim order was hand delivered to Shri SujitMitra who also received the same on behalf of Shri Pralay Kumar Saw and Shri Sanjoy Kumar Maiti. 3.2 Subsequently,vide notification dated April 14, 2015,published in newspaper Ananda Bazar Patrika,and notification dated April 15, 2015 published in newspaper Times of India, IRL and the directors were notified that they will be given the final opportunity of being heard on April 22, 2015 at the time and the venue mentioned therein.

4.1 Hearing and submissions: Shri ChinmoyGuhaThakurta whorepresents the Infinity Realcon Debenture Trust as trustee, appeared along with his advocate Mr. SaikatBasu on the date of hearing and sought for two weeks’ time for filing written submissions.The other noticees did not avail the opportunity of hearing held on April 22, 2015. Shri ChinmoyGuhaThakurta, has also filed a reply dated April 17, 2015 stating that:- a. A debenture Trust Deed was executed by him with an assurance by the Company to get permission from ROC and SEBI. But nothing was done till his resignation. He did not act as debenture trustee except for the creation of the said deed. b. The copy of the said deed has not been given to him by the Managing director and other directors despite repeated verbal requests. c. The company did not inform him about the progress on the proposed permission from SEBI and ROC, on his oral requests. d. Then he resigned and subsequent to his resignation, he had no connection with the company. 4.2 Thereafter, vide letter dated April 29, 2015, he made the written submissions stating that:- a. A deed of mortgage was registered on August 29, 2011 appointing him as mortgagee of the properties owned by the Company.

In conformity with the said deed, a separate trust deed was later registered on August 30, 2011. b. By virtue of the trust deed, he was made the sole trustee of the properties mentioned in schedule III of the trust deed securing payment of money to debenture holders in case, the company fails to pay them. However, contrary to the term of the trust deed, the documents relating to the properties mentioned in the schedule III, were not handed over to him, despite his letters dated September 26, 2011 and December 1, 2011 to the director, Shri Probir Mukherjee. c. His appointment as debenture trustee was null and void as no individual can be appointed as debenture trustee under the relevant law. d. He resigned from being debenture trustee on May 14, 2013 and intimated the same to the Chairman cum Managing director and the director of the company with a copy to the Registrar of Companies.

e. He neither attended any meeting nor signed any debenture certificate/ any other documents. f. Though appointed, he never performed any work relating to debenture trust. g. Therefore, his name may be struck off and necessary order be passed in this regard. 4.3 Shri SoumenMallick, one of the directors, vide his letter dated April 10, 2015 filed his reply stating that:- a. He joined as an ordinary employee after VRS from the Chartered Bank, without knowing anything about the intention or formation of the Company. b. The original owner of IRL fraudulently after taking his digital signature inserted the word “director” before his name with mala fide intention. The original owner is absconding. c. Coming to know about this, he submitted his resignation as director on November 4, 2013 and sent a legal notice to the original owner of IRL and also submitted a letter to the Director of the Registrar of Companies informing about his resignation. d. He knows nothing about the particulars and transactions of IRL. e. He is a serious diabetic patient and his movement is restricted due to amputation of his toe.

4.4 I have considered the allegations, replies,documents downloaded from MCA 21 Portal', Balance Sheet of IRL for the Financial Year ended March 31, 2012 and other material on record. On perusal of the same, the following issues arise for consideration. Each question is dealt with separately under different headings. 1. Whether the company came out with the Offer of RPS and NCDs? 2. If so, whether the said issues RPS and NCDs are in violation of Section 60, Section 56(1) and 56(3), Sections 73(1), (2) and (3) of the Companies Act,1956 and whether the offer of RPS is in violation of relevant provisions of DIP Guidelines and 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 IRL has appointed Infinity Realcon Debenture Trust (through Shri ChinmoyGuhaThakurta), who is ineligible to act as Debenture Trustee for the offer of NCDs, in violation of Section 117B of the Companies Act, 1956 and whether the trust/trustee 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 violation committed?

5.1 Whether the company came out with the Offer of RPS and NCDs ?: I have perused the interim order dated January 7, 2015 for the allegation of Offer of RPS and NCDs and material on record. The replying Debenture Trustee did not dispute the said issuance. The directors have not disputed the issuance. Shri SoumenMallick stated that he did not know anything in particular about the transactions of IRL. 5.2 I have also perused the documents/ information obtained from the 'MCA 21 Portal' and other documents filed before the Registrar of Companies. On perusal of the 515 instances of Form 2 filed by the company, I find that the Company had made allotment of Redeemable Preference Shares515 times, during the Financial Years 2009–10 to 2012–13 and allotted Redeemable Preference Sharesto a total of approximately 24,718 individuals/investors and mobilized funds amounting to approximately Rs.19.32 Crores as shown in Table No 1. 5.3 On examination of the document of “Terms and Conditions” for the issuance of NCDs, uploaded by the Company along with the Form 10 (which deals with the “Particulars for registration of charges for debentures”), I find that IRL had offered NCDs for subscription for the value of Rs. 50 crore pursuant to the Board resolution dated August 20, 2011. The said NCDs have a face value of Rs 1000/-.

In the said offer, an investor can make an application for a minimum of one Debenture. As a term of the said offer, IRL had stated that the NCDs would be secured by charge on company's immovable properties. As per the document of “Table Plan” uploaded along with the Form 10, IRL had brought out the different plans based on the difference in the maturity period as stated in the Table No 2 and 3. 5.4 I have examined “Note No. 2” of the ‘Notes on Accounts’ forming integral part of the Annual Accounts for the Financial Year ended March 31, 2011, wherein it is stated “‘During the year, the company has collected a total sum of Rs. 2,39,39,455/-against issue of “Secured Non-Convertible Redeemable Debentures” (Private Placement) for which the company have applied to RoC. The RoC has rejected the aforesaid application and thereafter the Company have moved another application with RoC, West Bengal. However, the Board of Directors in the meeting dated 20.12.2010 have made allotment to the extent of Rs. 1,00,00,000/- and the balance amount of Rs. 1,39,39,455/- have been kept in abeyance…” Form 20B filed for the Annual Return of the Financial Year ended March 31, 2012 only reflects the amount of Rs. 1 crore, for which allotment of NCDs has been made.

In view of the Note No.2, SEBI has evidence to the extent that IRL had raised an amount of Rs. 2,39,39,455 for issuance of NCDs. 5.5 On examination of the Form 10 filed in respect of “Particulars for registration of charges for debentures”, it shows that IRL created charge on August 29, 2011 for an amount of Rs. 50 Crores towards the Offer of NCDs. 5.6 In view of the non-co-operation of the noticees, SEBI does not have complete information as to the extent of money collected by the company, given the backdrop of Rs. 50 crore as offer size of NCDs and creation of charge to that extent. 6.1 If so, whether the said issues RPS and NCDs are in violation of Section 60, Section 56(1) and 56(3), Sections 73(1), (2) and (3) of the Companies Act,1956 and whether the offer of RPS is in violation of relevant provisions of DIP Guidelines and 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? 6.2 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).” 6.3 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.Section67(1)dealswiththeofferofsharesanddebenturestothepublicandSecti on67(2)dealswithinvitationtothepublictosubscribeforsharesanddebenturesandh owthoseexpressionsaretobeunderstood,whenreferenceismadetotheActorinthear ticlesofacompany.TheemphasisinSection67(1)and(2)isonthe―sectionofthepu blicǁ.Section67(3)statesthatnoofferorinvitationshallbetreatedasmadetothepub lic,byvirtueofsubsections(1)and(2),thatistoanysectionofthepublic,iftheofferori nvitationisnotbeingcalculatedtoresult,directlyorindirectly,inthesharesordebe nturesbecomingavailableforsubscriptionorpurchasebypersonsotherthanthose receivingtheofferorinvitationorotherwiseasbeingadomesticconcernoftheperso nsmakingandreceivingtheofferorinvitations.Section67(3)is,therefore,anexcep tiontoSections67(1)and(2).Ifthecircumstancesmentionedinclauses(1)and(b)ofS ection67(3)aresatisfied,thentheoffer/invitationwouldnotbetreatedasbeingmadet othepublic.

85. ThefirstprovisotoSection67(3)wasinsertedbytheCompanies(Amendmen t)Act,2000w.e.f.13.12.2000,whichclearlyindicates,nothingcontainedinSub-section(3)ofSection67shallapplyinacasewheretheofferorinvitationtosubscribefo rsharesor debenturesis madetofiftypersonsormore.Resultantly,after13.12.2000,anyofferofsecuritiesbya publiccompanytofiftypersonsormorewillbetreatedasapublicissueundertheComp aniesAct,evenifitisofdomesticconcernoritisprovedthatthesharesordebenturesare notavailableforsubscriptionorpurchasebypersonsotherthanthosereceivingtheoff erorinvitation….. 6.4 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. 6.5 On perusal of the 515 instances of Form 2 filed by the company, I find that preference shares have been allotted to 38 persons each on December 17, 2009, October 11, 2010 and January 21, 2011 and to 19 persons on March 31, 2011. The allotment of preference shares made by the Company, on various dates, to 47 persons each is shown in Table No. 4, to 48 persons each is shown in Table No. 5 and to 49 persons each is shown in Table No. 6.

Table No. 4 Dates of Allotment to 47 persons each

19/06/2009 28/01/2010 14/04/2010 10/08/2010 02/11/2010 27/02/2011 20/05/2011 15/12/2011 30/07/2009 30/01/2010 20/04/2010 18/08/2010 15/11/2010 02/03/2011 30/05/2011 20/12/2011 17/08/2009 10/02/2010 26/04/2010 30/08/2010 22/11/2010 05/03/2011 16/06/2011 27/12/2011 07/09/2009 24/02/2010 03/05/2010 31/08/2010 25/11/2010 09/03/2011 27/06/2011 30/12/2011 24/09/2009 26/02/2010 12/05/2010 03/09/2010 30/11/2010 12/03/2011 29/06/2011 24/01/2012 15/10/2009 09/03/2010 31/05/2010 08/09/2010 09/12/2010 16/03/2011 13/07/2011 24/02/2012 31/10/2009 15/03/2010 15/06/2010 14/09/2010 24/12/2010 23/03/2011 31/07/2011 13/03/2012 16/11/2009 17/03/2010 24/06/2010 18/09/2010 31/12/2010 25/03/2011 22/08/2011 27/03/2012 30/11/2009 24/03/2010 29/06/2010 22/09/2010 10/01/2011 31/03/2011 13/09/2011 31/03/2012 07/12/2009 25/03/2010 02/07/2010 25/09/2010 15/01/2011 31/03/2011 20/09/2011 25/04/2012 30/12/2009 30/03/2010 14/07/2010 29/09/2010 22/01/2011 31/03/2011 30/09/2011 25/05/2012 15/01/2010 31/03/2010 20/07/2010 05/10/2010 27/01/2011 31/03/2011 12/10/2011 02/06/2012 22/01/2010 31/03/2010 26/07/2010 13/10/2010 07/02/2011 09/04/2011 31/10/2011 27/06/2012 22/01/2010 31/03/2010 02/08/2010 25/10/2010 11/02/2011 11/04/2011 11/11/2011 12/07/2012 22/01/2010 09/04/2010 06/08/2010 01/11/2010 25/02/2011 11/05/2011 30/11/2011 02/08/2012 09/08/2012

Table No.5 Dates of Allotment to 48 persons each

02/06/2009 06/02/2010 15/05/2010 17/08/2010 06/11/2010 26/01/2011 11/04/2011 28/09/2011 21/07/2009 18/02/2010 17/05/2010 21/08/2010 10/11/2010 28/01/2011 14/04/2011 29/10/2011 07/08/2009 22/02/2010 22/05/2010 23/08/2010 12/11/2010 30/01/2011 19/04/2011 04/11/2011 20/08/2009 03/03/2010 26/05/2010 25/08/2010 18/11/2010 31/01/2011 26/04/2011 15/11/2011 31/08/2009 04/03/2010 29/05/2010 27/08/2010 22/11/2010 09/02/2011 30/04/2011 25/11/2011 23/09/2009 08/03/2010 31/05/2010 30/08/2010 24/11/2010 14/02/2011 07/05/2011 10/12/2011 06/10/2009 11/03/2010 31/05/2010 31/08/2010 29/11/2010 19/02/2011 16/05/2011 02/01/2012 12/10/2009 13/03/2010 08/06/2010 31/08/2010 30/11/2010 20/02/2011 27/05/2011 17/01/2012 30/10/2009 22/03/2010 10/06/2010 06/09/2010 01/12/2010 28/02/2011 01/06/2011 10/02/2012 05/11/2009 22/03/2010 12/06/2010 09/09/2010 06/12/2010 04/03/2011 08/06/2011 29/02/2012 12/11/2009 29/03/2010 16/06/2010 14/09/2010 08/12/2010 08/03/2011 14/06/2011 10/03/2012 30/11/2009 30/03/2010 21/06/2010 15/09/2010 10/12/2010 11/03/2011 20/06/2011 16/03/2012 14/12/2009 31/03/2010 22/06/2010 21/09/2010 13/12/2010 15/03/2011 25/06/2011 19/03/2012

21/12/2009 31/03/2010 28/06/2010 23/09/2010 21/12/2010 18/03/2011 30/06/2011 28/03/2012 31/12/2009 31/03/2010 30/06/2010 25/09/2010 23/12/2010 21/03/2011 08/07/2011 31/03/2012 04/01/2010 31/03/2010 30/06/2010 25/09/2010 27/12/2010 22/03/2011 19/07/2011 31/03/2012 12/01/2010 31/03/2010 08/07/2010 27/09/2010 28/12/2010 23/03/2011 22/07/2011 10/04/2012 19/01/2010 01/04/2010 13/07/2010 29/09/2010 30/12/2010 25/03/2011 29/07/2011 02/05/2012 22/01/2010 08/04/2010 17/07/2010 30/09/2010 30/12/2010 28/03/2011 29/07/2011 26/05/2012 22/01/2010 10/04/2010 22/07/2010 04/10/2010 31/12/2010 28/03/2011 30/07/2011 15/06/2012 22/01/2010 10/04/2010 24/07/2010 09/10/2010 03/01/2011 31/03/2011 10/08/2011 01/07/2012 22/01/2010 17/04/2010 28/07/2010 18/10/2010 04/01/2011 31/03/2011 24/08/2011 22/07/2012 22/01/2010 22/04/2010 30/07/2010 23/10/2010 06/01/2011 31/03/2011 29/08/2011 26/08/2012 28/01/2010 26/04/2010 31/07/2010 26/10/2010 12/01/2011 31/03/2011 05/09/2011 Nil 28/01/2010 30/04/2010 09/08/2010 28/10/2010 13/01/2011 31/03/2011 10/09/2011 Nil 30/01/2010 07/05/2010 13/08/2010 30/10/2010 18/01/2011 08/04/2011 16/09/2011 Nil 03/02/2010 10/05/2010 14/08/2010 30/10/2010 19/01/2011 11/04/2011 26/09/2011 Nil

Table No:6 Dates of Allotment to 49 persons each

19/05/2009 30/01/2010 27/05/2010 20/08/2010 04/11/2010 04/01/2011 31/03/2011 19/09/2011 31/05/2010 06/07/2009 01/02/2010 24/08/2010 09/11/2010 08/01/2011 31/03/2011 23/09/2011 17/08/2009 12/02/2010 07/06/2010 26/08/2010 11/11/2010 11/01/2011 31/03/2011 08/10/2011 28/08/2009 16/02/2010 09/06/2010 27/08/2010 15/11/2010 17/01/2011 31/03/2011 15/10/2011 14/09/2009 01/03/2010 14/06/2010 31/08/2010 16/11/2010 20/01/2011 07/04/2011 19/10/2011 31/08/2010 30/09/2009 05/03/2010 16/06/2010 20/11/2010 24/01/2011 09/04/2011 24/10/2011 09/10/2009 10/03/2010 21/06/2010 04/09/2010 26/11/2010 24/01/2011 11/04/2011 10/11/2011 10/09/2010 24/10/2009 18/03/2010 25/06/2010 29/11/2010 29/01/2011 11/04/2011 19/11/2011 10/11/2009 19/03/2010 30/06/2010 15/09/2010 30/11/2010 03/02/2011 18/04/2011 03/12/2011 20/11/2009 25/03/2010 30/06/2010 20/09/2010 30/11/2010 16/02/2011 23/04/2011 10/01/2012 23/11/2009 26/03/2010 06/07/2010 23/09/2010 03/12/2010 23/02/2011 28/04/2011 27/02/2012 27/11/2009 28/03/2010 09/07/2010 24/09/2010 07/12/2010 26/02/2011 30/04/2011 05/03/2012 30/11/2009 31/03/2010 12/07/2010 25/09/2010 11/12/2010 03/03/2011 31/05/2011 23/03/2012 11/12/2009 31/03/2010 16/07/2010 30/09/2010 14/12/2010 07/03/2011 06/06/2011 30/03/2012 24/12/2009 31/03/2010 19/07/2010 30/09/2010 14/12/2010 10/03/2011 11/06/2011 31/03/2012 31/12/2009 31/03/2010 23/07/2010 30/09/2010 16/12/2010 14/03/2011 22/06/2011 02/04/2012 08/01/2010 10/04/2010 28/07/2010 08/10/2010 18/12/2010 15/03/2011 05/07/2011 30/04/2012 22/01/2010 10/04/2010 30/07/2010 11/10/2010 22/12/2010 18/03/2011 13/07/2011 Nil Nil 22/01/2010 28/04/2010 31/07/2010 19/10/2010 27/12/2010 21/03/2011 04/08/2011 Nil 22/01/2010 30/04/2010 04/08/2010 20/10/2010 28/12/2010 24/03/2011 12/08/2011 Nil 22/01/2010 05/05/2010 09/08/2010 27/10/2010 29/12/2010 26/03/2011 27/08/2011 Nil 25/01/2010 19/05/2010 12/08/2010 29/10/2010 31/12/2010 28/03/2011 30/08/2011 Nil 29/01/2010 21/05/2010 16/08/2010 30/10/2010 31/12/2010 28/03/2011 07/09/2011

6.6 In the instant case, as shown in the Table Nos. 4, 5 and 6, the offer of RPS were issued to 47 to 49 persons each on various dates. The perusal of the above tables clearly shows that IRL made allotment to 47 persons 121 times, 48 persons 212 times, 49 persons 178 times. I further find that IRL allotted as many as 35 times in the month of March, 2010, that too12 times on the same date, i.e., on March 31, 2010. The sheer proximity in time of allotment and the periodicity of as many as 515 times, the allotment being made over a period of four years from 2009-10 to 2012-13, splitting the allotment even on the same day, by deliberately keeping the number of allottees below the statutory minimum, shows that the Company wantonly made repeated allotments to less than fifty persons in order to make an false appearance as if offer and allotment of RPS is a private placement, to evade the process of law and detection. Therefore, I find that the offer and allotment of RPS falls within the first proviso of section 67(3) of Companies Act, 1956. Thereby, such issues are deemed to be public issues and were mandated to comply with the 'public issue' norms as prescribed under the Companies Act, 1956. 6.7 As far as the offer of NCDs and allotment thereof made by IRL is concerned, it is stated, in the document titled “Table Plan” read with the “Terms and Conditions of Secured Non-convertible Redeemable Debenture” uploaded by the Company along with Form 10, that, "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, this offer cannot be transferred or renounced in anyone's favour". 6.8 Regarding the claim of issuance on private placement basis, on examination of Form 10, it is observed that that IRL had attached a list of 20 persons and designated them as 'proposed debenture holders' to whom it proposed to issue NCDs amounting to Rs. 50 Crores on private placement basis. However, on examination of the copy of the “application form” uploaded by the Company along with Form 10, it is not addressed to any of the said proposed allottees. On examination of the list of the “proposed allottees”, it shows that only names of individuals are shown as the “proposed allottees”. However, the document of “Terms and Conditions” for the issuance of NCDs uploaded by the Company along with the Form 10, places a condition on the applicants if they are companies or body corporates. As per the said condition, the certified true copy of the resolution empowering the said company or body corporate to make an application for the NCDs and the copy of the Memorandum and Articles of Association of the said company or body corporate, should also be enclosed along with the application form.

This clearly indicates that the offer was open to companies and other Body corporates. Moreover, the application form provides for application by various sections of public such as individual, Trust, Financial Institution, HUF, NRI and others. It does not stand to reason, as to why such different section of public are mentioned in the application form, if the proposed allottees are the only persons against whom the debentures were proposed to be offered and allotted. Therefore, I find that the offer of NCDs though named as private placement is not in fact offered only to the said twenty proposed allottees. The said offer of NCDs with the offer size of Rs. 50 crores, were made to various categories such as individual, Trust, Financial Institution, HUF, NRI and companies and body corporate and others. Though, SEBI vide letter dated August 8, 2014, sought clarification from IRL and its Directors regarding the Offer of NCDs, however, till date, no reply has been received from the aforesaid entities. 6.9 Without prejudice to the above findings, as an additional reason to hold that the offer was extended to more than 49 persons, I find, on perusal of the copy of the debenture certificates submitted by various complainants to SEBI, that the names contained therein, did not match with those contained in the aforementioned proposed list of debenture holders.

This further indicates that offer and allotment was made to persons other than the number of 20 persons shown as proposed debenture holders. 6.10 Therefore, I find that that the NCDs were offered to a section of public which is more than 49 persons. Even otherwise, by extending the offer of NCDs to various sections of the public without conformity to the section 67(3) (a) and (b) of the Companies Act, the said offer falls under the definition of public offer under section 67(1) of the Companies Act. Thereby, such 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. 6.11 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. 6.12 Neither the company nor the directors produced any record to show that IRL 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, IRL 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. 6.13 Further, by issuing RPS and NCDs to more than forty nine persons, as stated above, IRL 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.

6.14 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, IRL has contravened the said provisions. IRL or the directors have not provided any records to show that the amount collected by IRL are kept in a separate bank account. Therefore, I find that IRL 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. 6.15 Further as regards the violation of Debt Securities Regulations, it may be seen that 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 IRL 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. 6.16 Asregards the allegation 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. 6.17 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" 6.18 Inthis 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.

6.19 In the instant case, IRL has issued RPS prior to August 28, 2009, which are deemed to be public issue, when the DIP guidelines were in force. 6.20 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. 6.21 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, IRL was also mandated to comply with the provisions of DIP Guidelines till such time they were in force. 6.22 Therefore, IRL has not complied with the provisions of the DIP Guidelines in respect of its allotment made on 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 companies), f) Clause 4.11. (lock-in of minimum specified promoters contribution in public issues), g) Clause 4.14 (lock-in of pre-issue share capital of an unlisted company), h) Clause 5.3.1(memorandum of understanding), i) Clause 5.3.3 (due diligence certificate), j) Clause 5.3.5 (undertaking), k) Clause 5.3.6 (list of promoters group and other details), l) Clause 5.4 – appointment of intermediaries, m) Clause 5.6 (offer document to be made public) n) Clause 5.6A (Pre-issue Advertisement), o) Clause 5.7 - dispatch of issue material, p) Clause 5.8 – no complaints certificate, q) Clause 5.9 – mandatory collection centres and Clause 5.9.1.(minimum number of collection centres), r) Clause 5.10 – authorized collection agents, s) Clause 5.12.1. (appointment of compliance officer), t) Clause 5.13 – abridged prospectus, u) Clause 6.0 – contents of offer documents - 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, v) Clause 8.3 (Rule 19(2)(b) of SC(R) Rules, 1957), w) Clause 8.8.1 (Opening & closing date of subscription of securities), x) Clause 9 – guidelines on advertisements by issuer company, and y) Clause 10.1.

(Requirement of credit rating). 6.23 In view of the forgoing findings, I am of the view that IRL 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. 7.1 Whether IRL has appointed Infinity Realcon Debenture Trust (through Shri ChinmoyGuhaThakurta), who is ineligible to act as Debenture Trustee for the offer of NCDs, in violation of Section 117B, of the Companies Act, 1956 and whether the said trust/trustee has violated Section 12(1) of SEBI Act? 7.2 On perusal of the Form 10, I find that the company has filed the said Form 10 on August 30, 2011 creating a charge on August 29, 2011 for Rs. 50 crores on all stocks of pharmaceutical products and immovable property identified in the particulars of registration of charge. From the said Form 10, I find that Infinity Realcon Debenture Trust (through Shri ChinmoyGuhaThakurta)had been appointed as debenture trustee.

7.3 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. 7.4 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. Infinity Realcon Debenture Trust (through Shri ChinmoyGuhaThakurta) is not eligible to obtain a certificate of registration since it does not satisfy the eligibility criteria mentioned in Reg.

7 of the SEBI (Debenture Trustees) Regulations, 1993. Neither has Infinity Realcon Debenture Trust produced any valid certificate of registration issued by SEBI. Instead Shri ChinmoyGuhaThakurta admitted that debenture trust deed was executed by him. His claim that nothing was done by him till his resignation, or documents relating to the property were not handed over to him, does not alter his liability, since by execution of the Trust deed for acting as trustee for the impunged issuance, Infinity Realcon Debenture Trust (through Shri ChinmoyGuhaThakurta) has acted as a debenture trustee without registration as stipulated under Section 12(1) of SEBI Act. The claim that the debenture trustee deed was executed by him with an assurance by the Company to get permission from SEBI also does not alter his position, since the stipulation under section 12(1) of SEBI Act is on him. 7.5 In view of above, I find that Infinity Realcon Debenture Trust (through Shri ChinmoyGuhaThakurta) have 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. 8.1 If the findings on question No.2 and 3 are found in the affirmative, who are liable for the violation committed?

8.2 Section 56(1) and 56(3) read with section 56(4) imposes the liability on the company, every director, and other persons responsible for the prospectus for the compliance of the said provisions. The liability for non-compliance of Section 60 of the Companies Act, 1956 is on the company, and every person who is party to the non-compliance of issuing the prospectus as per the said section. 8.3 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. 8.4 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. 8.5 Reference may also be made to the ratio of the Hon’ble High court of Madras in MadhavanNambiar 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”. 8.6 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 inB.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.” 8.7 As far as the violations of the DIP Guidelines read with the ICDR Regulations, SEBI, in terms of Clause 17 of the DIP Guidelines, has power, in the interest of securities market and in the interest of investors, inter alia, to direct the persons concerned to refund the money collected under an issue to the investors with or without requisite interest (as the case may be) and direct the persons concerned not to access the capital market for a particular period.

8.8 I find from the “Register of directors, managing directors, manager and secretary,etc” obtained from the RoC, Kolkata by SEBI, the details of the appointment and resignation of the directors which is reproduced below:

Name Date of appointment Date of Cessation Bhaskar Banerjee 29/06/2009 22/03/2011 Sarbari Mukherjee 02/08/2010 31/12/2011 ParthaProtim Mukherjee 08/01/2013 24/04/2013 SujitMitra 04/11/2013 25/04/2014 Sanjoy Kumar Maiti 04/11/2013 25/04/2014

Name Date of appointment Date of Cessation Pralay Kumar Saw 04/11/2013 25/04/2014 Prabir Kumar Mukherjee 22/04/2009 - SoumenMallick 22/04/2009 - Pranab Mukherjee 22/04/2009 -

8.9 In view of the provisions of law, IRL and its Directors, viz., Shri Prabir Kumar Mukherjee, Shri Pranab Mukherjee, Shri SoumenMallick, Shri Sanjoy Kumar Maiti, Shri SujitMitra, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee, Shri Sarbari Mukherjee and Shri ParthaProtim Mukherjee and its Debenture Trustee, viz Infinity Realcon Debenture Trust (through its Trustee viz. Shri ChinmoyGuhaThakurta) are responsible for the non-compliance of the above mentioned provisions.They are co-extensively responsible along with the Company for making refunds along with interest under section 73(2) of the Companies Act, 1956 read with section 27(2) of the SEBI Act. 8.10 ShriSoumenMallick alleged that the original owner of IRL fraudulently after taking his digital signature inserted the word “director” before his name with mala fide intention. He further stated that coming to know about this, he submitted his resignation as director on November 4, 2013 and sent a legal notice to the original owner of IRL and also submitted a letter to the Director of the Registrar of Companies informing his resignation.

He also stated that he knew nothing about the particulars and transactions of IRL. 8.11 ShriSoumenMallick merely made allegations and he did not bring to the notice of SEBI any action taken by him against those who allegedly perpetrated the fraud. He did not even state the name of the alleged perpetrator of fraud. In fact, he did not place any documentary material to support his submissions including the date of his resignation. Not even the copy of the Form 32 to support his resignation was submitted by him before SEBI. In view of this, I consider that the submissions made by him was not acceptable for lack of evidence. 8.12 Shri Bhaskar Banerjee, Shri Sarbari Mukherjee, Shri Prabir Kumar Mukherjee, Shri SoumenMallick and Shri Pranab Mukherjee being the directors are responsible for the impugned issues and allotment in violation of law and regulations and hence co-extensively responsible along with the Company for making refunds along with interest. 8.13 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. 8.14 Therefore, the directors, Shri ParthaProtim Mukherjee, Shri SujitMitra, Shri Sanjoy Kumar Maiti and Shri Pralay Kumar Saw who joined subsequent to the impugned public issuance 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. Further, these directors viz. Shri ParthaProtim Mukherjee, Shri SujitMitra, Shri Sanjoy Kumar Maiti and Shri Pralay Kumar Saw have also not taken any steps to remedy the violations committed.

Therefore, I hold that they are also co-extensively responsible along with the Company for making refunds along with interest. 8.15 Interim order also directed that “IRL and its abovementioned past and present Directors, shall furnish complete and relevant information (as sought vide SEBI letters dated January 30, 2014; March 11, 2014 and March 24, 2014; August 4, 2014 and August 8, 2014), within 21 days from the date of receipt of this Order”. However the same was not provided by IRL and directors. 8.16 Writ Petition No. 22470 (W) of 2014 – SambhuNathBera& Others vs. Union of India & Others, was filed before the Hon’ble Calcutta High Court by agents and depositors of IRL. The petitioners therein have alleged that the company had raised money from the public through issuance of Non-convertible redeemable debentures and advanced booking schemes for electrical products and tour packages etc. The Petitioners therein, inter alia, had sought for a direction of investigation by Central Bureau of Investigation, Enforcement Directorate and SEBI. The Hon’ble High court vide order dated September 26, 2014 passed an order stating that “SEBI which has been accepted as the body to make an enquiry in the case of SubrataChattaraj vs. State of west Bengal and others (Re: Sarda Group of Properties) is also directed to make any an enquiry and submit its report on the next date of hearing.” 8.17 SEBI filed the Report on November 24, 2014 before the Hon’ble High court in the said Writ Petition.

Thereafter, the Writ Petition was disposedoff vide order dated November 24, 2014 with the following observation. "From a report filed by SEBI, it appears that further action and investigation by SEBI is under consideration. The petitioner has received deeds of conveyance in respect of properties belonging to the chit fund company, let such documents be forwarded to SEBI by the petitioner for necessary action being taken in respect thereof. In view of the aforesaid, this writ petition is disposed of. Report filed by SEBI and notice dated 8th April, 2014 issued by the Central Bureau of Investigation be kept on record." 8.18 It is observed that, so far no such documents have been received by SEBI pursuant to this order. 8.19 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 IRL and its Directors, viz., Shri Prabir Kumar Mukherjee, Shri Pranab Mukherjee, Shri SoumenMallick, Shri Sanjoy Kumar Maiti, Shri SujitMitra, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee, Shri Sarbari Mukherjee and Shri ParthaProtimMukherje, to refund the monies collected through issuance of NCDs and RPS, 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 preference shares 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. 9.1 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 and Clause 17 of the DIP Guidelines read with Regulation 111 of the ICDR Regulations,2009, hereby issue the following directions: a) The Company, namely, Infinity Realcon Limitedand its Directors, viz Shri Prabir Kumar Mukherjee, Shri Pranab Mukherjee, Shri SoumenMallick, Shri Sanjoy Kumar Maiti, Shri SujitMitra, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee, Shri Sarbari Mukherjee and Shri ParthaProtimMukherje 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 (in terms of Section 73(2) of the Companies Act, 1956) 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) Infinity Realcon Limitedand 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) Infinity Realcon Limitedand its Directors, viz., Shri Prabir Kumar Mukherjee, Shri Pranab Mukherjee, Shri SoumenMallick, Shri Sanjoy Kumar Maiti, Shri SujitMitra, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee, Shri Sarbari Mukherjee and Shri ParthaProtimMukherje, 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, Infinity Realcon Limited and its Directors, viz. Shri Prabir Kumar Mukherjee, Shri Pranab Mukherjee, Shri SoumenMallick, Shri Sanjoy Kumar Maiti, Shri SujitMitra, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee, Shri Sarbari Mukherjee and Shri ParthaProtimMukherje, shall file a report of such completion of repayment with SEBI, within 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) Infinity Realcon Limitedand its Directors, viz. Shri Prabir Kumar Mukherjee, Shri Pranab Mukherjee, Shri SoumenMallick, Shri Sanjoy Kumar Maiti, Shri SujitMitra, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee, Shri Sarbari Mukherjee and Shri ParthaProtimMukherje, 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 Infinity Realcon Limitedand its Directors, viz. Shri Prabir Kumar Mukherjee, Shri Pranab Mukherjee, Shri SoumenMallick, Shri Sanjoy Kumar Maiti, Shri SujitMitra, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee, Shri Sarbari Mukherjee and Shri ParthaProtimMukherje, 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) Infinity Realcon Limitedand its Directors, viz., Shri Prabir Kumar Mukherjee, Shri Pranab Mukherjee, Shri SoumenMallick, Shri Sanjoy Kumar Maiti, Shri

SujitMitra, Shri Pralay Kumar Saw, Shri Bhaskar Banerjee, Shri Sarbari Mukherjee and Shri ParthaProtimMukherje, 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) Infinity Realcon Debenture Trust and Shri ChinmoyGuhaThakurta, are 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. 10.1 Copy of this Order shall be forwarded to the recognized stock exchanges and depositories for information and necessary action. 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 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 :Oct 19th, 2015 PRASHANT SARAN Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA