Subhasish Pandey vs Sebi

Date of Decision : 15.09.2017

Appeal No. 45 of 2017

Subhasish Pandey Vill: Galsi, Police Station - Galsi, District - Burdwan, West Bengal, ...Appellant Pin - 713406.

Versus Securities and Exchange Board of India IDCOL House, Ashok Nager, Unit-II, Bhubaneswer, Odisha, Pin - 751009. ...Respondent

Mr. Samir Sarambalkar, Advocate for the Appellant.

Mr. Rajesh Nagori, Advocate with Mr. Pulkit Sukhramani and Ms. Vidhi Jhawar, Advocates i/b The Law Point for the Respondent.

WITH

Appeal No. 46 of 2017

Subhas Kundu Vill: Galsi, Police Station - Galsi, District - Burdwan, West Bengal, ...Appellant Pin - 713406.

Versus

Securities and Exchange Board of India IDCOL House, Ashok Nager, Unit-II, Bhubaneswer, Odisha, Pin - 751009. ...Respondent

Mr. Samir Sarambalkar, Advocate for the Appellant.

Mr. Rajesh Nagori, Advocate with Mr. Pulkit Sukhramani and Ms. Vidhi Jhawar, Advocates i/b The Law Point for the Respondent. 2

WITH Appeal No. 55 of 2017

Shri Sandip Roy Vill: Galsi, Police Station - Galsi, District - Burdwan, West Bengal, ...Appellant Pin - 713406.

Versus

Securities and Exchange Board of India IDCOL House, Ashok Nager, Unit-II, Bhubaneswer, Odisha, Pin - 751009. ...Respondent

Mr. Samir Sarambalkar, Advocate for the Appellant.

Mr. Rajesh Nagori, Advocate with Mr. Pulkit Sukhramani and Ms. Vidhi Jhawar, Advocates i/b The Law Point for the Respondent.

CORAM : Justice J.P. Devadhar, Presiding Officer Dr. C.K.G. Nair, Member

Per : Dr. C.K.G. Nair, Member (Oral)

1.

These appeals have been preferred by the appellants aggrieved by the

order dated December 11, 2015 passed by the Whole Time Member

('WTM' for short) of Securities and Exchange Board of India ('SEBI' for

short). By the said order M/s. Hum Projects Limited ('Company' for short)

and six of its Directors have been, inter alia, directed to refund the money

collected from 1272 investors / allottees through issue of Redeemable

Preference Shares ('RPS' for short) by the Company. While three of the

Directors have preferred appeal against the impugned order, the Company

and other three Directors have not filed any appeal. Since the impugned

order is common and basic facts relating to the appeal are the same we have

heard these appeals together and dispose them off by this common order. 3

2. Facts in the matter are not disputed. Briefly, the Company mobilised

funds to the tune of Rs. 1,66,40,470/- (Rs. 1.66 crore) on 10 days between

April 15, 2011 to March 31, 2012 by issuing / allotting RPS to 1272

investors. Since the number of investors have crossed 49 this issue of RPS

becomes a deemed public issue of securities under Section 67(3) of the

Companies Act, 1956. This would, in turn, further necessitate complying

with other sections of Companies Act such as Section 56, Section 60,

Section 73 etc. dealing with public issue of securities, which was not

complied by the Company.

3. Shri Samir Sarambalkar, Learned Counsel for the appellant stated

that while basic facts relating to the matter are not disputed the appellants in

Appeal Nos. 45 of 2017 and 46 of 2017 were Directors for only a very short

period. They became Director only on March 22, 2011 and resigned on July

28, 2011. Even in the case of Appeal No. 55 of 2017 though the appellant

became a Director on December 21, 2010 he resigned on November 28,

2011. However, this contention has not been accepted by the WTM of SEBI

in the impugned order, since, as per records, his resignation has not been

accepted and he continues to be a Director of the Company. Accordingly,

the Learned Counsel submitted that for refunding the money collected the

joint and several responsibility of the appellants along with other Directors

and Company as directed in the impugned order should be restricted only up

to the date of their resignation or for the period during which they were

Directors of the Company.

4. Learned Counsel Shri. Rajesh Nagori appearing on behalf of

respondent SEBI fairly submitted that the accountability of the Directors can

be restricted to the period during which they remained Directors of the 4

Company following the order of this Tribunal in the matter of Manoj

Agarwal vs Securities and Exchange Board of India (Appeal No. 66 of 2016

decided on July 14, 2017). Accordingly, in the case of appellants in Appeal

Nos. 45 of 2017 and 46 of 2017 the joint and several liability come to

Rs. 5,44,300/- each while that in the case of appellant in Appeal No. 55 of

2017 the joint and several liability is for the full amount of Rs.1,66,40,470/-.

5. In view of the submissions made by the Learned Counsel for both the

parties, without getting into further details of the matter we dispose of all the

appeals by making it clear that the joint and several liability of the

appellants in Appeal Nos. 45 of 2017 and 46 of 2017 respectively is

restricted to Rs. 5,44,300/- each and in the case of Appeal No. 55 of 2017

the joint and several responsibility of the appellant is for the full amount of

Rs. 1,66,40,470/-. They shall jointly and severally refund these amounts

along with the Company and other Directors as directed in the impugned

order.

6. Accordingly, while upholding the impugned order on merit we

dispose of the 3 appeals in the aforesaid terms with no order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Dr. C.K.G. Nair Member 15.09.2017 prepared & compared by-msb