WTM/PS/66/ERO/IMD/OCT/2015

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA

CORAM: PRASHANT SARAN, WHOLE TIME MEMBER
ORDER
Under sections 11(1), 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992
In respect of
1. Just-Reliable

Projects

India

Limited

(CIN-U45400WB2009PLC140276;PAN-

AACCJ2827P)
and its Directors, namely,
2. Mr.SwarupDutta (DIN-02498000; PAN-AGWPD2748J),
3. Mr. SumantaGorai (DIN-02946871;PAN-AGMPG1547N),
4. Mr. Susanta Ghosh (DIN-05185974;PANAEXPG6206P),
5. Mr. Sukanta Dutta (DIN-05235908; PAN-AKEPD8763F),
6. Mr. KoushikBej (DIN-05236482;PAN-APSPB6232N),
7. Mr. NajibSeikh (DIN-05241253;PAN-AYLPS8955R),
8. Mr. Anjan Jana (DIN-05247414;PAN-AHRPJ8186A),
9. Mr. Kanwal Prakash Singh (DIN-02869631; PAN-BVPPS9888H),
10. Mr. Gajender PalSingh (DIN-02869599; PAN-BESPS7926C),
11. Mr. Sandip Dutta (DIN-02647739; PANAFVPD8603A),
12. Mr. Virender Kumar (DIN-02487133; PAN-AJUPK8288M) and
13. Mr. Niladri Chakraborty (DIN-02946893; PAN-AEZPC3674D)

1.

Securities and Exchange Board of India (hereinafter referred to as "SEBI"), vide an interim ex-

parte Order dated December 16, 2014 (hereinafter referred to as "the interim order") had observed
that the company, Just-Reliable Projects India Limited (hereinafter referred to as "JRPIL" or "the
Company") is prima facie engaged in fund mobilising activity from the public, by its offer and issue of
Redeemable Preference Shares (hereinafter referred to as "RPS") and had allegedly violated the
provisions of sections 56, 60 read with section 2(36), 73 of the Companies Act, 1956 read with Section
465 of the Companies Act, 2013.

In order to protect the investors who have subscribed to the

Page 1 of 23

impugned offer and issue of RPS and to ensure that the Company and its directors are restrained from
carrying on with their fund mobilizing activity, SEBI had issued the following directions:
17. In view of the foregoing, I, in exercise of powers conferred upon me under Sections 11(1), 11(4), 11A and
11B of the SEBI Act, hereby issue the following directions:
a) JRPIL shall not mobilize any further funds from investors through the issue of RPS or through the issue of
equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either
directly or indirectly till further orders;
b) JRPIL (CIN- U45400WB2009PLC140276; PAN-AACCJ2827P) and its Directors viz. Shri Swarup
Dutta (DIN-02498000; PAN-AGWPD2748J), Shri SumantaGorai (DIN- 02946871;PANAGMPG1547N), Shri Susanta Ghosh (DIN-05185974;PANAEXPG6206P), Shri Sukanta Dutta
(DIN-05235908; PAN-AKEPD8763F), Shri KoushikBej (DIN-05236482;PAN-APSPB6232N), Shri
NajibSeikh

(DIN-05241253;PANAYLPS8955R),

Shri

Anjan

Jana

(DIN-05247414;PAN-

AHRPJ8186A), Shri Kanwal Prakash Singh (DIN-02869631; PAN-BVPPS9888H), Shri Gajendra Pal
Singh (DIN-02869599; PAN-BESPS7926C), Shri Sandip Dutta (DIN-02647739; PANAFVPD8603A), Shri Virendra Kumar (DIN-02487133; PAN-AJUPK8288M) and Shri Niladri
Chakraborty (DIN-02946893; PAN-AEZPC3674D) 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;
c) JRPIL and the 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;
d) JRPIL and its abovementioned Directors shall provide a full inventory of all its assets and properties;
e) JRPIL and its Directors shall not dispose of any of the properties or alienate or encumber any of the assets
owned/acquired by that company through the issue of RPS, without prior permission from SEBI;
f) JRPIL and its Directors shall not divert any funds raised from the public at large through the issue of RPS,
which are kept in bank account(s) and/or in the custody of JRPIL;
g) JRPIL and its Directors shall, within 21 days from the date of receipt of this Order, provide SEBI with all
relevant and necessary information, as sought vide SEBI letters dated November 01, 2013, November 28, 2013
and January 30, 2014.
18. The above directions shall take effect immediately and shall be in force until further orders.

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19. The prima facie observations contained in this Order are made on the basis of the material available on record
i.e. the complaint received by SEBI and information obtained from the 'MCA 21 Portal'. In this context, JRPIL
and its Directors may, within 21 days from the date of receipt of this Order, file their reply, if any, to this Order
and may also indicate whether they desire to avail themselves an opportunity of personal hearing on a date and time
to be fixed on a specific request made in that regard.
20. This Order is without prejudice to the right of SEBI to take any other action that may be initiated against
JRPIL and its abovementioned Directors, in accordance with law.
2.

Copies of the interim order were forwarded to the Company and above said directors vide

individual SEBI letters dated December 17, 2014. For the sake of convenience, the Company and its 12
directors named in the interim order are collectively referred to as the noticees and individually by their
respective names. Noticees, Mr. Gajendra Pal Singh and Mr. Virendra Kumar shall be read as Mr. Gajender Pal
Singh and Mr. Virender Kumar respectively. The above said SEBI letters were delivered on noticees- Ms.
Niladrai Chakraborty, Mr. SumantaGorai, Mr. Anjan Jana, Mr. Susanta Ghosh, Mr. Virender Kumar, Mr.
Gajender Pal Singh and Mr. Kanwal Prakash Singh. However, the SEBI letters had returned undelivered
with respect to the following persons:
Noticee

Remark with date

Company

Left 19.12.2014

Sukanta Dutta, Swarup Dutta, Door locked Intimation Served. Deposit for 7 days. 19.12.2014
Sandip Dutta

Not claimed hence return to sender 26.12.2014

NajibSekh, KousikBej

Addressee moved/Left without (informing) address - 20.12.2014

SEBI had also placed the interim order on its website and also made a Press Release regarding the
interim order.
3.

Mr. Virender Kumar filed his reply dated January 08, 2015 (received on January 27, 2015). Mr.

Kanwal Prakash Singh filed his undated reply received in SEBI on January 12, 2015. Mr. Gajender Pal
Singh also filed his reply dated January 06, 2015.
4.

In view of the fact that majority of the SEBI letters forwarding the copy of the interim order had

returned undelivered, SEBI made a Public Notice (in newspapers) on April 14, 2015 in Ananda Bazar
Patrika and on April 15, 2015 in Times of Indiainforming the noticees that a final opportunity of personal

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hearing was afforded to them on April 22, 2015 and advised them that failure to appear on the said date
would result in SEBI proceeding ex-parte in the matter on the basis of material available on record.
5.

In the personal hearing held on April 22, 2015

(a) Mr. Soubhik Chakraborty and Mr. JagatCharan Ghosh, Advocates, represented the Company,
Kanwal Prakash Singh, Sandip Dutta, SwarupDatta, Gajender Pal Singh, Sukanta Dutta
and Susanta Ghosh. The advocates represented that they were engaged on short notice and
requested time of around 4 weeks to submit reply/documents. The request was allowed.
(b) Noticee,Virender Kumar appeared along with his representative, Mr. Shyamal Kumar Biswas.
The noticee filed his reply dated April 22, 2015 and reiterated the submissions made therein.
(c) Noticees,NajibSekh, Niladri Chakraborty, SumantaGorai and Anjan Jana were represented
by Mr. Padmanava Biswas, Mr. Arindam Mukherjee, Mr. DebdasDatta and Mr. Sayontan
Chowdhury respectively. Written submissions were filed on behalf of these noticees. As the
advocates requested for the copy of the complaint referred to in the interim order, SEBI was
directed to furnish the same. Liberty was granted to them for filing their submissions if any, with
respect to the complaint within a period of 15 days.
(d) All the above noticees were directed to provide the correct and complete address to SEBI for
correspondence.

The personal hearing was concluded.

6.

Submissions of the noticees:

Submissions of Mr. Virender Kumar(vide reply dated January 08, 2015 and April 22, 2015):
(a) He along with Mr. Swarup Dutta and some persons from West Bengal and some persons from
Delhi arrived at a consensus to setup a business.
(b) He handed over all signed documents and Rs.2,00,000/- at Delhi as his contribution to join as
Director cum Promoter at the time of incorporation of the Company.
(c) The Company was duly incorporated on December 16, 2009.

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(d) He does not have any past business exposure and do not have any knowledge about company
law. Being influenced and motivated by Mr. Swarup Dutta to set-up their own business, he joined
in the formation of the Company.
(e) Within a few weeks, the noticee understood that his decision was wrong as it was not feasible to
co-ordinate/run the business in West Bengal while staying in Delhi. The matter was discussed
with Mr. Swarup Dutta over telephone and wrote his resignation and also asked him to repay his
contribution of Rs.2 lakh.
(f) Mr. Swarup Dutta was not ready to repay the said amount but agreed to pay a sum of Rs.1 lakh.
Due to the noticees financial requirement, he agreed to his terms and received Rs. 1 lakh in his
IDBI Bank Account. On demand for a fresh resignation letter, the noticee submitted his
resignation letter with date as March 29, 2012 and the same was filed with RoC.
(g) In his tenure as a director, the noticee tried to know about the Company and called Mr. Swarup
Dutta, who informed the noticee that the Company was not functioning. The noticee never
visited the Companys office.
(h) The noticee never received any notice of Board Meeting, AGM, EGM nor attended any meeting
either as a shareholder or director of the Company. He did not even receive the Annual Report
of the Company.
(i) The noticee was totally ignorant about the business activity of the Company and came to know
of the issue of RPS only through the SEBI letter and is totally ignorant about the same.
(j) The noticee did not sign in any document except the document for incorporation of the
Company at Delhi.
(k) The noticee submits that he was not a signatory in any Bank account nor consented to open any
bank account.
(l) The noticee requested SEBI to remove his name from the list of defaulters.
Submissions of SumantaGorai
(a) This noticee is a director in the Company. However, he was neither a founding director nor a full
time director.
(b) The Company was incorporated on December 16, 2009 with the following directors Swarup
Dutta, Virender Kumar, NajmulHodaNajmi, Prashant Kumar Bhatt, Sandip Dutta, Gajender Pal
Singh, Kanwal Prakash Singh.

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(c) The noticee joined the Company as an agent in October 2010 and that during such time, Mr.
Swarup Dutta and Sandip Dutta made a representation to the noticee that if he invests Rs.10 lakh
in the Company, his investment would double in forty months and that he would be elevated to
the position of a director. Based on such representationand being convinced by Mr. Swarup
Dutta, the noticee approached his father, Mr. GurudasGorai, who invested Rs.10 lakh in the
Company. No receipt was given for such investment. However, an agreement was made on a
stamp paper which was subsequently notarized on July 16, 2011 at Bankura. Subsequently, on
May 05, 2012, Mr. Swarup Dutta appointed this noticee as a director in the Company with DIN02946871, without digital signature on monthly payment basis.
(d) The noticee was working in the Company and was given the work of issuing cheques (as
signatory) as per the instructions of Swarup Dutta and Sandip Dutta.
(e) Subsequently, Swarup Dutta defaulted in making repayment to the noticees father and as
disputes arose, the noticee stopped working for the Company on September 02, 2013 and gave
his resignation to Swarup Dutta. Though the said resignation was accepted, he did not give any
receipt and did not update the same till now as gathered from the SEBI Order.
(f) The noticee was never aware about the affairs of the Company and was merely a sleeping paid
director of the Company.
(g) Mr. Swarup Dutta and Sandip Dutta were all in all in the Company from its incorporation and
never revealed any information regarding the financial affairs, assets and properties of the
Company as well as mobilization of the funds of the Company. Therefore, the noticee is not able
to furnish information regarding the related queries of SEBI.
(h) During the tenure of directorship of the noticee, Mr. Swarup Dutta had taken signatures of the
noticee in many papers without furnishing copies of those papers.
(i) The noticee does not know of any legitimate and illegitimate fund raising activities of the
Company and has no knowledge whether any investors were defrauded. It is a fact that Mr.
Swarup Dutta/Company did not return a single rupee to the noticees father and that in good
faith that the money would be returned, the noticee or his father did not file any case against
Swarup Dutta or the Company.
(j) The noticee tried several times to correspond with Swarup Dutta and his brother, Sandip Dutta.
Meanwhile, they had closed the office situated at Durgapur. They also failed to provide their
exact address to the noticee.

Page 6 of 23

(k) Given the above facts and circumstances, the noticee is not in a position as a director. However,
he is willing to abide by the directions whichever is applicable to him.
(l) The noticee is ready to co-operate/assist SEBI in future also if such assistance is required.
In view of his submissions and the nature of his involvement with the Company, the noticee
requested SEBI to discharge him from liability and set-aside the interim order.
Submissions of Niladri Chakraborty:
(a) The noticee admitted that he was a director in the Company. He however contended that he was
neither the founding director nor a full time director.
(b) He had initially joined the Company as an agent on April 20, 2010. After a year of his joining,
Swarup Dutta and Sandip Dutta (who were the founding directors of the Company as per his
information) informed the noticee that there was a requirement of director in the Company and
the remuneration for the same was Rs.16,000/- per month.

Subsequently, Swarup Dutta

appointed the noticee as a director with DIN-02946893, without any digital signature on monthly
payment basis.
(c) The noticee was given the work of issuing certificates on behalf of the Company as per
instructions of Swarup Dutta and Sandip Dutta.
(d) Though the noticee requested Swarup Dutta and Sandip Dutta to show him the details of the
Companys business, such details were not divulged. When the noticee had pressurized them to
share the details, they suggested him to resign from the position of director. Thereafter, the
noticee handed over his resignation to Swarup Dutta and since then the noticee had no relation
with the affairs of the Company.
(e) The noticee submitted that he was never aware of the affairs of the Company and that Swarup
Dutta and Sandip Dutta were in-charge of all affairs of the Company. They did not reveal any
information regarding the financial affairs, assets and properties of the Company. Therefore, the
noticee was unable to furnish information regarding the queries of SEBI.
(f) During his tenure as a director, Swarup Dutta used to take signatures of the noticee in many
documents without furnishing any copies.
(g) The noticee does not have any idea regarding the legitimate and illegitimate fund raising activities
of the Company and has no knowledge whether any of its investors were defrauded or not.

Page 7 of 23

(h) The noticee is ready to co-operate/assist SEBI in future also if such assistance is required.
In view of his submissions and the nature of his involvement with the Company, the noticee
requested SEBI to discharge him from liability and set-aside the interim order.
Submissions of NajibSeikh
(a) This noticee made submissions similar to that of noticee, Niladri Chakraborty.
(b) The noticee was appointed as a director in the Company on March 29, 2012, having been
appointed by Swarup Dutta with DIN-05241253 without any digital signature, on monthly
payment basis.
(c) The noticee resigned during the middle of 2013 and that Swarup Dutta did not co-operate with
respect to processing the resignation as per rules and regulations under the Companies Act. The
noticee submitted his resignation letter to the RoC on April 18, 2014 (a copy was enclosed with
reply) which was duly received by the said authority.
(d) It is contention of the noticee that since middle of 2013, he has no relation with the affairs of the
Company.
Submissions of Anjan Jana: This noticee made submissions on the line of submissions made by
noticee, NajibSeikh. He submitted that he was appointed a director in the Company by Swarup Dutta on
April 05, 2012 with DIN-052474114. He also submitted that he resigned during the middle of 2013 and
since then has no connection with the Company.
Submissions of Gajender Pal Singh and Kanwal Prakash Singh:
The above noticees vide separate letters received in January 2015 inter alia made the following
submissions:
(a)

Noticee,GajenderPal Singh was a friend of Virender Kumar. The said Virender Kumar
represented that he was a good friend of Swarup Dutta and that he would introduce them to
Swarup Dutta and that they can come together and open a Company and mobilize money from
investors and make them shareholders and on becoming shareholders, they would receive good
interest.

Page 8 of 23

(b)

On stating that they do not know about the functioning of a company due to lack of
experience, Virender Kumar and Swarup Dutta assured the noticees (i.e. Gajender Pal Singh
and Kanwal Prakash Singh) that they knew how to run a company as they operate other
companies.

(c)

Noticees were advised to pay Rs.5.5 lakh and become directors of the Company. The noticees
were assured by Virender Kumar and Swarup Dutta that like the noticees there were other
persons who were also investing in the Company.

(d)

On demanding receipts for the Rs.11 lakh invested in cash by the noticees, Swarup Dutta and
Virender Kumar did not issue receipts stating that receipts are not required as the noticees have
become directors/shareholders in the company.

(e)

Thereafter, the Company was incorporated during 2009-2010. CIN and PAN of the Company
was mentioned along with the registered office (at C-13, Tagore Park, Naskarhat, Kolkata700039).

(f)

Swarup Dutta, Virender Kumar, NajmulHodaNajmi, Sandip Dutta, Prasun Kumar, Prashant
Kumar Bhat,Gajender Pal Singh, Kanwal Prakash Singhand Manish Kumr became directors in
the Company.

(g)

Though Swarup Dutta represented that all directors would be consulted regarding business of
the Company, he did not do so. He had opened bank account and increased the share capital of
the Company without discussing the same with the other directors. These noticees became
aware of these details from the MCA-21 portal.

(h)

Though the noticees tried contacting Swarup Dutta, there was no response. The letter dated
June 18, 2010 issued by the noticees to Swarup Dutta informing the lapses returned
undelivered as Swarup Dutta refused to accept.

(i)

The noticees also came to know that other directors NajmalHodaNajmi and Prashant Kumar
Dutta were also upset with the manner of functioning of Swarup Dutta and also wanted to
issue letters to Swarup Dutta informing that the company was being operated without their
consent. Therefore, the noticees added the names of Najmul Huda Najmi and Prashant Kumar
Bhatt and issued another letter dated June 22, 2010 (contents similar to previous letter dated
June 18, 2010) to Swarup Dutta. This letter too returned undelivered as refused by Swarup
Dutta.

(j)

As information regarding the Company was not forthcoming, the noticees reached Kolkata and
resigned from their position as directors and asked Swarup Dutta to return their investment of

Page 9 of 23

Rs.11 lakh. While accepting resignation, Swarup Dutta took their signatures in a few preprinted forms, stamp papers and blank papers stating that the resignations would be accepted
after fulfilling the requirements. As regards their money, the noticees were told to contact
Virender Kumar. The noticees reached Delhi and were told by Virender Kumar that he did
not receive money from Swarup Dutta. Though they visited Kolkata again, they did not get
their money back.
(k)

With respect to the SEBI letter dated December 17, 2014, the noticees submitted that Swarup
Dutta did not inform them regarding the activities carried out by the Company and that on
finding the activities of the Company were suspicious, the noticees had resigned.

(l)

The noticees also contended that they have no relation with the Company as all information
and affairs were managed by Swarup Dutta and therefore SEBI should seek information only
from Swarup Dutta and Virender Kumar.

(m) The noticees also submitted that the present directors Swarup Dutta, SumantaGorai,
Sushanta Ghosh, Sukanta Dutta, KousikBej, NajibSeikh and Anjan Jana were managing the
affairs of the Company and therefore may provide information.
(n)

The noticees requested the refund of the sum of Rs.11 lakh by the Company and the matter
may be referred to the Station Officer of Shakarpur Police Station.

7.

It is noted from records that noticees, namely, Company, Sandip Dutta, SwarupDatta,

Sukanta Dutta and Susanta Ghosh, did not file any submissions till date, though they were allowed to
submit their reply/documents in the personal hearing held on April 22, 2015. Though SEBI furnished
copies of the complaint to the Advocates for the noticees, Anjan Jana, NiladriCharaborty, NajibSeikh
and SumantaGorai, as per directions given in the personal hearing on April 22, 2015, they did not file any
additional submissions.
8.

In view of the above, I proceed to consider the allegations levelled in the interim order against

the Company and other noticees in the light of the material available on record and submissions made by
them.

The charge against the Company, as per the interim order, is that the Company made a public

issue of RPS and issued such securities to 3558 persons and raised an amount of Rs.11,42,63,000/during Financial Years (FY) 2010-2011, 2011-2012 and 2012-2013, without complying with the public
issue norms as mandated under section 56, 60 and 73 of the Companies Act, 1956 read with the
Companies Act, 2013.

Page 10 of 23

9.

The interim order, on the basis of Form-2 (Return of Allotment) as available in the MCA-21

portal, has summarized the details of allotment of RPS made by the Company. Such details are
reproduced herein below:

Date of
allotment
29/05/2010
24/06/2010

2010-11
Total amount
(Rs.)
40,000.00
54,000.00

No of
allottees
5

Date of
allotment
31/05/2011

28/06/2011

2011-12
Total amount
(Rs.)
3,78,900.00
3,74,000.00

2012-13
No of
allottees
31

Date of
allotment
10/04/2012

40

26/04/2012

Total amount

No of
allottees

20,13,000.00

47

4,12,500.00

43

31/07/2010

8,05,000.00

24

29/07/2011

2,87,500.00

32

30/04/2012

5,50,000.00

27

16/08/2010

2,40,000.00

02/09/2011

5,47,500.00

46

20/05/2012

52,91,000.00

47

31/08/2010

3,87,000.00

16

05/09/2011

47,000.00

47

26/05/2012

4,39,000.00

42

01/10/2010

8,72,000.00

23

12/09/2011

44,000.00

44

28/05/2012

8,07,900.00

48

23

17/09/2011

44

29/05/2012

5,34,200.00

49

29

24/09/2011

48

30/05/2012

3,75,000.00

28

49

05/10/2011

47

20/06/2012

58,54,500.00

48

48

25/11/2011

44

26/06/2012

13,80,300.00

46

31/10/2010
30/11/2010
31/12/2010
31/01/2011

9,57,000.00
15,85,000.00
20,11,000.00
10,53,000.00

5,17,100.00
2,61,000.00
48,06,000.00
19,20,000.00

26/02/2011

11,62,000.00

40

20/12/2011

29,64,000.00

43

27/06/2012

10,63,500.00

48

28/02/2011

1,87,700.00

20

26/12/2011

5,03,000.00

26

27/06/2012

10,63,500.00

48

28/03/2011

5,72,000.00

45

31/12/2011

2,77,500.00

31

28/06/2012

9,85,500.00

48

20/01/2012

13,80,500.00

35

29/06/2012

7,55,400.00

49

38

30/06/2012

30,000.00

Not clear

38

18/07/2012

39,49,000.00

48

47

20/07/2012

10,67,000.00

48

48

22/07/2012

9,20,800.00

48

27/01/2012
31/01/2012
21/02/2012
24/02/2012

4,95,500.00
5,87,500.00
35,46,500.00
4,56,300.00

27/02/2012

6,62,000.00

19

24/07/2012

47,22,000.00

Not clear

28/02/2012

6,12,000.00

37

26/07/2012

20,40,000.00

48

20/03/2012

2,54,500.00

10

26/07/2012

15,90,000.00

48

28/03/2012

4,82,100.00

45

28/07/2012

18,79,400.00

49

47

16/08/2012

47,67,000.00

49

47

17/08/2012

32,26,500.00

47

45

18/08/2012

6,87,500.00

45

45

20/08/2012

6,56,500.00

35

29/03/2012
30/03/2012
31/03/2012
31/03/2012

7,52,200.00
7,52,200.00
4,13,000.00
27,62,200.00

31/03/2012

27,62,200.00

45

22/08/2012

5,08,000.00

26

31/03/2012

27,62,200.00

45

29/09/2012

11,93,700.00

48

29/09/2012

7,68,700.00

47

29/09/2012

13,66,200.00

40

29/09/2012

4,16,000.00

18

29/09/2012

4,16,000.00

18

Page 11 of 23

99,25,700.00

332

3,16,08,400.00

1114

Grand Total

08/10/2012

4,18,000.00

46

15/10/2012

7,73,800.00

44

22/10/2012

5,18,100.00

44

30/10/2012

15,41,500.00

41

30/10/2012

15,41,500.00

41

05/11/2012

4,55,000.00

44

12/11/2012

7,19,900.00

42

19/11/2012

5,54,000.00

44

22/11/2012

4,40,000.00

45

28/11/2012

1,64,800.00

25

30/11/2012

24,99,000.00

36

30/11/2012

24,99,000.00

36

15/12/2012

19,68,000.00

44

15/12/2012

19,68,000.00

44

17/12/2012

16,90,000.00

45

18/12/2012

6,82,200.00

46

24/12/2012

9,81,200.00

45

28/12/2012

4,47,300.00

24

12/01/2013

5,69,000.00

48

12/01/2013

5,69,000.00

48

7,27,28,900.00

*2112

11,42,63,000.00

*3558

*Details in respect of certain allotments under the issue of RPSfor the Financial Year 201213, is not clear. The number
of allottees apparently amounts to at least 2112 on account of available information.
10.

The interim order has observed that 10. .

Under the issue of RPS, it is observed that JRPIL issued and allotted RPS to more than 49 persons in each
of the financial year 2010-11, 2011-12 and 2012-13 in series of allotments and raised an amount of
Rs.11,42,63,000/-from 3558 persons during these three financial years. It is also pertinent to mention that
on many occasions more than one allotment was made on a single day. For instance, on 29/09/2012 there
were as many as five issues. Similarly, there were four issues on 31/03/2012 and two issues on six days,
viz. 27/06/2012, 26/07/2012, 30/10/2012, 30/11/2012, 15/12/2012 and 12/01/2013. The
frequency of allotments and the manner in which the allotments were made by JRPIL clearly indicate that
these multiple allotments were made only to circumvent the requirements of Section 67(3) of the Companies
Act, 1956. These facts, when viewed in light of failure on the part of JRPIL and its Directors to submit
relevant information to SEBI despite being given sufficient opportunities to do so, would prima facie indicate
that the issue of RPS was a public issue of securities under the first proviso to Section 67(3) of the Companies
Act, 1956, which has been elucidated by the Hon'ble Supreme Court of India in the Sahara Case.

Page 12 of 23

11.

With the above factual background, it is necessary to test whether the Company made a public

issue of RPS as alleged in the interim order. Section 67 of the Companies Act, 1956, lays down the
criteria to test whether the offer of securities is made on a private basis or made to the public at large.
Accordingly, it would be important to refer to the provisions of section 67(1) and (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) ...
(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).
From the reading of section 67 of the Companies Act, 1956, especially the sub-section 3 and the two
provisos thereafter, the following can be deduced:
a)

an offer or invitation shall not be treated as made to the public if such offer or invitation can be

regarded in all circumstances as not being calculated to result, directly or indirectly, in the securities
becoming available for subscription or purchase by persons other than those receiving the offer or
invitation;
b)

an offer or invitation shall not be treated as made to the public if such offer or invitation can be

regarded in all circumstances if the same is a domestic concern of the persons making and receiving the
offer or invitation; and

Page 13 of 23

c)

an offer or invitation made to more than 49 persons is a public issue notwithstanding anything

contained in sub-section (3) of section 67;

d)

Even if an offer is made to 49 persons or less, the company, to state that it made a private

placement, has to prove that its case falls either under clause (a) or (b) of section 67(3).
e)

NBFCs or PFIs are exempted only from the first proviso to section 67(3). Therefore, NBFC or

PFI do not have any restriction on the number of allottees as imposed on a company which is not an
NBFC or PFI. However, such companies also need to prove that its offer falls either under clause (a) or
(b) of section 67(3) to claim such issuance to be a private placement.
12.

In the present case, the Company had, in pursuance of its offer and issuance of securities and

mobilization of money, made a series of allotments on a regular basis during the three financial years
2010-2011, 2011-2012 and 2012-2013 to atleast3,558 persons and had mobilized a total of Rs.11.43 crore.
Considering the series of allotments that too made within a very short span between two consecutive
allotments, the number of allottes were either equal to or less than 49, it can be concluded that the
Company had devised a ploy or artifice to circumvent the first proviso to section 67(3) of the Companies
Act, 1956. The Company has not contested the allegations and observations made in the interim order. I
also note that such ploy or colourable scheme have always been disregarded by the Hon'ble Courts made
for evading the provisions of law. In this regard, I refer to the following observations made by the
Hon'ble Courts:
(a) The Hon'ble Supreme Court of India in the matter of Hindustan Lever &Anr vs State Of
Maharashtra &Anrdecided on November 18, 2003 had observed "In Hindustan Lever Employees
Union case (supra) it has been held by this Court that Section 394 casts an obligation on the Court to be
satisfied that the scheme of amalgamation or merger was not contrary to the public interest; the basic principle of
such satisfaction is none other than the broad and general principle inherent in any compromise or settlement
entered between the parties that it should not be unfair or contrary to public policy or unconscionable or that the
scheme should not be a device to evade the law."
(b) The Hon'ble Gujarat High Court in Patel RatilalMaganbhai [2003 (1) GLR 562] had observed
that "... Equity is always known to defend the law from crafty evasions and new subtleties invented to evade
law...".

Page 14 of 23

(c) Hon'ble Courts/Tribunal have considered whether a 'scheme' was a colourable device to evade
the payment of tax by an assessee and have held that tax could be avoided within the four
corners of law but colourable device shall not be allowed for evading tax.
13.

It is also noted that the details regarding the number of allottes with respect to the allotments

made on June 30, 2012 and July 24, 2012 is not available with SEBI. The Company/or its directors have
not provided details of the same. Therefore, the number of allottes in the offer and issue of RPS during
2012-2013 would atleastbe 2112 persons, as indicated in the interim order.
14.

In view of the above observations, it can be concluded that the Company in its effort to mobilize

money from the public through its issue of RPS had devised an artifice to make multiple allotments in
order to stay out of the regulatory purview and evade the liability of complying with the public issue
norms as alleged in the interim order. Therefore, I hereby conclude that the Company made a public
issue of RPS during the aforesaid financial years, in terms of section 67(3) of the Companies Act, 1956.
15.

By making a public issue of RPS, the Company was mandated to comply with all the legal

provisions that govern and regulate public issue of such securities, including the Companies Act, 1956
and the SEBI Act and regulations. In this context, I refer and rely on the below mentioned observation
made by the Hon'ble Supreme Court of India in the matter of Sahara India Real Estate Corporation Limited
&Ors.Vs. SEBI (Civil Appeal no. 9813 and 9833 of 2011)(hereinafter referred to as the 'Sahara Case'):
... ... that any share or debenture issue beyond forty nine persons, would be a public issue attracting all the relevant
provisions of the SEBI Act, regulations framed thereunder, the Companies Act, pertaining to the public issue. ".
Therefore, by virtue of section 55A(a) and (b) of the Companies Act, 1956 and section 11A of the SEBI
Act, SEBI has jurisdiction on the public issue of RPS made by the Company.
16.

As alleged in the SEBI Order, the Company was mandated to comply with the provisions of

sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013, in respect of its
offer and issue of RPS. In terms of section 56(1) of the Companies Act, 1956, every prospectus issued by
or on behalf of a company, shall state the matters specified in Part I and set out the reports specified in
Part II of Schedule II of that Act. Further, as per section 56(3) of the Companies Act, 1956, no one shall
issue any form of application for shares in a company, unless the form is accompanied by abridged
prospectus, contain disclosures as specified. Section 2(36) of the Companies Act read with section 60
thereof, mandates a company to register its 'prospectus' with the RoC, before making a public offer/

Page 15 of 23

issuing the 'prospectus'. As there is no document on record to suggest that the Company has filed a
Prospectus and mentioned the particulars as required under law, the Company has violated the
provisions of sections 56 and 60 of the Companies Act, 1956.
17.

The interim order has alleged that the Company failed to comply with section 73 of the

Companies Act, 1956 in respect of its issuance of RPS. In this regard, I observe the following:
(a)

By making a public issue of RPS, as discussed above, the Company had to compulsorily list
such securities in compliance with section 73(1) of the Companies Act, 1956. A Company
making a public issue of securities cannot chose whether to list its securities or not as listing
is a mandatory requirement under law. As per section 73(1) Companies Act, 1956, a
company is required to make an application to one or more recognized stock exchanges for
permission for the shares or debentures to be offered to be dealt with in the stock exchange.
The Company has not disputed that this allegation is incorrect. Further, there is no material
to say that the Company has filed an application with a recognized stock exchange to enable
the RPS to be dealt with in such exchange. Therefore, the Company has failed to comply
with this requirement.

(b)

Section 73(2) states that "Where the permission has not been applied under subsection (1) or such
permission having been applied for, has not been granted as aforesaid, the company shall forthwith repay
without interest all moneys received from applicants in pursuance of the prospectus, and, if any such money is
not repaid within eight days after the company becomes liable to repay it, the company and every director of
the company who is an officer in default shall, on and from the expiry of the eighth day, be jointly and
severally liable to repay that money with interest at such rate, not less than four per cent and not more than
fifteen per cent, as may be prescribed, having regard to the length of the period of delay in making the
repayment of such money". As the Company failed to make an application for listing such RPS,
the Company had to forthwith repay such money collected from investors. If such
repayments are not made within 8 days after the Company becomes liable to repay, the
Company and every director is liable to repay with interest at such rate. Considering that the
mobilization was done during FY 2010 till 2013, it would be appropriate to levy an interest
@ 15% p.a. as provided for under the above section. Further, the liability of the Company
to refund the public funds collected through offer and allotment of the impugned RPS is
continuing and such liability would continue till repayments are made.

Page 16 of 23

(c)

The Company 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.

(d)

The Hon'ble Supreme Court of India in the Sahara case has examined section 73 and made
the following observations:
"Section 73(1) of the Act casts an obligation on every company intending to offer shares or debentures to the
public to apply on a stock exchange for listing of its securities. Such companies have no option or choice but to
list their securities on a recognized stock exchange, once they invite subscription from over forty nine investors
from the public. If an unlisted company expresses its intention, by conduct or otherwise, to offer its securities to
the public by the issue of a prospectus, the legal obligation to make an application on a recognized stock
exchange for listing starts. Sub-section (1A) of Section 73 gives indication of what are the particulars to be
stated in such a prospectus. The consequences of not applying for the permission under sub-section (1) of
Section 73 or not granting of permission is clearly stipulated in sub-section (3) of Section 73. Obligation to
refund the amount collected from the public with interest is also mandatory as per Section 73(2) of the Act.
Listing is, therefore, a legal responsibility of the company which offers securities to the public, provided offers
are made to more than 50 persons."

(e)

Accordingly, it is concluded that the Company failed to comply with section 73 of the
Companies Act, 1956 in respect of its offer and issuance of RPS as discussed in this Order.

18.

Liability of directors:
(a) The interim order was issued to the following persons stated to be the Company's directors and
former directors along with the period of their directorship (as per the information obtained from RoC,
Kolkata) in the Company:
S. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

Name
Swarup Dutta
Kanwal Prakash Singh
Gajender Pal Singh
Sandip Dutta
Virender Kumar
SumantaGorai
Susanta Ghosh
Sukanta Dutta
KoushikBej
NajibSeikh
Anjan Jana

Period of directorship
From
To
16.12.2009
Still continues
16.12.2009
29.07.2011
16.12.2009
29.07.2011
16.12.2009
15.03.2012
16.12.2009
29.03.2012
06.04.2010
Still continues
03.10.2012
Still continues
29.03.2012
Still continues
29.03.2012
Still continues
29.03.2012
Still continues
05.04.2012
Still continues

Page 17 of 23

12.

Niladri Chakraborty

06.04.2010

15.03.2012

(b) The impugned offer and allotment of RPS was made from FY 2010-2011 to 2012-2013. As per
the interim order, the date of first allotment was on May 29, 2010 and the date of the last
allotment was on January 12, 2013. It is also noted that the Company was incorporated on
December 16, 2009.
(c) The Company has contravened sections 56, 60 and 73 of the Companies Act, 1956 read with the
Companies Act, 2013 with respect to its public offer and issuance of RPS during the aforesaid
financial years.
(d) 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 is on the
Company, and every person who is a party to the non-compliance of issuing the prospectus as
per the said section.
(e) The liability of the company and directors to repay under section 73(2) of the Companies Act,
1956 and section 27 of the SEBI Act, is a continuing liability and the same continues till all the
repayments are made. Therefore, the directors (irrespective of whether they continue or resign) who were
present during the period when the Company made the offer and allotted RPS shall be liable for
violation of sections 56, 60 and 73 of the Companies Act, including the default in making refunds
as mandated therein. As the liability to make repayments under sections 73(2) of the Companies
Act read with section 27 of the SEBI Act is a continuing liability,the persons who join the
Companys Board pursuant to the offer and allotment of RPS shall also be liable if the Company
and the concerned directors have failed to make refunds as mandated under law.
(f) Therefore,in terms of section 73(2) of the Companies Act and section 27 of the SEBI Act, a
director (irrespective of whether he continues or not)who was in the Companys Board, when the
impugned offer and issue of RPS by the Company during FY 2010-2011 to 2012-2013, as well as
directors who joined the Board of Directors of the Company subsequent to such issue of
securities are liable to make the repayments and would continue to be liable for the same till such
time the liability (to make refunds) is discharged by them.

Page 18 of 23

(g) Noticees, Virender Kumar, SumantaGorai, Niladri Chakraborty, NajibSeikh, Anjan Jana,
Gajender Pal Singh and Kanwal Prakash Singh have contended that they never managed the
affairs of the Company. However, having assumed position as directors of the Company during
the relevant period, they are under legal mandate to comply with the applicable law. They cannot
claim ignorance and the manner in which the Company was operated and the mobilization of
public funds by it. They have stated that it was Swarup Dutta who was in-charge of the affairs of
the Company and responsible for the same. However, it appears that they have not taken action
against the said person/s for mis-management and misrepresentation.
(h) I also note that Virender Kumar, Gajender Pal Singh, Kanwal Prakash Singh, Sandip Dutta
and Swarup Dutta were the directors of the Company from the date of its incorporation.
(i) SumantaGorai has contended that he was appointed as a director on May 05, 2012 and resigned
during September 2013. However, as per the information contained in Register of Directors,
Managing Director, Manager and Secretary, etc. as obtained from RoC, Kolkata, this noticee was
originally appointed on April 06, 2010 and appointed in the present designation (director) on May
05, 2012. This noticee also continues as a director in the Company.
(j) NajibSeikh has contended that he resigned during the middle of year 2013and as Swarup Dutta
did not co-operate with him for processing the same, he sent his resignation letter to the RoC on
April 18, 2014. A copy of the letter was enclosed. I have perused this letter. A seal of the ROC
was found affixed on the reverse of the first page with date April 21, 2014. However, as noted
from the MCA documents {as mentioned in the sub-para (a) above}, this noticee still continues
as a director. If he is aggrieved, he may make his representation before the concerned authorities.
(k) As per the information contained in Register of Directors, Managing Director, Manager and
Secretary, etc, obtained from RoC, Kolkata, Anjan Janawas originally appointed on April 05,
2012 as a director and continues till date. Accordingly, the contention of this noticee that he
resigned during the middle of 2013 and has no connection with the Company since then, is not
tenable.However, if he is aggrieved, he may make his representation before the concerned
authorities.

Page 19 of 23

(l) As regards Gajender Pal Singh and Kanwal Prakash Singh, it is their contention that though
they along with Virender Singh and Swarup Dutta promoted the Company, they were not
consulted with respect to any of the functioning of the Company. They also contend that they
have sent two representations June 18 & 22, 2010 to Swarup Dutta regarding the unilateral
decision taken to open Companys bank account, increase share capital from rupees one crore to
three crore without AGMand change in the registered office address. However, except for such
representations which have admittedly returned undelivered due to the refusal of Swarup Dutta,
they seem to have not initiated any action. This conduct of not taking action even when their
claimed investment of Rs.11 lakh was not returned, does not allow me to take credence of their
submissions. It is also noted that Virender Kumar and SumantaGorai have also claimed to have
invested Rs.2 lakh and Rs.10 lakh respectively and have not initiated action for default in
returning the same and the alleged misrepresentation.
(m) These directors seem to have not taken action against Swarup Dutta/Company even after the
receipt of the SEBI Order. Therefore, such conduct leads one to conclude on a possible
collusion at their end with the Company/the others concerned.
(n) Considering the above observations, all the aforesaid persons (past as well as present directors and
made noticees in the interim order) are liable for the non-compliance by the Company of the
provisions of the Companies Act, 1956, as discussed in this Order, including the default in
making refunds to the investors under section 73(2) of the Companies Actread with section 27 of
the SEBI Act.
19.

For the above reasons, I, in exercise of the powers conferred upon me under section 19 of the

Securities and Exchange Board of India Act, 1992 read with sections 11(1), 11(4), 11A and 11B thereof
hereby issue the following directions:
(a) The Company, Just-Reliable Projects India Limited (CINU45400WB2009PLC140276;
PAN-AACCJ2827P) and its Directors, namely, Mr. Swarup Dutta (DIN-02498000; PANAGWPD2748J), Mr. SumantaGorai (DIN-02946871;PAN-AGMPG1547N), Mr. Susanta
Ghosh (DIN-05185974;PAN-AEXPG6206P), Mr. Sukanta Dutta (DIN-05235908; PANAKEPD8763F), Mr. KoushikBej (DIN-05236482;PAN-APSPB6232N), Mr. NajibSeikh

Page 20 of 23

(DIN-05241253;PAN-AYLPS8955R), Mr. Anjan Jana (DIN-05247414;PAN-AHRPJ8186A),

Mr. Kanwal Prakash Singh (DIN-02869631; PAN-BVPPS9888H), Mr. Gajender Pal Singh
(DIN-02869599; PAN-BESPS7926C),

Mr. Sandip Dutta (DIN-02647739; PAN-

AFVPD8603A), Mr. Virender Kumar (DIN-02487133; PAN-AJUPK8288M) and Mr.

Niladri Chakraborty (DIN-02946893; PAN-AEZPC3674D), jointly and severally, shall
forthwith refund the money collected by the Company through the issuance of Redeemable
Preference Shares (which have been found to be issued in contravention of the public issue norms stipulated
under the Companies Act, 1956), to the investors including the money collected from investors, till
date, pending allotment of 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 to investors shall be effected only in cash through Bank Demand Draft or Pay
Order.
(c) The Company/its present management are permitted to sell the assets of the Company only
for the sole purpose of making the refunds as directed above and deposit the proceeds in an
Escrow Account opened with a nationalised Bank.
(d) The Company, itsdirectorsand other persons named above, shall issue public notice, in all
editions of two NationalDailies (one English and one Hindi) and in one local daily (in Bengali)
with wide circulation, detailing themodalities for refund, including details of contact persons
including names,addresses and contact details, within fifteen days of this Order coming
intoeffect.
(e) After completing the aforesaid repayments, the Companyshall file acertificate of such
completion with SEBI,within a period of three months from the date of this Order, from two
independent peer reviewedChartered Accountants who are in the panel of any public authority or
publicinstitution. For the purpose of this Order, a peer reviewed Chartered Accountantshall
mean a Chartered Accountant, who has been categorized so by the Institute ofChartered
Accountants of India ("ICAI").

Page 21 of 23

(f) The Company, its directors and former directors are also directed to provide a full inventory
of all their assets and properties and details of all their bank accounts, demat accounts and
holdings of shares/securities, if held in physical form.
(g) In case of failure of the company, Just-Reliable Projects India Limited and its directors
(including former directors), namely, Mr. Swarup Dutta, Mr. SumantaGorai, Mr. Susanta
Ghosh, Mr. Sukanta Dutta, Mr. KoushikBej, Mr. NajibSeikh, Mr. Anjan Jana, Mr. Kanwal
Prakash Singh, Mr. Gajender Pal Singh, Mr. Sandip Dutta, Mr. Virender Kumar and Mr.
Niladri Chakraborty, in complying 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 incharge 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) Just-Reliable Projects India Limited is directed not to, directly or indirectly, access the capital
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 4 years from the date of completion of refunds to investors as directed above.
(i) The directors including former directors, namely,Mr. Swarup Dutta (DIN-02498000; PANAGWPD2748J), Mr. SumantaGorai (DIN-02946871;PAN-AGMPG1547N), Mr. Susanta
Ghosh (DIN-05185974;PAN-AEXPG6206P), Mr. Sukanta Dutta (DIN-05235908; PANAKEPD8763F), Mr. KoushikBej (DIN-05236482;PAN-APSPB6232N), Mr. NajibSeikh

Page 22 of 23

(DIN-05241253;PAN-AYLPS8955R), Mr. Anjan Jana (DIN-05247414;PAN-AHRPJ8186A),

Mr. Kanwal Prakash Singh (DIN-02869631; PAN-BVPPS9888H), Mr. Gajender Pal Singh
(DIN-02869599;

PAN-BESPS7926C),Mr.

Sandip

Dutta

(DIN-02647739;

PAN-

AFVPD8603A), Mr. Virender Kumar (DIN-02487133; PAN-AJUPK8288M) and Mr.

Niladri Chakraborty (DIN-02946893; PAN-AEZPC3674D),are restrained from accessing the
securities market and further prohibited from buying, selling or otherwise dealing in the securities
market, directly or indirectly in whatsoever manner, with immediate effect. They are also
restrained from issuing prospectus, offer document or advertisement soliciting money from the
public and 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. The above
directions shall come into force with immediate effect and shall continue to be in force from the
date of this Order till the expiry of 4 yearsfrom the date of completion of refunds to investors, as
directed above.
(j) The above directions shall come into force with immediate effect.
20.

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 including former directors and other key persons.
21.

Copy of this Order shall be forwarded to the recognised stock exchanges and depositories for

information and necessary action.

22.

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.

PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA
Date:October 13th, 2015
Place: Mumbai

Page 23 of 23