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WTM/PS/34/IMD/ERO-RLO/MAY/2016

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA


CORAM: PRASHANT SARAN, WHOLE TIME MEMBER
ORDER
Under sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act,
1992.
In respect of
1. Bishal Horticulture and Animal Projects Limited (PAN: AACCB6631M) and its
directors (present and past) namely,
2. Mr. Madhab Chandra Purkait (PAN: AKZPP8185C; DIN: 07004248),
3. Mr. Gautam Kumar Halder (PAN: ADPPH2520Q; DIN: 07004250),
4. Mr. Mohd Kalimullah Baidya (PAN: ASPPB9723J; DIN: 07004251),
5. Mr. Tushar Kanti Nandi (PAN: ACTPN4128K; DIN: 07109702),
6. Mr. Santosh Kumar Paul (PAN: AMBPP4567C; DIN: 07109838),
7. Mr. Swapan Kumar Bose (PAN: AEEPB0756L; DIN: 07109850),
8. Mr. Ram Kumar Sinha (PAN: APYPS1402F; DIN: 02460975),
9. Mr. Sushant Kumar (PAN: AOVPK3954N; DIN: 06674534),
10. Mr. Sachin Kumar Thakur (PAN: AJUPT3341C; DIN: 06560350),
11. Mr. Chandan Shah (PAN: AVNPS3170R; DIN: 02093399),
12. Mr. Sankar Bhattacharjee (PAN AMRPB7694J; DIN: 06584569),
13. Smt. Priti Rani Chowdhury (PAN: AGUPC5065H; DIN: 01717301),
14. Mr. Ratan Chowdhury (PAN: ADIPC9989M; DIN: 00360241) and
15. Smt. Shima Chowdhury (PAN: ADIPC9990N; DIN: 00360423).

Date of personal hearing: September 3rd and 4th, 2015


Appearance:

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(a) Mr. Aniruddha Dasgupta, Advocate appeared for Chandan Shah on September 03, 2015.
(a) Mr. Kamal Das, Advocate appeared on September 04, 2015 on behalf of noticees, Gautam
Kumar Halder, Mohammad Kalimullah Baidya, Tushar Kanti Nandi, Santosh
Kumar Paul and Swapan Kumar Bose.
For SEBI: Mr. Prasanta Mahapatra, General Manager, Mr. N. Murugan, Assistant General
Manager, Mr. T. Vinay Rajneesh, Assistant General Manager, Mr. Mohammad Shahid, Assistant
Manager and Ms. Nikki Agarwal, Assistant Manager.
Date of personal hearing: November 23, 2015
(a) Mr. Kamal Das, Advocate appeared on behalf of Madhab Chandra Purkait, Tushar
Kanti Nandi, Swapan Kumar Bose, Santosh Kumar Paul, Gautam Kumar Halder
and Mohd. Kalimullah Baidya.
For SEBI: Mr. Prasanta Mahapatra, General Manager, Mr. T. Vinay Rajneesh, Assistant General
Manager, Mr. Rajeev Kumar, Assistant General Manager and Ms. Nikki Agarwal, Assistant
Manager.

1.

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

parte interim Order dated May 06, 2015 (hereinafter referred to as "the interim order") had
observed that the company, Bishal Horticulture and Animal Projects Limited (hereinafter
referred to as "BHAPL" or "the Company") was prima facie engaged in fund mobilizing activity
from the public through its offer and issue of Redeemable Preference Shares (hereinafter referred
to as "RPSs") and allegedly violated the provisions of sections 56, 60 read with section 2(36), 73
of the Companies Act, 1956 read with the Companies Act, 2013 and the SEBI (Disclosure and
Investor Protection) Guidelines, 2000 ("DIP Guidelines") read with the SEBI (Issue of Capital
and Disclosure Requirements) Regulations, 2009 ("ICDR Regulations"). In order to protect the

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investors who have subscribed to the 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:
i.

ii.

iii.

iv.

v.
vi.
vii.

BHAPL (PAN: AACCB6631M) shall not mobilize funds from investors through the Offer of
Redeemable Preference Shares 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;
BHAPL and its present Directors, viz. Shri Madhab Chandra Purkait (PAN: AKZPP8185C;
DIN: 07004248), Shri Gautam Kumar Halder (PAN: ADPPH2520Q; DIN: 07004250),
Shri MohdKalimullahBaidya (PAN: ASPPB9723J; DIN: 07004251), Shri Tushar Kanti
Nandi (PAN: ACTPN4128K; DIN: 07109702), Shri Santosh Kumar Paul (PAN:
AMBPP4567C; DIN: 07109838) and Shri Swapan Kumar Bose (PAN: AEEPB0756L;
DIN: 07109850), 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;
The past Directors of BHAPL, viz. Shri Ram Kumar Sinha (PAN: APYPS1402F; DIN:
02460975), Shri Sushant Kumar (PAN: AOVPK3954N; DIN: 06674534), Shri Sachin
Kumar Thakur (PAN: AJUPT3341C; DIN: 06560350), Shri Chandan Shah (PAN:
AVNPS3170R; DIN: 02093399), Shri Sankar Bhattacharjee (PAN AMRPB7694J; DIN:
06584569), Smt. Priti Rani Chowdhury (PAN: AGUPC5065H; DIN: 01717301), Shri
Ratan Chowdhury (PAN: ADIPC9989M; DIN: 00360241) and Smt. Shima Chowdhury
(PAN: ADIPC9990N; DIN: 00360423), 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;
BHAPL 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;
BHAPL shall provide a full inventory of all its assets and properties;
BHAPL's abovementioned past and present Directors shall provide a full inventory of all their assets
and properties;
BHAPL 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, without prior permission from SEBI;

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viii. BHAPL and its abovementioned present Directors shall not divert any funds raised from public at
large through the Offer of Redeemable Preference Shares, which are kept in bank account(s) and/or
in the custody of BHAPL;
ix. BHAPL and its abovementioned past and present Directors shall furnish complete and relevant
information (as sought by SEBI letter dated October 9, 2014), within 14 days from the date of receipt
of this Order.
2.

The interim orders were passed on the basis of the information available from the

complaint and MCA-21 portal. The interim order advised the Company and its past and present
directors, namely, Mr. Madhab Chandra Purkait, Mr. Gautam Kumar Halder, Mr. Mohd Kalimullah
Baidya, Mr. Tushar Kanti Nandi, Mr. Santosh Kumar Paul, Mr. Swapan Kumar Bose, Mr. Ram
Kumar Sinha, Mr. Sushant Kumar, Mr. Sachin Kumar Thakur, Mr. Chandan Shah, Mr. Sankar
Bhattacharjee, Smt. Priti Rani Chowdhury, Mr. Ratan Chowdhury and Smt. Shima Chowdhury (the
company and aforesaid directors are collectively referred to as noticees) to show cause as to why suitable
directions/prohibitions under sections 11(1), 11(4), 11A and 11B of the SEBI Act, 1992 including
the following, should not be passed against them:
i.

Directing them jointly and severally to refund money collected through the offer of
RPS alongwith interest, if any, promised to investors therein;

ii.

Directing them to not issue 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, for an appropriate period;

iii. Directing them to refrain from accessing the securities market and prohibiting them
from buying, selling or otherwise dealing in securities for an appropriate period.
The interim orders had also advised the noticees to file their replies and also seek opportunity of
personal hearing, if they desire.
3.

The interim orders were forwarded to the noticees vide SEBI letters dated May 08, 2015.

Interim order were delivered to Mohd Kalimullah Baidya, Tushar Kanti Nandi, Santosh Kumar
Paul, Ram Kumar Sinha, Sankar Bhattacharjee and Chandan Shah. However, interim order sent to
BHAPL, Madhab Chandra Purkait, Gautam Kumar Halder, Swapan Kumar Bose, Sushant Kumar,

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Sachin Kumar Thakur, Smt. Priti Rani Chowdhury, Ratan Chowdhury and Smt. Shima Chowdhury
were returned undelivered.
4.

In response, Mr. Chandan Shah, vide his letters dated May 28, 2015, while acknowledging

the receipt of interim order submitted the following:


(a) He was appointed as a director in BHAPL in June 2013 whereas the impugned offer and
issue of RPS were made by the Company during FYs 2006-07, 2007-08 and 2009-10 i.e.
the period when he was not connected with the said company.
(b) The noticee submitted that he joined the Company to look after its business on agreed
professional terms with the promoter director Mr. Ratan Chowdhury and had resigned
within 6 months of assuming the position.
(c) He further submitted that he is not a custodian of any documents of the Company and had
not attended any board meeting during the period and was also not involved in the day to
day affairs of the Company.
(d) He requested SEBI to absolve him from the charges and to set-aside the interim order.
5.

Mr. Ram Kumar Sinha, vide his letter (received in SEBI on July 06, 2015), while

acknowledging the receipt of the interim order had stated that


(a) He did not receive the earlier letter of SEBI and was therefore not able to reply to the same.
(b) As per the interim order, several documents were required by SEBI and that he is not in a
position to send the copies as he could not gather them. He further submitted that after
his resignation from the Company, he has no relation with them.
(c) He was working part-time for the Company. During June 2014, he along with Himadri Bag
and Sachin Kumar Thakur came to know that they were made additional directors without
prior information or salary.
(d) Thereafter, within three months, he had resigned from the Company.
(e) He enclosed copy of a purported agreement dated October 27, 2014 between the Bishal
group of companies (12 companies), represented by Himadri Bag and Bishal Group
Welfare Trust (transferee) represented by Madhab Purkait, Gautam Kumar Halder and Md.
Kalimullah Baidya, whereby the share capital, assets and liabilities of the companies would

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be taken over by the transferee. According to the noticee, the aforesaid document was the
only document available with him.
(f) The noticee submitted that he remained (as a director) only for a short span of three months
and no debenture/share or any kind of paper was issued under his signature.
(g) The noticee assured to co-operate with SEBI.
6.

The other noticees did not file any reply. In accordance with the principles of natural justice,

the noticees were afforded an opportunity of personal hearing on September 04, 2015. The
schedule of the personal hearing was informed to the noticees vide SEBIs letter dated August 10,
2015. As many of the noticees did not file their replies and considering that they may not have
received the interim orders, SEBI made a public notice in newspapers (in Times of India and
Hindustan both dated August 31, 2015) regarding the proceedings pursuant to the interim order
passed in the matter and the schedule of personal hearing.
7.

Though the matter was kept for hearing on September 04, 2015, the same was preponed

to September 03, 2015 with respect to Chandan Shah as his Advocate Mr. Aniruddha Dasgupta,
Advocate requested for the same when he appeared in other matters on September 03, 2015. The
learned advocate submitted that the noticee Chandan Shah had already submitted his resignation
to the Company. He also submitted that the board resolution accepting his resignation was available
and requested time upto September 11, 2015 for filing written submissions. The request was
allowed.
8.

On September 04, 2015, Mr. Kamal Das, Advocate appeared on behalf of noticees,

Gautam Kumar Halder, Mohammad Kalimullah Baidya, Tushar Kanti Nandi, Santosh
Kumar Paul and Swapan Kumar Bose in the instant matter and also in the matter of Bishal
Distillers Limited. As requested by the advocate, liberty was granted to file written submissions
along with documents, if any, within a period of 15 days. The other noticees failed to appear despite
public notice regarding the proceedings and the hearing date in newspapers.
9.

Thereafter, vide letter dated September 11, 2015, the following documents were submitted

on behalf of Chandan Shah:

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(a) Form No. DIR-11 (notice of resignation of a director to the Registrar) this document
mentions that Chandan Shah was appointed on December 24, 2012 as Managing Director
in Professional category and file his resignation with the Company on June 10, 2014.
(b) Resignation letter dated December 10, 2013 of the noticee.
(c) Form 32 Chandan Shah appointed on December 24, 2012 as director under promoter
category.
(d) Consent letter dated December 24, 2012 of the noticee addressed to the BoD of the
Company to act as director.
(e) Form DIR-12 (particulars of appointment of directors and key managerial personnel and
changes among them) as per this document, the noticee ceased to be the managing
director with effect from June 10, 2014.
(f) Resignation letter dated June 10, 2014 of the noticee.
(g) Companys acceptance of the noticees resignation intimated vide letter dated June 10, 2014
along with supporting board resolution.
10.

Written submissions dated September 21, 2015 were filed by Tushar Kanti Nandi through

Advocate Mr. Kamal Das for himself and also on behalf of Madhab Chandra Purkait, Gautam
Kumar Halder, Mohd. Kalimullah Baidya, Santosh Kumar Paul and Swapan Kumar Bose, wherein
the following submissions were filed:
(a) Tushar Kanti Nandi was authorized by the other noticees to file the present written
submissions.
(b) No further collection of money from the market or depositors were made after October
10, 2014 by any means including issuance of preference shares/debentures.
(c) Only one property in Coochbehar was sold by Madhab Chandra Purkait (managing
director) with the consent of other directors and the proceeds were distributed to the
investors of the Company.
(d) In the year 2005, Ratan Chowdhury, his wife Shima Chowdhury, his mother Priti
Chowdhury along with Prabir Chowdhury, Ashima Chowdhury, Sumanta Modak and
Mithun Chakraborty being the promoters incorporated the Company.

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(e) Tushar Kanti Nandi, Santosh Kumar Paul and Swapan Kumar Bose with others joined the
Company as agents in the year 2005. Except Tushar Kanti Nandi, all others had previous
relationship with Ratan Chowdhury.
(f) Ratan Chowdhury was the CMD of the Company and under his instructions and planning,
the Company flourished in business.
(g) The present directors Gautam Kumar Halder and Mohd. Kalimullah Baidya were
appointed as agents.
(h) The agents used to abide by the instructions of the management and did not have any say
in the business.
(i) The Company started to collect money from the market by issuing preference shares,
debentures, ponzi schemes and loans. The Companys management especially Mr. Ratan
Chowdhury represented that the Company was doing legal business and the noticees never
though that the collection of money from the market was illegal or unauthorized.
(j) The CMD started new businesses and incorporated various new companies namely Bishal
Distillers Limited, Bishal Agri-Bio Industries Limited, Bishal Abasan India Limited. All
these companies constituted Bishal group of companies and purchased a lot of properties.
(k) Being allured, the agents started working with full energy and tried their level best to
accumulate huge capital to fulfill the dreams of the Company.
(l) The Company had website and issued advertisements in popular newspapers, TV channels
regarding its products. Ratan Chowdhury received prizes from various authorities.
(m) Ratan Chowdhury was all in all of the Company and the same would be clear from the
advertisements and brochures. All the companies were incorporated by him and his family
members.
(n) The maturity process of the Company including payments were going on very smoothly till
the Sarada scam and the arrest of the directors of Sarada in April 2013. From September
2013, the Company stopped the payments.
(o) The agents met Ratan Chowdhury who assured that the situation was under control and
the Company had sufficient funds. Gautam Kumar Halder and Mohd. Kalimullah Baidya
also met Ratan Chowdhury who stated that due to a special enquiry, payments were stopped
for a few days.

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(p) In February 2014, all payments on maturity were stopped. During the period, it was
announced that Kuntal Bhattacharya and Sumanta Modak would be added as directors and
that Ratan Chowdhury would remain as Chairman and Litan Saha would be the marketing
manager. However, it was not informed that Ratan Chowdhury would be leaving the
Company and G. R. Agro Projects Limited would take charge of the Bishal group
companies. Ratan Chowdhury announced that he would clear all dues within March 31,
2014.
(q) It published in the newspapers that G.R. Agro Projects Limited would take charge of the
Bishal group of companies. One official of G.R. group namely Raju Ghosh affirmed that
GR group would arrange for the total payments of the Bishal group. In this regard, a
document was also shown by Kuntal Bhattarcharya and other directors. The previous
directors resigned and new directors namely Himadri Bag, Ram Kumar Sinha, Sachin
Thakur, Sekhar Koley, Susant Kumar became directors in the Bishal group of companies
and Raju Ghosh represented the GR group.
(r) Thereafter, the agents decided to stop collection from the market. Raju Ghosh and Sachin
Thakur requested the agents to transfer all the certificates and policies issued by the Bishal
group of companies in the name of the GR group. However, as the GR group delayed in
paying the maturity amounts, the agents decided not to transfer the certificates as they have
to ultimately face the depositors and investors. Then they understood that the GR group
is not a genuine entity and did not have enough funds. The agents demanded the
management of the Company to hand over the assets of the Company to the agents so that
they can repay the depositors.
(s) In such a situation, GR group represented by Raju Ghosh proposed that if three agents
become directors in the companies, they can hand over the properties.
(t) Thereafter, with the confirmation of all agents and with advice of Sujit Acharya, son-in-law
of Ratan Chowdhury, Sumanta Modak (relative of Ratan Chowdhury)and Kuntal
Bhattarcharya (brother in law of Ratan Chowdhury), three agents Gautam Kumar Halder,
Mohd. Kalimullah Baidya and Madhab Chandra Purkait became directors in a few
companies of the Bishal group.

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(u) Thereafter, on demand from depositors, Tushar Kanti Nandi, Santosh Paul and Swapan
Kumar Bose became directors on February 26, 2015 in order to repay the monies of the
investors. GR group then transferred the management to the agents and the related
document was annexed.
(v) Ratan Chowdhury assured the agents that he would arrange for funds for the depositors
and send them to the trustee board which was created to repay the depositors. Ratan
Chowdhury sent approximately Rs.60 lakh through RTGS. The same were paid to the
investors.
(w) Thereafter, Ratan Chowdhury and the GR Group had absconded. However, the agents
took initiative to trace them and a group led by Litan Saha, Santosh Kumar Paul, Swapan
Kumar Paul found the whereabouts of Ratan Chowdhury, who was arrested by the Police
in Nagpur and cash was seized.
(x) The agents are now homeless as they had collected huge money from the market and
money was deposited with the Company.
(y) The local depositors took possession of some of the assets as their deposits could not be
returned.
(z) The noticees were bound to become directors to save the lives of their family members
and to repay the monies of the investors. ID cards (proof of being agents) were enclosed.
(aa) The noticees filed copies of MoA and AoA and stated that they do not have the Annual
Accounts and that the same may be in the custody of Ratan Chowdhury or his relatives,
Smt. Shima Chowdhury, Kuntal Bhattacharjee or with the GR group personnel namely
Ram Kumar Singa, Himadri Bag or Sachin Kumar Thakur.
(bb)

The key person or mastermind of the Company was Ratan Chowdhury and besides

him there were Subhojit Saha (GourSaha) and Sumonta Modak.


(cc) All documents/deeds required by SEBI were lying with the past directors except for some
properties which were kept for selling and distributing the proceeds to the investors.
(dd)

The preference shares/debentures were allotted by the past directors and the

present directors never issued a single preference share nor collected a single rupee from
investors by issuing securities.

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(ee) The present directors became the directors of the Company as per request and decision of
agents in order to repay the investors.
(ff) The noticees assured to comply with directions of SEBI and wish that investors are
refunded as much as possible by selling the assets of the Company. They also requested
SEBI to allow them to operate their demat accounts which has no nexus with the Bishal
group.
(gg)They sought permission to file details of their personal assets and requested for another
opportunity of personal hearing.
The following documents were inter alia annexed with the written submissions:
(a) MoA and AoA;
(b) Certificate of incorporation of Company and certificate for commencement of business;
(c) ID cards of Md. Kalimullah Baidya, Santosh Kumar Paul, Gautam Halder and Tushar
Nandi;
(d) Agent allowance statement of Swapan Kumar Bose;
(e) News clippings regarding the Company;
(f) Agreement dated June 05, 2014 between Bishal Group of companies rep. by Kuntal
Bhattarcharya and GR Agro Projects Limited;
(g) Resolution of the BoD of the Company approving the aforesaid draft agreement.
11.

Mr. Ram Kumar Sinha, vide letter dated September 04, 2015 (received in SEBI on

September 30, 2015) through his Advocate Mr. Umesh Kumar Choubey, requested for another
date of hearing as he was not able to attend the previous hearing. This request was considered and
hearing was afforded on November 16, 2015. The hearing opportunity for Madhab Chandra
Purkait, Gautam Kumar Halder, Mohammad Kalimullah Baidya, Tushar Kanti Nandi, Santosh
Kumar Paul and Swapan Kumar Bose was also fixed on November 16, 2015. However, due to
administrative exigency, the hearings were rescheduled and fixed on November 23, 2015.

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12.

Thereafter, vide affidavit dated October 14, 2015, Mohd. Kallimullah Baidya submitted

copies of few documents/deeds stating that the same pertain to the properties of the Bishal group
and handed over to them by the GR group.
13.

In the hearing held on November 23, 2015, Mr. Umesh Kumar Choubey represented Mr.

Ram Kumar Sinha and requested for time as he was collecting documents. The request was
considered and liberty was granted to file documents and written submissions within a period of
45 days.
Mr. Kamal Das, Advocate appeared on behalf of Madhab Chandra Purkait, Gautam Kumar Halder,
Mohammad Kalimullah Baidya, Tushar Kanti Nandi, Santosh Kumar Paul and Swapan Kumar
Bose and filed further written submissions (signed by Mohd. Kalimullah Baidya for himself and on
behalf of aforesaid other 5 noticees). While reiterating the submissions in their previous written
submissions, it was further stated that Mr. Swapan Kumar Bose, Mr. Tushar Kanti Nandi and Mr.
Santosh Kumar Paul were in the custody of CID and referred to the properties of the Company
and stated that they have custody of original deeds of only few properties of the Company. They
stated that their intention is to dispose of the properties under supervision of Court or authority
or by themselves and use the proceeds to pay the investors. They requested that the deeds may be
retained by the Advocate as they fear that the same may be forcibly seized by the anti-social
elements. The noticees also requested SEBI to place an embargo on the sale of properties
pertaining to Ratan Chowdhury and his family members, Shima Chowdhury, Kuntal Bhattacharya,
Sumanta Modak, Sujit Acharya and Prabir Chowdhury. They further requested SEBI to pass orders
permitting the present directors to sell the properties under supervision and to refund the monies
to investors.
14.

Subsequently, Mr. Kamal Das, vide letter dated November 26, 2015, stated that he is

submitting copies of 13 property deeds which may relate to fresh properties or properties covered
under the deeds previously submitted with SEBI.
15.

Thereafter, Mr. Kamal Das, Advocate vide letter received in SEBI on January 08, 2016

referred to the previous hearings availed by him for his clients and stated that they have submitted

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list of 55 properties (SEBI observed that there were 53 deeds that were earlier submitted and were in Bengali)
and requested for permission to sell the properties to pay the investors. He further stated that few
of his clients were in jail along with Mr. Ratan Chowdhury, who wished to make submissions and
requested for hearing. As adequate opportunities of hearing were already afforded, the
Advocate/his clients were advised to furnish written submissions, if any. The Advocate was advised
to furnish written submissions, if any.
16.

Noticee, Mr. Ram Kumar Sinha, vide letter dated February 08, 2016 filed his written

submissions and inter alia submitted the following:


(a) He is alleged in the capacity of being a past director in the Company with respect to the
issuance of RPS to 3487 persons in the years 2006-07, 2007-08 and 2009-10.
(b) The charges levelled against him were frivolous and vague as he was a director for a period
of approx. 4.5 months i.e. from June 10, 2014 till October 24, 2014. He was neither a
director at the time of issuance of RPS nor at any time after his resignation.
(c) He was made an additional director on June 10, 2014. At the outset, the Company appeared
to be a decent company and he was not aware of the internal working of the Company.
(d) After joining, he realized that there was a very casual approach towards the work. He was
not satisfied with the working style and after working for approximately 5 months, he
tendered his resignation with effect from October 24, 2014.
(e) He was not related to the Company in any manner and was not associated with the
Company prior to his appointment.
(f) He was also not aware of the issuance of RPS during the years 2006-07, 2007-08 and 200910. Therefore, he is not able to furnish any documents related to the same.
(g) He had tried to contact the Company to furnish the details as sought in the interim order.
However, the efforts taken by him went in vain.
(h) He stated that he is not the person-in charge of and responsible to the Company for the
conduct of the business.
(i) He requested for inspection of documents on the basis of which SEBI had made allegations
and that he may make further submissions after the inspection.

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(j) He contended that he did not indulge in any manipulative activities directly or indirectly
and has not violated the provisions of law as alleged. He further stated that he is a bonafide
and genuine individual having no nexus with any activities of the Company after tendering
his resignation on October 24, 2014.
(k) The noticee requested SEBI to
i. Withdraw the interim order subject to any condition;
ii. Expunge his name from the proceedings; and
iii. Allow inspection of documents and to add/modify his submissions based
on such inspection.
iv. He requested for a personal hearing in New Delhi as he is residing and
working there.
17.

Thereafter, Mr. Kamal Das, Advocate, on behalf of his client Mr. Ratan Chowdhury, vide

letter received on May 07, 2016 read with letter dated May 02, 2016 inter alia made the following
common submissions in the instant matter and also in the matters of Bishal Abasan and Bishal
Distillers:
(a) He is under custody (under trial) in connection with various cases since the last 11 months.
Most of the present directors are arrested by C.I.D (EOW), West Bengal and by other
Police authorities. Most of them are released on bail and have decided to refund the money
collected from investors through the offer of RPS.
(b) Due to old age he had decided to retire from all the companies though he was the
promoting director of most of the companies.
(c) All complications were after his retirement.
(d) Bishal group is capable of refunding monies collected through the offer of RPS through
sale proceeds from properties.
(e) However, the problem was that whenever steps were taken to sell the properties, the local
investors used to gather and create pressure.
(f) They now wish to come out of the said problem by selling properties under the supervision
of Govt. authority or any Court.

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(g) They have also decided to appoint an arbitrator with the permission of the Honble High
Court of Calcutta. In this regard, two writ petitions are pending before the Honble High
Court.
(h) No money was collected from the public through any means after the present directors
were appointed. The present directors have also agreed to hand over the properties of the
Bishal group of companies to SEBI or to the Honble Court so that steps could be taken
for making refunds. These properties were handed over to the present management by the
GR Group (previous management).
(i) Though he had retired, his wish is that the investors should be repaid their monies.
The noticee also requested to send further notices to his Advocate, Mr. Kamal Das.
18.

Common Written submissions (received on May 12, 2016) were also filed by Mohd.

Kallimullah Baidya (through Mr. Kamal Das, Advocate) for himself and also on behalf of
Madhab Chandra Purkait, Gautam Kumar Halder, Tushar Kanti Nandi, Santosh Kumar
Paul and Swapan Kumar Bose in the present matter and in the maters of Bishal Abasan and
Bishal Distillers. These persons reiterated the submissions made by Ratan Chowdhury as
mentioned in the previous paragraph and stated that Bishal group of companies would be able to
refund the amounts raised through offer and issue of securities through the sale of properties
purchased by the companies. It was also stated that Bishal group of companies had purchased
properties and the noticees have submitted photocopies of property deeds (set of 55 deeds)
pertaining to the Bishal group.
19.

I have considered the interim order, the submissions made by the concerned noticees,

documents submitted by them and other material available on record. The interim order had alleged
that the Company, in pursuance of its fund mobilizing activity from the general public, had made
a public issue of RPS without complying with the provisions of sections 56, 60 and 73 of the
Companies Act, 1956 and the DIP Guidelines read with the ICDR Regulations. In this regard, the
following observations from the interim order are relevant:

Page 15 of 32

i.

BHAPL was incorporated on July 26, 2005, with CIN as U01409WB2005PLC104365. Its
Registered Office is at 56 Central Road, Jadavpur, Kolkata 700032, West Bengal, India.

ii.

The present Directors in BHAPL are Shri Madhab Chandra Purkait, Shri Gautam Kumar
Halder, Shri Mohd Kalimullah Baidya, Shri Tushar Kanti Nandi, Shri Santosh Kumar Paul and
Shri Swapan Kumar Bose.

iii. Shri Ram Kumar Sinha, Shri Sachin Kumar Thakur, Shri Sushant Kumar, Shri Chandan Shah,
Shri Ratan Chowdhury, Shri Sankar Bhattacharjee, Smt. Priti Rani Chowdhury and Smt. Shima
Chowdhury, who were earlier Directors in BHAPL, have since resigned.
iv. From the material on record, it is observed that BHAPL issued "NonConvertible Redeemable
Preference Shares" ("Offer of Redeemable Preference Shares") to investors during the
Financial Years 200607, 200708 and 200910, details of which are provided below
Type of Security

Year

No. of persons to whom Total Amount


preference shares were allotted ( in Crores)

Redeemable
Preference Shares

200607

600

0.58

200708

1663

1.46

200910

1224

0.80

3487

2.84

Total

20.

With the above factual information, which has not been disputed, it is to be considered

whether the Company made a public issue of RPS during the relevant period. In order to determine
whether an issue of securities is a 'public issue' or done on 'private placement', a reference to section
67(3) of the Companies Act, 1956 needs to be made:
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) ...

Page 16 of 32

(3) No offer or invitation shall be treated as made to the public by virtue of sub- section (1) or subsection (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).
21.

In terms of section 67(3), as amended by the Companies (Amendment) Act, 2000, with effect from

December 13, 2000, no offer or invitation shall be treated as made to the public by virtue of subsections (1) or (2), as the case may be, if the offer or invitation can properly be regarded, in all
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. More importantly, in terms of the first proviso to the aforesaid
section, the provisions of section 67(3) shall not apply in a case where the offer or invitation to
subscribe for shares or debentures is made to fifty persons or more. Therefore, the number of
subscribers becomes relevant to judge whether an issue of shares are for public or on a private
placement basis, in the light of the above said provision. Therefore, if an offer of securities are
made to fifty or more persons, it would be deemed to be a public issue. Non-Banking Financial
Companies (NBFCs) and Public Financial Institutions (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. The Company is not an NBFC or PFI.
22.

The Company had made an offer and issued RPS

Page 17 of 32

a. In FY 2006-2007 to 600 persons;


b. In 2007-2008 to 1663 persons;
c. In 2009-2010 to 1224 persons.
In aggregate, as per the interim order, the Company had issued RPS to 3487 persons during the
aforesaid period and raised Rs.2.84 crore. From the above, I hereby conclude that the Company
made a public issue of RPS in terms of first proviso to section 67(3) of the Companies Act, 1956.
23.

By making a public issue of RPSs, 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 regard, I note that in terms of section 55A of the
Companies Act, 1956, SEBI shall administer various provisions (as mentioned therein) of the said Act
with respect to issue and transfer of securities by listed companies, companies that intend to list
and also those companies that are required to list its securities while making offer and issue of
securities to the public. 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".
Under section 11A of the SEBI Act, SEBI is also empowered to regulate, by regulations/general
or special orders, the matters pertaining to issue of capital, transfer of securities and matters related
thereto. Accordingly, the Company, having made a public offer and issue of securities, as observed
above, is under the jurisdiction of SEBI.

Page 18 of 32

24.

The interim order has alleged that the Company failed to comply with sections 56, 60 and

73 of the Companies Act, 1956. In this regard, I observe the following:


a. 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/ issuing the 'prospectus'. There is no Prospectus issued by
the Company with respect to its offer of RPS. Accordingly, I find that the Company
has failed to comply with sections 56 and 60.
b. By making a public issue of RPS, the Company had to compulsorily list such
securities in compliance with section 73(1) of the Companies Act, 1956. 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. There is no material
to say that the Company has filed an application with a recognized stock exchange
to enable the RPSs to be dealt with in such stock exchange. Therefore, the
Company has failed to comply with this requirement.
c. 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

Page 19 of 32

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 securities, the
Company had to forthwith repay such money collected from investors, through
allotment of RPS and also those kept in the Companys possession pending
allotment. 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. The liability of the Company to refund the public funds
collected through offer and allotment of the impugned RPSs is continuing and such
liability would continue till repayments are made. There is no record to suggest that
the Company made the refunds as per law. Further, SEBI is in receipt of complaints
from investors alleging default by the Company in making repayments.
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."
In view of the above observations, I find that the Company has not complied with
the mandate under section 73(2) of the Companies Act, 1956.

Page 20 of 32

d. Section 73(3) states that - All moneys received as aforesaid shall be kept in a separate bank
account maintained with a Scheduled Bank 1 [until the permission has been granted, or where an
appeal has been preferred against the refusal to grant such. permission, until the disposal of the
appeal, and the money standing in such separate account shall, where the permission has not been
applied for as aforesaid or has not been granted, be repaid within the time and in the manner
specified in sub- section (2)]; and if default is made in complying with this sub- section, the
company, and every officer of the company who is in default, shall be punishable with fine which
may extend to fifty thousand rupees. . As found above, the Company had not applied
and obtained listing permission. The Company is therefore in non-compliance with
this provision also.
e. As the amounts mobilized through the issue of securities have not been refunded
within the time period as mandated under law, it would therefore be appropriate to
levy an interest @ 15% p.a. as provided for under section 73(2) of the Companies
Act, 1956 read with rule 4D (which prescribes that the rates of interest, for the purposes of
sub-sections (2) and (2A) of section 73, shall be 15 per cent per annum) of the Companies
(Central Governments) General Rules and Forms, 1956, on the amounts (i.e.
Rs.2.84 crore) raised by the Company through its offer and issuance of RPS
including preference share application money pending allotment collected by the
Company, due to be repaid by the Company. As stated above, the liability of the
Company to refund the public funds collected through offer and allotment of the
impugned RPSs is continuing and such liability would cease only if the repayments
are made in accordance with the relevant provisions of law.
25.

The Company had also failed to comply with the following provisions of the DIP

Guidelines read with regulation 111 of the ICDR Regulations:


a.
b.
c.
d.
e.

Clause 2.1.1. (Filing of offer document)


Clause 2.1.4 (Application for listing)
Clause 2.1.5 (Issue of securities in dematerialized form),
Clause 2.8 (Means of finance),
Clause 4.1 (Promoters contribution in a public issue by unlisted companies),

Page 21 of 32

f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
r.
s.
t.
u.
v.
w.
x.
y.
z.

26.

Clause 4.11 (Lock-in of minimum specified promoters contribution in public issues),


Clause 4.14 (Lock-In of pre-issue share capital of an unlisted company)
Clause 5.3.1 (Memorandum of understanding),
Clause 5.3.3 (Due Diligence Certificate)
Clause 5.3.5 (Undertaking),
Clause 5.3.6 (List Of Promoters Group And Other Details),
Clause 5.4 (Appointment of intermediaries)
Clause 5.6 (Offer document to be made public)
Clause 5.6A (Pre-issue Advertisement)
Clause 5.7 (Despatch of issue material)
Clause 5.8 (No complaints certificate)
Clause 5.9 [Mandatory collection centres including Clause 5.9.1 (Minimum number of collection centres)]
Clause 5.10 (Authorised Collection Agents)
Clause 5.12.1 (Appointment of compliance officer)
Clause 5.13 (Abridged prospectus)
Clause 6.0 (Contents of offer documents)
Clause 8.3 (Rule 19(2)(b) of SC(R) Rules, 1957)
Clause 8.8.1 (Opening & closing date of subscription of securities)
Clause 9 (Guidelines on advertisements by Issuer Company)
Clause 10.1 (Requirement of credit rating)
Clause 10.5 (Redemption)

In view of the above observations, I conclude that the Company made a public offer and

issued RPS during FYs2006-07, 2007-08 and 2009-10 without complying with the provisions of
sections 56, 60 and 73 of the Companies Act, 1956 and the DIP Guidelines read with the ICDR
Regulations and had mobilized funds to the tune of Rs.2.84 crore.
27.

I note that the interim order had passed prohibitory directions against Mr. Madhab Chandra

Purkait, Mr. Gautam Kumar Halder, Mr. Mohd Kalimullah Baidya, Mr. Tushar Kanti Nandi, Mr.
Santosh Kumar Paul, Mr. Swapan Kumar Bose, Mr. Ram Kumar Sinha, Mr. Sushant Kumar, Mr.
Sachin Kumar Thakur, Mr. Chandan Shah, Mr. Sankar Bhattacharjee, Smt. Priti Rani Chowdhury,
Mr. Ratan Chowdhury and Smt. Shima Chowdhury, who are said to be either the present or past
directors of the Company.

Page 22 of 32

The following table provides the period of directorship (source: Register of directors, managing directors
etc from RoC as on January 07, 2015 and Company master date from MCA website accessed on May 12,
2016) of the persons in the Company:
Noticee

Date
of
appointment
10.10.2014

Date of resignation if
any
Madhab Chandra Purkait
Continues,
present
director
Gautam Kumar Halder
10.10.2014
Continues,
present
director
Mohd Kalimullah Baidya
10.10.2014
Continues,
present
director
Santosh Kumar Paul
27.02.2015
Continues,
present
director
Swapan Kumar Bose
27.02.2015
Continues,
present
director
Tushar Kanti Nandi
27.02.2015
Continues,
present
director
Ram Kumar Sinha
10.06.2014
24.10.2014
Sushant Kumar
10.06.2014
10.12.2014
Sachin Kumar Thakur
10.06.2014
24.10.2014
Chandan Shah
24.12.2012
10.06.2014
Sankar Bhattacharjee
24.03.2014
10.06.2014
Priti Rani Chowdhury
26.07.2005
24.12.2012
Ratan Chowdhury
26.07.2005
18.02.2014
Shima Chowdhury
26.07.2005
24.12.2012
Sujit Acharjee*
19.07.2012
10.10.2013
Ajoy Paul*
09.10.2013
26.03.2014
Kuntal Bhattacharjee*
10.02.2014
26.03.2014
Sumanta Modak*
10.02.2014
10.06.2014
Litan Saha*
18.02.2014
26.03.2014
*past directors of the Company who were not covered in the interim order cum show cause notice
As per the details available in the MCA website accessed on May 12, 2016, Litan Saha, Madhab
Chandra Purkait, Gautam Kumar Halder, Mohd Kalimullah Baidya, Tushar Kanti Nandi, Santosh
Kumar Paul and Swapan Kumar Bose are the present directors in the Company.
In the light of the above facts, I observe the following:

Page 23 of 32

(i)

In terms of section 291 of the Companies Act, 1956, the board of directors of a
company shall be entitled to exercise all such powers and do all such acts and things as
the company is authorized to exercise and do. Therefore, the board of directors being
responsible for the conduct of the business of a company will be liable for any noncompliance of law and such liability shall be upon the individual directors also.

(ii)

With respect to the culpability of a director for breach of law by a company, I refer to
and rely on the following observations made by the Honble High Court of Madras in
Madhavan Nambiar vs Registrar Of Companies (2002 108 Comp Cas 1 Mad):
13. It may be that the petitioner may not be a whole-time director, but that does not mean
he is exonerated of the statutory obligations which are imposed under the Act and the rules
and he cannot contend that he is an ex officio director and, therefore, he cannot be held
responsible. There is substance in the contention advanced by Mr. Sridhar, learned counsel
since the petitioner a member of the Indian Administrative Service and in the cadre of
Secretary to Government when appointed as a director on the orders of the Government to a
Government company or a joint venture company, he is expected not only to discharge his
usual functions, but also take such diligent care as a director of the company as it is expected
of him not only to take care of the interest of the Government, but also to see that the company
complies with the provisions of the Companies Act and the rules framed thereunder. Therefore,
the second contention that the petitioner cannot be proceeded against at all as he is only a
nominee or appointed director by the State Government, cannot be sustained in law. A director
either full time or part time, either elected or appointed or nominated is bound to discharge the
functions of a director and should have taken all the diligent steps and taken care in the affairs
of the company.
14. 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.
15. Section 5 of the Companies Act defines the expression "officer who is in default". The expression
means either (a) the managing director or managing directors ; (b) the whole-time director or wholetime directors ; (c) the manager ; (d) the secretary ; (e) any person in accordance with whose directions
or instructions the board of directors of the company is accustomed to act; (f) any person charged by the
board with the responsibility of complying with that provision ; (g) any director or directors who may
be specified by the board in this behalf or where no director is so specified, all the directors.
16. Section 29 of the Companies Act provides the general power of the board and ...
Therefore it follows there cannot be a blanket direction or a blanket indemnity in favour of the petitioner
or other directors who have been nominated by the Government either ex officio or otherwise. Hence
the second point deserves to be answered against the petitioner.

Page 24 of 32

17. As regards the first contention, it is contended by Mr. Arvind P. Datar, learned senior counsel
appearing for the petitioner that the company or its board had resolved that Thiagaraj S. Chettiar
shall be the director in charge of the company of all its day-to-day affairs and, therefore, the petitioner,
an ex officio chairman and director, cannot be expected to attend to the affairs on a day-to-day basis.
This contention though attractive cannot be sustained as a whole. There may be a delegation, but
ultimately it comes before the board and it is the board and the general body of the company which are
responsible.

{Emphasis supplied}
(iii)

A person cannot assume the role of a director in a company in a casual manner. The
position of a director in a public company/listed company comes along with
responsibilities and compliances under law associated with such position, which have
to be fulfilled by such director or face the consequences for any violation or default
thereof.

(iv)

The Company has been found to have violated sections 56, 60 and 73 of the Companies
Act, 1956 and the DIP Guidelines with respect to its public offer and issue of RPS
during FYs 2006-07, 2007-08 and 2009-10.

(v)

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 noncompliance of issuing the prospectus as per the said section.

(vi)

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 NCDs 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

Page 25 of 32

Companys Board pursuant to the offer and allotment of securities shall also be liable
if the Company and the concerned directors have failed to make refunds as mandated
under law.
(vii)

The Company and its directors during the period when the offer and issue of RPS was
made are responsible for complying with the mandatory requirements under the DIP
Guidelines.

(viii)

In view of the above reasons and observations, noticees, Mr. Ratan Chowdhury, Smt.
Priti Rani Chowdhury and Smt. Shima Chowdhury are liable, as directors of the
Company during the period of offer and issue of RPS, for the violation of sections 56,
60 and 73 of the Companies Act, 1956 and the DIP Guidelines as found in this Order
and would also be liable to make refunds in terms of section 73(2) of the Companies
Act read with section 27 of the SEBI Act, as ordered herein. These noticees, despite
public notice and adequate opportunities have not filed their submissions.

(ix)

The other noticees having joined the Company after the offer and issuance was made
and therefore in view of the default in making refunds, were also under the statutory
liability to make refunds in terms of section 73(2) of the Companies Act read with
section 27 of the SEBI Act. These persons have not taken steps in this regard. Few of
the noticees (Madhab Chandra Purkait, Gautam Halder, Tushar Nandi, Santosh Paul
and Swapan Bose) have submitted that they were agents and became directors to ensure
payments to the investors. However, these submissions would not afford them any
concession or benefit with respect to their afore-stated liability. The purported taking
over of liabilities by GR Group would also not alter/absolve the liability of the noticees.
Chandan Shah had contended that he was appointed a director pursuant to the offer
of RPS and resigned within 6 months. However, as per the records of MCA/ROC, he
was a director from December 24, 2012 to June 10, 2014. Further, in view of the
observations made above, he too would be liable for making repayments and for

Page 26 of 32

consequential enforcement action. This noticee, himself, has produced documents with
respect to his appointment and resignation as a director in the Company.
The submissions of Ram Kumar Sinha are also considered. This noticee had admitted
that he was a director in the Company and submitted that he was present for a period
of around 3 months. The noticee has made a request for inspection vide his letter dated
February 08, 2016 and has stated that he may make further submissions pursuant to
the same. In this regard, I note that the interim order had provided the basis for alleging
that the Company made a public issue of RPS in violation of the provisions of the
Companies Act and SEBI rules/guidelines. Further, the interim order also mentioned
that this noticee was a past director. The noticee has been served with the copy of the
interim order and he has acknowledged receipt of the same. He has also admitted that
he was a director from 10.06.2014 to 24.10.2014 in the Company. The liability to make
repayments to investors, in case listing of securities issued in a public offer is not made
or is rejected, is under section 73 of the Companies Act, 1956. The noticee cannot plead
ignorance of law. The interim order has also advised the noticee to show cause as to
why he should not be directed inter alia to make refunds of the monies collected under
the offer and issue of RPS and prohibiting him from dealing in the securities/securities
market. Therefore, the noticee is already under notice regarding the alleged violations
and action contemplated if such violations are proved.
The noticee has also requested for an opportunity of further hearing. However, this
noticee has already been afforded an opportunity of personal hearing on November
23, 2015 when his representative had appeared. The noticee has also filed his
submissions in the matter. In view of the above, I consider that the requests for
inspection and further hearing made at this advanced stage of the proceedings is only
for delaying the proceedings. The noticee has submitted a copy of the purported
agreement between the Bishal group of companies and the Bishal Welfare Trust.
However, such documents cannot absolve Ram Kumar Sinha of the statutory

Page 27 of 32

responsibility and liability under section 73(2) of the Companies Act, 1956 and would
be liable for action for such default.
28.

I also note that Sujit Acharjee, Ajoy Paul, Kuntal Bhattacharjee, Sumanta Modak and Litan

Saha were the past directors of the Company, who were not covered in the interim order. Further,
Litan Saha is one of the present directors, having been re-appointed on April 27, 2015. These
persons allegedly were responsible to comply with section 73(2) of the Companies Act, 1956 read
with section 27 of the SEBI Act in making refunds to the investors. Few of the noticees have also
alleged that Kuntal Bhattacharjee, Sujit Acharjee, Sumanta Modak were also responsible for
the violations and unauthorized money collection. As the refunds are not made, SEBI is advised
to examine the role of the aforesaid persons and initiate appropriate action against them, in
accordance with law, including issuance of a show cause notice calling upon them to show cause
as to why, suitable directions including the following should not be imposed upon them:
a. directing them jointly and severally to refund the money collected through
the issue of RPS (as found to be unauthorisedly issued in this Order), along
with interest at 15% per annum from the date when the refunds became
due to the investors till the date of repayment;
b. directing them not to issue 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, for an
appropriate period;
c. directions restraining them from accessing the securities market and
prohibiting them from buying, selling or otherwise dealing in securities for
an appropriate period;
d. directing them and other companies in which they are directors/promoters
holding substantial or controlling interest, to not access the capital market
for an appropriate period.

Page 28 of 32

29.

In view of the foregoing, 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 and the ICDR Regulations, hereby issue the following directions:
(a) Bishal Horticulture and Animal Projects Limited, Mr. Madhab Chandra Purkait,
Mr. Gautam Kumar Halder, Mr. MohdKalimullahBaidya, Mr. Tushar Kanti Nandi,
Mr. Santosh Kumar Paul, Mr. Swapan Kumar Bose, Mr. Ram Kumar Sinha, Mr.
Sushant Kumar, Mr. Sachin Kumar Thakur, Mr. Chandan Shah, Mr. Sankar
Bhattacharjee, Smt. Priti Rani Chowdhury, Mr. Ratan Chowdhury and Smt. Shima
Chowdhury, 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 and its directors shall issue public notice, in all editions of two National
Dailies (one English and one Hindi) and in one local daily 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, the Company shall file a certificate of such
completion with SEBI, within a period of three months from the date of this Order, from

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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) Bishal Horticulture and Animal Projects Limited, Mr. Madhab Chandra Purkait,
Mr. Gautam Kumar Halder, Mr. MohdKalimullahBaidya, Mr. Tushar Kanti Nandi,
Mr. Santosh Kumar Paul, Mr. Swapan Kumar Bose, Mr. Ram Kumar Sinha, Mr.
Sushant Kumar, Mr. Sachin Kumar Thakur, Mr. Chandan Shah, Mr. Sankar
Bhattacharjee, Smt. Priti Rani Chowdhury, Mr. Ratan Chowdhury and Smt. Shima
Chowdhury 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 Bishal Horticulture and Animal Projects Limited, Mr. Madhab
Chandra Purkait, Mr. Gautam Kumar Halder, Mr. MohdKalimullahBaidya, Mr.
Tushar Kanti Nandi, Mr. Santosh Kumar Paul, Mr. Swapan Kumar Bose, Mr. Ram
Kumar Sinha, Mr. Sushant Kumar, Mr. Sachin Kumar Thakur, Mr. Chandan Shah,
Mr. Sankar Bhattacharjee, Smt. Priti Rani Chowdhury, Mr. Ratan Chowdhury and
Smt. Shima Chowdhuryin complying with the aforesaid directions, SEBI, on the expiry
of the three months period from the date of this order, i.

shall recover such amounts in accordance with section 28A of the SEBI Act
including such other provisions contained in securities laws.

ii.

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.

iii.

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

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iv.

would also make a reference to the Ministry of Corporate Affairs to initiate action
against the Company and directors as deemed fit.

v.

would also make a reference to the Ministry of Corporate Affairs to flag the names
of notice directors in its database so that information may be perused by RoC or
any other regulatory authority.

(h) Bishal Horticulture and Animal Projects 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) Mr.

Madhab

Chandra

Purkait,

Mr.

Gautam

Kumar

Halder,

Mr.

MohdKalimullahBaidya, Mr. Tushar Kanti Nandi, Mr. Santosh Kumar Paul, Mr.
Swapan Kumar Bose, Mr. Ram Kumar Sinha, Mr. Sushant Kumar, Mr. Sachin
Kumar Thakur, Mr. Chandan Shah, Mr. Sankar Bhattacharjee, Smt. Priti Rani
Chowdhury, Mr. Ratan Chowdhury and Smt. Shima Chowdhury 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 years from
the date of completion of refunds to investors, as directed above.
(j) The above directions shall come into force with immediate effect.

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30.

ThisOrder 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.
31.

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

for information and necessary action.


32.

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.
33.

As mentioned in paragraph 28, SEBI may examine the role of the concerned persons and

initiate action as appropriate under law.

Date: May 16th, 2016


Place: Mumbai

PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA

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