WTM/PS/35/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 Abasan India Limited (PAN: AADCB4465A),
its Directors, viz.

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. Himadri Bag (PAN: AJXPB3796L; DIN: 02729318),
10. Mr. Sachin Kumar Thakur (PAN: AJUPT3341C; DIN: 06560350),
11. Mr. Kuntal Bhattacharjee (PAN: AQMPB2700Q; DIN: 06584522),
12. Mr. Benukar Banerjee (PAN: BRMPB8677A; DIN: 06701788),
13. Mr. Chandan Shah (PAN: AVNPS3170R; DIN: 02093399),
14. Mr. Ratan Chowdhury (PAN: ADIPC9989M; DIN: 00360241) and
15. Smt. Shima Chowdhury (PAN: ADIPC9990N; DIN: 00360423)
and its Debenture Trustee, viz.

16. Bishal Abasan Debenture Trust (represented by its Trustee, viz. Mr. Tapas Das).

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Date of personal hearing: September 03, 2015

Appearance:
(a) Mr. Aniruddha Dasgupta, Advocate appeared for Chandan Shah.
(b) Benukar Banerjee appeared in-person.
(c) Tushar Kanti Nandi and Mohd. Kalimullah Baidya appeared through their Advocate Mr.
Kamal Das.
(d) Mr. Sumantra Sarathi Mahata appeared for Sachin Kumar Thakur and Himadri Bag.
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
Appearance: 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 Abasan India Limited (hereinafter referred to as "BAIL" 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 NonConvertible Debentures (NCDs) and had allegedly violated the provisions of sections 56, 60 read
with section 2(36), 73, 117B and 117C of the Companies Act, 1956 read with the Companies Act,
2013 and the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (ILDS

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Regulations). The interim order also alleged that the debenture trustee, Bishal Abasan
Debenture Trust, represented by its trustee, Mr. Tapas Das, had allegedly failed to meet the
eligibility conditions specified under regulation 7 of the SEBI (Debenture Trustees) Regulations,
1993 ("DT Regulations") and acted as an unregistered debenture trustee in violation of section
12(1) of the Securities and Exchange Board of India Act, 1992 (SEBI Act).
2.

In order to protect the 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.

BAIL (PAN: AADCB4465A) shall not mobilize funds from investors through the Offer of
Redeemable Preference Shares and Offer of NCDs or through the issuance of equity shares or any other
securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly
till further directions;
ii. BAIL 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;
iii. The past Directors of BAIL, viz. Shri Ram Kumar Sinha (PAN: APYPS1402F; DIN:
02460975), Shri Himadri Bag (PAN: AJXPB3796L; DIN: 02729318), Shri Sachin Kumar
Thakur (PAN: AJUPT3341C; DIN: 06560350), Shri KuntalBhattacharjee (PAN:
AQMPB2700Q; DIN: 06584522), Shri Benukar Banerjee (PAN: BRMPB8677A; DIN:
06701788), Shri Chandan Shah (PAN: AVNPS3170R; DIN: 02093399), 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;

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iv. BAIL 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;
v. BAIL shall provide a full inventory of all its assets and properties;
vi. BAIL's abovementioned past and present Directors shall provide a full inventory of all their assets
and properties;
vii. BAIL and its abovementioned present Directors shall not dispose of any of the properties or alienate
or encumber any of the assets owned/acquired by that company through the Offer of Redeemable
Preference Shares and Offer of NCDs, without prior permission from SEBI;
viii. BAIL and its abovementioned present Directors shall not divert any funds raised from public at large
through the Offer of Redeemable Preference Shares and Offer of NCDs, which are kept in bank
account(s) and/or in the custody of BAIL;
ix. BAIL 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;
x. The Debenture Trustee, viz. BishalAbasan Debenture Trust (represented by its Trustee, viz. Shri
Tapas Das), is prohibited from continuing with its assignment as debenture trustee in respect of the
Offer of NCDs of BAIL and also from taking up any new assignment or involvement in any new
issue of debentures, etc. in a similar capacity, from the date of this order till further directions.
3.

The interim order was 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. Himadri Bag, Mr. Sachin Kumar Thakur, Mr. Kuntal Bhattacharjee, Mr. Benukar
Banerjee, Mr. Chandan Shah, 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 and NCDs alongwith interest, if any, promised to investors therein;

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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 order had also advised the noticees to file their replies and also seek opportunity of
personal hearing, if they desire.
4.

The interim order was forwarded to the noticees vide SEBI letters dated May 08, 2015.

Interim order was delivered on Mohd Kalimullah Baidya, Tushar Kanti Nandi, Santosh Kumar
Paul, Ram Kumar Sinha, Benukar Banerjee, Chandan Shah and Tapas Das. However, interim order
sent to BAIL, Madhab Chandra Purkait, Gautam Kumar Halder, Swapan Kumar Bose, Himadri
Bag, Sachin Kumar Thakur, Kuntal Bhattacharjee, Ratan Chowdhury, Smt. Shima Chowdhury and
Bishal Abasan Debenture Trust were returned undelivered.
5.

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

the receipt of interim order submitted the following:

(a) He was appointed as a director in the Company during June 2013 whereas the impugned
offer and issue of RPS were made by the Company during FY 2011-12 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) With respect to the issuance of NCDs during FY 2012-2013 was concerned, the noticee
submitted that he was not present in the Company during such period and was not aware
of the issuance of NCDs during FY 2013-14.

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(e) He requested SEBI to absolve him from the charges and to set-aside the interim order.
6.

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
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.
7.

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 03, 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. In response to the hearing notice,

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Benukar Banerjee, Himadri Bag and Sachin Kumar Thakur informed that they would be present
in the personal hearing.
8.

In the personal hearing held on September 03, 2015

(a) Benukar Banerjee appeared in person and submitted written submissions dated
September 03, 2015 and made oral submissions on the lines of such written submissions.
The following were the submissions made in the written submissions:
i. He is a legal practitioner by profession.
ii. In the course of his practice, he was acquainted with Mr. Ratan Chowdhury
who was in need of an advocate having knowledge and experience in
investigation of marketable title of immovable properties, to prepare and
register conveyance deed for purchase and sale of properties on behalf of
companies of which he was the managing director. The noticee assured him
that he has the necessary knowledge and experience.
iii. Thereafter, he was entrusted the job related to purchase of premises.
iv. Apart from doing the said job, the noticee was to take up various other
matters namely investigation of title, preparation of sale deeds and various
other civil matters.
v. The noticee was called to the office of the company as and when his
services were required.
vi. The noticee was paid for his services against his bills.
vii. Considering the volume of work, Ratan Chowdhury requested the noticee
to attend office of the Company atleast for 2 hours every day for which a
letter to that effect was issued.
viii. Sometime in the month of January 2014, Ratan Chowdhury told the noticee
that for smooth running of the business, he intended to appoint the noticee
as a director in BAIL and Bishal Distillers Limited (another group
company) with effect from February 05, 2014. A letter dated February 07,
2014 was given as provisional appointment letter. He was informed that a
formal letter would be issued soon. However, such letter was never issued.

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ix. The noticee had tendered his resignation dated June 10, 2014 expressing
his inability to act as the director of the Company with immediate effect.
The resignation letter was accepted and duly acted upon with effect from
June 10, 2014.
x. The noticee did not have any opportunity or occasion to act as the director
of the Company and did not have any personal knowledge about the
dealings/activities of the Company.
The noticee had enclosed copies of his identity card, bills for his services,
provisional appointment letter and resignation letter and acceptance of the
resignation issued by the Company.
(b) Mr. Kamal Das, Advocate represented Tushar Kanti Nandi and Mohd. Kalimullah
Baidya and requested for adjournment. The request was not allowed. On request of the
counsel, time of two weeks was granted for filing written submissions.
(c) Mr. Sumantra Sarathi Mahata, Practising Company Secretary, appeared for Sachin Kumar
Thakur and Himadri Bag and sought time of two weeks for filing submissions. The
request was allowed.
(d) Mr. AniruddhaDasgupta, Advocate appeared on behalf of Chandan Shah and submitted
that his client had already submitted his resignation to the company and that the board
resolution accepting the resignation was available. On request, time was granted for filing
written submissions.
9.

Thereafter, vide letter dated September 08, 2015, Sachin Kumar Thakur inter alia made

the following submissions:

(a) The Company was incorporated on May 01, 2008.
(b) The Company registered its trust deed on January 21, 2012 signed by Ratan Chowdhury,
Shima Chowdhury and Priti Rani Chowdhury. It had permission to raise Rs.50 crore by
issuing NCDs.
(c) The Company had raised money from public by issuing NCDs.

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(d) After the Sahara dispute, it was clear that fund raising was illegal if not done through proper
compliance.
(e) After the Saradha incident, operations of companies who were mobilizing money from
public had stopped.
(f) In order to save themselves, the promoter directors who have siphoned off the funds have
resigned from the Company and appointed new people like this noticee who do not have
the basic knowledge of the rules.
(g) The noticee was an unemployed youth taken as a employee of the Company and were made
directors.
(h) Though he was promised remuneration by the Company, he was not paid. On advice from
a professional, he had resigned from all the companies in which he became a director.
(i) He is not a promoter director or a shareholder in the Company.
(j) He did not sign any papers of the Company.
(k) He did not receive any remuneration from the Company.
(l) He did not conduct meetings for raising funds from the public.
(m) He was a director from June 10, 2014 to October 24, 2014, i.e. for only 137 days. He has
worked as a mere employee.
(n) No proper board meetings were held in the Company. He does not know how much money
was mobilized by the Company.
(o) The promoters have not provided him annual accounts, balance sheet and other papers.
(p) The noticee requested that he may be discharged from the proceedings.
He had enclosed a document from the MCA supporting his tenure as a director in the
Company.
Noticee, Himadri Bag, vide his letter dated September 08, 2015 also made submissions as
that of Sachin Thakur.
10.

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 19, 2012 as Managing Director
in Professional category and filed his resignation with the Company on June 10, 2014.
(b) Resignation letter dated December 10, 2013 of the noticee.
11.

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 Bishal Horticulture and Animal
Projects Limited.
(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.

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(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
thought 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.
(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

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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 few companies
of the Bishal group.
(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

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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)

They key person or mastermind of the Company was Ratan Chowdhury and

besides him there were Subhojit Saha (Gour Saha) and Sumanta 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.
(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 wished 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:

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(a) ID cards of Md. Kalimullah Baidya, Santosh Kumar Paul, Gautam Halder and Tushar
Nandi;
(b) Agent allowance statement of Swapan Kumar Bose;
(c) News clippings regarding the Company/Bishal group;
(d) MoA and AoA;
(e) Certificate of incorporation of Company and certificate for commencement of business;
(f) Agreement dated June 05, 2014 between Bishal Group of companies represented by Kuntal
Bhattarcharya and GR Agro Projects Limited;
(g) Resolution of the BoD of the Company approving the aforesaid draft agreement.
(h) Form-1 application and declaration for incorporation of a company the initial directors
were Ratan Chowdhury including his family members.
(i) Form DIR-12appointment of Gautam Halder, Madhab Chandra Purkait, Mohd.
Kallimullah Baidya as directors in the Company on October 10, 2014 and Form DIR-12
appointment of Tushar Kanti Nandi, Santosh Kumar Paul and Swapan Kumar Bose as
directors in the Company on February 27, 2015.
12.

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.
13.

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

copies of a few documents/deeds stating that the same pertain to the properties of the Bishal group
and handed over to them by the GR group.
14.

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

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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, 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.
15.

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 (in addition to the
deeds submitted earlier to SEBI) or with respect to those deeds already submitted earlier. It was
noted by SEBI that the deeds/agreements forwarded earlier by the Advocate had copies of 53
deeds in Bengali.
16.

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
list of 55 properties 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. The Advocate was advised to furnish written
submissions, if any.

Page 15 of 37

17.

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 293 persons in the year 2011-12 and for the issue of NCDs in the years
2012-13 and 2013-14 by the Company.
(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 and NCDs as he was appointed during 201415. 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.
(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

Page 16 of 37

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.
18.

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 Horticulture 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.
(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

Page 17 of 37

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.
19.

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 Horticulture
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.
20.

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 and NCDs without complying with the provisions of sections 56, 60, 73,
117B and 117C of the Companies Act, 1956 and the ILDS Regulations. In this regard, the following
observations from the interim order are relevant:
i.

BAIL was incorporated on May 1, 2008, with CIN as U70100WB2008PLC125349. Its

Registered Office is at 3rd Floor, 56 Central Road, Jadavpur, Kolkata 700032, West Bengal,
India.

ii.

The present Directors in BAIL are Shri Madhab Chandra Purkait, Shri Gautam Kumar Halder,
Shri MohdKalimullahBaidya, Shri Tushar Kanti Nandi, Shri Santosh Kumar Paul and Shri
Swapan Kumar Bose.

Page 18 of 37

iii. Shri Ram Kumar Sinha, Shri Himadri Bag, Shri Sachin Kumar Thakur, Shri
KuntalBhattacharjee, Shri Benukar Banerjee, Shri Chandan Shah, Shri Ratan Chowdhury and
Smt. Shima Chowdhury, who were earlier Directors in BAIL, have since resigned.
iv. From the material on record, it is observed that BAIL issued "NonConvertible Redeemable
Preference Shares" ("Offer of Redeemable Preference Shares") to investors during the
Financial Year 201112, details of which are provided below
Type of Security

Year

No. of persons to whom Total Amount

preference shares were allotted (` in Crores)
293

Redeemable Preference 201112

Shares

v.

From the material on record, it is also noted that BAIL issued NonConvertible Debentures ("Offer
of NCDs") during the Financial Years 201213 and 201314, details of which are provided
below
Year

Type of Security

Number of Allottees

2012 13

NonConvertible Debentures

2013 14

Amount Raised
(` in Crores)

Details not available

0.87

Details not available

0.02

Total

21.

2.75

0.89

The above factual information has not been disputed. It is now to be considered whether

the Company made a public issue of RPSs and NCDs 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 19 of 37

(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).
22.

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.
23.

The Company had made an offer and issued

Page 20 of 37

(a) RPS during FY 2011-12 to 293 persons and had mobilized Rs.2.75 crore;
(b) NCDs duringi. FY 2012-13 and raised 0.87 crore; and
ii. FY 2013-14 and raised 0.02 crore.
In aggregate, as per the interim order, the Company had issued RPS and NCD and raised Rs.3.64
crore. Considering the number of persons to whom RPSs were issued i.e. 293 persons, it can be
concluded that the Company made a public issue of RPS during the relevant period in terms of
first proviso to section 67(3) of the Companies Act, 1956.
With respect to NCDs, though the number of investors are not available, the interim order has
observed Although details regarding the number of investors under the Offer of NCDs is not available for the
aforesaid Financial Years, nonetheless, the quantum of funds mobilized under the Offer of NCDs during the
aforesaid Financial Years (details provided in Table at paragraph 3(v) of page 4) when viewed in light of the amount
mobilized under the Offer of Redeemable Preference Shares during the Financial Year 201112 alongwith the
number of investors therein, would prima facie lead to the reasonable conclusion that such Offer was also a public
issue of securities, as prescribed under the first proviso to Section 67(3) of the Companies Act, 1956.. The
Company has not disputed this observation and has not provided complete information as sought
by SEBI vide letter dated October 09, 2014. The same is a breach of the direction issued vide the
interim order.
Considering the above and the conduct of the Company in issuing RPS to the public without
complying with the public issue norms, and the amounts mobilized through NCDs, I conclude that
the NCDs were also offered and issued in a public offer in terms of the first proviso to section 67(3)
of the Companies Act, 1956.
24.

By making a public issue of RPSs and NCDs, 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

Page 21 of 37

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.
25.

The interim order has alleged that the Company failed to comply with sections 56, 60, 73,

117B and 117C 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

Page 22 of 37

the Company with respect to its offer of RPSs and NCDs. Accordingly, I find that
the Company has failed to comply with sections 56 and 60.
b. By making a public issue of RPSs and NCDs, 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 securities 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
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 and NCDs 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

Page 23 of 37

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.
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.

Page 24 of 37

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.3.64 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 and NCDs is continuing and such liability would cease only if the
repayments are made in accordance with the relevant provisions of law.
f. Section 117B of the Companies Act, 1956, prescribes that no company shall issue
a prospectus or a letter of offer to the public for subscription of its debentures,
unless it has, before such issue, appointed one or more debenture trustees for such
debentures and the company has, on the face of the prospectus or the letter of
offer, stated that the debenture trustee or trustees have given their consent to the
company to be so appointed. The Company has admittedly not filed any
Prospectus. Therefore, the said provision has not been fully complied with.
Further, appointment of debenture trustee shall be in terms of all applicable law.
Further, section 117C stipulates that, where a company issues debentures, it shall
create a debenture redemption reserve for the redemption of such debentures, to
which adequate amounts shall be credited, from out of its profits every year until
such debentures are redeemed. There is no record to suggest that this provision
was complied with.
(i)

As NCDs are debt securities in terms of the ILDS Regulations, the Company was
also mandated to comply with the provisions of the ILDS Regulations in respect of

Page 25 of 37

its public issue of NCDs. However, the Company failed to comply with the following
provisions of the ILDS Regulations.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(q)
26.

Regulation 4(2)(a) Application for listing of debt securities

Regulation 4(2)(b) In-principle approval for listing of debt securities
Regulation 4(2)(c) Credit rating has been obtained
Regulation 4(2)(d) Dematerialization of debt securities
Regulation 4(4) Appointment of Debenture Trustee
Regulation 5(2)(b) Disclosure requirements in the Offer Document
Regulation 6 Filing of draft Offer Document
Regulation 7 Mode of disclosure of Offer Document
Regulation 8 Advertisements for Public Issues
Regulation 9 Abridged Prospectus and application forms
Regulation 12 Minimum subscription
Regulation 14 Prohibition of mis-statements in the Offer Document
Regulation 15 Trust Deed
Regulation 16 Debenture Redemption Reserve
Regulation 17 Creation of security
Regulation 19 Mandatory Listing
Regulation 26 Obligations of the Issuer, etc.

From the foregoing, I conclude that the Company failed to comply with the requirements

mandated under sections 56, 60, 73 of the Companies Act, 1956 in respect of its offer and issue of
RPSs and NCDs and the provisions of 117B and 117C of the Companies Act, 1956 and the
aforesaid provisions of the ILDS Regulations, in respect of its offer and issuance of NCDs as
discussed in this Order and mobilized Rs.3.64 crore (RPSs for Rs.2.75 crore and NCDs for 0.89
crore). The Company therefore becomes liable for suitable action under the Companies Act, 1956,
the SEBI Act and the ILDS Regulations.
27.

I note that the interim order had passed prohibitory directions against the Companys 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. Himadri Bag, Mr. Sachin Kumar Thakur, Mr. Kuntal

Page 26 of 37

Bhattacharjee, Mr. Benukar Banerjee, Mr. Chandan Shah, Mr. Ratan Chowdhury and Smt. Shima
Chowdhury, who are said to be either the present or past directors of the Company.
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 aforesaid persons in the Company:
Noticee

Date
appointment
10.10.2014

of

Madhab Chandra
Purkait
Gautam
Kumar
10.10.2014
Halder
Mohd Kalimullah
10.10.2014
Baidya
Tushar
Kanti
27.02.2015
Nandi
Santosh
Kumar
27.02.2015
Paul
Swapan
Kumar
27.02.2015
Bose
Ram Kumar Sinha
10.06.2014
Himadri Bag
10.06.2014
Sachin
Kumar
10.06.2014
Thakur
Kuntal
10.02.2014
Bhattacharjee
Benukar Banerjee
30.09.2013
Chandan Shah
19.12.2012
Ratan Chowdhury
01.05.2008
Shima Chowdhury
01.05.2008
Priti
Rani
01.05.2008
Chowdhury*
Prabir Chowdhury*
01.06.2012
Sujit Acharjee*
01.06.2012
Ajoy Paul*
09.10.2013
Litan Saha*#
18.02.2014
*persons not covered under the interim order

Date
of
resignation if any
Continues, present
director
Continues, present
director
Continues, present
director
Continues, present
director
Continues, present
director
Continues, present
director
24.10.2014
24.10.2014
24.10.2014
10.06.2014
10.06.2014
10.06.2014
18.02.2014
19.12.2012
19.12.2012
19.12.2012
10.10.2013
26.03.2014
26.03.2014

# Litan Saha is one of the present directors in the Company, re-appointed on April 27, 2015
In the light of the above facts, I observe the following:

Page 27 of 37

(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 shall
be responsible for the conduct of the business of a company and 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 28 of 37

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, 73, 117B and 117C of
the Companies Act, 1956 and the ILDS Regulations in respect of its public offer and
issue of RPSs and NCDs during the relevant period as discussed in this Order.

(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

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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 ILDS
Regulations.

(viii)

In view of the above reasons and observations, noticees, Mr. Ratan 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 ILDS Regulations 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 as 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 19, 2012 to June 10, 2014. This noticee,
himself, has produced documents with respect to his appointment and resignation as a
director in the Company. It is important to note that as per Form No. DIR-11 (notice

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of resignation of a director to the Registrar), Chandan Shah was appointed on

December 19, 2012 as Managing Director of the Company. Therefore, in view of the
observations made above, he too would be liable for making repayments and for
consequential enforcement action for default.
Benukar Banerjee had represented that he was assisting the Company/Ratan
Chowdhury in the investigation of title of immovable properties and preparation of
deeds for purchase and sale. He had admitted that he was made a director in the
Company. He has not resisted such appointment. Therefore, in view of the
observations made in the paragraphs above, I find him liable for the allotments of
NCDs during FY 2013-14 in contravention of law and for default in making refunds.
Ram Kumar Sinha has not disputed his tenure as a director in the Company. He had
requested for availing inspection and stated that he may make further submissions
pursuant to the same. This request was not made in his first reply and is made only
after the personal hearing. The interim order had provided the basis for alleging that
the Company made a public issue of RPS. Further, this noticee has been stated to be
a past director. This noticee, himself, has admitted that he was a director from
10.06.2014 to 24.10.2014 in the Company. Further, the liability to make repayment 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 NCDs and prohibiting him from dealing in the securities/securities
market. In view of the above, I find that these requests of the noticee is for delaying
the proceedings. He has submitted a copy of the purported agreement between the
Bishal group of companies and the Bishal Welfare Trust. However, such documents
cannot absolve this noticee of the statutory responsibility and liability under section
73(2) of the Companies Act, 1956 and action for such default.

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Himadri Bag and Sachin Kumar Thakur have submitted that they were mere
employees and were made directors in a fraudulent manner. They have also submitted
that they were director only for few days i.e. from 10.06.2014 to 24.10.2014. They
would also be liable as records indicate that they were directors. However, they may
take steps available under law regarding their claim that they were fraudulently
appointed as directors in the Company.
28.

I also note that Litan Saha is a present director having been appointed on April 27, 2015.

He was in the board of directors earlier also. Further, Priti Rani Chowdhury, Prabir Chowdhury,
Sujit Acharjee and Ajoy Paul are the past directors. These persons allegedly were responsible to
comply with the public issue norms including 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 Sujit Acharjee and the Chowdhury family were responsible for the violations and
unauthorized money collection. 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;

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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.
29.

The interim order has alleged that Bishal Abasan Debenture Trust represented by its

trustee Mr. Tapas Das has acted as a debenture trustee without registration from SEBI as
required under section 12(1) of the SEBI Act and has also not satisfied the eligibility condition
stipulated under regulation 7 of the DT Regulations. The debenture trust/its trustee have not filed
any submissions despite affording adequate opportunity. I note that the Trust/Tapas Das are not
registered with SEBI to perform the functions of a debenture trustee in the capital market.
Further, they do not satisfy the following conditions under regulation 7 of the DT Regulations:
"no person should act as a debenture trustee unless he is either
i. a scheduled bank carrying on commercial activity; or
ii. a public financial institution within the meaning of section 4A of the Companies Act, 1956; or
iii. an insurance company; or
iv. body corporate."
Accordingly, Bishal Abasan Debenture Trust represented by its trustee Mr. Tapas Dasis
found to have violated section 12(1) of the SEBI Act and regulation 7 of the DT Regulations. In
view of these observations, it can be said that the provisions of section 117B of the Companies
Act, 1956 have not been completely complied with.
30.

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 regulation 28 of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008,
hereby issue the following directions:
(a) Bishal Abasan India Limited, 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. Himadri Bag,
Mr. Sachin Kumar Thakur, Mr. Kuntal Bhattacharjee, Mr. Benukar Banerjee, Mr.

Page 33 of 37

Chandan Shah, 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 and Non-Convertible Debentures (which have been found to
be issued in contravention of the public issue norms stipulated under the Companies Act, 1956 and SEBI
regulations), 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
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 Abasan India Limited, 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. Himadri Bag, Mr.
Sachin Kumar Thakur, Mr. Kuntal Bhattacharjee, Mr. Benukar Banerjee, Mr.

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Chandan Shah, 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 Abasan India Limited, 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.
Himadri Bag, Mr. Sachin Kumar Thakur, Mr. Kuntal Bhattacharjee, Mr. Benukar
Banerjee, Mr. Chandan Shah, Mr. Ratan Chowdhury and Smt. Shima Chowdhury
in 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

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 Abasan 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

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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. Mohd Kalimullah
Baidya, Mr. Tushar Kanti Nandi, Mr. Santosh Kumar Paul, Mr. Swapan Kumar
Bose, Mr. Ram Kumar Sinha, Mr. Himadri Bag, Mr. Sachin Kumar Thakur, Mr.
Kuntal Bhattacharjee, Mr. Benukar Banerjee, Mr. Chandan Shah, 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) For the violations (i.e. acted as debenture trustee when they were not eligible to act as debenture trustees
and acted so without registration from SEBI) committed by Bishal Abasan Debenture Trust
represented by its trustee Mr. Tapas Das, they are hereby restrained from acting as an
intermediary, accessing the securities market and further restrained from buying, selling or
dealing in securities, in any manner whatsoever, for a period of 4 years.
(k) The above directions shall come into force with immediate effect.
31.

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.
32.

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

for information and necessary action.

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33.

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.
34.

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

initiate action as appropriate under law.

PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA

Date: May 16th, 2016

Place: Mumbai

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