WTM/PS/64/IMD/ERO/OCT/2015

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA

CORAM: PRASHANT SARAN, WHOLE TIME MEMBER
ORDER
Under sections 11(1), 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992.
In respect of
1. Suraksha Agrotech Industries Limited (CIN- U01400WB2008PLC130787; PANAAMCS7720G),
2. Mr. Ranjit Daspattanayak (DIN - 02821903; PAN - AKDPD9098A),
3. Mr. Barun Kumar Nandi (DIN - 00566937; PAN - ABFPN4182J),
4. Mr. Indranil Das (DIN- 00566904; PAN -AFTPD7822F),
5. Mr. Arunabha Mukhopadhyay (DIN-00566929; PAN- AEYPM2888J),
6. Mr. Akhil Chandra Saha (DIN-02243929; PAN- AQMPS4454N), and
7. Mr. Subrata Das (DIN-02262940; PAN-AJEPD3008L).

1.

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

parte Order dated December 29, 2014 (hereinafter referred to as "the interim order") had observed that
the company, Suraksha Agrotech Industries Limited (hereinafter referred to as "the Company") is
prima facie engaged in fund mobilising activity from the public, by making offer and issuing Redeemable
Preference Shares (hereinafter referred to as "RPS") and had allegedly violated the provisions of sections
56, 60 read with section 2(36), 73 of the Companies Act, 1956 read with Section 465 of the Companies
Act, 2013 and the SEBI (Disclosure and Investor Protection) Guidelines, 2000 (the DIP Guidelines
since rescinded) read with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the
ICDR Regulations). 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:

Page 1 of 20

17. In view of the foregoing, I, in exercise of powers conferred upon me under Sections 11(1), 11 (4), 11A and 11B
of the SEBI Act and Clause 17 of the DIP Guidelines read with Regulation 111 of the ICDR Regulations,2009,
hereby issue the following directions:
a) SURAKSHA AGROTECH shall not mobilize any further funds from investors through the issue of RPS or
through the issue of equity shares or any other securities, to the public and/or invite subscription, in any manner
whatsoever, either directly or indirectly till further orders;
b) SURAKSHA AGROTECH (CIN- U01400WB2008PLC130787; PAN- AAMCS7720G) and its
past and present Directors viz. Shri Ranjit Daspattanayak (DIN - 02821903; PAN - AKDPD9098A),
Shri Barun Kumar Nandi (DIN - 00566937; PAN - ABFPN4182J), Shri Indranil Das (DIN00566904; PAN -AFTPD7822F), Shri Arunabha Mukhopadhyay (DIN-00566929; PANAEYPM2888J), Shri Akhil Chandra Saha (DIN-02243929; PAN- AQMPS4454N), and Shri Subrata
Das (DIN-02262940; PAN-AJEPD3008L) are prohibited from issuing prospectus or any offer document or
issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either
directly or indirectly, till further orders;
c) SURAKSHA AGROTECH and its abovementioned Directors are restrained from accessing the securities
market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or
indirectly, till further directions;
d) SURAKSHA AGROTECH and its Directors shall provide a full inventory of all its assets and properties;
e) SURAKSHA AGROTECH and its Directors shall not dispose of any of the properties or alienate or encumber
any of the assets owned/acquired by that company through the issue of RPS, without prior permission from SEBI;
f)

SURAKSHA AGROTECH and its Directors shall not divert any funds raised from the public at large through
the issue of RPS, which are kept in bank account(s) and/or in the custody of SURAKSHA AGROTECH;

g) SURAKSHA AGROTECH and its Directors shall, within 21 days from the date of receipt of this Order,
provide SEBI with all relevant and necessary information, as sought vide SEBI letters dated July 26, 2013 and
February 05, 2014.

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2.

The interim order was issued without prejudice to the right of SEBI to take any other action that

may be initiated against the Company and its directors in accordance with law. The interim order
observed that the prima facie observations made therein were on the basis of material available on record
i.e. the complaint received by SEBI, the correspondence between SEBI and the Company and the
information obtained from the 'MCA 21 Portal', and advised the Company and its directors that they may
file their response within a period of 21 days and to inform whether they desire an opportunity of personal
hearing in the matter.
3.

The Company, vide its letter dated January 18, 2015, inter alia submitted that as per the ruling of

the Honble Supreme Court in the matter of Sahara India Real Estate Corporation Limited, the company
therein was permitted to dispose off their properties and assets and made payments to the investors. The
Company requested SEBI to dispose off its properties/assets for making payment to the investors. The
Company submitted that it has already started making payments to the investors and that it can submit
documentary evidence of payments made to investors. Regarding submission of Annual Accounts and
Balance Sheet for 2012-2013 and 2013-2014, the Company informed that the same would be sent at the
earliest. The Company queried whether it should approach the Calcutta Stock Exchange (CSE) for
listing of its shares.
4.

One of the noticees, Mr. Akhil Chandra Saha, vide his undated letter (received in SEBI on

January 12, 2015) inter alia submitted that

(a) He was associated with a leading public sector insurance company for over 27 years and
relinquished office in 2005.
(b) In the year 2007, he was approached by Late P.C. Das and Mr. Arunabha Mukhopadhyay of
Suraksha Family Services to promote mediclaim insurance and became associated with them for
the said assignment. In view of the then prevailing IRDA regulations, the promotion of mediclaim
insurance was discontinued.
(c) Thereafter, Mr. Arunabha Mukhopadhyay, the Managing Director of the Company advised the
noticee to take care and oversee their dairy projects. The noticee took initiative in holding
discussions with the Govt. of West Bengal for taking over their dairy plants located at Purulia
and Haringhata on long term lease basis. Under this pretext, the Managing Director invited the

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noticee to join the Board as Independent Director of the Company and look after the dairy and
agricultural projects undertaken by the Company.
(d) The noticee had no role in the day to day functioning including financial matters and the same
were looked after by Mr. Indranil Das (Whole Time Director) and Mr. Arunabha Mukhopadhyay.
(e) When the noticee observed that there was no financial discipline in the organization, he submitted
his resignation on May 06, 2013 (copy was enclosed).
(f) To his utter surprise, he observed that the Company had re-inducted him to the Board of
Directors on August 05, 2013 without obtaining his consent and forging his signature. The
noticee had formally lodged a complaint with the Company and the RoC.
(g) The noticee was totally unaware of any mischievous fund raising activity by the Company. He
was told to sign by Arunabha Mukhopadhyay in certain papers prepared and checked by other
directors and that in full faith had signed such papers.
(h) He was solely looking after the dairy and agro projects of the Company and was inducted on the
Board only because of his agri background. He is an ex-public servant and a citizen of good
social standing. The noticee requested for a personal hearing.
5.

As it was noticed that the interim order was not served on few noticees, SEBI made a public

notice dated March 31, 2015 in the newspapers (in Times of India dated April 15, 2015 and Ananda Bazar
Patrika dated April 14, 2015) regarding the proceedings against the Company and its directors initiated
vide the interim order. The newspaper notice also mentioned that another opportunity of personal
hearing was afforded to the noticees on April 22, 2015 in Kolkata. The noticees were advised that in case
they fail to appear before SEBI on the aforesaid date, then the matter would be proceeded ex-parte on
the basis of material on record. SEBI also sent notices informing the schedule of personal hearing.
6.

On April 22, 2015, i.e. the date of personal hearing (a) Noticee, Ranjit Das Pattanayak, appeared and filed his letter dated April 20, 2015 enclosing
copies of Form-32 and resignation letter dated August 18, 2010. Vide this letter, the noticee
submitted that he was associated with the Company for 7 months from January 2010 to August
2010 and hardly knew anything that they were working as a share trading and corporate agent of
Birla Sun Life. The noticee tendered his resignation on August 18, 2010, however, the Company

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sent Form-32 to RoC only on September 01, 2010. He stated I shall be obliged to delete my name as
a director from the above company considering the fact stated above.
(b) Noticee, Barun Kumar Nandi appeared and filed his letter dated April 21, 2015 enclosing copies
of his resignation letter and Form-32. The noticee submitted that he has no connection with the
above stated company since March 2009 as he had resigned. However, the Company accepted
his resignation only after a year of his resignation. The noticee had not taken any remuneration,
perks or any financial benefit from the Company as a director. The noticee alleged that his name
was used only as a director of the Company. He did not attend any Board meetings/EGMs. He
had accepted to be a director due to his friendship with Late Paresh Chandra Das, father of
Indranil Das (Director). The noticee had resigned after the death of Mr. Paresh Chandra Das.
The noticee has also enclosed copies of his letters addressed to the Company regarding his
resignation.
(c) Noticee, Akhil Chandra Saha, a director, appeared and reiterated his earlier submissions and
filed further documents. He enclosed copies of his resignation letters one dated May 06, 2013
said to be drafted by himself and another letter dated July 01, 2013 said to be drafted by the
Managing Director of the Company. The letter said to be drafted by the noticee himself alleged
that there was no transparency, suspicious mode of transaction of business of Company, misuse
of public money etc. as the reasons for resigning from the Company. The letter said to be drafted
by the M.D. does not contain these allegations.
(d) The Company was represented by Lt. Col. (Rtd.) T. K. Chattopadhyay and filed letter dated April
21, 2015 and copy of Balance Sheet for 2012-2013. Vide letter dated April 21, 2015, the Company
inter alia submitted that it has paid Rs.5,49,97,418/- till date, which was nearly 50% of the total
amount of Rs.11,45,97,600/-. Copy of Companys letter dated January 18, 2015 and Balance sheet
for 2012-2013 were also submitted.
(e) The other noticees/directors - Indranil Das, Arunabha Mukhopadhyay and Subrata Das, did not
appear in the personal hearing.

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7.

I have considered the interim order cum SCN, the submissions and documents submitted by the

aforesaid noticees and other material on record. The interim order has alleged that the Company did not
comply with the public issue norms mandated under the Companies Act, 1956 and the DIP Guidelines
in respect of the issue of Redeemable Preference Shares (RPS) issued by the Company during 2009-2010,
2010-2011 and 2011-2012. As per the interim order, the Company had issued and allotted RPSs to 13612
persons/investors and raised Rs.11,45,97,600/- during the aforesaid years. The Company has not
disputed the allegations and has merely stated that it has already commenced making the refunds. The
details of allotment such as number of allottees and amount raised etc. as noted from Form 2 (Form for
Return of Allotment filed by the Company with RoC) obtained from 'MCA21 portal' are as under:
Year

Date of
allotment

Type of Security

No of
securities

01/04/2009

Preference shares
of Rs. 10/ with
premium Rs. 40/-Do-Do-Do-Do-Do-Do-Do-Do-Do-Do-Do-

32420

No. of persons
to whom
issued(approx)
125

5200
30590
39930
35965
48110
43292
34150
72313
48738
52330
53044
496082

7
158
193
193
217
221
221
372
253
269
305
2534

30/04/2009
02/05/2009
01/06/2009
01/07/2009
2009-10
01/08/2009
01/09/2009
01/10/2009
01/11/2009
01/12/2009
01/01/2010
01/02/2010
Total in 2009-10
Year

Date of
allotment

Type of Security

No of
securities

01/04/2010

Preference shares
of Rs. 10/ with
premium Rs. 40/-Do-Do-Do-Do-

109078

No. of persons
to whom
issued(approx)
561

58864
79024
96751
108374

331
432
547
590

02/05/2010
01/06/2010
01/07/2010
01/08/2010

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Total Amount
(Rs)
16,21,000.00
2,60,000.00
15,29,500.00
19,96,500.00
17,98,250.00
24,05,500.00
21,64,600.00
17,07,500.00
36,15,650.00
24,36,900.00
26,16,500.00
26,52,200.00
2,48,04,100.00
Total Amount
(Rs)
54,53,900.00
29,43,200.00
39,51,200.00
48,37,550.00
54,18,700.00

01/09/2010
01/10/2010
2010-11
01/11/2010
01/12/2010
01/01/2011
01/02/2011
Total in 2010-11
01/04/2011
02/05/2011
2011-12
01/06/2011
11/08/2011
Total in 2011-12
Grand Total

8.

-Do-Do-Do-Do-Do-Do-Do-Do-Do-Do-

108834
118812
144702
104840
101355
90852
1121486
208286
128574
124605
212919
674384
2291952

590
639
843
701
675
523
6432
1994
877
773
1002
4646
13612

54,41,700.00
59,40,600.00
72,35,100.00
52,42,000.00
50,67,750.00
45,42,600.00
5,60,74,300.00
1,04,14,300.00
64,28,700.00
62,30,250.00
1,06,45,950.00
3,37,19,200.00
11,45,97,600.00

In order to ascertain whether the issue of RPS made by the Company, as mentioned above, was

a public issue as alleged in the interim order, it is necessary to refer to section 67(3) of the Companies
Act, 1956:
67. (1) Any reference in this Act or in the articles of a company to offering shares or debentures to the public
shall, subject to any provision to the contrary contained in this Act and subject also to the provisions of subsections (3) and (4), be construed as including a reference to offering them to any section of the public, whether
selected as members or debenture holders of the company concerned or as clients of the person issuing the
prospectus or in any other manner.
(2) ...
(3) No offer or invitation shall be treated as made to the public by virtue of sub- section (1) or sub- section
(2), as the case may be, if the offer or invitation can properly be regarded, in all the circumstances(a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for
subscription or purchase by persons other than those receiving the offer or invitation; or
(b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation
Provided that nothing contained in this sub-section shall apply in a case where the offer or invitation to
subscribe for shares or debentures is made to fifty persons or more:
Provided further that nothing contained in the first proviso shall apply to non-banking financial
companies or public financial institutions specified in section 4A of the Companies Act, 1956 (1 of 1956).
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 sub-sections (1) or (2), as
the case may be, if the offer or invitation can properly be regarded, in all circumstances (a) as not being

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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.
9.

The Hon'ble Supreme Court of India in the matter of Sahara India Real Estate Corporation

Limited & Others vs. SEBI and another (Civil Appeal Nos. 9813 and 9833 of 2011 ; decided on
August 31, 2012) ("the Sahara case") had inter alia held that "Section 67(1) deals with the offer of shares and debentures to the public and Section 67(2) deals with
invitation to the public to subscribe for shares and debentures and how those expressions are to be understood,
when reference is made to the Act or in the articles of a company. The emphasis in Section 67(1) and (2) is
on the section of the public. Section 67(3) states that no offer or invitation shall be treated as made to the
public, by virtue of subsections (1) and (2), that is to any section of the public, if the offer or invitation is 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 otherwise as being a domestic concern
of the persons making and receiving the offer or invitations. Section 67(3) is, therefore, an exception to Sections
67(1) and (2). If the circumstances mentioned in clauses (1) and (b) of Section 67(3) are satisfied, then the
offer/invitation would not be treated as being made to the public.
The first proviso to Section 67(3) was inserted by the Companies (Amendment) Act, 2000 w.e.f.
13.12.2000, which clearly indicates, nothing contained in Sub-section (3) of Section 67 shall apply in a case
where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more.
Resultantly, if an offer of securities is made to fifty or more persons, it would be deemed to be a public issue,
even if it is of domestic concern or proved that the shares or debentures are not available for subscription or
purchase by persons other than those received the offer or invitation.
I may, therefore, indicate, subject to what has been stated above, in India that any share or debenture issue
beyond forty nine persons, would be a public issue attracting all the relevant provisions of the SEBI Act,
regulations framed thereunder, the Companies Act, pertaining to the public issue. "
{Emphasis supplied}

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10.

In the present matter, it is noted that the Company has made multiple allotments on a monthly

basis during the financial years 2009-2010, 2010-2011 and 2011-2012. It can be seen that on every
allotment (excluding the solitary allotment made on 30.04.2009), the number of persons to whom RPS
were allotted always exceeded 49. The Company is not an NBFC or a Public Financial Institution within
the meaning of Section 4A of the Companies Act, 1956 to be covered under the second proviso to section
67(3) of the Companies Act, 1956. Therefore, considering the number of persons from whom monies
were mobilized by the Company by issuing RPSs, which is definitely more than 49 persons, it can be
concluded that the Company had made a public issue of RPS in terms of the first proviso to section 67(3)
of the Companies Act, 1956. Further, the manner of making such offer and issuance of RPS adopted by
the Company (i.e., series of allotments made consistently every month) can be definitely held to be a ploy
employed by the Company to circumvent the provisions of the first proviso to section 67(3) of the
Companies Act, 1956.
11.

By making a public issue of RPS, as discussed above, the Company was mandated to comply with

all the legal provisions that govern and regulate public issue of such securities, including the Companies
Act, 1956 and the SEBI Act and regulations. In this context, I refer and rely on the below mentioned
observation made by the Hon'ble Supreme Court of India in the matter of Sahara:
... ... that any share or debenture issue beyond forty nine persons, would be a public issue attracting all the relevant provisions
of the SEBI Act, regulations framed thereunder, the Companies Act, pertaining to the public issue. "
12.

In view of the above observations, by virtue of section 55A(a) and (b), the SEBI has jurisdiction

and would govern the issue of RPS as the same was made to more than 49 persons. As alleged in the
SEBI Order, the Company was mandated to comply with the provisions of sections 56, 60 and 73 of the
Companies Act, 1956 read with Companies Act, 2013 and the DIP Guidelines read with the ICDR
Regulations, in respect of its offer and issue of RPS. The Company has not disputed these allegations.
In this regard, I note that (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

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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'. The Company has contravened the above
provisions.
(b) By issuing RPS to more than 49 persons, 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.
The Company has not disputed that this allegation is incorrect. Further, there is no material to
say that the Company has filed an application with a recognized stock exchange to enable the
RPS to be dealt with in such exchange. Therefore, the Company has failed to comply with this
requirement.
Section 73(2) states that "Where the permission has not been applied under subsection (1) or such permission
having been applied for, has not been granted as aforesaid, the company shall forthwith repay without interest all
moneys received from applicants in pursuance of the prospectus, and, if any such money is not repaid within eight
days after the company becomes liable to repay it, the company and every director of the company who is an officer
in default shall, on and from the expiry of the eighth day, be jointly and severally liable to repay that money with
interest at such rate, not less than four per cent and not more than fifteen per cent, as may be prescribed, having
regard to the length of the period of delay in making the repayment of such money". As the Company failed
to make an application for listing such RPS, the Company had to forthwith repay such money
collected from investors. If such repayments are not made within 8 days after the Company
becomes liable to repay, the Company and every director of the Company is liable to repay with
interest. Considering that the mobilization commenced during 2009-2010, it would be
appropriate to levy an interest @ 15% p.a. as provided for under the above section. Further, the
liability of the Company to refund the public funds collected through the offer and allotment of
the impugned RPS is a continuing liability and such liability would continue till repayments are
made.

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The Company has also not complied with the provisions of section 73(3) as it has not kept the
amounts received from investors in a separate bank account and failed to repay the same in
accordance with section 73(2) as observed above.
In the Sahara Case, the Hon'ble Supreme Court of India had examined section 73 of the
Companies Act, 1956, and observed that "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, I find that the Company has contravened the provisions of section 73 of
the Companies Act, 1956.
(c) The Company has merely stated that it has commenced making refunds. The Company also
sought to know whether it could approach CSE for listing of its shares. As already stated, the
Company was mandated to list its shares (when issued to the public) on a stock exchange and in case
it failed to do so, it was mandated to make refunds under section 73(2) of the Companies Act.
Therefore, regularizing a public issue (made in contravention of public issue norms) by now
seeking to list on a stock exchange is not allowed under applicable law.
(d) During the personal hearing, the Companys representative submitted that the Company has paid
Rs.5,49,97,418/-out of the total amount of Rs.11,45,97,600/-. However, the Company did not
submit any proof for such claimed payments.

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(e) The interim order has also alleged that the Company failed to comply with the DIP Guidelines.
In this regard, the following provisions of the DIP Guidelines are supposed to be complied with
by any company making a public issue of securities:
a.

Clause 2.1.1. (Filing of offer document)

b.

Clause 2.1.4 (Application for listing)

c.

Clause 2.1.5 (Issue of securities in dematerialized form),

d.

Clause 2.8 (Means of finance),

e.

Clause 4.1 (Promoters contribution in a public issue by unlisted companies),

f.

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

g.

Clause 4.14 (Lock-In of pre-issue share capital of an unlisted company)

h.

Clause 5.3.1 (Memorandum of understanding),

i.

Clause 5.3.3 (Due Diligence Certificate)

j.

Clause 5.3.5 (Undertaking),

k.

Clause 5.3.6 (List Of Promoters Group And Other Details),

l.

Clause 5.4 (Appointment of intermediaries)

m. Clause 5.6 (Offer document to be made public)

n.

Clause 5.6A (Pre-issue Advertisement)

o.

Clause 5.7 (Despatch of issue material)

p.

Clause 5.8 (No complaints certificate)

q.

Clause 5.9 (Mandatory collection centres including Clause 5.9.1 (Minimum number of collection centres)

r.

Clause 5.10 (Authorised Collection Agents)

s.

Clause 5.12.1 (Appointment of compliance officer)

t.

Clause 5.13 (Abridged prospectus)

u.

Clause 6.0 (Contents of offer documents)

v.

Clause 8.3 (Rule 19(2)(b) of SC(R) Rules, 1957)

w.

Clause 8.8.1 (Opening & closing date of subscription of securities)

x.

Clause 9 (Guidelines on advertisements by Issuer Company)

y.

Clause 10.1 (Requirement of credit rating)

z.

Clause 10.5 (Redemption)

As regards the statutory force of the DIP Guidelines, the Hon'ble Supreme Court in the Sahara
Case, had observed that the "DIP Guidelines had statutory force since they were framed by SEBI in exercise
of its powers conferred on it under Sections 11 and 11A of the SEBI Act. Powers have been conferred on SEBI

Page 12 of 20

to protect the interests of the investors in securities and regulate the issue of prospectus, offer documents or
advertisement soliciting money through the issue of prospectus. Section 11 of the Act, it may be noted has been
incorporated, evidently to protect the interests of investors whose securities are legally required to be listed. DIP
Guidelines were implemented by SEBI with regard to the listed and unlisted companies, which made public offer,
until it was replaced by ICDR 2009".
Though the DIP Guidelines were rescinded vide the ICDR Regulations, regulation 111(2) of the
ICDR Regulations provided that "(2)Notwithstanding the repeal under sub-section (1) of the repealed enactments,
(a) anything done or any action taken or purported to have been done or taken including observation made in
respect of any draft offer document, any enquiry or investigation commenced or show cause notice issued in respect
of the said Guidelines shall be deemed to have been done or taken under the corresponding provisions of these
regulations;
(b) any offer document, whether draft or otherwise, filed or application made to the Board under the said Guidelines
and pending before it shall be deemed to have been filed or made under the corresponding provisions of these
regulations."
The Company has not denied such allegation. There is also no material to suggest compliance
with such provisions of law. The Company is therefore found to have contravened the aforesaid
provisions of the DIP Guidelines read with ICDR Regulations in respect of its offer and issue
of RPS during the relevant period.
In view of the foregoing reasons and observations, I conclude that the Company did not comply with
the public issue norms mandated under sections 56, 60 and 73 of the Companies Act, 1956 read with the
Companies Act, 2013 and the DIP Guidelines read with the ICDR Regulations in respect of its offer and
issue of RPS made during the financial years 2009-2010, 2010-2011 and 2011-2012. The Company is
therefore liable for appropriate regulatory action.
13.

The interim order had issued directions with respect to the following present and past directors

of the Company
a) Mr. Ranjit Daspattanayak,
b) Mr. Barun Kumar Nandi,

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c) Mr. Indranil Das,

d) Mr. Arunabha Mukhopadhyay,
e) Mr. Akhil Chandra Saha, and
f) Mr. Subrata Das.
My observations and findings in this regard are as below:
(a) The Company has violated the public issue norms mandated under sections 56, 60 and 73 of the
Companies Act, 1956 read with the Companies Act, 2013 and the DIP Guidelines read with the
ICDR Regulations in respect of its offer and issue of RPS made during the financial years 20092010, 2010-2011 and 2011-2012.
(b) Section 56(1) and 56(3) read with section 56(4) imposes 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, 1956 is on the
company, and every person who is a party to the non-compliance of issuing the prospectus as per
the said section.
(c) The liability of the company and directors to repay under section 73(2) of the Companies Act,
1956 read with section 27 of the SEBI Act, is a continuing liability and the same continues till all
the repayments are made. Therefore, the directors (irrespective of whether they continue or resign) who
were present during the period when the Company made the offer and allotted RPS shall be liable
for violation of sections 56, 60 and 73 of the Companies Act, including the default in making
refunds as mandated therein. As the liability to make repayments under sections 73(2) of the
Companies Act read with section 27 of the SEBI Act is a continuing liability, the persons who
join the Companys Board pursuant to the offer and allotment of RPS shall also be liable if the
Company and the concerned directors have failed to make refunds as mandated under law.
(d) For the violation of the DIP Guidelines read with the ICDR Regulations, SEBI, in terms of
Clause 17 of the DIP Guidelines, may in the interest of securities market and in the interest of
investors, inter alia direct the persons concerned to refund the money collected under an issue to

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the investors with or without requisite interest (as the case may be) and direct the persons
concerned not to access the capital market for a particular period.
(e) As per the information available in the website of MCA (accessed on October 06, 2015), Indranil
Das, Arunabha Mukhopadhyay, Akhil Chandra Saha and Subrata Das are the present
directors of the Company.
(f) It is noted that Arunabha Mukhopadhyay, Indranil Das and Subrata Das were appointed as
directors of the Company on November 24, 2008 and continue to occupy such position till date.
Few noticees have stated that Arunabha Mukhopadhyay is the Managing Director of the
Company. Though SEBI issued public notices in newspaper, the aforesaid three noticees have
neither filed replies to the interim order nor appeared in the personal hearing.
Therefore, for the reasons and observations made in sub-paragraph (b) above, the aforesaid
directors of the Company are liable for the violations and are also responsible, jointly and
severally, for making refunds to investors as mandated under section 73(2) of the Companies Act,
1956 read with section 27 of the SEBI Act and the DIP Guidelines.
(g) Mr. Ranjit Daspattanayak had submitted that he was director in the Company from January
18, 2010 to August 18, 2010. However, as per Form-32 and information from the RoC (i.e.
Register of directors, managing directors, manager and secretary etc.), the date of his cessation as director
was on September 01, 2010. As this noticee was a director during FY 2009-2010 and 2010-2011
when the RPSs were offered and issued without complying with the public issue norms, he also
becomes liable for the violations committed by the Company. This noticee is also liable, jointly
and severally, for making refunds to investors as mandated under section 73(2) of the Companies
Act, 1956 and section 27 of the SEBI Act and the DIP Guidelines. The submission that he was
not aware of the Companys business would not absolve this noticee of the responsibility and
liability.
(h) Noticee, Barun Kumar Nandi has also contended that he has no connection with the Company
since March 2009. Though the noticee has contended that the Company did not promptly act

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on his resignation letter dated March 10, 2009, there is on record another resignation letter
submitted by the noticee wherein he requested that he intends to discontinue as a director with
effect from May 15, 2010. As per records forwarded by the RoC (i.e. Register of directors, managing
directors, manager and secretary etc.) including Form-32, this noticee was appointed as a director in the
Company on November 24, 2008 and had resigned with effect from May 12, 2010. This noticee
was a director in the Company during the financial years 2009-2010 and 2010-2011 when the
RPSs were offered and issued without complying with the public issue norms. Therefore, he
becomes liable for the violations committed by the Company and also liable, jointly and severally,
for making refunds to investors as mandated under section 73(2) of the Companies Act, 1956
read with section 27 of the SEBI Act and the DIP Guidelines.
(i) Akhil Chandra Saha has contended that he had resigned on May 06, 2013 and that without his
consent the Company has re-inducted him as a director w.e.f August 05, 2013. He has also alleged
his signature was forged. Though this noticee has made allegations against the
Company/management in his submissions/resignation letter dated May 06, 2013, he has not
informed of any action taken by him in this regard except for forwarding a copy of his resignation
letter to the Commissioner of Police, Kolkata. However, the noticee is at liberty to take
appropriate steps for the alleged forgery of signature and retention of his name as the director in
the Company.
As per records forwarded by the RoC (i.e. Register of directors, managing directors, manager and secretary
etc.), this noticee was originally appointed as a director on November 24, 2008 and thereafter on
August 05, 2013. As per the MCA website/RoC records, this noticee is one of the present
directors of the Company. As this noticee was present as a director in the Company during the
financial years when the RPSs were offered and issued without complying with the public issue
norms, he also becomes liable for the violations committed by the Company. This noticee is also
responsible, jointly and severally, for making refunds to investors as mandated under section 73(2)
of the Companies Act, 1956 read with section 27 of the SEBI Act and the DIP Guidelines.
In view of the above observations, I hereby conclude that the aforesaid 6 persons (present and past
directors) are liable for the violations committed by the Company as found in this Order and also liable

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for making refunds under section 73(2) of the Companies Act, 1956 read with section 27 of the SEBI
Act and the DIP Guidelines.
14.

I also note that the interim order had inter alia directed the noticees to provide relevant and

necessary information, as sought vide SEBI letters dated July 26, 2013 and February 05, 2014. Though
the Company, vide letter dated August 14, 2013, sought extension of twenty days to furnish the
information/ documents, it failed to do so. Thereafter, a reminder was sent vide SEBI letter dated
February 05, 2014 to the registered office as well as the head office of the Company. However, these
letters were returned undelivered. As on date, the Company failed to submit information/documents as
directed in the interim order.
15.

In view of the above findings and observations, it becomes necessary to issue directions for

refund against the Company and its directors and other directions in the interest of investors and the
securities market. For the above reasons, I, in exercise of the powers conferred upon me under section
19 of the Securities and Exchange Board of India Act, 1992 read with sections 11(1), 11(4), 11A and 11B
thereof hereby issue the following directions:
(a) The Company, Suraksha Agrotech Industries Limited (CIN- U01400WB2008PLC130787;
PAN- AAMCS7720G) and its promoters and directors including Mr. Ranjit
Daspattanayak (DIN - 02821903; PAN - AKDPD9098A), Mr. Barun Kumar Nandi (DIN
- 00566937; PAN - ABFPN4182J), Mr. Indranil Das (DIN- 00566904; PAN AFTPD7822F), Mr. Arunabha Mukhopadhyay (DIN-00566929; PAN- AEYPM2888J), Mr.
Akhil Chandra Saha (DIN-02243929; PAN- AQMPS4454N) and Mr. Subrata Das (DIN02262940; PAN-AJEPD3008L) 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 and the DIP
Guidelines), 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.

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(b) The repayments to investors shall be effected only in cash through Bank Demand Draft or Pay
Order.
(c) The Company/its present directors 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 promoters and directors shall issue public notice, in all editions of two
National Dailies (one English and one Hindi) and in one local daily (in Bengali) with wide
circulation, detailing the modalities for refund, including details of contact persons including
names, addresses and contact details, within fifteen days of this Order coming into effect.
(e) After completing the aforesaid repayments, 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) The Company, its directors and former directors are also directed to provide a full inventory of
all their assets and properties and details of all their bank accounts, demat accounts and holdings
of shares/securities, if held in physical form.
(g) In case of failure of the Company and persons mentioned in sub-paragraph (a) above in
complying with the aforesaid directions, SEBI, on the expiry of the three months period from
the date of this order, a) shall recover such amounts in accordance with section 28A of the SEBI Act including
such other provisions contained in securities laws.
b) may initiate appropriate action against the Company, its promoters/ directors and the
persons/ officers who are in default, including adjudication proceedings against them, in
accordance with law.

Page 18 of 20

c) would make a reference to the State Government/ Local Police to register a civil/
criminal case against the Company, its promoters, directors and its managers/ persons incharge of the business and its schemes, for offences of fraud, cheating, criminal breach
of trust and misappropriation of public funds; and
d) would also make a reference to the Ministry of Corporate Affairs, to initiate the process
of winding up of the Company.

(h) The Company is directed not to, directly or indirectly, access the capital market by issuing
prospectus, offer document or advertisement soliciting money from the public and are further
restrained and prohibited from buying, selling or otherwise dealing in the securities market,
directly or indirectly in whatsoever manner, from the date of this Order till the expiry of 4 years
from the date of completion of refunds to investors as directed above.
(i) The directors including former directors, namely, Mr. Ranjit Daspattanayak (DIN - 02821903;
PAN - AKDPD9098A), Mr. Barun Kumar Nandi (DIN - 00566937; PAN - ABFPN4182J),
Mr. Indranil Das (DIN- 00566904; PAN -AFTPD7822F), Mr. Arunabha Mukhopadhyay
(DIN-00566929; PAN- AEYPM2888J), Mr. Akhil Chandra Saha (DIN-02243929; PANAQMPS4454N) and Mr. Subrata Das (DIN-02262940; PAN-AJEPD3008L), 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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16.

This Order is without prejudice to any action, including adjudication and prosecution proceedings

that might be taken by SEBI in respect of the above violations committed by the Company, its promoters,
directors and other key persons.
17.

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

information and necessary action.

18.

A copy of this Order shall also be forwarded to the Ministry of Corporate Affairs/concerned

Registrar of Companies, for their information and necessary action with respect to the
directions/restraint imposed above against the Company and the individuals.

PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA
Date: October 12th, 2015
Place: Mumbai

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