TMI Blog2016 (7) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... elate to an alleged breach by M/s. Gaurav Agrigenetics Ltd., of the Collective Investment Regulations, by treating them as existing collective investment undertaking. Those belonging to the proviso category, could only be proceeded against for having continued their activities relating to collective investment, without obtaining registration, after the notification of the Collective Investment Regulations (see paragraph 29 above). The said regulations came into existence with effect from 15.10.1999. By the time the Collective Investment Regulations were notified, respondent nos. 1 and 2 – Gaurav Varshney and Vinod Kumar Varshney, had already severed their relationship with M/s. Gaurav Agrigenetics Ltd. In view of the uncontroverted factual position expressed by learned counsel for the respondents, we find no difficulty in concluding, that proceedings which were initiated against respondent nos. 1 and 2, and were quashed by the High Court, call for no interference. Ordered accordingly. - Criminal Appeal No(s). 827-830/2012, Crl.A. No. 832/2012 Crl.A. No. 833-836/2012 Crl.A. No. 252/2015 Crl.A. No. 251/2015 - - - Dated:- 15-7-2016 - JAGDISH SINGH KHEHAR AND C. NAGAPPAN, JJ. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tracted hereunder:- The matter relating to regulating entities which issue instruments such as agro bonds, plantation bonds etc. has been receiving Government s attention. While the instruments may be funding agro based investment activity, it is observed that they often offer very high rates of return not consistent with normal returns in such activities. There is, therefore, a high element of risk associated with such schemes. In order to ensure that investors make investment decisions with the full knowledge of the risks involved in such schemes, Government has felt it necessary to put in place an appropriate regulatory framework for such schemes. Government after detailed consultation with the regulatory authorities concerned has decided to treat such schemes as Collective Investment Schemes coming under the provisions of the Section 11(2)(c) of the SEBI Act. In order to regulate such Collective Investment Schemes, both from the aspect of investor protection as well as allowing legitimate investment activity to take place, SEBI would first formulate draft regulations for this purpose. These draft regulations would be made available for public discussion. The investors wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EBI information within 21 days from today containing details such as:- - Terms and conditions of the schemes launched - Funds raised through all the schemes - Promises or assurances or assured returns made in the scheme - Copies of offer document of the scheme - Names, details and background of promoters/sponsors All collective investment schemes which want to take benefit of the proviso of Section 12(1B) are also directed to make an advertisement only in accordance with the advertisement code already prescribed by SEBI under the Disclosure and investors protection guidelines. In addition to the above, the Board also issued a public notice, on 18.12.1997. The instant public notice also related to, the implications of Section 12(1B). The contents of the public notice, are reproduced below:- The Central Government has by a press release dated 18.11.1997 decided that an appropriate regulatory framework for regulating entities which issued instruments such as agro bonds, plantation bonds, etc. has to be put in place. The Government has decided that schemes through which such instruments are issued would be treated as collective investment schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate the stance adopted on behalf of respondent nos. 1 and 2, it is essential to point out, that in consonance with Section 12(1B) of the SEBI Act, and in furtherance of the power vested with the Board , under Section 30 of the SEBI Act, the Board framed regulations - the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 (hereinafter referred to as, the Collective Investment Regulations). The Collective Investment Regulations, were to come into force, on the date of their publication in the official gazette. It is not a matter of dispute, that the same were brought into force, on 15.10.1999. 4. Respondent nos. 1 and 2 Gaurav Varshney and Vinod Kumar Varshney, were aggrieved by the criminal proceedings initiated against them, on the basis of a complaint filed by the Board , under Section 200 of the Code of Criminal Procedure, 1973 (hereinafter referred to as, the Cr.P.C.), read with Sections 24(1) and 27 of the SEBI Act, alleging, that they had breached the bar created by Section 12(1B), which had forbidden the sponsoring or carrying on of a collective investment initiative, without obtaining a certificate of registration from the Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticed hereinabove, it was urged, that if the date of resignation of respondent no. 1 Gaurav Varshney from the directorship of M/s. Gaurav Agrigenetics Ltd. is taken as 30.7.1998, and that of respondent no. 2 Vinod Kumar Varshney, is taken as 23.12.1998, both of them had admittedly resigned from the directorship of M/s. Gaurav Agrigenetics Ltd., prior to the coming into existence of the Collective Investment Regulations (with effect from 15.10.1999). The High Court, by its impugned order dated 13.5.2010, had agreed with the proposition canvassed on behalf of respondent nos. 1 and 2, and had quashed Complaint Case no. 1241 of 2003 (pending in the Court of Chief Metropolitan Magistrate, Tis Hazari Courts, Delhi), as well as, the order dated 15.12.2003 issued by the said Chief Metropolitan Magistrate, summoning respondent nos. 1 and 2 in the above noted complaint case. 7. Dissatisfied with the determination rendered by the High Court (vide the impugned order dated 13.5.2010), the Board approached this Court, through Criminal Appeal nos. 827-830 of 2012, to raise a challenge to the order passed by the High Court. 8. The primary contention advanced on behalf of the Board wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as air pollution control area shall apply to the Board for consent within the period prescribed for the purpose. Section 22 provides as under: 22. Persons carrying on industry etc. not to allow emission of air pollutants in excess of the standards laid down by State Board.-No person operating any industrial plant in any air pollution control area shall discharge or cause or permit to be discharged the emission of any air pollutant in excess of the standards laid down by the State Board under clause (g) of sub-section (1) of Section 17. Section 19 empowers the State Government to declare an area as air pollution control area. The relevant part of Section 19 reads as follows: 19. Power to declare air pollution control areas .-(1) The State Government may, after consultation with the State Board, by notification in the Official Gazette, declare in such manner as may be prescribed, any area or areas within the State as air pollution control area or areas for the purposes of this Act. (2) The State Government may, after consultation with the State Board, by notification in the Official Gazette,- (a) alter any air pollution control area whether by way of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in existence during a particular time or contingent, and so on and so forth. That is to say, something to happen in a manner, if such a manner is in being or exists, if it does not, it may not happen in that manner. Therefore, the reading of the provision under consideration makes it clear that manner of declaration is to be followed as may be prescribed i.e. if any prescribed. 13. Thus, in case manner is not prescribed under the rules, there is no obligation or requirement to follow any, except whatever the provision itself provides viz. Section 19 in the instant case which is also complete in itself even without any manner being prescribed as indicated shortly before to read the provision omitting this part in such manner as may be prescribed . Merely by absence of rules, the State would not be divested of its powers to notify in the Official Gazette any area declaring it to be an air pollution control area. In case, however, the rules have been framed prescribing the manner, undoubtedly, the declaration must be in accordance with such rules. 14. On the proposition indicated above, a decision reported in T. Cajee v. U. Jormanik Siem, AIR 1961 SC 276, would be relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolving the controversy we are concerned with. Once the manner is prescribed under the rules undoubtedly, the declaration of the area has to be only in accordance with the manner prescribed but absence of rules will not render the Act inoperative. The power vested under Section 19 of the Act, would still be exercisable as provided under the provision i.e. by declaring an area as air pollution control area by publication of notification in the Official Gazette. Non-framing of rules does not curtail the power of the State Government to declare any area as air pollution control area by means of a notification published in the Official Gazette. The part of the provision in such manner as may be prescribed would spring into operation only after such manner is prescribed by framing the rules under Section 54(2)(k) of the Act. This view as indicated earlier, is amply supported by the decision of this Court referred to above in the case of T. Cajee, AIR 1961 SC 276, which is a decision by a Constitution Bench of this Court. It has been followed in a subsequent decision of this Court reported in Surinder Singh v.Central Govt., (1986) 4 SCC 667. The Central Government had not framed rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioning of the Act which is meant for controlling the air pollution cannot be withheld and rendered nugatory only for the reason of absence of the rules prescribing the manner declaring an air pollution control area which otherwise is provided to be notified by publication in an Official Gazette which has been done in this case. Reliance was also placed on U.P. State Electricity Board, Lucknow vs. City Board, Mussoorie, (1985) 2 SCC 16, wherefrom, emphasis was placed on the observations extracted hereunder:- 6. The material part of Section 46 of the Act reads thus: 46. (1) A tariff to be known as the Grid Tariff shall, in accordance with any regulations made in this behalf, be fixed from time to time by the Board in respect of each area for which a scheme is in force, and tariffs fixed under this section may, if the Board thinks fit, differ for different areas. (2) Without prejudice to the provisions of Section 47, the Grid Tariff shall apply to sales of electricity by the Board to licensees were so required under any of the First, Second and Third Schedules, and shall, subject as hereinafter provided, also be applicable to sales of electricity by the Board to li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a collective investment scheme), only after obtaining a certificate of registration, from the Board . For an effective interpretation of Section 12(1B), learned counsel placed reliance on Union of India vs. A.K. Pandey, (2009) 10 SCC 552, and the Court s attention was drawn to the following observations recorded therein:- 8. Rule 34 of the Army Rules, 1954 with which we are concerned reads as follows: 34. Warning of accused for trial.- (1) The accused before he is arraigned shall be informed by an officer of every charge for which he is to be tried and also that, on his giving the names of witnesses whom he desires to call in his defence, reasonable steps will be taken for procuring their attendance, and those steps shall be taken accordingly. The interval between his being so informed and his arraignment shall not be less than ninety-six hours or where the accused person is on active service less than twenty-four hours. (2) The officer at the time of so informing the accused shall give him a copy of the charge-sheet and shall, if necessary, read and explain to him the charges brought against him. If the accused desires to have it in a language which he unders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, negative, prohibitory and exclusive words are indicative of the legislative intent when the statute is mandatory. (See Maxwell on Interpretation of Statutes, 11th Edn., pp. 362 et seq.; Crawford: Statutory Construction, Interpretation of Laws, p. 523 and Bhikraj Jaipuria v. Union of India, AIR 1962 SC 113. 18. The High Court said that the provisions contained in Section 108 of the Act are directory because non-compliance with Section 108 of the Act is not declared an offence. The reason given by the High Court is that when the law does not prescribe the consequences or does not lay down penalty for non-compliance with the provision contained in Section 108 of the Act the provision is to be considered as directory. The High Court failed to consider the provision contained in Section 629(a) of the Act. Section 629(a) of the Act prescribes the penalty where no specific penalty is provided elsewhere in the Act. It is a question of construction in each case whether the legislature intended to prohibit the doing of the act altogether, or merely to make the person who did it liable to pay the penalty. 19. Where a contract, express or implied, is expressly or by implicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) for the purpose of securing certain sources of revenue either to the State or to certain public bodies. If it is clear that a penalty is imposed by statute for the purpose of preventing something from being done on some ground of public policy, the thing prohibited, if done, will be treated as void, even though the penalty if imposed is not enforceable. 23. The provisions contained in Section 108 of the Act are for the reasons indicated earlier mandatory. The High Court erred in holding that the provisions are directory. 15. The principle seems to be fairly well settled that prohibitive or negative words are ordinarily indicative of mandatory nature of the provision; although not conclusive. The Court has to examine carefully the purpose of such provision and the consequences that may follow from non-observance thereof. If the context does not show nor demands otherwise, the text of a statutory provision couched in a negative form ordinarily has to be read in the form of command. When the word shall is followed by prohibitive or negative words, the legislative intention of making the provision absolute, peremptory and imperative becomes loud and clear and ordinarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the public notice dated 18.12.1997 issued by the Board . We have already extracted the aforesaid press releases and the public notice above. We have also highlighted the portions thereof, relied upon by learned counsel for the respondents, to contend that in the understanding of the Government of India, as also, the Board itself, there was no bar on sponsoring or commencing or carrying on a collective investment scheme, even after the insertion of Section 12(1B) into the SEBI Act. It was submitted, that the aforementioned press releases and public notice merely highlighted the requirement of obtaining a certificate of registration from the Board , consequent upon the framing of the Collective Investment Regulations, contemplated under Section 12(1B) of the SEBI Act. It was, therefore the submission of learned counsel for the respondents, that the action of the respondents, in merely commencing the activity of sponsoring or carrying on a collective investment scheme, should not be treated as a violation of Section 12(1B), at their hands. It was also contended on behalf of the respondents, that a breach of Section 12(1B) could have arisen, only if M/s. Gaurav Agrigenetics Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of a condition and what is delegated to the executive is the authority to determine by exercising its own judgment as to whether such conditions have been fulfilled and/or the time has come when such legislation should be brought into force. The taking effect of a legislation, therefore, is made dependent upon the determination of such fact or condition by the executive organ of the Government. Delegated legislation, however, involves delegation of rule-making power of legislation and authorises an executive authority to bring in force such an area by reason thereof. The discretion conferred on the executive by way of delegated legislation is much wider. Such power to make rules or regulations, however, must be exercised within the four corners of the Act. Delegated legislation, thus, is a device which has been fashioned by the legislature to be exercised in the manner laid down in the legislation itself. By reason of Section 3 of the Act, the Administrator, however, has been empowered to issue a notification whereby and whereunder, an exemption is granted for application of the Act itself. 17. In Hamdard Dawakhana v. Union of India, AIR 1960 SC 554, this Court stated: (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... einafter as, the non-proviso category). 16. The persons covered by the proviso category, referred to hereinabove, were permitted to continue their existing collective investment activities, till the framing of the Collective Investment Regulations. On the framing of the Collective Investment Regulations, the said persons covered by the proviso category, were required to obtain a certificate of registration, which would enable them to continue to operate their existing collective investment scheme(s). 17. Insofar as the non-proviso category is concerned, the same was barred from sponsoring or carrying on a collective investment initiative, without first obtaining a certificate of registration from the Board , in accordance with the Collective Investment Regulations. The non-proviso category, comprised of persons who had not commenced any activity in the nature of a collective investment, prior to 25.1.1995. In other words, Section 12(1B) introduced a clear bar, prohibiting any action of sponsoring or initiating a collective investment scheme after 25.1.1995, without obtaining a certificate of registration from the Board , under the Collective Investment Regulations. Stated d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... soring or carrying on a collective investment scheme by the said individual could not be termed as an existing collective investment scheme. An existing collective investment scheme (- as the heading of Regulation 5, suggests) within the meaning of Section 12(1B) read with the Collective Investment Regulations, could only be one which had commenced prior to 25.1.1995, i.e. prior to the insertion of Section 12(1B) in the SEBI Act. A collective investment scheme, which commenced after 25.1.1995, could not be described as an existing collective investment scheme, because the same was statutorily barred, and therefore, wholly impermissible in law. This has been the clear and unambiguous stance even of the learned counsel representing the Board . We may venture a different course, of reaching the same conclusion. What a statute bars, cannot be authorized through regulations. Any person/entity not falling in the proviso category (an existing operator, of a collective investment scheme) was barred from commencing to sponsor or carry on any collective investment activity, after the insertion of Section 12(1B) into the SEBI Act, till such time as he/it had obtained a certificate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, it was impermissible for a person who had not commenced a collective investment scheme prior to 25.1.1995, to do so thereafter, till the Collective Investment Regulations were framed. Thereafter, such new entrepreneur, had to obtain a certificate of registration from the Board under Regulation 4 of the Collective Investment Regulations, before he could legally commence activities concerning collective investment operations. Our inevitable conclusion is, that sponsoring or carrying on any collective investment activity, for the first time, on or after 25.1.1995, was a complete bar, in the absence of a certificate of registration from the Board . It accordingly follows, that if a person/entity had commenced to sponsor or carry on a collective investment scheme after 25.1.1995, without obtaining a certificate of registration from the Board , it would tantamount to breaching the express mandate contained in Section 12(1B) of the SEBI Act. 22. In our considered view, there can be no doubt, that the date when the Collective Investment Regulations came into force (-15.10.1999), has no relevance, insofar as the breach of Section 12(1B) of the SEBI Act, with reference to suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negative words in sub-Section (1B) No person shall , denotes mandatory intent, with reference to those not already engaged in collective investment operations. Fourthly because, of the use of negative words in conjunction with the word shall , further makes the legislative intent absolutely clear, and also, mandatory, with reference to those not already engaged in collective investment operations. And fifthly because, contravention of Section 12(1B) entails penal consequences, and therefore, cannot be construed as directory. We therefore hereby accept the submission advanced on behalf of learned counsel for the Board , and hold, that the bar created for new operators, of a collective investment initiative, was absolute and mandatory. The bar under Section 12(1B), restrained persons (who were not engaged in any collective investment venture upto 25.1.1995), from commencing activities concerning collective investment, till they had obtained a certificate of registration, in consonance with the Collective Investment Regulations. 24. We are also of the view, that the judgments relied upon by learned counsel for the appellant, namely, Orient Papers Mills, U.P. State Electricit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. In terms of Chapter IX of the said regulations, any person who had been operating a collective investment schemes at the time of commencement of the said regulations shall be deemed to be an existing collective investment scheme and shall comply with the provisions of the said Chapter IX. Further, in terms of the said Chapter IX any person who immediately prior to the commencement of the said regulations was operating a collective investment scheme shall make an application to SEBI for grant of registration within a period of two months from the date of notification of the said regulations. 11. SEBI vide its letters dated December 15, 1999/December 29, 1999 and also by way of a public notice dated December 10, 1999 gave intimation to the accused no. 1 directing it to send an information memorandum to all the investors detailing the state of affairs of the schemes, the amount repayable to each investor and the manner in which such amount is determined. As per the aforesaid letters of SEBI, the information memorandum to the investors was required to be sent latest by February 28, 2000. 12. SEBI having regard to the interest of investors and request received from variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uniary damage to them. 19. In view of the above, it is charged that the accused no. 1 has committed the violation of Section 11B, 12(1B) of Securities and Exchange Board of India Act, 1992 and Regulation 5(1) read with Regulations 68(1), 68(2), 73 and 74 of the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 which is punished under Section 24(1) of Securities and Exchange Board of India Act, 1992. 20. The accused nos. 2 to 11 are the Directors of the accused no. 1, and as such persons in charge of and responsible to the accused no. 1 for the conduct of its business and are liable for the violations of the accused no. 1, as provided under Section 27 of Securities and Exchange Board of India Act, 1992. 21. The violation of the aforesaid laws by the accused were the acts of omission and were occurred within the jurisdiction of this Hon ble Court and as such this Hon ble Court has got jurisdiction to try punish the accused. This complaint is within the limitation. The complainant craves the leave of this Hon ble Court to produce the documents referred to hereinabove as and when required. PRAYER It is, therefore, most r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 68, 73 and 74 (refer to paragraphs 8, 10, 11, 13 to 15, 18 and 19 of the complaint). Therefore, according to learned counsel for the respondents, the appellant had expressly treated the respondents as persons falling in the proviso category of Section 12(1B), namely, those who had commenced a collective investment undertaking prior to insertion of Section 12(1B) into the SEBI Act (-on 25.1.1995). It was, therefore submitted, that the respondents could not be proceeded against by treating them as belonging to the non-proviso category (-who had not commenced any activity associated with collective investment, before 25.1.1995) of Section 12(1B), by considering them as new entrepreneurs, who have commenced operating a collective investment scheme after 25.1.1995. 28. We express our complete agreement, with the stance adopted at the hands of learned counsel for the private respondents. The respondents were only accused of having not complied with, the provisions of the Collective Investment Regulations, pertaining to existing collective investment operators (those who had commenced the activity before 25.1.1995). Thus viewed, the fact that the respondents commenced the activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, the instant submission is canvassed before us on behalf of the Board , by describing the respondents as belonging to the non-proviso category, wherein persons not already engaged in an existing collective investment venture as on 25.1.1995, were precluded from activities concerning collective investment, till the time they obtain a certificate of registration from the Board in accordance with the Collective Investment Regulations. As already concluded above, this course could not be pursued against the respondents, because they were not so accused, in the complaint dated 15.12.2003. The question posed, is answered accordingly. 30. The sequence of facts narrated hereinabove reveals, incorporation of M/s. Gaurav Agrigenetics Ltd. after 25.1.1995, and also, that it commenced a collective investment scheme prior to 15.10.1999 (the date, when the Collective Investment Regulations, were notified). Undoubtedly, M/s. Gaurav Agrigenetics Ltd., could have been proceeded against, for having violated Section 12(1B). And it would have been fully justified for the Board , to proceed against M/s. Gaurav Agrigenetics Ltd., for having violated the said provision. The issue w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply for registration under the Collective Investment Regulations. And secondly, the accused did not take any steps for winding up of the collective investment scheme(s) being operated by them, refunding deposits made by the investors, as per the provisions of the Collective Investment Regulations. The basis of the accusations levelled against the accused was not, that they had no right to commence a collective investment venture, during the period between 25.1.1995 when Section 12(1B) of the SEBI Act came to be inserted, till the requisite certificate of registration was sought. The complaint did not include any direct or indirect insinuation, that the accused had unauthorisedly commenced operations of a collective investment scheme, after 25.1.1995. Even the date of commencement of the collective investment operations, by the accused, was not expressed in the complaint. It was imperative for the Board , to lay the above charge, through express assertions, for proceeding against the accused, for violation of the non-proviso mandate, under Section 12(1B). 33. We are mindful of the fact that, paragraph 15 of the complaint relied upon by the learned senior counsel, does make a ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e offence of which he is accused shall be stated to him . The particulars for an offence postulated for the non-proviso category (-where the activity of a collective investment scheme, is commenced after 25.1.1995), under Section 12(1B) of the SEBI Act, would be the date on which the accused commenced sponsoring or carrying on a collective investment scheme. If such date fell within the period when the initiation of a new collective investment endeavour stood barred under Section 12(1B), the accused had to be accosted of the same. And only thereupon, the accused would have understood, what charge was being levelled against him. Merely mention of the statutory provision, namely, Section 12(1B) of the SEBI Act, would not amount to disclosing to the accused, the particulars of the offence of which they were accused. One cannot lose sight of the fact, that implications for the proviso category (-those who commenced operations before 25.1.1995) and the non-proviso category (-those who commenced operations after 25.1.1995) are different. A perusal of the chargesheet reveals, that the respondents herein were being treated as belonging to the proviso category. But learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n existing collective investment scheme covered by the proviso category under Section 12(1B), came to be purchased or taken over by the concerned company, after its incorporation. There is no bar against a newly incorporated company, restraining it from taking over an existing business. If that was the case, there would be no violation of Section 12(1B), since an existing collective investment scheme, which came into existence prior to 25.1.1995, could legitimately continue its operations under the proviso to Section 12(1B), without a certificate of registration, till the framing of the Collective Investment Regulations. Therefore, merely the fact that the company under consideration was incorporated after 25.1.1995, in our view, would not be sufficient to demonstrate the culpability of the accused, insofar as, the restraint against fresh commencement of collective investment activities under Section 12(1B) of the SEBI Act is concerned. In the above view of the matter, we find no merit even in the third submission advanced on behalf of the Board . 38. The last submission advanced at the hands of the learned senior counsel for the Board , was based on Section 465 of the Cr.P.C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire factual scenario was clear and transparent, and known to one and all. The date of incorporation of the concerned company, wherein the accused were directors, is a matter of record, substantiated through cogent evidence produced before the trial Court. The fact that the accused were directors of M/s. Gaurav Agrigenetics Ltd., was also undisputed. Neither the company concerned nor the accused, had contested the fact, that they had sponsored or had been carrying on a collective investment scheme, which was initiated after 25.1.1995. Based on the undisputed and clear factual position narrated above, it was asserted, that no one could arrive at the conclusion, in the facts and circumstances of the case, that the findings recorded by the trial Court, had occasioned a failure of justice . 40. In order to support the above contention, the learned senior counsel for the Board , placed reliance on State of M.P. vs. Bhooraji, (2001) 7 SCC 679, wherefrom the Court s attention was drawn to the following observations:- 8. The real question is whether the High Court necessarily should have quashed the trial proceedings to be repeated again only on account of the declaration of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in good faith. The provision says that the proceedings adopted in such a case, though based on such erroneous order, shall not be set aside merely on the ground of his not being so empowered . 13. It is useful to refer to Section 462 of the Code which says that even proceedings conducted in a wrong sessions division are not liable to be set at naught merely on that ground. However, an exception is provided in that section that if the court is satisfied that proceedings conducted erroneously in a wrong sessions division has in fact occasioned a failure of justice it is open to the higher court to interfere. While it is provided that all the instances enumerated in Section 461 would render the proceedings void, no other proceedings would get vitiated ipso facto merely on the ground that the proceedings were erroneous. The court of appeal or revision has to examine specifically whether such erroneous steps had in fact occasioned a failure of justice. Then alone the proceedings can be set aside. Thus the entire purport of the provisions subsumed in Chapter XXXV is to save the proceedings linked with such erroneous steps, unless the error is of such a nature that it had occasio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased merely on account of a procedural lapse, particularly when the same happened at a time when the law which held the field in the State of Madhya Pradesh was governed by the decision of the Full Bench of the Madhya Pradesh High Court. The High Court should have dealt with the appeal on merits and on the basis of the evidence already on record. To facilitate the said course, we set aside the judgment of the High Court impugned in this appeal. We remit the case back to the High Court for disposal of the appeal afresh on merits in accordance with law and subject to the observations made above. 41. We have given our thoughtful consideration to the last submission advanced at the hands of the learned senior counsel for the Board . It is, however, not possible for us to accept the same. We are of the considered view, which clearly emerges from the observations rendered in Bhooraji s case (supra), that Section 465 of the Cr.P.C. pertains to omissions or irregularities in matters of procedure. It is, therefore, that both the sub-Sections of Section 465, pointedly refer to proceedings under the Cr.P.C. Added to the above it is of some significance, that Chapter XXXV of the Cr.P.C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have resigned from the directorship of M/s. Gaurav Agrigenetics Ltd. with effect from 30.7.1998, and respondent no. 2 Vinod Kumar Varshney can likewise be taken to have resigned from the directorship of the said company with effect from 23.12.1998. Both respondent nos. 1 and 2, according to learned counsel representing them, ceased to have any concern/relationship with M/s. Gaurav Agrigenetics Ltd., well before 15.10.1999 (when the Collective Investment Regulations were enforced). It was, therefore contended on behalf of the respondents, that this Court should not interfere with the impugned order passed by the High Court dated 13.5.2010, quashing the complaint preferred by the Board , as there were legally valid reasons for doing so. 44. Having given our thoughtful consideration to the contentions advanced at the hands of learned counsel for the respondents, we are satisfied, that the quashing of the proceedings initiated by the Board , against respondent nos. 1 and 2, calls for no interference, for the simple reason, that they relate to an alleged breach by M/s. Gaurav Agrigenetics Ltd., of the Collective Investment Regulations, by treating them as existing collective inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned judgment and order dated 12.8.2010, rendered by the High Court in Criminal Miscellaneous Case nos. 7468-7471 of 2006 and Criminal Miscellaneous no. 951 of 2007. It would be relevant to mention, that the respondent herein Mrs. Parvesh Varshney had also assailed the same complaint dated 15.12.2003 filed by the Board before the Chief Metropolitan Magistrate, Tis Hazari Courts, Delhi, wherein she was arrayed as accused no. 6. The High Court by its judgment and order dated 12.8.2010, had quashed the complaint filed against the respondent herein, in exercise of its jurisdiction under Section 482 of the Cr.P.C. 48. The commonness of the factual position in the appeals adjudicated upon by us (Criminal Appeal nos. 827-830 of 2012), and the present criminal appeals is, that whilst Gaurav Varshney accused no. 5, had tendered his resignation from the position of director of M/s. Gaurav Agrigenetics Ltd. on 30.7.1998, and Vinod Kumar Varshney accused no. 8, had tendered his resignation from the above company on 23.12.1998, the respondent herein Mrs. Parvesh Varshney accused no. 6, had tendered her resignation from the position of director of M/s. Gaurav Agrigenetics Ltd. wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Explanation.- For the purposes of this section, - (a) company means any body corporate and includes a firm or other association of individuals; and (b) director , in relation to a firm, means a partner in the firm. Based on Section 27 of the SEBI Act, it was contended, that besides a bald statement mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable for the offence. The proviso to the sub-section contains an escape route for persons who are able to prove that the offence was committed without their knowledge or that they had exercised all due diligence to prevent commission of the offence. *** *** *** 10. While analysing Section 141 of the Act, it will be seen that it operates in cases where an offence under Section 138 is committed by a company. The key words which occur in the section are every person . These are general words and take every person connected with a company within their sweep. Therefore, these words have been rightly qualified by use of the words: Who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence, etc. What is required is that the persons who are sought to be made criminally liable under Section 141 should be, at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal action under that provision should be a person in overall control of the day-to-day affairs of the company or a firm. This was a case of a partner in a firm and it was held that a partner who was not in such overall control of the firm could not be held liable. In Municipal Corpn. of Delhi v. Ram Kishan Rohtagi, (1983) 1 SCC 1, the case was under the Prevention of Food Adulteration Act. It was first noticed that under Section 482 of the Criminal Procedure Code in a complaint, the order of a Magistrate issuing process against the accused can be quashed or set aside in a case where the allegation made in the complaint or the statements of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which are arrived at against the accused. This emphasises the need for proper averments in a complaint before a person can be tried for the offence alleged in the complaint. 16. In State of Haryana v. Brij Lal Mittal, (1998) 5 SCC 343, it was held that vicarious liability of a person for being prosecuted for an offence committed under the Act by a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability. *** *** *** 22. Therefore, this Court has distinguished the case of persons who are in charge of and responsible for the conduct of the business of the company at the time of the offence and the persons who are merely holding the post in a company and are not in charge of and responsible for the conduct of the business of the company. Further, in order to fasten the vicarious liability in accordance with Section 141, the averment as to the role of the Directors concerned should be specific. The description should be clear and there should be some unambiguous allegations as to how the Directors concerned were alleged to be in charge of and were responsible for the conduct and affairs of the company. Last of all, learned counsel invited our attention to Gunmala Sales Private Limited vs. Anu Mehta, (2015) 1 SCC 103, wherefrom reliance was placed on the following observations:- 22. In National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330, this Court was dealing with the same question. After referring to S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (1), (2005) 8 SCC 89, S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (2), (2007) 4 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cheques or who are not Managing Directors or Joint Managing Directors are concerned, it is clear from the conclusions drawn in the abovementioned cases that it is necessary to aver in the complaint filed under Section 138 read with Section 141 of the NI Act that at the relevant time when the offence was committed, the Directors were in charge of and were responsible for the conduct of the business of the company. This is a basic requirement. There is no deemed liability of such Directors. This averment assumes importance because it is the basic and essential averment which persuades the Magistrate to issue process against the Director. That is why this Court in SMS Pharma (1) (supra), observed that the question of requirement of averments in a complaint has to be considered on the basis of provisions contained in Sections 138 and 141 of the NI Act read in the light of the powers of a Magistrate referred to in Sections 200 to 204 of the Code which recognise the Magistrate's discretion to reject the complaint at the threshold if he finds that there is no sufficient ground for proceeding .. *** *** *** 34. We may summarise our conclusions as follows: 34.1. Once i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court in this regard and the exercise of this power depends upon the facts and circumstances of each case. The High Court at that stage does not conduct a mini trial or roving inquiry, but nothing prevents it from taking unimpeachable evidence or totally acceptable circumstances into account which may lead it to conclude that no trial is necessary qua a particular Director. It was pointed out, that even though the judgments relied upon and referred to hereinabove, were with reference to Section 138 of the Negotiable Instruments Act, yet Section 141 thereof is exactly similar to Section 27 of the SEBI Act. And, therefore, insofar as the present issue is concerned, the cited judgments would be fully applicable to interpret and construe Section 27 of the SEBI Act. It was therefore asserted, that in the absence of any clear and firm assertion or material on the record of the case, to establish that the appellant was in charge of, and was responsible to the company for the conduct of its business, he could not be proceeded against. 53. It is not necessary for us to deal with the pointed issue at hand, on account of the clear findings recorded by the High Court in the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operating a Collective Investment Scheme, shall subject to the provisions of Chapter IX of these Regulations make an application to SEBI for grant of certificate of registration within a period of two months from the date of notification (i.e. October 15, 1999). Subsequently, having regard to the interests of investors and requests received from entities, SEBI had extended the last date for submitting application by existing entities upto March 31, 2000 and the same was intimated by SEBI by a Press Release and Public Notice. Thus, you as an existing Collective Investment Scheme entity, subject to the provisions of Chapter IX of these Regulations, were required to apply for registration by March 31, 2000. As per Regulation 73(1) an existing Collective Investment Scheme (CIS) which has failed to make an application for registration to SEBI, shall wind up the existing scheme and repay the investors. Further, as per Regulation 74, an existing CIS which is not desirous of obtaining provisional registration from SEBI shall formulate a scheme of repayment and make such repayment to the existing investors in the manner specified in Regulation 73(2). The existing Collective Investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regulations. 9. SEBI having regard to the interest of investors and request received from various persons operating collective investment schemes extended the last date of submitting the application by existing entities upto March 31, 2000 and the same was declared by SEBI vide a press release and a public notice. 10. However, the accused no. 1 failed to make any application with SEBI for registration of the collective investments schemes being operated by it as per the said regulations. 11. It is submitted that in terms of regulation 73(1) of the said regulations an existing collective investment scheme which failed to make an application for registration with SEBI, shall wind up the existing collective investment schemes and repay the amounts collected from the investors. Further, in terms of regulation 74 of the said regulations, an existing collective investment scheme which is not desirous of obtaining provisional registration from SEBI shall formulate a scheme of repayment and make such repayment to the existing investors in the manner specified in regulation 73. 12. SEBI vide its letter dated December 10, 1999 and December 29, 1999 and also by way of a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived, as the appellant had ceased to have any concern with the company, with effect from 20.2.2000. The instant factual position was sought to be demonstrated by placing reliance on Form-32, submitted with the Registrar of Companies. Our attention was also drawn to the statement of DW6 Vikram, Senior Dealing Assistant of the office of the Registrar of Companies, Jalandhar, who in his examination-in-chief, had acknowledged that in Form-32 (exhibited as DW6/1), Major P.C. Thakur was shown to have resigned from the directorship of M/s. Accord Plantation Ltd., with effect from 20.2.2000. Premised on the above factual position, it was submitted, that the appellant cannot be implicated for not having complied with the Collective Investment Regulations, because he had already resigned (-on 20.2.2000), before the cause of disobedience could have arisen (-on 31.3.2000, the extended last date for submitting applications for registration, by existing entities). We find merit in the contention advanced by learned counsel for the appellant, that since it has been effectively established, that the appellant ceased to be a director on 20.2.2000, and culpability, if at all, would arise only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he number of shares held by a member. Explanation.- Any reference in this section or in section 160 or 161 or in any other section or in Schedule V to the day on which an annual general meeting is held or to the date of the annual general meeting shall, where the annual general meeting for any year has not been held, be construed as a reference to the latest day on or before which that meeting should have been held in accordance with the provisions of this Act. Relying on Section 159(1) extracted above, it was submitted, that annual returns filed by a company are submitted on a prescribed proforma, and as such, the same being a statutory requirement, will have to be accepted as correct, unless it was shown otherwise. 58. It was also submitted, that the aforesaid statutory requirement is akin to the statutory requirement under Section 303 of the Companies Act, 1956, inter alia, pertaining to the details of the existing directors and/or any change among the directors, managing directors, managers or secretaries of a company. Insofar as the instant aspect of the matter is concerned, section 303(2) of the Companies Act, 1956, which was also relied upon, is extracted hereun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm within 30 days of such change. There is, thus, statutory requirement of informing the Registrar of Companies about change among Directors of the company. 17. In this view of the matter, in our opinion, it must be held that a Director, whose resignation has been accepted by the company and that has been duly notified to the Registrar of Companies, cannot be made accountable and fastened with liability for anything done by the company after the acceptance of his resignation. The words every person who, at the time the offence was committed , occurring in Section 141(1) of the NI Act are not without significance and these words indicate that criminal liability of a Director must be determined on the date the offence is alleged to have been committed. Based on the above, it was submitted, that no one could be permitted to dispute the fact that the appellant Major P.C. Thakur, had resigned from M/s. Accord Plantation Ltd. with effect from 20.2.2000. 61. We have given our thoughtful consideration to the afore-stated contention, pertaining to the date when Major P.C. Thakur severed his relationship with M/s. Accord Plantation Ltd., by tendering his resignation and subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Major P.C. Thakur from M/s. Accord Plantation Ltd. on 20.2.2000, was placed on the record of the case (as Annexure P-3). The same was produced by DW7 Ajay Vohra, while deposing before the trial Court in the case on hand. The veracity of Form-32 depicting the resignation of Major P.C. Thakur, was not contested by the Board , before the trial Court. Thus viewed, we find no justification whatsoever, in permitting the Board to contest the same, before this Court. We, therefore, hereby affirm that Major P.C. Thakur had duly resigned from the directorship of M/s. Accord Plantation Ltd. on 20.2.2000. 63. On the issue of liability of the appellant Major P.C. Thakur, we also consider it appropriate to make a reference to Section 27 of the SEBI Act. The above provision has already been extracted above, and the debate with reference thereto, and its conclusion, have also been recorded by us. The reference which we wish to make to Section 27 at the instant juncture, is for a different purpose. Section 27 makes every person, who at the time when the offence was committed, was in charge of, and responsible for, the conduct of the company s business, guilty of the offence allegedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention advanced on behalf of the appellant. It was also pointed out, that the question of initiation of proceedings against M/s. Accord Plantation Ltd. or the appellant, on account of a breach of Regulation 5 and Regulations 68 to 72 under Chapter IX of the Collective Investment Regulations, did not arise at all. Insofar as the instant aspect of the matter is concerned, learned counsel invited our attention to a communication dated 7.2.2000, which was addressed by M/s. Accord Plantation Ltd. to SEBI. The aforesaid communication is extracted hereunder:- ACCORD PLANTATION LTD. HO Blue Peak Office Complex (Near Gainda Mull Stairs) The Mall Shimla 171 001 Corp Office 19A Swastik Vihar Panchkula HR Phone No. 172-552962 Ref. No. HO/101/775/00 Date Feb 07, 2000 Shri Suresh Gupta Division Chief SEBI Earnest House, 194, Nariman Point Mumbai 400 021 Kind Attn.: Mr. Suresh Gupta, Divisional Chief Dear Sir, This is with reference to plantation schemes of the Company and its registration with SEBI as per latest guidelines on registration. We wish to inform you that we are no more interested in operating this schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be dated and signed by all the directors of the scheme. (4) The Board may specify such other disclosures to be made in the information memorandum, as it deems fit. (5) The information memorandum shall be sent to the investors within one week from the date of the information memorandum. (6) The information memorandum shall explicitly state that investors desirous of continuing with the scheme shall have to give a positive consent within one month from the date of the information memorandum to continue with the scheme. (7) The investors who give positive consent under sub-regulation (6), shall continue with the scheme at their risk and responsibility : Provided that if the positive consent to continue with the scheme, is received from only twenty-five per cent or less of the total number of existing investors, the scheme shall be wound up. (8) The payment to the investors, shall be made within three months of the date of the information memorandum. (9) On completion of the winding up, the existing collective investment scheme shall file with the Board such reports, as may be specified by the Board. Existing scheme not desirous of obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2003 under Section 200 of the Cr.P.C. read with Sections 24(1) and 27 of the SEBI Act, against M/s. Accord Plantation Ltd., and five of its directors. Sunita Bhagat, wife of Vinodh Bhagat was arrayed as accused no. 4. The charges levelled against the appellant Sunita Bhagat emerge from paragraphs 13, 15 and 18 of the complaint, which are extracted hereunder:- 13. However, the accused no. 1 neither applied for registration under the said regulations nor took any steps for winding up of the schemes and repayment to the investors as provided under the regulations and as such had violated the provisions of Section 11B, 12(1B) of Securities and Exchange Board of India Act, 1992 and Regulation 5(1) r/w Regulations 68(1), 68(2), 73 and 74 of the said regulations. *** *** *** 15. On January 31, 2001, SEBI by exercising its powers conferred upon it under Section 118 of Securities and Exchange Board of India Act, 1992 directed the accused no. 1 to refund the money collected under the aforesaid collective investment schemes of the accused no. 1 to the persons who invested therein within a period of one month from the date of the said directions *** *** *** 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have neither wound up its collective investment scheme, nor repaid its investors as per Regulations 73 and 74 of the Collective Investment Regulations. The accused were accordingly held guilty of violating Regulations 5(1) read with Regulations 68(1), 68(2), 73 and 74 of the Collective Investment Regulations read with Sections 26 and 27 of the SEBI Act. By a separate order passed on 26.3.2010, the trial Court sentenced accused numbers 2 to 5 to rigorous imprisonment for six months each. The accused-company and accused nos. 2 to 5 were ordered to pay a fine of ₹ 10 lakhs each, and in default thereof, accused nos. 2 to 5 were required to undergo simple imprisonment for a further period of three months each. 73. Dissatisfied with the orders of conviction and sentence, dated 25.3.2010 and 26.3.2010 respectively, the present appellant Sunita Bhagat filed Criminal Appeal no. 442 of 2010 before the High Court. The appeal preferred by the appellant Sunita Bhagat alongwith the appeal preferred by Major P.C. Thakur (Criminal Appeal no. 464 of 2010) and the other appeals filed on behalf of the directors of M/s. Accord Plantation Ltd., were dismissed by the High Court on 29.1.2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was invited to the statement of DW3 Yashpal, JTA, Registrar of Companies, Jalandhar. The same is extracted hereunder:- I have brought the summoned records relating to the company Accord Plantation Ltd. The certified copy of Form 32 placed in the judicial record had been issued by our office. The same is Ex. DW3/A. The Form 32 reflects that as on 31.8.1999, the accused no. 4 Sunita Bhagat had resigned as Director of the Accord Plantation Ltd. The resignation letter is on my record. Copy of the same is Ex. DW3/B. XXXX by counsel Sh. Sachit Setia for the SEBI We have received the resignation letter on 20.9.1999. It is correct that no date of receipt had been mentioned on the resignation letter Ex. DW3/B. On receipt of the resignation letter we have placed it on the record, being accepted. XXXX by counsel Sh. Neeraj Tiwari for A-5, Rajan Rai We did not prepare any list of directors after accepting the resignation of Smt. Sunita Bhagat. However, the modified list of directors would have been furnished by the company alongwith the annual returns filed by the company. As per the record, the directors of the company prior to the resignation of Smt. Sunita B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of, the provisions of any other law for the time being in force, including the Cr.P.C. This position was not repudiated on behalf of the Board . We are satisfied in recording, that the above contention, advanced on behalf of the appellant, is fully justified. 78. With reference to the provisions of the Cr.P.C., and to substantiate the plea of limitation, reliance was placed on Section 468, which is reproduced below:- 468. Bar to taking cognizance after lapse of the period of limitation.- (1) Except as otherwise provided elsewhere in this Code, no Court, shall take cognizance of an offence of the category specified in sub-section (2), after the expiry of the period of limitation. (2) The period of limitation shall be (a) six months, if the offence is punishable with fine only; (b) one year, if the offence is punishable with imprisonment for a term not exceeding one year; (c) three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years. 79. For invoking the plea of limitation, learned counsel also pointed out, that under Section 24 of the SEBI Act, before its amendment on 29.10.2002, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agat, would operate with effect from 20.9.2000. Admittedly, the complaint in the present case was preferred by the Board before the Additional Chief Metropolitan Magistrate, Tis Hazari Courts, Delhi, on 21.1.2003. The trial Court could not have taken cognizance of the same, in view of the clear bar contemplated under Section 468 of the Cr.P.C. 82. For the reasons recorded hereinabove, not only on account of the legal position expressed above, but also, on account of the plea of limitation, the proceedings initiated against the appellant were not sustainable in law. The instant appeal is accordingly allowed, and the conviction and sentence imposed on the appellant Sunita Bhagat is set aside, and the complaint filed against the appellant, stands dismissed. Criminal Appeal no. 832 of 2012 83. The position stands reversed again. The Board is the appellant in this matter and Raj Chawla, accused no. 10 before the trial Court, is the respondent. 84. The instant appeal has been preferred by the Board against the respondent Raj Chawla, who had approached the High Court by filing Criminal Miscellaneous Case 3937 of 2009, under Section 482 of the Cr.P.C., seeking quash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any filed information/details with SEBI regarding its collective investment schemes pursuant to SEBI press release dated November 26, 1997, and/or public notice dated December 18, 1997. *** *** *** 12. SEBI having regard to the interest of investors and request received from various persons operating collective investment schemes, extended the last date of submitting the application by existing entities upto March 31, 2000 and the same was declared by SEBI vide a press release and a public notice. 13. However, the accused no. 1 failed to make any application with SEBI for registration of the collective investment schemes being operated by it as per the said regulations. 14. It is submitted that in terms of Regulations 73(1) of the said regulations, an existing collective investment scheme which failed to make an application for registration with SEBI, shall wind up the existing collective investment scheme and repay the amounts collected from the investors. Further, in terms of Regulation 74 of the said regulations, an existing collective investment scheme which is not desirous of obtaining provisional registration from SEBI shall formulate a scheme of repayment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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