TMI Blog2018 (1) TMI 1589X X X X Extracts X X X X X X X X Extracts X X X X ..... rongly or rightly, who have been shown as directors on MCA portal should be made responsible for ensuring the repayment of the amount collected illegally by the company pursuant to resolution passed on 15th February, 2012, although the appellant was not a director at that time remains an admitted position. We are of the considered opinion that this appeal can be disposed of with a direction to the appellant to obtain appropriate documents/orders from the competent authority to the effect that he was fraudulently appointed as director of the company in question on 10th February, 2015. For this purpose, the appellant is granted time up to one year to do the needful and submit the same to SEBI. In the eventuality of appellant producing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early intervals, from the date when the repayments became due (in terms of Section 73(2) of the Companies Act, 1956) to the investors till the date of actual payment. b. The repayments to investors shall be effected only in cash through Bank Demand Draft or Pay Order. c. The Company/its present management are permitted to sell the assets of the Company only for the sole purpose of making the refunds as directed above and deposit the proceeds in an Escrow Account opened with a nationalised Bank. d. The Company/its present management shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily with wide circulation, detailing the modalities for refund, including details on cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectors and its managers/persons in-charge of the business and its schemes, for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and iv. would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company. g. The Company namely Golden Heaven Agro Project India Limited is directed not to, directly or indirectly, access the capital market by issuing prospectus, offer document or advertisement soliciting money from the public and is 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 four (4) years from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant has been appearing on the MCA portal and as such SEBI's action in making him responsible cannot be faulted with. 3. We have heard both the learned counsel for the parties for some time and during the course of hearing, both the parties have brought to our notice the judgment of this Tribunal dated 14th July, 2017 in Appeal No. 66 of 2016 (Manoj Agarwal vs. SEBI). In Manoj Agarwal's case, the appellant was a director of a company named, Bharatiya Real Estate Development Limited from 19th August, 2010 till 1st May, 2012. SEBI passed confirmatory order dated 21st January, 2016 confirming the ex-parte order dated 2nd December, 2014 whereby the directors of Bharatiya Real Estate Development Limited including the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any merit. In the present case, even though the intention of BREDL was to collect ₹ 40 lac by issuance of redeemable preference shares through private placement and not by the general public, admittedly allotments were made to more than 50 entities and therefore BREDL was obliged to follow the public issue norms specified under the Companies Act, 1956. Since the said norms were not followed, under Section 73(2) of the Companies Act, 1956 it was obligatory on part of BREDL to refund the amount collected within the time stipulated therein. As the amounts were not refunded to the investors it is held that BREDL and every director of BREDL who is an officer in default shall refund jointly and severally the amount with interest. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t had neither paid any subscription money to BREDL and the fact that the appellant was not involved in the day to day affairs of BREDL would not absolve the appellant from his obligation to refund the amount to the investors in view of the specific provisions contained in Section 73(2) read with Section 5 of the Companies Act, 1956. Admittedly, the appellant was a director of BREDL when amounts were collected by BREDL in contravention of the public issue norms and there is nothing on record to suggest that any particular officer/director was authorised to comply with the public issue norms. In such a case, all directors of BREDL including the appellant would be officer in default under Section 73(2) read with Section 5 of the Companies Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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