Order in the matter of M/s ERIL Mutual benefit India Ltd

dated August 31, 2012) (hereinafter referred to as the "Sahara Case") is important to note: "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."

9. I note that the jurisdiction of SEBI over various provisions of the Companies Act, 1956 in the case of public companies, whether listed or unlisted, when they issue and transfer securities, flows from the provisions of Section 55A of the Companies Act, 1956. While examining the scope of Section 55A of the Companies Act, 1956, the Hon'ble Supreme Court of India in the Sahara Case, had observed the following: "We, therefore, hold that, so far as the provisions enumerated in the opening portion of section 55a of the companies act, so far as they relate to issue and transfer of securities and non-payment of dividend is concerned, SEBI has the power to administer in the case of listed public companies and in the case of those public companies which intend to get their securities listed on a recognized stock exchange in India."

10. In this regard, it is pertinent to note that by virtue of section 55A of the Companies Act, section 67 of that Act, so far as it relates to issue and transfer of securities, shall be administered by SEBI in the case of listed companies and companies who intend to get their securities listed. Further, section 11a of the sebi act, 1992 empowers SEBI to regulate the matters relating to issue of capital, transfer of securities and other incidental matters. This provision also empowers SEBI to (i) prohibit any company from issuing propectus/offer document or advertisement soliciting money from the public for the issue of securities and

(ii) specify the conditions subject to which the prospectus, offer document or advertisement, if not prohibited may be issued. The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("the ICDR Regulations"), issued in exercise of powers conferred on SEBI under regulation 30 of the SEBI Act, also govern and regulate the issuance of equity shares (specified securities). Therefore, the Company was also mandated to comply with the provisions of the ICDR Regulations including the following with respect to its offer and issue of equity shares: - Application for listing of specified securities on one or more recognized stock exchange (Regulation 4(2)(d)), - Appointment of merchant banker and other intermediaries (Regulation 5), - Filing of draft offer document with SEBI and the designated stock exchange and RoC (Regulation 6), - Obtaining in-principle approval from the recognized stock exchanges in which the specified securities are to be listed (Regulation 7), - Satisfy the conditions of initial public offer (Regulation 25 and 26), - Lock-in of specified securities held by promoters and persons other than promoters (Regulation 36 and 37) - Keeping the public issue open for the specified period (Regulation 46), - Pre issue advertisement for public issue (Regulation 47) - Manner of disclosures in the offer documents (Regulation 57) - Refrain from offering any incentive to any person making application for allotment of specified securities (Regulation 59).

11. On a consideration of the aforementioned observations, I am of the view that the Company is prima facie engaged in fund mobilizing activity from the public, through the offer and issuance of equity shares and has contravened the provisions of sections 56, 60 and 73 of the Companies Act, 1956 read with section 67(3) thereof and the provisions of the ICDR Regulations.

12. It is noted from the MCA portal that the following are the directors of the Company : List of Signatories DIN/DPIN/PAN Full Name Present residential address Designation Date of Appointment 02550446 BIPLAB KUMAR DEY KALIKAPUR SAYAR PARA 1, ASANSOAL (DAKSHIN), BURDWAN, 713304, West Bengal, INDIA Director 05/04/2013 02888132 JUTHIKA GHOSH PART NO.62, NORTH 24 PARGANAS, HABRA, 743271, West Bengal, INDIA Director 05/04/2013 03459797 CHANDAN SINHA ROY 12, DHAKURIA EAST ROAD, 2ND FLOOR, FLAT - 9, KOLKATA, 700078, West Bengal, INDIA Director 05/04/2013 As can be, seen the above directors were appointed on April 05, 2013. The equity shares, which are the subject matter in this proceeding, were issued on June 30, 2013, after these directors assumed charge as directors of the Company. From the Board Resolution dated June 30, 2013, it can be inferred that all the above directors were present and had approved the allotment of the same to 519 persons. Accordingly, they are liable for the violations committed by the Company, as alleged above. As mentioned above, section 73(2) of the Companies Act, 1956 casts responsibility on the directors that if the Company fails to repay within the period of 8 days, the Company and every director of the company who is an officer in default shall on and from the expiry of the 8th day, be jointly and severally be liable to repay that money with interest. The directors, Mr. Biplab Kumar Dey, Ms. Juthika Ghosh and Mr. Chandan Sinha Roy are alleged to be the officers in default and liable for the default in initiating action as stipulated in section 73(2). Further, in view of the considerable time period that has elapsed i.e., from the date of allotment (on June 30, 2013) in making the repayments, it would be appropriate to advise the Company and its directors to show cause as to why the rate of interest be fixed at 15% as provided for in section 73(2) of the Companies Act.

13. I also note that the Company was incorporated on April 05, 2013. Within a short span of two months (i.e., June 30, 2013, when it had issued equity shares to more than 50 persons), the Company has, allegedly in contravention of the above provisions of law, mobilized public funds through offer and issue of equity shares. It is also noted from the MCA portal that the Company had not filed its Annual Accounts.

14. In view of the above alleged violations committed by the Company and its directors and their alleged default in making repayments in accordance with law, it becomes necessary for SEBI, as the regulator for the securities market, to intervene and issue suitable directions in order to ensure that the Company and its promoters/directors do not continue to collect public funds in contravention of the law. Further, the interest of the investors also need to be protected to ensure that public funds are not diverted.

15. In view of the foregoing, I, in exercise of the powers conferred upon me under section 19 of the Securities and Exchange Board of India Act, 1992 and sections 11(1), 11(4), 11A and 11B thereof read with regulation 107 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, hereby issue the following directions : (a) ERIL Mutual Benefit India Limited (CIN - U65991JH2013PLC001114) and its promoters/directors including Mr. Biplab Kumar Dey (DIN - 02550446), Ms. Juthika Ghosh (DIN - 02888132) and Mr. Chandan Sinha Roy (DIN - 03459797) -

(i) are restrained from mobilizing funds through the issue of equity shares or through any other form of securities, to the public and/ or invite subscription, in any manner whatsoever, either directly or indirectly till further directions;

(ii) 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 directions,

(iii) shall not dispose of any of the properties or alienate the assets of the Company or dispose off any of their properties or alienate their assets;

(iv) shall not divert any funds raised from public at large through the issuance of the impugned equity shares, kept in its bank accounts and/or in the custody of the company without prior permission of SEBI until further orders;

(v) are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities in any manner whatsoever, either directly or indirectly, till further directions;

(vi) shall co-operate with SEBI and shall furnish documents, as sought vide SEBI letter dated November 24, 2014;

(vii) shall 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. (b) The above directions shall come into force with immediate effect and shall continue to be in force till further directions.

16. ERIL Mutual Benefit India Limited and its promoters/directors including Mr. Biplab Kumar Dey, Ms. Juthika Ghosh and Mr. Chandan Sinha Roy are advised to show cause as to why suitable directions/prohibitions, under the sections 11(1), 11(4), 11a and 11b of the sebi act read with the ICDR Regulations, including the following, should not be taken/imposed against them :

a) directing them jointly and severally to refund the money collected through the issue of equity shares that are impugned in this Order, along with interest at 15% per annum from the date when the refunds became due to the investors till the date of repayment ;

b) directing them to not to issue prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, for an appropriate period;

c) directions restraining them from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period;

d) directing them and other companies in which their directors hold substantial or controlling interest, to not to access the capital market for an appropriate period.

17. ERIL Mutual Benefit India Limited and its promoters/directors including Mr. Biplab Kumar Dey, Ms. Juthika Ghosh and Mr. Chandan Sinha Roy may file their replies/submissions within a period of 21 days from the date of receipt of this Order and may also indicate whether they desire to avail an opportunity of personal hearing in the matter.

18. It appears from the complaint received that apart from raising funds through offer and issuance of equity shares, the Company has been mobilizing funds from the public by soliciting/accepting deposits by way of MIS/RD. SEBI has referred the matter to the Registrar of Companies and the Reserve Bank of India for their information and necessary action.

19. This Order is without prejudice to the right of SEBI to take any other action including prosecution proceedings under section 24 of the SEBI Act and section 621 of the Companies Act, 1956 read with the relevant provisions of the Companies Act, 2013 and adjudication proceedings under the SEBI Act, against ERIL Mutual Benefit India Limited and its promoters/directors including Mr. Biplab Kumar Dey, Ms. Juthika Ghosh and Mr. Chandan Sinha Roy, in accordance with law. PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA Date : March 27, 2015 Place: Mumbai