AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 568
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....g schemes; (ii) Not to launch any new scheme/plan or float any new companies/firm to raise fresh moneys; (iii) Not to dispose of any of the properties or alienate the assets obtained directly or indirectly through the money raised by VBDP; (iv) Not to divert any funds raised from public at large, kept in bank account(s) and/or in the custody of VBDP; (v) To immediately submit the full inventory of the assets obtained through money raised by VBDP; (vi) To immediately submit the full inventory of the assets owned by VBDP out of the amounts collected from the investors under its existing Scheme; (vii) To furnish all the information sought by SEBI, including - a. Copies of all the relevant documents of the company including Application Form, Agreement, Certificate issued by the Company, etc.; b. Scheme wise list of investors and their contact numbers and addresses, including - list of investors to whom land has been allotted and got registered and List of investors who have been refunded. c. Details of amount mobilized and refunded till date; d. Details of amount refunded till date along with the ....
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....he Interim Order to them through newspaper publication and email. Further, none of the Noticees have appeared for the personal hearings granted to them first on August 19, 2019 for which the hearing notice was served through newspaper publication and second on December 9, 2019 for which the hearing notice was served through the email address obtained from the MCA website. In view of this, I will proceed to deal with the matter on the basis of the material available on record. 7. Before proceeding to examine the matter on merits, it would be appropriate to refer to the relevant provisions which have been alleged to be violated by the Noticees. The relevant extract of these provisions are as under: Relevant extract of SEBI Act, 1992 "11AA. Collective investment scheme. (1) Any scheme or arrangement which satisfies the conditions referred to in subsection (2) or sub-section (2A) shall be a collective investment scheme: Provided that any pooling of funds under any scheme or arrangement, which is not registered with the Board or is not covered under the exemptions from CIS s....
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....de are in the nature of subscription to a mutual fund; (ix) such other scheme or arrangement which the Central Government may, in consultation with the Board, notify, shall not be a collective investment scheme." ** ** ** Section 12(1B): "(1B) No person shall sponsor or cause to be sponsored or carry on or caused to be carried on any venture capital funds or collective investment schemes including mutual funds, unless he obtains a certificate of registration from the Board in accordance with the regulations: Provided that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any venture capital funds or collective investment schemes operating in the securities market immediately before the commencement of the Securities Laws (Amendment) Act, 1995, for which no certificate of registration was required prior to such commencement, may continue to operate till such time regulations are m....
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....cate provided by one of the complainant (titled 'Registration Letter') included the name of the investor, nominee name, plan, term, date of commencement, final payment date, cost of product, mode of payment, instalment amount, agreed cost of product, and assumed cost of product. (ii) The reverse side of the certificate provided "Terms and Conditions". Some of the terms provided therein are as under: a. The land shall be allotted in the name of Customer in case of cash down/lump sum payment after 180 days of receipt of full payment. In instalment plan, allotment in the name of Customer shall be done after 60 days from date of receipt of 60% amount as per plan opted by the Customer. In both lumpsum plan and instalment plan, the sale deed will be executed in the name of Customer after the receipt of the full consideration amount. b. If the Customer after duly subscribing to a plan of VBDP fails and refuses to submit documents, papers, photographs to complete the necessary formalities and execute the documents required for the purpose of the effective transfer and maintenance of his/her/their plots by VBDP, the same shall be constructed as a case of o....
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....loan and advances) NIL Rs. 20,000/- (other non-current assets) Rs. 15,000/- (other non-current assets) Rs. 10,000/- (other non-current assets) NIL NIL NIL Current Assets NIL NIL Rs. 13,080,210/- (inventories Rs. 13,080,210/- (inventories) Rs. 13,080,210/- (inventories) Rs. 13,080,210/- (inventories) Rs. 75,000/- (cash & Cash equivalents) Rs. 70,000/- (cash & Cash equivalents) Rs. 126,597/- (cash & cash equivalents) Rs. 5,148,529/- (cash & Cash equivalents) Rs. 1,242,618/- (cash & cash equivalents) Rs. 1,730,521/- (cash & Cash equivalents NIL NIL NIL Rs. 22,080,574/- (short term loan and other advances) Rs. 21,048,705/- (Short term loan and other advances) Rs. 21,410,905/- (Short term loan and other advances) NIL NIL NIL Rs. 80,000/- (Other current assets) Rs. 40,389,313/- Rs. 10,854/- (Other current assets) Rs. 353,82387/- Rs. 27,900/- (Other current assets) Rs. 36,249,536/- Total asset Rs. 95,000/- Rs. 85,000/- Rs. 13,372,358/- Rs. 41,221,794/- Rs. 36,242,077/- Rs. 36,754,009/- Non current liability NIL NIL NIL ....
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.... Date of Agreement Land Location Total Consideration (in Rs. ) Total paid amount (in Rs. ) Remaining amount. (in Rs. ) 15-03-2013 (Sale deed) Gram : Bachora, Rani Mandal-02, Shivpuri, Ward No. 01, Madhya Pradesh (5.266 H) 1,21,96,000/- 1,21,96,000/-(this amount has been shown in 'inventories' in the balance sheet since the land was in the name of VBDP) 28-12-2013 Gram: Islampura, Dhar, Madhya Pradesh (3.542 H) 8,82,00,000/- 2,20,50,000/- ( this amount has been shown as short term loan in the FY 2012-13) 6,61,50,000/-(by June 11, 2015) 02-09-2013 Gram: Maath, Kharora, Raipur, Chhattisgarh (1.625 H) NA 15,00,000/- NA 10-09-2014 Gram: Telebadha, Raipur, Chhattisgarh (0.425 H) 23,43,000/- 5,85,750/- 17,57,250/- 29-10-2014 Gram: Islampura, Dhar Madhya Prades (0.266 H) 95,00,000/- 48,50,000/- 48,50,000/-(by December 31, 2017) 25-10-2013 Gram : Bachora, Rani Mandal-02, Shivpuri Ward No. 01, Madhy Pradesh (1500 Sq. ft) 6,00,000/- 3,00,000/- 3,00,000/- 12-11-2013 Gram : Bachora, Rani Mandal-02, Shivpuri Ward No. 01, Madhy Pradesh (2000 Sq. ft) 7,75,000/- 3,75,0....
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.... property and not a bounded property in itself. In fact, the Registration letter also mentions the expected value of the property over a defined time period, although there is no specific mention of a buy-back option. This "expected value" read along with the terms and conditions mentioned on the reverse of the Registration Letter which states that the company may purchase the property back from the investor, goes on to indicate that the transaction is not a simple case of land sale. Therefore, I am of the prima facie view that the company's scheme/plan also satisfies the second condition stipulated in Section 11AA (2) of SEBI Act, 1992. c. The property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors; and d. The investors do not have day-to-day control over the management and operation of the scheme or arrangement. As per the terms of the conditions mentioned on the reverse side of certificate(registration letter), the land will remain in the name the company till the payment of full consideration. Only after payment of certain percentage of consideration amoun....
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....VBDP had not obtained a certificate of registration from SEBI for offering the 'Scheme' which has been found to be CIS in the previous paras. Therefore, VBDP has violated Sections 12(1B) of the SEBI Act, 1992 and Regulation 3 of the CIS Regulations. I further note that Noticee 2 and 3 are directors of VBDP with effect from August 03, 2010 and continues to be directors till date and thus Noticee nos. 2 and 3 are responsible for the violations of provisions of law by VBDP. 17. I further note that Regulation 4 (2) (t) was inserted in the PFUTP Regulations 2003 with effect from September 13, 2013 and as per the said provision the raising of funds by VBDP under its 'Scheme' without seeking registration from SEBI or filing any offer document as required under the CIS Regulations amounts to illegal mobilisation of funds and therefore the Noticees have also violated Regulation 4 (2) (t) of the PFUTP Regulations, 2003. Directions 18. In view of the aforesaid observations and findings, I, in exercise of the powers conferred upon me under Sections 11(1), 11B, 11(4) read with Section 19 of the SEBI Act, 1992 and Regulation 65 of CIS Regulations and Regulation 11 of the....