WTM/PS/35/ERO/IMD/ AUG/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 the matter of PAFL Industries Limited
In respect of 1. PAFL Industries Limited (CIN:U29253WB2011PLC161075; PAN AAFCP9552J)
2. Mr. Anjan Das (DIN: 02611879; PAN :AGAPD6510E),
3. Mr. SankarSaha (DIN: 03053658; PAN : AKUPS5629M),
4. Mr. SatyaCharanMondal (DIN: 03065451: PAN: AWZPM0095L),
5. Ms. Mita Mukherjee (DIN: 05330663: PAN: AJNPM7974K),
6. Mr. SanjoyBiswas (DIN: 06619539: PAN : APVPB0765K),
7. Mr. Abdul Malek (DIN: 06792696; PAN : APYPM6292D),
8. Mr. Krishna Dakuya (DIN: 06792698; PAN : AWUPD0139P),
9. Mr. MabudHossain (DIN: 06792700; PAN : AELPH0259M),
10. Mr. RejaulSeikh (DIN: 06793785; PAN :EPXPS8288L) and
11. Mr. SudipBala (DIN: 06815979)

1.

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

parte Order dated July 31, 2014 (hereinafter referred to as "the interim order") had observed that the
company, PAFL Industries Limited (hereinafter referred to as "PAFL" or "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. In order to protect the investors who have subscribed to the impugned offer

Page1of19

and issue of RPS and to ensure that the Company and its directors are restrained from carrying on with
their fund mobilizingactivity, SEBI had issued the following directions:
"7.

In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11, 11(4), 11A

and 11B of the SEBI Act, hereby issue the following directions
i.

PAFL shall not mobilize funds from investors through the issue of RPS or through the issuance of

equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either
directly or indirectly till further directions;
ii.

PAFL and its Directors, viz. Mr. Anjan Das (DIN: 02611879), Mr. SankarSaha (DIN:

03053658), Mr. SatyaCharanMondal (DIN: 03065451), Ms. Mita Mukherjee (DIN: 05330663), Mr.
SanjoyBiswas (DIN: 06619539), Mr. Abdul Malek (DIN: 06792696), Mr. Krishna Dakuya (DIN:
06792698), Mr. MabudHossain (DIN: 06792700), Mr. RejaulSeikh (DIN: 06793785) and Mr.
SudipBala (DIN: 06815979), 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;
iii.

PAFL 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;
iv.

PAFL shall provide a full inventory of all its assets and properties;

v.

PAFL's abovementioned Directors shall provide a full inventory of all their assets and properties;

vi.

PAFL and its abovementioned 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;
vii.

PAFL and its abovementioned Directors shall not divert any funds raised from public at large through

the issue of RPS, which are kept in bank account(s) and/or in the custody of PAFL;
viii.

PAFL and its abovementioned 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 November 5, 2012
and April 30, 2013.

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8.

The above directions shall take effect immediately and shall be in force until further orders."

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 the correspondences
exchanged between SEBI and PAFL alongwith the documents contained therein; 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 letter dated August 21, 2014 (under signature of Mr. Abdul Malek, director)

submitted that they have taken all steps to pay-off the amount received by the erstwhile directors and
that from the available papers they were not able to find out any such debenture/preference shares.
The Company requested that allegations from investor (i.e. complaints) be forwarded to it. In their
letter to SEBI, the following documents were also stated to be enclosed :
a) Memorandum and Articles of Association of Company;
b) Balance Sheet;
c) Name of directors of the Company;
d) Name of key managerial personnel of the Company;
e) Details regarding the debentures/preference shares not furnished as documents not available
with it.
It was alsointer alia stated "We confirmthat since we have assumed the charges of the company we have not acted to
float or realize money by way of debentures or preference share or in any other format".
On perusal of the above documents, I note the following:
(a) As per the list of directors submitted, it is noted that the names, DIN, addresses,
designation and date of appointment of the noticee directors are mentioned.
(b) As per the Balance Sheet as at March 31, 2013, the Company has issued 20,954
preference shares @Rs.1000/- each for 2,09,54,000/-.

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(c) As per Form 20B pertaining to March 31, 2013, the subscribed and paid-up capital of
the Company is Rs.2,14,54,000/- including Rs.2,09,54,000/- from preference shares.
(d) As on the date of AGM relating to FY March 2013, Anjan Das, SankarSaha, Mita
Mukherjee and SanjoyBiswas were the directors.
(e) As per the MoA and AoA, the initial subscribers/promoters of the Company are SankarSaha, Anjan Das, Priya Das, BithikaSaha, ManajitSaha, Mita Mukherjee and
SekharSaha.
4.

An opportunity of personal hearing in the matter was fixed on November 07, 2014 in the

matter and the same was communicated to the noticees vide SEBI notices dated September 26, 2014.
However, there was no appearance by the noticees (i.e. Company and its directors named in the interim
order). Thereafter, Noticee, Mr. SudipBala vide letter dated November 10, 2014, December 06, 2014
(sent through email) and letter dated March 20, 2015 inter alia stated that he could not attend the
personal hearing and submitted that a) he was an agent and not a director as stated in the letter (i.e. interim order);
b) he does not know about the whereabouts of the company;
c) his duty was to collect new customers for the company and stated that photocopy of his
identity card as agent is attached;
d) the company was closed on May 05, 2013 and since then he was not engaged in any work for
company as agent;
e) he was a daily labourer and cannot travel to Mumbai and that he would assist in all respect
regarding the company through letters.
f) requested SEBI to consider his case sympathetically.
Mr. SudipBalavide his letter dated March 20, 2015 stated that he is poor and cannot travel beyond his
home town.
5.

Subsequently, it was discovered that the interim order and notices informing the personal

hearing was not served on other noticees - SankarSaha, SatyaCharanMondal, MitaMukjerjee, Krishna
Dakuya, Anjan Das and SanjoyBiswas. Therefore, a notice dated March 31, 2015 was published in the

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newspaper (Times of India dated April 10, 2015 and Ananda Bazar dated April 10, 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, none of the noticees(including Mr. SudipBala) appeared despite issuing

notices and publication in the newspapers. In view of such non-appearance, the opportunity of
personal hearing was closed.
7.

I have considered the interim order, the submissions of the above noticees and material

available on record. The following are the observations from the interim order :
"................
PAFL was incorporated on March 23, 2011, with the ROC, Kolkata, West Bengal with CIN No. as
U29253WB2011PLC161075. PAFL's Registered Office is at 189 RabindraSarani, 1st Floor,
Kolkata700007, West Bengal, India.

i.

ii.

The Directors in PAFL are Mr. SankarSaha, Mr. SatyaCharanMondal, Mr. Abdul Malek, Mr.
Krishna Dakuya, Mr. MabudHossain, Mr. RejaulSeikh, Mr. SudipBala, Mr. Anjan Das, Ms. Mita
Mukherjee and Mr. SanjoyBiswas.

iii. PAFL invited subscription for "Redeemable Preference Shares" ("Issue of RPS") in accordance with
inter alia the following terms and conditions
Plan

Minimum Investment

1000

1000

1000

1000

Redemption Period

3 Years

5 Years

10 Years

14 Years

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Indicative/Estimate Yield

500

5000

1000

10000

Estimated Maturity Value

1500

2000

6000

10000

a. Redemption: The principal shall be paid on maturity on surrender of the RPS Certificate. The Share
Certificate may be surrendered to the Company in advance i.e. 3 months before the due date to enable
the Company to issue repayment warrant/DD in time.
b. Principal terms of offer: RPS now being offered are subject to the terms of Memorandum and Articles of
Association of the company, this offer document, the application form. The principal terms are as
follows:
Face value: Each RPS will have a face value of 1000. Application can be made for a minimum
of 1 share amounting 1000 each.
Terms of payment: An amount of 1000 per share is payable on application.
c. Share of Application and Transferability of shares: The company has absolute and sole discretion to
accept or reject any application without assigning any reason the incomplete applications are liable to be
rejected.
d. Mode of payment: The entire amount of 1000 per share is payable on application.

iv. It is observed that PAFL allotted RPS to a large number of investors during the Financial Years 2011
12 and 201213, details of which are provided below Sl. No.

1.
2.
3.
4.
5.

Financial
Year

Date of
allotment

Amount
per share
( )

No. of
preference
shares allotted

19.04.2011
20.04.2011
22.04.2011
23.04.2011
25.04.2011

549
241
833
479
1584

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No. of persons
to whom
allotted
45
22
44
49
22

Total Amount
( in Lakhs)
5.49
2.41
8.33
4.79
15.84

6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.

201112

26.04.2011
27.04.2011
30.04.2011
02.05.2011
05.05.2011
10.05.2011
14.05.2011
20.05.2011
04.06.2011
11.06.2011
16.06.2011
18.06.2011
25.06.2011
05.07.2011
11.07.2011
20.07.2011
08.08.2011
16.08.2011
25.08.2011
12.09.2011
27.09.2011
13.10.2011
28.10.2011
11.11.2011
12.12.2011
13.01.2012
14.02.2012
15.03.2012

1000

Sub Total
1.

201213

05.04.2012

1000

Total

98
1054
361
734
425
388
629
297
688
538
906
356
262
840
421
265
388
485
2163
331
2450
464
350
391
411
864
350
359
20954

11
45
49
40
41
47
41
49
40
41
49
45
49
45
49
49
28
49
49
49
49
49
7
49
49
46
48
48
1392

0.98
10.54
3.61
7.34
4.25
3.88
6.29
2.97
6.88
5.38
9.06
3.56
2.62
8.40
4.21
2.65
3.88
4.85
21.63
3.31
24.50
4.64
3.50
3.91
4.14
8.64
3.50
3.59
209.57

393

47

3.93

21347

1439

213.50

.................."
Observations made in paragraph 4.3 sub-paragraph (iii) onwards ".............
iii. In the instant matter, for ascertaining whether the Issue of RPS is a public issue or an issue on private
placement basis in accordance with Section 67 of the Companies Act, 1956, the no. of subscribers is of
utmost importance.
a.

From the Compliance Certificate dated August 29, 2012 (which was addressed to the Members,
PAFL by the Company Secretary i.e. A. K. Labh& Co.), it has been stated as follows

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 "The Board of Directors of PAFL duly met 40 times on 24.03.2011, 25.03.2011,

16.04.2011, 19.04.2011, 20.04.2011, 22.04.2011, 23.04.2011, 25.04.2011,
26.04.2011, 27.04.2011, 30.04.2011, 02.05.2011, 5.05.2011, 10.05.2011, 14.05.2011,
20.05.2011, 04.06.2011, 11.06.2011, 16.06.2011, 18.06.2011, 25.06.2011,
28.06.2011, 5.07.2011, 11.07.2011, 20.07.2011, 8.08.2011, 16.08.2011, 25.08.2011,
12.09.2011, 27.09.2011, 13.10.2011, 28.10.2011, 11.11.2011, 14.11.2011,
10.12.2011, 12.12.2011, 7.01.2012, 13.01.2012, 14.02.2012 and 15.03.2012.
Three Extra-Ordinary General Meetings were held during the period on 17.04.2011,
07.07.2011 and 04.01.2012, respectively after giving notice to the members of the company and
the resolutions passed thereat was duly recorded in Minutes book maintained for the purpose.
The Company has issued 20954 preference shares for `1000 in tranches during the period for
which necessary compliances were duly made."
b.

Under the Issue of RPS, it is observed that during the financial year 201213, PAFL allotted RPS
to only 47 individuals/investors, for which it collected approximately 0.03 Crores. However, for the
earlier financial year i.e. 201112, PAFL allotted RPS to 1392 individuals/investors under the
Issue of RPS and mobilized funds amounting to approximately 2.09Crores.

c.

The number of allotments, the frequency alongwith the time span between such allotments during the
financial year 201112 when viewed in light of refusal to submit information to SEBI, by PAFL
and its Directors, would prima facie indicate that the Issue of RPS was a public issue of securities and
the method adopted by PAFL (Issue of RPS was made in tranches) for mobilization of funds is
nothing but a device to circumvent the provisions of section 67(3) of the Companies Act, 1956. In
view of the same, the abovementioned allotments under the Issue of RPS, therefore, have to be
construed as emanating from a single offer of securities during the financial year 2011-12 and prima
facie indicate that the number of persons to whom such offer was made, was above the limit of forty
nine persons as prescribed under Section 67(3) of the Companies Act, 1956.

d.

PAFL is not stated to be a non-banking financial company or a public financial institution within
the meaning of Section 4A of the Companies Act, 1956 and therefore, is not covered under the second
proviso to Section 67(3) of the Companies Act, 1956.
"

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8.

As mentioned in the interim order, the Company had in the financial year 2011-2012, allotted

RPS to 1392 persons (investors) under its offer and allotment of RPS and had mobilized funds to the
tune of Rs.2.09 crore. The allegation against the Company and its directors is that the Company had
not complied with the norms regulating the public issue of securities stipulated under section 56, 60 and
73 of the Companies Act, 1956.From the table mentioned above (as reproduced from the interim
order), the Company had allotted RPS to several persons on various dates during FY 2011-2012. It can
seen that the allotments are made within short intervals.

As an illustration, during April 2011, the

Company has allotted RPS on consecutive days.

Date of allotment

19.04.2011
20.04.2011
22.04.2011
23.04.2011
25.04.2011
26.04.2011
27.04.2011
30.04.2011

9.

No. of persons to
whom allotted
45
22
44
49
22
11
45
49

The interim order has also mentioned that the Board of Directors held 40 meetings and that

resolutions were passed in EGMs held on April 17, 2011, July 07, 2011 and January 04, 2012.
Therefore, it can be regarded that the allotments made from April 19, 2011 to July 05, 2011 were made
in pursuance of the Resolution dated April 17, 2011. Similarly, the allotments made from July 11,
2011to December 12, 2011 were done in pursuance of Resolution dated July 07, 2011 and that the
allotments made from January 13, 2012 to March 15, 2012 were made pursuant to the Resolution dated
January 04, 2012.
10.

In order to ascertain whether an issue of securities is a 'public issue' or done on 'private

placement', a reference to section 67(3) of the Companies Act, 1956 needs to be made:
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 sub-sections (3) and (4), be construed as including a reference to offering them to any section of the public,

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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 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 firstproviso 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.
11.

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

Limited & Others vs. SEBIand 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

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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. "
12.

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

consecutive days or within short intervals in FY 2011-2012. It can be seen that the number of persons
to whom RPS were allotted exceeded 49. This is the case, even if the allotments are grouped under the
respective resolutions as mentioned above. Therefore, considering the number of persons from whom
monies were mobilised 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 on consecutive days and/or within a
short duration between each allotment) 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.
13.

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:

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... ... 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. "
14.

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 in respect of its offer and issue of RPS. 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 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'.
15.

The interim order has alleged that the Company failed to comply with section 73 of the

Companies Act, 1956 in respect of its issuance of RPS. 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 disputedthat this allegation is incorrect.
Further, there is no material to say that the Company has filed an application with a recognised 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

Page12of19

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, who is an officer in default, is jointly and severally liable to repay with interest. Considering
that the mobilization was done during 2011-2012, it would be appropriate to levy an interest of 15% as
provided for under the above section. Further, the liability of the Company to refund the public funds
collected through offer and allotment of the impugned RPS is a continuing liability and such liability
would continue till repayments are made by the Company and the officers in default.
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.
16.

As mentioned above, the Company has mobilized Rs.2.09 crore from the public investors under

its offer and issue of RPS and in doing so has not complied with the provisions of the Companies Act,
1956. The Company or its directors have not disputed the allegations. The Company (signed by Mr.
Abdul Malek, director) has only submitted that they have taken all steps to pay-off any amount received
by the erstwhile directors and that from the available papers they were not able to find out any such
debenture/preference shares. In this regard, I note that the documents that substantiate the charges
are taken from the MCA portal and the correspondence from the Company. Further, the documents
submitted vide Company's letter dated August 21, 2014 donot support the case of the Company rather
substantiate the findings made in this Order.
17.

Liability of directors:
(a) The interim order was issued to the following persons stated to be the Company's directors:
1. Mr. Anjan Das (DIN: 02611879),
2. Mr. SankarSaha (DIN: 03053658),
3. Mr. SatyaCharanMondal (DIN: 03065451),
4. Ms. Mita Mukherjee (DIN: 05330663),
5. Mr. SanjoyBiswas (DIN: 06619539),

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6. Mr. Abdul Malek (DIN: 06792696),

7. Mr. Krishna Dakuya (DIN: 06792698),
8. Mr. MabudHossain (DIN: 06792700),
9. Mr. RejaulSeikh (DIN: 06793785) and
10. Mr. SudipBala (DIN: 06815979)
As per the information available from the MCA website (accessed on July 14, 2015), the above persons
are shown as the directors of the Company. The details regarding their designation and date of
appointment is mentioned below:
List of Signatories
DIN/DPIN/PAN

06815979

03065451

06792696

06792698

Full Name

Present residential
address

Designation

SUDIP BALA

THAKURANAGAR
MASHTAR
PARA,CHIKANPARA
CT,GAIGHATA,, NORTH 24
PARGANAS, KOLKATA,
743287, West Bengal,
INDIA

Director

01/02/2014

VILL.
DHAKURIA,P.O.DHAKURIA
KALIBARI, P.S-GAIGHATA,
24 PGS (N), GAIGHATA,
743246, West Bengal,
INDIA

Director

01/01/2014

SINHATI
PURBAPARA,(MAUJA
SINHATI,J.L NO-20),
NAOPARA-1 DHUBULIA
NADIA, Nadia, 741140,
West Bengal, INDIA

Director

01/01/2014

LAKSHIPUR,NAKPUL(CT),
, NORTH 24 PARGANAS,
Parganas North, 743252,
West Bengal, INDIA

Director

01/01/2014

SATYA CHARAN
MONDAL

ABDUL MALEK

KRISHNA
DAKUYA

06792700

MABUD HOSSAIN

SAHARA,J.H.NO.-145,,
CHALUN GANGARAMPUR,
DakshinDinajpur, 733140,
West Bengal, INDIA

Director

01/01/2014

06793785

REJAUL SEIKH

KAYEMBA, MARGRAM,
BIRBHUM, BIRBHUM,
731241, West Bengal,
INDIA

Director

01/01/2014

03053658

SANKAR SAHA

80/2, SHARMA PARA

LANE, NADIA, RANAGHAT,
741201, West Bengal,
INDIA

Director

23/03/2011

02611879

ANJAN DAS

162 SEBAGRAM
PASCHIM, 11 NOWPARA
NORTH 24 PARAGANAS.,
KOLKATA, 743122, West
Bengal, INDIA

Director

23/03/2011

05330663

MITA
MUKHERJEE

D.T.S HILL COLONY P.O.

LUMDING, DIST NAGOWAN, ASSAM,
LUMDING, 782447, Assam,
INDIA

Director

20/07/2012

Page14of19

Date of
Appointment

06619539

SANJOY BISWAS

DEBINAGAR, MOUJAKASBA, J.L. NO. 145, 10

NO. MARAIKURA,
RAYGANJ, UTTAR
DINAJPUR, RAIGUNJ,
733154, West Bengal,
INDIA

Director

01/06/2013

The period during which the RPS were issued without complying with the public issue norms is from
April 19, 2011 to March 15, 2012. Noticees, Shankar Saha and Anjan Das were appointed on March
23, 2011 and still continue as directors of the Company. The directors are 'officers in default' andliable,
during the relevant period, for the violations found against the Company and also for committing
default in returning the monies due to the investors who have subscribed to the RPS in accordance
with section 73. The other directors including Mr. SudipBalaare noticed to have joined the Company's
Board pursuant to the above said period. However, they are also responsible as 'officers in default in
terms of section 73(2) of the Companies Act, 1956 for returning the monies with applicable interest.
They have failed to do so. Though Mr. SudipBala has stated that he was an agent and not a director, the
above information accessed from the MCA portal proves otherwise.
18.

As mentioned above, the liability to refund the public funds collected through offer and

allotment of the impugned RPS is continuing and such liability would continue till repayments are made
by the Company and the officers in default. Mr. Abdul Malek has stated that the Company is making
refunds to the investors of the money collected by the previous management. These directors seem to
have not taken action against the previous management (for violating the public issue norms as stipulated under
the Companies Act, 1956 while making the offer and issuing the RPS), even after the receipt of the SEBI Order
and such conduct leads one to conclude on a possible collusion at their end with the Company and its
previous management.
19.

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 November 5, 2012 and April 30, 2013 and also
a full inventory of all their assets and properties. These directions have not been complied with.

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20.

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.
21.

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, PAFL Industries Limited (CIN : U29253WB2011PLC161075; PAN
AAFCP9552J) and and its promoters and directors including Mr. Anjan Das (DIN:
02611879; PAN :AGAPD6510E), Mr. SankarSaha (DIN: 03053658; PAN : AKUPS5629M),
Mr. SatyaCharanMondal (DIN: 03065451: PAN: AWZPM0095L), Ms. Mita Mukherjee
(DIN: 05330663: PAN: AJNPM7974K), Mr. SanjoyBiswas (DIN: 06619539: PAN :
APVPB0765K), Mr. Abdul Malek (DIN: 06792696; PAN : APYPM6292D), Mr. Krishna
Dakuya (DIN: 06792698; PAN : AWUPD0139P), Mr. MabudHossain (DIN: 06792700;
PAN : AELPH0259M), Mr. RejaulSeikh (DIN: 06793785; PAN :EPXPS8288L) and Mr.
SudipBala (DIN: 06815979), 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), 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.
(b) The repayments to investors shall be effected only in cash through Bank Demand Draft or Pay
Order.
(c) PAFL Industries Limitedand the above persons/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.

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(d) PAFL Industries Limitedand its promoters and directorsshall issue public notice, in all
editions of two NationalDailies (one English and one Hindi) and in one local daily (in Bengali)
with wide circulation, detailing themodalities for refund, including details of contact persons
including names,addresses and contact details, within fifteen days of this Order coming
intoeffect.
(e) After completing the aforesaid repayments, the Company shall file acertificate of such
completion with SEBI,within a period of three months from the date of this Order,from two
independent peer reviewedChartered Accountants who are in the panel of any public authority
or publicinstitution. For the purpose of this Order, a peer reviewed Chartered Accountantshall
mean a Chartered Accountant, who has been categorized so by the Institute ofChartered
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, PAFL Industries Limited and its promoters and directors
including Mr.Anjan Das, Mr.SankarSaha, Mr.SatyaCharanMondal, Ms.Mita Mukherjee,
Mr.SanjoyBiswas, Mr. Abdul Malek, Mr. Krishna Dakuya, Mr.MabudHossain, Mr.RejaulSeikh
and Mr.SudipBala, 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.
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

Page17of19

in-charge 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) PAFL Industries Limitedis 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 yearsfrom the date of completion of refunds to investors as directed above.
(i) The directors including former directors, namely,Mr. Anjan Das (DIN: 02611879; PAN
:AGAPD6510E), Mr. SankarSaha (DIN: 03053658; PAN : AKUPS5629M), Mr.
SatyaCharanMondal (DIN: 03065451: PAN: AWZPM0095L), Ms. Mita Mukherjee
(DIN: 05330663: PAN: AJNPM7974K), Mr. SanjoyBiswas (DIN: 06619539: PAN :
APVPB0765K), Mr. Abdul Malek (DIN: 06792696; PAN : APYPM6292D), Mr. Krishna
Dakuya (DIN: 06792698; PAN : AWUPD0139P), Mr. MabudHossain (DIN: 06792700;
PAN : AELPH0259M), Mr. RejaulSeikh (DIN: 06793785; PAN :EPXPS8288L) and Mr.
SudipBala (DIN: 06815979),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
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 of4 yearsfrom 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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22.

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.
23.

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

information and necessary action.

24.

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 : August 05, 2015
Place: Mumbai

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