WTM/PS/02/ERO/APR/2015

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA

CORAM: PRASHANT SARAN, WHOLE TIME MEMBER
ORDER
Under Sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992
In respect of Mangalam Agro Products Limited
its Directors, namely, Mr. Kamolesh Kumar Ghosh, Mr. Ujjal Sikder and Mr. Tapan Kumar
Dey; and
its Debenture Trustees, namely, Mangalam Institute of Development and Research (through
its Settlor viz. Mr. Madhusudhan Chatterjee) and Ms. Chandani Mohta
Date of hearing : August 22, 2014
Appearance :
For noticees : Ms. Chandani Mohta, appeared in-person. No appearance or representation for the other
noticees
For SEBI : Ms. Soma Majumder, General Manager, Mr. T. Vinay Rajneesh, Assistant General Manager
and Ms. Nikki Agarwal, Assistant Manager
Date of hearing : September 26, 2014
For noticees : none appeared
1.

Securities and Exchange Board of India (hereinafter referred to as "SEBI") passed an ex-parte

interim Order dated May 30, 2014 (hereinafter referred to as "the interim order") in the matter of
Mangalam Agro Products Limited (hereinafter referred to as "the Company"). This Order was issued
against the Company, its directors Mr. Kamolesh Kumar Ghosh, Mr. Ujjal Sikder and Mr. Tapan
Kumar Dey and its Debenture Trustees, Mangalam Institute of Development and Research
(through its Settlor viz. Mr. Madhusudhan Chatterjee) and Ms. Chandani Mohta (collectively referred
to as "the noticees"). The interim order inter alia observed/alleged that a) The Company had made an offer and allotted Secured Non-Convertible Debentures ("NCDs")
to around 4820 investors during the Financial Year 2011-2012 and mobilized Rs.11 crores.
b) The Company had made a series of offers (totaling 107 offers) and allotments during the period
January 2011 to June 2012.

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c) The series of offers were done in pursuance of Resolutions dated March 01, 2011 (approval for
issue of 50,00,000 NCDs @ Rs.10/-) and November 15, 2011 (approval for issue of 6,00,000
NCDs @ Rs.100/-).
d) The Company had represented that it allotted NCDs to less than 49 persons under each such
offer.
e) The series of offers (of NCDs) and allotments made in tranches by the Company, as
mentioned, above, during 2011-2012, as per approval of two resolutions, resulted in the
allotment of NCDs to approximately 4820 investors, indicating that the offer and allotment of
NCDs were made to more than 40 persons.
f) The series of offers and allotments made by the Company to less than to 49 persons in each of
such allotments, was alleged by SEBI to be a device adopted to circumvent the provisions of
section 67(3) of the Companies Act, 1956. As the aggregate number of investors (to whom the
offers and allotments were made) were more than 49, the offer of NCDs made by the
Companies Act, 1956 was alleged to be a public issue' of such securities in terms of the first
proviso to section 67(3) of the Companies Act, 1956 read with section 55A thereof, made
without complying with (i) sections 56(1) & (3), 60 [read with section 2(36)], 73, 117B and 117C of the Companies Act,
1956; and
(ii) the relevant provisions of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008
("the ILDS Regulations").
g) The amount mobilized by the Company i.e., Rs.11 crores, was indicated in the Balance Sheet
for 2011-2012 under the head "Non-current Liabilities: Long Term Borrowing".
h) It was also alleged that the Debenture Trustees, Mangalam Institute of Development and
Research (through its settlor, Mr. Madhusudhan Chatterjee) and Ms. Chandani Mohta,
appointed by the Company, have contravened section 12(1) of the SEBI Act as they are not
registered with SEBI. The above persons were also alleged to have not satisfied the eligibility
criteria laid down under regulation 7 of the SEBI (Debenture Trustees) Regulations, 1999 ("the
DT Regulations").
2.

In view of the above findings and allegations, SEBI, in order to protect the interest of investors

who had subscribed to the securities issued by the Company and to ensure that the funds
mobilized/assets are not diverted, the following directions were issued:
"...........

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8.

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 read with the Debt Securities Regulations and the Debenture Trustee Regulations, hereby issue
the following directions
i.

MAPL shall not mobilize funds from investors through the issue of Secured NonConvertible Debentures
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. MAPL and its Directors, viz. Shri Kamolesh Kumar Ghosh, Shri Ujjal Sikder and Shri Tapan Kumar
Dey, 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. Mangalam Institute of Development and Research (through its Settlor viz. Shri Madhusudhan Chatterjee)
and Chandani Mohta are prohibited from continuing with their present assignment as debenture trustees in
respect of the issue of Secured NonConvertible Debentures of MAPL and also from taking up any new
assignment or involvement in any new issue of debentures, etc. in a similar capacity, from the date of this
order till further directions.
9.

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

10.

The prima facie observations contained in this Order are made on the basis of the material available on record i.e.
correspondences exchanged between SEBI and MAPL alongwith the documents contained therein, information
obtained from MCA21 Portal, Order of the Honble Kolkata High Court dated May 6, 2014. In this context,
MAPL and its abovementioned Directors; its Debenture Trustees, viz. Mangalam Institute of Development and
Research (through its Settlor viz. Shri Madhusudhan Chatterjee) and Chandani Mohta may, within 21 days
from the date of receipt of this Order, file their reply, if any, to this Order and may also indicate whether they
desire to avail themselves an opportunity of personal hearing on a date and time to be fixed on a specific request
made in that regard.

11.

This Order is without prejudice to the right of SEBI to take any other action that may be initiated against
MAPL and its abovementioned Directors; its Debenture Trustees, viz. Mangalam Institute of Development
and Research (through its Settlor viz. Shri Madhusudhan Chatterjee) and Chandani Mohta, in accordance with
law."

3.

The interim order advised the noticees to file their replies and to indicate whether they desire

to avail themselves an opportunity of personal hearing. As per the information available from 'India
Post', it is noted that the copies of the interim order were delivered upon Mr. Tapan Kumar Dey,

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Mangalam Institute of Development and Research, its settlor Mr. Madhusudhan Chatterjee and Ms.
Chandani Mohta.
4.

An opportunity of personal hearing was afforded to the noticees on August 22, 2014. On this

day, Ms. Chandani Mohta appeared in-person and made submissions. She orally submitted that she had
accepted to act as the debenture trustee in view of the consideration offered by the Company. No
written reply was received from Ms. Chandani Mohta. In respect of the other noticees for whom
deliveries of the notices informing the hearing schedule could not be done, SEBI attempted to get the
notices hand-delivered/pasted. The notice was hand-delivered at the registered office address of the
company. Whereever, delivery could not be done, attempts were made to get the notices pasted. Notice
was pasted at the address of Mr. Kamolesh Kumar Ghosh. The address of the director, Mr. Ujjal Sikder
could not be located and on local enquiries it was learnt that the said address is incorrect. Though the
interim order could be delivered on Mr. Tapan Kumar Dey, the hearing notice could not be delivered
as the same returned. Attempts to hand deliver/paste the hearing notice to the director, Mr. Tapan
Kumar Dey also failed as he was not found at the address available with SEBI.
5.

Another opportunity of personal hearing was afforded on September 26, 2014 for those

noticees who did not appear in the previous personal hearing. The hearing notice was sent through
hand delivery to the Company at its registered address. However, as it was noted that the Company was
not present at its registered address, SEBI inquired in the locality regarding the same. It was learnt that
the Company had shifted its premises to a nearby location. However, in this location, there were no
personnel to accept the notices. Hence, the notice was pasted. It is also noticed that SEBI had pasted
the notices at the last address of noticee, Mr. Kamolesh Kumar Ghosh and delivered to the neighbour
of Mr. Tapan Kumar Dey. Further, the address of Mr. Ujjal Sikder could not be located and was learnt
later that the same was incorrect.

The notice was hand delivered on Mangalam Institute of

Development and Research and Mr. Madhusudhan Chatterjee.

In the personal hearing held on

September 26, 2014, none of the noticees appeared.

6.

As mentioned in paragraph 11 of the interim order, the Hon'ble Calcutta High Court had vide

Order dated May 06, 2014 in C.A. No. 304/2014 (in the matter of Mangalam Agro Products Limited)
had appointed a Special officer to take possession of the assets, properties and bank accounts of the
Company. The Company was restrained from dealing with, disposing of, alienating, encumbering
and/or creating third party interest in respect of its assets and properties without leave of the Court and

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to be dealt with only in the usual course of business. I note that two more Orders were passed by the
Hon'ble High Court. Vide Order dated June 05, 2014, the Court had mentioned the interim order
passed by SEBI and further directions were passed in pursuance of the directions issued vide Order
dated May 06, 2014. Vide Order dated June 10, 2014, the Hon'ble High Court, after hearing the
Company, had inter alia directed the Central Government to appoint an agency preferably the Serious
Frauds Investigation Office (SFIO) to investigate into the affairs of the Company. The Hon'ble Court
also directed that the Special Officer appointed vide its Order dated May 06, 2014 shall stand
discharged once Central Government appoints SFIO.
7.

In view of the above, it can be inferred that the Company having appeared before the Hon'ble

High Court, and wherein the interim order was also referred to dealing with the money mobilization
through issue of debentures, was aware of the proceedings before SEBI, but chose not to participate.
Though the interim orders and notices were served on Mangalam Institute of Development and
Research and Mr. Madhusudhan Chatterjee, they failed to submit reply and appear in the personal
hearing.
8.

I also note that Mr. Tapan Kumar Dey vide letter dated October 17, 2014 (received in SEBI on

October 28, 2014) inter alia made the following submissions:

a. He was innocent in the matter.
b. Mr. Sikder was his friend and wanted this noticee to work as a financial consultant for the
Company for arranging funds.
c. The noticee had given his personal details, address proof, PAN card etc for incorporating the
same in the Fee Protection Agreement.
d. He could not arrange for loans due to the adverse notes in the balance Sheets and irregularities
carried out by the directors of the Company. In view of the same, Mr. Sikder warned him of
severe action.
e.

The Company fraudulently made him a director and he never attended any board meetings.

f. He never took any sitting fees/reimbursement of expenses.

g. He was not a signatory of any bank account of the Company.
h. He was also not aware of any case pending in the Calcutta High Court.
i.

He never consented to become a director and did not sign the RoC documents. He never
provided digital signature and does not hold any equity shares of the Company. As per RoC
records, his consent to work as a director was filed on November 26, 2013. However, the

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irregularities in the NCD issues by the Company and debenture trustees happened prior to
December 2013.
j.

As he was not in the board of the Company, he was not in any manner related to the Company.
Hence, he requested that his name be dropped from the proceedings.

k. He wanted to file a case of 'cheating' against the Company and its directors and made several
attempts to meet them personally to collect records. However, they were absconding from
Kolkata and therefore he was not able to take action against them.
9.

I have considered the interim order, the submissions made by the concerned noticees and other

material available on record. The allegation against the Company is that it had made an offer and
issued debentures and the same was in the nature of a 'public issue' in terms of the first proviso to
section 67(3) of the Companies Act, 1956 and such public issue was done in contravention of the
public issue norms as stipulated under section 56, 60, 73, 117B and 117C of the Companies Act, 1956
and the provisions of the ILDS Regulations. In order to determine whether an offer is made to the
public or done through private placement, the criteria laid down under section 67 of the Companies
Act, 1956 needs to be applied. Accordingly, it would be important to refer to the provisions of section
67(1) and (3) of the Companies Act, 1956.
"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, 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).

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In terms of the first proviso to section 67(3), any offer or invitation to subscribe for shares or debentures
made to 50 persons or more is construed to be an offer made to the public. The interim order has
alleged that during the year 2011-2012, the Company had, in pursuance of its offer of NCDs, made
offer and allotted NCDs (50 lakh NCDs of Rs.10/- and 6 lakh NCDs of Rs.100/-) to approximately
4820 investors/persons. The Company had allegedly mobilized Rs.11 crores through these allotments
of NCDs. The number of investors i.e., approximately 4820 as alleged in the interim order was as per
the material furnished by the Company to SEBI. However, the Hon'ble High Court of Calcutta in the
Order dated June 10, 2014, had inter alia observed that "... It is in the financial year 2012-2013 that Rs.11
crore has been realised by the applicant company from the public at large. The number of debenture holders aggregates to
about 80,000 while the number that finds mention in the payment schedule is only 8227. Admittedly, the number is
beyond fifty. Therefore it required compliance with section 73 of the 1956 Act....". The interim order had already
alleged that the series of allotments claimed to have been done by the Company is only to circumvent
the provisions of section 67(3). Further, as the Company had admittedly made offer and issued
debentures to more than 50 persons, the same became a 'public issue' of such securities in terms of first
proviso to section 67(3). The Company is not a NBFC or a public financial institution to claim any
exemption under this provisions.
10.

In view of the foregoing, it would be in accordance with the law laid down under the first proviso

to section 67(3) of the Companies Act, 1956 to include all the allotments done by the Company under
the same Resolution. Accordingly, the offer and allotment of NCDs made to more than 50 persons by
the Company thereby mobilizing Rs.11 crore is definitely a 'public offer of NCDs'. By making a public
issue of NCDs, the Company was mandated to comply with all the legal provisions that govern and
regulate such public issue of NCDs, 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 India Real Estate Corporation Limited & Ors. Vs. SEBI
(Civil Appeal no. 9813 and 9833 of 2011) (hereinafter referred to as the 'Sahara Case'):
... ... 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. "
11.

As alleged in the interim 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 NCDs. 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

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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'. As recorded in the interim order, the Company has admitted that it did not issue any
Prospectus, Advertisement or other promotional material for issuing NCDs.

The interim order has

also alleged that the Company did not comply with sections 117B and 117C of the Companies Act,
1956. The relevant portion of the said sections are reproduced below for reference:
"117B. APPOINTMENT OF DEBENTURE TRUSTEES AND DUTIES OF DEBENTURE
TRUSTEES (1) No company shall issue a prospectus or a letter of offer to the public for subscription of its debentures,
unless the company has, before such issue, appointed one or more debenture trustees for such debentures and the company
has, on the face of the prospectus or the letter of offer, stated that the debenture trustee or trustees have given their consent to
the company to be so appointed..."
"117C.

LIABILITY

OF

COMPANY

TO

CREATE

SECURITY

AND

DEBENTURE

REDEMPTION RESERVE (1) Where a company issues debentures after the commencement of this Act, it shall
create a debenture redemption reserve for the redemption of such debentures, to which adequate amounts shall be credited,
from out of its profits every year until such debentures are redeemed."
There is no material on record to arrive at a finding that such provisions had been complied with by the
Company. Accordingly, the Company is found liable for the contravention of sections 117B and 117C
of the Companies Act, 1956.
12.

Further, by issuing NCDs to more than 50 persons, the Company had to compulsorily list such

securities in compliance with section 73 of the Companies Act, 1956. As per section 73(1) and (2) of
the 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 and if permission has not been applied for or not granted, the company is required to
forthwith repay with interest all moneys received from the applicants. The Company has contravened
the said provisions as it has neither made an application seeking listing permission nor refunded the
amounts on account of such failure. For this failure the directors of the Company, being the 'officers in
default' are also liable. 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

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same in accordance with section 73(2) as observed above. Accordingly, I find the Company liable for
not complying with the provisions of section 73 of the Companies Act in respect of its offer and issue
of NCDs.
13.

The interim order has also alleged that the Company has not complied with the provisions of

the ILDS Regulations in respect of its issue of NCDs to the public. In terms of the ILDS Regulations,
'debt securities' are 'non-convertible debt securities which create or acknowledge indebtedness, and include debenture'.
The NCDs are debentures which are non-convertible in nature and acknowledge debt. Accordingly, the
ILDS Regulations would be applicable for the offer and issue of NCDs made by the Company. I
therefore find the Company liable for contravening the following provisions of the ILDS Regulations :
i. Regulation 4(2)(a) Application for listing of debt securities
ii. Regulation 4(2)(b) In-principle approval for listing of debt securities
iii. Regulation 4(2)(c) Credit rating has been obtained
iv. Regulation 4(2)(d) Dematerialization of debt securities
v. Regulation 4(4) Appointment of Debenture Trustee
vi. Regulation 5(2)(b) Disclosure requirements in the Offer Document
vii. Regulation 6 Filing of draft Offer Document
viii. Regulation 7 Mode of disclosure of Offer Document
ix. Regulation 8 Advertisements for Public Issues
x. Regulation 9 Abridged Prospectus and application forms
xi. Regulation 12 Minimum subscription
xii. Regulation 14 Prohibition of mis-statements in the Offer Document
xiii. Regulation 15 Trust Deed
xiv. Regulation 16 Debenture Redemption Reserve
xv. Regulation 17 Creation of security
xvi. Regulation 19 Mandatory Listing
xvii. Regulation 26 Obligations of the Issuer, etc.

14.

I also note the following observations from the interim order:

"....
i. It is interesting to note that while the Offer of NCDs was made "pursuant to the resolution passed in the
meeting of the Board of Directors of the company held on March 1, 2011", MAPL, had admittedly made
a series of offers under the Offer of NCDs during the period January 2011 to June 2012, which would
indicate that it had made an unauthorized issuance of NCDs even before the Board's approval on March
1, 2011.

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ii.

In its letter dated December 23, 2013, MAPL submitted that it has not issued any NCDs post March
2012. However, as per the details of debenture holders provided by that company, it is observed that in
certain cases the date of offer and allotment was after March 2012. Moreover, on examining the copy of
debenture certificate as attached with the complaint forwarded by the RBI, it is also observed that the date of
application therein was July 10, 2012 and the maturity date was July 10, 2017.
iii. It is observed that in large number of cases, the maturity dates of the debentures pertain to the financial
year 2012-13. However, from the unaudited Balance Sheet as on March 31, 2013 (obtained from the
MCA21 Portal), it is observed that the company has not redeemed any NCDs during the financial year
2012-13. The Compliance Certificate submitted by the relevant Company Secretary also records that
MAPL has not redeemed any NCDs during the financial year 2012-13. Therefore, it prima facie appears
that the company has defaulted in its re-payment obligations.
iv. Further, from the Audited Balance Sheet as on March 31, 2013 (obtained from the MCA21 Portal), it
is noted that the company had issued two types of NCDs, viz. 5000000 NCDs @ `10 and 600000
NCDs @ `100, aggregating `11 Crores. However, as per the details of debenture holders provided by
MAPL vide letter dated December 23, 2013, the face value of all the debentures was `100 each.
Accordingly, the information reflected in the Audited Balance Sheet of MAPL as on March 31, 2013, is
inconsistent with the record of debenture holders maintained by that company.
v. From the Audited Balance Sheet for the year ending March 31, 2013 (obtained from the MCA21
Portal), it is observed that there was a significantly high DebtEquity ratio i.e. 109:1. Such a high Debt
Equity ratio is prejudicial to the interest of the debenture holders and may significantly hamper the ability of
the company to fulfill its obligation of redeeming the debentures on maturity especially since in the instant
matter, there already appears to have been a default in the redemption of NCDs by MAPL during the
financial year 2012-13 (paragraph 7.11(iii) above).
vi. It is also observed that there has been a change in the Auditors of the company. The company submitted
unaudited Balance Sheet and Profit & Loss Accounts for the year ended March 31, 2013 (vide its letter
dated December 23, 2013), to SEBI, which were not signed by any Auditor and only signed by the
Directors; only the name of an Auditor (without signature) was printed. However, from the filings made by
MAPL with the ROC, it is observed that a new Auditor has been appointed by that company, who has
audited the Balance Sheet and Profit & Loss Accounts for the year ended March 31, 2013. However, no
such Audited Balance Sheet and Profit & Loss Accounts for the year ended March 31, 2013, has been
submitted by MAPL to SEBI.
vii. From the Audited Balance Sheet of MAPL as on March 31, 2012, it is observed that the company
received deposits and advances against its products aggregating to `29.55 Crores and 4.82 Crores
respectively and the Auditor had also certified in the Companies (Auditors' Report) Order, 2003, that
MAPL had complied with the provisions of sections 58A and 58AA of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from public.
Further, on examining the unaudited (but signed by Directors of MAPL) Balance Sheet as on March 31,

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2013 (submitted by the company vide their letter dated December 23, 2013), it is observed that the amount
of deposits and advances was `33.28 Crores and `19.32 Crores respectively. However, on examining the
Audited Balance Sheet for the year ended March 31, 2013 (obtained from the MCA21 Portal), it is
observed that there are no amounts due against deposits and advances. In addition, in the Audit Report
submitted by the new Auditor of MAPL, it has been stated that MAPL has not accepted any deposits
from the public."
15.

The interim order was issued to the directors of the Company alleging them to be responsible

for the violations committed by the Company. It is noted that Mr. Kamolesh Kumar Ghosh and Mr.
Ujjal Sikder were appointed as directors on May 18, 2009 and continue to be the directors. Therefore,
they were the directors during the period when the impugned offer and allotment of securities were
made by the Company. They have not taken any steps to remedy their action in offering and allotting
securities in contravention of the applicable law. I, accordingly, find them responsible for the violations
committed by the Company and also for the default in making repayments in accordance with section
73(2).
Mr. Tapan Dey was appointed on November 11, 2013 as the director. I note that he has not exercised
necessary diligence while taking charge of directorship in the Company. He has contended that he was
fraudulently made as a director. However, he seems to have not taken any action against the
Company/its other directors for the same. It is very surprising to note that even after the interim order
was passed making allegations, he chose not to act. The very inaction by him against the previous
management (for violating the public issue norms as stipulated under the Companies Act, 1956 and the ILDS
Regulations while making the offer and issuing the impugned securities), even after the receipt of the SEBI Order,
leads one to conclude on a possible collusion with the Company and its management. Even after
receiving the interim order, he has not taken any steps to remedy the situation to safeguard the interests
of the investors in NCDs issued by the Company.
In view of the above observations, I hold Mr. Kamolesh Kumar Ghosh, Mr. Ujjal Sikder and Mr.
Tapan Kumar Dey to be 'officers in default' and hence responsible for the violations and default in
repayments to the investors. Accordingly, the Company and directors shall be jointly and severally liable
for making the refunds. In view of the foregoing, the natural consequence of not adhering to the norms
governing the issue of securities to the public and making repayments as directed under section 73(2) of
the Companies Act, 1956 is to direct the Company, its directors Mr. Kamolesh Kumar Ghosh, Mr.

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Ujjal Sikder and Mr. Tapan Kumar Dey to refund the monies to such investors in accordance with
section 73(2).
16.

The interim order has observed that Mangalam Institute of Development and Research

(through its Settlor viz. Mr. Madhusudhan Chatterjee) and Ms. Chandani Mohta were appointed as
debenture trustees by the Company and that they were not registered with SEBI to act in that capacity
in contravention of section 12(1) of the SEBI Act. As mentioned above, the said Institute and
Chandani Mohta did not file any written submissions. Section 12(1) of the SEBI Act mandates that
"No trustee of trust deed shall buy, sell or deal in securities except under, and in accordance with, the conditions of
a certificate of registration obtained from the Board in accordance with the regulations made under this Act. " It is a fact
that the above entity/person are not registered with SEBI in the capacity as a 'Debenture Trustee'.
This conduct is therefore in contravention of section 12(1) of the SEBI Act, as alleged.

The above

persons are also not eligible to act as debenture trustees in terms of regulation 7 of the DT Regulations.
17.

As stated above, in terms of the directions of the Hon'ble High Court of Calcutta, the Central

Government vide Order dated July 17, 2014 had appointed the SFIO to investigate into the affairs of
the Company. The Hon'ble High Court vide Order dated June 10, 2014 directed that upon
appointment of the agency (SFIO), the assets and properties of which possession had been taken by the
Special Officer shall be handed over to the agency including the bank accounts.
18.

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 read with sections 11(1), 11(4), 11A and 11B
thereof hereby issue the following directions:
(a) The Company, Mangalam Agro Products Limited (PAN- AAGCM0547H; CIN U01400WB2009PLC135152), its promoters and directors including Mr. Kamolesh Kumar

Ghosh ( PAN- AKQPG9925L; DIN- 02492074), Mr. Ujjal Sikder (PAN- CDUPS3451C;
DIN- 02528616) and Mr. Tapan Kumar Dey (PAN- AHPPD9308L; DIN- 03363185),
jointly and severally, shall forthwith refund the money collected by the Company through the
issuance of Secured Non-Convertible Redeemable Debentures (which have been found to be issued in
contravention of the public issue norms stipulated under the Companies Act, 1956 and the SEBI (Issue and
Listing of Debt Securities) Regulations, 2008), to the investors including the money collected from
investors, till date, pending allotment of NCDs, if any, with an interest of 15% per annum

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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) The Company, Mangalam Agro Products Limited and its promoters and directors shall issue
public notice, in all editions of two National Dailies (one English and one Hindi) and in one
local daily (in Bengali) with wide circulation, detailing the modalities for refund, including details
of contact persons including names, addresses and contact details, within fifteen days of this
Order coming into effect.
(d) After completing the aforesaid repayments, the Company shall file a certificate of such
completion with SEBI from two independent peer reviewed Chartered Accountants who are in
the panel of any public authority or public institution. For the purpose of this Order, a peer
reviewed Chartered Accountant shall mean a Chartered Accountant, who has been categorized
so by the Institute of Chartered Accountants of India ("ICAI").
(e) The Company, 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 restrained
from accessing the securities market for the purposes of raising funds 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 years from the date of completion of
refunds to investors, made to the satisfaction of SEBI, as directed above.
(f) The directors Mr. Kamolesh Kumar Ghosh, Mr. Ujjal Sikder and Mr. Tapan Kumar Dey are
restrained from accessing the securities market and would be further prohibited from buying,
selling or otherwise dealing in securities, directly or indirectly in whatsoever manner, from the
date of this Order till the expiry of 4 years from the date of completion of refunds to investors,
made to the satisfaction of SEBI, as directed above. 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, for a period of 4 years.

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(g) Mangalam Institute of Development and Research (through its Settlor viz. Mr. Madhusudhan
Chatterjee) and Chandani Mohta, who were engaged by the Company as its debenture trustee in
contravention of law, shall not offer themselves to be engaged as a debenture trustees or in any
capacity as an intermediary in the securities market, without obtaining a certificate of
registration to undertake that assignment as required under law. Further, they are restrained
from accessing the securities market and also prohibited from buying, selling or dealing in
securities, in any manner whatsoever, for a period of 4 years.
(h) The above directions shall come into force with immediate effect.
19.

In case of failure of the company, Mangalam Agro Products Limited, its promoters and

directors including Mr. Kamolesh Kumar Ghosh, Mr. Ujjal Sikder and Mr. Tapan Kumar Dey to
comply with the aforesaid directions, SEBI 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 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.
20.

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. SEBI may also initiate further action
including prosecution proceedings against Mangalam Institute of Development and Research and Ms.
Chandani Mohta for acting as unregistered debenture trustees and for their failure to protect the
interest of the debenture holders.

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21.

This Order and the directions passed above shall be read harmoniously with the Order dated

June 10, 2014 passed by the Hon'ble Calcutta High Court.

22.

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

information and necessary action.

23.

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 : April 06, 2015
Place: Mumbai

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