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WTM/PS/33/EFD/MAY/2016

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA


CORAM: PRASHANT SARAN, WHOLE TIME MEMBER
ORDER
Under Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act,
1992 read with Regulation 65 of the SEBI (Collective Investment Schemes)
Regulations, 1999
In the matter of SPNJ Land Project and Developers India Limited
In respect of:
1. SPNJ Land Project and Developers India Limited [PAN: AANCS5416Q],
2. Mr. Raj Kumar Banerjee [PAN: ANLPB5866B],
3. Ms. Dolly Banerjee [PAN: ANLPB5867A] and
4. Ms. Mausami Banerjee [PAN: AUZPB0556H]
________________________________________________________________________
Date of Hearing:
December 14, 2015
Appearances:

Mr. Sunil Kumar, Advocate appeared for the Company

For SEBI:

Mr. Pradeep Kumar, Assistant General Manager and Mr. Abhiraj


Arora, Manager

1.

Securities and Exchange Board of India (hereinafter referred to as SEBI) conducted


a preliminary inquiry in the investment scheme of one SPNJ Land Project and
Developers India Limited (hereinafter referred to as the Company or SPNJ).
Pursuant to the inquiry, SEBI vide an ex-parte interim Order dated September 17, 2014
(hereinafter referred to as the interim order), prima facie observed that SPNJ is engaged
in fund mobilizing activities from the public, which falls within the ambit of Collective
Investment Scheme (hereinafter referred to as CIS) as defined under Section 11AA
of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as
the SEBI Act), without obtaining a certificate of registration from SEBI as required
under Section 12(1B) of the SEBI Act and Regulation 3 of the SEBI (Collective
Investment Schemes) Regulations, 1999 (hereinafter referred to as the CIS
Regulations). The mobilization of funds by SPNJ through its schemes, was also prima
facie found to be a fraudulent practice in terms of Regulation 4(2)(t) of the SEBI
(Prohibition of Fraudulent and Unfair Trade Practice Relating to Securities Market)
Regulations, 2003 (hereinafter referred to as PFUTP Regulations).
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2.

The interim order was issued in order to protect the interest of investors, to ensure that
the Company and its directors do not collect further funds under its schemes/ plans
and to safeguard the assets/ acquired by SPNJ and its directors from the funds of the
investing public. This Order directed SPNJ and its directors, namely, Mr. Raj Kumar
Banerjee, Ms. Dolly Banerjee and Ms. Mausami Banerjee (hereinafter collectively
referred to as noticees):
a. not to collect any money from investors from its existing scheme/plan;
b. not to launch any new schemes or float any new companies to raise fresh moneys;
c. to immediately submit the full inventory of the assets owned by SPNJ out of the amounts
collected from the "applicants"/investors under its existing scheme/plan;
d. not to dispose of any of the properties or alienate the assets of the existing scheme;
e. not to divert any funds raised from public at large, kept in bank account(s) and/or in the
custody of the company;
f. to furnish all the information with regard to scheme wise list of investors and their contact
numbers and addresses along with the details of amount mobilized and refunded till date.

3.

The aforesaid directions came into force with immediate effect and the noticees were
advised to file their reply within a period of fifteen (15) days from the date of receipt
of the interim order and also to indicate whether they wish to avail an opportunity of
personal hearing in the matter.

4.

The interim order was forwarded to the Company and its directors vide letters dated
September 18, 2014. The letters were delivered to all the noticees. The Company vide
its letter dated October 01, 2014, while requesting for two weeks time for replying to
the interim order, submitted that it is in the process of collecting the information/
documents/ material and the same will take some time. Vide letter dated October 17,
2014, the Company submitted a letter of authority in favour of one Mr. Sunil Kumar,
Advocate. The Company vide another letter dated October 20, 2014, requested for an
inspection and copies of certain documents. Mr. Sunil Kumar, Advocate for the
Company vide his letter dated November 01, 2014, filed a representation/ brief reply
and requested for further four weeks time for filing a detailed reply. The submissions
in brief, are as under:
a. The Company and its directors are complying with the interim order.
b. The Company was incorporated on October 12, 2009, with an authorised capital of
5,00,00,000 and deals in real estate. The business operations/ arrangements of the
Company are not covered under the Section 11AA of the SEBI Act.

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c. The interim order has been passed based on incomplete documents and nonappreciation of relevant documents/ information/ material.
d. The Company deals in non-agricultural land and the number of buyers registered with
the Company are much less than the land available with the Company. The agreement
form specifically indicates the intention of the Company for execution of the sale deed
with respect to the specific plot of the land to its registered buyer/ unit holder after
receiving full and final payments/ sale consideration from the said buyer/ unit holder.
e. The amount paid by the buyer/ investor/ unit holder as per payment schedule were
only a part sale consideration for purchasing specific property.
5.

SEBI vide its letter dated December 09, 2014, granted time till December 19, 2014 to
the Company for replying to the interim order. Mr. Sunil Kumar Advocate, vide his
letter dated December 15, 2014, while submitting that the Company is maintaining
complete status quo in terms of the interim order, requested for another four weeks time
for filing detailed reply. Vide SEBI letter dated January 14, 2015, a further time of two
weeks was requested for submitting the reply.
In the meantime, SEBI vide its letter dated January 06, 2015, granted an opportunity
of inspection of the documents to the Company and its directors. Mr. Sunil Kumar,
Advocate vide his letter received by SEBI on January 15, 2015, requested for
permission to conduct the inspection of documents on January 20, 2015, which was
acceded to. On the date fixed, the inspection was conducted and the copies of the
documents were provided to the representative of the Company.

6.

Thereafter, Mr. Sunil Kumar, Advocate vide his letter dated January 31, 2015, while
seeking an opportunity of personal hearing, submitted that the Company had already
provided details of assets and investment vide its letter dated February 06, 2014 and
provided the details of the purchasers/ unit holders, who had purchased/ booked land
from the Company.
S. No.
1.
2.
3.
4.
5.
6.
7.

Plan No.
03
04
05
06
07
08
203

Total number of customers


5,099
2,700
3,674
4,500
4,700
2,500
4,500

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8.
9.
10.
Total

7.

204
205
206

3,000
2,500
2,000
35,173

As requested, an opportunity of personal hearing was afforded to the Company and


its directors on November 18, 2015 and the same was communicated to the noticees
vide SEBI letter dated October 20, 2015. The representative of the Company, Mr.
Sunil Kumar, Advocate vide his e-mail dated November 06, 2015 requested for
rescheduling of the personal hearing. The request was acceded to and the date was
rescheduled to December 14, 2015. The representative vide his e-mail dated December
09, 2015, requested for an adjournment, which was rejected. On the date fixed Mr.
Sunil Kumar, Advocate appeared as authorized representative of the Company and
requested time for submitting the written submissions. The request was acceded to
and ten days time was granted for submitting the written submissions and supporting
documents, if any. However, till date no written submissions have been received.
Considering the reasonable opportunities already afforded to the noticees for making
submissions in the matter, I am inclined to proceed further with the matter.

8.

I have considered the interim order, the reply of the Company dated November 01,
2014 and the material available on record. The interim order has alleged that the plans/
schemes operated by the Company are in the nature of CIS and that the Company was
offering these schemes without obtaining the registration from SEBI, in contravention
of the provisions of Section 12(1B) of the SEBI Act and Regulation 3 of the CIS
Regulations read with Section 11AA of the SEBI Act. The directors of SPNJ were also
alleged to be responsible for the illegal conduct of the business of the Company. The
interim order has noted the features of the alleged scheme offered by the Company.
The following are the observations from the interim order:

i. SPNJ (CIN :U45201CT2009PLC021412) was incorporated on October 12, 2009

with its registered office at 206-207, 2nd floor, Sakuntala Complex, Narmda Para,
Gudhiari Underbridge, Raipur (C.G.)- 492001 and Head Office at 205/A, Behind
Union Bank, Wallabh Nagar, Pachpedinaka, Raipur - 492001, Chhattisgarh.
ii. The Directors of SPNJ are Mr. Raj Kumar Banerjee, Ms. Dolly Banerjee and Ms.
Mausami Banerjee (present Directors). Further as per copies of Form 32 submitted to
SEBI in person by the representative of SPNJ on February 10, 2014, Mr. Anand
Mangal Pandey, Ms. Prabhavati Shukla and Ms. Mili Banerjee were the past Directors
of SPNJ.

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iii. As per the Memorandum of Association, the main objectives of SPNJ are "to carry on

the business as construction purchase and sale of building complex, colonies, Real Estate,
flats, markets, mansions, apartments, houses and to undertake construction of all types
and to promote developing land and purchasing and selling such land/s and to maintain
improve and develop such properties."
iv. SPNJ collects funds from the public for the scheme of development and maintenance of
land/plot. The amounts are collected for the scheme by offering various plans (10 plans),
which are further categorized as "Single Installment Plans" (4 schemes) and "Regular
Installment Plans" (6 schemes). One plan from each category is illustrated below:

a) Plan 203 (Single Instalment Plan) F3 5.6 years:


Consideration amount (Rs.)

Realisation value (Rs.)

Sqaure ft. (Area of land)

5,000
10,000
30,000
50,000
1,00,000

10,000
20,000
60,000
1,00,000
2,00,000

50
100
300
500
1000

b) Plan 006 (Regular Installment plan) R6 7.6 years:


Square ft. (Area Consideration
of land)
amount (Rs.)

450
540
630
720
810
900

45,000
54,000
63,000
72,000
81,000
90,000

Monthly

500
600
700
800
900
1,000

Quarterly Half yearly

1,475
1,770
2,065
2,360
2,655
2,950

2,900
3,480
4,060
4,640
5,220
5,800

Yearly

5,800
6,960
8,120
9,280
10,440
11,600

Expected
amount (Rs.)

72,500
87,000
1,01,500
1,16,000
1,30,500
1,45,000

v. It is noted from the above tables that SPNJ is collecting funds from the public on the basis

of aforesaid payment schedules and on completion of their payment terms, which range from
5.6 years to 15 years the rate of return offered is between 15-18% p.a.
vi. The "applicants"/investors who are interested in the aforesaid schemes offered by SPNJ
are made to execute an "Application form cum Agreement" with SPNJ. After the
execution of the same, SPNJ issues "Registration Certificates" to the "applicants"/
investors and in the said certificate, the "applicants"/investors are referred as "unit
holders". The important aspects noted in the "Application form cum Agreement" and the
terms and conditions stipulated overleaf the sample "Registration certificate" are reproduced
as follows:

a) Clauses indicated in the 'Terms and conditions' of the Application Form:

The management of SPNJ reserves the right to discontinue/ change/ amend/ modify or alter
prospectively/ retrospectively any of the rules/ regulation and plans and introduce new plans
at any time at its sole discretion with or without any notice. (Clause No. 12),
Since fragmentation into smallest size of land may not be practicable, feasible or
permissible under the relevant revenue or local laws, the applicant shall have requisite share
along with other allottees'/transferees' in a particular piece of land, SPNJ shall execute/
procure execution and registration of sale deed / deeds ensuring the title and interest of
allottees' / transferees in the joint holding with other applicant. Accordingly, symbolic
possession of the plot shall be handed over to the customers.... (Clause No. 13),
In case the customer is not possible to sell the allotted land due to some local / revenue law(s),
SPNJ reserves the right to allot another piece of land in place of previous allotment and in
this case customer have option to receive the amount as per plan opted by him / her. (Clause

No.14),
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b) Clauses indicated in the "Proforma of Agreement" in the Agreement form:

The Customer shall be entitled for allotment of said property, and subsequent transfer of
title and possession of the same in his favour by means of registered sale deed , within such
period, after receipt, by full consideration in case of Cash Down Payment s Plans and 50%
of the consideration in case of instalment payment plan, as have been set out in the terms
and conditions contained in the application form(Clause 1)
(a) SPNJ shall carry out necessary works by conducting the survey, demarcation, clearing
and other related jobs / works on behalf of the customer. (Clause 2)
(c) SPNJ shall keep accounts with reference to the income and expenditure incurred/to be
incurred, pertaining to the development and maintenance of the entire project site, which
includes the said property. (Clause 2)
SPNJ shall have the right to develop and maintain the said property in consultation with
Engineers / Experts. Customers shall not ordinarily interfere with the method and mode of
development and maintenance of the said property. .... (Clause 3)
The Customer shall pay, in aggregate , a sum of Rs.___ ( Rupees ____ Only) as per
payment schedule of plan opted by him/her , towards consideration for the acquisition, sale,
development and maintenance of the aforesaid property by SPNJ, and the CUSTOMER
will pay for such other expenses as my be allocable, apportionable , or appropriable to the
said property. (Clause 4)
SPNJ shall pay the land tax and other public dues,/levies, payable in from the customer
respect of the SAID PROPERTY to the appropriate authorities for and on behalf of the
customer and SPNJ shall be entitled to get the same reimbursed from the Customer.

(Clause 6)
c) Following are noted from the terms and conditions on the reverse of the
"Registration Certificate":

"Management of the company is authorized to change the rules as and when necessary without
any prior notice(Clause No. 5)
In case of any dispute the decision of Chairman / Managing Director of the company will
be binding and no legal recourse is allowed. Arbitrator if required will be nominated by the
Chairman / Managing Director. (Clause No. 9)
Ownership of unit shall be transferred in the name of Unit holder on the completion of the
Terms and conditions of the scheme as applicable therefore the investment made by the Unit
holder is secured. (Clause No. 11)
The company shall enter into a legal agreement with the Unit holder after completion of three
years. The expenses of the legal agreement will be borne by the Unit holder. (Clause No.

12)

If the Unit Holder does not want to take possession of the plot offered by the company as
per above said legal agreement he has the option to do so,. For this he will have to inform the
company in writing for selling his / her unit and making payment in lieu therefor at least
180 days before the expiry of period of the lease agreement. (Clause No. 14)

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Accidental risk cover will be given equal to the face value and maximum upto Rs.50,000/of regular policies (Clause No. 19)"
vii. As per the details of amount collected from the investors provided by SPNJ, on February
10, 2014, it is noted that an amount of 13 crore had been collected from 40,000 investors
as on February 10, 2014. However, the amount reflecting in the balance sheet of the
company for the period upto March 31, 2013 is 33.63 crore, under the head "Long
Term Borrowings".
viii. From the "Branch Investor Register" for the period January 01, 2014 to January 31,
2014, furnished by SPNJ, it is noted that SPNJ has collected funds from around 385
investors and face value indicated ranges between 5000/- and 2,00,000/ix. Further, I note that vide its letter dated February 06, 2014, SPNJ informed that it has
115.70 acre of land bank with it at several locations in Chhattisgarh (one land parcel
being in MP). I also note that SPNJ has submitted copies of few sale deeds executed by it
to purchase land parcels from different individuals. Details of some of the land parcels as
provided by SPNJ are tabulated below:
S.No. Location of the property Khasra
Area
number
1.
2.
3.
4.

Bemetara (C.G.)
Kota Raipur (C.G.)
Kota Raipur (C.G.)
Ulfra Bemetara (C.G.)

1297 / 2
150 / 13
130 / 127
1297 / 1

1.60 hectare
0.038 hectare
0.016 hectare
1.88 hectare

"
9.

I note from the interim order that the Company had mainly two plans i.e. Regular
Installment Plan and Single Installment Plan. For subscribing to the plans of the
Company, a customer/ investor was required to submit an Agreement form (which
is in the nature of application form). I have considered the relevant terms and
conditions of the agreement as noted in the interim order. Certain additional clauses
also found relevant have been noted below:

11. SPNJ shall have first charge on said property on account of its unpaid instalments for services/
developments/ maintenance charges and for other incidental expenses incurred by SPNJ. The said
property cannot, in any other manner be sold, assigned, mortgaged, pledged or alienated without
obtaining NO DUES CERTIFICATE, from the SPN by the applicant.

15. The applicant has the right to retain or sell the said property, to anybody or to the SPNJ as
he/ she may deem fit on expiry of tenure of this agreement to facilitate easy liquidity, SPNJ
provides to applicant the marketing services for sale of developed land.

PROFORMA OF AGREEMENT

WHEREAS SPNJ is in process of making arrangements/ has made arrangements for


purchasing/ procuring the land, forming part of various plans launched by SPNJ, with clear and
marketable titles.

5. The CUSTOMER shall be owner in possession of the said property at all times. SPNJ shall
enter upon the said property only for the limited purposes of rendering the services of development
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and maintenance of the said property as per the terms & conditions settled between the parties in
that regard.
The next document is the Registration Certificate which contains the space for
agreement number, total amount payable by unit holder, minimum realizable value,
instalment amount, date of acceptance, date of completion, date of last instalment, etc.
I have perused the sample registration certificate, considered the relevant terms and
conditions as noted in the interim order. Certain additional clauses also found relevant
have been noted below:
13. NO DUES AND NO OBJECTION CERTIFICATE: After completion of the term
of the scheme, the unit Holder is authorised to sell, Transfer, dispose off, construct the said plot in
say manner, after obtaining NO DUES AND NO OBJECTION CERTIFICATE from
the company.

15. UNIT One unit means one yard.


10.

Considering the above, the following are my findings:


a. No plot/ land was identified by the Company even after taking full payment from its
customers/ investors,
b. The allotment of plot is at the discretion of the Company as the agreement form does
not give an option to the customers to specify the location/ details of the land they
wish to apply for,
c. The development of plot/ land was an integral part of the plan of the Company,
d. The Company provide marketing services to its customers/ investors,
e. The Company had made provisions for joint holding of the plot/ land.

11.

Now I proceed to deal with the characteristics of the impugned plans/ schemes floated
and carried on by the Company against the four conditions under Section 11AA(2) of
the SEBI Act as alleged in the interim order. For concluding whether a scheme is a CIS
or not, all the four conditions under Section 11AA(2) of the SEBI Act should be
satisfied.

i.

The first condition is that the contributions, or payments made by the investors, by whatever name
called, are pooled and utilized for the purposes of the scheme or arrangement. In this regard, I note
that:

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The Company accepts the contribution/ investments from the investors/


customers for subscribing to one of its plans for the purchase of land/ plot.

Till the stage of agreement and registration certificate, the Company does not
identify the specific plot/ land to be sold to the customers.

The Company had not specified any time period for allotment of land/ plot under
the Cash Down Payment Plans/ single installment plan. As regards, the
installment payment plan, the land/ plot is promised to be allotted on receipt of
the 50% of the consideration.

Further, the clause in the agreement form that the Company is in process of
making arrangements/ has made arrangements for purchasing/ procuring the land, suggests
that the Company till the date of agreement was only making arrangements for
purchasing/ procuring the land.

The agreement form/ registration certificate does not provide the time period
within which the possession of the property is given to the customer/ investor.

These facts show that the Company pools the investment made by the customers, with
an aim/ object of carrying out the overall plan/ scheme. From the same, it can be
concluded that the contributions, or payments made by the investors, are pooled and
utilised by the Company for the purposes of the scheme or arrangement, the scheme
being to accept contributions/ payments in the name of sale of plot/ land. Thus,
satisfying the first condition as stipulated in Section 11AA(2)(i) of the SEBI Act.
ii.

The second condition is that the contributions or payments are made to such scheme or
arrangement by the investors with a view to receive profits, income, produce or property, whether
movable or immovable from such scheme or arrangement. The plans of the Company and
registration certificate provides for the realisation value/ expected amount/
minimum realisable value. The Company also provided for accidental risk cover to
its customers/ investors. From the same, it can be concluded that the investment/
contributions were made by the customers/ investors with a view to earn profits.
Considering the same, it is concluded that the customers/ investors had made the
contribution/ payment to the Company with a view to earn profits/ income/
property/ return on the initial investments that may accrue to them as applicable, thus
attracting the second condition as stipulated in Section 11AA(2)(ii) of the SEBI Act.

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iii.

The third and fourth conditions under Section 11AA(2) of the SEBI Act are being
discussed together. The said conditions are that the property, contribution or investment
forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors
and the investors do not have day to day control over the management and operation of the scheme or
arrangement. In this regard, I note as under:
a. The payments/ investments made by the customers/ investors is retained by the
Company, who in turn manages these on behalf of the customers/ investors during
the term of plan.
b. The customer/ investor is not allowed to interfere with the method and mode of
development and maintenance of the property.
c. SPNJ reserves the right to discontinue/ change any rules and plans.
The above discussion hints that the plot/ land was not managed by the customers, at
any stage of the scheme. The investments of the customers/ investors were managed
and utilized by the Company at its discretion. In view of the same, it can be concluded
that the plans/ schemes of the Company satisfy the third and fourth conditions under
Section 11AA (2) of the SEBI Act also.

12.

From the discussion above, it is evident that the Company solicits investments from
its customers in its scheme of purchase of plot. The scheme of the Company in taking
monies from its customers/ investors and promising them realisation value/
expected amount/ minimum realisable value at the end of the contract, definitely
fall within the ambit of Section 11AA of the SEBI Act. As all the four conditions
specified under Section 11AA(2) of the SEBI Act are satisfied in the present facts of
the case, the schemes/ plans promoted, launched, carried on and operated by the
Company are in the nature of CIS in terms of Section 11AA(1). While proceeding
further, I place my reliance on the observations of the Hon'ble Supreme Court, made
in the matter of PGF Limited & Ors. Vs. Union of India & Anrs. (Civil Appeal No. 6572
of 2004):
42.
... .. as per the agreement between the customer and the PGF Limited, it is the responsibility
of the PGF Limited to carry out the developmental activity in the land and thereby the PGF
Limited undertook to manage the scheme/arrangement on behalf of the customers. Having
regard to the location of the lands sold in units to the customers, which are located in different

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states while the customers are stated to be from different parts of the country it is well-neigh
possible for the customers to have day to day control over the management and operation of
the scheme/arrangement. In these circumstances, the conclusion of the Division Bench in
holding that the nature of activity of the PGF Limited under the guise of sale and development
of agricultural land did fall under the definition of collective investment scheme under Section
2(ba) read along with Section 11AA of the SEBI Act was perfectly justified and hence, we
do not find any flaw in the said conclusion.
... ....
53. therefore, hold that Section 11AA of the SEBI Act is constitutionally valid. We
also hold that the activity of the sale and development of agricultural land squarely falls
within the definition of collective investment scheme under Section 2(ba) read along with
Section 11AA (ii) of the SEBI Act ...
In view of the discussion, the argument of the Company that it is in the business of
real estate cannot be considered. Therefore, having concluded that the activities of the
Company are CIS, in terms of Section 11AA of the SEBI Act, I proceed further with
the matter.
13.

Section 12(1B) of the SEBI Act mandates that no person, shall sponsor or cause to be
sponsored or carry on or caused to be carried on any CIS unless it obtains a certificate
of registration from SEBI in accordance with the CIS Regulations. The Company has
clearly failed to do so. Regulation 3 of the CIS Regulations provides that no person
other than a Collective Investment Management Company which has obtained a
certificate under the said regulations shall carry on or sponsor or launch a 'CIS'. A
person can launch or sponsor or cause to sponsor a CIS only if it is registered with
SEBI as a Collective Investment Management Company. Therefore, the launching/
floating/ sponsoring/ causing to sponsor any collective investment scheme by any
person without obtaining the certificate of registration in terms of the provisions of
the CIS Regulations is in contravention of Section 12(1B) of the SEBI Act and
Regulation 3 of the CIS Regulations.

14.

Further, in terms of Regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and


Unfair Trade Practices Relating to Securities Market) Regulations, 2003, dealing in
securities shall be deemed to be a fraudulent or an unfair trade practice if it involves
fraud and includes illegal mobilization of funds by sponsoring or causing to be
sponsored or carrying on or causing to be carried on any CIS by any person. This
provision in the above Regulations has been brought into effect from September 06,
2013. Accordingly, it could be held that by mobilizing public funds through CIS

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without obtaining registration from SEBI as required under Section 12(1B) of the
SEBI Act read with Regulation 3 of the CIS Regulations, the Company has
contravened the above said provision.
15.

Liability of the Directors: I note that the interim order was issued against the
Company and its directors namely Mr. Raj Kumar Banerjee, Ms. Dolly Banerjee and
Ms. Mausami Banerjee. The details of the appointment these are as under:
Name

Mr. Raj Kumar Banerjee,


Ms. Dolly Banerjee
Ms. Mausami Banerjee

Date of Appointment
12/10/2009
25/10/2011
01/03/2011

Date of Cessation
Continuing as director
Continuing as director
Continuing as director

It is noted that Mr. Raj Kumar Banerjee, Ms. Dolly Banerjee and Ms. Mausami
Banerjee are the present director of the Company. At this stage, I note from the interim
order that SPNJ in its letter dated February 10, 2014, indicated that it has been mobilizing funds
from the public since 2009. In view of the same, I have no hesitation in holding that the
Company and its directors namely Mr. Raj Kumar Banerjee, Ms. Dolly Banerjee and
Ms. Mausami Banerjee were engaged in the illegal fund mobilising activity by floating/
sponsoring/ launching, unregistered/ unauthorised CIS, as defined in the Section
11AA of the SEBI Act. In view of the above findings and observations made in this
Order and the violations committed by the Company, it becomes necessary for SEBI
to issue appropriate directions in order to protect the interest of investors and also to
secure the interest of the securities market.
16.

At this stage, I note the observation of the interim order that the details of amount
collected from the investors provided by SPNJ, on February 10, 2014, it is noted that an amount of
13 crore had been collected from 40,000 investors as on February 10, 2014. However, the amount
reflecting in the balance sheet of the company for the period upto March 31, 2013 is 33.63 crore,
under the head "Long Term Borrowings". In this regard, the advocate of the Company vide
his letter dated has submitted the details of only 35,173 customers/ investors. Further,
SEBI has also received investor complaints, alleging that the Company has continued
to solicit money from the investors even after passing of the interim order dated
September 17, 2014.

Page 12 of 15

17.

In view of the observations made in this Order, 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), 11B and 11(4) thereof and Regulation 65 of the SEBI (Collective
Investment Schemes) Regulations, 1999, hereby issue the following directions:
a. SPNJ Land Project and Developers India Limited [PAN: AANCS5416Q], Mr.
Raj Kumar Banerjee [PAN: ANLPB5866B], Ms. Dolly Banerjee [PAN:
ANLPB5867A] and Ms. Mausami Banerjee [PAN: AUZPB0556H] shall abstain
from collecting any money from the investors or launch or carry out any Collective
Investment Schemes including the scheme which have been identified as a Collective
Investment Scheme in this Order.
b. SPNJ Land Project and Developers India Limited and its directors namley Mr.
Raj Kumar Banerjee, Ms. Dolly Banerjee and Ms. Mausami Banerjee shall wind
up the existing Collective Investment Schemes and refund through Bank Demand
Draft or Pay Order, the money collected by the said company under the schemes
with returns which are due to its investors as per the terms of offer within a period of
three months from the date of this Order and thereafter within a period of fifteen
days, submit a winding up and repayment report to SEBI in accordance with the SEBI
(Collective Investment Schemes) Regulations, 1999, including the trail of funds
claimed to be refunded, bank account statements indicating refund to the investors
and receipt from the investors acknowledging such refunds.
c. SPNJ Land Project and Developers India Limited and its directors namley Mr.
Raj Kumar Banerjee, Ms. Dolly Banerjee and Ms. Mausami Banerjee are
permitted to sell their assets only for the sole purpose of making the refunds as
directed above and deposit the proceeds in an Escrow Account opened with a
nationalised Bank.
d. After completing the aforesaid repayments in terms of sub-paragraph (b) above, the
Company shall file a certificate of such completion with SEBI, within a period of 15
days, 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

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peer reviewed Chartered Accountant shall mean a Chartered Accountant, who has
been categorized so by the Institute of Chartered Accountants of India (ICAI).
e. SPNJ Land Project and Developers India Limited and its directors namley Mr.
Raj Kumar Banerjee, Ms. Dolly Banerjee and Ms. Mausami Banerjee are also
directed to provide a complete and detailed 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.
f. SPNJ Land Project and Developers India Limited and its directors namley Mr.
Raj Kumar Banerjee, Ms. Dolly Banerjee and Ms. Mausami Banerjee are
restrained from accessing the securities market and are prohibited from buying, selling
or otherwise dealing in securities market for a period of four years.
g. In the event of failure by SPNJ Land Project and Developers India Limited and its
directors namley Mr. Raj Kumar Banerjee, Ms. Dolly Banerjee and Ms. Mausami
Banerjee to comply with the above directions, the following actions shall follow:
- SPNJ Land Project and Developers India Limited and its directors namley
Mr. Raj Kumar Banerjee, Ms. Dolly Banerjee and Ms. Mausami Banerjee shall
remain restrained from accessing the securities market and would further be
prohibited from buying, selling or otherwise dealing in securities, even after the
period of four years of restraint imposed in sub-paragraph (f) above, till all the
Collective Investment Schemes of SPNJ Land Project and Developers India
Limited are wound up and all the monies mobilized through such schemes are
refunded to its investors with returns which are due to them.
- SEBI would make a reference to the State Government/ Local Police to register a
civil/ criminal case against SPNJ Land Project and Developers India Limited, 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
- SEBI would make a reference to the Ministry of Corporate Affairs, to initiate
appropriate action as deemed fit against the Company, SPNJ Land Project and
Developers India Limited.

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- SEBI would also make a reference to the Ministry of Corporate Affairs to restrain
the abovementioned noticee directors from being directors in other companies.
- SEBI shall initiate attachment and recovery proceedings under the SEBI Act and
rules and regulations framed thereunder.
18.

This order shall come into force with immediate effect.

19.

This Order shall be without prejudice to the right of SEBI to initiate prosecution
proceedings under Section 24 and adjudication proceedings under Chapter VIA of the
Securities and Exchange Board of India Act, 1992 against SPNJ Land Project and
Developers India Limited, including other persons who are in default, for the
violations as found in this Order.

20.

Copy of this Order shall be forwarded to the stock exchanges and depositories for
necessary action.

DATE : May 16th, 2016


PLACE : Mumbai

PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA

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