Adjudication Order in the matter of Ramel Industries Ltd ... - SEBI

Adjudication Order in the matter of Ramel Industries Ltd Page 1 of 18

BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO. RA/DPS/96-100/2017]

UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING

PENALTIES BY ADJUDICATING OFFICER) RULES, 1995.

Adjudication Order in respect of:-

1. M/s Ramel Industries Ltd (PAN – AAGCR8991L) having address at 15, Krishna Nagar

Road, Kolkata, West Bengal-700 126.

2. Shri Rameswar Podder (PAN – AFVPP4292B) having address at Part No.- 93,

Dakshin-Nabapally, North 24 Parganas, Kolkata - 700126, West Bengal.

3. Shri Remendra Mohan Sarkar (PAN – AUIPS3363G) having address at Kumudnagar,

Mouja-Nasra, Ranaghat, Nadia, Ranaghat - 741202, West Bengal.

4. Shri Sukanta Deb (PAN – AJIPD0118R) having address at Sebagram N. Barrackpore,

Noyapara North 24 Parganas, Barrackpore - 743122, West Bengal.

5. Shri Partha Das (PAN – ANMPD8317J) having address at Sankalpa Recedency, 3rd

Floor, Ichapur, Udyan Pally, P.O.- Nawabgan, P.S.- Noapara, (N) 24 PGS., Ichapur -

743144, West Bengal.

In the matter of Ramel Industries Ltd

FACTS OF THE CASE

1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) has initiated

adjudication proceeding under section 15 D and 15HB of the Securities and Exchange

Board of India Act, 1992 (hereinafter referred to as 'SEBI Act') against (1) M/s Ramel


Industries Ltd., (2) Shri Rameswar Podder, (3) Shri Remendra Mohan Sarkar, (4) Shri

Sukanta Deb and (5) Shri Partha Das (hereinafter referred to as ‘the Noticee No. 1 to

5 respectively or all may be referred to as “the Noticees” collectively’). The Noticee No.

1 (being a company), Noticee No. 2 – 5 (Directors) of the Noticee No. 1 / Ramel

Industries Ltd were alleged to have not complied with the directions issued under SEBI

Order No. WTM/PS/19/ERO/CIS/JULY/2014 dated July 11, 2014 directing the

Noticee(s) to wind up its existing collective investment schemes and refund the monies

collected under its schemes with returns which are due to the investors as per the terms

of offer, within a period of three months from the date of this Order and within a period

of 15 days, submit a winding up and repayment report to SEBI in accordance with the

SEBI (Collective Investment Schemes) Regulations, 1999 (hereinafter referred to as

‘CIS Regulations’).

APPOINTMENT OF ADJUDICATING OFFICER

2. SEBI had vide order dated December 12, 2014 appointed the undersigned as

Adjudicating Officer under section 15 I of the SEBI Act read with rule 3 of the SEBI

(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules,

1995 (hereinafter referred to as ‘Adjudication Rules’) to inquire into and adjudge under

section 15D and 15HB of the SEBI Act, the non-compliance of directions issued under

aforesaid SEBI order dated July 11, 2014.

SHOW CAUSE NOTICE, REPLY AND HEARING

3. A common Show Cause Notice No. EAO/RA/DPS/ 3171, 3172, 3173, 3175 and

3176/2015 dated January 29, 2015 (hereinafter referred to as ‘SCN’) was issued

against the Noticees under rule 4(1) of the Adjudication Rules to show cause as to why

an inquiry should not be held and penalty be not imposed against them under sections

15D and 15HB of the SEBI Act for the aforesaid alleged non-compliance of directions

passed under SEBI order dated July 11, 2014.

4. The allegations levelled against the Noticees in the SCN are mentioned hereunder;


5. The Whole Time Member of the SEBI under section 11, 11(4) and 11B of the SEBI Act

read with regulation 65 of the CIS Regulations had passed an Order No.

WTM/PS/19/ERO/CIS/JULY/2014 dated July 11, 2014 against the Noticee (s) with

following directions having immediate effect;

(a) Ramel Industries Limited and its promoters/directors shall abstain from collecting

any money from investors or launch or carry out any scheme which has been

identified as a collective investment scheme in this Order.

(b) Ramel Industries Limited shall wind up its existing collective investment schemes

and refund the monies collected under its 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 15 days, submit a winding up and

repayment report to SEBI in accordance with the CIS Regulations, including trail

of funds claimed to be refunded, bank account statements indicating refund to the

investors and receipt from the investors acknowledging such refunds.

(c) Ramel Industries Limited shall not alienate or dispose off or sell any of its assets

except for the purposes of making refunds to its investors as directed above.

(d) In the event of failure by Ramel Industries Limited and its directors/promoters to

comply with the above directions, SEBI would -

i. Make a reference to the State Government/Local Police to register a civil/

criminal case against Ramel Industries Limited and its 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;

ii. Make a reference to the Ministry of Corporate Affairs, to initiate the process of

winding up of Ramel Industries Limited; and

iii. Without prejudice to the above, shall also initiate attachment and recovery

proceedings under section 28A of the Securities and Exchange Board of India

Act, 1992.


6. Ramel Industries Limited is restrained from accessing the securities market and is

prohibited from buying, selling or otherwise dealing in securities market till all its

collective investment schemes are wound up and monies mobilized under such

schemes are refunded to its investors, as directed above.

7. The above action would be without prejudice to the right of SEBI to initiate prosecution

proceedings under section 24 and adjudication proceedings under Chapter VI of the

Securities and Exchange Board of India Act, 1992 against Ramel Industries Limited and

its directors Mr. Rameshwar Podder, Mr. Ramendra Mohan Sarkar, Mr. Sukanta Deb

and Mr. Partha Das including other persons who are in default, for the violations as

found in this Order.

8. It was alleged that the all the Noticees (being the Company / Managing Director /

Directors etc.) had failed to comply with the directions issued under aforesaid SEBI

order, to wind up its existing collective investment schemes and to refund the money

collected by it under the schemes with returns which are due to the investors within a

period of three months from the date of said order; and also allegedly failed to submit a

winding up and repayment report to SEBI in accordance with the CIS Regulations.

9. It was stated in the SCN that the aforesaid alleged failure of directions, if established,

would make the Noticees liable for monetary penalty under section 15D and 15HB of

the SEBI Act, which reads as under:

Penalty for contravention where no separate penalty has been provided. 15HB- Whoever fails to comply with any provision of this Act, the rules or the regulations made or directions issued by the Board thereunder for which no separate penalty has been provided, shall be liable to a penalty which may extend to one crore rupees. Penalty for certain defaults in case of mutual funds. 15D- If any person, who is— (a) required under this Act or any rules or regulations made thereunder to obtain a certificate of registration from the Board for sponsoring or carrying on any collective investment scheme, including mutual funds, sponsors or carries on any collective investment scheme, including mutual funds, without obtaining such certificate of registration, he shall be liable to a penalty of one lakh rupees for each day during which


he sponsors or carries on any such collective investment scheme including mutual funds, or one crore rupees, whichever is less.

10. The SCN was issued through Regd. Post AD to all the five Noticee(s), of the five SCN

was delivered to only two Noticee(s) (i.e. Ramel Industries Ltd and Partha Das) and the

remaining three SCN’s were returned undelivered by the Postal Department with

remarks as mentioned in the below table;

Noticee No. Name of Noticees SCN Delivery status

1 Ramel Industries Ltd Delivered on February 5, 2015

2 Shri Rameswar Podder SCN Returned with Remark - Door Locked / Unclaimed

3 Shri Remendra Mohan Sarkar SCN Returned with Remark – Unclaimed

4 Shri Sukanta Deb Neither Postal AD received nor returned undelivered

5 Shri Partha Das Delivered through Regd Post (date not indicated by receiver)

11. SCN issued to Noticee No. 2 and 3 returned undelivered, Noticee No.2 and 3 being

Directors of Noticee No. 1 on February 26, 2015 SCN addressed to Noticee No. 2 and

3 was once again sent at the address of Noticee No. 1 i.e. Ramel Industries Ltd, 15,

Krishna Nagar Road, Kolkata, West Bengal – 700 126, However it was also returned

undelivered with remark, “Door Locked – Intimation served / unclaimed”.

12. SCN was once again sent to Noticee No. 3 on March 18, 2015 at the address, “Ramel

Industries Ltd, 15, Krishna Nagar Road, Kolkata, West Bengal – 700 126”. However it

was also returned undelivered with remark, “Door Locked – Intimation served /

unclaimed”.

13. SCN was also sent to Noticee No. 2 on March 24, 2015 at the address, “Ramel Sea

Foods Limited, 33A, Chowringee Road, 21st Floor, Unit No. A02 – 08, Kolkata - 700071”.

However it was also returned undelivered with remark, “Left”.

14. As the SCN issued to Noticee No. 1 was delivered, Noticee No. 1 was directed to deliver

the SCN to its Directors viz Noticee No. 2 and 3 on priority basis, and forward the

delivery report along with details of their current address on April 13, 2015. However it

was also returned undelivered with remark, “Door Locked – Intimation served /

unclaimed”.


15. Noticee No. 2 and 3 did not claimed the SCN, therefore another attempt was made to

serve the SCN by way of affixture in terms of rule 7(c) of the Adjudication Rules.

Accordingly, Eastern Regional Office of SEBI (hereinafter referred as SEBI) on May 27,

2015 was asked to serve / affix the SCN at the last known address of the Noticee(s).

16. With regard to SCN issued to Noticee No. 4, neither Postal AD received nor returned

undelivered. Attempts were made to trace delivery, if any, however the same was not

fruitful. Hence, another attempt was made to serve the SCN by way of affixture in terms

of rule 7(c) of the Adjudication Rules. Accordingly, SEBI on August 10, 2015 was asked

to serve / affix the SCN at the last known address of the Noticee.

17. Thereafter, SEBI forwarded service / affixture reports of the SCN on June 10, 2015 and

vide email December 21, 2015 details of which are shown in table below:-

Noticee No. Name of Noticee(s) Details of Service / Affixture of SCN

2 Shri Rameswar Podder Affixtue on June 2, 2015

3 Shri Remendra Mohan Sarkar Affixtue on June 2, 2015

4 Shri Sukanta Deb Through hand delivery on September 4, 2015

18. In order to conduct an inquiry in terms of rule 4(3) of the Adjudication Rules, the

Noticee(s) were granted an opportunity of personal hearing on January 13, 2016 vide

notice dated December 21, 2015 through Speed Post Acknowledgement Due (SPAD)

as well as SEBI on December 21, 2015 was asked to served / affix the hearing notice

(HN) at the last known address of the Noticee(s).

a) Hearing Notice issued to Noticee No. 3 and 4 were delivered through SPAD on

January 01, 2016 and December 30, 2015 respectively. Further, Hearing Notice

issued to Noticee No. 1, 2 and 5 returned undelivered with the remarks as mentioned

in the below table;

Noticee No. Name of Noticees SCN Returned with Remarks

1 Ramel Industries Ltd Addressee Moved

2 Shri Rameswar Podder Unclaimed

5 Shri Partha Das Left


b) SEBI informed that hearing notice to Noticee No. 5 was delivered through hand

delivery on January 11, 2016. As the hearing notices to Noticee No. 1 and 2 were

returned undelivered through speed post. Accordingly, SEBI was asked to deliver/

affix the hearing notices at the last known address of the Noticee(s). Attempts were

made to seek status of affixture of notices to Noticee(s) No. 1 & 2, however the same

was not fruitful. SEBI on February 20, 2017 informed that the affixture of hearing

notices to Noticee No. 1 and 2 has not been done and requested to issue fresh

hearing notices as the earlier date has since lapsed.

19. During the period of instant proceeding, the Hon’ble Supreme Court of India vide

judgment dated November 26, 2015 in the case of SEBI vs. Roofit Industries Ltd. held

that Adjudicating Officer has no discretion in deciding quantum of penalty under Chapter

VI A (except in u/s 15F (a) and 15HB of the SEBI Act). The issue involved in Roofit case

was differently interpreted in case of Sidharth Chaturvedi (decided on March 14, 2016)

and accordingly, the legal issue / matter was pending for Larger Bench of Hon’ble

Supreme Court of India. Meantime, as per “The Finance Act 2017” (Notified for Part VIII

of Chapters VI came into effect from April 26, 2017) following has been inter - alia

clarified in respect of adjudication under SEBI Act-

147. In section 15J of the principal Act, the following Explanation shall be inserted, namely:-

“Explanation- For the removal of the doubts, it is clarified that the power of an adjudicating

officer to adjudge the quantum of penalty under section 15A to 15E and clauses (b) and (c) of

section 15F, 15G, 15H and 15HA shall be and shall always be deemed to have been exercised

under the provisions of this section.”

20. Consequent to the clarity brought into the Finance Act, 2017 and as no appearance was

made by the Noticee No. 3 to 5 and hearing Notice to Noticee No. 1 and 2 could not be

delivered / affixed earlier. Therefore, second and final opportunity of hearing was

granted to all the Noticee(s) No. 1 to 5 on April 27, 2017 vide notice dated March 30,

2017 through SPAD as well as SEBI on March 30, 2017 was asked to served / affix the

hearing notice (HN) at the last known address of the Noticee(s).

a) Hearing Notice issued to Noticee No. 3 and 4 were delivered through SPAD on April

05, 2017 and April 07, 2017 respectively. Further, Hearing Notice issued to Noticee


No. 1, 2 and 5 have returned undelivered with the remarks as mentioned in the below

table;

Noticee No. Name of Noticees HN Returned with Remarks

1 Ramel Industries Ltd Addressee Moved

2 Shri Rameswar Podder Addressee Moved

5 Shri Partha Das Left

b) SEBI informed that hearing notices issued to Noticee No. 2 to 4 were delivered

through hand delivery to the said Noticee(s) at Jharpara Special Jail, Bhubaneswar

on April 12, 2017 and hearing Notice addressed to Noticee No. 1 was affixed at the

address, “Ramel Industries Limited, 15, Krishna Nagar Road, Kolkata, West Bengal-

700126” on April 8, 2017. Hearing Notice to Noticee No. 5 was affixed at the address,

“Shri Partha Das, Sankalpa Recedency, 3rd Floor, Ichapur, Udyan Pally, P.O.-

Nawabgan, P.S.- Noapara, (N) 24 PGS., Ichapur - 743144, West Bengal” on April

8, 2017.

21. Noticee No. 4 through his Advocate – Jayanta Samanta, replied to hearing notice vide

letter dated April 10, 2017 that he is presently in the judicial custody at Orissa.

Therefore, it is not possible to submit reply to Show Cause Notice at this stage.

22. On April 27, 2017 only the authorized representative (AR) of the Noticee No. 5 - namely

– Mr. Subhash Rajora came for hearing and requested for Adjournment of hearing and

submitted that it will submit its reply to SCN dated January 29, 2015, within fifteen days

from the date of this hearing. Further also, inform the current communication address

of the Noticee where Notice can be delivered and the Original Authority letter of today’s

hearing immediately. In response to the SCN, Noticee filed its reply dated May 12, 2017.

The key submissions/ reply of the Noticee No. 5 are being mentioned below:-

a) The Noticee No. 5 herein Partho Das is not the promoter director of the alleged

company namely Ramel Industries Company and he is neither is he holding any

shares of the company.


b) The Noticee No. 5 is appearing before all respected Authorities on each and every

date and is entirely cooperating with all information of the above said company, as

per best of his knowledge to initiate the proceedings.

c) The Noticee No. 5 is a law abiding citizen and is a resident of Sankalpa Residency,

3rd Floor, Udyan Pally, Post Office – Nawabganj, Police Station – Noapara, North 24

Parganas, Ichapur, Pin – 743144, West Bengal.

d) Sometime in the year of 2010 the Noticee herein was offered by the Noticee 2 to 4,

the promoters/ Directors of the company (Ramel Industries Ltd) to join the company

as an agent for business.

e) Director’s liability arises because of their position as agents or officers of the

Company as also for being in the position of trustees or having fiduciary relation with

the Company or its shareholders. Non-executive Director’s (NEDs) or independent

directors (IDs) are those not charged with the day-to-day affairs and management

of the Company and are usually involved in the planning and decision making

activities. The appointment of NEDs and IDs provide specialized knowledge and skill

to the company contributing in better corporate governance performance.

f) As far as the culpability is concerned, there is no distinction between EDs and NEDs

to determine the penal consequences. Any director, who is an officer in default within

the meaning of section 5 of the Companies Act 1956, read with section 2(60), 2(47)

with sub section (5) of section 149 and section 2(51) of the companies act 2013 will

be a question of evidence and proof will be resolved at the stage of trial.

g) Going through the entire process of prosecution is in itself a turbulent experience

and could act as a serious disincentive to join the board by NEDs where they are

not even involved in the day-to-day management of the company. The liability of the

Managing Director when compared the other directors as “officer in default” is

comparatively higher. Whether a particular Director (not being the Managing

Director) could be proceeded against or not is a matter of evidence.

h) In case where the company has no Managing Director/ Whole Time Director, all

directors including NEDs liable for any omission or commission of acts, however in

case where the company has Whole Time Directors, the liabilities of NEDs are

limited for ensuring compliance with specific provision of the Act which cast an

individual responsibility on the director concerned to act as such.


23. Noticee No. 4 through his Advocate – Jayanta Samanta, replied to hearing notice vide

letter dated April 10, 2017 that he is presently in the judicial custody at Orissa and

Noticee No. 5 came for hearing on April 27, 2017 and requested for Adjournment of

hearing. In case of Noticee No. 1, hearing notice could not be delivered through speed

post and it was affixed. Therefore Final opportunity of hearing was provided to the

Noticee No. 1, 4 and 5 on June 21, 2017 vide Notice dated May 25, 2017 through SPAD

as well as SEBI on May 25, 2017 was asked to served / affix the hearing notice (HN) at

the last known address of the Noticee(s). The said Notice was communicated to Noticee

No. 1 through email dated May 25, 2017 (at the e-mail ID: [email protected] - as

available from website of Ministry of Corporate Affairs (MCA) under head of Company

Master Data, [email protected] – as per Form 10 & Form 61 submitted to

Registrar of Companies (ROC); [email protected] and [email protected]

– as per the email id mentioned in the Noticee No. 1 letter head) and to Noticee No. 4

through email dated May 25, 2017 (at the e-mail ID: [email protected] -

as available from the reply of the Noticee No. 4, dated April 10, 2017 replied to hearing

notice) was duly digitally signed by the undersigned.

a) Hearing Notice issued to Noticee No. 4 and 5 have been delivered through SPAD

on May 29, 2017 and May 29, 2017 respectively. Further, Hearing Notice issued to

Noticee No. 1 have returned undelivered with the remarks as mentioned,

“Addressee Moved”.

b) SEBI informed that hearing notice issued to Noticee No. 4 have been delivered

through hand delivery to the Noticee No. 4 at Jharpara Special Jail, Bhubaneswar

on June 1, 2017 and hearing Notice addressed to Noticee No. 1 was affixed at the

address, “Ramel Industries Limited, 15, Krishna Nagar Road, Kolkata, West Bengal-

700126” on June 3, 2017. Hearing Notice to Noticee No. 5 was hand delivered on

June 3, 2017.

24. On June 21, 2017 only the authorized representative (AR) of the Noticee No. 5 - namely

– Mr. Subhash Rajora came for hearing and requested for Adjournment of today’s

hearing and may be granted short date for hearing. As per request, last and final

mailto:[email protected]






opportunity of hearing was provided to Noticee No. 5 on June 29, 2017 and no further

hearings will be granted to Noticee No. 5 as already hearings were granted on January

13, 2016, April 27, 2017 and June 21, 2017. Further, Mr. Subhash Rajora, Authorised

Representative of the Noticee also submitted that if no appearance is made by them on the date

of hearing i.e. on June 29, 2017, you may pass an order in this matter on the basis of evidence

available with you. However the Noticee No. 5 failed to avail the opportunity of personal

hearing.

25. As sufficient time has been granted to the Noticee(s) to file reply towards the SCN which

they have failed to make till date, except for Noticee No. 5, therefore, I assume that

Noticees No. 1 to 4 has nothing to submit and the matter can be proceeded further on

the basis of evidences available on records. It is relevant to point out that the

consequence of non-filing of reply has been clearly indicated at para 8 of the SCN which

states that if no reply is received within 14 days from receipt of this SCN, then, it shall

be presumed that you have no reply to submit and the matter would be decided further

on the basis of evidence available on record in terms of sub-rule (7) of rule (4) of the

Adjudication Rules.

26. It is also relevant to mention that in terms of rule 4(3) of the Adjudication Rules, all the

Noticee(s) (Noticees No. 1 to 5) were granted an opportunity of personal hearing on

January 13, 2016 and April 27, 2017 vide notice dated December 21, 2015 and March

30, 2017 respectively. It is relevant to point out that in both the said hearing notices

issued on December 21, 2015 and March 30, 2017 the Noticees were asked to file their

reply before the hearing. It is also noted that the Noticee No. 1, 4 and 5 were granted

an opportunity of personal hearing on June 21, 2017 vide Notice dated May 25, 2017

and once again to Noticee No. 5 on June 29, 2017.

27. I am of the view that sufficient time has been provided to the Noticees to submit reply

or to indicate their desire for hearing in the matter, which the Noticees had failed to

make except for Noticee No. 5. Hence, the undersigned is proceeding against the

Noticee(s) ex-parte on the basis of available records/evidence.


CONSIDERATION OF ISSUES AND FINDINGS

28. The issues that arises for consideration in the present case are :

a) Whether all the Noticee(s) had failed to comply with the directions issued under SEBI

Order No. WTM/PS/19/ERO/CIS/JULY/2014 dated July 11, 2014 and without

obtaining certificate of registration carried on such schemes?

b) If yes, then, whether the same is the violation attracting monetary penalty under

section 15D and 15HB of the SEBI Act?

c) If yes, then, what would be the monetary penalty that can be imposed upon the

Noticees taking into consideration the factors mentioned in section 15J of the SEBI

Act read with rule 5(3) of the Adjudication Rules?

ISSUE 1 & 2

29. It was alleged that the Noticees had failed to comply with the directions issued under

SEBI Order No. WTM/PS/19/ERO/CIS/JULY/2014 dated July 11, 2014 to wind up its

existing collective investment schemes and refund the monies collected under its

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 15

days, submit a winding up and repayment report to SEBI in accordance with the CIS

Regulations, including trail of funds claimed to be refunded, bank account statements

indicating refund to the investors and receipt from the investors acknowledging such

refunds.

30. Here I note that only Noticee No. 5 has replied to the SCN and in its reply it has

mentioned that, Noticee No. 5 / Partha Das is not the promoter director of the alleged company

namely Ramel Industries Company and he is neither holding any shares of the company and

mentioned the liability of the directors in the company. Here I note that as per the MCA

website checked on June 19, 2017, the list of directors and their date of appointment is

shown below:-


SL. No.

Director Identification Number (DIN) Name

Begin date / Appointment date

1 1753196 Rameswar Podder (Noticee No. 2) January 10, 2008

2 1753154 Remendra Mohan Sarkar (Noticee No. 3) January 10, 2008

3 1753238 Sukanta Deb (Noticee No. 4) January 10, 2008

4 3631995 Partha Das (Noticee No. 5) May 10, 2012

31. In view of the above said list of directors, I note that Noticee No. 5 / Partha Das was

shown as the existing director of the Noticee No. 1 / Ramel Industries Ltd. at the relevant

point of time (viz. July 11, 2014 onwards). Therefore the reply of the Noticee No. 5 is

not acceptable. I also note that, Noticee No. 4 through his Advocate – Jayanta Samanta,

replied to hearing notice vide letter dated April 10, 2017 that he is presently in the judicial

custody at Orissa. Therefore, it is not possible to submit reply to Show Cause Notice at

this stage. In this regard, vide notice dated May 25, 2017, Noticee No. 4 was informed that

Show Cause Notice has been issued to you, opportunity of replying the said SCN and to attend

the hearing has already been provided to you twice vide Notice dated December 21, 2015 and

March 30, 2017. In adherence to the principles of natural justice, last and final opportunity was

provided to you to submit your reply on or before June 13, 2017 and final opportunity of hearing

was provided to you on June 21, 2017. In the said notice it was clearly stated that the proceedings

cannot be kept in abeyance anymore, as sufficient time to submit your reply and opportunities of

being heard have been provided to you and it was also made clear that if Noticee No. 5 fails to

avail the last opportunity of hearing (either in person or through its authorized representative),

then the matter would be decided further on the basis of evidence available on record.

32. It is well settled position of law as well as held by the Hon’ble Securities Appellate

Tribunal (SAT) in the matter of Shri B. Ramalinga Raju v/s SEBI [2017] (in appeal No. 286

of 2014) decided on May 12, 2017 inter-alia held that – If at all the appellants were aggrieved

by the decision of SEBI in refusing to keep the proceedings in abeyance till the criminal trial

was over, the appellants could have challenged that decision of SEBI. However, the appellants

neither challenged the decision of SEBI nor participated in the proceedings by availing the

opportunity of personal hearing offered to them during the period from March 2010 till

12.05.2014. Thus, the appellants by their conduct have driven the WTM to proceed ex-parte and

hence, appellants are not justified in contending that the impugned order is passed in violation

of the principles of natural justice.


33. I note that no reply has been filed by the Noticee No. 1 to 4 and neither did the Noticee(s)

appear for personal hearing. The AR of Noticee No. 5 came for hearing on June 21,

2017 and requested for Adjournment of hearing and requested for another short date.

As per the request, last and final opportunity of hearing was provided to Noticee No. 5 on

June 29, 2017 and AR also submitted that if no appearance is made by them on the date of

hearing i.e. on June 29, 2017, you may pass an order in this matter on the basis of evidence

available with you. However the Noticee No. 5 failed to avail the opportunity of personal

hearing.

34. As observed in pre paras that despite service of SCNs and hearing notices through by

SPAD / affixture at the last known address of the Noticee(s) / digitally signed email

(Noticee No. 1), the Noticee No. 1 to 4 neither submitted any reply towards the SCNs

nor appeared for hearing under inquiry. It is well settled position of law as well as held

by the Hon’ble Securities Appellate Tribunal (SAT) in the matter of Classic Credit Ltd. v/s

SEBI [2007] 76 SCL 51 (SAT - MUM) inter-alia held that – “the appellants did not file any

reply to the second show-cause notice. This being so, it has to be presumed that the charges

alleged against them in the show-cause notice were admitted by them”.

35. The Hon'ble SAT also made such proposition in case of Sanjay Kumar Tayal & Ors. Vs.

SEBI (in appeal No. 68/2013) decided on February 11, 2014 viz. “…………….., appellants have

neither filed reply to show cause notices issued to them nor availed opportunity of personal

hearing offered to them in the adjudication proceedings and, therefore, appellants are presumed

to have admitted charges levelled against them in the show cause notices”.

36. Therefore, I rely upon the material available on records while examining this issue. It is

observed that the Ld. WTM of SEBI had passed order dated July 11, 2014 directing the

Noticee (s) to comply with the directions as mentioned at para 18 to 20 of the said order

and had also categorically stated the consequences of failure of such directions. Para

18 to 20 of said order is reproduced as under;


(a) Ramel Industries Limited and its promoters/directors shall abstain from collecting

any money from investors or launch or carry out any scheme which has been

identified as a collective investment scheme in this Order.

(b) Ramel Industries Limited shall wind up its existing collective investment schemes

and refund the monies collected under its 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 15 days, submit a winding up and

repayment report to SEBI in accordance with the CIS Regulations, including trail

of funds claimed to be refunded, bank account statements indicating refund to the

investors and receipt from the investors acknowledging such refunds.

(c) Ramel Industries Limited shall not alienate or dispose off or sell any of its assets

except for the purposes of making refunds to its investors as directed above.

(d) In the event of failure by Ramel Industries Limited and its directors/promoters to

comply with the above directions, SEBI would -

i. Make a reference to the State Government/Local Police to register a civil/

criminal case against Ramel Industries Limited and its 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;

ii. Make a reference to the Ministry of Corporate Affairs, to initiate the process of

winding up of Ramel Industries Limited; and

iii. Without prejudice to the above, shall also initiate attachment and recovery

proceedings under section 28A of the Securities and Exchange Board of India

Act, 1992.

……………………………………

…………………………………….SEBI to initiate prosecution proceedings under

section 24 and adjudication proceedings under Chapter VI of the Securities and

Exchange Board of India Act, 1992 against Ramel Industries Limited and its

directors Mr. Rameshwar Podder, Mr. Ramendra lvlohan Sarkar, Mr. Sukanta Deb


and Mr. Partha Das including other persons who are in default, for the violations

as found in this Order.

37. I cannot ignore the fact that a time line of 3 month was given under aforesaid order to

comply with the directions (viz. to wind up its existing collective investment schemes

and refund the monies collected under its 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 15 days, submit a winding up and repayment

report to SEBI in accordance with the CIS Regulations, including trail of funds claimed

to be refunded, bank account statements indicating refund to the investors and receipt

from the investors acknowledging such refunds), however, till date, no evidence has

been placed on records which may suggest that the Noticee(s) had either fully or party

complied the direction as stated at Para 18 of the said order. In view of the same, I am

of the opinion that the directions under the aforesaid SEBI order remains uncomplied.

38. It is noted from the said SEBI order that M/s Ramel Industries Limited – being the

Company (Noticee No.1), Shri Rameswar Podder (Noticee No.2), Shri Remendra

Mohan Sarkar (Noticee No.3), Shri Sukanta Deb (Noticee No.4) and Shri Partha Das

(Noticee No.5) being the Directors of the Company were directed to comply with the

directions contained in said order within 3 months. Also, it was specifically stated in the

said order that SEBI would take actions including adjudication proceedings against the

Company and its Directors in case of failure to comply with the said directions.

ISSUE NO. 3

39. Since, it is established that the Noticee No. 1, 2, 3, 4 and 5 had failed to comply with

the directions issued under the said SEBI order and carried on as an unregistered CIS;

and also keeping in view the facts and circumstance / undisputed fact, I am of the view

that a monetary penalty needs to be imposed upon them under sections 15D and 15HB

of the SEBI Act.


40. I have taken into account the factors stipulated in section 15J of SEBI Act read with rule

5(2) of the Adjudication Rules, which reads as under;

15J - Factors to be taken into account by the adjudicating officer

While adjudging quantum of penalty under section 15-I, the adjudicating officer shall

have due regard to the following factors, namely:-

(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable,

made as a result of the default;

(b) the amount of loss caused to an investor or group of investors as a result of the

default;

(c) the repetitive nature of the default.”

41. The available records neither indicates specific quantum of any unfair gain made by the

Noticees nor the specific loss caused to the investors. However, non-winding up / not

refunding of the money collected with returns which were due to the investors as per

the terms of offer by the Noticee No. 1 to 5, is certainly causing loss to the investors and

is unlawful gain to the Company/Noticee(s). Further, not heeding towards the directions

issued under SEBI order and acting as unregistered CIS, is certainly a serious

irregularity affecting the interest of numerous investors at large. I cannot ignore the

gravity of this matter as no compliance of direction is met till date even after lapse of 3

years which certainly warrants the maximum penalty as stipulated in section 15D and

15HB of the SEBI Act to commensurate the violations committed.

ORDER

42. After taking into consideration all the aforesaid facts / circumstances of the case, I

hereby impose a penalty of `1,00,00,000/- (Rupees One Crore only) under section 15D

of the SEBI Act and ` 1,00,00,000/- (Rupees One Crore only) under section 15HB of

the SEBI Act, upon Noticee No. 1 to 5 (namely – M/s Ramel Industries Ltd., Shri

Rameswar Podder, Shri Remendra Mohan Sarkar, Shri Sukanta Deb and Shri Partha

Das). The said total amount of penalty of `2,00,00,000/- (Rupees Two Crores only) shall

be paid by them jointly and / or severally. I am of the view that the said penalty would

commensurate with the violations committed by them.


43. The Noticee No. 1 to 5 shall remit / pay the said amount of penalty within 45 days of

receipt of this order either by way of Demand Draft in favour of “SEBI – Penalties

Remittable to Government of India”, payable at Mumbai, or through e-payment facility

into Bank Account the details of which are given below;

Account No. for remittance of penalties levied by Adjudication Officer

Bank Name State Bank of India

Branch Bandra-Kurla Complex

RTGS Code SBIN0004380

Beneficiary Name SEBI – Penalties Remittable To Government of India

Beneficiary A/c No. 31465271959

44. The Noticee shall forward said Demand Draft or the details / confirmation of penalty so

paid through e-payment to the Chief General Manager of Enforcement Department of

SEBI. The Format for forwarding details / confirmations of e-payments shall be made in

the following tabulated form as provided in SEBI Circular No.

SEBI/HO/GSD/T&A/CIR/P/2017/42 dated May 16, 2017 and details of such payment

shall be intimated at e-mail ID - [email protected]

Date

Departme

nt

of SEBI

Name of

Intermediary/

Other Entities

Type of

Intermediar

y

SEBI

Registrat

ion

Number

(if any

PAN Amount

(in Rs.)

Purpose of

Payment

(including

the period for

which payment

was made e.g.

quarterly,

annually

Bank name

and

Account

number

from which

payment is

remitted

UTR

No

45. In terms of rule 6 of the Adjudication Rules, copies of this order are sent to the Noticees

and also to the SEBI.

DATE: JULY 7, 2017

PLACE: MUMBAI

RACHNA ANAND

ADJUDICATING OFFICER


Documents

Adjudication Order in the matter of Ramel Industries Ltd ... - SEBI