WTM/SR/SEBIWRO: ILO/IMD/ 07/01/2016

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA

S. RAMAN, WHOLE TIME MEMBER
ORDER
Under Sections 11, 11(4) and 11B of the Securities and Exchange Board of India Act, 1992,
against the past Directors of Shri Ram Real Estate and Business Solution Limited, viz. Mr.
Bhuvneshwar Prasad Sahu (DIN: 06405979, Mr. Rajesh Kumar Bhagat (DIN: 02240082), Mr.
Vikram Singh (DIN: 02254081), Mr. Man Singh Verma (DIN: 02292062), Mr. Hemant Bhagat
(DIN: 02287766) and Mr. Gyan Singh (DIN: 02303319).

1.

Securities and Exchange Board of India ("SEBI") vide an interim order-cum-show cause notice
bearing no. WTM/SR/CIS/WRO-ILO/47 /03/2015 dated March 17, 2015 ("Interim
Order"), passed certain directions as mentioned at paragraph 20 thereof, against Shri Ram
Real Estate and Business Solution Limited ("SRREBSL") and its Directors viz., Mr. Sanjay
Mewada, Shri Babaloo Prajapati, Shri Gopal Meena, Shri Subhash Deshmukh, Shri Vijay
Singh, Shri Sohan Kumar Patel, Shri Nirmal Dhaneliya and Shri Jagdish Meena, for violating
the provisions of Section 12(1B) of the SEBI Act, 1992 (SEBI Act)read with Regulation 3
of the SEBI (Collective Investment Schemes) Regulations, 1999 ("CIS Regulations") and
Regulation 4(2)(t) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to
Securities Market), 2003 ("PFUTP Regulations"), for running collective investment schemes
without certificate of registration granted by SEBI.

2.

Vide the above Order, it was held that the Schemes offered by SRREBSL were 'collective investment
schemes' as defined in Section 11AA of the SEBI Act.

3.1

It has now come to the notice of SEBI that the following persons were also Directors of
SRREBSL when the Schemes were offered to members of the public:-

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Sr.
No.

Name

Address

DIN

Date of
Appointment

Date of Cessation

Mr.
Bhuvneshwar
Prasad Sahu

Ward No. 52, H.No 358,

Ishwar Nagar, E-8,
Bharat Nagar, Bhopal,
Madhya Pradesh- 462001
Geeta Bhawan, Moti Baba
Ka Bagicha, MPEB
Station Road, Sehore,
Madhya Pradesh- 466601

6405979

Jan 09, 2013

May 03, 2013

2240082

Dec 04, 2013

Sept 08, 2008

Jan 25, 2014

Dec 05, 2008

Village -Mugali, TehsilAshta, Sehore, Madhya

Pradesh, 466116
Madhyamik Shala, Mugli,
Tehsil- Ashta, Sehore,
Madhya Pradesh, 466116
Nehru Colony Station
Road, Sehore, Madhya
Pradesh- 466001
Village Dhabla Dhir, PODhabladhir, Tehsil- Kala
Pipal, District- Shajapur,
Nandini, MadhyaPradesh465337

2254081

Sept 08, 2008

Dec 05, 2008

2292062

Sept 08, 2008

Dec 05, 2008

2287766

Sept 08, 2008

Dec 05, 2008

2303319

Sept 08, 2008

July 01, 2011

Mr. Rajesh
Kumar Bhagat

Mr. Vikram
Singh

Mr. Man
Singh Verma

Mr. Hemant
Bhagat

Mr. Gyan
Singh

3.2

In this context, it is noted that

i.

In terms of Section 12(1B) of the SEBI Act "no person shall sponsor or cause to be sponsored or
cause to be carried on a 'collective investment scheme' unless he obtains a certificate of registration from the
Board in accordance with the regulations.

ii.

In terms of Regulation 3 of the CIS Regulations No person other than a Collective Investment
Management Company which has obtained a certificate under the Regulations shall carry on or sponsor
or launch a collective investment scheme.

iii.

In view of the abovementioned provisions, any person who carry on, sponsor or cause to
be sponsored and carried on a 'collective investment scheme' or those who mobilize funds
illegally by sponsoring or causing to be sponsored or carrying on or causing to be carried on any collective
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investment scheme are responsible for the violations of the above mentioned provisions. In
the instant case past directors having been the directors and persons in charge of the
affairs of the company, are equally liable for any noncompliance with the provisions with
respect to collective investment schemes.
3.3

Upon a consideration of the aforementioned paragraphs, I am of the prima facie view that the
past directors of SRREBSL viz., Mr. Bhuvneshwar Prasad Sahu, Mr. Rajesh Kumar Bhagat,
Mr. Vikram Singh, Mr. Man Singh Verma, Mr. Hemant Bhagat, Mr. Gyan Singh, by carrying
on collective investment schemes through various payment plans camouflaged as real estate
schemes without the certificate of registration granted by SEBI, have violated the
aforementioned provisions of the SEBI Act, CIS Regulations.

3.4

In addition, it is noted that Regulation 4(2) (t) of SEBI (Prohibition of Fraudulent and Unfair
Trade Practices) Regulations, 2003 (PFUTP Regulations) came into force with effect from
September 06, 2013. The same is reproduced hereunder for reference:

4. Prohibition of manipulative, fraudulent and unfair trade practices

(2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud
and may include all or any of the following, namely
(t) illegal mobilization of funds by sponsoring or causing to be sponsored or carrying on or causing to be
carried on any collective investment scheme by any person."
In view of the abovementioned provision, I am of the prima facie view that Mr.
Bhuvneshwar Prasad Sahu, who was director at the relevant period has also violated the said
Regulation 4(2) (t) of PFUTP Regulations.
3.5

Protecting the interests of the investors is the first and foremost mandate of SEBI and
therefore, SEBI has to take immediate steps to prevent activities, if companies or persons
indulge in defrauding the investors and damage the orderly development of the securities
market. In order to ensure that the above said past directors do not collect further funds
through any new Company or by associating with any company and to safeguard the
assets/property acquired by them from the funds of the investing public, it becomes necessary
for SEBI to take urgent preventive action. In the light of the above, I find no other alternative
but to take recourse to an interim order against the above said directors for preventing them
from further carrying on with the fund mobilizing activity by launching 'collective investment
scheme', without obtaining registration from SEBI in accordance with law.
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4.

In view of the alleged violations by the abovementioned past Directors, I, in exercise of the
powers conferred upon me under Sections 11, 11(4) and 11B of the SEBI Act, hereby direct
that Mr. Bhuvneshwar Prasad Sahu (DIN: 06405979, Mr. Rajesh Kumar Bhagat (DIN: 02240082),
Mr. Vikram Singh (DIN: 02254081), Mr. Man Singh Verma (DIN: 02292062), Mr. Hemant Bhagat
(DIN: 02287766), Mr. Gyan Singh (DIN: 02303319):
i.

shall not launch any new scheme or plan or float any new company to raise fresh money for
launching CIS schemes ;
ii. shall not dispose of or alienate any of the properties/assets obtained directly or indirectly through
money raised by SRESBL;
iii. shall provide full inventory of all their assets and properties;
iv. furnish their Permanent Account Number (PAN) to SEBI.
5.

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

6.

The past Directors of SRREBSL viz., Mr. Rajesh Kumar Bhagat, Mr. Vikram Singh, Mr. Man
Singh Verma, Mr. Hemant Bhagat, Mr. Gyan Singh, are advised to show cause as to why
suitable directions/prohibitions under Sections 11(1), 11(4) and 11B of the SEBI Act and CIS
Regulations, including directions in terms of Regulations 65 and 73 of the CIS Regulations
should not be issued against them.

7.

Mr. Bhuvneshwar Prasad Sahu is advised to show cause as to why suitable

directions/prohibitions under Sections 11(1), 11(4) and 11B of the SEBI Act, CIS Regulations
and PFUTP Regulations should not be issued against him.

8.

The abovementioned past Directors of SRREBSL, 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 of an opportunity of personal hearing on a date and time to be fixed
on a specific request made in that regard.

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9.

This Order shall be read in conjunction with the Interim Order dated March 17, 2015 referred
to paragraph 1 of this order. The copy of the said interim order dated March 17, 2015 is
enclosed with this Order.

Place: Mumbai
Date: January 14, 2016

S. RAMAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA

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