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2015 (10) TMI 2866
Prosecution u/s 276C - whether the petitioner/assessee has conducted himself in the manner which could fall within the ambit of Section 276C of the Act so as to prosecute him in a criminal Court and whether he can be termed as a person who wilfully attempted to evade any tax, penalty or interest? - HELD THAT:- As decided in K.C.Builders and Anr. [2004 (1) TMI 7 - SUPREME COURT] assessee was unsuccessful in his attempts to get the proceedings launched in a criminal Court quashed under the provisions of Sections 397 and 401 Cr.P.C. The trial Court and the High Court rejected the prayer of the assessee and hence the matter went to the Supreme Court as held the matter which has been adjudicated and settled by the Tribunal need not be dragged into the criminal Courts unless and until the act of the appellants could have been described as culpable.
Bearing in mind the above principles enunciated by the Supreme Court and in view of the submissions made by petitioner, what could be stated is that continuing the criminal prosecution of the petitioner/assessee will be subjecting the assessee to needless haarassment in view of the facts and circumstances noted hereunder - In the instant case, for the assessment year 2005-06, as per the Assessment Order, dated 18-12-2007, the demand was NIL. The assessee paid the tax and interest of Rs.39,14,408/- by 25-11-2005 through challans - Rs.25,00,000/- on 24-11-2005 Rs.10,00,000/- on 24-11-2005 and Rs.4,14,408/- on 25-11-2005. Proof thereof is produced. It is not disputed.
In that view of the matter, all further proceedings are liable to be quashed. Criminal Petition is allowed quashing all further proceedings in C.C.No.71 of 2007 on the file of the Special Judge for Economic Offences at Hyderabad against the petitioners/accused No.3 and 5.
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2015 (10) TMI 2865
Denial of benefit of exemption u/s 11 - Assessee society is set up for religious activities while claiming charitable status -
HELD THAT:- The appeal filed by the Revenue against the said order of the ITAT for AY 1992-93 has already been dismissed by this Court on endorsed the opinion that the assessee was entitled to claim charitable status u/s 11. The Revenue’s appeal involving the same question, was dismissed.
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2015 (10) TMI 2864
Taxability - whether the transaction providing set top box is taxable under the Karnataka Value Added Tax Act, 2003? - HELD THAT:- Apparently, the assessment orders of even date 20th August, 2015, Annexures-G, G1 G2 and G3 for the assessment years 2010-11 to 2013-14, respectively, do not make reference to either clause 1 (c) or clause 10 of the agreement and in the absence of such a consideration, it cannot but be said that there is denial of justice.
Suffice it to hold that the orders impugned of the assessing authority suffers from an error apparent on the face of record, calling for interference.
There is need to interfere with the orders of the assessing authority - Orders of assessment, Annexure-G series, are quashed and the proceeding remitted for consideration afresh, after extending reasonable opportunity of hearing to the petitioner - Petition allowed.
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2015 (10) TMI 2863
Constitutional validity of the Kerala Local Authorities Entertainment Tax (Amendment) Act, 2013 - new provision has been introduced for levying collection of a cess for the Kerala Cultural Activists' Welfare Fund constituted under the Kerala Cultural Activitsts' Welfare Fund Act - absence of quid pro quo - HELD THAT:- In United Provinces v. Mt.Atiqa Begum & Other [1940 (12) TMI 25 - FEDERAL COURT], their Lordships upheld the principle that the question whether any impugned Act is within any of the three lists or in none at all, is to be answered by considering the Act as a whole and deciding whether in pith and substance the Act is with respect to particular categories or not and held that in doing so, the relevant factors are the design and the purport of the Act, both as disclosed by its language, and the effect, which, it would have in its actual operation. The pith and substance of the impugned legislation is collection of an amount from the viewers for the collective welfare of the artists.
The substance of the legislation is within the powers conferred under Entry 62 of State List. Even if the charge levied is construed as a cess, it appears to be justifiable as it is not capable of any controversy that the benefits are indeed meant to be and are bound to be conferred on the cultural activists including those artists in the film world. This would be an incentive to attract more capable persons to the field and ultimately the viewers would be benefited.
It has been held by the apex court in The Check Post Officer & Others v. K.P. Abdulla & Bros. [1970 (11) TMI 72 - SUPREME COURT] that an entry confers power upon the legislature to legislate for matters ancillary or incidental thereto. As long as the legislation is within the permissible field in pith and substance, the objection would not be entertained merely on the ground that while enacting legislation, provision has been made for a matter, which, though germane for the purpose, for which, competent legislation is made, it covers an aspect beyond it. In a series of decisions, the apex court has opined that if an enactment substantially falls within the powers expressly conferred by the Constitution upon the legislature enacting it, it cannot be held to be invalid merely because it incidentally encroaches on matters assigned to another legislature. Viewed in that profile, this Court is of the view that the challenge put forward by the petitioners is on a misconception of facts and law.
A legislative entry does not merely enunciate powers. It specifies a field of legislation and the widest import and significance should be attached to it. Power to legislate on a specified topic includes power to legislate in respect of matters, which may fairly and reasonably said to be comprehended therein. Therefore, the collection of ₹3/as provided by the Amendment Act, according to me, is within the legislative competence of the State; and therefore, the same does not call for any interference of this Court in exercise of powers conferred under Article 226 of the Constitution of India.
Conclusion - i) A legislative entry does not merely enunciate powers. It specifies a field of legislation and the widest import and significance should be attached to it. ii) The constitutional validity of the Kerala Local Authorities Entertainment Tax (Amendment) Act, 2013 upheld.
Petition dismissed.
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2015 (10) TMI 2862
Direction to deposit 15% of the penalty amount and to furnish a security for the balance amount of 85% within 30 days from the date of communication of the order as a pre-deposit - HELD THAT:- Tribunal while directing the petitioner to deposit 15% of the amount of penalty imposed and to furnish reliable security for the balance amount of 85% as a pre-deposit for hearing of the appeal has noticed that the petitioner has an arguable case and it would cause hardship in case the waiver is not allowed, but no case of complete waiver was made out.
In the present case, the petitioner has been required to pre-deposit 15% of the penalty amount as a condition precedent for hearing of the appeal, which is reasonable and justified.
In view of the above, finding no merit in the instant writ petition, the same is hereby dismissed.
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2015 (10) TMI 2861
Assessee not interested in prosecuting appeals - HELD THAT:- As in the case of CIT vs Multiplan India (P) Ltd. [1991 (5) TMI 120 - ITAT DELHI-D] observed that the provisions of Rule 19 state that mere issue of notice could not by itself mean that the appeal had been admitted. This rule only clarifies the position. There might be various reasons with the appellant to remain absent at the time of hearing. One of the reasons might also be a desire or absence of need to prosecute the appeal or liability to assist the Tribunal in a proper manner or to take benefit of vagaries of law.
Respectfully following the precedents, the appeals filed by the assessee are treated as un-admitted and dismissed in limine.
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2015 (10) TMI 2860
Export of services or not - place of provision of services - location of recipient - receipt in foreign exchange - business auxiliary service - services in relation to export of goods - giving recommendation about the product integrity, inspecting export consignments and issuing inspection certificates, screening the vendor’s suitability in terms of child labour norms and pollution control norms and recommending the teams to be engaged in logistic work like transportation, clearing and forwarding etc. for export of the purchased products out of India - Export of Service Rules, 2005
HELD THAT:- As respondent has circulated a letter praying for adjournment on the ground of filing counter affidavit.
As prayed list the matter after four weeks.
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2015 (10) TMI 2859
Applicability of provisions of Section 50C in case of transfer of tenancy rights - Tribunal decided that AO has wrongly substituted the value adopted or assessable stamp valuation authority only in respect of land or building or both cannot be extended or extrapolated to the transaction of transfer of the tenancy rights under the provisions of Section 50C - HELD THAT:- We find that the impugned order of the Tribunal dismissed the Revenue's appeal inter alia holding that the provisions of Section 50C of the Act would not be attracted in case of transfer of tenancy rights.
The impugned order placed reliance upon its own decision in “Shri. Atul G. Puranik [2011 (5) TMI 576 - ITAT, MUMBAI] as held that transfer of tenancy rights is neither 'a land or building or both' and thus would not be covered under Section 50C of the Act. Mr. Malhotra, learned Counsel for the Revenue very fairly states that the Revenue has accepted the decision in the case of “Shri. Atul G. Puranik”(supra) inasmuch as no appeal has been preferred against the said order. No substantial question of law
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2015 (10) TMI 2858
Depreciation on the ‘contract maintenance portfolio’ u/s 32 (1) (ii) - HELD THAT:- The finding recorded by the ITAT is that the Assessee had acquired maintenance contracts for 3578 elevators, which was the main source of revenue for the Assessee. Maintenance contracts for 1001 elevators which were under warranty period were expected to start yielding revenue once the warranty period expired. The ITAT has, in the impugned order, rightly noted that since the maintenance portfolio was purchased by the Assessee as part of the purchase by way of ‘slump-sale’, it constituted the basic income earning apparatus and was therefore entitled to depreciation under Section 32 (1) (ii) of the Act.
The Court finds that the decision of this Court in Areva T & D India Limited [2012 (4) TMI 79 - DELHI HIGH COURT] answers a similar question in favour of the Assessee and against the Revenue. In that decision it was held that know-how, business contracts, business information, etc. acquired as part of a slump sale were entitled for depreciation u/s 32 (1) (ii) of the Act.
Whether the goodwill is an asset within the purview of Section 32? - Question stands answered in favour of the Assessee and against the Revenue by the decision of Smifs Securities Limited [2012 (8) TMI 713 - SUPREME COURT]
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2015 (10) TMI 2857
Admissibility of confessional statements under Section 27 of the Evidence Act - possession of fake currency notes of Rs. 100 denomination were found - conviction and sentence of the Appellants for commission of offence Under Section 489C - HELD THAT:- There was discovery of a fact as per the statement of Mehmood Ali and Mohd. Firoz. Co-accused was nabbed on the basis of identification made by the accused Mehboob and Firoz. He was dealing with fake currency notes came to the knowledge of police through them. Recovery of forged currency notes was also made from Anju Ali. Thus the aforesaid accused had the knowledge about co-accused Anju Ali who was nabbed at their instance and on the basis of their identification. These facts were not to the knowledge of the Police hence the statements of the accused persons leading to discovery of fact are clearly admissible as per the provisions contained in Section 27 of the Evidence Act which carves out an exception to the general provisions about inadmissibility of confession made under police custody contained in Sections 25 and 26 of the Evidence Act.
The judgment and order of sentence passed by the trial court and confirmed by the High Court are found to be appropriate - Appeal dismissed.
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2015 (10) TMI 2856
Seeking cancellation of charge of Sales tax department on the land together with the construction thereon - direction to respondent authorities to enter name of the petitioner in the revenue record - seeking to set aside all the impugned entries in respect of charge and attachment in respect of alleged dues of Government of Gujarat - cancellation of charge of the sales Tax Department over the land.
Whether the assessment of the Sales Tax dues is calculated and what steps have they taken against the Ornet Ceramic Ltd.?
HELD THAT:- The answer is not produced on record. This shows approach of the authority trying to recover the dues which were provisionally assessed by the authorities before 2010 i.e. before the property was put to an auction. It is true that the Sales Tax Department had written to the Bank that they have charge over the property, and therefore, the property should not be permitted to be auctioned. On these counts, the State authorities have not answered. On this pivotal issue, the entire petition and the fate would lie.
It is yet open for the State authorities to claim the money from Ornet Ceramic as it has been rightly pointed out by Revenue that the charge was on the land, therefore, authorities felt that they were secured, yet, they have been writing letter to the Bank that even after auctioning the said property, there was a surplus amount of Rs. 77 lacs. Pursuant to that, the Sales Tax officers have did nothing.
The present petition requires to be allowed with a rider that the Sales Tax Department would be at liberty to claim the amount from the Ornet Ceramic Ltd. as the assessment which is now produced on record by way of affidavit was done after 8 months of the auction. If they are entitled, they may recover from Ornet Ceramic Ltd, the original company, which is liable to pay the sales tax dues and the petitioner cannot be saddled with the liabilities even as per the sale deed executed with the Bank, at page 193-194 of this petition, which is executed between the present petitioner and State Bank of India. Further, there is also an averments that every thing will be borne free from all encumbrances,and therefore also, the stand taken by the Bank and the sales Tax Department cannot be sustained.
Whether can it be said that the charge was on the property and the petitioner purchased the property with open eye, as contended by the State. The answer would be no. The documentary evidence go to show that though the Sales Tax Department was aware that the property was put to auction, but they did nothing - The order of Mamlatdar, Morbi is nothing else but perverse, and therefore, name of the petitioner has to be mutated in the revenue entry as they have purchased the property free from all encumbrances. The charge of Sales Tax Department cannot be mutated, which is contrary to the decision of this Court in the case of Baroda City Cooperative Bank Ltd. v. State of Gujarat [2010 (5) TMI 774 - GUJARAT HIGH COURT]. This petition under Article 226of the Constitution has to be accepted and it is held that the orders are bad in eye of law. The mutation entry is totally unauthorised.
Thus, no entry can be posted or no mutation can be effected in respect of charge. In view of the statutory provisions, the mutation entries regarding charge of the alleged tax dues of the State could not have been posted and the action of posting such entry is without authority, powers and jurisdiction., and therefore, mutation entry posted and certified in respect of attachment by Assistant Commissioner, Commercial Tax, is unauthorised, and Assistant Commissioner Commercial Tax has no authority to attach the property under Gujarat Sales Tax Act, Central Sales Tax Act and Value Added Tax. Even no procedure under the Land Revenue Code is followed for the attachment of the questioned land and the Sales Tax Commissioner could not have legally attached the property for recovery of the dues from the previous owner.
Petition allowed.
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2015 (10) TMI 2855
Delay in filing petition - Denial of reasonable opportunity to the delinquent official - Non-Compliance with Rule 34 of the Jammu and Kashmir Civil Services (Classification, Control & Appeal) Rules, 1956 - HELD THAT:- There was a manifest error by the High Court, for it had really not taken note of the stand and stance that was eloquently put by the State as regards the delay and laches. The averments in the writ petition were absolutely silent and nothing had been spelt out why the delay had occurred. The Single Judge, as stated earlier had chosen not to address the said issue. The Division Bench in appeal addressed the submission, totally being oblivious of the ground pertaining to delay and laches clearly stated in the memorandum of appeal, and modified the order passed by the learned Single Judge as if that was the sole submission. It needs no special emphasis to state that in the obtaining factual matrix, the application for review did not require delving deep into the factual matrix to find out the error. It was not an exercise of an appellate jurisdiction as is understood in law. It can be stated with certitude that it was a palpable error, for the principal stand of the State was not addressed to and definitely it had immense significance and hence, the same deserved to be addressed to.
In the case at hand, the employee was dismissed from service in the year 1999, but he chose not to avail any departmental remedy. He woke up from his slumber to knock at the doors of the High Court after a lapse of five years. The staleness of the claim remained stale and it could not have been allowed to rise like a phoenix by the writ court.
In the case at hand, the employee was dismissed from service in the year 1999, but he chose not to avail any departmental remedy. He woke up from his slumber to knock at the doors of the High Court after a lapse of five years. The staleness of the claim remained stale and it could not have been allowed to rise like a phoenix by the writ court.
A writ court while deciding a writ petition is required to remain alive to the nature of the claim and the unexplained delay on the part of the writ Petitioner. Stale claims are not to be adjudicated unless non-interference would cause grave injustice. The present case, need less to emphasise, did not justify adjudication. It deserved to be thrown overboard at the very threshold, for the writ Petitioner had accepted the order of dismissal for half a decade and cultivated the feeling that he could freeze time and forever remain in the realm of constant present.
The judgment and orders passed by the High Court are set aside - the Court held that the Respondent's writ petition should not have been entertained due to the unexplained delay and laches, and the claim was stale - Appeal allowed.
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2015 (10) TMI 2854
Sanction of scheme of amalgamation - HELD THAT:- Pursuant to the report of the Official Liquidator, it is ordered that, the petitioner company shall preserve its books of accounts, papers and records and not dispose of the records without prior permission of Central Government as per the provisions of Section 396(A) of the Companies Act, 1956 and shall not be absolved from any statutory liability. Considering the above, it is ordered that, the scheme at Exhibit `C’ to the petitions is hereby sanctioned.
Company Petitions are allowed.
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2015 (10) TMI 2853
Accrual of income in India - treating receipt from sale of software product as royalty and subjecting it to tax - PE in India or not? - assessee an American Company is engaged in the business of providing information solution - as argued such income has not been offered to tax on the reasoning that as the assessee is not having a P.E. in India such income being in the nature of business income is not taxable under the provisions of India USA DTAA
HELD THAT:- On a perusal of the material on record, it is seen that identical dispute came up for consideration before the co-ordinate bench of the Tribunal in assessee’s own case for the assessment year 2007-08[2011 (11) TMI 887 - ITAT MUMBAI] wherein after considering the terms of both the agreements as well as other relevant facts came to conclude that the receipts from sale of computer software products is not royalty but business income.
in the assessment year 2007-08 also, the Departmental Authorities treated the receipt from sale of software product as royalty solely relying upon the nomenclature of the product given in the invoice as “intellectual” value which is also the case in the impugned assessment year.
Tribunal, taking into consideration such fact has given a categorical finding that the amount received by the assessee towards sale of software products cannot be treated as royalty and thereby accepted assessee’s claim of business income. As there is no material difference in the facts considered by the Tribunal in assessment year 2007–08 and the impugned assessment year, we accept assessee’s claim that the amount received from sale of software product cannot be considered as royalty but is the business income of the assessee, hence, as per the provisions of India–USA treaty it is not taxable in absence of a P.E - Assessee appeal allowed.
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2015 (10) TMI 2852
Refund of unutilized CENVAT Credit - Export of exempted service - It was held by CESTAT that respondent assessee will be entitled to refund as held by the impugned appellate order - HELD THAT:- Issue notice - Tag with SLP(C) No.29712 of 2014.
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2015 (10) TMI 2851
Kidnapping and Murder - destroying the evidence - application for leading additional evidence at the appellate stage - HELD THAT:- It has been the consistent defence of the Appellant that the dead body found in agricultural fields in District Muzaffar Nagar was that of Pushpa Verma and he went to the extent of producing photograph of the dead body in the present trial. He also examined Brahm Pal Singh, Sub-Inspector and other witnesses. It was certainly possible to examine Forensic Expert at the trial court stage itself and the High Court was right and justified in rejecting the prayer to lead additional evidence at the appellate stage - The exercise undertaken by that expert is to start with the admitted photograph of Pushpa Verma on a computer, then remove the "bindi" by some process on the computer, then by same process remove her spectacles and by computer imaging change the image as it would have looked if the lady was lying down in an injured condition. The computer image so changed was then compared with the photograph of the dead body - there are no reason to differ from the view taken by the High Court.
The transactions as have been admitted by the Appellant. The signatures alleged to have been put by Pushpa Verma on said documents is seen - the signatures are compared and it is found that the view taken by the High Court in that behalf to be correct. It is impossible and inconceivable that a lady who had retired as head mistress would mis-spell her own name while putting signatures. The flow of signature as evident from the admitted source is completely of a different nature. The signatures on the documents in question, to a naked eye, cannot be that of Pushpa Verma. Further, there is no reason why a lady who has two sisters and two Advocate nephews staying in same town, would give power of attorney and execute a Will in favour of a total stranger. These circumstances are clinchingly against the Appellant. His assertion that he had made over the payments received in cash to Pushpa Verma is not supported by any material on record. In fact, the Appellant kept receiving payments even in the month of March, 2003. None of the payments are reflected in the account of Pushpa Verma. Receipt of Rs. 1,00,000/- by way of cheque in the name of Appellant himself is also a circumstance against the Appellant. The evidence thus shows that the Appellant had fabricated the documents in question and was attempting to defraud Pushpa Verma, as stated in the extra judicial confession.
There is nothing on record to show that the Appellant had undertaken any attempt, if he was genuinely acting as power of attorney on her behalf. It is satisfying that the circumstances on record, even if to disregard that relating to the recovery of Voter Identity Card Ext.P-12, do suggest only one hypothesis and that is the guilt of the Appellant. The defence set up by the Appellant does not inspire any confidence and merits rejection.
The appeal, therefore fails and is dismissed.
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2015 (10) TMI 2850
Addition u/s 40A - assessee had paid excessive interest - this interest was @ 12% paid to depositors who are not family members, 15% to relatives and 18% to the associated concern - AO adopted uniform interest rate in all the above three categories to be @ 15% resulting in the impugned disallowance - HELD THAT:- We find that the hon’ble jurisdictional high court in Sarjan Realities Ltd.[2014 (8) TMI 206 - GUJARAT HIGH COURT] holds that solely because an assessee had paid an interest to different parties would not itself be a ground to come to conclusion that payment of interest to related companies at rate other than that paid to other parties was excessive and unreasonable resulting in section 40A(2)(b) addition in question. We reiterate that neither of the lower authority gives an independent finding of such an excessive component over and above the prevailing market interest rate. The Revenue fails to point out any distinction on facts or law. We accept assessee’s arguments and delete the impugned addition - Assessee’s appeal is allowed.
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2015 (10) TMI 2849
Illegal Gratification - plea of the accused was that target was fixed by the Department to collect contribution for purchase of National Savings Certificate and the amount that was given by the complainant was towards that only - HELD THAT:- The prosecution has not examined any other witness present at the time when the money was demanded by the accused and also when the money was allegedly handed-over to the accused by the complainant. The complainant himself had disowned his complaint and has turned hostile and there is no other evidence to prove that the accused had made any demand. In short there is no proof of the demand allegedly made by the accused. The only other material available is the recovery of the tainted currency notes from the possession of the accused. The possession is also admitted by the accused. It is settled law that mere possession and recovery of the currency notes from the accused without proof of demand will not bring home the offence Under Section 7, since demand of illegal gratification is sine-qua-non to constitute the said offence. The above also will be conclusive insofar as the offence Under Section 13(1)(d) is concerned as in the absence of any proof of demand for illegal gratification the use of corrupt or illegal means or abuse of position as a public servant to obtain any valuable thing or pecuniary advantage cannot be held to be established. It is only on proof of acceptance of illegal gratification that presumption can be drawn Under Section 20 of the Act that such gratification was received for doing or forbearing to do any official act. Unless there is proof of demand of illegal gratification proof of acceptance will not follow.
In the present case the primary facts on the basis of which the legal presumption Under Section 20 can be drawn are wholly absent - the conviction of the Appellant Under Section 7 and under Section 13(1)(d) read with Section 13(2) of the Act and the sentences imposed are set aside and he is acquitted of the charges - Appeal allowed.
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2015 (10) TMI 2848
Unexplained investment in construction of residential building - Addition merely on the basis of DVO’s report - CIT(A) has deleted the addition - HELD THAT:- Mere valuation report is not sufficient to conclude that the assessee has made unexplained investment. From perusal of the assessment, nowhere it reveals that inspite of search, Revenue was in a position to lay its hands on any material exhibiting the unexplained investment made by the assessee, over and above one stated in the books of accounts.
FAA is of the opinion that the addition cannot be made merely on the basis of DVO’s report, and there should be some other incriminating material to support the case of the Revenue. No reason to interfere in the order of the CIT(A), which is confirmed and the ground of appeal of the Revenue is dismissed.
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2015 (10) TMI 2847
Fund mobilising activity from the public - offer and issuing Redeemable Preference Shares (RPS) - Company and its directors are restrained from carrying on with their fund mobilizing activity - violation of the provisions of sections 56, 60 read with section 2(36), 73 of the Companies Act, 1956 r.w.s. 465 of the Companies Act, 2013 and the SEBI (DIP Guidelines – since rescinded) read with SEBI (ICDR Regulations) - HELD THAT:- Company has made multiple allotments on a monthly basis during the financial years 2009-2010, 2010-2011 and 2011-2012. It can be seen that on every allotment (excluding the solitary allotment made on 30.04.2009), the number of persons to whom RPS were allotted always exceeded 49. The Company is not an NBFC or a Public Financial Institution within the meaning of Section 4A of the Companies Act, 1956 to be covered under the second proviso to section 67(3) of the Companies Act, 1956. Therefore, considering the number of persons from whom monies were mobilized by the Company by issuing RPSs, which is definitely more than 49 persons, it can be concluded that the Company had made a public issue of RPS in terms of the first proviso to section 67(3) of the Companies Act, 1956. Further, the manner of making such offer and issuance of RPS adopted by the Company (i.e., series of allotments made consistently every month) can be definitely held to be a ploy employed by the Company to circumvent the provisions of the first proviso to section 67(3) of the Companies Act, 1956.
In view of the above observations, by virtue of section 55A(a) and (b), the SEBI has jurisdiction and would govern the issue of RPS as the same was made to more than 49 persons. As alleged in the SEBI Order, the Company was mandated to comply with the provisions of sections 56, 60 and 73 of the Companies Act, 1956 read with Companies Act, 2013 and the DIP Guidelines read with the ICDR Regulations, in respect of its offer and issue of RPS.
As Company did not comply with the public issue norms mandated under sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013 and the DIP Guidelines read with the ICDR Regulations in respect of its offer and issue of RPS made during the financial years 2009-2010, 2010-2011 and 2011-2012. The Company is therefore liable for appropriate regulatory action.
6 persons (present and past directors) are liable for the violations committed by the Company as found in this Order and also liable for making refunds under section 73(2) of the Companies Act, 1956 read with section 27 of the SEBI Act and the DIP Guidelines. Thus it becomes necessary to issue directions for refund against the Company and its directors and other directions in the interest of investors and the securities market.
Order:- Company jointly and severally, shall forthwith refund the money collected by the Company through the issuance of Redeemable Preference Shares (which have been found to be issued in contravention of the public issue norms stipulated under the Companies Act, 1956 and the DIP Guidelines), to the investors including the money collected from investors, till date, pending allotment of securities, if any, with an interest of 15% per annum compounded at half yearly intervals, from the date when the repayments became due (in terms of Section 73(2) of the Companies Act, 1956) to the investors till the date of actual payment.
The repayments to investors shall be effected only in cash through Bank Demand Draft or Pay Order.The Company/its present directors are permitted to sell the assets of the Company only for the sole purpose of making the refunds as directed above and deposit the proceeds in an Escrow Account opened with a nationalised Bank.
The Company 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. After completing the aforesaid repayments, the Company shall file a certificate of such completion with SEBI, within a period of three months from the date of this Order, from two independent peer reviewed Chartered Accountants who are in the panel of any public authority or public institution.
The Company, its directors and former directors are also directed to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/securities, if held in physical form.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 are further restrained and prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, from the date of this Order till the expiry of 4 years from the date of completion of refunds to investors as directed above.) The directors including former directors restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, with immediate effect.
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9911796707
