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TMI Blog2020 (3) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 2. The facts leading to the filing of the present appeals is that Securities and Exchange Board of India (hereinafter referred to as, 'SEBI') received several investor complaints pertaining to money mobilization by Sanghi Plantations Ltd. (SPL / the Company) and its failure to refund the dues to the said investors. SEBI examined the complaints and found that the money collected by the Company for teak plantation scheme was in the nature of Collective Investment Scheme (CIS) as defined in section 11AA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as, 'SEBI Act'). Since the scheme was being carried on without requisite registration under the SEBI Act, a common show cause notice dated Febr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly liable to wind up the existing collective investment schemes and refund the money collected by it under the 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. The refund shall be made through 'Bank Demand Draft' or 'Pay Order'. (ii) Upon completion of the refund as directed above, within a further period of seven days, the Noticee company and the present directors namely, Kodhaty Chandrasekhar Rao and Benda Ram Narayan shall submit a winding up and repayment report (WRR) to SEBI in accordance with the CIS regulations. The WRR shall be supported by the proof of the trail of funds claimed to be refunded, bank account statements indicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bruary 26, 2008 and resigned on June 6, 2009. During this period no money was collected under the scheme nor the investors amount had matured during their period which required repayment to the investors. It was, thus, contended that since the appellants were appointed as directors for a brief period they cannot be held liable to refund the amount which was not collected during their period nor had matured during their period. It was contended that since they are no longer directors, they cannot be made liable to wind up the existing scheme nor can they in any way alienate or dispose of the assets of the company. It was also urged that since they were not responsible for the affairs of the company, the directions of the WTM restraining the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIS. There is no finding that the amount collected had matured during the period when these appellants were the directors. Consequently, in our opinion, these directors could not be fastened the liability to refund the amount as they had neither collected the money nor were responsible for disbursement of the money to the investors at that stage. Further, admittedly the said appellants after their resignations are not involved in the affairs of the company. Consequently, no direction could be issued to them to wind up the investment scheme or to restrain them from selling the assets of the company in which they are not the directors. In the light of the aforesaid, the impugned order in so far as the appellants in Appeal No. 378 of 2017 is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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