BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Date of Decision: 22.7.2019
Appeal No.202 of 2019
1. Life Care Real Developers Limited
306, 3rd Floor, Vardhman City-2,
Plaza Asaf Ali Road Delhi-110002.
2. Arshad Hussain
Vill. DurgaMandir Road, Bhatpar Rani,
Near Gramin Bank Ke Pas, Bhatpar Rani,
Deoria – 274702, Uttar Pradesh.
3. Mohammed AftabAlam
DhanouziKhurd, Fajil Nagar,
Deoria-274001, Uttar Pradesh.
4. Mohd. Gani
66 Mehrauna, Salempur,
Dist. Deoria, 274702, Uttar Pradesh.
5. ShibaPravin
DurgaMandir Road, Bhatpar Rani,
Deoria-274702, Uttar Pradesh.
6. Mohd. Seraj Lari
56 KHA, BasiyanVadar No-09 Khanda 1,
Khanda 1, Bans, Devariya-274001,
Uttar Pradesh.
7. Rajneesh Chandra Shukla
629/6, Govindpuri, Kalkaji,
New Delhi – 110019.
Versus
… Appellants
2
Ld. Adjudicating Officer
Securities and Exchange Board of India
SEBI Bhavan, Plot No.C-4A, G Block,
Bandra Kurla Complex, Bandra (East)
Mumbai-400051.

… Respondent
Mr. Saurabh Bachhawat, Advocate with Mr. Jitendra Sharda,
Advocate i/b. Mindspright Legal for the Appellants.
Mr. Shyam Mehta, Senior Advocate with Mr. Mihir Mody and
Mr. Sushant Yadav, Advocates i/b. K. Ashar & Co. for the
Respondent.
CORAM: Justice Tarun Agarwala, Presiding Officer
Dr. C.K.G. Nair, Member
Justice M.T. Joshi, Judicial Member
Per : Justice Tarun Agarwala (Oral)
1.

The facts leading to the filing of the appeal is that the
appellants had raised capital for its business requirements
through issuance of Redeemable Preference Shares (RPS).
Since the provisions of the Companies Act, 1956 were violated
Securities and Exchange Board of India (hereinafter referred to
as ‘SEBI’) in exercise of the powers granted under Section 11
and 11B of the Securities and Exchange Board of India Act,
1992 (hereinafter referred to as ‘SEBI Act’) passed an order
dated December 9, 2015 directing the appellants to jointly and
severally refund the monies collected from the investors.

3
2.

The appellants filed an appeal before this Tribunal which
was disposed of on the basis that the appellants would repay the
balance amount in installments by making an application to
SEBI. For facility, the order of the Tribunal dated 25th October,
2016 is extracted hereunder:
“1. This appeal is basically filed to challenge the order
passed by the Whole Time Member (“WTM” for short) of
Securities and Exchange Board of India (“SEBI” for
short) on 9th December, 2015. By the said order,
appellants are jointly and severally directed to refund the
moneys collected by the appellant No.1-company through
issuance of the redeemable preference shares to the
investors. Counsel for the appellants fairly states that in
compliance of the aforesaid order, appellants have
already refunded approximately Rs.75 lakh to the
investors and the appellants would like to repay the
balance amount in installments by making an application
to SEBI.
2. Accordingly, appellants are permitted to make an
application to SEBI by 3rd November, 2016 setting out in
detail the modalities for refunding the balance amount to
the investors. If such an application is made, SEBI shall
consider the same and pass appropriate orders thereon.
3. It is made clear that if the appellants fail to submit an
application within the stipulated time, then SEBI is at
liberty to enforce the impugned order as they deem fit.
4.
Appeal is disposed of in the above terms with no
order as to costs.
5. In view of the disposal of appeal, Misc. Application
filed by the appellants becomes infructuous and is
accordingly disposed of as infructuous.”
4
3.

It transpires that a proposal was made which was rejected
by SEBI by an order of 16th March, 2017. It further transpires
that a fresh proposal was again submitted.
4.

In the meanwhile, because the balance amount was not
been deposited recovery proceedings were initiated and a show
cause notice was again issued to the show cause why an enquiry
should not be held and penalty be not imposed under Section
15HB of the SEBI Act. The Adjudicating Officer passed an
order dated 28th January, 2019 imposing a penalty of
Rs.65 lakhs for not complying with the directions of SEBI order
dated 9th December, 2015. The appellant being aggrieved by
this order of penalty has filed the present appeal.
5.

Having heard the learned counsel for the appellant we find
that admittedly the order dated 9th December, 2015 as affirmed
by the Tribunal by its order of 25th October, 2016 has not as yet
been complied with till date. The balance amount has not been
refunded to the investors. We also find that dilatory tactics are
being adopted to scuttle the recovery proceedings in one way of
the other. In this regard, in order to test the bonafides of the
appellant, this Tribunal by an order dated 27th June, 2019 had
directed the appellants to deposit a sum of Rs.1.5 crores by
15th July, 2019 which was also not been done.

5
6.

Considering the aforesaid and looking into the conduct of
the appellants we find that there is willfull default and failure on
the part of the appellants in not refunding the amount as per the
order of the Tribunal dated 25th October, 2016.
7.

Consequently, we do not find any manifest error in the
impugned order. The appeal fails and is dismissed.

Sd/Justice Tarun Agarwala
Presiding Officer
Sd/Dr. C. K. G. Nair
Member
Sd/Justice M.T. Joshi
Judicial Member
22.7.2019
Prepared and compared by
RHN