BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO. RA/JP/ 40 - 44/2016]
________________________________________________________________
UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA
ACT, 1992 AND RULE 5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND
IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995.
In respect of:(1) Skylark Land Developers & Infrastructure India Ltd. (PAN: AAOCS3538A)
(2) Mr. Jaihind Kumar (PAN: ALAPK2141F)
(3) Mr. Durga Prasad Yadav (PAN: ABAPY8539M)
(4) Mr. Rama Shankar Yadav (PAN: AAUPY1604L)
(5) Mr. Dilip Jain (PAN: AEUPJ 2034B)
BACKGROUND
1. A Public Interest Litigation (PIL) was filed before the Honble High Court of
Madhya Pradesh (Bench at Gwalior) in the year 2010 against various companies
including the Skylark Land Developers & Infrastructure India Ltd. for cheating
thousands of investors / public in various fraudulent schemes of mobilizing money
from the investors / public by promising higher return of interest.Upon direction of
the Honble High Court of Madhya Pradesh dated July 05, 2011, the Central
Bureau of Investigation (CBI) conducted preliminary investigation. Subsequently,
vide order dated July 13, 2012, the Hon'ble High Court of Madhya Pradesh
disposed of the said PIL / Writ Petition with direction that concerned department
(including Securities and Exchange Board of India) are at liberty to take
appropriate actions in accordance with law.
2. Securities and Exchange Board of India (hereinafter referred to as SEBI) during
the course of investigation inter-alia observed that the (1) Skylark Land
Developers & Infrastructure India Ltd. (a Company), (2) Mr. Jaihind Kumar, (3) Mr.
Durga Prasad Yadav, (4) Mr. Rama Shankar Yadav and (5) Mr. Dilip Jain
Directors of the said Company (hereinafter referred to as 'the Noticee No. 1 to
Page 1 of 19

5respectivelyorall may be referred collectively as the Noticees)had failed to

provide the information / documents as sought by the Investigating Authority and
had allegedly violated Section 11 C (3) of the Securities and Exchange Board of
India Act, 1992 (hereinafter referred to as 'SEBI Act').

APPOINTMENT OF ADJUDICATING OFFICER

3. SEBI has initiated adjudication proceedings and appointed the undersigned as
Adjudicating Officer under section 15 I of the SEBI Actread with rule 3 of the SEBI
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer)
Rules, 1995 (hereinafter referred to as Adjudication Rules) vide order dated
January 06, 2015, to inquire into and adjudge under section 15 A (a) of the SEBI
Act,the violations of Section 11 C (3) of the SEBI Act alleged to have been
committed by all the Noticees.Order appointing the undersigned as Adjudicating
Officer was communicated vide communiqu dated May 14, 2015.

SHOW CAUSE NOTICE, REPLY AND HEARING

4. A common Show Cause Notice No. EAO/RA/JP/17950/2015 dated June 30, 2015
(hereinafter referred to as SCN) was issued against the Noticeesunder 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 15A (a) of the SEBI Act
for the aforesaid alleged violations of the SEBI Act. The SCN sent at the common
address of all the Noticees viz. 2nd Floor, Ganga Complex, Mall Road, Morar,
Gwalior 474 001 (MP)and sent to the Noticee No.1 at the address- 202 A, 2nd
Floor 47/21, Old Rajinder Nagar, New Delhi- 110 060,was returned undelivered
by the Postal Department with remarks left. On the other addresses of the
Noticees(except in case of Dilip Jain), the SCN was not returned undelivered and
hence served upon them.

5. The observations made under the investigations and the allegations levelled
against the Noticeesin the SCN are mentioned hereunder;

(a) A Public Interest Litigation (PIL) was filed before the Honble High Court
ofMadhya Pradesh (Bench at Gwalior) in the year 2010 against various
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companies including the Noticee No.1, for cheating thousands of investors / public
in various fraudulent schemes of mobilizing money from the investors / public by
promising higher return of interest from 15-20%. Upon direction of the Honble
High Court of Madhya Pradesh dated July 05, 2011, the Central Bureau of
Investigation (CBI) conducted preliminary investigation. Subsequently, vide order
dated July 13, 2012, the Hon'ble High Court of Madhya Pradesh disposed of the
said PIL / Writ Petition with direction that concerned department (including SEBI)
are at liberty to take appropriate actions in accordance with law.

(b) Accordingly, SEBI served upon Noticee No. 1 a letter dated November 22,
2012 asking to provide information by December 05, 2012 about its scheme /
plans offered to public, funds mobilized, Memorandum of association, detail of
directors etc. in order to examine the matter under section 11AA of the SEBI Act
and under SEBI (Collective Investment Schemes) Regulations 1999. In response
to said letter of SEBI, the Noticee No. 1 vide letter dated December 05, 2012
while denying mobilization of funds from public, requested for 2 months time for
preparation of desired information.

(c)SEBI again vide letters dated January 11, 2013, November 07, 2013 and
February 20, 2014 asked the Noticees to provide the said information. In
response, the Noticee No. 1 vide letter dated April 02, 2014 provided partial
information only viz. memorandum of articles of association, details of past and
present directors, copy of audited financial statements for the year 2010-11 and
2011-12, income tax return, registered office address and two criminal case
information. The Noticee No. 1 also vide e-mail dated April 03, 2014 (ID:
skylark2010gwalior @gmail.com) informed about forwarding of its said letter.

(d)

Further,

SEBI

vide

e-mail

dated

April

21,

2014

at

e-mail

ID:

skylark2010gwalior @gmail.com and vide letter dated May 05, 2014 asked the
Noticees to provide the balance information / documents etc. as stated therein by
April 25, 2014 and May 16, 2014 respectively. However, the Noticees had
allegedly failed to provide the said information/documents.

Page 3 of 19

(e)As the entire information was not provided by the Noticees, the Investigating
Authority of SEBI issued summons dated July 30, 2014 under section 11 C (3) of
the SEBI Act, requiring all the Noticees to provide the information / documents /
reports etc. as mentioned in annexure attached therewith (i.e. copy of SEBI letter
dated May 05, 2014) by August 07, 2014. The said summons was sent through
Regd. Post AD. In response to the said summons, the Noticee No. 1 through email dated August 16, 2014 (while attaching a letter dated August 14, 2014)
requested some more time for preparing the required information / documents
and also stated that its Director (s) will be personally present at the office of
Investigating Authority along with required documents between 5th September to
10th September 2014.

(f)Also, the Investigating Authority vide e-mail dated August 16, 2014 (at e-mail
ID: skylark2010gwalior@gmail.com)categorically informed the Noticee No.1 that
despite repeated communication it had failed to provide the information and in
case no information is provided by August 19, 2014, then, its shall be considered
as non-compliance of summons by it and its directors and matter would be
proceeded ex-parte. However, allegedly, the information / documents sought
under the said summons was not provided by the Noticees.

(g)Thereafter, another summons dated September 12, 2014 was issued by the
Investigating Authority to the Noticees along with a letter September 12, 2014,
requiring them to furnish the information by September 22, 2014.The said
summons was sent through Regd. Post AD; and online track records of the Postal
Department reveals the delivery thereof. However, allegedly, again the
information/ documents sought under the said summons were not provided by the
Noticees.

(h)In view of the above, it was alleged that the Noticees had not provided the
information / documentssought by the Investigating Authority under the aforesaid
2 summons read with aforestated letter / e-mails and therefore, allegedly the
Noticees had violated Section 11 C (3) of the SEBI Act. The provision of section
11C (3) is produced as under;
Page 4 of 19

The Investigating Authority may require any intermediary or any person associated with
securities market in any manner to furnish such information to, or produce such books, or
registers, or other documents, or record before him or any person authorised by it in this
behalf as it may consider necessary if the furnishing of such information or the production
of such books, or registers, or other documents, or record is relevant or necessary for the
purposes of its investigation.
(i)It was stated in the SCN that the aforesaid alleged violation, if established,
would make all the Noticees liable for monetary penalty under section 15 A (a) of
the SEBI Act.
Penalty for failure to furnish information, return, etc.
15A. If any person, who is required under this Act or any rules or regulations made
thereunder,
(a) to furnish any document, return or report to the Board, fails to furnish the same, he
shall be liable to a penalty which shall not be less than one lakh rupees but which may
extend to one lakh rupees for each day during which such failure continues subject to a
maximum of one crore rupees.
6. Steps were taken to deliver the SCN and to know about delivery of SCN upon the
Noticees including upon Mr. Dilip Jain (Noticee No. 5) through SEBI Local Office
at Indore and Protocol and Security division of SEBI vide letter and office note
dated August 14, 2015 respectively. Thereafter, vide an e-mail dated August 19,
2015 at the e-mail ID skylark2010gwalior@gmail.com, the Noticee No. 1 was
informed that the SCN has been served through Regd. Post AD at its two
addresses i.e. I-71, West Patel Nagar, Delhi -110 008 AndF-81, Ground Floor,
First Side, West Patel Nagar, Delhi 110 008, however, no reply has been
received towards the SCN till date. The Noticee No. 1 was also asked to serve
again the copy of SCN along with Annexures upon its Directors at their addresses
as shown in SCN or at other available addresses as per its records; and forward
the proof of service of SCN.It was also stated that in case the SCN could not be
served upon the directors, then, it can affix the same at conspicuous part of their
addresses evidenced by two witnesses and forwards the Affixture Report. The
copy of SCN was attached with the said e-mail. Vide said e-mail, the Noticee No.
1 was asked to file its reply if any, towards the SCNand serve the SCN upon its
directors on priority basis but not later than August 26, 2015. Department of Post
vide its letter dated August 22, 2015 confirmed the delivery of SCN upon
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DurgaPrasad Yadav (Noticee No. 3). Meantime, the Post Master, BPC Vile Parle
West was asked vide communique dated November 30, 2015 to submit the
delivery proof of the SCN upon Mr. Jaihind Kumar and Mr. Ram Shanka Yadav
(Noticee No. 2 &4 respectively), though no reply has been received to the
undersigned till date.

7. As no reply was received from any of the Noticees despite lapse of enormous
time, hence, vide an e-mail dated November 30, 2015 (digitally signed by me)
sent at the e-mail IDs of all the Noticees viz. skylark2010gwalior@gmail.com;
info@sldiindia.com;

dilip.jainsldi@gmail.com;

dpyadav.sldi@gmail.com;

jaihind.sldi@gmail.com; ramagwalior@gmail.com,attaching a copy of the SCNand

advising all the Noticees to file their reply on or before December 10, 2015 and
also provided with an opportunity of hearing on December 15, 2015. Vide said email, it was clearly indicated that if no reply is submitted / appearance madeby the
Noticees, then, the matter would be further proceeded with on the basis of the
evidence available on record in terms of sub-rule (7) of Rule (4) of the
Adjudication Rules. The delivery report of the said e-mail upon the Noticees are
available on records. The said time to file reply and opportunity of hearing was
also forwarded to the Noticeesthrough Speed Post AD vide notice dated
November 30, 2015. The postal AD about the receipt of said notice by the Noticee
No. 1 is available on records. However, the said notice was returned undelivered
by postal dept. in respect of Durga Prasad Yadav and Dilip Jain (Noticee No. 3 &
5 respectively). But, the same was not returned undelivered by the Postal Deptt.
in respect of Mr. Jaihind Kumar and Mr. Rama Shankar Yadav (Noticee No. 2 & 4
respectively) and hence delivery of said notice is presumed to have been done
upon them (Noticee No. 2 & 4).

8. Therefore, vide said e-mail the SCN has been duly served again upon all the
Noticees in term of rule 7 (a-b) of the Adjudication Rules. In respect of SCN / said
e-mail dated November 30, 2015, no reply or correspondence was received from
the directors (Noticee No. 2-5). However, surprisingly, the Noticee No. 1on the
same day vide its e-mail stated that there is nothing on the body of e-mail dated
November 30, 2015 under Adjudication proceedings and the attachment therewith
Page 6 of 19

cannot be opened. Such false / surprising claim of the Noticee No.1 cannot be
accepted as it is apparent from the records of the said e-mail that the contents are
appearing therein and also the attachment can be easily opened as the same was
well tested before forwarding to the Noticees.

9. However, considering the principle of natural justice, the SCN was put in the body
part of the e-mail and was again sent to the Noticee No. 1 vide an e-mail dated
December 01, 2015 (duly digitally signed by the undersigned). In the said e-mail
dated December 01, 2015, it was clearly stated that SCN has already been
delivered to it by RPAD at its Delhi address and thereforeit is in the knowledge of
the SCN, and it may take help of someone/expert to open the attachment. Despite
said delivery of the SCN through RPAD and through e-mail, the Noticee No. 1was
also given a liberty that if it still need one more copy of the SCN then, it may
provide its as well as its directors correspondence address where the same can
be delivered. The Noticee No. 1 was clearly informed about the consequence of
failing to respond the SCN and failing to appear for hearing.

10. In respect to aforesaid e-mail, the Noticee No.1 vide an e-mail dated December
12, 2015 (from an employee of the Noticee No. 1 viz. Mr. Sanjay Jain) attached
an authority letter dated December 11, 2015 authorizing Mr. Subodh Kumar
Gupta Advocate to represent the Noticees. The said authorization letter was
signed by the Noticee No. 4 only viz. Ram Shankar Yadav (as a director of the
Noticee No. 1). However, till then, no reply was received from the Noticees
towards the SCN.

11. On the day of scheduled hearing on December 15, 2015, Mr. Subodh Kumar
Gupta Advocate appeared but the hearing was adjourned as the authority letter
was not signed/issued by all the Noticees (except the Noticee No. 1&4) and as no
reply was received towards the SCN from any of the Noticees which is necessary
for the purpose of hearing. On the same day, the documents (Annexure 1-10)in
respect of the SCN were received from the Noticee (s) along with their letter dated
December 15, 2015. Thereafter, as desired by the said advocate, another

Page 7 of 19

opportunity of hearing was provided to the Noticees on December 22, 2015 vide
an e-mail dated December 18, 2015.

12. I respect to said opportunity of hearing, an e-mail dated December 21, 2015 was
received from the Noticee No. 1 confirming the appearance by their aforesaid
authorized representative Mr. Subodh Kumar Advocate. It was also stated in the
said e-mail that directors namely Mr. Jaihind Kumar, Mr. Durga Prasad Yadav and
Mr. Dilip Jain (Noticee No. 2, 3 & 5 respectively) are not available in the city
therefore, authority letters could not be provided to their advocate.

13. Hearing on December 22, 2015 was attended by Mr. Subodh Kumar Gupta
Advocate. During the course of hearing, the said authorized representative was
clearly informed thatsince he has not beenspecifically / individually authorized by
the 3 Noticee/Directors viz. Mr. Jaihind Kumar. Mr. Durga Prasad Yadav and Mr.
Dilip Jain, hence, if he want to make representation on their behalf besides the
Company and Mr. Rama Shankar Yadav, then, he would have to undertake to
provide the individual authorization within a period of seven days, failing which his
presentation for said 3 Noticees would be treated as null and void / as
unauthorized. In respect of aforesaid, the authorized representative agreed to
provide the authority letters within time.

14. During hearing, it was submitted by the authorized representative that the
Noticeeshave forwarded today a reply (5 pages) in the matter through e-mail to
the undersigned and whatever as submitted in the said reply is reiterated. It was
also stated by him that the Noticeeshave not cheated any investors, complied with
investigation of SEBI and the entire data/documents were seized by the Police,
hence, could not produce the same before SEBI in compliance of summons and
therefore, the Noticeeshave not violated section 11 C (3) of the SEBI Act. He
assured to provide the date of seizure by police along with authentic proof in
support thereof within a period of 7 days and he placed on records Annexure 1-6
(containing total 16 pages).During the hearing, the authorized representative was
asked to provide additional communication addresses of the all Noticees as most
of communication at their last known addresses as shown in the SCN are
Page 8 of 19

returned undelivered by Postal Deptt. The authorized representative assured that

additional addresses if available, would be provided within 7 days. Accordingly,
the hearing was concluded.

15. Thereafter, vide an e-mail dated December 28, 2015 from the e-mail IDof Noticee
No.1; the a authorization letter dated December 19, 2015 signed by all the
Noticees authorizing Mr. Subodh Kumar Gupta Advocate as their representative,
was attached therewith and same was taken on records.

16. The reply of the Noticees dated December 22, 2015 and additional reply dated
December 30, 2015 was received and taken on records. Though, the said replies
were made on behalf of Noticee No. 1 and signed by one of the Noticee / director
only viz. Ram Shankar Yadav (Noticee No. 4), however, since the nature of
allegations are common and other Noticees are the directors of the Noticee No. 1;
and were commonly represented by their aforesaid authorized representative
during the hearing, therefore, the submission made under the aforesaid replies
are being taken for all the Noticees while deciding the case against them.
Reply of Noticees
(a) In reply to the contents of para 2 (A), it is submitted that the order passed by
Honourable High Court of Madhya Pradesh needs no comment. The final order
passed by High Court (the extract of the copy of the order dated 13 July 2012 is
hereby being annexed as Annexure 1to this reply) had observed in regards to the
captioned company which is stated as below:
Since the duration of the operation of the Company is less than a year (
minimum period after which the issues the allotment letter), it is not possible to
say conclusively that whether the Company would have allotted/ transferred the
land in the name of Investors within the prescribed period or otherwise .
(b) In reply to para 2 (b), 2(c), 2(d), 2(e) & 2(f) it is stated that all the records were in
the custody of the Collector, Gwalior. Therefore, we were handicapped and could
not provide any information to you. As the above is evident from para 8 of the
interim order dated December 15, 2014 which is quoted below:
In the meanwhile SEBI vide letter dated February 7, 2014, June 27, 2014 and
June 06, 2014 (with a copy to Chief Secretary of Madhya Pradesh) requested the
Page 9 of 19

Collector, Gwalior to provide access to the records of Skylark Developers, which

were in custody of the Collector. However, SEBI has not been able to obtain the
requisite details, till date.
(c) From the above it is crystal clear that as all the records were in the Collectors
custody therefore Company could not provide any details. The delay in filling the
information sought was not deliberately or intentionally.Whatever informations &
documents were available with the Company, the same has been provided from
time to time.
(d) in reply to the contents of para 4& 5, it is stated that the violation of Section 15A
(a) shall not be established against the Company as the delay in furnishing all the
informations was only due to the reasons of the seizure of records with the
Collector, Gwalior. The Noticees have always tried best to co-operate with SEBI &
has provided the information available with the Noticees.
(e) As interim order was passed on December 15, 2014, and the first date fixed was
July 10, 2015 on which the legal representative of Company was present. The
next date fixed was August 21, 2015. On this date an application was moved by
our legal representative with the heading to provide the documents / evidence /
complaints / statements / affidavits & investigation report if any as the applicant is
not aware of the material which is available on record resulting the order dated 15
December, 2014. Reply to the SEBI letter dated July 10, 2015 was submitted on
August 20, 2015 and was furnished to the Whole Time Member (Mr. Prashant
Saran) at the time of hearing on August 21, 2015. The photocopy of the
application dated August 21, 2015 is hereby being annexed as Annexure No. 2
and the photocopy of letter dated August 20, 2015 is hereby being annexed as
Annexure No. 3.
(f) The application dated August 21, 2015 was pending & no decision was taken.
Therefore two reminders were sent by the Noticee i.e. on September 1, 2015 and
on November 4, 2015. It is pertinent to mention here that SEBI has not provided
us the demanded documents instead they have sent us all the correspondence
made between SEBI &Noticee. SEBI has not provided us the copy of complaint;
affidavit to its effect, evidence collected against the notice any statement and a
copy of Investigation Report if any.
(g) We had also mentioned in the application that the demanded information is
necessary for the Noticees to file a detail and complete reply. As all the above
documents were not provided, the notices could not file the reply. In the SEBI
letter dated November 4, 2015,Noticees have been advised to file the reply
towards the Interim order cum Show Cause Notice within 15 days from the receipt
of these documents. In compliance,the Noticees filed again certain documents
Page 10 of 19

were on December 15, 2015 (in the present adjudication proceeding) in SEBI
office BandraKurla Complex Mumbai. The photocopy of the order dated
November 04, 2015 is hereby being annexed as Annexure No. 4 & the list of the
documents filed on December 15, 2015 is hereby annexed as Annexure No. 5.
(h) The Noticee moved an application on September 30, 2015 before the Whole Time
Member, Mr. Prashant Saran requesting to grant permission to disburse the
property & to utilize the money for repayment to the investors. The same is still
pending & has not been disposed of till date. The photocopy of the application
September 30, 2015 is hereby being annexed as Annexure No. 6.
(i) An interim order was passed by Board on December 15, 2014 retraining the
captioned Company not to collect any fresh money from investors, not to dispose
of any of the property or alienate the assets of the existing schemes with certain
other direction. The Companys motive was for the betterment of its investors. It
never intended to cheat or defraud its investors, Company also intends to protect
the interest of the investors but the order of the SEBI has tight the hands of the
Company as it is facing great difficulty in repaying its customers.We request SEBI
to grant permission to the Company to disburse the land / assets, so that the
money obtained will be utilized for repayment of the left over investors. As
disbursement would make the Company in a healthier position.
(j) In view of the above stated facts & circumstances, it is stated that the Noticees
have never tried to disobey any order & have fully co-operated by furnishing the
information sought from time to time. Further, we state that the entire documents/
data were seized on 5th May 2011. This date is evident from para 3 of the interim
order passed by SEBI on 15th December, 2014 and also from High Court order.
(k) In reply to question no. 3 of the hearing minutes in the present adjudication
proceedings, we are submitting the present address of the Company as Delhi
Office: 2324/5, Ground Floor, Pvt Flat No. G-1, MandirWaliGali, ShadiKhampur,
New Delhi 110008.

17. After taking into account the allegations, replies of the Noticees and other
evidences / material available on records, I hereby, proceed to decide the case on
merit.
CONSIDERATION OF ISSUES AND FINDINGS
18. The issues that arise for consideration in the present case are :

Page 11 of 19

a)

Whether the Noticees had failed to comply with the summons dated July 30,
2014 and summons dated September 12, 2014 along with letter/e-mail etc.
issued under section 11 C (3) of the SEBI Act by the Investigating Authority of
SEBI?

b)

Whether, the failure in proving the required information/documents by the

Noticees amount to any violation of section 11 C (3) of the SEBI Act?

c)

If yes, then, does the violation, on the part of the Noticees attracts monetary
penalty under sections 15 A (a) of the SEBI Act?

d)

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?

19. I have carefully perused the allegations, submissions of the Noticees and the
evidences / material available on records. The contents of the SCN and the
annexures relied upon under the SCN (viz. the details of summonses, letters, emails issued by the SEBI and the e-mails /letters etc. of the Notices as stated
therein) are not in dispute by the Noticees. In the entire reply, the Noticees mainly
contended that they have not violated section 11 C (3) of the SEBI Act as they
have provided the required information/documents and fully co-operated with
Investigating Authority/SEBI. The Noticees also contended that since all the
records of the Company was seized by the police during May 05, 2011, hence,
they could not provide the documents/information as sought under the said
summonses.

20. I have perused the allegation and the reply of the Noticees and the evidences in
support thereof. It is apparent from the records that the SEBI had issued various
letters / summonses / e-mails to the Noticees specifying the documents /
information required to be submitted by the Noticees. The details of documents /
information are specified in the letter dated May 05, 2014, however, the
Noticeeshad failed to provide those documents as it clearly appears from the
series of communication made by the Noticeesin the matter. The series of
letter/summons/e-mail etc. are produced hereunder which shows that the required

Page 12 of 19

information/documents

were

not

provided

by

the

Noticees

during

the

investigation.

21. SEBI served upon Noticee No. 1 a letter dated November 22, 2012 (Annexure II
of the SCN) asking to provide information by December 05, 2012 about its
scheme / plans offered to public, funds mobilized, Memorandum of association,
detail of directors etc. in order to examine the matter under section 11AA of the
SEBI Act and under SEBI (Collective Investment Schemes) Regulations 1999. In
response to said letter of SEBI, the Noticee No. 1 vide letter dated December 05,
2012 (Annexure III of the SCN) while denying mobilization of funds from public,
requested for 2 month time for preparation of desired information. SEBI again vide
letters dated January 11, 2013, November 07, 2013 and February 20, 2014
(Annexure IV VI of the SCN) asked all the Noticees to provide the said
informations/documents.

22. From Annexure VII of the SCN, it appear that the Noticee No. 1 through its e-mail
dated April 30, 2014 attached a scanned copy of letter dated April 02,
2014provided partial information only. Thereafter, SEBI vide e-mail dated April 21,
2014 at e-mail ID: skylark2010gwalior @gmail.com and vide letter dated May 05,
2014 (Annexure VIII of the SCN) asked all the Noticees to provide the balance
information / documents etc. as stated therein by April 25, 2014 and by May 16,
2014 respectively. However, it is noticed from the records that no details were
provided by them.

23. It is observed that as the entire information was not provided by the Noticees, the
Investigating Authority of SEBI issued a summons dated July 30, 2014 (Annexure
IX of the SCN) under section 11 C (3) of the SEBI Act, requiring all the Noticees
to provide the information / documents / reports etc. by August 07, 2014as
indicated in SEBI letter dated May 05, 2014 which was enclosed along with said
summons. From the available records (viz. Annexure X of the SCN), it is observed
that in respect to said summons, the Noticee No. 1 through e-mail dated August
16, 2014 (while attaching a letter dated August 14, 2014) requested some more
time for preparing the required information / documents and also stated that its
Page 13 of 19

Director (s) will be personally present at the office of Investigating Authority along
with required documents between 5th September to 10th September 2014.
However, neither any reply towards the summons nor any appearance before the
Investigating Authority was made by the Noticee No. 2-5 (directors) as assured by
the Noticee No. 1.

24. The Investigating Authority vide e-mail dated August 16, 2014 (Annexure XI of the
SCN) at e-mail ID: skylark2010gwalior@gmail.comcategorically informed the
Noticee No.1 that despite repeated communication it had failed to provide the
information / documents and in case the same is not provided by August 19,
2014, then, its shall be considered as non-compliance of summons by it and its
directors. However, as per available records, it is noticed that the information /
documents sought under the said summons etc. were not provided by all the
Noticees.

25. It is noted that second summons dated September 12, 2014 (Annexure XII of the
SCN) was issued by the Investigating Authority to all the Noticees along with a
letter September 12, 2014, requiring them to furnish the information / documents
by September 22, 2014. However, it is again observed from the records that all
the information / documents as sought by the Investigating Authority were not
provided by the Noticees.

26. From the above series of communication / response, it is crystal clear that all the
Noticeeshad failed to provide the required information/documents by September
22, 2014 or thereafter. Also, in the instant proceedings, the Noticees had failed to
prove that they have complied with the aforesaid summonses in toto despite so
many

opportunities

were

provided

them

to

submit

the

additional

information/documents. No evidence was provided by the Noticees to show that

they have complied with the summonses / subsequent e-mails of Investigating
Authority.

27. During the instant proceedings, the Noticee(s) had filed aforesaid replies and also
enclosed Annexure 1 to 10 along with letter dated December 15, 2015 stating
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vaguely (without specifying the documents) that many of these documents have
already been submitted by them during the investigation of SEBI, but had not
produced any evidence to support their such contention. The following documents
have been submitted by the Noticee (s) in the instantproceeding;
a. Scheme wise list of investors.
b. Details of amount mobilized and refunded till date.
c. Sample copies of all documents pertaining to schemes including the
documents / Agreements / contacts executed with the customers / Investors.
d. Certified copies of MOA & AOA.
e. Details of Skylark Developers & its Directors/ Promoters.
f. Brochures pertaining to schemes / offers which were made available.
g. Copies of application forms that are required to be submitted by the investor /
applicants to participate in the schemes.
h. Copies of Registration Certificate & allotment letter.
i. Copies of Audited balance sheet for Financial Year 2011-2012, 2012-2013 &
2013-2014.
j. Copies of Income Tax Return filed by the Company for the Financial Year
2011-2012, 2012-2013 & 2013-2014
28. Upon perusal and scrutinisation of the information/documents as required by the
Investigating Authority and the aforesaid documents submitted by the Noticees, it
is observed that the documents at serial no. (e), (h), (j), (k), (l),(m), (n), (o), & (p)
as asked vide aforesaid summonses / letter dated May 05, 2014 of the
Investigating Authority,were even not provided in this proceedingby the Noticees.
Therefore, it is clearlyestablishedthat information/documents were neither
submitted before the Investigating Authority at all nor submitted in entirety in the
instant proceedings as well by the Noticees and no explanation to for rest of the
documents was given by them.It is also observed that the documents as sought
by the Investigating Authority at point (c) & (d) of the letter dated May 05, 2014
(viz. the copy of 2 duly submitted application / allotment letters of the investors)
are not provided by the Noticees with its annexures.

29. It is also surprisingly noted that the Noticees at one hand are submitting vaguely
that they have submitted most of the information / documents as and when sought
by the SEBI / Investigating Authority and on the other hand they are also taking
plea that they could not provide the required documentsas the same were seized
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by the police. Such plea cannot be accepted in the given facts and circumstance
of the case. Even if the said contention of the Noticees is accepted that the police
had seized their records, but it cannot be relied absolutelythat the Noticees were
not having any records available with them in any other form. It is relevant to
mention here that such plea of non-availability of information/documents as
seized by police, was not taken/raised at all by the Noticeesin theirletter dated
December 05, 2012, e-mail dated April 03, 2014 and e-mail dated August 16,
2014 attaching a letter dated August 16, 2014 while responding to the
summons/e-mails of the Investigating Authority; rather, vide their said
communications, they assured to prepare the details as sought within some time
and also assured that its directors /Noticees No. 2-5 would personally appear
before the Investigating Authority.In view of the above, it is clear that the Noticees
were having the documents/information as sought by the Investigating Authority
with them at that point of time as well but failed to provide the same.

30. Secondly, for sake of presumption, if it is accepted that the required

documents/information were seized by the police, then the question arises as to
how in the present proceedings the Noticees were able to submit many of the
documents/information / details which they in fact failed to provide earlier before
the Investigating Authority. It is not the case of the Noticees that the entire records
have been released by the police on a particular date and therefore, they were
able to provide the same in the present proceedings. Replies of the Noticees do
not indicate at all about any release of the records by the police. In view the
above (especially taking into account the Noticees letter dated December 05,
2012, e-mail dated April 03, 2014 and e-mail dated August 16, 2014 attaching a
letter dated August 16, 2014 and taking into account the submission of some of
the required documents in the present proceedings) it is apparent that the
Noticees were having the information/documents with them in some form, but had
failed to submit the same as required by the Investigating Authority vide aforesaid
summonses etc.

31. I cannot ignore the fact that other correspondence addresses of all the Noticeesas
asked during the course of hearing in the present proceedings (where the
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communication can be served upon all the Noticees as the addresses shown in
the SCN are mostly retuned undelivered) were not provided by the
Noticees(except one new address of the Noticee No.1).

32. The other submissions of the Noticees(viz. moving of an application on

September 30, 2015 before the Ld. Whole Time Member to grant permission to
disburse the property & to utilize the money for repayment to the investors etc.)
are not pertaining to the allegation of non-compliance of summonses issued by
investigating Authority, but are related to some other proceedings before the Ld.
Whole Time member of SEBI and hence, same is not relevant to be considered in
the present proceedings.

33. Keeping in view the aforesaid observations made at pre paras of this order, I am
of the view that the Company (Noticee No. 1) as well as the Directors (Noticee
No. 2-5) who were asked to provide the information / documents as sought by the
Investigating Authority, had failedto comply with the aforesaid 2 summons read
with aforestated letter / e-mails and accordingly, the said failure is in violation of
Section 11 C (3) of the SEBI Act.

34. Thus, the aforesaid violations committed by the Noticees makes them liable for
penalty under Section 15A (a) of the SEBI Act which read as follows:
Penalty for failure to furnish information, return, etc.
15A. If any person, who is required under this Act or any rules or regulations made
thereunder,
(a) to furnish any document, return or report to the Board, fails to furnish the same, he
shall be liable to a penalty which shall not be less than one lakh rupees but which may
extend to one lakh rupees for each day during which such failure continues subject to a
maximum of one crore rupees.
35. While determining the quantum of penalty under sections 15A (a), it is important
to consider the factors stipulated in section 15J of SEBI Act, 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;
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(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.
36. No specify disproportionate gains or unfair advantage made by the Noticees or
the specific loss suffered by the investors due to such non-compliance of the
summons; or no repetition of the default by the Noticeesis shown on records /
Action Taken Report of SEBI. However, it is necessary to refer that the noncompliance of summons in submitting the required informnation/documents
certainly hampers the further course of investigation. I cannot ignore the fact that
the investigation were carried out by SEBI in the matter relating to the raising of
funds under the alleged unauthorized activities of the Noticees in violation of SEBI
(Collective Investment Scheme) Regulations, 1999. Non-compliance under
investigation particularly in case where the interest of thousands of investors are
involved, needs to be looked into seriously. If the Noticees were so complaint of
the rules and regulationsas they are contending in the present proceedings, then,
they should have co-operated / complied with the investigation Authoritys
direction as and when required. But, it was not so done at the end of the Noticees
as established above.

37. Therefore, considering the facts and circumstance of the case, the purpose of
investigation and taking note of section 15 A (a) of the SEBI Act where the
violation attracts the penalty ofrupees one lakh for each day during which such
failure continues or rupees one crore, whichever is less, I am of the view that a
justifiable penalty needs to be imposed uponall the Noticees.I cannot ignore the
fact that the information / documents were required to be submitted from the
Noticeesunder aforesaid summons by September 22, 2014, but, they have failed
to submit the same by that prescribed time line or thereafter. The Noticees had
submitted some of the required information/documents only in this proceeding on
December 15, 2015 after a huge time gap of around 15 months. Since, the delay
was more than 100 days and that too entire information/documents were not
provided in this proceedings as well, therefore, in my view the maximum penalty
is attracted in the matter as stipulated under section 15 A (a) of the SEBI Act
against each of the Noticees.
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ORDER
38. After taking into consideration all the facts and circumstances of the case, I
hereby impose a penalty of `1,00,00,000/- (Rupees One Croreonly) under section
15A (a) of the SEBI Actupon each of the Noticeesfor the aforesaid violations.
Therefore, a total penalty of `5,00,00,000/- (Rupees Five Croresonly) is imposed
uponon all the Noticees. I am of the view that the said penalty would be
commensurate with the violations committed by the Noticees.

39. The Noticees shall pay the said amount of penalty by way of Demand Draft in
favour of SEBI - Penalties Remittable to Government of India, payable at
Mumbai, within 45 days of receipt of this order. The said demand draft should be
forwarded to Chief General Manager, Enforcement Departmentat the address:SEBI Bhavan, Plot No. C4A, G Block, BandraKurla Complex, Bandra (E),
Mumbai-400 051.

40. In terms of rule 6 of the Adjudication Rules, copies of this order are sent to the
Noticees and also to the SEBI.

Date: January 20, 2016

RACHNA ANAND

Place: Mumbai

ADJUDICATING OFFICER

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