ALCHEMIST INFRA REALTY LIMITED, MR. N. MADHAV KUMAR AND MR. BRIJ MOHAN MAHAJAN Vs. SECURITIES AND EXCHANGE BOARD OF INDIA

JUDGEMENT

(1.) BOTH the instant appeals have been preferred by three Appellants, namely, Alchemist Infra Realty Limited (Appellant No. 1), Mr. N. Madhav Kumar, Director (Appellant No. 2) and Mr. Brij Mohan Mahajan, Director (Appellant No. 3). In Appeal No. 123 of 2013, the Appellants have only challenged the action of the Respondent in returning outright their request for a consent order without any consideration whatsoever as required by the two circulars dated April 20, 2007 read with Circular dated May 25, 2012. In Appeal No. 124 of 2013, however, Appellants have mainly challenged the impugned order dated June 21, 2013 by which the Respondent has held that Appellant No. 1 had launched Collective Investment Schemes ("CISs") without obtaining any registration from the Respondent as mandated by the provisions of Section 12(1B) of the SEBI Act, 1992 and Regulation 3 of the SEBI (Collective Investment Schemes) Regulations, 1999 ("CIS Regulations"). With the consent of learned senior counsel for both the parties, the two appeals are taken up for final hearing and are heard together. Accordingly, both the appeals are being disposed of by the present order.

(2.) THE case of Appellant No. 1 is that it is not dealing in any "securities" as defined under the SEBI Act, 1992 or Securities Contracts (Regulation) Act, 1956 ("SCRA"). Appellant No. 1, therefore, submits that it is not connected with the securities market in any manner and that its affairs are governed by the Ministry of Corporate Affairs, Government of India as per the provisions of the Indian Companies Act, 1956. The submission advanced on behalf of Appellant No. 1 is that its business operations are not covered by any of the provisions of the SEBI Act, SCRA or CIS Regulations in question. Therefore, no certificate of registration was required to be obtained by Appellant No. 1 in terms of the above said Acts or the CIS Regulations.

(3.) AFTER expiry of the agreed fixed period of time, agreed between the two parties, the purchaser has the option of requesting Appellant No. 2 to identify a suitable party for disposing of the said land at a mutually agreed price. Not only this, a Special Power of Attorney is also executed by Appellant No. 1 in favour of the nominee by the two parties in question which is duly notarized. Therefore, it is contended on behalf of Appellant No. 1 that all the ingredients of a 'sale' as defined under the Transfer of Property Act, 1882 are present in the instant case. If the development period is over, the purchaser of land is free to sell it to whosoever he thinks proper. It is submitted to be a mere prudent business practice prevailing in similar trades in the market. However, even during the development period the purchaser is stated to be the absolute legal owner of the land if the land cannot be developed due to any unforeseen reason, the tenure of the 'Supervision Agreement' can be flexibly extended, but this factum alone does not in any way dilutes the title of the owner of the piece of land.