Offers to over fifty persons constitute public offers requiring stock exchange permission and SEBI registration.

SICCL, a Sahara Group company, issued Optionally Fully Convertible Debentures (OFCDs) between July 1998 and June 2008, raising approximately ₹14,106 Crores from over 1.98 Crore allottees.

SEBI investigation revealed that while SICCL filed a Red Herring Prospectus (RHP) with the RoC, it did not comply with public issue norms under the Companies Act, 1956, or SEBI Regulations.

The Appellants contended the issue was a "private placement" to "targeted persons" and claimed most funds were already refunded via cash, cheques, or equity conversion.

SEBI issued an order on October 31, 2018, directing refunds and debarring the Appellants.

1. Whether the OFCDs offered and issued constituted a public offer within the regulatory jurisdiction of SEBI?

2. Whether there was an inordinate and non-bona fide delay by SEBI in initiating the investigation?

3. Whether the Managers and Company Secretary (Appellants in Appeal No. 252/2019) were personally liable for the company's defaults?

The Tribunal applied Section 67 of the Companies Act, 1956, which stipulates that any offer to 50 or more persons is deemed a "public offer" regardless of intent.

It relied on Section 73 of the same Act, requiring companies making public offers to seek listing at a recognized stock exchange.

The court further applied Section 12(1-B) of the SEBI Act, 1992, requiring registration for collective investment schemes.

The precedent in *Sahara India Real Estate Corporation Ltd. v. SEBI (2013)*, which affirmed SEBI's jurisdiction over unlisted companies intending to offer securities to the public.

The Tribunal found that even prior to the 2000 amendment, the offer failed the "domestic concern" test of Section 67(3) because it was offered to millions, thereby triggering Section 73's requirement for stock exchange permission.

Post-2000, the statutory proviso explicitly rendered any offer to 50+ persons a public issue; SICCL's 1.98 Crore allottees clearly exceeded this limit.

Regarding delay, the Tribunal held the timeframe was reasonable given the complexity of the Sahara Group investigations and the date SEBI received the MCA report.

On the issue of refunds, the Tribunal rejected the Appellants' reliance on a mere CA certificate and cash payment claims, noting a lack of primary evidence for transactions involving millions of investors.

Concerning the employees (Appeal No. 252), the Tribunal noted they were not "officers in default" under Section 73 and, as paid employees/agents, should not bear personal liability for the Directors' acts.

It allowed Appeal No. 252, setting aside the order against the Managers and Company Secretary, holding they were not personally liable for the refund.

The primary directions for refund, inventory disclosure, and debarment against the Company, its Directors, and the "arranger" (M/s Sahara India) remain in force.