SEBI issues new norms for issuance of debt securities

If the issuer does not receive minimum subscription of its base issue size of 75%, then the entire application money would be refunded within 12 days from the date of the closure of the issue, SEBI says

Market regulator Securities and Exchange Board of India (SEBI) has issued new norms for public issuance of debt securities under which such offers have to be of minimum Rs100 crore, while issuers would need to make additional disclosures and attain at least 75% subscription.


SEBI said entities coming out with public issue of non-convertible debentures (NCDs) would have to provide granular disclosures in their offer document, with regards to the 'object of the issue'.


Also, an entity has to make additional disclosures in the offer document about details of money utilised from the previous issues of the issuer as well as the group companies.


The new norms would be applicable for the draft offer document for issuance of debt securities filed with the stock exchanges on or after 16th July, SEBI said.


Market watchdog said that the minimum subscription for public issue of debt securities has to be 75% of the base issue size for both non-banking finance companies (NBFCs) and non-NBFC issuers.


Further, if the issuer does not receive minimum subscription of its base issue size (75%), then the entire application money would be refunded within 12 days from the date of the closure of the issue.


In the event, there is a delay, by the issuer in making the refund, then the issuer would have to refund the subscription amount along with annual interest of 15% for the delayed period.


However, the issuers issuing tax-free bonds would be exempted from the proposed minimum subscription limit.


SEBI has fixed a base issue size of at least Rs100 crore.


Besides, SEBI said issuers would be allowed to retain the over-subscription money up to the maximum of 100%of the base issue size or any lower limit as specified in the offer document. However, for the issuers filing a shelf prospectus, they can retain over subscription up to the rated size, as specified in their shelf prospectus.


"The issuers of tax free bonds, who have not filed shelf prospectus, the limit for retaining the over subscription shall be the amount, which they are authorised by CBDT to raise in a year or any lower limit, subject to the same being specified in the offer document," SEBI said in a circular.


SEBI said, "entities coming out with public issue of NCDs shall provide granular disclosures in their offer document, with regards to the 'object of the issue' including the percentage of the issue proceeds earmarked for each of the 'object of the issue'.”


Further, the regulator said that amount earmarked for 'general corporate purposes' would not exceed 25% of the amount raised by the issuer in the proposed issue.


Rajat Gupta: From lofty board room to lowly cell

Rajat Gupta began his prison sentence after fighting a protracted legal battle to clear his name in one of the biggest insider trading schemes in the US history

Rajat Gupta, the former director of Goldman Sachs and a one-time poster boy of Indians in the US, has begun his two-year jail term for insider trading while losing his appeal against paying nearly $14 million in civil penalties and ban on serving as a public company officer.


India-born Gupta will now have to pay $13.9 million as penalty in the US Securities and Exchange Commission’s parallel insider trading case against him, in addition to the $5 million fine in the criminal case and $6.2 million restitution to Goldman Sachs.


A three-judge Bench of the US Court of Appeals for the 2nd Circuit denied Gupta’s plea to overturn the decision of the district court that had imposed a permanent injunction prohibiting the former McKinsey head from serving as an officer or director of a public company, associating with brokers, dealers or investment advisors, and further violating securities laws.


The district court had also ordered Gupta to pay the $13.9 million civil penalty, equal to three times the profits gained and losses avoided by one-time billionaire hedge fund founder Raj Rajaratnam.


The setback for Gupta came the same day he reported to the Federal Medical Center-Devens in Ayer, Massachusetts, to begin his two-year prison sentence on insider trading charges.


Gupta had “surrendered” to the prison and was undergoing routine medical tests, which could take a day to be completed.


Following the tests, Gupta will be lodged in the satellite camp near the centre.


According to initial information available on the facility’s website, Gupta has been described as a 65-year-old “Asian male”.


Gupta’s appeal was denied by the appeals court, a day after hearing arguments from his lawyer Seth Waxman and the SEC.


The judges Barrington Parker, Denny Chin and William Sessions said in their order that “we find no abuse of discretion in the imposition of injunctive relief and civil penalties on Gupta by the district court. We have considered Gupta’s remaining arguments and find them to be without merit.”


“Accordingly, we affirm the judgement of the district court,” the judges said in their six-page order.


Gupta began his prison sentence after fighting a protracted legal battle to clear his name in one of the biggest insider trading schemes in US history.



Suiketu Shah

3 years ago

Well deserved sentence Gupta gets.USAQ is the USA ,not like India you bribe and get away.Interestingly several people in the stock market industry rightly think India stock market is mainly governed by insider trading.

Fees refund: Should students sue education institutes and can they do so? Yes!

Law is on the side of students who want to leave an institute or course mid-way and are seeking refund of fees. This also means, education institutes should not be charging upfront fees for the entire course and refuse refund, in case the student wants it

Consider a typical scenario: A student takes admission to a coaching institute for a two year course, broken into four semesters. The student signs the enrollment /admission form containing various conditions. The institute collects upfront fees for the entire course. After attending classes for a few days/weeks, the student is dissatisfied and wants to opt out, but the institute refuses to refund the fees. It cites a clause in the admissions form that says, "Fees once paid shall not be refunded under any circumstances."

When the student persists with the demand, the institute cites another clause in the form: "In case of any dispute, matter shall be referred to arbitration and institute shall appoint the Arbitrator. The decision of the arbitrator shall be final and binding on the parties."

What is the solution? Here are two real life resolutions.

In one case, Dr Minathi Rath, a student’s father, dragged the coaching institute to the Consumer Forum. The State Commission held in 2006, that the clause "fees once paid is not refundable" was "unconscionable and voidable”. It further directed all educational institutes not to charge fees for the whole duration of the course in advance by way of lumpsum payment. The judgement was reported in the media as well. FIIT-JEE challenged this in the National Consumer Disputes Redressal Commission (NCDRC), but more about that later.

In another case,  a student paid an upfront fee of Rs1.8 lakh for a two-year coaching programme for the IIT-JEE entrance test. After a few classes, he wanted to opt out and sought a refund. As expected, FIIT-JEE (the coaching institute) refused, citing the non-refund clause which he had signed.

When the student’s father persisted with the request to refund the fee (after deducting a portion for the duration he attended the classes) FIIT-JEE initiated arbitration proceedings. The Arbitrator declined to grant the refund and agreed with FIIT-JEE’s submisison that once the student signed the admission form, he was bound by its clauses.

I entered the scene after the arbitration proceedings and filed an objection in the District Court against the order of the Arbitrator. The District Judge reversed the order of the Arbitrator with detailed reasons. The judge specifically noted that when a student signs the admission form, he has no bargaining power to negotiate, or refuse to sign any particular clause in the admission form. Hence, these clauses should not be held against the student. The District Judge also directed the Arbitrator to refund the proportionate fee to the student.

The matter did not end there. FIIT-JEE hired a big law firm and challenged the order in the High Court, although the amount involved was only Rs2 lakh. The matter came up before the High Court on 21 November 2011.

At the hearing, FIIT-JEE conceded that the non-refundable fee clause can be challenged as unconscionable under Section 23 of the Indian Contract Act, 1872, besides being in violation of the principles of public policy. The High Court agreed with the District Judge's view and remanded the matter to the Arbitrator for a decision after taking into account all the recent precedents on the point of law. The order is available here.

Now, in another development just a week prior to the High Court hearing, the NCDRC decided on FIIT-JEE’s appeal in Dr Minathi Rath’s case that we mentioned earlier. It is pertinent to mention here that the Supreme Court had settled the fee issue in the case of Islamic Academy of Education Vs. State of Karnataka (2003) 6 SCC 696. The Apex Court had expressed unhappiness with educational institutes charging the entire fees upfront and had said that students should only be asked to pay fees for a semester/ year to begin with.

But FIIT-JEE argued before the NCDRC that the ruling of Islamic Academy was not applicable to it since it is not an educational institute but only a coaching institute. The NCDRC was not impressed and upheld the order of the State Commission, directing FIIT-JEE to refund the fees. The order is available here.

We now began a second round of arbitration in the second FIIT-JEE case as directed by the High Court, by providing all the rulings on the dispute. This time the Arbitrator awarded the refund of fees for one year after deduction of statutory fees like Service Tax, etc.

In situations like these, students who want to leave an institute or course mid-way, usually hesitate to appoint a lawyer to argue their case. On the other hand, institutes have the resources for good legal representation. My advice to students is that the law is on your side if you want to fight. And educational institutes should be prudent, desist from charge upfront fees for the entire course, and if they do, should not refuse a refund.
(Dushyant K Mahant, is Founding Partner of Mahant & Mahant
and Intellectual Property Lawyer. He did his Masters in IP Law from Brisbane. Does pro bono work as well. Mr Mahant is active on social media to exchange views and news about politics, law and common sense)



Uday Narayan

5 days ago

But FITJEE Still take advance fees and PDC even force to sign agreement for cheque dishonor and No fees refund even pay fees of full course no matter you stop going FITJEE.


7 days ago

I had paid ₹ 30000 in IBMR GURGAON for mba program but due to my financial condition i cannot offered the full so i asked them to return my registeration fee but they totaly refused to return . A lady in IBMR GURGAON she told me its your mistake not collage, collage will not refund any money. Please help me what should i do..?

Ash Priyanka

1 month ago

Hello sir,
I am recently join a course of fashion designing in Kanpur and they charge 35000 in first half we pay from loan and I attend the class only 4 days now I don't want to continue the class by financial problem they they only refund me 13000 in this situation I didn't understand sir what I will do now ..

Kuldeep Singh Chahar

1 month ago

Sir,some educational institutions,have some terms in there forms that the fees is refundable only in first month after the classes get started..... But if a student like me and others are not able to continue studies in the respective cities where these coachings are situated, then how can we get our parent's money back.....?

Dipika Sheth

4 months ago

I took admission in Amity global business school pune(AGBS), they provided me with a seat but being an NRI student they asked an equivalence certificate from ASSOCIATION OF INDIAN UNIVERSITIES,they refused to issue this certificate because I am a technical student and I asked for a refund from AGBS-PUNE,they refused. They didn't let me give exam of first semester I simply attended the lecture. Please tell me what can I do in such case?! Am I supposed to file a case against them?!


Mohit Bisht

In Reply to Dipika Sheth 1 month ago

if the certificate was mandatory for the admission then instution shouldn't have allow you the admission without the certificate.
but there should be no written agreement between you and your institute of promising the submission of certificate in the future.

Asis Kumar Das

10 months ago

my daughter got admitted in Dayananda sagar college of dental sciences in BDS courses at Bengaluru through COMEDK counselling on 4th oct 2016 and she got free BDS seat in govt. quota through Andhra pradesh medical counselling on 7th oct 2016. As the original certificates are there in Dayananda sagar college, they are not ready to return that along with fees structure. Plse advise me what to do


10 months ago

Hi, My brother took admission in GMR Academy. We deposited Rs. 85,875 as initial payment and was supposed to deopsit the remaining Rs. 65,000 at the time of start of the batch. The batch was supposed to start in May 2016 but GMR Academy eep on delaying the batch start date. We got fed up with them and asked for refund of our money as Academy was not in a position to start the batch as there were only 4 student available in that batch while they usually start a batch with 20 student.
While processing refund, they said that they will deduct service tax.
My objection was that it is your fault that has forced me to as for refund & if a service is not offered to me then how can you deduct Service Tax?
GMR Academy is based in Delhi Airport.
Kindly suggest me how to proceed case against them?

Naveen Kumar # 9812073629


Mohit Bisht

In Reply to NAVEEN 1 month ago

hire a will get your money back. notice from a lawyer would be enough

neetu mina

11 months ago

If student go AIPMT coaching only two days nd he /she not feel well or ill then fees will be refund or not??


Mohit Bisht

In Reply to neetu mina 1 month ago

yes. if you are not satisfied with the service of the institution you can drop your admission with refund fee


11 months ago

Sir my friend took admission in oriental college ,Bhopal.she has submitted fees for 1 year worth RS 1.36 lakh including hostel fees .now she wanted to withdraw ,she got admission in last cut off ,the college claim that they have permission from SC to do so.the college is yet to start .what is the remedy available?

Amit jha

1 year ago

Hello Sir. I have completed 1st year B.A.F from mumbai university. And I want to leave my current college because it is more than 60 kilometers and the quality pf teaching is not up to the mark and I want to join a new college but the prinicipal sir of my college is say to pay the fees for remaining years then only they will give me my original document otherwise not.

what should I do. Is that any rule like this. I dont want to study in tgis college really.

plz help me sir.

Siddhi Mahajan

1 year ago

Hi sir myself siddhi mahajan
I took admission to TIME institute for MBA entrance .
after attending 3-4 lectures I am not satisfy with this institute . I requested for the fees refund but refuses my request. Institution fees 42000/- can you please help me for how to refund fees .

Siddhi Mahajan

1 year ago

My name is siddhi mahajan .I took admission at TIME institute for MBA entrance fees-42k. And I am not satisfy with there course . And they refuses to refund fees what to do now ??

Prashant Parashar

1 year ago

Very good and succinct analysis by Dushyant.


2 years ago

Subject - Not refunding my fee money by IIMPS.

Dear Sir / Madam
My name is Vinod M. I took MTech admission from Techno Global university, Shilog through Isara Institute of Management & Professional Studies Pvt Ltd (, New Delhi. After i got my 1st year mark sheet. I found wrong on that mark sheet .So for that I verified by RTI and IBC Verification. Both are verified and results came Fake University and Mark sheet .I come to know IIMPS has running fake university by the name of TIG (Techno Global University Shillong) . I am withdraw and surrender my admission . I am asking money to return from IIMPS INSTITUTES but they not responding they are not ready to PAY my full amount . I payed Them 47100 Rs . And they must pay me 3000 Rs for my other Investments money for Verification. Total 50100 Rs. they still misguiding me .

IIPMS Had Cheated me . I complaint to AICTE but they not responding. It’s my humble request to you please help me on this matter Sir .Please file the case against them .Please find the Enclosed copy of fee Receipts and Verification documents .

Thanks and regards
Mob-+91 9739205571

rajesh gupta

2 years ago

your article is very courageous to me regarding fee refund. i am also facing same problem,i want to take your detail is as follow:
My son took admission in B.Tech.(ECE) in ITM University ,Gurgaon dated on 24.07.2015 and withdrawal his candidature(admission)0n 31.08.2015 Due to the change of its name by the ITM , University ,Gurgaon . Now new name is Northerncap University(NCU).The admission was taken by my son with the good fame ,reputation and brand value of ITM,Gurgaon . The university changed its name dated on 31.08.2015 without proper intimation to us.When my son was taking admission in this university ,there was nothing told about it. As a result my son complained me and said that he is not interested to do B.Tech. with new name of ITM,Gurgaon Then similarly same day i.e. on 31.08.2015 I gave an application for withdrawal the admission of my son in NCU. The last date of admission was the 25.08.2015 in this university. Presently the university is using its new name i.e. northerncap university(NCU). . Now Northerncap University sent a letter at my home. In it, university is claiming that you have to pay balance 3 and half years fee i.e. Rs..7,14,000(seven lac fourteen thousand) within a month. University says, you have withdrawn the admission in mid-session. In this regard they referred me their admission and withdrawal policy. In which it is mentioned if you withdrawal the admission after due date then it will be classified as mid course withdrawal then you should have to pay balance years fee because we have no lateral entry and it will remain unfilled for the balance years. They sent me a letter and demanding the said amount for deposit . I have already submitting the amount for 1st semester fee i.e. Rs.102000 and they insisting me to deposit the balance years fee also. All the fee , forms are submitted by me to the ITM University, Gurgaon, not to the NCU.In ITM University(Now NCU) ,there are 110 seats available in B.Tech.(ECE). In which approx. 75 to 80 seats are filled .Others are lying vacant.
Now, on the above suggest me:-
1. Can private university/college demand the balance year’s fee from the student/parents after the MID-COURSE WITHDRAWAL.
2. As per the guidelines, rules and directions of the university grant commission(UGC)/AICTE,Is this demand legal or not?
3. What are the rules, regulation guidelines and policies of U.G.C./AICTE regarding mid session withdrawal the course?
1. Can I also claim the amount for refund(Rs.102000) which was deposited by me at the time of admission as a first semester fee?
Help me, I am very upset and not in position to pay this whole amount.
Rajesh gupta
Email -- [email protected]
Mob. 09968073184

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