SEBI CIS compliance, WB land law, entity structure, and the 7-document chain — everything documented.
Separation of development, management, and hospitality — each with distinct accountability.
Acquires land, sells UDS, develops infrastructure, earns development fee. NOT the ongoing farm operator.
Separate entity from Management Co. — cannot act as fund manager.
Wholly-owned subsidiary of Developer Co. Operates the farm under Farm Management Agreement. Replaceable by Owners' Committee.
Key SEBI safeguard: Owners' Committee can terminate FMA with 90 days' notice and appoint new manager.
Second subsidiary. Constructs and operates cottage facilities. Separate from farm operations to ring-fence liability.
Hospitality agreement is separate from Sale Deed. Cottage entitlement is a service — not an additional property right.
SEBI Collective Investment Scheme Regulations 1999 define a CIS as a scheme meeting ALL FOUR criteria below. Matigarh fails criteria 1 and 4 — and therefore falls outside SEBI CIS jurisdiction.
| # | CIS Criterion | PACL / Typical Scheme | Matigarh Estate | Status |
|---|---|---|---|---|
| 1 | Contributions pooled and used with a view to receiving profits, income, or property | Contributions pooled; investors got certificates | Contributions used to buy land directly transferred to buyer. No pooling of title. | ✅ Does NOT apply |
| 2 | Property managed as a whole by the operator | Operator controlled everything | Farm managed as whole (necessary for 27 acres). Criterion 2 applies — this is acknowledged. | ⚠️ Applies |
| 3 | Contributions and profits not day-to-day under investor control | Investors had no control | Owners' Committee has daily oversight rights; FMA terminable 90 days. | ⚠️ Partially applies |
| 4 | Investors do not have day-to-day control over management of contributions / property | No investor had control | Owners' Committee: 5 elected co-owners with documented replacement rights. This is genuine co-ownership management. | ✅ Does NOT apply |
Five Non-Negotiable Safeguards
Marketing Red Lines
The CNT/SPT Problem
Chotanagpur Tenancy Act 1908 (JH) and Santhal Parganas Tenancy Act 1949 (JH) effectively prohibit transfer of tribal agricultural land to non-tribals in most of Jharkhand. Ranchi, Bokaro, Jamshedpur are all within these jurisdictions. This is not a process issue — it is a structural prohibition.
The Purulia Solution
WB Land Reforms Act 1955 requires permission from District Land Reforms Officer (DLRO) for non-agriculturist purchase of agricultural land. This is a bureaucratic process — not a prohibition. With proper application: 6–12 months typically.
Barga (Sharecropper) Risk
Before LOI, thoroughly check the Barga Register for any recorded barga (sharecropper) rights on the parcel. Barga rights under WBLR Act create a complex acquisition situation. Avoid any parcel with recorded barga rights. This check must be done by a local advocate with access to district records.
| Decision Type | Who Decides | Voting Threshold | Examples |
|---|---|---|---|
| Routine operations | Farm Manager | No vote needed | Crop inputs, irrigation schedule, staff day-to-day |
| Operational decisions | Owners' Committee (5 members) | Simple majority (3/5) | New crop variety, repair >₹50K, vendor change, AGM agenda |
| Significant decisions | AGM — all UDS holders | Simple majority (101/200) | Annual budget, Management Co. fee revision, major capex |
| Structural decisions | AGM — all UDS holders | 60% supermajority (120/200) | Replace Management Co., amend no-partition covenant, sell land |
| Absolute prohibition | Cannot be voted | Not applicable | Partition of land (10-year lock), convert land to non-agricultural without 75% vote |
Owners' Committee Powers
UDS Holder Rights