KF aircraft impounded for Rs 63 crore tax default

TNN | Dec 12, 2012, 03.59AM IST

MUMBAI: The service tax department has impounded an ATR aircraft belonging to Kingfisher Airlines for defaulting on dues amounting to Rs 63 crore.

The airline owes around Rs 190 crore to the service tax department, of which Rs 127 crore is under litigation. The airline had announced a partial lock-out on October 1, following a strike by its employees over non-payment of salary dues. Two weeks later, the Directorate General of Civil Aviation suspended the airline's scheduled operators' permit and the airline has been grounded for the last two months. Meanwhile, airline officials said that they had received a notice from the service tax department to which they had responded.

In a letter sent to assistant commissioner of service tax on Monday, the chief financial officer of the airline, A Raghunathan, said that the aircraft VT-KAR is taken on operating lease by Kingfisher Airlines and so the airline is just lessee and not owner of the aircraft. "Since the aircraft is taken by Kingfisher purely on operating lease basis and the airline is only a lessee of the aircraft, it does not feature as an asset in the books of accounts of Kingfisher," the letter said. 

நீதிபதி வி.கே. சர்மாவுக்கு எதிராக வழக்குரைஞர்கள் நீதிமன்றப் புறக்கணிப்பு

By dn, சென்னை

First Published : 12 December 2012 04:26 AM IST

 டிச. 11: சென்னை உயர் நீதிமன்ற நீதிபதி வி.கே. சர்மாவுக்கு எதிராக வழக்குரைஞர்கள் செவ்வாய்க்கிழமை நீதிமன்ற புறக்கணிப்புப் போராட்டத்தில் ஈடுபட்டனர்.

சென்னை மயிலாப்பூரைச் சேர்ந்த டி.எம்.வி. ரகு நந்தகோபால் உள்ளிட்ட 9 பேர் சார்பில் அவர்களது பொது அதிகாரம் பெற்ற ராஜ திலகன் என்பவர் உயர் நீதிமன்றத்தில் மனு ஒன்றை தாக்கல் செய்திருந்தார். ரகு நந்தகோபால் மற்றும் அவரது சகோதர, சகோதரிகளுக்குச் சொந்தமான 1.33 ஏக்கர் நிலம் பெசன்ட் நகர் பார்வதி தெருவில் உள்ளது. அந்த இடத்தை சாந்தோமைச் சிலர் ஆக்கிரமித்துள்ளனர். அங்கு தனியார் கட்டுமான நிறுவனம் ஒன்று அடுக்கு மாடிக் குடியிருப்புகளைக் கட்டி வருகிறது.

இந்த வழக்கில் சிவில் நீதிமன்றம் பிறப்பித்த உத்தரவு எங்களைக் கட்டுப்படுத்தாது என நீதிமன்றம் அறிவிக்க வேண்டும் என்று அந்த மனுவில் கோரப்பட்டிருந்தது.

இந்த மனுவை விசாரித்த நீதிபதி வி.கே.சர்மா, தனியார் கட்டுமான நிறுவனத்தின் கட்டுமானப் பணிகளுக்கு இடைக்காலத் தடை விதித்து உத்தரவிட்டிருந்தார். கடந்த வாரம் இந்த வழக்கு மீண்டும் விசாரணைக்கு வந்தபோது எதிர் மனுதாரர்கள் சார்பில் மூத்த வழக்குரைஞர் கே.எம். விஜயன் ஆஜராகி வாதிட்டார். அதனைத் தொடர்ந்து வழக்கின் விசாரணையை டிசம்பர் 13-ம் தேதிக்கு நீதிபதி ஒத்தி வைத்தார்.

அதன் பின்னர் மூத்த வழக்குரைஞர் சித்ரா சம்பத் எதிர் மனுதாரர்கள் சார்பில் சில வாதங்களை நீதிமன்றத்தில் வைத்திட முயன்றார். ஆனால் ஏற்கெனவே எதிர் மனுதாரர்கள் சார்பில் மூத்த வழக்குரைஞர் விஜயன் ஆஜராகி வாதிட்டு,  விசாரணையும் ஒத்தி வைக்கப்பட்டு விட்டதால், சித்ரா சம்பத்தை வாதிட அனுமதிக்க இயலாது என்று நீதிபதி கூறி விட்டார்.

இதனைத் தொடர்ந்து வழக்குரைஞர் சித்ரா சம்பத் கூறிய சில கருத்துகள் நீதிமன்றத்தை அவமதிக்கும் வகையில் உள்ளதால், அவர் மீது ஏன் நீதிமன்ற அவமதிப்புக்கான நடவடிக்கை எடுக்கக் கூடாது என்பது பற்றி விளக்கம் அளிக்குமாறு அவருக்கு நோட்டீஸ் அனுப்ப நீதிபதி உத்தரவிட்டார். இந்த நோட்டீஸ் தொடர்பாக செவ்வாய்க்கிழமை (டிச. 11) சித்ரா சம்பத் பதிலளிக்க வேண்டும் என்று நீதிபதி உத்தரவிட்டிருந்தார்.

இந்த நிலையில், மூத்த வழக்குரைஞர் சித்ரா சம்பத்துக்கு இவ்வாறு நோட்டீஸ் அனுப்பியதைக் கண்டித்தும், நோட்டீûஸ திரும்பப் பெற வலியுறுத்தியும் நீதிமன்றத்தை செவ்வாய்க்கிழமையன்று வழக்குரைஞர்கள் புறக்கணித்தனர். இதற்கான அழைப்பை சென்னை உயர் நீதிமன்ற வழக்குரைஞர்கள் சங்கமும், பெண் வழக்குரைஞர்கள் சங்கமும் விடுத்திருந்தது.

இதற்கிடையே டிசம்பர் 13-ம் தேதிக்குள் பதிலளிக்கும் வகையில் புதிய நோட்டீûஸ வழக்குரைஞர் சித்ரா சம்பத்துக்கு அனுப்புமாறு நீதிபதி வி.கே. சர்மா செவ்வாயன்று உத்தரவிட்டார்.

Air India penalised for unfair trade practice

Express news service : Chandigarh, Sun Nov 25 2012, 01:09 hrs

The State Consumer Disputes Redressal Commission has set aside an earlier judgement of the UT District Consumer Forum against Kingfisher Airlines in a case of unfair trade practice. Air India, however, has been penalised for causing mental agony and harassment to passenger after a delayed flight.

The complainant, Parminder Kwatra from Chandigarh, had booked a Kingfisher Airline flight to Bengaluru in November 2011. However, the flight was delayed by three hours and she was, instead, accommodated in an Air India flight that went via Delhi.

According to the complaint, in Delhi, she was moved to the another Air India flight to Bengaluru that was running late by two hours.

Kwatra alleged that when she reached Bengaluru, Air India officials informed he that her baggage was being transported by the next flight and she had to wait for another two hours for its arrival. She stated that despite her repeated requests to be accommodated in a lounge or a nearby hotel, the airline officials did not oblige.

In its written reply, officials at Kingfisher Airline submitted that she was informed of the flight delay much in advance and was transferred to another flight by Air India without any extra charges. Air India officials stated that all courtesies were extended to her for the duration of her wait, which were declined by her.

“One can well imagine the plight of a passenger, especially a lady, who reached Bengaluru Airport at about 9.15 pm and had to wait for her baggage which had not been brought in the same flight, on account of the acts of omission and commission of the officials of Air India,” observed the consumer commission.

The order by the commission stated that the district forum was wrong in not touching this aspect of the matter of the mental agony and harassment experienced by the complainant. Air India was, thus, directed to compensate Kwatra with Rs 10,000 and bear litigation costs of Rs 5,000.

Osian’s art auction house close to loan recast with Axis Bank

Osian’s Connoisseurs of Art, run by art collector and dealer Neville Tuli, is in talks with Axis Bank to avert the risk of closure. Photo: Abhijit Bhatlekar/Mint

Axis Bank filed a petition in Bombay high court in Feb alleging Osian’s not in a position to discharge debt

Mumbai: Osian’s Connoisseurs of Art Pvt. Ltd, run by art collector and dealer Neville Tuli, is in talks with Axis Bank Ltd to avert the risk of closure after the lender dragged the auction house to court over unpaid debt it has estimated at Rs.41 crore.

Mumbai-based Axis Bank filed a winding up petition in the Bombay high court in February, alleging that Osian’s was not in a position to discharge its debt and was “proposing to sell its assets” to defeat the bank’s claim. A copy of the petition has been reviewed by Mint.

Osian’s and Axis Bank are in negotiations and both hope to file consent terms—which relates to loan-restructuring conditions—when the matter comes up for hearing on Monday (3 December), said a person with direct knowledge of the matter. The person cannot be named as he is not authorised to speak to the media.

Axis Bank didn’t respond to mails and calls seeking comment.

Osian said the loan recast deal is only awaiting court acceptance.

“The petition you refer to is a two-year-old document which had been settled between the parties and has been awaiting formal closure in the courts for the past three months,” said Niranjan Desai, president, group communications, Osian Group, in reply to a query from Mint.

“The settlement was negotiated and agreed in June 2012, and the final closure formalities were to be completed last week, but the hearing was postponed. We expect the court to accept the matter on record in early/mid December,” Desai said.

Axis Bank filed a recovery suit in the debt recovery tribunal on 28 July 2010, which may account for the reference to a “two-year old document”. The suit is pending.

Osian’s Connoisseurs of Art is the flagship company of the privately held Osian’s Group, which supports many entities and activities. Apart from the art fund, the group runs the Osian’s-Cinefan Film Festival, which resumed this year after a two-year break.

Three years ago, the Rs.100 crore Osian’s Art Fund, India’s first such venture, struggled to repay investors. The fund failed because art prices crashed both internationally and in India and the company was left holding unsold inventory.

Amid a slowdown, the appeal of art has been hit even among the high net worth individuals who specialise in the field.

“Just like equities and other markets, the art market has also been affected by the economic slowdown,” said Girish Shahane, an art critic.

Tuli was supposed to open a film-themed cultural centre at the Minerva cinema in Mumbai, but the project has been stuck for many years. The centre is now supposed to come up at Kila Complex in Mehrauli in Delhi.

In the petition filed in February, Axis Bank asked the court to restrain the company from “disposing of, encumbering or creating any third-party rights in any manner whatsoever over the assets of the company,” and appoint an official liquidator with all recovery powers to protect the interests of the creditors.

According to the petition, Osian’s has pledged its current assets as collateral for the bank’s loan, which would possibly include items that art auction houses typically deal in, such as paintings, film memorabilia and posters.

The petition was listed for hearing on 23 November, but none of the cases scheduled for that day at that court came up because the single-judge bench was hearing cases at another division bench.

Earlier, on 11 October, justice Anoop V. Mohta passed an order adjourning the case until the Diwali holiday as the two parties were “exploring the possibility of settlement”.

According to the Axis Bank petition, Osian’s Connoisseurs had been borrowing money since October 2005, but had stopped paying outstanding dues from around 20 January 2010.

On 2 July 2010, Axis Bank sent a legal notice to the company asking it to pay Rs.40.35 crore with interest and charges, within three days of the receipt of the notice. Later in the same month, the bank approached the debt recovery tribunal.

On 15 September 2011, the bank sent another notice to Osian’s Connoisseurs asking for payment of around Rs.41 crore including interest, but the company neither cleared the dues nor replied to the bank notice.

The petition has alleged that Osian’s Connoisseurs is “failing to meet their liabilities in the ordinary course of business”. According to Axis Bank’s plea, “The said company is having huge liabilities and is in a financially embarrassed position.” It also said “the company is commercially insolvent and unable to pay day-to-day charges and liabilities.”

Ravi Krishnan contributed to this story.

Bankers, ARCs laud debt recovery amendment

BS Reporter / Mumbai Dec 11, 2012, 00:58 IST Conversion of part-debt into equity to work as sop for ARCs The Lok Sabha on Monday approved an amendment Bill to ease the recovery of bad loans by banks. Opposition parties walked out after the government rejected their demand for referring it to a standing committee. The Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill, 2011, was approved by voice vote in the House. It seeks to convert any part of debt into shares of the defaulting company by an asset reconstruction company(ARC). Bankers and ARCs welcomed it, as the amended law will improve the prospects for reviving stressed units and loan recovery. Bankers and ARCs said although delayed, it is a welcome step, as the amendments remove some hurdles and empower them to get more legal protection while restructuring loans and supporting weak units. P H Ravikumar, managing director of Invent ARC Ltd, said, “ARCs were running risks associated with equity when supporting revival of a sick unit. The returns were those linked to debt. That situation will get corrected, indicating better returns at the time of exit.” The Bill was introduced in the Lok Sabha in December 2011. While the Opposition demanded it be referred to a standing committee for scrutiny, Finance Minister P Chidambaram said when the bill was introduced last year, the Speaker had decided against so referring it. Doing so would delay the process further, he said, adding the then minister wanted it to be passed without delay, as the amendments were of a technical nature. “The Bill was introduced in 2011 and should not be referred (to Standing Committee) now after 12 months. It would defeat the very purpose the Bill. In the interest of the banking sector, it is necessary to pass the bill in 2012,” he said, adding the move would quicken the process of loan recovery. The Bill also seeks to enable banks or any person to file a caveat so that before granting any stay, the bank or person is heard by the Debt Recovery Tribunal. According to a senior ARC official, this prevents orders by courts without hearing a bank or ARCs. Many a time, ARCs were not aware that the lender had filed a suit. On the issue of rising non-performing assets ( NPAs) of banks, Chidambaram said the sector was well regulated and the gross NPAs, around 3.5 per cent of total loans, were not high and the situation would improve with economic recovery. According to credit rating agency Icra, overall, the credit profiles of borrowers could weaken in 2012-13 due to factors such as moderation or slowdown in demand conditions, project implementation related delays, higher interest rates and foreign exchange losses, compression of operating profitability due to cost pressures, and inability of companies to pass on the higher costs in a scenario of increasing competitive intensity.

If I get a right price, I'd like to sell Rs 400 cr of NPAs this year: M V Tanksale

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BS ; Neelasri Barman & Vrishti Beniwal / Mumbai Nov 27, 2012, 00:40 IST

Interview with Chairman and Managing Director, Central Bank of India

M V Tanksale, chairman and managing director of Central Bank of India, says non-performing assets (NPAs) in the banking system will grow for a while and as long as credit creation will be there, there will be slippages. In an interview with Neelasri Barman and Vrishti Beniwal, he talks about restructuring, business growth and capital raising plans. Edited excerpts:

You have a Rs 350-crore exposure in Kingfisher Airlines that you hope to recover. How will you do so?

The company’s promoter, Vijay Mallya, is looking to raise funds. He would definitely like to do something to bail out Kingfisher. But what is his plan and how exactly it will happen are things we are yet to see. Neither he nor we have given up. As a banker, I should look for a respectable exit either way. It is better I give some breathing time, so that we can get back the money.

All public sector banks are seeing erosion on asset quality for several quarters. Do you think NPAs have peaked out?

Asset quality can be divided into two segments, one coming from the corporate sector and the other from small and medium enterprises. If a bank is more dependent on big corporate entities, then they are going to get impacted.

There is nothing called NPAs peaking out. As long as credit creation will be there, we will see slippages.

How much of NPAs do you plan to put on sale this financial year?

Many banks are looking for such a sale for balance sheet management, including me. I have put on the cards a selloff of about Rs 400 crore. We will have to see how much of it we can sell.

What are the concerns due to which NPAs are not getting sold?

The sale of assets should be at a right price. If I get one, I shall sell it.

What debt restructuring have you seen this year?

Our total restructuring book is about Rs 21,000 crore and I think our major restructuring is over. I am looking at another Rs 2,000-2,500 crore of restructuring.

Any capital raising plans?

It will be around Rs 2,000 crore. It will be by the government but they’ve also made very clear that they would appreciate it if we go through a rights issue, so that the minority stakeholders are respected.

When are you planning the rights issue?

Right now, I do not know how much the government will commit to me. Once they commit, I shall decide about it.

The Reserve Bank of India has been concerned that monetary transmission is not taking place. When do you see that happening?

Every bank has started reducing their high cost deposits. I have also brought down mine down to a large extent and reduced deposit rates. And, we have reduced lending rates on a selective basis, like home loans and car loans. We have also reduced our rates on micro, small and medium enterprises and for agriculture. Selectively, we have already transmitted whatever benefits we have got out of the cash reserve ratio reductions.

How is the credit growth pick-up in the second half of the year?

On a year-on-year basis, we have seen 17 per cent growth and I feel 15 per cent on a year-on-year should be achieved. Our focus is on retail (lending), which is expected to growth by 25 per cent or more.

What is your outlook on net interest margin?

My NIM is 2.66 per cent. I feel we should be able to maintain it at 2.7-2.75 per cent for the financial year.

Debt Recovery Act passed amid opposition walkout

B S :Aditi Phadnis / New Delhi Dec 10, 2012, 19:57 IST

Bill seeks to convert any part of debt into shares of defaulting company by Asset Reconstruction Company

A bill to make technical changes in the system of debt recovery was today passed in the form of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill, 2011, with Finance Minister P Chidambaram assuring the House that problem of mounting Non Performing Assets (NPAs) of banks was not insurmountable and was certainly not alarming.

However, several members questioned the rationale for the hurry shown by Chidambaram in having the law passed to the extent that the legislation bypassed the Standing Committee on Finance. The BJP led by former Finance Minister Yashwant Sinha walked out in protest.

The bill seeks to convert any part of debt into shares of defaulting company by the asset reconstruction Company (ARC).

Chidambaram said when the bill was introduced last year the Speaker decided against referring it to the Parliamentary committee.     Referring it to the committee now would delay the process further, he said,

Trinamool Congress’ Saugata Roy said he had no serious differences with the government on the bill

A Sampath (CPIM) pointed out the misutilisation of public sector financing institutions like NABARD.

Pinaki Mishra (Biju Janata Dal) raised the issue of inefficiency of the public sector banks. “The NPAs of all nationalised banks in India stand at a staggering figure of Rs.1,23,462 crore,” he said.

Critiquing the legislations for their “inefficacy” he said, “There are 67,524 cases are pending before the Debt Recovery Tribunals.” There is just no accountability in the public sector banking institutions he added.

Mishra argued that Asset Reconstruction Companies should  be able to pass on debt to one another. “The purpose of SARFAESI was to ensure the expeditious recovery of debts. Therefore, if Section 5 of SARFAESI could be suitably amended and there could be an inter se re-assignment of debt, this could be much more expeditious and efficacious way of settling these issues.

Mishra also said a codified structure  was needed by which banks  can show complete transparency in their assignment of debts to ARCs.“So far, this has been done in an extremely cloak and dagger fashion which does not inspire any confidence”.

He also said one of the difficulties being faced by the secured creditors under SARFAESI Act is the determination of the priority of debts.

“There is a complication because the State Sales Tax Act always have a provision in their various State enactments that their’s shall be the first charge on the assets. Therefore, on realization of debts, the secured creditors are left high and dry and the purpose of SARFAESI Act is not served” he said. He argued for an in the SARFAESI Act so that it has overrding effect on all statutory dues including Sales Tax, Income Tax, Central Excise so that other secured creditors will have priority in realization of debts, of course, pro rata with workers,” Mishra said

He also pointed out that the Stamp Act is inconsistent across states. “the Stamp Act must be uniform in all the States that have the SARFAESI Act” , he said . Gurudas Dasgupta (CPI) raised the issue of Kingfisher Airlines and lauded the State Bank of India was refusing to lend any more to the ailing airline.  In his reply, Chidambaram said no leinency would be shown to anyone.

While conceding that Non Performing Assets of banks had indeed been going up – it was no approximately 3.5% -  the Finance Minister said this was a function of the performance of the economy. “Because the RBI is very strict inrequiring the banks to make provision, the net NPA is still only 1.62%. The effort is to ensure that sectors which are under stress are helped to get out of this difficult time and units which are making money, we must recover the loans. Units which are genuinely stressed must be helped.

“I said that there must be some hand-holding in a time of stress so that they all do not become bankrupt or insolvent. They come out of the stress. We have to protect employment; we have to protect jobs; and we have to protect manufacturing. They will come out of the difficulty, once the economy recovers. We are going through a difficult time. And it is this difficulty which is reflected in this rising gross NPAs. But let me tell you, thanks to the RBI, thanks to the strict vigilance, thanks

to the provisions made, the net NPAs are well under control. There is no reason to think that our banking system is in difficulty. In fact, many Members rightly complimented the banking system. When over a thousand banks failed in the United States, not one bank in India failed.…” Chidambaram said.

He was clear that no special favours would be shown to anyone including individual cases referred to by other members, he said. “A particular case was mentioned, where there was a huge NPA; the strictest action is being taken by the banks, in asking them to put up the money upfront before any kind of accommodation can be given; no fresh loans are being given. In fact, the Tax Department has taken severe action in attaching those assets. So, no favours are being shown to any one, irrespective of whoever he may be. The law is taking its course”.