Staff crunch forces debt recovery tribunals to put off cases

Anita Bhoir & Maulik Vyas, ET Bureau :Mumbai :Dec 10, 2012, 05.28AM IST

Debt recovery tribunals (DRTs), an important mechanism for loan recovery by banks, are foundering amid charges of lack of professionalism and shortage of staff as bad loans are crippling banks. 

The disposal of cases has been falling as a few members have to handle enormous amount of claims and the delaying tactics employed by defaulters by going in appeal against every order are defeating the purpose.

In fact, bankers at a recent meeting with the finance ministry officials have charged that unjustified orders are being passed by some DRT officials in connivance with promoters who want to protect their assets.

 "We had complained about the unilateral stays that the registrars of the debt recovery tribunals are granting to the borrowers without giving banks a proper hearing,'' said a bank chairman, who did not want to be identified.

"The issue was raised by us at a DRT forum where finance ministry officials were also present."

There are at least 33 DRTs and five appellate bodies to deal with cases. Although the mechanism was brought in with a noble aim to decide on the cases within 6 months, the lack of adequate staff and timely replacements have hit their operations. 

With corruption spreading, some say, even DRTs are not immune to it. "Borrowers are taking advantage of the debt recovery appellate tribunal and appealing against the order issued by the DRTs,'' said advocate Ravi Goenka of Goenka Law Associates, who represents financial institutions like asset reconstruction firm Arcil and OBC.

"According to the law, DRTs have to dispose off cases in six months, but it's taking almost two to three years.'' In 2011-12, of the total amount recovered through the Sarfaesi Act, DRTs and Lok Adalats registered a decline of 8.2% at 14,400 crore, from 15,700 crore a year earlier despite a surge in bad loans.

There is only one member looking after the Western region comprising entire Maharashtra, Gujarat and Goa. For a long time, the post of presiding officer was vacant and presiding officer of the Kolkata bench was looking after the Western region appellate tribunal as additional portfolio. Mumbai-based banks had to go to Kolkata to file a case in most of the cases, said a lawyer representing a bank.

The long duration taken by DRTs to decide on the cases is reflected in the fact that the Oriental Bank of Commerce and Bank of India are still fighting a case to recover dues from former stock broker Ketan Parekhin a case relating to the 2001 securities scandal. He was barred from trading at the Indian stock exchanges till 2017.

During June to December 2012, some important cases involving companies like

 Som Developers (owing 390 crore to SBI, UBI and other banks),

 Sterling Biotech ( 322 crore debt towards a subsidiary of LIC) and

 Aeroflex ( 181 crore towards SBI) were admitted.

 "The DRTs were to finish cases in six month. However, they are not able to adhere to the timeline as they have become like a civil court,'' said the legal head of a private sector bank.

Amendments to debt recovery law will ensure banks get ‘right pricing for assets on sale’

B L :MUMBAI, DEC. 14,2012

Allowing asset reconstruction cos to convert a part of debt into equity is a positive

The amendment to the debt recovery legislation will, among others, allow multi-state co-operative banks to assign their bad loans to asset reconstruction companies (ARCs), proving a win-win for banks as well as the companies

Currently, these co-operative banks are not allowed to sell bad loans to ARCs. “This (amendment to the debt recovery legislation) will open the opportunity for ARCs to tap the sector which has so far not been targeted for debt recovery,” P. Rudran, MD and CEO of Arcil, country's largest asset reconstruction company said.The amendment to the debt recovery legislation will, among others, allow multi-state co-operative banks to assign their bad loans to asset reconstruction companies (ARCs), proving a win-win for banks as well as the companies.

The Enforcement of Security Interest and Recovery of Debt Laws (Amendment) Bill, 2011 was passed in the Lok Sabha on Monday. Rising non-performing loans has prompted the Finance Ministry to look at alternative ways to help banks mitigate the bad loans problem. The amendments if passed by Rajya Sabha will be notified by the Reserve Bank of India. ARCs buy bad loans from banks and financial institutions at a discounted rate and recover the dues from the borrower.

IMMOVABLE PROPERTY

The amendments also allow banks to acquire immovable properties from the borrower so that they can sell them at a later date.

Sometimes there are no buyers for a property or there is cartelisation from bidders, who deliberately quote a lower price thus undervaluing it. “The amendment will ensure that banks do not get into the situation of distress sale and get the right pricing for the assets on sale,” Rudran said. The amendment states that banks will be heard in Debt Recovery Tribunals (DRTs) before granting any stay on recovery of loans from borrowers. This will ensure that the law is not misused by borrowers to delay the settlements and payment of dues.

Also, the amendment allows ARCs to convert a part of the debt into equity. This could be a win-win situation for the borrower as well as the ARC. The borrower stands to gain because his outstanding liability decreases to the extent of equity conversion and the ARC can exit the company when it has made good of the liability. Further, the ARC will also get some amount of management control in the borrowing company so as to aid in the turnaround of the stressed company.

Private, foreign banks made greater use of loan recovery agents: FinMin

B L :NEW DELHI, DEC. 14:2012

The Finance Ministry has admitted that private sector and foreign banks made greater use of agents to recover outstanding loans from customers than nationalised banks, the State Bank of India and its associate banks.

In a written reply on Friday in Lok Sabha, the Minister of State for Finance Namo Narain Meena informed that out of total of 149 complaints (received between April-November 2012), 101 were against private sector banks (72) and foreign banks (29) for use of direct selling or recovery agents.

He also informed that 116 complaints out of 149 have already been disposed of.

Meanwhile, the number of complaints has been coming down after the Reserve Bank of India issued guidelines on July 1, 2011. These guidelines define norms for recovery of loans, including vehicle loans, along with engagement and training of recovery agents and methods to be followed by them. The guidelines ask banks to avoid adoption of uncivilised, unlawful and questionable behaviour of recovery agents during the process of loan recovery.

These are applicable to all scheduled commercial banks, regional rural banks and even primary cooperative banks.

“Banks are, therefore, required to rely on legal remedies available under the relevant statutes while enforcing security interests without intervention of the courts of law,” he said.

BANK FRAUDS DOUBLE

In reply to another question, Meena informed that the amount involved in fraud cases in public sector banks during the first six months has exceeded the total of the last full fiscal.

It is more than double of 2010-11.

According to figures, public sector banks reported 1,714 cases of frauds involving Rs 5,210.56 crore, while in 2011-12 a total of 3,392 cases with an amount of Rs 4,025.30 crore were reported.

SUSPICIOUS DEALS

The Finance Ministry said that during April-October, 2012, various agencies reported a total of 17,204 suspicious transactions (STRs) to the Financial Intelligence Unit-India.

These are for investigations of suspected money laundering, so the amount involved can not be ascertained now, Meena said.

In a reply to a question, the Minister said Foreign Currency Convertible Bonds (FCCBs) worth Rs 2,104 crore were due for maturity this month.

This amount will be Rs 667 crore, Rs 80 crore and Rs 317 crore for January, February and March, respectively.

To prevent any default of redemption of FCCB by Indian companies, the RBI has permitted restructuring of FCCBs not involving change in conversion price under the approval route.

Further, buyback of FCCBs has been allowed under the approval route at a minimum discount of 5 per cent on the accreted value up to March 31, 2013, the answer stated.

RBI may hike NPA provision ratio if needed: Chakrabarty

F C :PTI Dec 09 2012 , Mumbai

RBI Deputy Governor K C Chakrabarty has come down heavily on banks showing higher 
profits without providing adequately for bad loans, and said if need be, the central bank may hike provision coverage ratio (PCR) levels.


"Why banks need to show profits as high as 25 per cent? They can show 5 per cent growth in their profits. If they are not doing (providing more), I will increase it (PCR)," he told PTI in an interview.

The RBI had done away with its earlier requirement of forcing banks to maintain the PCR, or the ratio of provision to gross non-performing assets (NPAs), at 70 per cent.

The apex bank had increased the PCR to 70 per cent after the Lehman crisis in 2008 and this was applicable till September, 2011. While almost all private banks have higher PCR, majority of the state-run lenders could not meet this deadline.

A number of public sector banks, especially the smaller ones, have shown a drop in PCR in the second quarter earnings and posted a good jump in profits as a result.

The RBI has floated a discussion paper to explore having dynamic provisioning which requires banks to keep aside money during good times for a rainy day, rather than providing after an account has gone bad.

Speaking about NPAs of banks, Chakrabarty attributed a majority of them to poor administration and risk management practices of lenders and went to the extent of terming it as 'non-performing administration.'

"I call NPA as non-performing administration. We have to make the administration functioning," Chakrabarty, who oversees banking supervision at RBI, said.

The RBI Deputy Governor said the "change in the administration" has to come in a slew of areas which would be internal as well as external.

Lending rates would have been far lower if banks had got their NPAs down, Chakrabarty said.

Law changes to help revive stressed firms

 F C :Manju AB Dec 11 2012 , Mumbai

Give asset reconstruction firms more options

After the amendment to the SARFESI Act and the debt recovery tribunal in the Lok Sabha on Tuesday it will now be easier for banks and financial institutions to help revive companies and recoup their advances as no opposing bank or party can file a caveat in the debt recovery tribunal to obtain a stay unless both parties to the case are heard. Under the present DRT regulations it is possible for a bank or a borrower, which is opposed to the restructuring to file a caveat in the DRT and stall the revival or recovery process.

The asset reconstruction companies can also convert their debt into equity during  a restructuring so that the cost will come down for the company and the ARC gains by buying into the equity of the company. Until now it was not allowed to convert into equity.

P Rudran, MD and CEO, Arcil said, “By allowing the banks and FIs to file caveats and to be heard in DRTs before granting any stay, will ensure that the process of law is not misused by unscrupulous borrowers to delay the settlements and payment of dues. Similarly, allowing 15 days (instead of 7 days) to reply to the borrower’s objective under section 17 of SARFAESI act is also a good change so that the lenders can meaningfully analyse the issues raised by the borrowers.”

The amendments are to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFESI) Act of 2002, and the Recovery of Debts Due to Banks and Financial Institutions Act of 1993.

M Narendra, CMD, Indian overseas banks said, “No one can get a stay order from the tribunal unless all the parties to the case are heard which is a big step forward for resolution of cases. Allowing banks to acquire immovable properties towards the settlement of the dues is another big step, which will help banks buy back the property that is unsold in the auction. Now we had to hold it as non-current asset in our book for nearly seven years, now it can be acquired and will form a part of our fixed assets. These amendments will help in speedier resolution of cases.”

The amended law will allow the asset reconstruction firms to convert fully or in part their loan to a stressed entity into equity. This is specially useful in the initial stages when the company is under stress and the option of converting debt into equity will reduce the interest cost for the company in the initial stages where costing is an important factor.

According to rating agency Icra report the gross non-performing assets (NPAs) likely to cross Rs 2,00,000 crore and reach 3.6-3.8 per cent of gross advances as on March 31, 2013, up from 2.8 per cent as on March 31. Standard restructured advances could move up to Rs 3,70,000-4,20,000 crore by March 31, 2013 as against Rs 2,30,000 crore as on March 31.

நீங்க பாட்டனி படிக்கலையா...'இரட்டை இலை' வழக்கில் அட்வகேட் ஜெனரலை வாரிய நீதிபதி!

  One India :Friday, December 14, 2012, 15:30 [IST]


சென்னை: எம்.ஜி.ஆர்.சமாதியில் அமைக்கப்பட்டுள்ள புதிய கட்டடம் பார்க்க இரட்டை இலை போலத்தான் உள்ளது. இந்த இரட்டை இலை நடுவில் காம்பும் உள்ளது என்று சென்னை உயர்நீதிமன்ற நீதிபதி கூறினார்.

 ஆனால் அதை மறுத்து அட்வகேட் ஜெனரல் கூறியபோது, நீங்க தாவரவியல் படிக்கலையா என்று கிண்டலாக கேட்டார்.

 மேலும், இதுதொடர்பாக 8 வாரத்திற்குள் விளக்கம் அளிக்குமாறு அரசுக்கு உயர்நீதிமன்றம் உத்தரவிட்டது.

 எம்.ஜி.ஆர். சமாதியில் அமைக்கப்பட்ட இரட்டை இலை சின்னத்தை அகற்ற கோரி திமுக சட்டத்துறை செயலாளர் ஆர்.எஸ்.பாரதி சென்னை உயர் நீதிமன்றத்தில் மனு தாக்கல் செய்துள்ளார். 

இந்த வழக்கை நீதிபதி பால் வசந்தகுமார் விசாரித்து வருகிறார். நேற்று நடந்த விவாதம் விவரம்: 

திமுக வக்கீல் விடுதலை: கடந்த ஆண்டு அதிமுக ஆட்சிக்கு வந்ததும் எம்.ஜி. ஆர் மற்றும் அண்ணா சமாதிகளை புதுப்பிக்க ரூ. 8 கோடியே 90 லட்சம் ஒதுக்கப்பட்டது. இதில் 3 கோடியே 40 லட்சத்தில் எம்.ஜி.ஆர். சமாதியில் வளைவு அமைத்து அதில் இரட்டை இலை சின்னம் வைத்துள்ளனர். இது சட்டவிரோதமானது. பெரம்பூர் நெடுஞ்சாலை யில் அதிமுக வளைவு அமைக்கப்பட்ட வழக்கில் உச்ச நீதிமன்றம் வகுத்த விதிமுறைகளை அரசு பின்பற்றவில்லை. 

அட்வகேட் ஜெனரல் நவநீதகிருஷ்ணன்: 2007ல் 35 லட்சம் செலவில் கலைஞர் கருணாநிதி பெயரில் சட்டபேரவை பொன்விழா வளைவு அமைத்துள்ளனர்.

 விடுதலை: பெயர்தான் வைத்துள்ளனர். திமுகவின் உதயசூரியன் சின்னம் அமைக்கவில்லை. ஆனால் இங்கு இரட்டை இலை சின்னம் அமைத்துள்ளனர். ராணி மேரி கல்லூரியில் கலைஞர் மாளிகை என்ற பெயரை கலை மாளிகை என்று மாற்றியுள்ளனர். 

அட்வகேட் ஜெனரல்: மனுதாரர் கூறுவது தவறு. ஏற்கனவே இரட்டை இலை சின்னத்தை எதிர்த்த வழக்கை உயர் நீதிமன்றம் தள்ளுபடி செய்துள்ளது. 

விடுதலை: ஜெயலலிதா பிலிம் சிட்டி என்ற பெயரை எம்.ஜிஆர். பிலிம் சிட்டி என்று மாற்றினர். இப்போது என்ன நிலை யில் உள்ளது என்று தெரிய வில்லை. மாயாவதி தனது கட்சியின் யானை சின்னத்தை அரசு செலவில் அமைத்ததை எதிர்த்த வழக்கு உச்ச நீதிமன்றத்தில் நிலுவையில் உள்ளது. எனவே இந்த வழக்கில் அரசு பதில் அளிக்க நோட்டீஸ் அனுப்ப வேண்டும்.

 அட்வகேட் ஜெனரல் : எம்.ஜி.ஆர். சமாதியில் உள்ளது இரட்டை இலை சின்னம் இல்லை என்று உறுதியாக கூறுகிறேன். தேர்தல் கமிஷன் அங்கீகரித்த இரட்டை இலை சின்னம் அமைக்கப்படவில்லை. இது இரட்டை இலை இல்லை. குதிரையின் இறகு. சிலையின் மேல்பகுதியில் தேன்கூடு போன்ற அமைப்புதான் உள்ளது.

 விடுதலை: மக்கள் இதை இரட்டை இலை என்றுதான் கருதுவார்கள். 

அட்வகேட் ஜெனரல்: அப்படி ஏற்க முடியாது.

 நீதிபதி: (சிரித்து கொண்டே) எம்ஜிஆர் சமாதியில் அமைக்கப்பட்ட வடிவமும் இரட்டை இலை போலத்தானே உள்ளது.?

 அட்வகேட் ஜெனரல்: இரட்டை இலை இல்லை.

 விடுதலை: இரட்டை இலை இல்லாவிட்டால் யாருக்கும் அழைப்பு அனுப்பாமல் ஞாயிற்றுக்கிழமை அவசர அவசரமாக இந்த சிலையை முதல்வர் திறக்க வேண்டிய அவசியம் என்ன? வழக்கு தாக்கல் செய்து தடை வாங்கிவிடுவார்களோ என்று அஞ்சிதான் இதை முதல்வர் செய்துள்ளார். மக்கள் வரி பணம் வீணடிக்கப்பட்டுள்ளது.

 நீதிபதி: அழைப்பு அனுப்புவது அரசு விருப்பம். 

அட்வகேட் ஜெனரல்: இந்த வழக்கு விசாரணைக்கு உகந்தது இல்லை. இரட்டைஇலை வேறு, இது வேறு.

 நீதிபதி: இந்த இரட்டை இலை நடுவில் ஏன் காம்பு உள்ளது? 

அட்வகேட் ஜெனரல்: அது காம்பு இல்லை. அது ஒரு தூண்தான். 

நீதிபதி: (அட்வகேட் ஜெனரலை பார்த்து) நீங்கள் தாவரவியல் பாடம் படிக்கவில்லையா? காம்பு இல்லை என்று கூறுகிறீர்கள். காம்பு மாதிரியான தூண் என்று கூறுகிறீர் களா? இந்த வழக்கில் விரிவாக பதில் மனுவை அரசு 8 வாரத்தில் தாக்கல் செய்ய வேண்டும். இதில் தீர விசாரணை நடத்தி தான் முடிவு எடுக்க முடி யும். இந்த வழக்கை விசாரணைக்கு ஏற்றுக்கொள்கிறேன். உள்துறை செயலாளர் உள்பட 7 பேர் பதில் மனு தாக்கல் செய்ய வேண்டும் என்று உத்தரவிட்டார்.

Top banking scandals 2012

BS Reporter / New Delhi December 11, 2012, 16:00 IST

HSBC and Standard Chartered, the two biggest UK banks by market value, are to pay more than $2.5bn in fines as part of record settlements with US authorities over money laundering charges.

HSBC has confirmed it is to pay US authorities $1.9bn in a settlement, the largest paid in such a case.

It was fined for money laundering activities tied to drug cartels in Mexico and terror-linked groups in Saudi Arabia in December 2012.

The bank admitted to a breakdown of controls and apologised in a statement on Tuesday announcing it had reached a deferred-prosecution agreement with the US Department of Justice.

Money laundering is the process of concealing the source of money obtained by illicit means.

The settlement is the third time in a decade that HSBC has been penalized for lax controls and ordered by US authorities to better monitor suspicious transactions.

According to Quartz, it will take HSBC a mere 41 days to earn back the $1.9 billion fine.

On Monday, StanChart agreed to pay $327m to several authorities in the US to settle charges it violated US sanctions law and impeded government inquiries. 

That sum comes on top of the $340m the UK bank agreed to pay in August to New York state’s Department of Financial Services.

It was fined on August and December 2012 for violating US curbs on transactions with Iran, Burma, Libya and Sudan.

Business Standard presents a list of the most infamous banking scandals of 2012

1) Barclays CEO Bob Diamond resigns after rates scandal

1) On 03 July,  Barclays Plc Chief Executive Bob Diamond resigned, the highest-profile casualty of an interest rate-rigging scandal that spans more than a dozen major banks across the world. "The external pressure placed on Barclays has reached a level that risks damaging the franchise - I cannot let that happen," Diamond said in a statement.

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2) JPMorgan reveals shock loss of $2bn

In May, JPMorgan Chase disclosed that it had lost more than $2 billion in trading. Jamie Dimon, the chief executive of JPMorgan, blamed “errors, sloppiness and bad judgment” for the loss, which stemmed from a hedging strategy that backfired.

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3) The Libor saga

Barely a week after London-based Barclays Bank Plc was fined a record £290 million (Rs 2,500 crore), for allegedly participating in the fixing of the London Interbank Offered Rate, or Libor, by regulators in the US and the UK, its chairman Marcus Agius and outspoken CEO Robert Diamond have finally resigned.

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4) Nomura chief quits over insider trading
In July, chief executive of Japan's Nomura Holdings Kenichi Watanabe resigned following a damaging insider-trading scandal. It was alleged that staff leaked information on share offerings to customers before it was made public.

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On November 03, Nomura faced another major more legal problems. Nomura said it was likely involved in a new insider trading case, months after the firm’s CEO, Kenichi Watanabe, resigned following similar charges.

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5) Lloyds executive quits over funds bungling charges

A senior banker at the Lloyds TSB has resigned following claims that millions of pounds were channelled to companies set up by a pair of young Indian men he befriended. Andrew Taylor, 46, quit citing 'ill health' as auditors were sent in to probe the accounts of a firm controlled by the two colleagues - Vijay Bhaskar and Raj Kumar.

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6) Loss due to technical glitch

In August, media reported that Royal Bank of Scotland (RBS) kept aside £125m to pay compensation to customers affected by the recent breakdown in its computer systems. Account holders at RBS and its NatWest and Ulster Bank subsidiaries faced disruption for up to two weeks in June after a software upgrade at the bank.

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7) Big Four admit to mis-selling interest rate swaps

In June, Britain’s four main high street lenders have agreed to compensate small and medium sized businesses mis-sold interest rate hedging products after the Financial Services Authority said it had found “serious failings” in the way they marketed to some customers.  Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland have all agreed to immediately halt the sale of complex interest rate hedges to smaller businesses and have pledged to compensate potentially thousands of customers.

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8) In June, ING Group was charged for covering up fund transfers in violation of US sanctions against Cuba and Iran

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9) In February 2012, Bank of America was fined for charging discriminatory lending rates to African American and Latino borrowers.

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.