Has India failed because of its Judicial System?

 IBTL :Thursday, Jan 03,2013, 12:00 IST posted by DRT India on 16 th March 2013

Thanks To Mr Ajay Kumar Khemka

The protests in Delhi about the brutal gang rape of a 23 year old girl are more than just a spontaneous outpouring of grief over the victim. The citizens of this country are seething with rage over a callous unresponsive government and judiciary.

They are no longer fooled by promises of action and statements such as “law will take its course” or setting up of toothless judicial commissions.

Let us consider some simple facts about the pathetic state of affairs

Justice Delayed is Justice Denied.
1. There is a backlog of 30 million cases in India. Even if no new cases are filed, it will take about 350 years to dispose of them all. If a common man gets cheated or assaulted or murdered his family will have to move heaven and earth to get justice which will ultimately be denied to them. This is true of cases where no high profile individuals are involved.

2. Judgements in high profile cases like the fodder scam have still not been received inspite of having a special court to deal with the issue.

3. The term of the current LokSabha is nearing an end but the electoral fraud case against the present Finance minister has just commenced. It will probably be a decade before all the appeals are finished.

4. Celebrities like Salman Khan have not appeared in court despite being summoned 82 times. Does the Judiciary not even view this as an insult? Anyone with a little knowledge can manipulate the system at will.

5. Not a single conviction of a single politician has come for the 1984 Sikh carnage.

6. The so called landmark verdict on black money where a SIT was ordered to be appointed was referred to a larger bench where it has lingered for over a year and a half. This raises serious questions about judicial independence in India.

7. An open and shut case like Kasab's will take 4 years to work its way through the system. Of course the prosecutor Ujjwal Nikam would claim that it is a great triumph, but if even this case had not ended we would have been the laughing stock of tinpot republics in Sub-Saharan Africa

Compare the above delays with cases in the US, such as the Rajat Gupta conviction, Enron scam and Bernard Madoff case. In all these cases the trial was finished in regular courts in 1-2 months.

Policeman-Prosecutor-Judiciary the lethal trio

8. India has the lowest citizen to police ratios in the world. The recommended average is a policeman for every 200 citizens. In India, the ratio is close to 700. If one takes into account those tied up for 'VIP security', the ratio will probably be close to to 1 policeman for every 1000 citizens.

9. Cops simply don't have the time to investigate any case as they will be called for securing routes for VIP convoys, attend to traffic holdups, escort under-trials to courts, do passport verifications etc.

10. Without training or forensic support all they can resort to is crude torture to elicit confessions and claim to have solved cases. Any confession made before a police officer is inadmissible as evidence. So this is an exercise in futility. This lack of admissible evidence is a major cause for pathetically poor conviction rates (around 15%) for rapes in India. Is it so hard to do a DNA test in this day and age? It is sheer callousness and criminal indifference on the part of the police.

11. Appointments to inspector, sub-inspector, constable etc are made after bribes running into several lakhs. These people are just interested in a return on their investment and not doing their job, so they deliberately destroy evidence, botch investigation, bully witnesses to prevent them from coming forward.

12. Even the rare instance of an upright officer, will be subject to threats and coercion. It is simply impossible for such an individual to function in such an environment.

13. The next stage is the public prosecutor who is a political appointee. Most of these are ignorant of the law and again susceptible to the same bribery and coercion from higher ups as the policeman.

14. The ignorance of the prosecutor is typically reflected in the size of the charge-sheet. Instead of being brief and to the point, charge-sheets are an example of verbal diarrhea in poor English. All that is required for conviction is 1 witness who will stand firm. Instead dozens of witnesses some of whom are probably unconnected with the case or can be influenced are cited and these will turn hostile during trial and undermine the credibility of the true witness. This is a reflection of the 'history exam mentality' where it is believed that pages and pages of junk is a substitute for facts.

15. The CBI is a classic example of political interference. As Mr. Joginder Singh (ex Director) has repeatedly stated, it can't even take a bathroom break without permission. The Bofors case is a classic example of how an open and shut case was deliberately sabotaged by the CBI which in fact went out of its way to ensure that Mr. Quatrochi was allowed to go scot free with his loot. We have all seen how the CBI deliberately waters down cases against the likes of Mulayam and Mayawati in return for their support to the government.

16. The final stage is the judges. Judges are appointed from a pool of lawyers, most of whom do not inspire any confidence. The hooliganism and booth capturing seen during bar council elections brings shame to the legal fraternity.

17. Once a bad judge is appointed he has to just sit tight and keep getting promoted. This is why the quality of judgments in lower and higher courts has consistently gone downhill. Mr. Arun Shourie's book on this subject is a must read for anyone.

18. Judgments instead of being to the point are often long essays in poor English. Some judgments are so bad that they either do not address the issue that is asked, or are self contradictory or are simply unimplementable. It is widely believed that reserving judgments is a way of demanding inducements.

19. There are many instances of rampant corruption in the lower and higher judiciary. Noted activist Prashanth Bhushan has even said publicly that 8 of the last 16 chief justices were definitely corrupt. The silence of the judiciary on this allegation is deafening. Are they afraid to take on Mr. Bhushan? The icing on the cake seems to be the rumor going around that a certain female lawyer traded sexual favors to a spokesman of a political party to get appointed as a judge.

20. Lack of reform in the administrative mechanism causes case details to be physically transported from lower to higher courts for appeals. There is a crying need for electronic transfer, tracking and monitoring of petitions. So a case relating to a property or murder in Nagalalnd will physically move through 4 or 5 appeals courts, finally making its way to the Supreme Court. At every stage the evidence will be either lost or manipulated.

When a system is in such shambles no-one without the tenacity and perseverance of Dr Subramanian Swamy can fight cases. Imagine how effective India's one man army for justice would be in a system that actually worked.

Law will take its own course. I have complete faith in the law.

Have we not heard the above line parroted by every politician accused of graft, rape or murder?

 What they really mean is that they are absolutely confident that they will be able to get away.

In such a situation, what is an ordinary citizen expected to do? Is he expected to run after justice endlessly while the other party 'manages' the system, or should he take matters into his own hands and then 'manage' the system? This is a question that every citizen of this country needs to ponder about. Unless all the above flaws are rectified vigilantism and mob justice will become the norm. After all when the system has failed, it is but natural that people set right the injustices done to them as they have no-one to turn to.
What is the solution?
01. Throw out the present CrPC and CPC into the dustbin. Replace it with the American model to ensure speedy trials. Cases stretching for decades are UNACCEPTABLE. I have no faith in your judiciary. ALL trials must end in 3 months. Not just rape trials.

02. Train cops in investigative techniques and evidence collection.

03. Set-up well equipped forensic labs with well trained personnel.

04. Have a training institute for cops, prosecutors and judges and increase the number of courts, judges and cops. India has the lowest fraction of cops and judges for its population.

05. Have a transparent system to investigate corruption in the judiciary.

06. Expose corrupt judges and cops. Have the harshest penalties for those who betray public trust.

07. Setup an independent ombudsman to investigate judicial and police corruption and ensure independence of the CBI.

08. Judges must be barred from holding public office or heading commissions such as the NHRC after retirement. This is a form of inducement to the judiciary. Even the Pakistani Supreme Court has more independence and courage to confront the executive and legislature compared to the Indian Supreme Court.

09. Implement police reforms to free cops from political patronage and corruption.

10. Judges who release rape accused on bail must have a permanent black mark against their career and lose all chance of promotion if the accused repeats the offence or threatens a witness while on bail.

11. For extremely brutal rape cases, a public physical castration and beheading is necessary to serve as a deterrent.

12. Judgments should be brief and to the point. The operational part of the judgment should be confined to 1 or 2 pages. And a 1or 2 page explanation for the same may be provided. Judges need not pretend to be literary masters and waste their and the litigants time.

13. There needs to be a foolproof electronic way of transferring case related documents from lower to higher courts to save time, money and the prevent the possibility of destruction of evidence.

Either all these reforms can be done, or people will do what is necessary and 'manage' the system later. This is what true reform is all about Mr. PM (where you fix the corrupt and broken legal system). Tinkering with percentages for FDI in retail in exchange for suitcases of goodies is not reform.


Author : manekshaws | Follow the writer on twitter/manekshaws
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Disclaimer: The author is a commentator on issues of national interest. These are his personal views and do not necessarily reflect IBTL's opinion

Bad loans: Banks sleeping at the wheel

Housing loan frauds have become commonplace. — Nagara Gopal

Competition has pushed banks into cutting corners, while checking the borrowers’ antecedents.

 M. SITARAMA MURTY  former MD, State Bank of Mysore.:BL :March 15, 2013:  

Non-performing assets (NPAs) have always been a part of the credit function in banks. It is only after the regulator introduced the concept of income recognition and provisioning in the 80s, tightening the definition of NPAs and provisioning norms, that they have assumed greater importance. 

Adoption of the Basel guidelines on capital adequacy made it a critical segment. For the third quarter of this year, most banks reported a decline in profits, citing the burgeoning NPAs. The fears of the rating agencies, which are sceptical about the assets quality and health of the banks, have been confirmed.

Gross NPAs showed signs of easing for a couple of years, but are moving menacingly towards the 4 per cent mark. The problem is so widespread that a CEO of a major PSB could defend the low profits as a fall-out of decline in asset quality, and not change in incumbency. Normal growth in credit could have, to some extent, improved the earnings and salvaged the ratios, but the economic slowdown and higher inflation and interest rates have dampened investments.

INCREASING FRAUDS

If a critical analysis is made, some worrying aspects do surface. Increasing number of frauds has contributed in no small measure to the problem. The acts of criminal minds in financial transactions, internal or external, including cyber crime, are labelled ‘fraud’ and are reported to the RBI. These do not, however, fully reflect the magnitude of the problem. 

A clear trend of defrauding the banks is emerging. The amounts lost in transaction frauds or theft pale into insignificance if the amounts involved in NPAs due to misrepresentation, falsification of accounts, diversion of funds, cheating, forgery and wilful default are considered.

Believing it to be safe lending, all banks pushed for housing loans in a big way. While percentages may provide a false comfort, the sheer number of cases where banks were cheated, some times several banks by the same person, with fake or forged documents runs into thousands. If the notices of sale or auction appearing in the press daily are any indication, many loans seem to have been granted without meticulous verification of the KYC norms, the earnings or the repayment capacity of the borrowers.

A common modus operandi of the fraudsters is to sell off the property or mortgage it to other banks, using multiple copies of the documents. In the era of colour printers it is difficult to make out the genuineness, except by a thorough verification at the registration office. This is time-consuming and beset with practical difficulties, too. With the records not updated in some States even for 5 to 7 years and there being no system of issuing encumbrance certificates in some others, it reads like a horror story. The advocates have to wade through voluminous haphazardly stored papers to verify.

WILFUL DEFAULT

The number of camouflaged fraudulent borrowings in the trade, manufacturing and services sectors is on the upswing. What is more alarming is that an increasing number of large value or corporate borrowers are resorting to false information and fake or forged documents for obtaining credit.

The failure of the banks to make a critical and realistic appraisal of credit needs and have efficient credit management practices at all levels, makes it that much easier for a dishonest borrower. Banks have to help themselves by not rushing through the sanctions, in the name of competition. It is a paradox that applicants still complain about delays.

Prudence or due diligence need not result in delays. But negligence of basics of banking can lead to frauds. Outsourcing most functions such as project appraisal, verification of documents, inspection of securities and their valuation, scrutiny of accounts and books, verification of stocks, internal audit and even recovery, have the bankers lost their professional touch? Is it because of volumes or reluctance to face accountability?

Realising that the entire exercise of recovery is ending in knots, the government and the RBI thought it fit to have a national register of bank mortgages as a self-help measure. But it will take time to stabilise, as in many States, the revenue and municipal records need to be streamlined and updated. Promotion of Credit Information Bureau (CIBIL) for building the credit history of borrowers is another initiative by the RBI.

SLOW RECOVERY

The recovery process is slow and painful, despite creation of DRTs and introducing the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI). Several borrowers become wilful defaulters, only to take advantage of the one-time settlement (OTS) system and gain. Having enjoyed the funds, interest apart, they bargain for discount in the principal. Anxious to reduce NPAs and at their wits end, finding no better alternative, banks fall for the OTS bait, sacrificing substantial amounts.

The DRTs and the SARFAESI act procedures involve interventions of police and revenue machinery and finally courts, leading to delays up to several years. The work load has also multiplied manifold over the years. Stays are sought and granted routinely, rendering the process ineffective. DRTs frequently stay proceedings under the SARFAESI Act which is not envisaged.

The Board of Industrial and Financial Reconstruction, which was to be wound up, is going strong and promptly stays recovery proceedings, unable to dispose of the cases for years on. Borrowers know this too well and after several years, throw the bait of OTS at the frustrated bankers.

If some banks successfully reach the stage of disposal of properties, influential defaulters ensure that no one participates in the auctions. For fear of litigation about the price and procedure, banks shy away from private sale. They settle for sale of debts to asset recovery and management companies at deep discount, as a last resort.

ILLUSIVE SECURITIES

Only banks with security of immovable property can hope to recover some dues. Traditionally, stocks of goods or commodities, machinery and book debts were considered good liquid securities.

But not any more. Once an account is irregular or becomes an NPA the stocks do a vanishing trick or the banks find them of no value. Mostly machineries and fixtures are either not available or of only scrap value, by the time the bankers could lay their hands on them, overcoming the various hurdles.

Book debts are like mirages; either mere statements submitted by the borrowers or the certificates given by the chartered accountants. Bankers seem to have forgotten the skill of verifying and monitoring the book debts. No details of transactions or contact particulars or any supporting documents are available with the banks.

Banks cannot deny credit for want of securities, particularly if there are not any. The RBI and governments prodding the banks to achieve targets for sectors such as exports, even those who have enough means, avoid offering any securities. Thanks to Export Credit Guarantee Corporation (ECGC), some relief is at hand. Ultimately, it boils down to banks substantially upgrading their appraisal skills and monitoring methods of scrutiny, verification, checks and cross checks. Self-help is the best help.

They need to look more inwards.

The author is former MD, State Bank of Mysore.

Bank books swelling with Rs 1-cr-plus bad loans

Worry lines: P. Chidambaram, Finance Minister. – V.Sudershan The Hindu

 

B L :NEW DELHI, MARCH 15: 2013

 

State Bank of India worst hit followed by PNB

After giving out the number of crorepati tax assessees, the Finance Ministry has made public the details about loan accounts of over Rs 1 crore with public sector banks that are pending recovery. 

The amount in such accounts has increase by over 1.5 times during the last three years.

Finance Minister P. Chidambaram informed the Lok Sabha that the number of such accounts went up to nearly 7,300 at the end of March 2012. The amount involved in such accounts was around Rs 68,000 crore. The State Bank of India tops the list with the maximum number of such accounts as well as the maximum amount, followed by Punjab National Bank, IDBI Bank and Bank of India among others.

“The Government has advised PSBs (public sector banks) to take a number of new initiatives to increase the pace of recovery and manage NPAs (non-performing assets), which include appointment of nodal officers for recovery, to conduct special drive for recovery of loss assets, to put in place an early warning system, to replace the system of post-dated cheques with electronic clearance system (ECS) and to constitute a Board Level Committee for monitoring of recovery,” Chidambaram said in a statement, as a part of his reply.

Interestingly, the statement mentioned that the steps taken by the Government and the Reserve Bank of India had resulted in year-on-year improvement in recovery of NPAs by PSBs.

 It also said that the existing guidelines were sufficient to address the issue of NPA management. However, data given along with the statement do not support this view.

The statement also mentioned steps taken by the RBI, which include a robust mechanism for early detection of signs of distress, including prompt restructuring in the case of all viable accounts, to have a loan recovery policy that sets down the manner of recovery of dues and targeted level of reduction.

The steps also talked about norms for permitted sacrifice, waiver, factors to be taken into account before considering waivers, decision levels and reporting to higher authorities.

Some other measures included monitoring of write-off or waiver cases, valuation of properties including collaterals accepted for their exposures and taking legal recourse.

Shishir.Sinha@thehindu.co.in

தமிழகத்தில் இன்று கோர்ட் புறக்கணிப்பு

தினமலர் :மார்ச் 11,2013,00:16 IST

சென்னை:"சண்டிகார், ஜெய்ப்பூரில், வழக்கறிஞர்கள் மீது போலீசார் நடத்திய தாக்குதலை கண்டித்து, இன்று கோர்ட் நடவடிக்கைகளில் கலந்து கொள்ளப் போவதில்லை' என, தமிழ்நாடு பார் கவுன்சில் அறிவித்துள்ளது.

ராஜஸ்தான் மாநிலம் ஜெய்ப்பூரிலும், சண்டிகரிலும், வழக்கறிஞர்கள் நடத்திய போராட்டத்தின் போது, போலீசார் தாக்குதல் நடத்தினர். இதில், வழக்கறிஞர்கள் பலர் காயமடைந்தனர். 

இச்சம்பவம் தொடர்பாக, ராஜஸ்தான் ஐகோர்ட் தலைமை நீதிபதியை, இந்திய பார் கவுன்சில் தலைவர், மன்னன்குமார் மிஸ்ரா, நிர்வாகத் தலைவர் அபூர்வகுமார் சர்மா ஆகியோர் சந்தித்துப் பேசினர்.சுப்ரீம் கோர்ட் தலைமை நீதிபதிக்கு, பார் கவுன்சில் தலைவர் மிஸ்ரா மற்றும் செய்தி தொடர்பாளர், எஸ்.பிரபாகரன் ஆகியோர் அனுப்பிய கடிதத்தில், "சம்பவம் குறித்து, நீதி விசாரணைக்கு உத்தரவிட வேண்டும்; காயமடைந்த வழக்கறிஞர்களுக்கு, தலா, 2 லட்சம் ரூபாய் நஷ்டஈடு வழங்க, ராஜஸ்தான் அரசுக்கு உத்தரவிட வேண்டும்' என, வலியுறுத்தி உள்ளனர்.

மேலும், "டில்லியில் புறக்கணிப்பு நடந்ததால், மற்ற மாநிலங்கள் முழுவதும், 11ம் தேதி (இன்று), கோர்ட் நடவடிக்கைகளில் வழக்கறிஞர்கள் கலந்து கொள்ளக் கூடாது என, பார் கவுன்சில் அழைப்பு விடுத்துள்ளது.

 இதையடுத்து, "தமிழகத்திலும், கோர்ட் நடவடிக்கைகளில் வழக்கறிஞர்கள் கலந்து கொள்ளாதிருக்க, தமிழ்நாடு பார் கவுன்சில் தலைவர் செல்வம், வேண்டுகோள் விடுத்துள்ளார்.

தொடர் மோதல் எதிரொலி : போலீஸ் சீர்திருத்த சட்டம் ; மத்திய, மாநிலஅரசுகளுக்கு சுப்ரீம் கோர்ட் நோட்டீஸ்

தினமலர் மார்ச் 11,2013,14:49 IST

புதுடில்லி: போலீஸ் சீர்திருத்தம் கோரி சுப்ரீம் கோர்ட்டில் தொடரப்பட்ட வழக்கில் மத்திய , மாநிலஅரசுகளுக்கு நோட்டீஸ் அனுப்பி 7 நாட்களுக்குள் பதில் அளிக்க உத்தரவிடப்பட்டுள்ளது.

 இதில் ஏற்கனவே போலீஸ் சீர்திருத்தம் தொடர்பாக சுப்ரீம் கோர்ட் பிறபித்த உத்தரவை அமல்படுத்தாதது ஏன் எனவும் விளக்கம் கேட்டுள்ளது. 

நாட்டில் பல்வேறு மாநிலங்களில் போலீசார் அத்துமீறி தாக்குதல் நடத்தி வருவதை பல்வேறு டி.வி. சானல்கள் செய்தியாக ஒளிபரப்பி வருகின்றன. ராஜஸ்தானில் போராட்டம் நடத்திய வக்கீல்கள் மீது போலீசார் தடியடி நடத்தினர். பீகாரில் கடந்த 5-ம் தேதி பல்வேறு கோரிக்கைகளை வலியுறுத்தி போராட்டம் நடத்திய ஆசிரியர்கள மீது போலீசார் தடியடி நடத்தினர். 

பஞ்சாப் மாநிலம் தாரன்தாரன் நகரில், போலீசாரிடம் பாலியல் புகார் கொடுக்க சென்ற பெண் ஒருவரை கடந்த 4-ம் தேதி போலீசார் சரமாரியாக தாக்கியும் பிடித்தும் தள்ளினர்.இது போன்ற விவகாரங்கள் பெரும் புயலை கிளப்பியுள்ளது. இது போன்ற சம்பவங்கள் டி.வி.யில் நேரடியாக ஒளிபரப்பாயின . 

இதையடுத்து சுப்ரீம் கோர் தானாக முன்வந்து வழக்காக எடுத்துக்கொண்டது. அதில் ராஜஸ்தான், பஞ்சாப், பீகார் ஆகிய மாநிலங்களில் நடந்த போலீசாரின் அராஜகங்கள் கவனத்தில் எடுத்துக்கொள்ளப்பட்டன. வழக்கினை விசாரித்த நீதிபதிகள் ஜி.எஸ். சிங்வி, தலைமையிலான நீதிபதிகள், போலீஸ் சீர்திருத்தம் தொடர்பாக சுப்ரீம் கோர்ட் உத்தரவை ஏன் மதிக்கவில்லை என, மத்திய அரசு, உள்துறை அமைச்சகம், மாநில அரசுகள், யூனியன் பிரதேசங்களின், தலைமை செயலர்கள், உள்துறை செயலர்கள், மாநில காவல்துறை டி.ஜி.பி.க்கள் ஆகியோருக்கு நோட்டீஸ் அனுப்பி 7 நாட்களுக்குள் பதில் மனு தாக்கல் செய்ய உத்தரவிட்டுள்ளனர்.

போலீஸ் சீர்திருத்த சட்டம் என்னாச்சு ? 

ஏற்கனவே நாட்டின் போலீஸ் சீர்திருத்தம் கோரி மாஜி டி.ஜி.பி. பிரகாஷ்சி்ங் சுப்ரீம் கோர்ட்டில் தொடரப்பட்டிருந்த வழக்கில் அனைத்து மாநிலங்களும் சுப்ரீம் கோர்ட் உத்தரவினை பின்பற்ற வேண்டும் என உத்தரவிட்டிருந்ததது குறிப்பிடத்தக்கது.

Pantaloons: reducing debt

Pantaloons’s operating measures for its core retail business improved in the December quarter, helped by the festival season. Photo: Ramesh Pathania/Mint

Pallavi Pengonda : live Mint :: Sun, Mar 10 2013. 03 36 PM IST

Pantaloons has taken steps to improve its financial health in the past few months by offloading stake in various entities

Pantaloon Retail (India) Ltd (PRIL) announced on Friday after market hours that it has entered into a share purchase agreement (SPA) with Industrial Investment Trust Ltd (IITL) to sell 22.5% stake in Future General India Life Insurance Co. Ltd (FGILICL). The consideration though wasn’t made public. However, according to news reports, the size of the deal is about Rs.300 crore.

It goes without saying that if the company uses the proceeds for debt repayment, it will be a positive given that its high debt has been a major concern for shareholders for a while now. As on 31 December, the company’s total consolidated debt— long-term borrowings plus short-term loans—stood at Rs.5430 crore. This is on a market capitalization of about Rs.4000 crore.

The company has taken steps to improve its financial health in the past few months by offloading stake in various entities and investors were expecting the current news as well, so the development is on expected lines. Interestingly, Future Group, including Pantaloons and Sprint Advisory Services Pvt. Ltd, shall still continue to hold 52% shares in FGILICL after completion of this transaction.

The debt situation is expected to improve. “The company has sold its flagship Pantaloons format and has also exited some of its non-core business. On the back of these moves, we expect PRIL to witness a significant reduction in debt levels to about Rs.3400 crore (FY14E),” ICICI Securities Ltd said in a 26 February note.

Meanwhile, Pantaloons’s operating measures for its core retail business improved in the December quarter, helped by the festival season. The company posted the strongest same-store-sales (SSS) growth in the last six quarters in its lifestyle and value retail segment. SSS growth measures growth based on stores open for at least a year.

Interest costs were flat year-on-year for the December quarter. But, and this is an important but, interest expenses still accounted for 55% of its last quarter’s Ebitda (Rs.285 crore). Ebitda refers to earnings before interest, tax, depreciation and amortization. After depreciation and interest costs, Pantaloons earned Rs.7 crore at the profit before-tax level, which is pathetic on a revenue of Rs.3171 crore.

At Rs.184, the stock trades at about 23 times its estimated earnings for the year to March 2014. So far, since the beginning of 2013, the stock has underperformed the benchmark Sensex. Triggers for the trend to change appear limited.

For one, the operating environment hasn’t seen a dramatic improvement as far as consumer sentiments are concerned. Investors would do well to track whether the improvement in SSS sustains after the festival season as well. Of course, an improvement in its debt position and the resultant savings in interest cost would be helpful. A tie-up with a foreign partner at comparatively higher valuations, if it happens, would be positive, say analysts.

Clear all dues before seeking licence renewal: DGCA to KFA

PressTrust of India  |  Mumbai  March 10, 2013 Last Updated at 16:44 IST

The airline management has repeatedly failed to act on its promise to clear the salary dues of its employees

Aviation regulator DGCA wants grounded Kingfisher Airlines to clear all dues, including pending salaries of employees, before taking up for consideration its application for renewal of flying licence.

"The airline (KFA) has been promising to pay salary dues to its employees since the last six months, but has not done so. Moreover, the renewal of Kingfisher Airlines' air operator permit (AOP) is not only linked to the unpaid staff wages, but also to the massive dues towards its vendors and lessors," DGCA sources said here.

"So we have to take into consideration all these dues before accepting the airline's application for licence renewal," they said, adding the airline needs to come up with a credible revival plan, which should include commitment to clear dues of all stakeholders.

The regulator's apprehension stems from the fact the airline management has repeatedly failed to act on its promise to clear the salary dues of its employees, who have not been paid since June last year, the sources said.

Last week, KFA Chief Executive Sanjay Aggarwal met the DGCA officials in a bid to get the AOP renewed.

The private airline, grounded since October last year, lost its flying permit in December though it has a two-year window to get it renewed.

The KFA-DGCA meeting came amidst report that the Civil Aviation Ministry was likely to auction the Vijay Mallya-led carrier's domestic slots and international flying rights to other Indian airlines.

Naresh Goyal-promoted Jet Airways' application seeking KFA slots is already pending with the Ministry.

Aggarwal reportedly told the watchdog that the airline was awaiting proceeds from the UB Group's deal with UK firm Diageo to clear salary dues. The Group has sold 53.4% stake in United Spirits to Diageo for about $2 billion.

He also requested the Government to keep aside some of the slots, including those at Mumbai and Delhi airports, of KFA so that they can be used once the airline resumes flights.

KFA, which started operations in 2005, is reeling under debts of about Rs 8,000 crore and a similar amount of accumulated loss. Last month, KFA lenders decided to start the process of recovering Rs 7,500 crore outstanding loans from the airline. 

E-Governance in Debts Recovery Tribunals

PIB :Ministry of Finance :Mar  8,18:48hrs

In order to enhance the efficiency of Debt Recovery Tribunals (DRTs) and Debt Recovery Appellate Tribunals (DRATs) and to provide a platform for seamless operations to Banks, Financial Institutions and general public to expedite recovery of public money, there is a proposal for introduction of e-governance in DRTs. The key objectives envisaged for the e-DRT engagement are as follows: i) To implement information technology to automate the processes/procedures in DRTs/DRATs. ii) To empower DRT officials by providing technology enablers to help them deliver best possible services efficiently and to provide hassle free administrative services. iii) To facilitate applicants and defendants to get hassle free administrative services. iv) To have access to timely and accurate reports v) To efficiently manage case records. vi) To enable banks and financial institutions to easily track their case related information. vii) To support Recovery Officers with state of the art tools and technology to speedily enforce the orders. No final decision has been taken relating to the agency for implementation of the project. This was stated by the Minister of State for Finance, Shri Namo Narain Meena in a written reply to a question in the Lok Sabha today.

Beware loan defaulters! Banks to publish photos in newspapers

PTI: NEW DELHI, MAR 10 2013, 15:24 IST

Adopting a name and shame policy to make borrowers pay their dues, banks have decided to publish in newspapers photographs and details like names and addresses of wilful loan defaulters and market leader SBI has taken the lead in doing so.

Besides, banks would also publish photographs, names and addresses of guarantors of such defaulters in newspapers if the dues are not cleared within 15 days of the notice containing particulars of the original borrowers.

Some banks have also decided to prominently display the photographs and other details of the wilful loan defaulters at branches in the locality of such borrowers, a senior executive with a leading bank said.

Taking the lead, State Bank of India has begun publishing photographs and other particulars of such defaulters and has published one such public notice in newspapers for five defaulters in the national capital.

These persons had taken export credit loans of Rs three lakh each and their outstanding amounts were in the range of Rs 2.6 lakh to Rs 2.93 lakh.

Executives at many other banks said that they would also publish the photographs and other details of their wilful defaulters in local newspapers circulated in areas of

residence of such persons.

As per RBI's regulations, wilful defaulters are mostly those who are found to be engaged in deliberate non-payment of dues despite adequate cash flow and good networth.

Besides, banks can also classify defaulters as 'wilful' if the loans are utilised for purposes other than those previously stated, funds are siphoned off from the bank-financed activity, records are falsified, securities are disposed of without bank's knowledge and the borrower indulges in fraudulent transactions.

RBI has already put in place a system to disseminate credit information pertaining to wilful defaulters for cautioning banks and financial institutions, so that any further bank finance is not made available to such borrowers.

Now, banks have decided to make public the photographs and other details of wilful loan defaulters through newspaper notices, so that such borrowers clear their dues. Besides, banks also expect such notices to act as a deterrent for others against any loan defaults.

In one such notice, SBI said that names and photographs of the guarantors of those defaulters would be published in newspapers if these borrowers do not clear their dues within 15 days of the publication of notice.

The bank also warned other defaulters that "their photograph may be the next to be published after completion of necessary formalities, if the dues are not cleared immediately".

RBI has also asked Credit Information Bureau India Ltd (CIBIL) to publish a list of wilful defaulters involving defaults of Rs 25 lakh and above.

As per CIBIL database, there were a total of 123 suit- filed accounts of wilful defaulters, involving loan value of Rs 2,993.22 crore, as on December 31, 2012.

Out of these, Tamil Nadu accounted for the maximum 25 such accounts, followed by 23 in Maharashtra, 16 in Kerala, 14 in Uttar Pradesh and 11 in Gujarat.

In terms of loan value, UP was on the top (Rs 990 crore), followed by Madhya Pradesh, Maharashtra, Tamil Nadu and Haryana.

CIBIL has also listed 516 cases of suit-filed accounts of Rs one crore and above as on December 31, 2012 and these cases together accounted for total loan value of about Rs 5,563 crore.

BCI's Notification in regard to abstain from the work on Monday i.e. 11.03.2013

Australian court refuses Perdaman’s request to sue ICICI Bank

In January, Perdaman Chemicals said it filed a lawsuit against ICICI Bank seeking damages worth 3.2 billion Australian dollar, claiming that the Indian bank restrained Griffin Coal from supplying coal to its upcoming urea plant in Western Australia. Photo: Ramesh Pathania/Mint

Live Mint : PTI : FRi :8th Mar 2013

Court says ICICI Bank cannot be dragged into the legal dispute as it had had no obligations to Perdaman

The Federal Court of Australia in its ruling has saidICICI Bank Ltd that financed Lanco Group for acquisition of Griffin Coal cannot be dragged into the legal dispute that Perdaman Chemicals and Fertilisers has with the Indian infrastructure company over coal supply issue.

Federal Court Justice Neil McKerracher, on 6 March, refused Perdaman’s request to formally serve the bank with the lawsuit in Singapore.

“The Bank had no obligations to Perdaman nor was it negotiating with or bargaining with Perdaman. The bank was entitled to and, on one view, obliged to obtain the best possible security it could to protect the interests of the financiers,” Justice Mckerracher observed in the judgement.

In January, Australia-based Perdaman Chemicals said it filed a lawsuit against ICICI Bank Ltd seeking damages worth 3.2 billion Australian dollar (around Rs.18,010 crore today), claiming that the Indian bank restrained Griffin Coal from supplying coal to its upcoming urea plant in Western Australia.

Griffin Coal was acquired by Lanco for 730 million Australian dollars in March, 2011 and a syndicate of lenders led by ICICI Bank financed the acquisition.

Perdaman claimed that it spent nearly 195 million Australian dollars on the project and the termination of coal supply agreement prevented it from getting financing for the construction of the urea fertilizer plant at an estimated value of 3.39 billion Australian dollars.

“The bank was the financier for Lanco in its acquisition of Griffin. It was entitled to protect its own interests and to impose and to adhere to whatever security requirements it could achieve in its dealings with Lanco.”

An email sent to Perdaman seeking its reaction to the judgement yielded no reply till filing this report.

Perdaman last year had filed 3.5 billion Australian dollars separate lawsuit against Lanco in Australia, alleging non-compliance with fuel supply pact by Griffin Coal for its upcoming urea plant in Western Australia.

Terming Perdaman’s move to drag ICICI Bank into the dispute as “desperate attempt in frustration”, Lanco earlier has said.

ICICI has no contractual relationship with Perdaman.