Fearless Friday : Quotegems 4 :

Fearless Friday : Quotegems 4 :     

You never know how
Strong
you are until being Strong
is the only choice you have.

Burgeoning NPAs of banks: Whose baby?

kASHMIR tIMES :Tuesday, April 01, 2014

The CBI has reportedly booked six companies for Bank bad loans and it intends to probe conspiracy aspect in spiralling bad loans of banks. Indian banks led by the public sector have accumulated sticky loans of over Rs. 6.5 lakh crores till the end of 2013. Construction, infrastructure steel and textile companies are the top defaulters. CBI last year began verification of non-performing assets (NPAs) of banks, which revealed that several companies have soot outstandings running into several thousand crores. 
Union Finance ministry and the RBI expressed concern over spiralling of bad loans in banking sector. Finance Minister said that willful defaulters would be sternly dealt with. It revealed further that several banks did not file complaints against defaulting companies with the authorities despite pending loans for years together and a bulk of NPAS is from top 30 accounts learnt to have running into thousands of crores and banks were reluctant to declare bad accounts as fraud which adversely affected the tracking and recovery of proceeds of crime.

So far as common man is concerned, he does not prefer taking loan from bank normally unless he has no other option and if he applies for the same from the bank of very small amount he is asked to complete the formalities and produce gauranteer before the loan is granted to him. In case he fail to pay any installment of the loan he is harassed and humiliated by dragging him and the gauranter to face legal proceedings in the court of law. 

Several such cases are lying pending in the courts, one fail to understand why the big companies, who obtain loans running into several thousand crores of rupees to expand their business, dare to default in repaying the loans unless the bank authorities are not hand in glove with such dare devil defaulters who provide escape route by restructuring bad loans by the bank authorities very often or write NPAs as non recoverable.

—Krishan Singh,

Talab Tillo, Jammu.

Contempt of court: Shouting at court great contempt

Contempt Act sec.14 – Shouting at court – is a great contempt , no notice sec.14 is necessary when done in the presence of High court and Apex court = Ram Niranjan Roy …Appellant Versus State of Bihar and Ors. …Respondents = 2014 (March.Part) http://judis.nic.in/supremecourt/filename=41369ADVOCATEMMMOHAN ⋅ APRIL 2, 2014 ⋅ 

The  appellant

claimed in the application that he was the President of  Bihar  Police  Seva

Sangh, a service association of members of Bihar Police Service.  He  stated

in the application that the transfers and postings of the officers of  Bihar

Police Service were done arbitrarily  in  violation  of  guiding  principles

framed by the  Home  Department  of  Government  of  Bihar.  =

He shouted  and  told  the  court

that he was  intervener  and  that  the  High  Court  has  not  focused  its

attention on the wrong policies of transfers within the  police  department.

He raised his voice with impertinence and declared that the  High  Court  is

not taking up his case wherein he has challenged his  transfer  and  posting

made in the police department.  Learned Judges, then, asked him  whether  he

had been granted leave by the Director General  of  Police  to  present  his

case.  He again shouted at the court and stated  that  he  had  applied  for

leave but whether leave is granted to him or not is not the concern  of  the

court.

  “Section 14 of the  Contempt  of  Courts  Act  no  doubt  contemplates

      issuance of notice and an opportunity to the contemnors to answer  the

      charges in the notice to satisfy the principles  of  natural  justice.

      However, where an incident of the instant nature  takes  place  within

      the presence and sight of the learned  Judges,  the  same  amounts  to

      contempt in the face of the Court and is required to be dealt with  at

      the time of the incident itself. This is necessary for the dignity and

      majesty of the courts to be maintained. When  an  object,  such  as  a

      footwear, is thrown at the Presiding Officer in  a  court  proceeding,

      the object is not to merely scandalise or humiliate the Judge, but  to

      scandalise the institution itself and thereby lower its dignity in the

      eyes of the public.” =

In the ultimate analysis we are  of  the  view  that  the  High  Court

cannot be faulted for punishing the appellant for  contempt  of  court.   No

interference is necessary with the impugned order.

IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1240 OF 2004
Ram Niranjan Roy …Appellant

Versus

State of Bihar and Ors. …Respondents
J U D G M E N T
(SMT.) RANJANA PRAKASH DESAI, J.
1. A petition was filed in public interest in the Patna High Court being
C.W.J.C. No. 1311 of 2003 by Bihar Vyavsayik Sangharsh Morcha and another
raising several issues relating to law and order problem in the State of
Bihar. The State of Bihar, the Director General of Police of Bihar and
others were made party respondents. The issues raised inter alia were
whether the respondents were duty bound to provide safe and healthy
atmosphere for the proper development of the State or not and whether the
inaction of the respondents was violative of fundamental rights guaranteed
under Articles 19 and 20 of the Constitution of India. The petitioner
inter alia sought direction to the respondents to take measures to stop
exploitation of shopkeepers, dealers, artisans, labourers and industrial
units by officers and police personnel.

2. The High Court issued notices to the respondents pursuant to which
they filed affidavits. On 14/08/2003 the High Court directed the Director
General of Police to make a list of officers from the Station House
Officers upto the Additional Director General of Police, of those who have
remained in their station for more than four years. Relevant paragraphs
from the High Court’s order could be quoted:

“The court suggests the following measures as an ad interim exercise:
a) Let the Director General Police make out a list of officers from
the Station House Officer upto the Additional Director General of
Police, of those who have remained in their station for more than four
years. This dossier is to be supported with information from service
record as to which officer throughout their career has remained at
which station and for how long. Officers who have remained at one
station for over four years must see a posting out within six weeks
from today. These would be officers below the rank of Inspector
General of Police. Staff below the SHOs who have remained at a
particular station beyond three years will be identified by the
District heads of police concerned and their movement will be
undertaken by the Director General of Police.
It must be mentioned that the period of four years is set
because in the normal course of government service, transfers and
postings are made for officers if they have been at a particular
station for more than three years. This order obviously does not
preclude the Director General of Police from making any transfers
should an officer have been at a posting for a lesser period, which is
within normal administrative powers.”

3. In December, 2003, the appellant, who was holding the post of Deputy
Superintendent of Police, Crime Investigation Department (CID), Bihar,
filed an intervention application being I.A.No.5588 of 2003. The appellant
claimed in the application that he was the President of Bihar Police Seva
Sangh, a service association of members of Bihar Police Service. He stated
in the application that the transfers and postings of the officers of Bihar
Police Service were done arbitrarily in violation of guiding principles
framed by the Home Department of Government of Bihar. The appellant
referred to a Writ Application filed by him being C.W.J.C. No.12225 of 1999
against the State of Bihar for an order directing the respondents to
implement the said guiding principles. He stated that the said writ
application has been pending in the High Court for last four years during
which the government has tried to victimize him mala fide. He further
stated that his application should be heard along with the C.W.J.C. No.1311
of 2003. He, therefore, prayed that he may be impleaded in C.W.J.C.
No.1311 of 2003.

4. Admittedly, the appellant is posted at Patna for several years. It
is clear from several orders that the High Court has passed in this matter
that while dealing with the question of law and order situation in Bihar,
the High Court was looking into the State Government’s policy of postings
and transfer of police officers, obviously because that has a direct
bearing on efficiency and rectitude of the police officers. The High
Court even recorded the statement of the Advocate General that certain
transfers of police officers are being effected. The appellant was unhappy
and disturbed about the task undertaken by the High Court. This is evident
from the first paragraph of his intervention application where he has
referred to the order passed by the High Court directing the respondents to
submit a list of officers who have not been removed from their station for
more than four years. It is this that made him intervene in C.W.J.C.
No.1311 of 2003.

5. The appellant wanted his writ application pending in the Patna High
Court to be heard with C.W.J.C. No. 1311 of 2003. We have, therefore,
carefully gone through that petition. The appellant wants to create an
impression that he is fighting for the cause of police officers of Bihar,
but a careful reading of his application makes it clear that he is
espousing his own cause. He has stated that he is continuously posted for
seven years in Cabinet Vigilance Department. He has stated that his
posting in Criminal Investigation Department is wrong and he should be
posted as Sub Divisional Police Officer anywhere in Patna or in any other
proper office such as traffic or transport department in Patna, so that he
may do government duties and take over the responsibility as the President
of Bihar Police Seva Sangh. We shall advert to this Seva Sangh a little
later, but, suffice it to say at this stage that the appellant’s pending
writ application concentrates on his posting and he figures in the prayer
clause also.

6. From the impugned order it appears that on 27/01/2004, the appellant
appeared in-person before the High Court. He shouted and told the court
that he was intervener and that the High Court has not focused its
attention on the wrong policies of transfers within the police department.
He raised his voice with impertinence and declared that the High Court is
not taking up his case wherein he has challenged his transfer and posting
made in the police department. Learned Judges, then, asked him whether he
had been granted leave by the Director General of Police to present his
case. He again shouted at the court and stated that he had applied for
leave but whether leave is granted to him or not is not the concern of the
court. The High Court has observed that he could not show to the court
that leave had been granted to him by the Police Headquarters to argue his
case in-person and challenge transfer policy of the police department. The
High Court has further observed that the appellant baited the court. He
wanted his writ application to be considered out-of-turn on the ground that
it was concerning transfers and postings of police officers. The High
Court, therefore, called for the record, perused the appellant’s
application and found out that it mainly related to his own transfer. The
appellant, then, claimed to be an office bearer of Bihar Police Seva Sangh
and stated that the Police Manual has declared him a member of the
protected staff and he has immunity from transfers and he cannot be
touched. He produced a letter addressed by a Cabinet Minister to the Chief
Minister of Bihar questioning why he was transferred from one establishment
to another, though, within the city. The said letter is quoted in the
impugned order. It appears from the impugned order that the appellant did
not show the slightest remorse nor regret and instead continued to bait the
court and repeat that even the Minister had given him protection and had
granted stay of his transfer. In view of this contumacious behaviour, the
High Court directed that the appellant may be taken into custody by the
Court Officer and the Sergeant and sent to jail as punishment for a day
i.e. for twenty four hours. His intervention application came to be
rejected. Aggrieved by this order, the appellant has approached this
Court.

7. The appellant appeared in-person. Looking to the importance of the
matter, we requested Mr. Siddharth Luthra, learned Additional Solicitor
General, to assist us. As usual, Mr. Luthra has rendered remarkable
assistance to this Court. We heard the appellant at some length. He
submitted that he is not guilty of contempt of court. He submitted that he
has highest regard for the court and he never shouted in the court as
stated in the impugned order. He submitted that he is the President of
the Bihar Police Seva Sangh and is espousing the cause of police officers
in general. On a query made by this Court, whether the Bihar Police Seva
Sangh is a registered society or whether it has got any recognition, he
submitted that the application in that behalf is pending. The Bihar Police
Seva Sangh, however, has not received any recognition so far. He submitted
that the respondents have not refuted any of his contentions by filing any
affidavit in reply. He drew our attention to Section 14 of the Contempt of
Courts Act, 1971 and submitted that no opportunity, as contemplated
therein, was given to him to make his defence. He submitted that he had
filed an application for bail. However, no order was passed thereon. He
further submitted that the High Court has unnecessarily cast aspersions on
him. He urged that the impugned order may be set aside.

8. Mr. Luthra, learned Additional Solicitor General, on the other hand,
submitted that the appellant is guilty of contempt committed in the face of
the High Court and his case is covered by the judgment of this Court in
Leila David(6) v. State of Maharashtra and Others[1] where this Court
has observed that when a contemnor disrupts the court proceedings by using
offensive language, it is permissible to adopt summary proceedings to
punish him. Mr. Luthra further submitted that the appellant tried to get
his personal application tagged to the Public Interest Litigation petition
for his personal gain and he utilized a letter of a Cabinet Minister to
overawe the court. Besides, he produced incorrect copy of the impugned
order in this Court. He claimed that he had filed bail application when no
such application is found in the record. He has committed breach of
undertaking given in the affidavit filed in this Court. Mr. Luthra
submitted that no leniency should be shown to such a person and the appeal
may, therefore, be dismissed.

9. We have extensively referred to the contents of the impugned order of
the High Court with a purpose. It reflects the appellant’s rude behaviour.
The intemperate language used by the appellant while addressing learned
Judges of the High Court is most objectionable and contumacious. The
appellant is Deputy Superintendent of Police. He claims to be the
President of Bihar Police Seva Sangh. A responsible police officer is not
expected to behave in such undignified and unruly manner in the Court. He
shouted at the Judges. When they asked him whether the police headquarters
had granted him any permission to argue his case in-person and challenge
transfer policy of the police department, he rudely stated that that was
not the concern of the court. He was, however, unable to produce any
permission. Thereafter, he told the court that his application should be
heard along with Public Interest Litigation as it related to postings and
transfers of police officers. On scrutiny, it was found that it mainly
related to his transfer. Thus, he made a wrong statement before the Court.
He, then, stated that he is a protected staff member and has immunity from
transfer and he cannot be touched. He tried to overawe the court by
producing a Cabinet Minister’s letter addressed to the Chief Minister
recommending his case. He did not show any remorse. He did not tender any
apology, but, continued his rude behaviour of shouting at the court and
baiting the court. By this behaviour he lowered the dignity and authority
of the High Court. He challenged the majesty of the High Court by showing
utter disrespect to it. Undoubtedly he committed contempt of the High
Court in its presence and hearing. He is, therefore, guilty of having
committed contempt in the face of the High Court. His case is squarely
covered by Section 14 of the Contempt of Courts Act, 1971.

10. In Re: Vinay Chandra Mishra[2], on a question put to him by a Judge
of the Allahabad High Court, the contemnor, who was an advocate, started
shouting at the Judge and told him that the question could not have been
put to him and he would get the Judge transferred or see that impeachment
motion is brought against him in Parliament. He made more such derogatory
comments. Learned Judge addressed a letter to the Acting Chief Justice
narrating the incident. The Acting Chief Justice forwarded the letter to
the then Chief Justice of India. This Court, then, issued a notice to the
advocate taking a view that there was a prima facie case of the criminal
contempt of the court. This Court treated the said contempt as criminal
contempt committed in the face of the High Court and sentenced the
advocate. Commenting on the contemnor’s conduct, this Court observed as
under:
“To resent the questions asked by a Judge, to be disrespectful to him,
to question his authority to ask the questions, to shout at him, to
threaten him with transfer and impeachment, to use insulting language
and abuse him, to dictate the order that he should pass, to create
scenes in the court, to address him by losing temper are all acts
calculated to interfere with and obstruct the course of justice. Such
acts tend to overawe the court and to prevent it from performing its
duty to administer justice. Such conduct brings the authority of the
court and the administration of justice into disrespect and disrepute
and undermines and erodes the very foundation of the judiciary by
shaking the confidence of the people in the ability of the court to
deliver free and fair justice.”

The above observations of this Court have a bearing on the present
case.

11. In Ranveer Yadav v. State of Bihar[3] the appellant and the
other contemnors disrupted the court proceedings by aggressively exchanging
heated words and created unpleasant scenes in the Court. The decorum and
dignity of the court was so much threatened that the Judge was forced to
rise. This Court held that the offending acts of the appellant constitute
contempt in the face of the court. The relevant paragraph could be quoted.
“The offending acts of the appellant constitute contempt in the face
of court. When contempt takes place in the face of the court, peoples’
faith in the administration of justice receives a severe jolt and
precious judicial time is wasted. Therefore, the offending acts of the
appellant certainly come within the ambit of interference with the due
course of judicial proceeding and are a clear case of criminal
contempt in the face of the court.”

12. The appellant’s contention that no opportunity was given to him to
make his defence must be rejected. In Pritam Pal v. High Court of
Madhya Pradesh, Jabalpur, through Registrar[4], while dealing with the
nature and scope of power conferred upon this Court and the High Court,
being courts of record under Articles 129 and 215 of the Constitution of
India respectively, this Court observed that the said power is an inherent
power under which the Supreme Court and the High Court can deal with
contempt of itself. The jurisdiction vested is a special one not derived
from any other statute but derived only from Articles 129 and 215. This
Court further clarified that the constitutionally vested right cannot be
either abridged, abrogated or cut down by legislation including the
Contempt of Courts Act.

13. In Leila David(6) this Court has discussed what is contempt in
the face of the Court. In this case, the petitioners made contumacious
allegations in the writ petition and supporting affidavits. Notices were
issued to them as to why contempt proceedings should not
be issued against them. The hearing commenced. The writ
petitioners disrupted the proceedings by using very offensive,
intemperate and abusive language at a high pitch. One of the
petitioners stated that the Judges should be jailed by initiating
proceedings against them and threw footwear at the Judges. The petitioners
stood by what they had said and done in the Court. One of the learned
Judges felt that there was no need to issue notice to the petitioners and
held them guilty of criminal contempt of the court. The other learned
Judge observed that the mandate of Section 14 of the Contempt of Courts
Act, 1971 must be followed before sending the contemnors to jail. The
question was, therefore, whether the petitioners were entitled to any
opportunity of hearing. The matter was thereafter placed before a three
Judge Bench. The three Judge Bench resolved the difference of opinion and
observed as under:

“Section 14 of the Contempt of Courts Act no doubt contemplates
issuance of notice and an opportunity to the contemnors to answer the
charges in the notice to satisfy the principles of natural justice.
However, where an incident of the instant nature takes place within
the presence and sight of the learned Judges, the same amounts to
contempt in the face of the Court and is required to be dealt with at
the time of the incident itself. This is necessary for the dignity and
majesty of the courts to be maintained. When an object, such as a
footwear, is thrown at the Presiding Officer in a court proceeding,
the object is not to merely scandalise or humiliate the Judge, but to
scandalise the institution itself and thereby lower its dignity in the
eyes of the public.”

14. Thus, when a contempt is committed in the face of the High Court or
the Supreme Court to scandalize or humiliate the Judge, instant action may
be necessary. If the courts do not deal with such contempt with strong
hand, that may result in scandalizing the institution thereby lowering its
dignity in the eyes of the public. The courts exist for the people. The
courts cherish the faith reposed in them by people. To prevent erosion of
that faith, contempts committed in the face of the court need a strict
treatment. The appellant, as observed by the High Court was not
remorseful. He did not file any affidavit tendering apology nor did he
orally tell the High Court that he was remorseful and he wanted to tender
apology. Even in this Court he has not tendered apology. Therefore, since
the contempt was gross and it was committed in the face of the High Court,
learned Judges had to take immediate action to maintain honour and dignity
of the High Court. There was no question of giving the appellant any
opportunity to make his defence. This submission of the appellant must,
therefore, be rejected.

15. In this Court also the appellant’s behaviour is far from
satisfactory. He told us that he had filed an application for bail in the
High Court, but the High Court did not consider it. The bail application
attached at Annexure-A/6 to the petition is unsigned, supported by unsigned
affidavit bearing no name of the lawyer. We have gone through the entire
record of the High Court and we find that there is no bail application in
the record. Still worse is the tampering of the impugned order. The
appellant has not filed the true copy of the impugned order. The first
sentence of paragraph 4 of the copy of the impugned order filed in this
Court reads as under:

“The intervenor who presents himself in person otherwise a police
officer didn’t shout at the Court that he is an intervenor in this
case….”
However, in the original impugned order the said sentence does not
have the words ‘didn’t shout.’ It reads as under:
“the intervenor who presents himself in person otherwise a police
officer shouted at the Court that he is an intervenor in this
case…….”

Thus, the words ‘didn’t shout’ have replaced the word ‘shouted.’
When we asked for an explanation, the appellant stated that there is no
tampering, but it is merely a typing error. We refuse to accept this
explanation. In this case, by replacing the word ‘shouted’ by the words
‘didn’t shout’ the appellant has changed the entire meaning of the sentence
to suit his case that he did not shout in the court. Thus, he is guilty of
tampering with the High Court’s order and filing it in this Court. This
would, in our opinion, be criminal contempt as defined by Section 2(c) of
the Contempt of Court Act, 1971. There is abundance of judgments of this
Court on this issue. This Court has taken a strict view of such conduct.
We may usefully refer to Chandra Shashi v. Anil Kumar Verma[5] where in
a transfer petition the contemnor had filed a forged experience certificate
purportedly issued by the Principal of a college from Nagpur. The
Principal filed affidavit stating that the said certificate is forged.
This Court observed that an act which interferes or tends to interfere or
obstructs or tends to obstruct the administration of justice would be
criminal contempt as defined in Section 2(c) of the Contempt of Courts Act,
1971. This Court further observed that if recourse to falsehood is taken
with oblique motive, the same would definitely hinder, hamper or impede
even flow of justice and would prevent the courts from performing their
legal duties as they are supposed to do. The contemnor was, therefore,
suitably sentenced.

16. In Re: Bineet Kumar Singh[6] a forged/fabricated order of this
court was used for the purpose of conferring some benefits on a group of
persons. This Court took a strict view of the matter and observed as
under:
“The law of contempt of court is essentially meant for keeping the
administration of justice pure and undefiled. It is difficult to
rigidly define contempt. While on the one hand, the dignity of the
court has to be maintained at all costs, it must also be borne in mind
that the contempt jurisdiction is of a special nature and should be
sparingly used. The Supreme Court is the highest court of record and
it is charged with the duties and responsibilities of protecting the
dignity of the court. To discharge its obligation as the custodian of
the administration of justice in the country and as the highest court
imbued with supervisory and appellate jurisdiction over all the lower
courts and tribunals, it is inherently deemed to have been entrusted
with the power to see that the stream of justice in the country
remains pure, that its course is not hindered or obstructed in any
manner, that justice is delivered without fear or favour. To discharge
this obligation, the Supreme Court has to take cognizance of the
deviation from the path of justice. The sole object of the court
wielding its power to punish for contempt is always for the course of
administration of justice. Nothing is more incumbent upon the courts
of justice than to preserve their proceedings from being
misrepresented, nor is there anything more pernicious when the order
of the court is forged and produced to gain undue advantage. Criminal
contempt has been defined in Section 2(c) to mean interference with
the administration of justice in any manner. A false or misleading or
a wrong statement deliberately and wilfully made by a party to the
proceedings to obtain a favourable order would undoubtedly tantamount
to interference with the due course of judicial proceedings. When a
person is found to have utilised an order of a court which he or she
knows to be incorrect for conferring benefit on persons who are not
entitled to the same, the very utilisation of the fabricated order by
the person concerned would be sufficient to hold him/her guilty of
contempt, irrespective of the fact whether he or she himself or
herself is the author of fabrication.”

We respectfully concur with these observations.
17. We shall now turn to the affidavit filed by the appellant in this
Court. He has sworn an affidavit stating that the annexures of the
criminal appeal are the true copies of the originals and the facts stated
in the criminal appeal are true to his knowledge. As already noted by us,
the appellant has tampered with the original impugned order. He stated
that he had filed a bail application in the High Court. The copy of the
said bail application filed in this Court is unsigned and supported by
unsigned affidavit bearing no name of the lawyer. The appellant has not
made the Registrar of the Patna High Court party to the appeal. The
Registrar could have clarified whether any bail application was, in fact,
filed by the appellant. In any case, we have perused the record and we
find that there is no such bail application in the record. Thus, in this
Court the appellant has filed a false affidavit. This amounts to contempt
of this Court.

18. Another very disturbing feature of this case is the manner in which
the appellant flourished in the High Court a Cabinet Minister’s letter
addressed to the Chief Minister recommending his case. We do not want to
comment on the propriety of the Cabinet Minister in addressing such a
letter to the Chief Minister in this case, though this Court has in Prakash
Singh and ors. v. Union of India and ors[7] sought to insulate the
police from political interference. In any case, the appellant should not
have tried to overawe the High Court by producing the said letter. We
deprecate this conduct. We were also taken aback when we were informed
that the appellant is the President of the Bihar Police Seva Sangh. We
are, however, informed that membership of such association is permitted in
the State of Bihar even to the police officers. However, the fact remains
that the said association is not registered.

19. The appellant’s contention that since the respondents have not filed
affidavit, his case is unrebutted is without any merit. A contempt matter
is essentially between the contemnor and the court. On the basis of the
record and the attendant circumstances the court has to decide whether
there is any contempt or not. No doubt, the respondents could have filed
an affidavit, but merely because there is no affidavit, the contemnor
cannot escape his liability. The facts of the case are gross. The
contempt is in the face of the High Court. The fact that the respondents
have not filed affidavit in reply does not dilute the contempt committed
by the appellant.

20. In the ultimate analysis we are of the view that the High Court
cannot be faulted for punishing the appellant for contempt of court. No
interference is necessary with the impugned order. We are also concerned
with the contempt of this Court committed by the appellant. We direct the
appellant to pay a fine of Rs.25,000/-. The fine shall be deposited with
the Supreme Court Legal Services Committee within four weeks from today,
failing which the appellant shall suffer simple imprisonment for seven
days. The amount deposited by the appellant may be utilized for issues
concerning juvenile justice.

21. The appeal is disposed of in the afore-stated terms.
…….……………………………..J.
(Ranjana Prakash Desai)

……………………………………J.
(Madan B. Lokur)
New Delhi;
March 31, 2014.

———————–
[1] (2009) 10 SCC 337
[2] (1995) 2 SCC 584
[3] (2010) 11 SCC 493
[4] 1993 Supp (1) SCC 529
[5] (1995) 1 SCC 421
[6] (2001) 5 SCC 501
[7] (2006) 8 SCC 1

———————–
22

Banks' NPAs rise to 2.8L crore in 5 years

HT Correspondent, Hindustan Times  New Delhi, April 02, 2014

As overleveraged companies saddled with stalled projects struggle to repay loans, it is the banks who are probably keeping one eye on the outcome of the upcoming Lok Sabha polls.

A fractured mandate in the elections could turn matters worse for banks, global investment banks have warned.

Between two general elections of 2009 and 2014, gross NPAs (non-performing assets) — shorthand for loans that could turn bad — of Indian banks have soared from Rs. 69,000 crore to an estimated Rs. 2.8 lakh crore.

“In the current downturn, corporate asset quality has deteriorated due to a sustained deceleration in GDP, policy paralysis, high interest rates and higher corporate leverage,” according to a research note issued global brokerage firm UBS last month.

“The issues related to investment cycle (fuel availability, land acquisition etc.) are stickier this time. A weak coalition government at the Centre would be most negative sentiment-wise for corporate private banks as credit costs would likely remain elevated,” the note says.

According to analysts, while the sharp slowdown in growth has hurt most sectors, iron, steel and infrastructure have been hit most by policy logjam.

These two sectors, coupled with textiles, made up for nearly half of total stressed assets.

In another note to investors, Macquire Equities Research has said that while banks are looking to sell bad loans to asset reconstruction companies, the latter do not have an appetite to buy more than 5-10% of stressed assets.

Between October and February, close to Rs. 45,000 crore of bad assets — about 15-20% of overall NPAs of banks — came up for sale. The number could rise to Rs. 60,000 crore by March 2014, almost four-times of last year’s level.

The government and state-owned banks, however, shrugged off any risks of bad loans becoming an unmanageable problem.

“NPAs have risen because of certain things but there is no need to press the alarm button, we have asked banks to focus on recovery to address the issue and banks are more or less on track,” Rajiv Takru, financial services secretary, told HT.

“Recovery is happening and now things are looking up and once the economy picks up, the issue would be addressed to a large extent,” said VR Iyer, chairperson and managing director, Bank of India. Iyer added that RBI’s norms on NPAs have also had a positive impact.

“All banks have taken several steps to ensure that the issue is addressed, we are monitoring all accounts regularly and there is no cause for concern,” said M Narendra, chairman and MD, Indian Overseas Bank.

Prithvi Info Solution founder’s assets auctioned to recover $17 million penalty

MONEYLIFE DIGITAL TEAM | 03/04/2014 12:18 PM 

A Court in the US held Prithvi Information Solution and its associates guilty for $17 million fraud to Kyko Global Inc. On failure of payment, the Sheriff seized and auctioned personal assets of the company founder Madhavi Vuppalapati

Following directions from a US District Court to recover money, the Sheriff from KingCounty auctioned personal assets of Madhavi Vuppalapati, founder of Prithvi Information Solutions Ltd to recover $17 million.
 

Canada based Kyko Global Inc had filed a fraud case against the Indian company in the Washington Court. In its petition, Kyko Global had alleged that Prithvi and its affiliates created fictitious, counterfeit customers to get an advance payment of $17 million from them.
 

In its Judgment on 6 September 2013, the Court said, “Judgment should be entered against Prithvi Information Solutions Ltd, Prithvi Information Solutions International LLC, Prithvi Catalytic Inc, Prithvi Solutions Inc, Madhavi Vuppalapati, DCGS Inc, Inalytix Inc, Avani Investments Inc, Ananya Capital Inc, EPP Inc, Financial Oxygen Inc, Huawei Latin American Solutions Inc and L3C Inc in the amount of $1,75,68,854 plus prejudgment interest accruing at the rate agreed to between the parties at 2.45% per month in the total amount of $7,96,776, as confessed to by the Defendants.”
 

However, Prithvi and its associates including Vuppalapati failed to pay $17 million along with penalty charges. This lead to the Sheriff auctioning personal assets like Lexus car, jewellery and household good belonging to Vuppalapati on 20 March 2014.
 

In November 2011, Kyko said it entered into an agreement with Prithvi for certain factoring services. As per their agreement, Prithvi had to identify certain of its customer account receivable for IT services and authorize direct payment to be made to Kyko. Prithvi Information Solutions offered account receivables of few major customers to Kyko. However, none of the customers Prithvi offered had any business relationship with it.
 

When Kyko tried to acknowledge that these clients will make payments directly to Kyko, they got verifications, but in reality, it was the associates of Prithvi that had posed as clients and created and executed the verifications. When Kyko requested Madhvi Vuppalapati to be put in touch directly with the representatives of the five clients, she turned down the request saying that it will be detrimental to their relationships with these clients.
 

Over a next two years, Vuppalapati and her associates continuously deceived the unsuspecting Kyko, in the process and kept them in the dark, Kyko alleged. Finally, while attempting to collect outstanding dues, Kyko came to know, through its own internal investigation that Prithvi had created fictitious customers to deceive Kyko and extract more monies from it.
 

In order to get money back, Kyko filed a lawsuit on 16 June 2013 against Prithvi Information Solutions at the US District Court. On 8 August 2013, Kyko moved the court for issuance of judgment in amount against defendants in pursuant to confession of judgment and the motion was granted by the court.