Cabinet approves the Commercial Courts, Commercial Division and Commercial Division of High Courts (Amendment) Bill, 2018

The Union Cabinet has approved the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill, 2018 for introduction in the Parliament.

The Bill seeks to achieve the following objectives:

• The Bill brings down the specified value of a commercial dispute to 3 Lakhs from the present one Crore. Therefore, commercial disputes of a reasonable value can be decided by commercial courts. This would bring down the time taken (presently 1445 days) in resolution of commercial disputes of lesser value and thus further improve India's ranking in the Ease of Doing Business.

• The amendment provides for establishment of Commercial Courts at district Judge level for the territories over which respective High Courts have ordinary original civil jurisdiction i.e in the cities of Chennai, Delhi, Kolkata, Mumbai and State of Himachal Pradesh. The State Governments, in such territories may by notification specify such pecuniary value of commercial disputes to be adjudicated at the district level, which shall 'not be less than three lakhs rupees and not more than the pecuniary jurisdiction of the district court. In the jurisdiction of High Courts other than those exercising ordinary original jurisdiction a forum of Appeal in commercial dispute decided by commercial courts below the level of District judge is being provided, in the form of Commercial Appellate Courts to be at district judge level.

• The introduction of the Pre-Institution Mediation process in cases where no urgent, interim relief is contemplated will provide an opportunity to the parties to resolve the commercial disputes outside the ambit of the courts through the authorities constituted under the Legal Services Authorities Act, 1987 will also help in reinforcing investor's confidence in the resolution of commercial disputes.

• Insertion of new section of 21A which enables the Central Government to make rules and procedures for PIM.

• To give prospective effect to the amendment so as not to disturb the authority of the judicial forum presently adjudicating the commercial disputes as per the extant provisions of the Act.

With the rapid economic development there has been considerable increase in commercial activities and consequent steep rise in number of commercial disputes at domestic and international level. Increase of Foreign Direct Investment (FDI) and overseas commercial transactions have further contributed to a significant increase of commercial disputes.

With a view to address the issue faster resolution of matters relating to commercial disputes and to create a positive image particularly among the foreign investors about the independent and responsive Indian legal system, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 was enacted and commercial courts were established at District Levels in all jurisdictions, except in the territories over which the High Courts have original ordinary civil jurisdiction. These five High Courts i.e. the High Courts of Bombay, Delhi, Calcutta, Madras and of Himachal Pradesh, exercise ordinary original civil jurisdiction in regard to territories of cities of Mumbai, Delhi, Kolkata, Chennai and the territory of the State of Himachal Pradesh respectively. In such territories of these High Courts as per proviso to sub-section (1) of section 3 there are no commercial courts at district level and instead Commercial Divisions have been constituted in each of these High Courts.

The specified value of such commercial disputes to be adjudicated by the Commercial Courts or the Commercial Division of High Court, as the case may be is presently Rs. one Crore.

Ease of Doing Business is an index of World Bank which inter alia refers to the dispute resolution environment in a country which facilitates the investors in deciding for setting up of and operation of a business.

Fugitive Economic Offenders Bill to deal with the lokes of Vijay Mallya and Nirav Modi

The Union Cabinet has approved the Fugitive Economic Offenders Bill, 2017 on 1st March 2018

The Bill would help in  laying down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.

This would also help the banks and other financial institutions to achieve higher recovery from financial defaults committed by such fugitive economic offenders, improving the financial health of such institutions.

Economic offences are those that are defined under the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, the Customs Act, the Companies Act, Limited Liability Partnership Act, and the Insolvency and Bankruptcy Code.

Offences involving amounts of ₹100 crore or more fall under the purview of this law.

Who is a ‘fugitive economic offender’?

According to Section 4 of the law, a ‘fugitive economic offender’ is “any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, who:

(i) leaves or has left India so as to avoid criminal prosecution; or

(ii) refuses to return to India to face criminal prosecution.”

How is a person declared an offender?

A Director, appointed by the central government, will have to file an application to a Special Court to declare a person as a ‘fugitive economic offender’.

Under Clause (2) of Section 6, the application must contain:

“(a) reason/s for the belief that an individual is a fugitive economic offender;

(b) any information available as to the whereabouts of the fugitive economic offender;

(c) a list of properties or the value of such properties believed to be the proceeds of crime, including any such property outside India for which confiscation is sought;

(d) a list of properties owned by the person in India for which confiscation is sought;

(e) a list of persons who may have an interest in any of the properties listed under sub-clauses (c) and (d).”

The Director has the power to attach any property the accused holds.

What does the offender have to do?

The Court will issue a notice to the person named a ‘fugitive economic offender’. Within six weeks from the date of notice, the person will have to present themselves at “a specified place at a specified time”. If the offender fails to do so, they will be declared a ‘fugitive economic offender’ and their properties as listed in the Director’s application will be confiscated.

Once property is confiscated, can the offender file a civil claim?

No. Section 11 of the Act disqualifies those declared as offenders from either filing or defending a civil claim in court.

What happens to the properties?

The Special court will appoint an ‘administrator’ to oversee the confiscated property. This person will be responsible for disposing of the property as well, and the property will be used to satisfy creditors’ claims.

After two instances of businessmen  fleeing the country to avoid being arrested for economic fraud, Finance Minister Arun Jaitley had announced in last year’s Union Budget that the government would soon bring about a law that would allow the state to take possession of properties belonging to such offenders. 

Salient features of the Bill:

Application before the Special Court for a declaration that an individual is a fugitive economic offender;Attachment of the property of a fugitive economic offender;Issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender;Confiscation of the property of an individual declared as a fugitive economic offender resulting from the proceeds of crime;Confiscation of other  property belonging to such offender in India and abroad, including benami property;Disentitlement of the fugitive economic offender from defending any civil claim; andvii. An Administrator will be appointed to manage and dispose of the confiscated property under the Act.

If at any point of time in the course of the proceeding prior to the declaration, however, the alleged Fugitive Economic Offender returns to India and submits to the appropriate jurisdictional Court, proceedings under the proposed Act would cease by law. All necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal to the High Court have been provided for. Further, provision has been made for appointment of an Administrator to manage and dispose of the property in compliance with the provisions of law.

Implementation strategy and targets:

In order to address the lacunae in the present laws and lay down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts, the Bill is being proposed. The Bill makes provisions for a Court ('Special Court' under the Prevention of Money-laundering Act, 2002) to declare a person as a Fugitive Economic Offender. A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution. A scheduled offence refers to a list of economic offences contained in the Schedule to this Bill. Further, in order to ensure that Courts are not over-burdened with such cases, only those cases where the total value involved in such offences is 100 crore rupees or more, is within the purview of this Bill.

Sources:

1. The Hindu

2. http://pib.nic.in/newsite/PrintRelease.aspx?relid=176920

Scrapping the RTO setup, and Protest by RTO Agents - An interesting Saga in the Making

This Saga been waiting for years to happen, and now its started. 

 

Finally someone realised that its time to Scrap or amend the Motor Vehicles Act 1988. The Union Minister makes a statement, and the protectorates under the MV Act start running for cover. This Act has spawned innumerable Corrupt Officers and their Handmaids/Manservant - Agents, who together run a parallel RTO setup in the country, though not in unison, but on similar lines.

Remember the KamalHasssan starring Movie "Indian" in Tamil, or "Hindustani" in Hindi??

The story runs on two tracks. One is that of Chandra Bose alias Chandru (Kamal Haasan), a small-time broker outside the RTO (Regional Transport Office) who gets people to high positions by accepting bribes. He is supported in this work by Subbiah (Goundamani). Paneerselvam (Senthil) plays an officer in the RTO who has conflicts with Subbiah. Aishwarya (Manisha Koirala) and Chandru are in love with each other. Sapna (Urmila Matondkar) is the daughter of Gandhikrishna, an officer in RTO. Her father promises to get Chandru a job of being a brake inspector in the RTO, if he runs errands for them. He agrees to work for them, and soon he becomes a brake inspector.
The other track is of Senapathy alias Indian (Kamal Haasan), a 70-year-old man who kills top government officials (like Commissioners of Corporation etc.) in an extreme attempt to weed out corruption from Indian soil.

Thats about the EXTANT of corruption in the Regional Transport (Authority) Offices in the Indian Soil.

Now for the news....

 

After axing the Planning Commission of India, it seems that the Narendra Modi government will soon scrap the Regional Transport Offices (RTO) and replace them with an alternative system in the coming months. 

 

Union Minister of road transport and highways Nitin Gadkari while delivering the JS Karandikar memorial lecture in Pune said that the central government was in the process of bringing in a law to scrap the outdated Regional Transport Offices (RTO). He said, "There are some outdated laws and systems which need to be scrapped. Systems like RTOs will soon be abolished; there is no need for RTOs. We have prepared a law which will be introduced soon to replace RTOs." 

 

At RTOs, corruption has become a way of life Corruption has become an everyday phenomenon in RTOs and this has led to the word 'bribe' being replaced with ‘service charge,' and further encouraging the back-door policies. 

 

The future plan - alternative for RTOs Revealing more about the future plan of scrapping RTOs, Gadkari said that a new system will be employed with the help of the traffic models in the UK and other countries to nab the traffic violators. 

 

Not only the RTO offices even the RTO officials create a lot of problems for the public. In January a non -government organization (NGO) based in Thane had alleged that at the border check posts, the number of heavy carriage vehicles are underreported which in turn caused multi-crore losses to the state exchequer. 

 

Unless the middlemen (the agents) are eliminated and more people are appointed, corruption cannot be weeded out from these RTOs. Thus, it seems this plan to scrap these Regional Transport Offices will be in country's favour. 

 

Source: http://news.oneindia.in/feature/scrapping-rtos-another-step-narendra-modi-government-toward-1505198.html

The Association of RTO Agents, a body with 300 members who offer their services to Mumbaikars inside and outside the Mumbai RTO office in Tardeo, has decided to protest if such a move comes into being.

Ilyas, the head of the RTO Association, said, "We serve Mumbaikars charging a nominal sum. We make sure people get relevant documents on time. If the Central government is planning to scrap RTOs, where will we go and what will happen to our business and our families? We will definitely protest against this decision, if it gets implemented."

Agents in Mumbai countered Gadkari's argument of outdated computerisation, saying it is nothing but a strategy to make money for RTO officials. 

At the Tardeo RTO office, Ramesh Patel has been running pillar to post to renew his licence. "For the last two months, I have been trying to renew my driving licence. You can see this receipt given to me two months back. But till today, no RTO official is willing to give me the renewed licence or even not ready to give me a new date. I wasted my entire day today, but no one has an answer."

When asked if he had gone through any agent, he replied, "Why should I? These agents will take a good amount from me for just renewing my old driving licence. Why are these RTO officials here?"
Source: http://indiatoday.intoday.in/story/gadkari-regional-transport-offices-wrong-notions-mumbai/1/377865.html

Union Road Transport and Highways Minister Nitin Gadkari on said that the government will introduce the Motor Vehicles Amendment Bill in the next Parliament session.

“The Bill, being prepared in sync with practises in six advanced nations – USA, Canada, Singapore, Japan, Germany and the UK will be introduced in the next session of Parliament. This will overhaul the sector bringing to an end the corrupt practises in RTOs,” Gadkari said.

The Act has become obsolete in the present context and needs overhaul, he said, adding the new law is designed in a way that will provide permits online besides slapping fines on violators of traffic rules on the basis of recordings in camera.

“The new law will provide a corruption free and transparent system with a proper record of driving licenses. Data would be utilised in e-governance. International norms are there for vehicle design, pollution control on the basis of prevalent laws in six advanced nations – US, Canada, Singapore, Japan, Germany and UK, I have firm faith that the new law will end corrupt practises in RTOs through e-governance,” he said.

Source: http://freepressjournal.in/motor-vehicles-bill-in-next-parliament-session/

Competition law violations get personal | Business Standard

Competition law violations get personal

Directors and senior officers could be now fined for the anti-competitive conduct of their companies

Avirup Bose

The Competition Commission of India (CCI) has upped the ante on competition law compliance by Indian companies. Now a director or a senior officer incharge of the affairs of a company may be held personally liable for anti-competitive conduct of the company. The company may be penalised separately for such anti-competitive conduct.

The CCI in a recent order against Bengal Chemist and Druggist Association (BCDA) not only penalised the association for its anti-competitive conduct but additionally held 78 of its senior officers to be personally liable for taking/endorsing such anti-competitive conduct of the BCDA. The aggregate fine imposed on the BCDA and its officers was approximately Rs 18.38 crore (out of which the amount of fine imposed upon the BCDA was a mere Rs 13.24 lakh). The BCDA case marks the first instance when the infringement of competition law by a trade association triggered action against its senior officers.

Under the Competition Act, the term "company" includes a partnership firm or a trade association. Thus, the provisions of the Competition Act under which the BCDA officers were held personally liable are equally applicable to directors and senior officers of a company or the managing partner of a firm. Therefore, from now on directors and senior officers of a company are equally vulnerable to such liability.

At the core of an anti-competitive conduct by a company is a decision of a director and/or its corporate officers to pursue such an anti-competitive conduct. A company cannot remain in compliance with rules of competition law if its corporate officers either willingly or unknowingly adopt corporate practices that are anti-competitive in nature or willingly ignore their commitment towards competition law compliance programmes. A survey conducted by Deloitte in 2007 revealed that one of the top-most incentives for senior management to comply with competition rules are sanctions that operate at the individual, as opposed to corporate, level. Section 48 of the Competition Act provides such an incentive by rendering directors and other officers who are in charge of the affairs of the company to be personally liable, where their actions result in the company falling foul of the rules of Indian competition law.

In the BCDA case, the CCI found, among other things, that the trade association engaged in issuing anti-competitive circulars directing its member-retailers not to give any discount to consumers and to sell drugs only at their MRP, thereby indirectly determining the sale prices of drugs and controlling or limiting the supply of such drugs in the market. The CCI found such practices of the BCDA to be anti-competitive in nature and violative of the provisions of the Competition Act. The CCI also identified: (a) senior officers of the BCDA who were directly responsible for the BCDA to adopt such anti-competitive practices; and (b) members of the BCDA's executive committee who ratified such decisions. The senior officers and the executive committee members were penalised at the rate of 10 and seven per cent of their annual salary/receipts for the preceding three years, respectively.

The law does not expect the directors or the senior management of a company to be experts in competition law. However, they should be aware of the basic rules, which will allow them to manage and avoid the risk of a competition law infringement.

It is pertinent to note that since offences under the Competition Act are not criminal in nature, the CCI may hold directors personally liable for offences committed by their corporations based solely on circumstantial or indirect evidence. There is, however, a silver lining. The Competition Act provides that directors and senior officers may avoid liability through a "due diligence defence". This would require them to demonstrate that an anti-competitive act occurred despite there being an appropriate competition law compliance programme in place, which consisted of proper controls and systems, or without their knowledge. The due diligence defence relies more on the process that the directors or senior officers followed than on the result. Therefore, if the directors "inform" themselves before making a decision - for example, if they approve the merger of the company with a competitor after due discussions, asking the appropriate questions and seeking advice from experts - they may be able to use the due diligence defence to avoid personal liability, even if their decision produces results that contravene Indian competition law. The CCI would usually not second-guess the business judgement of a company's directors where they have followed the proper procedure in reaching their business decisions.

In the BCDA decision, the CCI did not have an opportunity to address the issue of personal liability of an independent director for the company's anti-competitive conduct, since the decision dealt with the anti-competitive conduct of a trade association that typically does not have any independent board members. In my opinion, executive directors are more likely to be held liable for anti-competitive acts of a company than independent directors because they usually have decision-making responsibilities and a supervisory role over the company's business on an ongoing basis. However, even an independent director may be held liable if s/he knowingly endorses an anti-competitive conduct of the company.

Source:

Avirup Bose: Competition law violations get personal | Business Standard:

'via Blog this'

Supreme Court flays the government for turning to judges whenever in problem

Source - http://www.india.com/loudspeaker/supreme-court-flays-the-government-for-turning-to-judges-whenever-in-problem-101283/

New Delhi, Jul 23: Criticising the government for substituting judges with subject experts without legal background in tribunals under its control, the Supreme Courtsaid that whenever it is confronted with contentious issues it knocks at the doors of the court for their resolution. “Judges may not be expert but whenever problem arises they (government) come to judges either by way of (setting up) Commission or (approach) Court to decide the issues” said the apex court constitution bench of Chief Justice R.M. Lodha, Justice Jagdish Singh Khehar, Justice J. Chelameswar, Justice A.K. Sikri and Justice Rohinton Fali Nariman.

The court was apparently referring to numerous instance when government has moved the top court for the resolution of contentious and delicate issues which have political and other implications. The court said this as it reserved its verdict on a batch of petitions challenging the validity of the National Tax Tribunal Act and Article 323-A of the constitution providing for administrative tribunals, and Article 323-B providing for tribunals for all other matters including tax, foreign exchange, import and export and customs.

The government wants to do away with the “artificial knowledge” of the judges which they gain from decades of their practice of law first at the bar and later on bench, and substitute them on the tribunals with non-judicial members having “specialised knowledge” bereft of any legal grooming, the court said.

The scathing observations came as senior counsel Arvind Dattar told the court that the Income Tax Appellate Tribunal and National Tax Tribunals while deciding the tax matters were also deciding the matters related to the Hindu succession law. The court asked Dattar to provide with some of the cases where tax tribunal has decided the tax matters involving the Hindu succession law.

Dattar who appeared for Madras Bar Association told the court that while Article 323-A of the constitution had sought to eliminate judicial review for the executive actions in service matters, Article 323-B “enabled the creation of parallel judiciary under the executive control.” He said that at any rate Article 323-A “should be struck down” and Article 323-B must be interpreted so that the word “Tribunal” only covers tribunals that are part of the judiciary like Rent Control Tribunals, Motor Vehicles Tribunals, Labour Tribunals etc.”

Assailing the Centre’s stand that tribunals were created because high courts were clogged with the huge pendency, Dattar said that “clogging” of the high courts could not be a ground for creating a judicial system out the constitutionally mandated judiciary with defined hierarchy.

Dattar wondered whether same logic could be extended to have an “alternative institutional mechanism” for parliament as its functioning or lack of it has been criticised variously. The Chief Justice Lodha in a mocking observation said that tribunals that were being constituted were not independent what to talk of being autonomous.

Chief Justice Lodha’s scathing observations came as Solicitor General Ranjit Kumar while defending the dispensation of justice by the tribunals referred to a British judgment supporting tribunals. Ranjit Kumar landed in difficulty as British judgment stressed on the “autonomy” of the tribunals and not dispensing with the “constitutional role of the High Courts – a position that is non-existent in Indian context.

Earlier in the course of the hearing the court told senior counsel K.V. Vishwanathan that deciding an appeal involved a complex knowledge of law which was beyond the comprehension of a chartered accountant.

“How a CA who is not qualified in law, can help in the determination of substantial question of law, and to spell out what is the substantial question of law was beyond their comprehension”, the court told Vishwanathan who had appeared for the Instituted of Company Secretaries of India.

Yes we can! (destroy a booming economy) - Straight from the Hip by J Mulraj

Yes we can! (destroy a booming economy) - Straight from the Hip by J Mulraj

Manmohan Singh's version of Obama's 'Yes We Can' speech: 'The one who is on my mind today is Mother India, who is thousands of years old' 

"And tonight, I think about all that she's seen throughout her life - the heartache and the hope; the struggle and the progress; the times we were told that we couldn't destroy her currency's value, which was equal to the $ in 1947, and the economists who opined we cannot make her diminish in stature. I say to them: Yes we can diminish it. 

"At a time when rational voices were warning us of the dangers to her economy from uncontrolled fiscal and current account deficits, we silenced them with leaky welfare schemes that allowed us to reach for the ballot, whilst destroying the country's balance sheet. I say to them: Yes we can destroy it. 

"When there was optimism and entrepreneurship across the land, we saw a nation succumb to fear with policy paralysis, new subsidies, and new regulations that stifled growth. I say to them: Yes we can stifle it. 

"When the corruption scandals and scams fell on our TV channels and threatened our crony capitalism world, she was there to witness a generation brainwashed to yield to corruption and lose its moral values. I say to them: Yes we can degrade values. 

As Finance Minister, Manmohan Singh led India out of the 1991 economic crisis. As Prime Minister, he has led India back into a bigger one. 

Last week the Parliament passed two laws, the Food Security Bill, which seeks to provide subsidised grain to 67% of the population, even though 23% are below the poverty line and deserving of the subsidy, at an estimated annual cost of Rs 1.25 lac crores; and the Land Acquisition Bill, which seeks to provide farmers who sell their land to developers either for manufacture or for housing, a fair compensation for it, judged to be 4 times the (undefined) market rate for rural and 2 times for urban land. The non-definition will, of course, lead to uncertainty and further corruption. 

There are other complications. The acquisition is subject to clearance by 80% of the owners in the case of a private acquirer and 70% in the case of a PPP project (public private partnership). It is also subject to a social impact audit, which, in turn, is to be approved by various layers. 

This amount of uncertainty will make land acquisition for manufacture and for housing an impossibly arduous and uncertain process. It is doubtful whether foreign investors, with global choices, would wish to undergo it. 

India's growth story was largely predicated upon the encashment of its demographic dividend. The young population, after getting jobs, would have spending power, and the economy would be led by a consumption driven boom for decades. 

This story requires two ingredients. One is the provision of jobs. The second is the provision of housing for the young population, which will largely be a migratory one from rural to urban India. In India, agriculture has a 14% share of national income but over half the population depends on it. This is unjust and has to change. It will change when they get jobs and move to urban areas, where they will need housing. 

The service sector has provided the jobs so far, but the potential to provide millions of jobs in future will necessarily come from the manufacturing sector. 

So will the uncertainties, and the additional costs, emanating from the recently passed Land Acquisition Bill encourage the manufacturing sector to provide the jobs, and the real estate sector to build the homes, and if so, at what cost? 

It was Martin Luther King who said "True compassion is more than flinging a coin to a beggar; it is not haphazard and superficial. It comes to see that an edifice that produces beggars needs restructuring" 

Even prior to the Land Acquisition bill, some large foreign companies had expressed their intention to quit India.Nokia, chagrined at the reneging of the promise by Tamil Nadu State to refund it a 4% VAT, as agreed to, is one . Shell and Vodafone are fighting disputes relating to untenable tax demands. 

It is little wonder that GDP growth for the quarter ended June has fallen to 4.4%, a 4 year low. The falling rupee will push up import cost of oil (an estimated 27%) and push up prices of petrol, diesel and power. This would lead to less consumption, hence lower consumption led GDP growth. The investment led growth will also slow down, thanks to a variety of factors including high interest rates and the higher cost, longer time, and uncertainties relating to land acquisition. 

The root of all this is appallingly poor governance. As Martin Luther King said, quoted above, the polity should see that the edifice that produces beggars needs restructuring. The polity is, however, busy making Luddite laws and messing up the India story. In some States there is little law and order; politically connected people get away with bulldozing homes of doctors, without authorisation. 

Even as they accuse and transfer a Government official of illegally demolishing a wall, which was held by a District Magistrate to be a false accusation. So a Government functionary is falsely accused of an illegal demolition, even as politically connected persons are not arrested for doing the same thing! The District Magistrate who dared to opine that the accusation was false, was transferred! Who would invest under these conditions? 

The NSEL (National Spot Exchange Limited) imbroglio is getting murkier, and the Government is not doing what it ought to be doing. 

One can compare the Sahara episode with NSEL. In the case of the two Sahara companies, there was a regulatory vacuum as the collective investment schemes floated by them fell in the regulatory chasm between RBI and Company Law Board. Neither of them thought of a joint consultation and intervention, a criminal neglect of duty. 

Similarly, in the case of NSEL, the exchange was allowed to operate but without regulatory oversight. This makes the Government entirely culpable and responsible for the losses; it cannot evade its responsibility. 

Now in the case of Sahara, the Government delegated the task to SEBI which approached the Supreme Court, got orders passed against the two Sahara companies, and has sequestered the personal properties of the promoters of the group. 

Why can this not be followed in the case of NSEL? 

What is the reason for such a lackadaisical and ineffectual response? 

When it wants to, the Government has plenty of powers to use against a defaulting group. If it wants to. Ergo, its reluctance to act stems from the 'if' and not from the 'when'. 

It is only in times of crisis that the Government is forced to take decisions that are sensible but politically deemed to be tough. The word 'deemed' is advisedly used. It is a perception that the decisions are politically tough, more than a reality. 

One such is the discussion, now being held, to reduce Government stakes in public sector banks to below 51%. Among others, this column has been long suggesting that this is inevitable and necessary. But it is only when the Government is in a financial crisis that it thinks of such things. 

Several commentators have mooted the idea of tapping into India's huge gold reserves, by offering private holders (including temples) a scheme by which they would earn a modest income on gold surrendered to the Government plus the option to get it back in future. It has taken years, and a CAD crisis, for the Government to think of mooting it. 

Last week the sensex gained 100 points, mainly after the Prime Minister promised there would be no capital controls and the rupee bounced. For a Government that brings in retrospective changes in law, the confidence of investors is quite touching. The BSE-Sensex ended the week at 18,619. The NSE-Nifty was unchanged over the week, at 5,471. 

Will the Government now have an amnesty scheme for foreign bank account holders? If so, will it result in a substantial inflow of foreign funds lying abroad? That would cause a rally in stock markets and in the Indian currency. 

Otherwise, both would continue sinking, chasing the credibility of a Government that has driven a wedge in the India story.

Naval Base at Karwar - The Untold Agony in the Achievements...

India is finally going in for a major expansion of its newest naval base at Karwar in coastal Karnataka, which provides it "strategic depth" on the western seaboard and will house aircraft carriers and nuclear submarines in the future.

This comes after a long delay since the ambitious `Project Seabird' to build the futuristic Karwar naval base was first approved by the government way back in 1985 at an initial cost of Rs 350 crore. Budgetary constraints derailed the project for a decade before a truncated Phase-I was approved in 1995, with the work finally commencing in 1999 with a Rs 2,500 crore fund allocation.

"Phase-I is now fully complete. We have 10 warships based there. Now, the detailed project report for Phase-II is in the final stages. After approval by the Cabinet Committee on Security, construction will begin next year,'' Navy chief Admiral Nirmal Verma told TOI. Navy will be able to berth 25 to 30 big warships at Karwar after Phase-II gets over by 2017, he added. The base will also house a wide variety of smaller ships, including 10 of the 80 fast-interceptor craft of Sagar Prahari Bal, the specialised force being raised for coastal security after the 26/11 terror attacks on Mumbai. 
Source - http://timesofindia.indiatimes.com/india/After-long-delay-India-moves-to-expand-strategic-Karwar-naval-base/articleshow/5804347.cms

INS Kadamba

INS Seabird

Project Seabird was a program to establish a new Naval Base, the INS Kadamba. This base would be India's first base exclusively for naval ships and the largest. Prior to its existence, naval ships shared space with commercial vessels at the two major ports in Mumbai and Visakhampatnam as well as smaller enclaves in Kochi, Goa and other small ports. A new Naval Base on the western coast was sanctioned in 1985 primarily on strategic consideration for completion by 1995 to provide additional infrastructure for the growing Naval Fleet. Karwar in Karnataka was chosen as the location of this base. The base would is under the jurisdiction of the Western Naval Command.

The Naval base was inaugurated by Defence Minister, Mr Pranab Mukherjee on 05 May 2005. The then Prime Minister Late Shri Rajiv Gandhi laid the foundation stone on 24 Oct 1986. The project was originally conceived by Admiral OS Dawson (Retd), PVSM, AVSM, ADC, who was Chief of Naval Staff from 28 Feb 82 to 30 Nov 84.

The West Coast was chosen for the location of the new base since the eastern base at Visakhapatnam, which could berth 50 ships, was considered adequate for India’s security needs in the east. Mumbai, on the west coast, was too congested due the substantial number of merchant vessels that docked there regularly, often forcing naval ships to wait a day before they could dock. Shallow waters along the channel in Mumbai prevent the berthing of aircraft carriers, which would have to lie in anchorage. Expansion of the Mumbai base was impossible and nearby buildings such as the Bombay Stock Exchange presented a security risk. Furthermore, Mumbai was a mere 580 nautical miles (900 kilometers) from Karachi whereas the Karwar base would be around 900 nautical miles (1,450 kilometers) from Karachi, thus being further away from potential attacks such as via missiles. The topography of the Karwar base was also considered valuable by the Navy. Features include sufficient and even water depth permitting easy berthing and navigation, hilly forested terrain to camouflage ground installations and the low occurrence of siltation.

The project was beset with abnormal delays. Despite revision of completion schedule from 1995 to 2005, the execution of marine works commenced after 14 years in 1999 raising doubts about the completion of the project even as per the revised schedule.

The cost of the project estimated at Rs 350 crore (Rs 3.5 billion) in 1985 increased to Rs 959 crore in 1990 on finalisation of detailed project report and further escalated to Rs 1294 crore in 1995, though the scope of the project was considerably reduced. The Ministry accepted consultancy services for supervision, contract management and quality assurance at higher rates than that quoted by foreign consultant in July 1990, resulting in extra expenditure of Rs 7 crore. Incomplete and inadequate studies by Central Water Power Research Station entrusted with site selection studies prolonged the studies for more than eight years. Tardy progress in implementation of approved rehabilitation package for the affected families despite budgetary allocations for this project led to its revision time and again and ultimately its financial impact increased by Rs 78.20 crore. Investment of Rs 2.64 crore on creation of assets, established to match the proposed commencement of marine works in June 1998 remained unproductive due to non-acquisition of land and conclusion of marine works contract.

The Ministry sanctioned in July 1986, acquisition of 6933 acres of State Government revenue and forest land and 5421 acres of private land at a cost of Rs 22 crore. But subsequent developments like (a) minimising human displacement (b) restriction on construction within 200 metres from high tide line, (c) planning of Konkan Railway line through the station and (d) reduced scope of the project necessitated reassessment of land to be acquired. Out of 8175 acres land decided to be finally acquired, 324 acres had not been acquired as of January 2000.

The INS Kadamba was commission on May 31, 2005. As of then, Project Seabird was being executed on 4480 hectares (11200 acres) of land, which was a mix of forest, revenue and private land. More than 4000 families living in 13 villages have been relocated to seven Rehabilitation Centers. Out of the acquired 3500 hectares of forest land, only 400 hectares have been used for construction. As per the existing policy, 800 hectares of compensatory afforestation has been done. In addition, about 900 hectares of afforestation has been carried out within the Naval area after taking over. Some sources have estimated the cost the total project cost at US$800 million.

Due to budget limitations, the Navy halved the original Phase I of Project Seabird. Phase II which will last from 2005 to 2010 will double most of the existing facilities. In addition, a naval air station will also be constructed where large ship-based helicopters will be stationed. The Navy ultimately plans to berth 50 vessels at Karwar.

Currently, the Navy plans to station the operating fleet of the Western Naval Command at Karwar while sending ships for repair and maintenance to Mumbai.

One of the unique feature of the base is the ship-lift and ship-transfer system for dry docking of the ship at the Naval Ship Repair Yard. The ship-lift is capable of lifting upto 10,000 tonnes and measures 175m x 28m. A ship-lift is a large elevator platform that can be lowered into water and lift a ship vertically to the yard-level so that the ship can be moved onto a dry repair berth on land. The ship-lift will be able to lift all other Indian Navy vessels except aircraft carriers and supply vessels. Currently there are 2 jetties available for ship-berthing. Ultimately, 11 piers will be available which will be able to accommodate 42 ships. Ships will be placed by end 2005 to enable the Western Naval Command with operational flexibilities.

Source

Land Acquisition/Rehabilitation of Displaced Persons

The land required for execution of Project Seabird was approx. 4480 hectares, which was a mix of forest, revenue and private land. Over 4000 families living in 13 villages were required to be rehabilitated. The rehabilitation of the project affected families commenced in 1995 and this process went through various stages of negotiations, agitations, resistance, discussions and meetings with the involvement of local, state and national level political level leadership, including the High Court of Karnataka and National Human Rights Commission. Finally, at a meeting between the then Raksha Mantri and the CM of Karnataka in 1999, a comprehensive rehabilitation package was settled at a cost of Rs 126 crores as opposed to the original estimate of only Rs 9 crores. The actual work at site was to have been completed within 10 years (1995-2005), but could only commence in 2000 after the project affected families were rehabilitated in seven Rehabilitation Centers. The Project is being executed in a holistic manner with the involvement of all agencies. 

Source

Non-payment of Compensation – Movable Assets of Govt Office Attached

The court personnel attached the movable assets found in the office of the special land acquisition officer of the Seabird Naval Base here, located in the office of the district deputy commissioner, on Monday March 8. The court had ordered for the attachment of the movable assets of the office, as per an execution petition filed by the persons aggrieved at the non-payment of compensation for their lands acquired for the naval base.
Land belonging to the late Vishnu Siddappa Naik, the late Datta Siddappa Naik, and their brother, Mohan Siddappa Naik, located in Chendia Aligadda village, had been acquired by the land acquisition officer in the year 1989.  The land owners, dissatisfied with the price offered for their lands, had approached the court for enhancement of compensation, which was granted by the civil court here. Thereafter, the government had filed a special leave petition in the High Court to approach the Supreme Court against the court order, which was declined. The appeal filed by the estate officer of the department of defence in the court against the court order, is yet to be admitted by the Supreme Court.
The court bailiffs took away chairs, tables, fans, Xerox machine, and cupboards found in the office. Employees of the office, who initially resisted the move, had to move out of the office as they could not function in the office that was being emptied. Advocate for the displaced persons, P S Bhat, said that the court took this step, as the land acquisition officer failed to pay compensation as per the court order, even after several requests were made to him on this issue.
Source - Daijiworld.com



Compensation, a mirage for Seabird land losers in Karwar - Deccan Herald
It is 24 years since the government acquired 2,500 acres of private land from people in Karwar and Ankola taluks to build ‘Seabird,’ the biggest naval base in Asia.
However, compensation has become a mirage for the people who lost their home and hearth for the naval base. The land acquisition process for the project costing Rs 25,000 crore began in 1986. But the compensation distribution has run into a controversy. As a result nearly 25,000 people of 8,000 families have become homeless.

These people had sacrificed their land to strengthen the defence system of the country. However, they are yet to be compensated. The Government had paid just Rs 150 per gunta. Those who lost the land went to the court saying that the sum was too meagre.

The Additional Civil court (Senior Division) directed the government to pay Rs 11,500 per gunta. According to the court order, Geethabai Dayanand Naik, who had given up her land, was given a compensation amount of Rs 4.90 lakh.  However, the Defence department appealed to the High Court against the lower court order stating that it was not possible for the government to give such a huge amount. The High Court upheld the order of the civil court. The Department has now filed a special leave petition in the Supreme Court. It will take a long time for the hearing to come up in the Supreme Court.

The majority of the families who have lost land either belong to the fisher community or are farmers. As the seashores are a part of the naval base project, the fishermen are worried about their future. The farmers rehabilitated in a barren land are not able to continue with their agriculture activities. 
Source - http://www.deccanherald.com/content/61202/compensation-mirage-seabird-land-losers.html
More - http://onespot.wsj.com/india-news/2010/03/30/a/603926757-compensation-a-mirage-for-seabird/


Despair of the displaced

The displaced families complain that the land in the rehabilitation centres is not fit for cultivation and that the government has not been able to provide them an alternative livelihood.

PROJECT SEABIRD has, by and large, overcome its initial setbacks, but many of the families that lost their land and/or livelihood as a result of the building of the naval base are yet to find their feet.

According to revenue records, 4,111 families, including 3,315 engaged in farming on less than one acre of own land and 856 of fisherfolk, living in 12 villages have been affected by the project. However, Prabhakar Rane, a former Karnataka Minister who is honorary president of the Seabird Naval Base and Konkan Railway Evacuees Forum, disputes the figure. He says there are more than 10,000 project-displaced families, comprising around 40,000 people.

The 11-year delay between the final land acquisition notification in 1989 and the actual shifting of people from the project site added to the problems associated with rehabilitation and resettlement (R&R). During this period of uncertainty, families expanded and land prices climbed. The displaced families were unhappy with the R&R package that the Karnataka government offered initially. In 1989, many of them approached the Karnataka High Court, which forbade the evacuation of people until "proper rehabilitation measures" were undertaken.

In August 1998, the Defence Ministry and the State government signed a Memorandum of Understanding (MoU) on a Rs.126-crore rehabilitation package, and the court allowed the project to proceed. Under the package, the head of every displaced family received Rs.50,000 and a house site in one of the newly created rehabilitation centres (RCs), while two adult sons and one unmarried daughter above the age of 35 got Rs.70,000. (The site was in addition to the compensation plus 30 per cent solatium and 12 per cent interest received for the extent of land lost.) Seven RCs were created - at Chittakula, Amadalli and Harwada for fishermen and at Todur, Hattikeri, Belekeri and Mudageri for agriculturists.

The displaced families want the R&R package to be extended to all sons and a maintenance allowance for the 12 years that they remained without their lands and jobs. The families are unhappy with the RCs, most of which do not have proper roads and a regular water supply system. Most important, the families want the State government to provide an alternative livelihood, which even government officials agree they have not been able to do. The few government-sponsored employment generation schemes (like carpentry, poultry and mushroom farming) have not found favour with the displaced people. They hope the government or the Navy will provide them with jobs as security guards, drivers or secretaries.

Said Nagubeechu Gowda, whose family lost land in NK Bail, Berede and Bavekeri villages and has now been rehabilitated at the Belekeri RC: "Earlier we cultivated paddy and even cash crops like coconut, groundnut and cashew, but here the land is not fertile, we cannot cultivate anything. There is no water either for drinking or for irrigation. Many of the wells have dried up." Added Sukri Gowda, a farmhand who has also been rehabilitated at the Belekeri RC: "There is hardly any agricultural activity close to the RC. We cannot even collect firewood because the Navy has taken over most of the forest areas."

Source - Frontline

Seabird officer issued notice

The additional civil court (senior grade) here has issued a showcause notice to the land acquisition officer of Seabird Naval Base project, asking him why he should not be arrested for not complying with the court order.

A case was filed about 10 years ago by one Janaki Teka Naik of Amadalli village, asking for more compensation for her land acquired by the naval base. But after her death when the court case was still in progress, her son Devidas Naik continued with the case. On February 7, 2008, the court ordered the land acquisition officer to deposit 25% of the amount of the additional compensation to be paid to Devidas.

As per the direction of the court, the officer presented a cheque of Rs 29,57,928 in the court on October 18, 2008. The cheque was sent to State Bank of India's Bangalore branch for realization. But due to the negligence of the bank staff, the cheque was not realized even after nine months, according to a written statement issued by Pradeep Naik, the advocate representing Devidas in the case. Repeated requests of Devidas and his family made to the land acquisition officer, bank officials and defence officials did not yield any results. Considering this as a serious offence, the court issued the showcause notice to the land acquisition officer.

Source - Times of India, from http://findarticles.com/p/articles/mi_8012/is_20090716/ai_n39597262/

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