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| Sunday, January 28, 2001, Chandigarh, India   
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HFCL net profit skyrockets 382 pc
Golden handshake hurts bankers too
Forex reserves at new high Himachal plans to become leading wine producer |
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| Competition
law can wait The government is proactive in enacting the competition law. It has put its viewpoint on the web to trigger public debate. The Law Minister is holding meetings with chambers of industry. Such a law is perceived as regulation through which the government intends to pull strings of the industry. In the wonderland of investment
‘Dr Doom’ loses fortune Bum-patting
is no harassment
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HFCL net profit skyrockets 382 pc NEW DELHI, Jan 27— Himachal Futuristic Communications (HFCL) announced a 382 per cent jump in its third-quarter net profit on Saturday, beating market expectations. The telecom goods and services firm, which also has interests in software and Internet, reported that its net profit rose to Rs 1.30 billion ($28.07 million) during the three months ended December 31, from Rs 270.73 million in the year-ago period. Income from operations rose to Rs 3.95 billion from Rs 1.74 billion. Analysts polled by Reuters had forecast, on average, a net profit of Rs 905 million. For the nine months ended December, net profit rose to Rs 2.87 billion from Rs 548.93 million in the year-ago period. HFCL's shares ended Thursday 0.7 percent higher at Rs1,268.95, while the 30-share Bombay exchange index ended 0.09 percent higher. The market was shut on Friday for Republic Day, a national holiday. Sundaram Fastners Sundaram Fastners (SFL) profit for the third quarter ended December 31, 2000, fell to Rs 7.86 crore from Rs 11.16 crore in the corresponding period of the previous year. The company’s total sales slightly increased to Rs 107.98 crore against Rs 105.96 crore during the corresponding period of the previous year. Though SFL’s domestic sales during the third quarter slightly increased to Rs 91.04 crore against Rs 87.98 crore, its exports slightly during the third quarter fell to Rs 16.94 crore against Rs 17.98 crore. Sundaram Fastners’ net profit for the past nine months also dipped to Rs 27.04 crore against Rs 34.48 crore recorded in the same period of the corresponding year. Mascot Systems Mascot Systems total revenues for the third quarter for the year crossed Rs 1 billion and the profit rose to Rs 153 million compared with net loss of Rs 14 million for the period last year. The total revenues increased to Rs 1.02 billion while revenues from operations increased seven times to Rs 985 million compared with Rs 123 million during the same period last year. UTI Global Bank The Boards of UTI Bank and Global Trust Bank (GTB) today approved the merger of these private sector banks and recommended a swap ratio of nine shares of the former to four shares of GTB for establishing the new entity, UTI Global Bank Ltd. ‘‘The amalgamation will be achieved by merging UTI Bank into GTB, notwithstanding UTI being the principal shareholder of the merger bank’’, UTI Chairman P.S. Subramanyam told newspersons here. An extraordinary general meeting of the banks would be convened on February 24, 2001, he said, adding that the merged entity was expected to become the largest private sector bank in the country with a combined balance sheet size of nearly Rs 20,000 crore. The RBI approval was expected to come by the end of February, Subramanyam said BPCL net down 19.14 pc High interest and sale costs have brought down the net profit of Bharat Petroleum Corporation Ltd (BPCL) by 19.14 per cent at Rs 113.6 crore for the quarter ended
December 2000 as compared to Rs 141 crore in the corresponding period last fiscal. Reuters, PTI, UNI
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Golden handshake hurts bankers too NEW DELHI, Jan 27— Time is running out for these banks as the government has moved a Bill that would bring down the ceiling of government equity in banks to 33 per cent from the existing 51 per cent. This would mean a more independent board and pressure to perform. The Finance Ministry has estimated that at least 12 of the 27 nationalised banks have excess staff to the tune of 10 to 15 per cent. The apex organisation of banks, the Indian Banks Association says the VRS would enable banks to infuse fresh blood and professionalism in the country’s banking sector. Bank employees over the age of 40 and with at least 15-years service are eligible for the golden handshake. The package includes two months salary for every completed year of service and applicable pension. The final package, which works out to between Rs 12 lakh and to Rs 15 lakh for a senior officer, in savings instrument would yield close to a serving banker’s take-home pay. The package appeared to be a win-win situation for both the employers and employees. Thousands of employees stepped forward and banks made arrangements to cut the flab. The VRS benefited older banks like Punjab National Bank, Bank of India and Indian Overseas Bank, which had a higher age profile of employees, the most. PNB identified around 10,000 of the 65,000 workforce as surplus while Indian Overseas Bank targeted around 1500
employees. The State Bank golden handshake too had many takers. The rosy picture however, started getting murkier when the banks realised that the outgo of personnel was not only of those unwanted but included even highly skilled workers. According to an SBI union leader, the rush of talent from the bank was so high that the bank issued a circular asking the staff to reconsider their decision. He said the bank was already short of around 10,000 personnel and the VRS had only compounded the woes. The price of the VRS is also proving to be heavy for the banks. For instance, Punjab National Bank has reported a dip of 11.34 per cent in its net profit due to the Rs 321 crore prorata requirement for its ongoing voluntary retirement. The VRS also has a human side to it. Several employees who opted for the scheme are now repenting and want to join back service. A large number of such staff had recently approached the Bank of India to allow them to rejoin. Unemployment for these staffers looms large even though they would be drawing what they get now from their savings. However, not
everybody is unhappy with the VRS. Several junior officers and clerks are happy at the prospects of promotion that the VRS would yield. Someone’s loss is afterall somebody’s gain. |
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Forex reserves at new high MUMBAI, Jan 27— India's foreign exchange reserves rose to a record high in dollar terms by mid-month, the central bank reported, reflecting a huge inflow of foreign money into buy Indian stocks. By the close of trading last week, foreign investors had brought over nine times as much money into India as they had a year ago, according to analysts. The Reserve Bank of India (RBI) said foreign exchange reserves totaled $40.469 billion on January 19, up $116 million from a week earlier. But in rupee terms reserves fell, reflecting the rupee's appreciation against the dollar. India's foreign exchange reserves totaled Rs 1,878.79 billion , down Rs 2.44 billion from a week earlier. The rupee, at its highest, gained 0.7 percent in January to 46.34 per dollar, up nearly 1.2 percent from the record low of 46.92 rupees struck in October. But it subsequently weakened on month-end import demand. The rupee fell on Thursday to close at 46.48/49 per dollar, snapping a 13-day rally. "There was some month-end demand from importers and there was buying by some traders who had gone short on the dollar expecting further weakness in the U.S. unit," said the foreign brokerage analyst. Added an analyst at a foreign brokerage: "We have seen the rupee appreciate against the dollar in January on continued foreign fund buying and on a large remittance from a foreign bank for a specific commitment." The foreign investors have bought a net $704.3 million of Indian securities, including $648.5 million of just stocks, so far in January, according to data compiled by
SEBI. |
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Himachal plans to become leading wine producer SOLAN, Jan 27— Horticulture Minister Narinder Bragta, while chatting with mediapersons here yesterday, said that considerable follow-up action had been taken in establishing two wineries in the state, the MoU for which was signed was signed between the Government of Himachal Pradesh, and two private sector firms in April last. The firms — Champagne Indage Bombay, and Groupe Taillan, a leading wine manufacturer of France along with the public sector Horticulture Produce Marketing Corporation (HPMC) and the state government had now floated a new company which had been incorporate as Him Indage Ltd with its head office at Shimla. The new company’s wineries will be set at Pragatipur, in Shimla district and at Nagwai in Mandi district. The private partners, who would buy back the new joint venture’s products, would be holding 30 per cent of the equity each while the HPMC and the state government would each take 10 per cent. The balance 20 per cent is being offered to fruit growers of the state. The proposed wineries will manufacture apple and plum wines (the minister preferred to call these as health drinks), initially. Grape wines will be introduced as and when sufficient wine grade grapes are available within the state. The state Horticulture Department imported four varieties of grape root stocks and planted 6,500 grape wines in Kinnaur and another 6000 in Shimla, Solan and Bilaspur districts, last year. These had proved to be highly promising and are expected to start bearing fruit next year. Mr Bragta said HPMC had recently sold 300 metric tonnes of apple concentrate to Nestle India who would be using it as a constituent of “Apple Cerelac” a nutrition supplement for children. Negotiations with Hindustan Levers were in an advanced stage. The Horticulture Minister said that Himachal Pradesh was today confident of creating a globally competent horticulture based industrial infrastructure. The net effect of all this would be that the state would be relieved of the burden of providing support prices and procuring culled fruit every now and then. Already a healthy downward trend in procurement of apples by the government had started. |
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Competition
law can wait The government is proactive in
enacting the competition law. It has put its viewpoint on the web to
trigger public debate. The Law Minister is holding meetings with
chambers of industry. Such a law is perceived as regulation through
which the government intends to pull strings of the industry. The
government clarifies that all this is being done in the interest of
the consumer. The Law Minister explains that there is the UNCTAD model law which is being applied world over. There are 30 liberalised countries which have enforced this law. According to government view our version is softer. The proposed competition law has four distinct features. It intends to take care of cartelisation, sharing of territories, restricting production and collusive bid rigging. Secondly the bill deals with abuse of dominance although size per-se is not considered bad. Thirdly the bill relates to combination control through mergers. The government has, however, withdrawn the provision of pre-merger enquiry. With the enactment of the competition law the present MRTP will be scrapped. The competition commission of India (CCI) will take care of issues falling under the purview of the law. The industry views the CCI as the super regulator which is against the spirit of liberalised economy. There is a feeling that this law is being forced by the USA on all the developing countries. There are 80-odd acts on competition that have been legislated in different countries. The competition law is essentially a US substitute for the natural competitive forces that operate under free trade. When a natural economic force like free trade is substituted by artificial restraint imposed through such laws the outcome is both uncertain and perverse. The MRTPC has been in place for quite a long time. No effort was taken to control the monopolies although it has sharp teeth. At times Customs duties had been changed in such a manner as to give benefit to one company. Only recently the Customs duty on kerosene was made zero for one company. Take the case of stock market which raises or lowers the status of a company in no time. This is certainly against the interest of the consumer. Case of stock market earthquake of 1992 is an eye opener. Were not banks and FIs involved in it? Does this raise the spirit of competition? It is thus fairly clear that super regulation like the competition law is likely to be misused to the detriment of economic growth. We can’t expect that crop of rulers who will be widely different from the standards nation has seen in the recent past and present. This law can wait for some time as the industry is passing through transitory phase. |
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In the wonderland of investment Q: What is the implication of death of a person in business during a financial year? His business is continuing through employees etc. What are the tax implications? What about the income arising from investments etc. made during his lifetime or rents? — Sandeep Garg, Ajmer A: When an individual dies, all his income ceases to be received in his hands. It is his estate that becomes an assessee. Any income earned by the individual from his investment will become income of the estate and the same rule is applicable to his business. Q: Can the deductions u/s 88 be claimed on the PF deducted on arrears of salary for the year to which it pertains or can it be claimed for the year in which it is deducted? — Taxpayer A: The rebate u/s 88 is applicable for the year during which the contribution is made. It is true that the arrears of salary and the associated PF deductions are pertaining to years gone by. However, since the deductions are actually effected during the year when the arrears are paid, the rebate is available only for the year during which the arrears are paid. Unfortunately, even if the contribution goes beyond Rs 60,000, the rebate can be claimed up to this ceiling of Rs 60,000. Q:
I had booked a flat in May 1989. The flat was completed in 1992. The cost was Rs 1,51,500. I have sold this flat in May 2000 for Rs 6,95,000. Simultaneously, I have bought a resale flat for Rs 8,10,000. I have applied for a loan of Rs 6 lakh and will get the loan in September 2000. Besides the loan amount, balance amount for the flat which is Rs 1.1 lakh will be paid out of value of my previous flat. What is my tax liability due to above transactions? — Kapil A: The cost inflation index for 89-90 was 172 and for 00-01 is 406. Therefore, the indexed cost is Rs 3,57,610. The capital gain is 3,37,390. You have applied Rs 2,10,000 for purchase of a new flat. Therefore you have to pay tax on Rs 1,27,390. Wait a minute. Perhaps I am mistaken. Firstly, what you had paid for in 89-90 was for a right to occupy the house and not a house. You have merely stated that it was completed in 1992. The cost inflation index for 91-92 or 92-93 would apply depending upon whether you have taken the possession during January to March or April to December 1991 respectively. I wish you had given me the exact data. Q: A promoter was developing a property in which one agreement was for purchase of proportionate land share and second as development agreement for construction of flat. Accordingly I had entered into separate land and development agreements some 3 or 4 years ago. Now the building is complete. The final payment is due. Other people are staying in the building. Now I am trying to sell the flat. What is my tax liability? — Kedar Singh, Kolkata A: You have sold your land and acquire a housing property. If you are eligible for the exemption u/s 54F and moreover, if you have taken possession of the flat within 3 years of sale of land then you are entitled to claim exemption on long-term capital gains. The fact that one instalment is balance is immaterial. However, if you sell the property without taking possession of the house, you will have to pay tax on long-term capital gains arising out of sale of the land. If the land was sold over 3 years ago (you should have been clear on this important criterion) and if you sell the house without taking its possession, you will have earned a long-term capital gain. Now, suppose the building is ready and immediately after taking possession you sell the flat. This will be short-term capital gain. Here, you will not be selling the right of possession but the residential flat itself. The new asset has to be held again for 3 more years to get the status of long-term capital asset! |
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‘Dr Doom’ loses fortune NEW YORK: An economics professor, who predicted American capitalism’s downfall 25 years ago, has today lost both his honour and fortune but still hopes to see his word come true one day. Ravi Batra, Professor at the Southern Methodist University, is now not only without honour but without the fortune he earned from his bestseller, The Great Depression of 1990, according to The Wall Street Journal. The book, in which he predicted American capitalism’s downfall, made him a millionaire. However, he believed his own theories and instead of putting his money in stocks which he had thought would collapse, he made had investments which, he says, ‘‘put a big crimp on my living standard.’’ After he made his doomsday predictions which put his book, The Crash of the Millenium: Surviving the Coming Inflationary Depression, on the best seller list, the US economy, instead of collapsing prospered as never before. He says his colleagues don’t talk to him now, his old publishers won’t touch him, and while other economics professors are getting big raises, he has had to plead for small increases. Bum-patting
is no harassment ROME: Italy’s Supreme Court has decided that a little unexpected pat on the bottom at work does not amount to sexual harassment — as long as it’s only occasional. The country’s highest court of appeal has
overturned a man’s conviction for patting a female colleague’s behind saying there was no evidence that he had behaved ‘‘lasciviously.’’ Instead, the court ruled that any pat that is ‘‘isloated and impulsive’’ should be okay. The woman had alleged that the man had also threatened her, saying he would block her career if she denounced him. The man was last year found guilty of sexual harassment, sentenced to 18 months in prison and fined. But the conviction was later quashed. The same appeals court sparked widespread outrage in 1999 when it upheld a verdict declarign that a woman could not have been raped because she was wearing skin-tight jeans. The court stated that tight jeans could not even be partly removed without the help of the person wearing them and, therefore, the woman must have consented to sex.
—Agencies |
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by Praful R. Desai Presumption of posting Q: Can presumption of due service be raised if document sought to be served is sent by properly addressing pre-paying and posting by registered post to addressee? Ans: In Surender Bala v M/s. Sandeep Foam Industries P Ltd (2000 (2) R.C. J. 358) the Delhi H.C. held thus: Presumption U/s 114 (f) of the Evidence Act is on the same footing as a presumption U/s, 27 of the General Clauses Act. Presumption U/s 114 (f) arises on proof of the fact of posting a letter in the ordinary post, whereas presumption U/s 27 is with regard to the letter sent through registered post. There is no evidence of the notice having been sent through courier also, therefore the question of raising any presumption U/s 114 (f) of the Evidence Act also does not arise. It is to be observed in this case that when appellant desired to prove the duplicate copy of the certificate of the post office dated 23.3.94 certifying that the letter sent vide postal receipt No 4564 dated 13.12.93 was not received back and was duly delivered, the method and manner of proof was objected to by the defendants — respondents. The said objection was not decided by the Trial Court immediately. The objection with regard to the proof of such vital documents could not and ought not to have been kept pending. Had the objection been decided by the Trial Court at an early stage of the proceedings, the plaintiff — appellant might have taken recourse of remedial measures for proving the said document in accordance with law.
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by Pushpa Girimaji Pursuit of justice dies with the doctor IT
was perhaps in 1992 that I met Mr Balbir Singh Makol at the National Consumer Disputes Redressal Commission. He was there in connection with the medical negligence case that he had filed following the death of his son in August 1990. Two years had passed since his son’s death, but the man was yet to come to terms with his child’s death or the circumstances leading to it. He strongly believed that his child would be alive if only the doctors had resorted to mid-thigh amputation in time instead of bone-grafting, to treat osteo sarcoma. And he wanted justice. He was so passionately involved in fighting the case that he gave the impression of a man to whom nothing else mattered except pursuing this case to its logical conclusion. He wanted all those whom he believed were responsible for his son’s death to pay for their negligence. But Mr Makol’s long struggle for justice has been in vain. The parallel consumer justice system is supposed to deliver justice quickly, but his case, like many others before the apex consumer court, dragged on. And now after eight years, his complaint has been dismissed, not because of his failure to prove his case but because during this time the doctor against whom the main allegation of negligence had been made, has died. In its order delivered on December 15, 2000, the commission said it was unfortunate that no relief could be accorded to the complainant on account of the death of the senior surgeon who treated Manpreet Singh Makol. We have no way of ascertaining what were the considerations before the deceased when he took the decision to operate in the manner he did. According to the complaint filed in 1992, Manpreet was diagnosed at the very initial stage, to have osteosarcoma of the upper end tibia by the doctors at the PGI, Chandigarh. However, on the advice of a doctor at the General Hospital in Chandigarh, the father consulted Dr J.S. Makhani, a senior orthopaedic consultant at Sir Ganga Ram Hospital in New Delhi, who first resorted to bone grafting in July 1989 and then in October, mid-thigh amputation. Eight months later, Manpreet succumbed to cancer. Devastated, Mr Makol shot off representations to just about everyone he could think of from the Prime Minister to the Delhi Government and the Indian Medical Association. Eventually, he sought the intervention of the consumer court. His main allegation was that a simple, timely leg amputation would have saved Manpreet’s life. Instead, the unwanted bone grafting and delayed amputation had led to his death. Dr Makhani denied the allegation and said the earlier surgical procedure was for diagnosing the nature of the tumour and for the purpose of biopsy which necessitated a minor bone graft to pack the cavity which had come to light only after opening up of the patient’s knee. The report of PGI, Chandigarh, that the patient was suffering from osteo sarcoma of the upper end of the tibia could not be treated as confirmation because it was based on fine needle aspiration cytology. The case was taken up for hearing on various dates, but before it could be completed the court was informed in March last year that Dr Makhani had died. Consequent to that, the commission dismissed the case on the ground that death extinguished the doctor’s liability in tort and also the complainant’s right to sue. The commission said it could not proceed against the other respondents too in view of this. The junior doctor named in the complaint was not responsible for any decision on the line of treatment. Nor could the hospital be held liable because there was no allegation of negligence in its service. Mr Makol’s is a classic case of justice delayed being justice denied. If the case had not dragged on for so many years, it would have been decided one way or the other. As things stand, Mr Makol’s son might or might not have been a victim of medical negligence, but Mr Makol is certainly a victim of poor implementation of a law meant to provide succour to harassed consumers. |
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