Sunday, June 27, 1999
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B U S I N E S S | Sunday, June 27, 1999 |
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Corporate India chips in
to help Kargil victims 31 farmhouses penalised
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MTNL, Software Tech to
launch ‘IT corridor’ Hudco bypasses govt, legal opinion LPG use in vehicles illegal, says
govt Market thriving on wear & tear ST hike grinds mixi units to a
halt Central Bank net falls 29 per cent |
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Corporate
India chips in to help Kargil victims NEW DELHI, June 26 — After the world cup extravaganza, Corporate India has now rallied around the brave soldiers who are fighting in the Kargil sector to flush out Pakistan backed infiltrators. Employers and employees are liberally coming forward with donations for relief work for the victims and their families of the Kargil skirmishes. Daewoo Motors India Limited chose to “pay tributes to those who sacrificed their lives for the sake of the country” by donating Rs 20 lakh and five Cielo cars to the Army relief fund. “Our contribution of Rs 20 lakh and five Cielo cars is only a very small yet humble way of fulfilling our role as a responsible corporate citizen of this country, said Mr S.G. Awasthi, Managing Director of the company. In addition to this Daewoo will also contribute a 31 seater bus which will be part of the CII contribution. Infosys Technologies has announced a contribution of Rs 50 lakh at its annual general meeting held recently and the money will come from its employees. Castrol India had donated Rs 25 lakh to the Army relief fund to be utilised by for the welfare of the families of armed personnel who have died in Kargil. The Times Group, which has set up an fund for Kargil heroes, has made and initial contribution of Rs 5 lakh and its 6,000 employees will donate a day’s salary to the fund. Well-known NRI industrialist, Mr L.N. Mittal, has donated Rs 11 lakh to the Shaheed Parivar Rakshanidi, a fund to protect families of Indian armymen martyred in Kargil. Several other NRI groups in London have also announced funds to finance the education and upbringing of bereaved children of soldiers. The state owned public sector units have also not lagged behind and several PSUs have come forward to donate funds for the fighting soldiers. Gas Authority of India Limited has contributed Rs 15 crore to National Defence Fund in the wake of the Kargil crisis. Mr C.R. Prasad, Chairman and Managing Director, GAIL, handed over the cheque to Prime Minister, Mr Atal Behari Vajpayee, in the presence of Mr V.K. Ramamurthy, Union Minister of Petroleum and Natural Gas. In addition, all the employees of GAIL are contributing one day’s salary to the National Defence Fund. Videsh Sanchar Nigam Limited has also announced a scheme of contributions to the National Defence Fund. As per the scheme, for contributions made to the fund, VSNL will offer free internet accounts. For a contribution of Rs 5,000 a 25-hour VSNL internet account will be provided free while for a contribution of Rs 10,000 a 50-hour VSNL internet account will be provided free of cost. The Board of Directors of VSNL has separately approved a contribution of Rs one crore to the National Defence Fund. The government has also
decided to earmark 500 LPG dealerships for the direct
allotment to widows and dependants of defence personnel
killed in action. |
31 farmhouses penalised for power misuse NEW DELHI, June 26 (UNI) — In the Delhi Government’s drive against power theft, misuse charges have been levied against 31 big farmhouses, according to the task force set up for this purpose. The farmhouses, located in South and West Delhi, were paying only 50 paise per unit, that is agricultural rates, while not doing any farming. Misuse charges at the rate of Rs 5 per unit were being levied now, the task force informed Chief Secretary Omesh Saigal during a meeting yesterday. The Chief Secretary was also informed that the Delhi Vidyut Board’s (DVB) revenue collection for this month is likely to cross Rs 300 crore. A total of 265 cases of power theft at a connected load of 3.5 MW was detected last week. A total of 52 cases had been booked and 20 FIRs were to be filed. Meanwhile, Power Minister Narendra Nath today appealed to the agitating technical staff of the DVB to suspend their agitation as five of their six demands,including increased conveyance allowance and issuance of transfer policy, had been met. The technical staff had
proceeded on work to rule a few days ago to press their
demands. |
MTNL, Software Tech to launch ‘IT corridor’ MUMBAI, June 26 (PTI) — MTNL and Software Technology Parks of India (STPI) have joined hands to launch the Mumbai Information Technology (IT) corridor, to provide optical fibre connectivity to software developers operating at three software parks in the city. The three parks are the Santacruz Electronic Export Processing zone, the Millennium Business Park at Mhape and the International Infotech Park at Vashi. MTNL will provide lease lines for national and international connectivity for these software developing centres, MTNL officials said at a meeting here last night. This venture is a part
of the Maharashtra Government’s larger plan for a
“knowledge corridor” between Mumbai and Pune,
Maharashtra Secretary of Industries Yashwant Bhave said. |
Hudco
bypasses govt, legal opinion NEW DELHI, June 26 — Bypassing the Union Government’s directions and legal opinion sought by it on the appointment of an arbitrator, the Housing and Urban Development Corporation (Hudco) has gone ahead and appointed an arbitrator before proceeding to cancel the sub-lease on default of the third instalment due to it from Leela Hotels Limited (LHL) due on June 30. The land in the prestigious South Delhi area of Andrews Ganj, which was allotted to LHL, belongs to the Government of India and Hudco could not decide on its own to appoint any arbitrator against the directions of the Union government. The arbitration application moved by LHL on Tuesday seeking the appointment of an arbitrator went futile when Hudco conceded that it had already appointed an arbitrator. LHL did not press the petition for arbitrator that day. Cash-strapped Leela Hotels had decided to withdraw from the Andrews Ganj hotel project and has asked for refund of Rs 163.29 crore paid in two instalments to Hudco for two acres there. Demanding the refund, the company has alleged that Hudco has not met the conditions of the deal, delaying the project and making it financially vulnerable. However, Hudco and the Urban Development Ministry has rejected the allegations. Insisting that the third instalment must be paid by the company, a senior official of the ministry has noted on the files that the timely payment of premium is the essence of the contract irrespective of whether the allottee has been able to start the construction or not due to any reason. According to the agreement, the allotment stands cancelled if the company fails to pay the third instalment of around Rs 76 crore by the due date, which is June 30. As per the conditions of the allotment, in the event of LHL’s inability to pay the third instalment on March 31, 1999 and with interest on June 30, 1999, Hudco is bound to forfeit 50 per cent of the instalments paid and proceed to cancel the allotment on June 30, 1999. Interestingly, Hudco obtained legal opinion from a former Chief Justice of India, Mr Justice Y.V. Chandrachud, on June 17 for placing before its Board on June 21, even as the Ministry of Urban Development rejected the proposal for appointment of an arbitrator on May 5. But Hudco, without taking final approval of the Union Government, bypassed the Ministry’s observations that LHL’s demand for appointment of arbitrator was illegal and not justified, went ahead. Justice Chandrachud had specified that on non-payment of dues by LHL on June 30, the agreement to sub-lease be cancelled and LHL be dispossessed of the property. In his 15-page legal opinion, it is specifically stated that the plea of LHL regarding approvals of building plans and permission to mortgage are not tenable in law since they did not pay the property tax dues, the building plans could not be approved. The interesting aspect here is that as per conditions of allotment, unless the building plans are approved, the question of mortgage does not arise at all since loan could not be allowed to be raised towards payment of instalment of the land. The financial institutions have confirmed that they had rejected the proposal of loans to Leela Hotels Ltd since the project was unviable, being under litigation with MS Shoes East Ltd. However, interestingly, since LHL was unable to pay the property tax dues of Rs 5.63 crore and was unable to get the building plans approved, as stated by Justice Chandrachud, LHL could not have blamed Hudco for any delay leading to any cost over-runs of the project. Further, Justice
Chandrachud has noted that “taking an overall and
pragmatic view of this seemingly complicated matter,
Hudco should act with a sense of urgency, terminate the
sub-lease of Leela Hotels if they do not pay the third
instalment within time, and consider the re-allotment of
the property to MS Shoes East Ltd. That will see the end
of what threatens (and promises!) to be a long drawn-out
litigation started by MS Shoes”. |
LPG use in vehicles illegal, says govt TIRUCHIRAPALLI, June 26 (UNI) — The Union Petroleum Ministry will clear the waiting list for liquefied petroleum gas (LPG) connections till 1997, by July to August next, once the proposed LPG refinery being set up by the Reliance group is completed. Talking to newsmen here, the Petroleum Minister said the Ministry had so far provided connections to 68 lakh consumers, clearing the waiting list till 1993. LPG connections were now available on demand in hill stations to prevent felling of trees for fuel. Besides, there was no waiting list for the new connections in Assam, Jammu and Kashmir, Himachal Pradesh and parts of Gujarat. He said that use of LPG in automobiles is illegal, adding that his Ministry had asked the Surface Transport Ministry to bring an amendment to the Automobile Act to prevent the use of LPG for vehicles. Referring to the Liquefied Natural Gas (LNG) project at Ennore, near Chennai, he said his Ministry was “anxiously’’ awaiting the implementation of the project and it was satisfied with the reply of the Tamil Nadu Industrial Development Corporation (TIDCO) with regard to the finalisation of the contract by it. Mr Ramamurthy said the Ministry had made necessary arrangements for importing LNG for the proposed terminal at Ennore. The work was on to lay pipelines to transport petroleum products between Karur and Tiruchirapalli, Bangalore-Chennai, Vijayawada-Secunderabad-Tirupati-Chitoor-Chennai-Nagapattinam and Jhansi-Kanpur, he said. The Ministry will shortly start work on the laying of a new central pipeline from Kanyakumari in Tamil Nadu and it will be linked with the existing HPJ pipeline. Prime Minister, Mr A.B. Vajpayee, will dedicate a new refinery at Assam, to the nation next month. Referring to the ongoing
agitation against the Union Government’s reported
move to privatise the Salem Steel Plant, he said there
were no plans to privatise any PSUs. |
Market thriving on wear & tear NEW DELHI, June 26 (PTI) — Rags mean business too — at least in one of Asia’s biggest rags bazar in the capital where heaps of coloured cloth strips and vibrant mounds of scrap feed many a hosiery and garment industry. The market, tucked away in West Delhi’s Mongolpuri area, has mounds of cotton, rayon, crepe, all in various sizes, coming from virtually all export houses of the country. Operated by only women shopkeepers, and involving over 5000 workers, it provides raw material for a host of manufacturers — from push cart dealers in hosiery, T-shirts, pyjamas and children’s wear to durrie and mattress makers. “Waste cloth strips and cut pieces from almost all export houses of Delhi, Bombay, Surat, Ahmedabad and Calcutta are collected by our workers and sorted on the basis of the colour, fabric type, length, quality and design”, says Kishore Kumar Naveria, President of the Katran Market Association. “These rags may look waste but they are very productive components for making mattress, durries, cardboard and small hosiery goods.” “We have clients from as far as Rajasthan, Uttar Pradesh and Gujarat coming to buy these pieces, which are available at very cheap prices,”says Naveria. “Though small pieces are sold for a mere 25 paise per kilo, large pieces of the size of bedcovers fetch Rs 100 a kilo, but there is not a single rag that goes unutilised,” says Shugna Paliwal, a shop owner. More than 200 fabrics are available in this market and as most of them are of export quality, it attracts a lot of small time manufacturers. “Most of our clients come from Panipat and Sitapur where durrie making units are located and they are the main source of business for us, says Ramesh Kumar Khichi, Chairman of the Association. Says Satyaprakash, who operates a durrie making unit in Panipat, “the Katran Market provides us with the cheapest source of raw material and is very suitable for our production as multi-coloured durries are in great demand.” “We buy around 100 kg of rags at one go, these are then pressed under heating machines with other raw material to make coloured durries which are exported to Bangladesh, Nepal and Myanmar,” says Satyaprakash. “Two kg of rag is enough to make a medium sized mattress and it does not cost much, these pieces are mixed with some cotton to stitch a comfortable mattress,” says a mattress maker. Besides garment manufacturers, the market is also frequented by factory owners who need cloth for dusting and cleaning machines. “Powder coating machines require large quantities of cloth for frequent cleaning, as only fine cotton is required for the purpose, we procure five-ten kgs of cloth every month from this market, says Manish Goel, who owns a powder coating unit. “The price of dusters is exhorbitant and does not suit our budget while cotton pieces are easily available at Rs 20 a kilo and are more economical, says Goel. But the main attraction of the market is that it is operated only by women shopkeepers with their husbands helping only in procuring the pieces from export units. The clients have increased over the years, but these women shopkeepers say the business has not grown as much. Only business worth few lakhs is conducted every month. Moreover the market,
located in the congested bylanes of West Delhi is prone
to fire. “Only last month some 40 shops were gutted
in a fire,” says Naveria, adding “we could do
much more if relocated in a better place by the
government.” |
ST hike
grinds mixi units to a halt WITH many mixi units closing shop, Ambala has fallen behind Mumbai and Delhi to rank a poor third in this trade. Entrepreneurs blame indifferent government policies for this. It was in 1965 when Rajendra Nath manufactured the first mixi in the country. The seventies was a boom time despite lack of sound technical knowhow the idea caught on and soon more than 500 units sprouted, affecting the market of reputed brands because of good quality as well as competitive prices. “Local mixis are available at almost half the price because of less overhead expenses,” says Prem Gulati, a leading manufacturer who began his business in 1980. He says that there is stagnation in the mixi industry. More than 50 per cent manufacturing units in the town have to close their shutters. “An increase in sales tax from 6 to 12 per cent in the State is the main reason for this stagnation. Tax evasion has also increased with this hike. We are compelled to continue with this business though the earnings have reduced due to severe competition among local small manufacturers,” says entrepreneurs involved in this business. According to them, they have to pay 12 per cent extra on purchase of components from the market. “We are not in a position to compete in the export market with Panasonic, Braun and Star brands which are now imported into the domestic market,” says Rajendra nath, the founder of mixi industry in Ambala who produces more than 10,000 mixis every month and who exports to the USE and West Asia. With the arrival of
multinational companies, the manufacturers in the town
have started concentrating on quality. “The market
share of the Ambala mixi industry has drastically
declined during the past few years and none of the units
is doing more than 50 per cent of their capacity, “
says Umesh Garg, former President of the Ambala
Electrical Manufacturers Association. Gulati feels the
need for tool room facilities at Ambala for which they
have to rush to Ludhiana. “We are dependent on big
towns for the requirement of raw material. Finished goods
are sent to the metros for sale and the extra burden of
freight reduces the profit margin,” says Gulati.
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Q: I am doing tuitions and earning about Rs 2500-3500 p.m. which I am depositing in my savings bank account. Besides this, I have interest income on fixed deposits which is about Rs 30,000 per year. (a) Do I have to give tax and file return? (b) Do I have to regularly deposit the monthly income in bank to make it white or can it be kept as cash? (c) Do I need a PAN number? Please clarify on these points. —Narinder Pal, Mohali. Ans: On the facts stated by you, your yearly taxable income comes to Rs 30,000 to Rs 42,000 plus you are having bank interest income to the tune of Rs 30,000, thereby making your gross taxable income within the range of Rs 60,000 to Rs 72,000. If after claiming deduction u/s 80L on bank interest amount to the tune of Rs 12,000 the net taxable income exceeds Rs 50,000 only then you are required to make your Income-tax return. If the net taxable income is below Rs 50,000 you need not file your Income-tax return. However, it is recommended that you better file your Income-tax return even when it is below taxable because on the facts stated by you it appears that some times you may have income exceeding the exemption limit. It is also advisable compulsorily to obtain a Permanent Account Number which is available by submitting an application in Form No. 49A. Q: I deposited Rs 1,60,000 in NSS 87 of Post Office during the period March ‘88 to March 92. I want to withdraw Rs 1.25 lakh during this financial year. The P.O authorities will recover TDS @ 20 per cent i.e. Rs 25,000 and will pay Rs 1 lakh to me. I retired in February 1993. This year my pension income was Rs 1.10 lakh and interest income including that of UTI is Rs 30,000. I have invested Rs 65,000 u/s 88. Please clarify if 20 per cent of TDS to be deducted by Post Office will be sufficient or I shall have to pay some thing more to Income Tax authorities during this financial year and how much. — Inder Mohan Khosla, Chambaghat, Solan Ans: The Post Office will deduct TDS on NSS withdrawal @ 20 per cent. Now when you file your Income-tax return at that time in the total income you should include the pension income, the income from UTI income as also the amount withdrawn from NSS A/c. Now you have to calculate the total tax payable on the gross total income. From this amount you deduct the tax deducted at source by the postal authorities on withdrawal of NSS. If thereafter some tax still becomes payable by you, you are required to make payment of the tax. In the alternative, if no tax is payable and there is some refund due you can file the Income-tax return and claim refund of Income-tax. Q: 1. I am seeking your expert advice in connection with HUF Status in the following cases. (a) where there ary only two members i.e. Karta & Co-parcener, (i) in case one of them dies. (ii) Can they break up HUF in their life time with mutual consent ? If so, procedure to be followed. (b) In the event of Karta’s demise, when all other coparceners are only females. (c) Can an aged couple who are having their own HUF, Co-opt as co-parcener, a male blood relation (son) who is having his own independent HUF with his children, the procedure to be followed in this case. 2. I have earlier written of letters but no response. Hope my letter did make their way to you. It will be a personal favour to me if you can advise me on these points for which I shall feel heavily indebted to you. —Colonel R.N. Sharma (Retd.), A.F. Station Barnala Ans:
When there are only two members of the HUF namely the
Karta and the co-parcener, the HUF will automatically
come to an end as soon as one of them dies. The HUF
Co-parceners have got the right to break up the HUF even
during their life time. No mutual consent is necessary.
If the Karta desires, he can dissolve the HUF and
partition the amount amongst the Karta and the
co-parceners. The Karta has right to distribute the asset
of the HUF in the manner as he likes. In the event of the
Karta’s demise and where all the other co-parceners
are only female members then the female members cannot
become the Karta. The HUF however continues. An aged
couple who are having their own HUF will have their own
son by right as a member of the HUF itself. No procedure
is required to be followed because the couple can form
HUF if they have their own male blood relation namely son
who night even have his own independent HUF with his
children. Even then, he would be eligible to become the
member of his father’s HUF.
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Q: When in view of a decree in a suit, restitution petition was rejected but when the decree is found to be null and void, whether rejection of restitution petition was correct? Ans: Karnataka H.C. in V.K. Rama Setty v A Gopinath (1999 (1) R.C.J. 257) held the view thus: In the court below the evidence was recorded, petitioner got himself examined along with one witness, and the respondent got himself examined along with a witness. 21 documents were produced by the petitioner. It should be stated that a suit was filed by the petitioner subsequent to the filing of miscellaneous application, the order in which has been impugned at present. Through miscellaneous application was filed earlier, the suit was decreed earlier. At the time the subsequent suit was decreed, the earlier Misc. Appl. was pending. In view of the fact that the petitioner’s suit filed subsequently for declaration and injunction was decreed, what the Chief Judge observed in his impugned order was that it was not necessary for the petitioner to have pursued Misc. Application and he could as well have withdrawn that application. The H.C. said that it has carefully gone through the impugned order passed by the Chief Judge. In view of his above conclusion, it is obvious, he has not discussed the voluminous evidence and the documents produced by the petitioner obviously because the petitioner’s suit came to be decreed. This court held that the decree in the subsequent suit is a nullity. The learned Chief Judge, to repeat, has not discussed the evidence on record. He has not adverted to the documents produced by the petitioner. In this court, both the parties took the H.C through the evidence and the documents to justify their respective stand. This court, observed the H.C. , cannot assume the role of original court. It is open to the parties to urge their points in the court below. For the aforesaid reasons, the impugned order is set aside and the matter is remanded to the lower court who has passed the impugned order. He was directed by the H.C. to discuss the evidence and then pass appropriate order. It was made clear by the H.C. that the parties shall not be permitted to adduce further evidence. In that way, the
Revision Petition was allowed. |
Central Bank net falls 29 per cent The net profit of Central Bank of India fell by 29 per cent to Rs 146.25 crore in 1998-99 from Rs 174.89 crore in the previous year. The bank has attributed the Rs 28.64 crore fall in net profit to higher provisioning on priority sector advances, ad hoc provision of Rs 40 crore due to the impending wage revision and reduction in interest rate spreads due to lowering of prime lending rate (PLR). Against the general trend, the bank’s net non-performing assets were down to 9.79 per cent against 12.21 per cent as on March 31, 1998. The total deposits of the bank grew by 16.2 per cent from Rs 26,373 crore as on March 31, 1998 to Rs 30,649 crore as on March 31, 1999 and the cost of deposits in 1998-99 was contained at 7.92 per cent due to higher mobilisation of low cost — savings and current —deposits. The bank’s advances were up by 19.48 per cent from Rs 10,714 crore as on March 31, 1998 to Rs 12,800 crore as on March 31, 1999. SBI Mutual Fund The SBI Mutual Fund, the second largest mutual fund in the country, has declared dividend of five schemes and provided positive appreciation to investors for all the 19 schemes during first half of 1998-99. The magnum bond fund of SBIMF has declared a tax-free dividend payout in five of its schemes, a company release said here today. SBIMF’s open-end equity scheme MMS 90, which has appreciated by over 50 per cent in 1998-99, has declared an interim dividend of 8 per cent for 1999-2000. Magnum Liquibond Income Fund, a 100 per cent debt fund investing in high quality debt instruments, has declared a maiden dividend of 5 per cent for the half-yearly period from November 1998 to April 1999. SBIMF is also paying out dividends in three of its close-ended schemes — Magnum Equity Linked Savings Scheme (MELS 91), Magnum Growing Investments from tax savings scheme plan A (Gifts A) and Magnum Monthly Income Scheme (MMIS 97). The schemes paid out a dividend of 13.5 per cent, 10 per cent and 10.75 per cent respectively. The record date for dividend payout is July 5, 1999, the release said. Vysya Bank to pay 35 pc The Board of Directors of Vysya Bank have recommended a dividend of 35 per cent for 1998-99 while the net profit stood at Rs 30.54 crores. The business of the bank crossed Rs 10,000 crore, deposits went up by Rs 762 crore to touch Rs 6510 crore as on March 31, 1999. Non Resident Indians deposit stood at Rs 454 crore, an increase of 16 per cent, savings bank deposits went up by Rs 26 per cent to reach Rs 589 crore. The networth, including revaluation reserves, stood at Rs 438 crore as on March 31, 1999 and capital to risk asset ration stood at 10.63 per cent, well above the minimum requirement of 8 per cent for banks in India. Nalco gets exports award National Aluminium Company Limited (Nalco), country’s leading manufacturer-exporter of alumina and aluminium, has won the all India trophy for highest exports from the Engineering Export Promotion Council (EEPC) for 1997-98. Mr B.P. Singh, Resident manager of Nalco in New Delhi received the award. —
Agencies |
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| Gold falls NEW DELHI, June 26 (PTI) — Gold prices retreated on the bullion market today on lack of buying against fresh arrivals and closed with losses. Silver also declined on stockists selling in the absence of any worthwhile support. The quotations: Silver 999 (ready) 7700 and delivery 7700, coins buyer 10.400 and seller 10.600. Standard gold 4070, ornaments 3920 and sovereign 3650. HMT awarded Customers meet Hudco |
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