Sunday, December 24, 2000,
Chandigarh, India







THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Meeting on Maruti, VSNL selloff called off
NEW DELHI, Dec 23 — The Cabinet Committee on Disinvestment (CCD) scheduled to discuss disinvestment of government stakes in Maruti Udyog Ltd and Videsh Sanchar Nigam Ltd was called off today without any official explanation.

Governor for more multinational firms
KURUKSHETRA, Dec 23 — Haryana Governor Babu Parmanand here today expressed the fear that the entry of multinationals in India without pre-determined modalities in respect of the areas of operation, guarantee of growth rate, employment potential, investment in core sectors and infrastructure conditions of service were likely to draw public resentment.

Panel must to check tax evasion
T
HE hosiery industry which prevents shivering of others is itself shivering. Hosiery and cycle industries were the two sectors which set the tone of industrialisation of Punjab. After having heydays thanks to the Russian hosiery industry is in doldrum. Implication of this situation is of direct concern to any government as it is the highly labour intensive sector. Blame for this sorry state has to be shared by the industry itself. Of course weather God who has reduced the intensity and span of the winter.

Craftsmen display handicrafts in city
CHANDIGARH, Dec 23 — As many as 200 families of craftsmen have displayed their handicrafts at the Crafts Bazar which was formally inaugurated at the Sector 17 Circus Ground here this afternoon.



EARLIER STORIES

 

Dosanjh launches Markfed project
CHANDIGARH, Dec 23 — Mr Ujjal Dosanjh, Premier of B.C. (Canada), launched Markfed’s fruits & vegetables marketing project here today. In the beginning, Markfed would supply farm fresh-packed fruits and vegetables to Chandigarh and Mohali. Later on it would export these products.

Q: I am a senior citizen, getting family pension from a bank. With the implementation of government decision on the recommendations of the 5th Pay Commission revision of pension of pre and post-1986 pensioners/family pensioners etc. I am also affected by this implementation. Since my late husband who took voluntary retirement in 1983, my family pension has also been revised, I will be getting some arrears in this financial year. How can I save tax on this?

Wilful default
Q: Does the evidence justify inference that there was wilful default in payment of rent for 10 months prior to filing of petition?

Q: We are registered as a dealer under the provisions of the Himachal Pradesh General Sales Tax Act, 1968 and the Central Sales Tax Act, 1956. A consignment of goods was coming from Delhi as a result of a purchase in the course of inter-State trade or commerce while it has been intercepted and subsequently detained by the Officer Incharge of the entry barrier on the grounds (i) that CST number of the consignee firm is wrong; and (ii) that the goods are under-invoiced.

Need to constitute regulator for postal services
T
HE re-appearance of the familiar figure — the friendly neighbourhood postman — after a long gap of a fortnight should certainly make consumers, particularly those who are waiting for money orders or cheques or replies to job application or any other urgent matter, heave a long sigh of relief.

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Meeting on Maruti, VSNL selloff called off
Tribune News Service

NEW DELHI, Dec 23 — The Cabinet Committee on Disinvestment (CCD) scheduled to discuss disinvestment of government stakes in Maruti Udyog Ltd and Videsh Sanchar Nigam Ltd was called off today without any official explanation.

The spokesman of the Disinvestment Ministry confirmed the cancellation of the meeting but did not give any reasons for the same. He also did not give the new date for the meeting.

The CCD was scheduled to discuss the findings of the Committee of Secretaries on MUL and the proposal for the disinvestment of VSNL.

Reports said the Department of Disinvestment was expected to recommend to the government to invite bids from international automobile firms acceptable to Suzuki. The government and Japanese Suzuki are equal partners in MUL.

According to MUL company rules, any buyer must have Suzuki’s consent.

The Union Disinvestment Minister, Mr Arun Shourie, had informed Parliament earlier this month that his ministry would ask Suzuki to give a list of acceptable partners for Maruti and the buyer would be selected through a competitive bid.

Maruti, which had 80 per cent market share two years ago, now has only 54.5 per cent share following the opening of the automobile sector to competition.

The company had made a profit of Rs 650 crore three years ago but had incurred a loss of Rs 128 crore during the first seven months of the current fiscal year.

The Maruti Udyog Employees Union has opposed the government’s plan to divest its shares stating that it would dramatically alter the position of the company’s employees. Moreover, MUL already has a strategic partner in Suzuki of Japan unlike other PSUs.

The VSNL monopoly on overseas telephone calls would end in 2002. The CCD was expected to discuss the disinvestment of government stakes. Reports indicated the government could sell 15 per cent stake of VSNL to a strategic partner to face competition in post 2002 period.
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Governor for more multinational firms
From K.G. Dutt
Tribune News Service

KURUKSHETRA, Dec 23 — Haryana Governor Babu Parmanand here today expressed the fear that the entry of multinationals in India without pre-determined modalities in respect of the areas of operation, guarantee of growth rate, employment potential, investment in core sectors and infrastructure conditions of service were likely to draw public resentment.

The Governor who was addressing seminar on “Academia-Industry Interface on Global Competitiveness and Indian Corporate sector: Challenges and Opportunities”, at Senate Hall of Kurukshetra University said the trend was already evident in insurance and banking sectors and disinvestment of public sectors undertakings.

Babu Parmanand was worried that nothing concrete was visible on the unemployment front and removal of poverty in rural India as well as solving housing problems. He said India should not lose sight of its goals set during the freedom movement i.e. “Be Indian buy Indian”. He was happy that the globalisation of trade and entry of multinationals in corporate sector had opened new opportunities for entrepreneurs.

The Governor said India needed to integrate its economy with the world economy and allow more direct foreign investment as well as entry of multinationals in different fields of economy activities. He, therefore, felt that the greatest challenge to Indian economy would be the competition among unequals in respect of experience, funds, infrastructure, information technology, professional management and quality control. Mr R.S. Chaudhry, Vice-Chancellor of KU in his presidential address, highlighted some of the pitfalls of globalisation of economy. He stated that 60 per cent of Indian workforce which was engaged in agriculture and its allied activities had been put under threat by the reform process.

Mr Chaudhry pointed out that since 1991, food production in India had increased by 1.55 per cent per annum, which was lower than its population growth rate.

Prof Pritam Singh, Director of the Indian Institute of Management, Lucknow, said new graduates in business management should be trained keeping in view the needs of the global markets and they should be prepared to go out and work there.

Dr Pritam Singh cautioned that non-performing organisations would have no place in the future economy.

Mr P.V. Narasimhan, Chairman and Managing Director of Industrial Finance Corporation of India, said the psyche of the Indian corporate sector needed to be changed.

Dr S.L. Gupta, Director of the seminar, highlighted the objectives to host such an important meet at this crucial juncture of changing Indian economy. He wanted that Indian corporate sector should be prepared to face the challenges with vision, courage, spirit of competition and able managerial set up.

Mrs Sudesh Hooda of the Department of Management, said there should be proper co-ordination between the teaching faculties of Business Management and the corporate sector so as the latter did not function in the air.
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Panel must to check tax evasion
By P.D. Sharma

THE hosiery industry which prevents shivering of others is itself shivering. Hosiery and cycle industries were the two sectors which set the tone of industrialisation of Punjab. After having heydays thanks to the Russian hosiery industry is in doldrum. Implication of this situation is of direct concern to any government as it is the highly labour intensive sector. Blame for this sorry state has to be shared by the industry itself. Of course weather God who has reduced the intensity and span of the winter.

The episode which took place few days back speaks about the ground realities. The matter under focus has to be decided by the court for which no comment can be offered. However, the factors which led to this situation need careful analysis.

Collection of sales tax is no doubt a tedious process. It is the main source of revenue for any state government. At the same time this tax is crucial for the industry itself. Unlike the previous regimes the current top functionaries of the Sales Tax Department are very responsive. It is a rare occasion when Excise & Taxation Minister himself takes initiative to reduce some tax rates.

Meetings of the industry and trade with the Minister have revealed the mindset of the government. It is a pity that some vested interests from the industry itself convey subjective arguments which further baffle the department. It is gathered from the PSEB also that some consumers secretly tell the board that tariff rates should be higher. It is not difficult to draw conclusion as to the motives of such interests.

In general perception the hosiery industry is perceived as the highly sales tax evader sector. This may be partly true and partly wrong. No doubt there can be tax evaders in any sector.

The hosiery industry has a large number of cottage and smaller units. The government has levied sales tax of 4.4 per cent at first stage on all stages; fibre; top; yarn; waste and hosiery. On the other hand composite bigger units have the advantage of many in house processes. This reduces the cost of production from these units while relatively smaller units have to pay more tax due to multiplicity. Material which is entering through Nepal border is in fact destabilising the entire spinning-based industry.

The government without losing its revenue from the hosiery sector can do much to save it from extinction. Stringent laws alone can’t do anything. Why are transporters taking interest in sales tax matters? Some sort of collusion among various agencies, including some officials, might be inducing evasion. What is the way out?

The government should have regular dialogue with the industry & trade. There should be a standing committee on sale tax which should include representatives from various sectors of the industry. Meeting of this committee should be presided over by the Minister himself along with top functionaries. Representatives in a way shall be more responsive in checking evasion in any sector. With this mode of working the government revenue is bound to group which the industry may also get relief.

Stringent laws and their wrong enforcement in fact increase the transactional cost of any business without boosting the government revenue. Free and frank dialogue alone is the answer to this situation.
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Craftsmen display handicrafts in city
Tribune News Service

CHANDIGARH, Dec 23 — As many as 200 families of craftsmen have displayed their handicrafts at the Crafts Bazar which was formally inaugurated at the Sector 17 Circus Ground here this afternoon.

Talking to newsmen, Mr A.R. Chaudhuri, Director, Office of the Development Commissioner (Handicrafts), said that from this year onwards, the government has decided to provide free sites to artisans to display their ware. The practice of providing the participants travelling and dearness allowance for the duration of the exhibition has been discontinued from this year.

Mr Chaudhuri said that the Union Government has been trying to revive the languishing crafts by introducing the “guru-shiksha” scheme in which expert craftsmen of languishing crafts are employed to train youngsters.

He said that Punjab was not only ahead in agriculture but has rich cultural heritage and some of the handicrafts of the state were popular the world over. He said that it was the fourth time that this annual Craft Bazar was being organised in the city.

Handicrafts items worth Rs 1.3 crore have been displayed at the Bazar which would continue until January 1.

Mr Chaudhuri said that exports of handicrafts from India touched Rs 8059 crore during 1999-2000 against Rs 7027.34 crore in 1997-98. At present, he said, there were 78 lakh people employed in the handicraft sector in the country.

The Crafts Bazar, which was inaugurated by Mr M.P. Singh, Commissioner, Chandigarh Municipal Corporation, focuses on special range of crafts, including folk, tribal, traditional and contemporary. On display at the Bazar are tribal textiles from Manipur and Nagaland, sandal wood carvings of Karnataka, artistically woven paithani sarees of Maharashtra, tribal embroidery and crochet from Andhra, cane and bamboo furniture from bengal, mithila painting from Bihar, stone carving, paper machie from Pondicherry and sea shells from Port Blair.
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Dosanjh launches Markfed project
Tribune News Service

CHANDIGARH, Dec 23 — Mr Ujjal Dosanjh, Premier of B.C. (Canada), launched Markfed’s fruits & vegetables marketing project here today. In the beginning, Markfed would supply farm fresh-packed fruits and vegetables to Chandigarh and Mohali. Later on it would export these products.

Mr Dosanjh, addressing a gathering, said the B.C. Government as well as individuals would sign MoUs with different organisations, including semi-government and private companies. Canada is ahead in food processing technology and Punjab may get its benefits because the state is surplus in agricultural production. He especially mentioned the quality and taste of Sohna Saag which is used in Punjabi Houses in Canada.

Earlier speaking on the occasion, Mr Parkash Singh Badal, Chief Minister, said Punjab would get benefits from the tour of Mr Dosanjh. Some MoUs would be signed for imports and export, in various fields.

Mr Ranjit Singh Bramhpura, Cooperation Minister, Punjab, gave details of the achievements of the cooperation movement in the state and claimed that due to these facilities Punjab is surplus in food grains, vegetable and fruits.

Mr D.S. Bains, MD Markfed, said Markfed had launched its project keeping in view the crises of Punjab farmers. With this project, the farmers would be directly linked with the customers and Markfed would provide fruits and vegetables on their door steps. The details of the products would be available on Markfed website.

Some of the exotic vegetables like brussel sprouts, lettuce, bell peppers, broccolli, yellow capsicum, red capsicum, red cabbage, parsley, endive (salads) etc. are also available at very reasonable price. Soon the produce will be available in the Verka booths along with fresh milk. Markfed will open such links between producers and consumers in Amritsar, Ludhiana, Jalandhar, and Patiala. Later Markfed will also access market of Delhi.
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Grapevine

IOC
THE company has entered into a revenue sharing-cum-lease agreement with Domino’s Pizza. The agreement is to set up Domino’s pizza outlets at IOC petrol stations across the country. The idea is to offer a one-stop shop along the lines of the hugely successful “Top Gear” shopping mall in Mumbai. With a Domino’s counter at their outlets, it would be like adding ‘fuel’ to the fire of change that seems to be devouring most PSUs!!!

Telco
Tata Engineering’s production of heavy commercial vehicles at its assembly line has picked up considerably. Tata Engineering is also expecting positive news from Pretoria in South Africa where it has bid, with Daimler Chrysler, for supply of a large number of HCVs to their government. Missing in action, is back in action, wot?!!

Procter & Gamble
Procter & Gamble plans to take its flagship brand Vicks to the European and US markets. The company has already initiated tests and research to change the composition of Vicks Vaporub made in the country to make it suitable for these markets. The move will make India a global sourcing base for Vicks Vaporub and gels, and will enable the company’s overall plan to make India a global hub for various healthcare products. Hmmm, Vicks seems to be opening up markets instead of nose and throats!!!

Sterlite Opt
The board of directors of the company passed an enabling resolution to raise up to $ 200 million from the international markets. The board approved a proposal of the company to access international markets. The board approved a proposal of the company to access international markets by way of ADRs or GDRs or other financial instruments. The international listing will also pave the company’s way to be acclaimed as an international optic fibre cable company. Bandwidth anyone?!!
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In the wonderland of investment
By A.N. Shanbhag

Q: I am a senior citizen, getting family pension from a bank. With the implementation of government decision on the recommendations of the 5th Pay Commission revision of pension of pre and post-1986 pensioners/family pensioners etc. I am also affected by this implementation. Since my late husband who took voluntary retirement in 1983, my family pension has also been revised, I will be getting some arrears in this financial year. How can I save tax on this?

—Shilla V.. asrrao @ cat. ernet. in

A: Relief u/s 89 (1) is available only on salary and pension but not on family pension. I only hope that the authorities realise the injustice arising out of not extending this benefit to those: who are in receipt of family pension and take remedial measures in due course.

Q: Will Sec. 115JB be applicable to companies falling under Sec. 10C (since such companies exempted from the purview of fax?

sshyamsukha @ vsnl. com

A: You are pointing out an anomaly in the Act and I am thankful to you for the same Sec. 10C offers total exemption to an industrial undertaking launched after 1.4.98 in any integrated infrastructure development or any industrial growth centre located in North Eastern regions. Sec. 115 JB pegs the income tax payable by a company at the rate 7.5% of its book profit if the income tax payable on the total income is less than this level. Normally, an exempt income is not an income chargeable to tax and therefore does not form a part and parcel of total tax. Hence one could take a view that companies falling the purview of Sec. 10C escapes the provisions of Sec. 115JB, in spite of the Sec. starts with — “Not withstanding anything contained in any other provision of this Act...” The explanation related with Sec. 115JB.

Q: I purchased a flat through HDFC Finance. I claim deducation in Income Tax was 24 and rebate u/s 88 for the loan repayment amount to HDFC. Recently I was transferred to and I was compelled to hire a flat at Pune for my accommodation. My block in Calcutta is, presently, under lock and key and in my possession, not rented to anybody. Now, while filing this year’s Income tax return (for FY 00-01), can I enjoy tax saving benefit U/s 24 and Sec. 88 for Calcutta flat repayment, as well claim deduction u/s 10 (13A) towards HRA for the block hired at Pune? On enquiry at ITO Pune, I was told... one can claim either u/s 24 or u/s 10 (13A)... if so why?

— VV Daptardar, suknya @vsnl. com

A: I am afraid, the ITO Pune has erred.

There are two conditions under which the exemption u/s 10 (13A) is debarred. These are —

1. The residential accommodation occupied by the assessee is owned by him or.

2. The assessee has not actually incurred expenditure on payment of rent in respect of the residential accommodation occupied by him.

Consequently, an employee living in his own house or in a house for which he does not pay any rent is not eligible for this exemption. Obviously both these conditions are not applicable to you and therefore you are entitled to the HRA exemption. Then again, the exemption of interest u/s24 and rebate u/s 88 on housing loans has nothing to do with HRA or the exemption.

Q: I am a first class graduate in engineering. Until recently I was temporarily working for a reputed construction company. Due to some reason I had left the job. Thereafter I tried for another worth living in Mumbai, but to vain.

I come from a lower middle-class family from a remote village. I hope heard from my friend that I can get a loan upto 5 lacs from the banks under the PMRY or some other schemes without producing any surety, conditions that I should surrender all my degree certificates etc. I am now thinking of setting up a small dairy farm with some 20 buffaloes. This is the only business I can do nearby my village.

Is what my friend have told me true? If so, let me have details of how to approach, the banks with my proposal. Since my expertise is in engineering will the bank accept my project which is related to agriculture?

— Gopinath mallesh padkanti, padkantigopinath@ rediffmail. com

A: The scheme is for providing educated unemployed youth with funds to start self employment. The person should be between 18-35 years of age. (relaxed by 5/10 years for schedule castes). Minimum educational qualification required is upto SSC. The income of the family; should not be over Rs 24,000 per year. The person should be resident in the area where he intends to start the business for at least 3 years. A ration card is proof enough. He should also be trained in the service industry or the manufacturing industry from government agency. The amount of loan could be upto Rs 1 lakh inclusive of working capital. However 5% of the amount should be contributed by the applicant. No collaterial is necessary if assets created are worth over Rs 50,000. The repayment period varies from 3 to 7 years. The repayment should start after 6 months (maximum 18 months in some cases)

A higher loan upto Rs 5 lakh may be sanctioned but collaterial or guarantors will be necessary.

The applicant has to approach District Industries Centre or district metropolian authority in your area with complete plans of your scheme. The committee will recommend you to the bank/branch that you desire to approach if it approves of your plan.

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RENT CASES
by Praful R. Desai

Wilful default

Q: Does the evidence justify inference that there was wilful default in payment of rent for 10 months prior to filing of petition?

Ans: Andhra Pradesh H.C. in N. Srinivas v Smt. K. Kamalamma (2000 (2) RCJ 287) expressed the view thus:

On the ground of wilful default in payment of rent subsequent to the eviction petition, the eviction was ordered by both the Courts below.

On this point, petitioner relies on the decision by the S.C. in K.A. Ramesh v Susheela Bai (1998) 3 CCC 58). Respondent on the other hand relies on certain decisions of the learned Single Judges of this Court for the countrary proposition.

The second point is a debatable one. Even then, the wilful default in payment of rents prior to the filing of eviction petiton is sufficient to evict the petitioner-tenant. Not doubt, the finding in this regard is against the respondent-landlord. But the fact remains that the arrears of rent were received under protest as seen from Exhibit A. 1-and within a short time thereafter the landlord filed the eviction petition.

Hence, the plea of waiver or the like cannot be raised in the opinion of the H.C. It is true that the finding of the Rent Control Court and the Appellate Court on the second point is in favour of the petition-tenant. But as held by this Court in B. Ranganayakulu v Mathupalli Nageshwara Rao (1992 (i) ALT 526), the correctness of the adverse finding can be canvassed by the respondent. The wide language of S.22 of the A.P. Rent Act lends support to the principle laid down in the aforementioned decisions.

Hence, concluded the H.C. that the landlord is entitled to object to the finding recorded by the Lower Court and Appellate Court. There can be no doubt that the evidence on record justifies the inference that there was wilful default in payment of rent for about ten months prior to the filing of eviction petition.

Therefore, the H.C. held that there was no merit in the present revision petition and hence dismissed the same.
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SALES TAX ISSUES
by A.K. Sachdeva

Q: We are registered as a dealer under the provisions of the Himachal Pradesh General Sales Tax Act, 1968 and the Central Sales Tax Act, 1956. A consignment of goods was coming from Delhi as a result of a purchase in the course of inter-State trade or commerce while it has been intercepted and subsequently detained by the Officer Incharge of the entry barrier on the grounds (i) that CST number of the consignee firm is wrong; and (ii) that the goods are under-invoiced.

As far as CST number as mentioned in the bill of sale is concerned, it was due to inadvertance that the consignor’s employee made a mistake in quoting the number while all other particulars such as name and complete address have been correctly furnished. It is also important to mention here that CST number has been correctly given in the goods receipt which was also accompanying the consignment.

Further no under-valuation of the goods is involved as has been alleged by the officer incharge in the notice issued following the detention of the goods. We have also met the Assistant Excise and Taxation Commisioner explaining away these facts but the goods have not been released. He proposes to impose penalty under sub-section (7) of section 22 of the Himachal Pradesh General Sales Tax Act, 1968. Kindly advise.

— Sudhir Aggarwal, Simla

Ans. Under the provisions of sub-station (7) of section 22 of the Himachal Pradesh General Sales Tax Act, 1968 penalty becomes leviable only if, after the enquiry, the Officer finds that there has been an attempt to evade the tax due under the Act. Simply because the consignor’s employee has committed a mistake in specifying the CST number in the bill of sale it does not lead to the conclusion that the consignee attempted to evade the payment of sales tax due under the Himachal Pradesh General Sales Tax Act, 1968. Obviously a buyer cannot be proceeded against for the fault of a seller more especially when the mistake is not the result of an intentional default.

Regarding under-invoicing it has not been stated by the queriest as to whether the Officer Incharge of the barrier has brought some evidence on record suggesting incorrect value of the goods in the bill of sale ? For this purpose it is necessary that a written objection to the show cause notice initiating the penalty proceedings should be submitted before the Assistant Excise and Taxation Commissioner.

It would be appropriate to lead evidence proving correct and proper value of goods so that the allegation of the revenue regarding under invoicing could be refuted. If sufficient material is brought on record in support of this point, there is no reason to propose imposition of penalty.

Q: We are engaged in the business of stationery items being a dealer registered under the Punjab General Sales Tax Act,1948 and the Central Sales Tax Act, 1956. While filing the returns for the quarter ended June 30, 1999 three transactions relating to sales to registered dealers against declaration in form ST-22 were omitted from being declared in the returns while these were duly entered in our regular account books.

No revised return could be furnished within the stipulated period. Can we give revised statement of sales at the time of assessment? Kindly advise if any penalty is imposable for filing incorrect returns?

— Sandeep Trading Co.

Ans. Even if no revised return was furnished, it is still open to the queriest to bring these facts to the notice of the assessing authority during the assessment proceedings by way of filing a reconciliation statement. Ommssion of certain sales which have been duly accounted for in the regular account books does not give rise to imposition of penalty more particlularly when a satisfactory explanation to this effect is duly furnished by the assessee.
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CHECK OUT
by Pushpa Girimaji

Need to constitute regulator for postal services

THE re-appearance of the familiar figure — the friendly neighbourhood postman — after a long gap of a fortnight should certainly make consumers, particularly those who are waiting for money orders or cheques or replies to job application or any other urgent matter, heave a long sigh of relief. However, given the huge pile of mail accumulated during this period, I am sure consumers will have to wait for some more time for normalisation of the service and for receiving all their mail help up so far. On the eighth day of the strike, the government had estimated that over 36 crore letters, cards and post cards and Rs 106 crore worth of money orders were help up due to the strike. So it is quite likely that by the time these and much more which would have accumulated during the fortnight-long strike are sorted out and delivered, many of them, particularly invitation cards and interview calls, would have become redundant. Even then, one hopes that the postal staff will diligently sort out and deliver each one of the mail to the addressees, and not think of quick and easy methods of disposal of mail. But then even if they don’t deliver the entire backlog, there is very little that the consumers can do.

Yes, I think it’s now time for consumers to press for their demands vis-a-vis postal services, including courier services. Today, thanks to the archaic Indian Post Office Act of 1898, consumers do not have the right to haul up the postal staff for deficiency in service before the cunsumers courts and seek compensation for any loss or suffering caused as a result of delay in delivery or non-delivery of mail or money order, unless he or she can prove that such deficiency was caused by a fraudulent or a wilful act or by default. Section 6 of the Act gives the postal department immunity from liability for loss, delay or damage to any postal article in the course of its transmission by pot. Similarly, Section 48 provides exemption from liability in respect of money orders. And so that is the reality of the basic mail service today. While all other service providers can be hauled up by consumers under the Consumer Protection Act for deficient service rendered, the postal department staff is protected under the Indian Post Office Act from any liability for the poor service rendered.

It is no better when it comes to private courier services. And here it is not an archaic law, but a conservative interpretation of the law that has prevented consumers from seeking adequate compensation from courier companies for negligent service rendered. The apex consumer court, the National Consumer Disputes Redressal Commission in its order delivered in 1996 in the case of DHL Worldwide Express vs Bharathi Knitting, held that the liability of a courier in case of loss or damage to an article was limited to the amount specified by the courier in the contract. This view of the National Commission was unfortunately upheld by the Supreme Court (Bharathi Knitting vs DHL Worldwide Express, CA No 9057 of 1996), which said that when there is a specific term in a contract limiting the liability of the courier, the parties were bound by it.

Now whenever a consumer hires the service of a courier and hands over a package, he or she is asked to sign on a paper or a copy of the receipt, containing the terms of the contract. And under these, courier companies usually limit their liability in case of loss or damage to good Rs 100-300 in case of domestic cargo and around $ 100 in case of international cargo. Now, according to the Supreme Court judgement, the signature tat the consumer puts on this contract binds him to the terms of the contract. Never mind the fact that the contract binds him to the terms of the contract. Never mind the fact that the contract is between a strong and a week party and a consumer has no choice but to sign it. Or that it is a one-sided contract drawn up by the courier for his protection and without any consultation with the other party signing the contract-the consumer.

So, besides replacing the Indian Post Office Act (the government has been promising that for quite some time) with a law that is in keeping with the times, the government should constitute an independent regulator for all the postal services, including the private courier services. The main job of the regulator would be to draw up performance standards for these services and ensure that they are actually followed by the service providers. Failure to keep up to those standards should invite penalty. Be it the government-run mail service or the private courier service, the regulator should ensure that the terms and conditions of the contract between the service provider and the consumer are fair to the consumer and also ensure adequate compensation to consumers who are victims of negligent service. 
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BIZ BRIEFS

Markets closed
MUMBAI, Dec 23 (UNI) — All the principal markets, including the Bombay Stock Exchange, National Stock Exchange, Foreign Exchange, Interbank call money market, cotton, and oilseeds markets will be officially closed on Monday on account of “Christmas”.

Indica price
CHANDIGARH, Dec 23 (TNS) — Tata Engineering has increased the prices of Indica, Safari and Sumo from January 1, 2001. The tentative increase will vary from Rs 8,000 to the 15,000.

Lakme saloon
AMRITSAR, Dec 23 (FOC) — The Lakme super model Lisa Ray today inaugurated the Lakme beauty saloon here. Lakme has ventured into Punjab, opening four such saloons in Amritsar, Jalandhar, Ludhiana and Chandigarh.
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