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December 31, 2000, Chandigarh, India   
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Criminal complaint against Coca Cola
IDBI Bank to invest 40 cr in tech platform ST amendments to hit industry A year of privatisation, IT leaders’ visits |
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Octroi on power discriminatory Hartron gets ISO 9001 Fake Zarda firm
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From Ashok Kumar in Mumbai THE New Year is in and I am hopeful that this will be a better year for the bourses. Am I sounding like a mad hatter given the sense of despondency that enveloped the Indian markets, especially over the last month or so? Well, the optimism is based on the fact that just as euphoria at the bourses normally ends in a vertical crash, a runaway rally generally materialises in the aftermath of prolonged despondency.
Parking area contractor responsible for loss IN a welcome departure from its earlier stand, the National Consumer Disputes Redressal Commission has held a parking lot contractor liable for the loss of a car at the parking lot.
Termination Q: Is the demand of the employee to insist on permanent appointment appropriate?
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Criminal complaint against Coca Cola
MUMBAI, Dec 30 (PTI) — Nina Pillai, widow of former biscuit tycoon Rajan Pillai, has filed a criminal complaint against Coca Cola Corporation, Atlanta, the USA for allegedly cheating her and misrepresenting facts to the government in an application seeking leave to return to India after 20 years. The complaint filed yesterday in a local court at Dadar, has been posted for hearing by Metropolitan Magistrate B.L. Waghmare for January 17 next. Pillai has contended that Coca Cola was a minority partner with a 40 per cent stake in Janardhanan Mohandas Rajan Pillai Coke (JMRPCO), where the late Pillai controlled 60 per cent as an NRI. She has contended that a shareholder agreement between her husband and Coke had come to light recently wherein she discovered that the latter had grossly misrepresented facts to the Government of India in its application seeking re-entry into India after 20 years. Pillai has alleged that the permission granted to her husband for 60:40 per cent joint venture was actually a 100 per cent subsidiary in the guise of an NRI project. She further contended that once Coca Cola got necessary permission a company known as “Britco” was formed in which 66 per cent shares were owned by JMRPCO, 24 per cent by Britannia India and 10 per cent by a Maharashtra Government agency.
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IDBI Bank to invest 40 cr in tech platform CHANDIGARH, Dec 30 — IDBI Bank is investing Rs 40 crore for new generation banking e-platforms. Keeping in line with its policy of leveraging technology to drive its business, the bank is tying up with Infosys, Reuters, Synergy Log In and NCR Corporation for a total of its technology platforms. The bank has entered into a strategic partnership with Infosys Technologies for replacing its current core banking system with Finacle, the e-age banking solution from Infosys. The bank has tied up with Reuters for its flagship risk management product Kondor+ and with Synergy Log-In Systems for its Integrated Treasury Management System for its Treasury front and back office operations. IDBI Bank has also signed a major contract with NCR Corporation, the global leaders in ATM shipments for supply of 200 more higher end ATMs in the next eighteen months in addition to its existing 69 ATM network.
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ST amendments to hit industry THE recently promulgated notification of the Haryana Government which seeks to take away one of the important rights of the sales tax registered dealers relating to the benefits of adjustment of sales tax under Rule 24-A of the Haryana General Sales Tax Rules, 1975 poses a serious threat to the entire trade and industry in the state. With the complete omission of Rule 24-A from the statute book, the government introduces the system of double-taxation on October 16, 2000. It is worth recalling that the way back in 1988 the state government had brought well-thought provisions relating to adjustment of first stage tax on the statute book with a view of providing the traders and the manufacturers with the relief from multiple-taxation. As a matter of fact it was in December, 1987, that a large number of items had been brought into the net of first stage tax under Section 18 of the Haryana General Sales Tax Act, 1973, which led to a great deal of difficulties more especially for the traders engaged in the business involving inter-state sales. In order to ensure single-point taxation it was, inter alia, provided in law that the amount of tax paid at the first point under the Haryana General Sales Tax Act, 1973, shall be reduced from the sales tax payable on the goods sold as such in the course of inter-state trade or commerce. The decision of the government departing from the decade-old policy of one-point tax has come as a shock to the trading community in the state for the obvious reason that it will put undue impediment over the free flow of trade and commerce. Surprisingly enough, the state government has provided no opportunity to the traders in the state before taking recourse to the amendments which have the effect of putting unreasonable burden in the form of taxes upon them. Even the requirement of previous publication as provided in sub-section (1) of Section 64 of the Act has not been complied with as no draft notification proposing deletion of Rule 24-A as such has been issued by the law-makers. Another important aspect of the matter is that the notification comes into operation from October 16, 2000, but the copies of the official gazette have been made available to the public in the last week of December, 2000. The question, therefore, arises is what will happen to the transactions which have taken place in between? Was it not the duty of the state government to have ensured timely publication and circulation of the official gazette in the interest of trade and industry? One does not find any answer to these pertinent questions. Protesting strongly over these amendments, the Jagadhri Metal Traders Association has made a detailed representation to the government. The traders engaged in the business of ferrous and non-ferrous metal utensils and wares happen to be the most affected persons in the state. What will happen following these amendments is that they will have to pay 4 per cent sales tax at the first point of sale in the state. They will again be required to pay 4 per cent Central Sales Tax on the sale of such goods in the course of inter-state trade or commerce. Introduction of double-tax is bound to result in total elimination of the trading activities as it will be difficult to offer competitive price of the goods in the market. It is interesting to note here is that a manufacturer paying first stage tax on inputs becomes entitled to the benefit of set-off in the event of finished goods being sold in the course of inter-state trade or commerce. However, a trader paying first stage tax to the state at the first point has been deprived of its right to claim the similar benefit while selling his goods to ex-Haryana parties. This discriminatory treatment is not understandable. |
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A year of privatisation, IT leaders’ visits NEW DELHI, Dec 30 — Amid the dooms day predictions, nations across the globe rolled over to Year 2000 (Y2K), only to witness the dotcom bubble bursting and the knowledge-based industry’s teenage millionaires counting their last dollar as the stock markets plunged. The new economy widening its scope, brick and mortar companies emphasised the need for a web presence. Convergence and bandwidth were the two mantras which dominated the telecom, information technology and communication sectors. Realising the huge potential, the government, too, came out with a series of initiatives for the private sector, opening up of long distance telephony, unrestricted entry in basic and cellular services and offering a shift from migration to revenue sharing to existing cellular, basic and paging operators. By the end of the millennium year, virtually all telecom services except international voice telephony were thrown open for private sector participation. Even in this case, the government has decided to end the monopoly of VSNL by March 31, 2002, instead of the scheduled review in 2004. Listening to the hue and cry of the IT industry that shortage of bandwidth was curtailing its growth, the government allowed Internet service providers to have submarine cable landing stations, obtain bandwidth from foreign satellite and establish international gateways. The cluttered cyber space posing an easy target for cyber criminals had its checks with India becoming one among the select few nations to enact the Information Technology Act. There are 14 other nations across the globe having similar legislations. The IT Act deals with legal aspects of new economy - cyber crime, digital signature and e-commerce. The government also framed rules under the Act and appointed a Controller of Digital Signature Certifying Agencies. The Act, which makes digital signatures legally valid in the country, is also the biggest achievement of the year old Ministry of Information and Technology. The year saw a series of visits by global leaders of the IT industry. Microprocessor giant Intel’s president and Chief Executive Officer, Dr Craig R Barret, visited India in May and announced a $ 100 million venture fund for the country. Mr Jery Yang of Yahoo, Mr Robert Bishop, Chairman and CEO of Silicon Graphics, Dr Arun Netravali of Bell Labs, Mr Michael Dell of Dell Computers and Mr Bill Gates of Microsoft visited the country, acknowledging India’s skills in the IT sector. The visiting US President, Mr Bill Clinton, during his stay in the country emphasised the Indian prowess in software sector. And his visit to Nayala village in Rajasthan brought out the IT saavy village woman folks to the world. The results of the high profile visits were to be seen immediately. The US hiked the H1-B visa cap and a number of countries like Germany, Japan, Ireland and Australia pitched in to attract Indian software professionals. The year 2000 saw the painful process of corporatisation of the telecom sector with the formation of Bharat Sanchar Nigam Limited in September, which was preceded by a strike by the telecom employees and the minister’s populist announcement of free telephone to all the serving employees of the Department of
Telecommunications (DoT). The Sankhya Vahini project, which was to provide a high speed data network, was marred with controversy. Critics pointed out security concerns and questioned the rationale in giving the project to the joint venture organisation floated by Carnegie Mellon University and a private player. For the telephone subscribers, there was plenty of good news. The new connection rates were slashed, the procedure of applying and paying bills were simplified and in about 15 state capitals the telephones could now be got on demand. Private players have now entered six basic telecom circles. These are Andhra Pradesh, Gujarat, Maharashtra, Madhya Pradesh, Punjab and Rajasthan. The government also allowed entry of private sector in basic services on revenue sharing basis. On the regulatory front, TRAI has been empowered to provide recommendations on various aspects related to the functioning of the telecom service providers. An amendment to the TRAI Act also paved the way for the creation of the Telecom Dispute Settlement and Appellate Tribunal. Reports of US economy likely to slowdown, however, has taken the fizz out of the champagne bottle of the Indian software industry. The IT sector, which is the highest export revenue earner for the country, is, however, optimistic that its honeymoon would continue. |
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Octroi on power discriminatory HARDLY a day goes without reference of the W.T.O. Industrialist’s first sight on the newspaper fixes on the item which is a new victim of the Chinese import. Politicians in power utter so many words of assurance to the industry in one breath. In action they are in fact handicapping the industry to meet the competition. The industry is ‘fully confident to meet the challenge provided they are given smooth working environs and transaction cost is reduced. Rationalisation of indirect taxes deserves top priority. Octroi is one such tax which needs complete abolition. Empowered committee of state Finance Ministers has urged the Centre to help out the industry on the face of a menace of cheap imports. The Finance Ministers perhaps are unaware that bulk of the problems are created by the states themselves. Ruling alliance of Punjab before coming to power promised to do away with octroi. Instead of doing this they have accentuated the problem. More than 4000 octroi checkposts result in 15 per cent of fuel consumption being wasted. On the other hand saving of fuel is the top priority. These checkposts involve the carrying capacity of 80,000 trucks being rendered idle. Take the actual incidence of octroi on the Punjab’s industry. The final cost of the product carries the burden of octroi ranging from 4 to 6 folds. Input to steel furnace; steel ingots to re-rolling mills; finished steel to say forging unit; forged product to another manufacturer carry octroi levy. If manufacturer of final product is in different city another octroi levy is imposed when the product goes to the unit who markets it. In financial terms the total octroi burden ranges from 6 to 10 per cent. The Punjab Government has further aggravated the problem. Octroi on power is the most pernicious levy. It was started with 2 paisa a unit in 1994 and has gone up to 7 paisa/unit. If repeated burden of this accumulated this may turn out to be between 15 and 20 paisa a unit. If total octroi on any product is added the final cost may escalate to around 15 per cent. This is equivalent to Central Excise duty. Which product can remain competitive with this invisible burden? Octroi on power is otherwise highly discriminatory in nature. Two units for instance will have different costings if one lies within octroi range and other outside it. What Chinese can’t do we are ourselves doing it. The Punjab Government is urged to at least remove octroi on power to start with. It is also a pity that industrial consumers are having grave like silence on the issue although they murmur against it in mutual discussions. The Punjab Government should see what is happening in Gujarat. Industry & trade there has started a mass agitation against power tariff. The Punjab’s industry can’t sit silent indefinitely.
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Hartron gets ISO 9001 CHANDIGARH, Dec 30 (TNS) — The Haryana State Electronics Development Corporation (Hartron) today claimed to have emerged as the first electronic development corporation in the country to attain ISO 9001 certification. The certification has been granted to it for its corporate office as well as its field units, thus making it first such corporation in the state. The Chairman of the Haryana State Electronics Development Corporation, Mr S.Y. Quraishi, and Managing Director, Mr K.K. Khandelwal, showed these certificates to the Chief Minister, Mr Om Prakash Chautala, here last evening. |
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Fake Zarda firm
unearthed NOIDA, Dec 30 — The Sector 20 police arrested a self styled politician and one of his associates and seized fake ‘Tulsi Zarda’ in pouches and wrappers worth Rs 20 lakh. According to SSP office
sources, the politician Permanand Yadav has three dozen cases pending against him at various police stations. He even contested for Zila Panchayat elections in Noida also. Sources said the raids were carried out on information provided by the original maker of the brand. The police said that zarda was being sold in Noida, Delhi, Haryana, Rajasthan and Gujrat. Police also seized a packing machine from his residence. |
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Better year for bourses ahead THE New Year is in and I am hopeful that this will be a better year for the bourses. Am I sounding like a mad hatter given the sense of despondency that enveloped the Indian markets, especially over the last month or so? Well, the optimism is based on the fact that just as euphoria at the bourses normally ends in a vertical crash, a runaway rally generally materialises in the aftermath of prolonged despondency. Last year, I ran the risk of being branded a lunatic when I shouted myself hoarse that the rally seemed unreal when the Sensex zoomed incessantly from 5000 to 6000 points level, and this year I am willing to take that risk all over again and advise my clients to start bargain hunting at these levels. One of the most common queries we have been receiving on our recently launched ‘Online Mail a Query’ service pertaining to the Indian stockmarket revolves around the future of the TMT sectors. IT stocks are not exactly in vogue at the moment. Three IT stocks that our research team is placing bets on at the prevalent price levels include Hughes Software, HCL Technologies and Visualsoft. Why, you may well ask ? I assure you, the answer to that will follow in the weeks to come. What about media and entertainment stocks ? To be frank, I am not overly enamoured by most of the media and entertainment stocks on offer at the Indian bourses. In fact, where they really slip is on the corporate governance front and notwithstanding their sharp price flip-flops, they remain at best trading bets that can be ridden at appropriate moments of time. Perhaps, a genuine media professional like Pranoy Roy, the promoter of NDTV might be a better bet as and when his company forays into the capital market. Telecom stocks invariably appear promising, but it is about time they started delivering. While, I would not, for the life of me, ever recommend MTNL, I have a gut feel that VSNL, in spite of its PSU legacy just might be able to break the shackles and emerge as a frontrunner yet again in this segment. By the way, I was amused to read a report that SEBI is worried that companies with bottomlines of Rs 10,000 technically qualify on the profitability track record front that it has instituted in the primary market. Now, where is it mandated that good old SEBI, will go beyond its role of being the regulator and start policing every nook and corner searching for the possibility of gremlins existing in some corner of the capital market? After all every prospectus, both the abridged and the unabridged one, does clearly indicate the profitability track record of the company and even if it is Re 1, it is a profit after all. To expect SEBI to qualify its rules and mandate a certain profitability level would be to spoon feed investors even more than they already are. What’s more, the number of suckers at the bourses, will nevertheless continue to grow at a rate inversely propotional to the growth of the bell-weather BSE Sensex. The underlying message is — it is high time the Indian investor got smart and invested some time in looking at the fine print. After all, if an investor can invest a fair sum of money, she or he can certainly invest some time to try and comprehend what he or she is getting into. If that is not possible, consult an investment expert or even go to a mutual fund, but for God’s sake do not voluntarily walk in blindfolded into an investment and then lament that SEBI’s norms are not stringent enough. After all, in a money market, everyone gets just what they deserve.
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Parking area contractor responsible for loss IN a welcome departure from its earlier stand, the National Consumer Disputes Redressal Commission has held a parking lot contractor liable for the loss of a car at the parking lot. When you park your vehicle at an authorised parking lot, you are expected to pay a certain fee and the parking lot attendant gives you a slip or a receipt on which he notes down your vehicle registration number. It is only when you produce that slip are you allowed to drive your vehicle out of the parking lot. Or if the parking lot attendant has kept the keys of the vehicle, he will give that to you only on your showing the receipt. In other words, besides providing parking space, the parking attendant promises to safeguard your vehicle while at the parking lot and for that service, you pay him a fee, which varies from place to place (Rs 5 to Rs 50). And obviously, if on your return you find your vehicle missing or damaged, you would hold him responsible. Now take the case of Mr Arun Kumar Gumber, who on August 5, 1993 went to the Indira Gandhi International Airport in New Delhi to see off his brother. He parked his car in the authorised parking area, after paying Rs 10 and collecting a receipt. However when he returned shortly afterwards, he found the car missing. He lodged a police complaint, but the car could not be traced. Since there was no insurance cover for the car, Mr Gumber filed a complaint before the District Forum, seeking the cost of the car and compensation from the Airport Authority as well as Mahesh Enterprises, which had been allotted the parking contract. The District Forum held both of them responsible, but the State Commission, after examining the licence agreement wherein the licensee had assumed responsibility for the safety of vehicles parked on payment of prescribed charges, held only Mahesh Enterprises liable. This view of the State Commission has now been upheld by the National Commission. Saying that the State Commission was legally right in holding that the facts and the circumstances would constitute ‘bailment’ and the person responsible for the management of the parking area was liable to make good the loss, the National Commission directed Mahesh Enterprises to pay Rs 90,000 along with interest at the rate of 12 per cent calculated from August 5, 1993, till the date of payment....(Revision Petition no 250 of 1997, order dated Nov 15,2000). This is an important Order from the point of view of consumers because in the earlier cases, even though the District Fora and the State Commissions awarded compensation to consumers placed in similar situation, the National Commission had held a contrary view and said those running parking lots cannot be held responsible for the safety of the vehicle and asked to indemnify the loss. In the case of Rohini Group of Theatres vs V.Gopalakrishnan (decided in May 1996), where the complainant’s brand new bicycle parked at the theatre’s authorised parking lot was found missing, the District Forum had asked the theatre to pay the cost of the bicycle, besides compensation. The state Commission too held that the position of the theatre or its owner was that of a bailee and that he was bound to take as much care of the goods bailed to him as a man of ordinary prudence would under similar circumstances. And there was absolutely no evidence to show that he took as much care as it was required of a prudent man as laid down under Section 151 of the Contract Act. The theatre, therefore, had to pay for the bicycle. The National Commission, however, had disagreed and said the attendant at the parking lot who collected a nominal fee of Re 1 for the parking of the vehicle cannot be said to be a bailee by any stretch of imagination. The bailment was the delivery of goods by one person to another for some purpose under a contract that they shall when the purpose is accomplished be returned or otherwise disposed of according to direction of the person delivering them. In the present case the bicycle was not delivered to the opposite party for any purpose and the parking lot attendant only ensured orderly parking at the theatre, the Commission had said. It had also quoted its order in the case of The Commissioner, Corporation of Madras vs S. Alagraj where the complaint related to the loss of a two-wheeler parked at a parking lot and said the parking lot was mainly for ensuring orderly parking and smooth flow of traffic and the person who collected a nominal fee was only providing parking space as a service and was not undertaking to ensure the safety of the vehicle. Given these earlier pronouncements, the recent order of the apex consumer court in the case of Mahesh Enterprises should come as a big relief to consumers |
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Termination Q: Is the demand of the employee to insist on permanent appointment appropriate? Ans: The SC in Delhi Public School M.P. v Teshlal Prajapati (2000-II-LLJ-1412) was considering this point. This appeal arises out of an order made by the H.C. on a challenge to an award made by the Labour Court on the ground that the term of contract of employment of the respondent - employee had expired and as such termination from service is governed by S.2(00) (bb) of the I.D. Act and that on the expiry of the term of employment, an offer had been made for employment again which had been declined by him. Therefore, the employee having lost his claim, the Labour Court ought to have rejected the same. The HC noticed that on an earlier occasion, on the question of retrenchment the matter had come up before it and it was decided in that case that the exception clause in S.2 (00) (bb) could not apply in this case and as that aspect of the matter had become final and it was no longer open to the appellant to reopen that issue. Therefore, as was rightly noticed by the H.C., the Labour Court was bound by the decision of the H.C. on this aspect of the matter. So far as the second point is concerned, a perusal of the offer made by the appellant that it would give a fresh appointment, it is clear that the same was only on an adhoc basis and for a period of ten and half months on a consolidated scale of Rs 500 per p.m. Naturally, the respondent - employee would decline the offer and insist upon a permanent appointment. In the circumstance, the SC felt it was not appropriate for the appellant to hang on to that offer. On the other hand, the HC noticed that the appellant had nor pursued with this plea before the Labour Court and, therefore, must be deemed to have been given up. That finding also appears to be justified in the circumstances of the case. Consequently, SC saw no reason to interfere with the order made by the H.C. The appeal that way was dismissed. |
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Nocil Petro BASELL, the international entity formed by a joint venture (JV) between Shell, Montell and BASF, has expressed its intention to acquire a higher stake of up to 76 per cent in Nocil Petrochemicals, the demerged comapny of National Organic Chemical Industries Ltd. As per the JV agreement signed two years back, Basell was to pick up a 49 per cent stake in Nocil Petrochemicals. Looks like good ‘chemistry’, wot?!! With the profitablility of Chambal Fertilisers and Chemicals surging, the KK Birla group outfit is planning a major diversification into textiles, housing and software. Also in its major diversification programme is the manufacture of phosphoric acid. The company has floated Chambal Agritech Ltd., a 50:50 joint venture with Technico Ltd. of Australia for its foray into agriculture sector. This company seems to be manufacturing a new ‘potion’ for its growth!!! This company has created a new corporate identity. The new logo of the company is a blue earthen lamp with a saffron flame on top accompanying Max. The idea behind the shift to a new identity is because Max is into diverse lines of life insurance, healthcare and information technology which require huge ad spends. To go with the huge spends; they needed a logo that can generate a lot more interest. Ring in the new, we say!!! The company, which is a subsidiary of the UB Group, has made a foray into the ready-to-serve drinks category. The first of its kind in the Indian market, Millennium Alcobev will launch these drinks in the beer, rum and
whisky segments. The company is currently test-marketing the products in Goa. The ready-to-serve drinks comprise light cocktails with alcohol content of under five per cent. The company seems to have launched its products at the ‘right time’ (Christmas and New Year) and the ‘right place’ (Goa)!!! |
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Markfed Country Club Raymond Prashanti unit A.A. Khan SBI strike |
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