B U S I N E S S

CONSUMER RIGHTS
Dealer ‘liable’ for defective product
IS a dealer as liable for a poor quality product as a manufacturer? Or can he escape liability for a defective product by pointing to the manufacturer? Well, a recent decision of the apex consumer court has made it clear that a dealer who sells the goods and collects the money from the consumer is as much responsible as a manufacturer for a defective product.

Iraq to sell 3 m tonnes crude oil to India
New Delhi, August 10
Iraq has offered to sell three million tonnes of crude oil to India this fiscal, a deal for which is likely to be signed in the third week of August. This will be New Delhi’s first crude from Iraq after the end of the US-led war.

Conversion of IDBI into bank opposed
New Delhi, August 10
A day before the Union Cabinet takes up the issue of IDBI’s restructuring, Opposition MPs have written to Prime Minister Atal Bihari Vajpayee strongly opposing conversion of the country’s leading development financial institution into a bank, saying it will have “devastating” effect on industrial growth of the country.

Bollywood actress Mahima Chowdhury at the launch of Lifestyle International Store, in Mumbai on Sunday. — PTI

Indian exports to China zoom by
101.5 per cent
Beijing, August 10
Indian exports to China zoomed by 101.5 per cent in the first half of 2003 to propel bilateral trade to a record $ 3.4 billion, aided by impressive performance of iron and steel, ores, plastics and organic chemicals.

Fans gather around glamour icon Rekha, after she unveiled the cover of Elle's 75th issue, at the Oxford Books Store in Mumbai on Saturday. — PTI

JK Paper net profit jumps 94.6 per cent
New Delhi, August 10
J.K. Paper has reported a 94.6 per cent jump in net profit for fiscal year ended on June 30, 2003 at Rs 33.04 crore as against Rs 16.98 crore last fiscal.

Inflation at 27-week low of 4.09 per cent
New Delhi, August 10
Inflation fell to 27-week low of 4.09 per cent, shedding 0.5 per cent during the week ended July 26 with primary articles and manufactured products becoming cheaper.

Asians in UK most technology savvy
London, August 10
Asians are more technology savvy than any other social group in Britain, with most Asian homes having Internet connections and DVD players, according to a survey.

MARKET SCAN

Mastershare delisted from stock exchanges
UTI Mastershare has now been delisted from stock exchanges since August 12, 2003 for restructuring the scheme. The Mastershare scheme is due to terminate in October 2003, as it has now been decided by the UTI to convent it into a mutual fund open-ended scheme from September 12, 2003.

ROUND-UP

SAIL plans VRS to shed 6000 employees
New Delhi, August 10
With a view to rationalise its workforce by bringing it down to one lakh, the Steel Authority of India Ltd (SAIL) is likely to come out with a fresh round of Voluntary Retirement Scheme soon.

• Wipro Info office for Saudi Arabia

• Services sector to grow by 7 pc

• FIIs net buyers in equities at 416.8 cr

CONSUMER RIGHTS
Dealer ‘liable’ for defective product
by Pushpa Girimaji

IS a dealer as liable for a poor quality product as a manufacturer? Or can he escape liability for a defective product by pointing to the manufacturer? Well, a recent decision of the apex consumer court has made it clear that a dealer who sells the goods and collects the money from the consumer is as much responsible as a manufacturer for a defective product.

The product in this case was a car, which was found to be defective. The District Consumer Disputes Redressal Forum passed an order directing both the dealer and the manufacturer to replace the vehicle with a new one or to refund the price of the vehicle to the complainant. In addition, it also awarded the consumer a compensation of Rs. 5,000 and costs of Rs. 500.

The dealer contested this decision before the State Consumer Disputes Redressal Commission and, on its dismissing it, went to the National Consumer Disputes Redressal Commission. His contention was that he was merely an agent of the manufacturer and therefore he cannot be held responsible for the defect in the vehicle. The direction for replacement of the vehicle or refund of its cost should, therefore, be issued only to the manufacturer and not to the dealer.

The commission, after considering all aspects of the case, disagreed. It pointed out that there was nothing on record to show that the dealer was the agent of the manufacturer. In fact, the records showed that the dealer was an independent person who sold the defective vehicle. “It is the dealer who received the payment from the complainant as the price of the vehicle. After having sold the defective vehicle and having charged the price thereof, the petitioner (dealer) cannot shift the blame wholly on the manufacturer. If the dealer has any grievance on this score, he should sort it out with the manufacturer. As far as the complainant is concerned, consideration was paid to the dealer and he cannot be absolved of the responsibility of having either to replace the vehicle or to refund the price.”, the commission said (Marikar (Motors) Ltd vs Lalan Carmu and another, RP No 1298 of 2001).

In several earlier cases, the National Commission had concurred with the decisions of the lower consumer courts, directing both the dealer and the manufacturer to make good the loss suffered by the consumer on account of defective goods. However, it had not specifically addressed in any one of those cases, the question of whether the dealer would be as liable as the manufacturer for a defect in the product. This order now gives no scope for ambiguity in the matter.

In an earlier order, the commission had made certain important observations about the responsibility of the dealer, but in that case the ‘dealer’ referred to was actually the fabricator and was not the registered dealer of the manufacturer. The case pertained to an assembled air-conditioner that was found to be defective. When the consumer court directed the assembler who had sold the air-conditioner to pay compensation to the consumer, he came out with the ridiculous argument that he could not be held responsible for the defect. His contention was that it was the sealed compressor that he had used in the air-conditioner that was found to be defective. Since he was not the manufacturer of the compressor, he cannot be held liable.

Dismissing this argument, the commission remarked : “A dealer cannot avoid his liability simply on the ground that he was not the manufacturer. It is his responsibility to carry out the terms of the warranty and in turn he may involve the manufacturer in fulfilling its obligations under the warranty” (Harmohinder Singh vs Anil Sehgal, RP Nos 949 and 955 of 1996, date of the order 23-3-1999).

Whether it is an electric or an electronic gadget, cosmetics or readymade garments, if a consumer is unhappy with the product or finds it to be defective, he contacts the retailer and not the manufacturer for redress because the retailer is his first point of contact for the product that he has bought. Besides, as far as the consumer is concerned, he has paid the retailer and completed the transaction with him and, therefore, it is obviously the dealer who has to sort out any problem that may arise with the product. And those dealers who fail to understand this will end up before the consumer court.

Iraq to sell 3 m tonnes crude oil to India

New Delhi, August 10
Iraq has offered to sell three million tonnes of crude oil to India this fiscal, a deal for which is likely to be signed in the third week of August. This will be New Delhi’s first crude from Iraq after the end of the US-led war.

“Iraq’s State Oil Marketing Organisation (SOMO) has offered us 3 million tonnes of Basra Light crude oil during October to March. We expect to sign the deal later this month,” IOC Director (Finance) P Sugavanam told PTI here. Senior IOC officials will be visiting Baghdad in the third week of August to seal the deal.

“We have already received the draft contract for supply of 3 million tonne crude. Our team will visit Baghdad shortly and sign the contract,” he said.

IOC officials were to visit Iraq on July 21-22 but confusion over requirement of visa led to the cancellation of the trip a few days before the scheduled departure.

Before the war in Iraq, India bought at least one very large crude carrier (about two million barrels) of Basra Light, a favourite with its refineries. Sugavanam said Basra Light crude oil would be used at its Koyali refinery in Gujarat, Panipat refinery in Haryana and Mathura refinery in Uttar Pradesh. — PTI

Conversion of IDBI into bank opposed

New Delhi, August 10
A day before the Union Cabinet takes up the issue of IDBI’s restructuring, Opposition MPs have written to Prime Minister Atal Bihari Vajpayee strongly opposing conversion of the country’s leading development financial institution into a bank, saying it will have “devastating” effect on industrial growth of the country. About 50 Members of Parliament asked the PM to ensure government’s holding in IDBI remains at least 51 per cent, restore income tax benefits and retain the DFI role and permit it to raise cheaper funds.

“IDBI’s corporatisation will have a devastating effect in the industrialisation of the country and seriously impact employment generation,” they said in a letter to the PM.

The letter comes a day before the Cabinet meeting to approve IDBI’s corporatisation and conversion into a bank through repeal of IDBI Act of 1964.

“The country is passing through industrial recession and such a move will have a further negative impact and send wrong signals,” it said. The MPs fear that the corporate entity will be guided by profit motive and the government would have no influence over management to carry out the development mandate given to it.

“We feel that government should let IDBI continue its DFI role in its present form,” the MPs said. In order to ensure investors’ interest and avoid a run on the bank, they said the government equity holding should not go below 51 per cent at any time.

“This will also enable IDBI to raise more funds and at cheaper rates due to the faith of investors in government institutions,” they said. — PTI

Indian exports to China zoom by 101.5 per cent

Beijing, August 10
Indian exports to China zoomed by 101.5 per cent in the first half of 2003 to propel bilateral trade to a record $ 3.4 billion, aided by impressive performance of iron and steel, ores, plastics and organic chemicals.

India-China bilateral trade during January-June this year reached $ 3.4 billion, up 67 per cent over the same period last year, according to statistics released by General Administration of Customs of China.

While Indian exports to China made an impressive growth of 101.5 per cent to touch $ 1.979 billion, imports from China saw a moderate growth of 35 per cent to total $ 1.478 billion.

The trade balance for the period was also in favour of India to the tune of $ 501 million.

Official sources said trade enquiries from Chinese companies have zoomed after Prime Minister Atal Bihari Vajpayee’s visit and this year’s total trade is set to surpass last year’s trade turnover of $ 4.9 billion.

In June alone, India exported goods worth $ 295 million, up 86 per cent over January 2002.

Exports of iron and steel amounted to $ 621 million, up 1452 per cent. Also, exports of ores, slag and ash went up 74 per cent to earn $ 543 million during the period.

Plastics sector continued its good performance by exporting $ 145 million worth of goods to China, registering a 27 per cent growth.

While organic chemicals earned $ 140 million during the first six months, exports of inorganic chemicals to China were worth $ 56 million. — PTI

JK Paper net profit jumps 94.6 per cent

New Delhi, August 10
J.K. Paper has reported a 94.6 per cent jump in net profit for fiscal year ended on June 30, 2003 at Rs 33.04 crore as against Rs 16.98 crore last fiscal.

Sales turnover increased 8.8 per cent to Rs 660.13 crore last fiscal over the previous fiscal, a company release said.

Its board recommended a 15 per cent dividend on equity shares (Rs 1.5 per share) amounting to Rs 4.67 crore.

The company achieved its highest ever production of paper and pulp at 1,71,849 tonnes during the review period.

“Overall plant capacity utilisation increased to 115 per cent,” Managing Director Harsh Pati Singhania said.

The sales volume at 1,79,362 tonnes last fiscal was an all-time high.

To maintain a consistent presence in the global markets, it exported 10,296 tonnes of paper last fiscal.

The company maintained its focus on branded products, which registered a 12 per cent growth over the previous year. — PTI

Inflation at 27-week low of 4.09 per cent

New Delhi, August 10
Inflation fell to 27-week low of 4.09 per cent, shedding 0.5 per cent during the week ended July 26 with primary articles and manufactured products becoming cheaper.

The point-to-point Wholesale Price Index (WPI) inflation fell to little over four per cent, which is also this fiscal’s lowest level, but prices of essential items like vegetables and fruits soared. The rate was 4.59 per cent a week ago.

The quarterly review, an offshoot of the passage of Fiscal Responsibility and Budget Management Bill in Parliament, said the inflation was decelerating.

The WPI inflation stood at 3.04 per cent during the same period of 2002-03. — PTI

Asians in UK most technology savvy
Prasun Sonwalkar

London, August 10
Asians are more technology savvy than any other social group in Britain, with most Asian homes having Internet connections and DVD players, according to a survey.

The Sky TV survey indicates that entertainment enjoys a prime position in the daily agenda in Asian homes. One reason why television viewing is high among the Asians is because most of them do not go to clubs or pubs.

The survey is said to be the first of its kind on viewing habits in Asian homes, and was commissioned by Sky TV to mark the 10th anniversary of Asian satellite TV broadcasting in Britain.

The survey reveals that Asians are twice as likely as other families to have DVD players and more likely to have PCs, games consoles and Internet connections.

Three out of four British Asians have access to the Internet, compared to a national average of 50 per cent. Moreover as many as 31 per cent of Asian families have DVD players, which is more than double the British average.

The findings also reveal that six out of 10 Asian families have multi-channel TV and three-quarters feel underserved by mainstream terrestrial channels. But many also do not like the 24 Asian satellite TV channels to which they subscribe.

According to the survey, nine out of 10 Indian families are movie buffs but among Pakistanis the figure falls to less than half. Bollywood movies are among the most popular draws.

Research Director Saber Khan said: "The survey shows for the first time that ethnic media consumption is high. Multi-channel TV now plays the major role in meeting TV demands of Asians." — IANS

MARKET SCAN

Mastershare delisted from stock exchanges
J.C. Anand

UTI Mastershare has now been delisted from stock exchanges since August 12, 2003 for restructuring the scheme. The Mastershare scheme is due to terminate in October 2003, as it has now been decided by the UTI to convent it into a mutual fund open-ended scheme from September 12, 2003. Those who hold Mastershare units have the option either to sell off these units to the UTI or to convert their investments into a new open-ended scheme. The NAV of Mastershare at the end of the year 2002 (on December 31) was Rs 11.41. At present, the NAV value is Rs 13.12 per unit of Rs 10 face value. The buyback rate for those who want to opt out will be the present NAV.

Those investors who want to sell back their units to the UTI at the present NAV can do so w.e.f. August 13, 2003 to September 12, 2003 by completing the documentary formalities as required by the UTI. Who hold these units in a demat form can make the purchase request can collect exit forms either from UTI Branch offices or the DPs at their demat offices.

Interestingly, the Board of the UTI Trustees is meeting on August 30 to recommended income distribution to holders of Mastershares. In case the proposal is approved, the record date will be September 18 and the account books in this scheme will remain closed from September 19 to 25.

It appears that dividend will be payable to the holders of Mastershare units. It is, however, not clear whether those investors who opt out of the scheme before September 19 will be entitled to those dividend. It is, however, likely that those who opt out before September 12, will be paid by the UTI at the present NAV but those who stay back in the open ended scheme may be paid dividend as decided on August 30 meeting of the UTI Board. Army further clarification from the UTI on these important issues may be available after August 30 meeting of the UTI Board.

Another aspect of the problem is that those who opt of the scheme will have to pay long-term capital gains tax in case these units have been held for one year or more but those who do not qualify for the long-term capital gain will have to add any gains made in respect of those units (after deducting cost price) to their regular income for the purpose of income tax.

Perhaps those investors who do not opt out of the Mastershare close-ended scheme and now become investors in the new open-ended scheme may get dividend (to be declared on August 30) which ma be tax-free in the hands of the holders.

Another aspect of the proposed open-ended scheme is that NAV of the scheme will be declared on daily basis and units will be sold at a NAV-related price. Repurchase will also be at NAV price. As a mutual fund scheme it will not be listed on any stock exchange and any return from the scheme to the investors will be taxable.

Probably it may be wise to wait for the Board meeting of August 30 which would declare dividend before an investor takes a final decision whether to opt out of the close-ended scheme or to stay back in the new open-ended scheme.

Contrary to what I had expected, the market has rallied to a two-year high level. The Sensex closed at 3883.76 points which was the highest level in the 29 months. Nifty touched 1222.65 points. Tata group shares sparked-up, though the rally also covered FMCG majors like Hindustan Levers, ITC, Nestle and Britannia as well as those connected with electric power projects like ABB and Siemens.

NCAER business confidence index in July 2003 has moved up by 14 points to 125.7 points. However, FICCI has further warned that the market might slow down during the elections period which are due in September or October.

ROUND-UP

SAIL plans VRS to shed 6000 employees

New Delhi, August 10
With a view to rationalise its workforce by bringing it down to one lakh, the Steel Authority of India Ltd (SAIL) is likely to come out with a fresh round of Voluntary Retirement Scheme soon.

“We are planning to reduce our work force by 10,000 in the current fiscal through a mix of VR and natural retirement. The plan is to offer VR to 6000 employees,” SAIL Chairman V S Jain told PTI.

SAIL’s current work force is 1.37 lakh and it had agreed to reduce it to one lakh by 2005 while entering into an agreement with the government two years back. — PTI

Wipro Info office for Saudi Arabia

New Delhi: Wipro Infotech, a division of Wipro Ltd is planning to open an office in Saudi Arabia, with a view to strengthen its presence in the market.

According to sources, the company will open an office there in the next few months while continuing its existing alliance with a local partner.

Pointing out that the Wipro’s business in the region was growing, the sources added the company wanted to invest more there in terms of people, management focus and customer contact.

The division currently has over 200 professionals positioned in the Middle East out of which 17 are business development and pre-sales people and the balance are devoted to projects. It is currently executing 21 projects in the region with half of projects coming from Saudi Arabia. — PTI

Services sector to grow by 7 pc

New Delhi: The services sector of the economy is expected to grow between 7 to 7.5 per cent this year, according to an apex industry chamber.

According to CII-Ascon Services Sector Survey for April-June 2003 quarter, cellular phones, construction industry and hotel industry continued their impressive growth.

Out of the eight sectors surveyed, three sectors registered excellent growth of more than 20 per cent, four registered high growth between 10-20 per cent and one sector recorded negative growth year-on-year.

The fastest growing sector has been the cellular services sector, which registered a subscriber growth rate of 115 per cent year-on-year in April-June 2003. The growth rate in April-June 2002 over April-June 2001 was 164 per cent. — UNI

FIIs net buyers in equities at 416.8 cr

Mumbai: The foreign institutional investors (FIIs) have netted purchases of Rs 416.8 crore ($ 89.2 million) in equities and Rs 162.8 crore ($ 35 million) in debt market during the trading week ended August 8.

Mutual Funds (MFs) also recorded net inflows at Rs 15.45 crore and Rs 297.25 crore in equities and debt respectively, according to the data available with SEBI here.

FIIs were net buyers in equities on four trading days and netted their highest inflow of the trading week at Rs 299.1 crore ($ 64 mn) on August 4 followed by Rs 105.5 crore ($ 22.8 mn) and Rs 84.7 crore ($ 18.1 mn) on August 6 and 5, respectively.

The foreign funds were net sellers at Rs 73.3 crore ($ 15.9 mn) on August 7 in equity market.

On debt front, they registered net purchases of Rs 138.5 crore ($29.7mn) on August 5 and Rs 35.5 crore ($7.7mn) on the next day. — PTI

BRIEFLY

SBP branch
Fatehabad, August 10
The Rattia (Fatehabad) branch of the State Bank of Patiala has become the best branch of Haryana zone. Mr Harish Khurana, Manager of the branch, has been honoured with a trophy and a citation. The award was presented to him yesterday at the bank head office in Patiala. — OC

ICICI Bank
Jalandhar, August 10
ICICI Bank felicitated bright students of KRM DAV College, Nakodar, yesterday for their out standing performance in the examinations conducted by Guru Nanak Dev University. The prizes were distributed to 25 meritorious students by Regional Head of the bank, Mr Shyam Patnaik. — OC