(1) Will Ask SC to set up Special Court to deal with Politicians with
Criminal Background: Narendra Modi
The
following news item is self explanatory. What is needed is overall
judicial reforms which is mother of all reforms so that thorough trial
is completed within well defined time frame. In US, the suits are
decided within 9 months and that too with thorough trial. There are 73
countries which are having better judiciary compared to India. Neither
the Govt nor the Bar Council of India is interested to learn from them.
Till then the criminals will subvert the democracy and public will
continue to suffer
Will
ask SC to set up special courts to deal with politicians with criminal
backgrounds: Narendra Modi
Wednesday, 16 April 2014 - 10:34pm IST | Place: Gandhinagar | Agency:
ANI
http://www.dnaindia.com/india/report-will-ask-sc-to-set-up-special-courts-to-deal-with-politicians-with-criminal-backgrounds-narendra-modi-1979093
Bharatiya Janata Party (BJP) prime ministerial candidate Narendra Modi
said on Wednesday that if voted to power after the 2014 general
elections, he would approach the Supreme Court of India with a request
to set up special courts to deal with politicians who had criminal cases
registered against them.
Modi told Smita Prakash, Editor (News) Asian News International (ANI),
in an exclusive interview held here, that: “Criminilastion of politics
is a grave issue, and this concern, is shared by every citizen of the
country. It should be the concern of every party and all leaders.”
When asked what solutions he had in mind to deal with the issue, Modi
said: “One solution is that political parties feel determined and don’t
give tickets to such leaders. But this situation hasn’t arrived as of
now. I have made up my mind, that this time, the MLAs or MPs who have
been elected, to whichever party they belong, even if they belong to the
BJP, if they have criminal charges against them, then I would request
the SC to set up special courts to try them, and see that all of these
criminals cases be disposed off within an year.”
“So, that if a person is convicted, and his seat is vacated, then a
person of a non-criminal background can takeover. In this way, the
criminal layer in politics would be erased,” he added.
On
whether he would work for a political consensus on this issue in
parliament, the BJP prime ministerial candidate said: “Every party
raises this issue, but nobody actually takes the initiative. I want to
do this, and, I think, this is the best way. But, I am open to other
good ideas.”
“This should not be taken in a political context to put someone in jail.
The real issue is that if Modi has four FIRs in his name, then it should
be tried within a year. This is what I am saying, There is nothing
vindictive. It’s not that we will start a new CBI inquiry or dig out
files of certain leaders. I don’t want to commit this sin,” Modi said.
“I
want the credibility of the Indian institutions and the respect of
Constitutional organisations to increase. If the country stands on
multiple pillars of constitutional institutions, it will emerge
stronger,” the BJP prime ministerial candidate said.
Seeing the issue from a historical perspective, he said: “In the
beginning, the leadership that emerged was from the revolution for
Independence. Then, it came from social welfare. Then, it went towards
casteism. Slowly and slowly, a leadership started emerging through
gunpoint. This was a big deterioration, which is of grave concern.
Earlier, political parties use to seek the help of criminals for gains.
But then, criminals felt that why shouldn’t they themselves do this? So,
this was the situation which started developing. Even if this was in
small percentages like two percent or five percent, it was an issue of
concern.”
(2) Problem of Deposits for Granting Stay in SA and or Appeal to DRAT
under Securitization Act
Several borrower litigants have approached us for suggesting solution to
above problem, Our views are as under:-
(a) In
SA, special and suitable pleadings be made that the borrower does not
have liquid funds to provide any deposit.
(b) In
the said SA, the above be mentioned as first of the preliminary issues
to be taken up by the DRT.
(c) As
soon as the proceedings of the SA commences, an application be submitted
to decide the said preliminary first.
(d) If
the verdict of the DRT is not favourable, the relevant order be reviewed
and appealed to higher courts.
======================================================================================
Weekly Mails and DVDs are DRT Legal Guide and gold mine of practical
information for the borrowers and guarantors - The
mail recipient particularly Borrowers and Guarantors will be immensely
benefited by our weekly mails and DVDs, all previous issues of weekly
mails from 1st one till the last one may be viewed by clicking the links
given at the top. Separate web pages have been created to contain these
mails in batches of 10 so that pages open up fast. These mails are gold
mine of information on current topics giving lot of practical
suggestions and comments. Any new recipient to these mails must go
through all the weekly mails right from the issue no 1 to the latest. If
possible please spread the reference of our web site and the weekly mail
among the persons, borrowers and guarantors who are the bank victims. If
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is issued on every Friday. The particular issue of the weekly mail is
first published on the web site and then mailed to borrowers, guarantors
and their advocates in the country. This service is free in the best
interest of society in general and litigant borrowers and guarantors in
particular. We are getting huge no of mails appreciating our weekly
mails. We welcome suggestions.
DRT Solutions Weekly Mail – 309th Issue
dated 11th April
’14
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(2) Sec 14 of Securitization Act - Important Judgement of Supreme Court
of 03.04.14
Mr
Bharat Gandhi, Advocate on Record, Supreme Court has informed the
following recent judgment of the Supreme Court in the matter of Sec 14
of the Securitization Act relating to tenancy. Extract from the said
judgment is reproduced according to which the Magistrate has to look
into the facts concerning tenancy and decide as per this judgment:-
Reportable
IN
THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL No. 736 OF 2014
(Arising out of S.L.P. (Crl.) No.1666 of 2012)
Harshad Govardhan Sondagar …… Appellant
Versus
International Assets Reconstruction Co.
Ltd.
& Ors. ….. Respondents
J U D G M E N T
A. K. PATNAIK, J.
Extract from the above judgment is reproduced below:-
“Orders and directions of this Court in the facts of the cases before
the Court:
28.
Having expressed our opinion on the different questions of law raised in
these appeals, we may now pass orders and directions considering the
broad facts of the three different categories of the case before us:
(i) In
Criminal Appeals arising out of Special Leave Petition (Criminal)
Nos.9426 of 2012, 9170 of 2012, - - - , the appellants claim that they
are in possession of the secured asset under a lease made prior to the
mortgage but the Chief Metropolitan Magistrate, Mumbai, has passed
orders under Section 14 of the SARFAESI Act for delivery of possession
of the secured asset to the respective secured creditors. These orders
passed by the Chief Metropolitan Magistrate, Mumbai, are set aside and
the matters are remitted to the Chief Metropolitan Magistrate to pass
fresh orders in accordance with this judgment and any other law that may
be relevant after giving an opportunity of hearing to the appellants and
the secured creditors.
(ii) In
Criminal Appeals arising out of Special Leave Petition (Criminal)
Nos.4064 of 2012, - - when the appellants filed the Special Leave
Petitions under Article 136 of the Constitution of India, the
applications of the secured creditors under Section 14 of the SARFAESI
Act were pending. In case the applications are still pending, the Chief
Metropolitan Magistrate or the District Magistrate, as the case may be,
will consider the claims of the appellants that they were in possession
of the secured asset under a lease made prior to the creation of the
mortgage and decide the applications under Section 14 in accordance with
this judgment and any other law that may be relevant. In case, during
the pendency of these appeals, orders have been passed by the Chief
Metropolitan Magistrate or the District Magistrate under Section 14 of
the 6 SARFAESI
Act, the orders so passed will stand quashed and the Chief Metropolitan
Magistrate or the District Magistrate will pass fresh orders in
accordance with this judgment and any other law that may be relevant
after giving an opportunity of hearing to the appellants and the secured
creditors.
(iii) In
the Criminal Appeals arising out of Special Leave Petition (Criminal)
Nos.4619 of 2012, when the Special Leave Petitions were filed under
Article 136 of the Constitution of India, no application under Section
14 of the SARFAESI Act had been filed by the secured creditors. In case
such application under Section 14 of the SARFAESI Act has been filed in
the meanwhile or is filed in future, the Chief Metropolitan Magistrate
or the District Magistrate, as the case may be, will decide the
applications in accordance with this judgment and any other law that may
be 6 relevant
after giving opportunity of hearing to the appellants and the secured
creditors.
(iv) In
all these appeals, the Chief Metropolitan Magistrate or the District
Magistrate, as the case may be, will pass final orders under Section 14
of the SARFAESI Act within four months from the date of filing of
certified copy of this judgment by either the lessee/tenant or the
secured creditor.
(v) With
the aforesaid directions and orders, the appeals are allowed. The
parties shall bear their own costs.
.……………………….J.
(A.
K. Patnaik)
………………………..J.
(V.
Gopala Gowda)
New
Delhi,
April 03, 2014.”
(2) CBI Arrests Debt Recovery Tribunal Officer While Accepting Bribe
One of our clients from Cochin has made reference to the following news
item which is self explanatory:-
CBI Arrests Debt Recovery Tribune Officer While Accepting Bribe
http://www.newindianexpress.com/cities/kochi/CBI-Arrests-Debt-Recovery-Tribune-Officer-While-Accepting-Bribe/2014/03/30/article2139106.ece#.U0ZfETssXQA
By Express News Service - KOCHI
Published: 30th March 2014 09:37 AM
Last Updated: 30th March 2014 09:37 AM
The Central Bureau of Investigation (CBI) on Saturday caught an official
of Debt Recovery Tribune (DRT) red-handed while receiving bribe.
The arrested has been identified as N Ranganathan, of Alappuzha, who is
a Recovery Officer of the DRT here.
According to CBI officials, the accused person had been caught taking a
bribe of `2 lakh from a person who won the bid for a property recovered
by a bank.
“The complainant had won the bid from DRT for 70 cents of land in
Angamaly which had been seized by SBT as part of revenue recovery. He
won the bid for the property for `50 lakh.
However, Ranganathan approached the complainant and demanded a bribe of
`2 lakh for releasing the property.
If the bribe is not paid, he would delay the release of the property,
the official had told the complainant. The person then lodged a
complaint with us and a trap was set. Ranganathan was contacted, and he
asked the complainant to come Jawaharlal Nehru International Stadium in
Kaloor,” officials said. “The chemically-treated currency notes were
handed over to Ranganathan as bribe and following this, we caught him
red-handed,” officials said.The agency has found that the accused had
lowered the value of the properties to get bribe from the people who bid
for revenue recovery properties. “The price of the property with the
complainant in this case was `70 lakh. But Ranganathan lowered the price
to `50 lakh. He did this to receive bribe. We are checking whether he
did similar things in the past. For this, the properties released by the
DRT are being checked,” a CBI official said.
The agency has registered a case under various sections of the
Prevention of Corruption Act. The accused would be produced before the
court.
DRT Solutions Weekly Mail – 308th Issue
dated 4th April
’14
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(1) Landmark Judgment – Errant Bank Loses Case in all higher Courts i.e.
DRAT, High Court and the Supreme Court – Possession given back after
DRAT Order - Borrower also entitled for Compensation u/s 19 of
Securitization Act
We are thankful to Mr Armstrong Rajkumar (email id – iamarmstrong@hotmail.com)
for giving complete feedback along with copies of the relevant judgments
in this epoch making Bank Litigation under Securitization Act. This will
promote and inculcate confidence in borrowers that if cases are fought
relentlessly, they can win the battle in all higher courts i.e. DRAT,
High Court and the Supreme Court.
The extracts from various orders of the said litigation are as under:-
(a) M/s
Hubert Furnishers, Chennai filed SA No 135/2006 in DRT-1, Chennai
challenging the section 13(4) notice issued by the Punjab and Sind Bank
claiming a sum of Rs 78.96 lacs on the ground that the action of the
bank u/s 13(4) of the Act is void ab initio and it has been initiated by
a person who is not authorized officer under the Act and also failed to
comply with the provisions of the said Act. The DRT, Chennai dismissed
the said SA. The borrower filed appeal before DRAT Chennai.
(b) The
DRAT Chennai
observed that apart from the above all the proceedings under Section
13(4) of the Act have not been carried out in adherence to the
provisions of the Act and the Rules made thereunder and added to this
the secured asset still continues to be in possession of the bank and it
can be easily said that by the act of taking possession of the secured
asset and the bank being in continued physical possession of the secured
asset for the last over 6 years it has effectively prevented the
appellants’ Managing Partner to conduct the business and eke out his
livelihood inspite of having paid sums of money more than that was
required to be paid as per the RBI circular. It
is seen that the bank was duty bound to inform the appellant about the
appellant’s eligibility to be considered for the OTS Scheme and that the
bank failed in its duty to inform the appellant. It can be
seen that the bank has chosen to ignore the RBI guidelines which it was
bound to follow and it has also preferred to remain silent about the RBI
guidelines in its letter.
(c) DRAT
further found that the respondent bank had not abided by the RBI
circular and has also not informed the appellant about the OTS but has
chosen to proceed under the provisions of the SARFAESI Act and thus has
caused great prejudice to the appellant. It can be seen that the
respondent bank also failed to obey the dictum of the Hon’ble Supreme
Court of India. The Respondent bank has neither chosen to obey the
dictum of the Hon’ble Supreme Court of India nor has chosen to adhere to
the circular / guidelines issued by the RBI and by its act has caused
great prejudice to the appellant and has made the appellant to run from
pillar to post for the last several years.
(d) DRAT
further mentioned that it is seen Shri H.S. Brar, Chief Manager and
Authorized Officer of the respondent bank issued a letter dated
27.1.2005 to Shri M.R. Gopinath, Officer, Punjab and Sind Bank stating
that he is the Authorized Officer of the account for taking action under
SARFAESI Act, 2002 and that he is authorizing the said Shri M.R.
Gopinath to appear on behalf him before the Chief Metropolitan
Magistrate Court, Egmore, Chennai in the proceedings initiated by the
bank under Section 14 of the SARFAESI Act. A perusal of C.M.P. No.
1459/2005 filed under Section 14 of the SARFAESI Act before the Chief
Metropolitan Magistrate, Egmore, Chennai depicts that Shri M.R. Gopinath
as the Authorized Officer in this case. Thereafter an Advocate
Commissioner was appointed by the Chief Metropolitan Magistrate, Egmore,
Chennai by order dated 30.5.2005 and the Advocate Commissioner proceeded
to take possession of the shop at 185, Royapettah High Road,
Chennai. The proceedings of the Advocate Commissioner reveals that no
notice of taking of possession has been served on the appellant and a
copy of the inventory was also not served to the appellant. It is seen
that the Advocate Commissioner after taking possession has given the
keys of the property to Shri M.R. Gopinath and who in turn gave the keys
to one Shri Thiyagarajan who is stated to be a security agent. A
communication dated 11.6.2005written by the said Shri M.R. Gopinath to
the Chief Manager, Punjab & Sind Bank, 161, Mount Road reveals that he
was acting under the instructions of the Chief Manager and he has
described himself as the “Authorized Officer of the case”. The
publications that are required to be effected for the taking of
possession have been done nearly after a year after the date of taking
of possession. Further the notice under Rule 8(6) of Security Interest
(Enforcement) Rules, 2002 for the sale of the property reflects no
date.
(e) It
is also seen that the appellant had approached the Criminal Court by
filing Cr. M.P. No. 878/2005 in CC No. 17359/2005 on the file of XIII
Metropolitan Magistrate, Egmore, Chennai and had filed a private
complaint against the said Shri M.R. Gopinath and Shri H.S. Brar and
that the criminal court had dismissed the application by its order dated
23.8.2005 and that the appellant aggrieved by the said order filed Crl.
R.C. No.1503/2005 before the Hon’ble High Court of Madras. The Hon’ble
High Court of Madras by its order dated 3.2.2011 set aside the order of
the Magistrate and directed a trial against Shri M.R. Gopinath for the
offences stated in the private complaint in C.C. No. 17359/2005.
(f) DRAT
further ruled that Shri M.R.
Gopinath cannot be the Authorized Officer in this case and whatever
actions that had been taken by him as the Authorized Officer in this
case are liable to be set aside as all his actions under the SARFAESI
Act as the Authorized Officer are in violation of the SARFAESI Act and
the Rules made thereunder. Therefore
the act of Shri M.R. Gopinath in taking physical possession, the act of
Shri M.R. Gopinath receiving the possession of the property from the
Advocate Commissioner as the Authorized Officer, the act of Shri M.R.
Gopinath in handing over the physical possession of the property to a
third party agent and the act of Shri M.R. Gopinath addressing himself
as the Authorized Officer in this case are all acts done by the said
Shri M.R. Gopinath, Officer of the Punjab & Sind Bank and the said
acts can only be termed as illegal as he had no authority therefor.
Further it is seen that the copy of the possession notice was not served
on the appellant and it is also seen that the publications were not
effected as it is required to be effected and therefore the taking of
possession of the secured asset is liable to be set aside.
(g) DRAT
further stated that the notice issued under Rule 8(6) of the Security
Interest (Enforcement) Rules, 2002 for the sale of the property is also
not in consonance with the Act and the Rules framed thereunder. Therefore
in this case it can be seen that the secured creditor being Punjab &
Sind Bank has permitted a person who is not Authorized under the Act to
be an Authorized Officer and the said unauthorized person has usurped
the powers of the Authorized Officer and has committed illegalities in
the enforcement of the rights of the secured creditor and that the said
officer has also acted in contravention to the provisions of the
Security Interest (Enforcement) Rules, 2002 and therefore the entire
exercise of the secured creditor right from taking physical possession
of the shop on 11.6.2005 and thereafter can only be said to be a series
of contraventions of the provisions of the Act and the Rules made
thereunder. Therefore it has to be concluded that the proceedings taken
up by the secured creditor firstly through Shri H.S. Brar and secondly
through Shri M.R. Gopinath are in contravention of the SARFAESI Act and
the Rules made thereunder.
(h) DRAT
finally concluded that the SA filed by the appellant before the Tribunal
below was entitled to be allowed by the Tribunal below and that the
tribunal below had erroneously dismissed the SA. Therefore the order
of the Ld. Presiding Officer, DRT-I Chennai dated 20.8.2010 in SA No.
135/2006 is hereby set aside.
(i) Subsequent
to the said order of the DRAT, the bank handed over the possession back
to the borrower.
(j) As
usual, the bank appealed to Madras High Court. The said High Court in
its order dated 12.03.13 decided against the bank and ruled that as per
Section 19 of the Act when there is deviation and the possession has
been handed over, the borrower is entitled for compensation. Hence the
matter is remitted back to Tribunal to determine the quantum of the
compensation.
(k) The
bank filed SLP before the Supreme Court of India. On 28.03.14, the
Supreme Court dismissed the said SLP on the ground of delay as well as
on merits.
Our Comments
Since 2001, we have been advising all our clients that one has to be
prepared to fight in all courts right from DRT to the Supreme Court.
During this period, one should have resources not only for survival but
for the legal expenses also. In this context, the counter-claim becomes
highly essential so that at appropriate time, adequate compensation is
determined. With passage of time, more such judgments are expected.
(2) Supreme Court directs Samsung Chairman to appear before Trial Court
Mr Himanshu Mehta, one of our clients from Mumbai has informed the
following news item which is self explanatory. It is relevant to note
that we have all along been emphasizing that the Chairmen of the Bank
and all higher officials be impleaded in bank litigations on account of
wrong doings committed by the bank.
Supreme Court has directed
Samsung Chairman Lee Kun-hee to appear before a Ghaziabad court
PTI New Delhi, April 2, 2014 | UPDATED 13:11 IST
In
fresh trouble for Samsung Electronics Chairman Lee Kun-hee, who is
facing an arrest warrant, the Supreme Court has directed him to appear
before a Ghaziabad court in a 1.4 million dollar cheating case filed
against him.
A
bench of justices CK Prasad and PC Ghose, however, directed that the
arrest warrant issued against 72-year-old Lee for his non-appearance in
the case before the trial court will not be executed for a period of six
weeks.
"However, the warrant of arrest issued against the petitioner (Lee)
shall not be executed for a period of six weeks from March 31. In the
meanwhile, the petitioner shall appear before the trial court in
seisin(hearing) of the case and seek bail and/or exemption from
appearance in accordance with law," the bench said.
The
court, however, made it clear that it was not expressing any opinion on
the merit of the case pending before the trial court.
The
bench passed the order on Monday on an appeal filed by Lee challenging
the Allahabad High Court's order dismissing his plea for setting aside
arrest warrant issued against him.
A
complaint was filed by an Indian company, JCE Consultancy, against Lee
in the Ghaziabad court for allegedly cheating it of 1.4 million dollar.
Lee
had then approached the high court and the Supreme Court for quashing of
FIR against him but his plea was rejected by both the courts earlier.
The
trial court, thereafter, issued an arrest warrant against him for not
appearing before it in the case.
DRT Solutions Weekly Mail – 307th Issue
dated 28th March
’14
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(1) Registrar DRT returning SA with Oral Orders:-
We
have received complaints of several borrowers that the Offices of
Registrar DRTs are returning the SAs with oral orders or comments to
resubmit the same after removing the defects so pointed out. Our
comments are as under:-
(a) The
Borrowers should study the Rules and Regulations of concerned DRT and
examine the objections raised by the said office of Registrar. If it is
a valid objection in terms of the said Regulation, it should be
rectified.
(b) In
case the objection is not valid, the office should be asked to
communicate the same in writing.
(c) The
said written orders of the office of the Registrar are appealable before
the PO DRT.
(d) The
Borrower should obtain the certified copies of the proceedings and take
timely actions so that appropriate actions are within limitation and
available remedies are not lost.
(2) Chief Justice, Supreme Court of India admits to Registry’s Error
The
following news item is self explanatory:-
CJI Admits
to Supreme Court Registry's Error
By Express News Service - NEW
DELHI
Published: 25th March 2014 08:12 AM
Last Updated: 25th March 2014 08:12
AM
http://www.newindianexpress.com/nation/CJI-Admits-to-Supreme-Court-Registrys-Error/2014/03/25/article2129106.ece
Chief Justice P Sathasivam on Monday
admitted a mistake on the part of the Supreme Court registry for posting
a particular case before a Bench after senior advocate Dushyant Dave
mentioned the matter alleging that people are resorting to forum hunting
in the top court.
Dave had alleged that it is the most
shocking development in the history of the apex court as a particular
court is being preferred by the Mumbai builders to adjudicate their
cases.
“It is the most shocking incident and
it sends an extremely wrong signal from the Supreme Court,” he said
mentioning the facts of the case and urging the Chief Justice of India
to withdraw the case from the Court No 10 where the matter is listed for
hearing.
“A strong message needs to be sent that
forum shopping won’t be allowed in this court,” he said.
The Chief Justice of India then assured
Dave that he will look into the case and pass appropriate orders after
talking to the registrar general.
Later, speaking to reporters after a
public function, Sathasivam said that the “mistake has been rectified”
and case has been listed before an appropriate Bench.
“I verified those case papers. In our
system, the computer allots these cases. For example if it pertains to
criminal matters, it will go to particular judges. And this case by
mistake has gone to that court and it was brought to notice by senior
advocate Dushyant Dave.
DRT Solutions Weekly Mail – 306th Issue
dated 21st March
’14
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(1) Pathetic Tale of a Guarantor
Son
of a Guarantor rang us and discussed the whole matter on phone. It was a
pathetic tale as under:-
(a) Ten
years back, Mr X took a loan of Rs 25 lacs for the business of building
construction. His friend stood as a Guarantor by mortgaging his only
house worth Rs 40 lacs.
(b) For
nearly 5 years the business was going on smoothly. On account of
recession, the business suffered. The borrower sold the buildings
secretly and in collusion with the bank officials thrusted the
enforcement of securities belonging to the guarantor.
(c) The
guarantor filed the SA and when attended the DRT, he found that the
performance of the advocate was not satisfactory. He changed 10
advocates. During the course of DRT proceedings, the bank organized
auctioning the property. The Guarantor filed a stay application in DRT
which was allowed. The bank appealed to DRAT.
(d) The
continuous fight for last 4 years has exhausted the 75 years old
guarantor. At this stage, his son visited our web site and discussed the
whole matter with us.
(e) We
advised him the following:-
(i) The
bank will fight even upto Supreme Court.
(ii) The
battle will take several years even may take decades.
(iii) The
SA needs to be amended to include counter-claim.
(iv) The
collusion between the borrower and bank officials also needs to be
pleaded by amending the SA.
(v) Right
to life with reference to the single dwelling also needs to be pleaded.
(2) Unsettling Indian Justice System
The
following news item is self explanatory:-
The Unsettling Indian Justice System
By Aakar
Patel
Published: March 15, 2014
http://tribune.com.pk/story/683237/the-unsettling-indian-justice-system/
Twenty
years ago, my beat as a reporter was sessions court in Bombay. I was
often struck by what I thought (perhaps, wrongly) were incorrect and
poorly argued judgments. That this does not seem to bother too many
people in India probably means that I am, as I said, wrong. But I wanted
to put a few recent cases forward to show what I find unsettling.
Last week,
the Delhi High Court upheld
the death sentence of
four men who raped and murdered a girl in an infamous incident. The
court said that if the convicts were not hung, the “rage of society
would not be satisfied and our justicing (sic) system would be rendered
suspect”. Furthermore, that “any leniency shown in the matter … would
give rise to a feeling of private revenge among people, leading to
lawlessness in society”.
I was
alarmed by these words. The writer, Antara Dev Sen, wrote that given
the existence
of the death penalty and
the viciousness of the crime, “the Delhi High Court had no choice”. She
then adds: “But did it need to specify that it was doing so because it
feared public rage? Did it need to explain that it was persuaded, not
only by the demands of justice, but by the demands of a possible mob? …
Allowing mob sentiment — however justified — to influence legal
procedure sets a dangerous precedent.”
Last year,
Arundhati Roy pointed out that the Supreme Court judgment on Afzal
Guru,
hanged for his role in the attack on India’s parliament, said something
similar. The Court accepted that the evidence was circumstantial: “As is
the case with most conspiracies, there is and could be no direct
evidence amounting to criminal conspiracy.” But then it went on to say:
“The incident, which resulted in heavy casualties, had shaken the entire
nation and the collective conscience of society will only be satisfied
if capital punishment is awarded to the offender.”
Like Roy,
I found this line of reasoning frightening. Also, last year, in another
case, the Supreme Court had defined which cases were the “rarest
of rare”.
It said: “Certain murders shock the collective conscience of the court
and community … we are of the view that such crimes, which shock the
collective conscience of society by creating extreme revulsion in the
minds of the people, are to be treated as the rarest of rare category.”
I do not
understand what collective conscience is and how it is to be measured
for extreme or moderate revulsion.
Then, last
week, we had the unusual report of the head of Sahara India, who is in
jail on contempt of court charges arising from unpaid money to
investors. Unusual, because his lawyer, Ram Jethmalani, said he was,
according to a report, “embarrassed to point out the mistakes committed
by the bench in passing the March 4 detention order and wondered whether
the petition could be placed before a larger bench”.
The bench
opened the next hearing with the remark: “We have gone through the writ
petition. Nothing in the petition embarrasses us. You can argue the
petition, including its maintainability.”
To this
Jethmalani is reported to have said: “My client is not sure what his
offence exactly is. He believes it is contempt of court. Even if I
presume that is the offence for which he is jailed, it is a bailable
offence as the maximum punishment is six months imprisonment.” The court
had wanted to be shown how the money is to be returned, rejecting one
proposal and then asking the Sahara group to come out with an “honourable
proposal”
(according to The Times of India) for depositing Rs20,000
crore of investors’ money. What is the meaning of honourable here? I do
not know, but we shall know soon enough if Jethmalani is right and there
is something embarrassing about the matter.
A couple
of years ago, I had a chat with a Supreme Court justice (who was then
chief justice of the Karnataka High Court) at a dinner. I suggested to
him that judgments in India were often poor because most of the lower
judiciary didn’t know Latin and didn’t understand the fundamentals of
jurisprudence. He thought about it and said, “No, all that most judges
need to do is listen to the testimony and decide who’s right.”
Perhaps,
he is right, and I have no idea if he is. But all the same, it is, as I
said, most unsettling.
Published in The Express Tribune, March 16th, 2014.
DRT Solutions Weekly Mail – 305th Issue
dated 14th March
’14
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(1) Praiseworthy Efforts of a Borrower
Recently we came across a Borrower who took lot of interest in making
prior preparations for the ensuing DRT litigations. He went through our
web site and all the weekly mails. He took our DVDs and viewed the same.
He contacted us for several clarifications. He had discussions with the
senior and top bank officials. All such discussions were video recorded
through a spy camera. After all these preparations, recently he has
received the notice u/s 13(2). The CDs of the important video clips will
be enclosed with the forthcoming Objections and Representation with
copies to the concerned senior officials of the bank. This is going to
be an exemplary DRT litigation.
DRT Solutions Weekly Mail – 304th Issue
dated 7th March
’14
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(1) DRT fixes First Date of SA after 11 months
One of our clients filed his SA in one of the DRTs and informed us that
the first date has been fixed after 11 months. We advised our client to
file an application for interim stay alonwith an application for urgent
hearing of the said stay application.
It is surprising that despite DRT Act mentioning that the entire trial
be completed within six months, the first date is being given after 11
months and hence the trial will take several years. Thus the DRTs are on
the way of becoming like civil courts.
The bank lobby has been instrumental in creating DRTs. Instead of
improving the civil courts, special courts line DRTs were created. The
DRT Act and NPA Act have several provisions to complete the trial well
within six months. Now the DRTs are heavily overloaded and the disposal
period is ranging from 2 years to 10 years. In fact proper trial of
complex matters relating to banking matter requires sufficient time and
six months is not a correct period.
Until and unless the complete judicial process is properly studied, the
advocates and judges are properly trained and court room technology is
upgraded; the disposal period will continue to be uncertain.
(2) Complaint against PO DRT
There are complaint against several DRT POs. The borrowers will have to
form their associations and collect cases where there are clearcut
violations of law by the POs of the DRTs. Such complaint is required to
be placed before the concerned High Court.
DRT Solutions Weekly Mail – 303rd Issue
dated 28th February
’14
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on top of this page
(1) 108 Yrs Old Village Woman fighting Legal Battle past 80 Yrs – Sorry
State of Affairs in Indian Judiciary
On 23.02.14, we happen to view a news item in Zee News TV Channel
concerning 108 years old woman named Mangi Bai from village Jashpur MP
fighting a legal battle for ownership of half an hectare of land since
when she was 20 years old. Past 80 years there has been more than 8000
dates for hearing. We separately recorded this particular news item and
uploaded the same on YouTube vide link www.youtube.com/watch?v=pum-3JOgmsQ This
case raises following pertinent questions:-
(a) For
a simple case relating to land, more than 80 years have passed. There is
no self corrective measure in the judicial system. The officers of the
court i.e. the Judges and the Advocates are not concerned about
achieving the sole objective of justice.
(b) On
one hand they talk about quicker justice to senior citizens, ‘fast track
courts’ and tribunals, on the other simple matters as in this case are
being dragged on for more than 80 years.
(c) It
is relevant to mention that Justice Krishna Iyer has said that Indian
Judiciary is 200 years behind developed countries. Justice Rao of Andhra
Pradesh High Court has said that the pendency in Indian court is more
than 3 crore cases and it will take 320 years to clear the pendency.
There are 73 countries which have a better judicial system.
(d) Despite
above bare facts, there is no concentrated efforts for overall judicial
reform except some cosmetic changes. In this context formation of DRTs
instead of improving the existing courts, enacting special DRT and
Securitization Act wherein it is mentioned that complete case be
disposed within 6 months, despite SC verdict past 15 years, not
transferring the DRTs from Ministry of Finance to Ministry of Law,
appointing POs from Bank Officials, holding meetings with the POs etc
are only desperate and fragmentary efforts which will lead no where.
When simple land case could not be decided in 80 years, how a complex
industrial case can be decided in six months.
(e) The
litigants in general and borrowers in particular should keep the above
in view. They should attend all dates, sit with their advocate one week
in advance to plan the next date, plead all the wrong doings of the
lenders and raise counter-claims, initiate Review and Appeals against
all the orders which are not legal, make audio and video record of all
proceedings etc so that there is no violation of law at every moment of
time then only the ultimate goal of judicial system i.e. Justice will be
achieved.
(2) Bank Chairperson resigns on Rifts on NPA Classification
The
following news item proves as to how the Chairmen of the Banks are
involved in NPA classifications and hence we have been emphasizing to
implead the Chairmen and higher officials right from the inception.
Further there are several RBI Guidelines which lay down specific duties
of the Chairmen of the banks and therefore they are also responsible for
many wrong doings committed by the bank resulting into counter-claims.
United Bank of India CMD Archana Bhargava resigns; reports of rifts on
NPA classification
http://articles.economictimes.indiatimes.com/2014-02-22/news/47581694_1_united-bank-rajiv-takru-non-performing-assets
KOLKATA: State-owned United Bank of India, staggering under the weight
of bad loans, hit bottom on Friday after its chairperson and managing
director quit, while the government said that it was preparing a rescue
plan for the lender.
Chairperson and managing director Archana Bhargava opted for voluntary
retirement as the government, which has an 88 per cent stake in the
troubled bank, looks at ways of resolving the crisis. Financial services
secretary Rajiv Takru confirmed Bhargava's resignation and said the
revival plan would be ready in the next seven to 10 days.
ET broke the news of the resignation on Friday morning on ET Now. Takru
said Bhargava had submitted her resignation the evening before citing
health reasons. Over the past week, when the bank started fire-fighting
operations, Bhargava hadn't been very high profile, officials said. She
didn't respond to phone calls from ET. Before she stepped down, there
had been reports about rifts between Bhargava and the senior management
team on the classification of NPAs. She had apparently instructed
auditors to aggressively declare NPAs but several senior officials were
of the view that simple restructuring could have made the numbers look
better.
UBI's stock price dropped 3.5 per cent to an all-time low of Rs 23.40 on
BSE, immediately after the news of Bhargava's resignation hit the
market. The stock, which listed in February 2010, recovered during the
day and closed 0.41 per cent higher at Rs 24.35. India's lenders,
particularly the stateowned ones, are groaning under a massive bad loan
burden amid a slump in growth to a 10-year low which means companies are
finding it difficult to repay debt. United Bank of India is one of the
worst affected with sticky loans having risen to an industry high of
10.8 per cent as a proportion of all loans and two quarterly losses in a
row, forcing the bank to impose stringent restrictions on lending as ET
reported on February 10. Bhargava was present at the board meeting that
reviewed third-quarter financial results on February 7.
Takru told ET that the finance ministry will find a new chairman within
15 to 20 days. The ministry has asked executive directors Deepak Narang
and Sanjay Arya to run United Bank until then. United Bank's
non-performing assets jumped nearly three times to Rs 8,546 crore at the
end of December last year from Rs 2,964 crore in March 2013, forcing the
bank to report an unprecedented Rs 1,238-crore loss in the December
quarter.
The plunge in UBI's fortunes has demoralised its workforce and caused
extreme concern among depositors, executives said. It should be pointed
out, however, that as a state-owned bank, deposits are implicitly
guaranteed by the government and that there is no risk on that front.
The state of affairs at the bank has prompted inquiries into what may
have gone wrong.
There have been reports about accounting glitches and the
classifications of loans, although none of this has been verified. The
bank has said that Finacle, the core banking software developed by
Infosys, could not detect smaller NPAs and restructured accounts earlier
and wrongly classified standard loans as sticky. Infosys rejected this
contention.
It's also been pointed out that the software is in wide use at banks
throughout the world. "We would like to clarify that there are no
inherent deficiencies in Finacle,"
United Bank's Narang had said in a joint statement issued by the bank
and Infosys on Thursday, after a volley of words the day before. "The
version of the NPA tool currently used at UBI needed certain additional
customisations to meet our specific needs, which are feasible and are
being addressed now." While the government takes the developments at
United Bank very seriously, Takru downplayed the bad-asset issue to an
extent. "We don't think it (NPAs) is a huge problem for the bank.
There was manual disabling of the system that detects NPAs," Takru said,
adding that the ministry will investigate how the lapse occurred. "For
the time being, UBI should only focus on recovery." The silver lining
is, perhaps, that the bank has now provided for all sticky loans and any
recovery will only add to the bottom line and improve shrinking capital
ratios as more money needs to be set aside for any rise in NPAs. United
Bank executives have set a loan recovery target of Rs 2,000 crore by
March and are expecting fourth-quarter results to look up
commensurately.
DRT Solutions Weekly Mail – 302nd Issue
dated 21st February
’14
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(1) Distressed Assets: RBI Framework leaves Everyone “Stressed”
Mr
Himanshu Mehta, one of our clients from Mumbai has sent the following
news item which is useful and self explanatory:-
Distressed
assets: RBI framework leaves everyone ‘stressed’
NIDHI BOTHRA AND ABHIRUP
GHOSH | 18/02/2014
03:07 PM |
http://www.moneylife.in/article/distressed-assets-rbi-framework-leaves-everyone-stressed/36439.html
RBI’s framework for
revitalising distressed assets leaves everyone in stress. Banks, NBFCs,
India Inc, CAs and advocates, no one is spared
The
slacking Indian economy is sitting with huge pile of bad
loans (estimated to be about Rs2.9 lakh crore) in the Rs82 lakh crore banking
system and surely is the cause of concern to the health of the economy.
The continuing rise in number of the non-performing assets (NPAs) and
restructured cases in the banking system made the Reserve Bank of India
(RBI) came out with a “Framework for revitalising
distressed assets in the economy” on 30 January 2014 to recognise
early signs of distress, catalyse the restructuring process, quicker
distress resolution planning, leveraged buyouts, take-out financing and
more. The framework will be effective from 1 April 2014 and the banks
and the non-bank lenders will be required to put in place the necessary
infrastructure to implement the Framework.
The framework requires ‘Early Recognition of Stress’ and setting up of a
Central Repository of Information on Large Credits (CRILC) whereby
before an account is declared as NPA, it shall pass through a ‘Special
Mention Account’ (SMA). Lenders falling under the framework will have to
put in place proper management information system (MIS) to ensure the
SMA triggers are captured as they are breached.
The CRILC
will collect data of the borrowers having aggregate fund and non-fund
exposure of more than Rs500 crore and apart from banks, non-banking
financial companies- systemically important (NBFC-SIs) and NBFC-Factors
will also be required to furnish data. Apart from these, eligible
lenders in India will be required to report lending under external
commercial borrowing (ECB) regulations as extended by overseas branches
to Indian borrowers.
Further,
where a borrower account falls under SMA-II, banks and notified NBFCs
will be required to mandatorily form a Joint Lenders’ Forum (JLF) and
formulate Corrective Action Plan (CAP). Any lender reporting an account
as SMA-II will trigger the formation of JLF. RBI may also in due course
require banks to form the JLF and formulate CAP if the borrower account
is SMA-0 for three quarters in a year or SMA-I for two quarters during a
year.
Where a
borrower requests for formation of JLF on account of imminent stress,
the lenders will report that account as SMA-0 to CRILC. Indian Banks'
Association (IBA) is required to prepare the Master JLF agreement and
the operational guidelines for JLF to be adopted by all lenders.
The CAP by
the JLF will include identifying ways of regularising the account and
ensuring that it does not slip into SMA-0, which will include analysing
the need for strategic investor, equity participation from
outsider, need for additional finance to the borrower and personal
guarantees from promoters.
The JLF will
also be mandated to adopt the options proposed at CAP within 30 days of
account being reported as SMA-II or from the receipt of request from
borrower and the detailed CAP to be signed off from within the next 30
days. If either of rectification or restructuring process are
ineffective, then JLF should initiate recovery process, which would be
as per the corporate debt restructuring (CDR) guidelines laid down by
RBI.
Some of the
options suggested for loan restructuring is the possibility of
transferring equity of promoters to lenders to compensate for their
sacrifice or requiring promoters to infuse more equity or transferring
the promoters’ shareholding into escrow till the turnaround happens.
This would mean where the account is showing signs of NPA due to
whatever reasons, there is threat to the sweat equity of the promoter
being snatched from him.
In case,
banks and notified NBFCs don’t adhere to the SMA classification norms,
they will be subjected to accelerate provisioning and other supervisory
action as may be deemed appropriate by RBI. Also once a lender has
agreed on the CAP by the JLF but changes stance later on or delays the
implementation package will also be subject to accelerated provisioning
norms as mentioned below:
