| LEGAL DIGEST |
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THE Supreme Court last week set aside the injunction granted by the Allahabad high court in favour of Ishan Systems Ltd in a debt recovery case. Without notice to the creditor companies, Optiemus Infracom Ltd and Phoenix Arc Ltd, the high court passed restraining orders against the auction purchaser of the property of Ishan Systems. The latter company had challenged the auction in the debt recovery tribunal and the appellate tribunal without success. On appeal, the high court passed orders without hearing the creditor companies whose interests were affected. They appealed to the Supreme Court. It quashed the high court order with strong remarks against it. The judgment stated that "the practice adopted by the Allahabad high court is not only arbitrary but also contrary to the concept of the principles of natural justice. We hope that in future, this kind of order will be avoided in the interest of justice." >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> No leniency in economic crimes The Supreme Court has stated that "the courts cannot take a lenient view in awarding sentence on the ground of sympathy or delay, particularly, if it relates to distribution of essential commodities under government scheme intended to benefit the public at large." The court said so while dismissing the appeal of Sadhupati Nageswara Rao who was convicted in Andhra Pradesh for breach of trust while handling distribution of rice at free of cost under the "Food For Work Scheme". >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Creditorcan rejectBIFR options The Delhi high court last week declared that under the Sick Industrial Companies Act, an unsecured creditor has the option not to accept the scaled-down value of its dues and wait till the scheme of rehabilitation of the sick company has worked itself out with an option to recover its debt after such rehabilitation. In this case, Continental Carbon India Ltd vs Modi Rubber Ltd, the latter company was declared sick in 2006 and IDBI was appointed the operating agency to examine the viability of reviving the sick company. It gave three options to the creditors. However, Continental Carbon did not agree to the option of scaled-down value. The appellate tribunal AAFIR rejected its contention stating that in view of the three options given to the unsecured creditors, the revival scheme cannot be stalled. Therefore, the company appealed to the high court. Allowing the appeal, the court clarified that Continental was not bound to choose one of the options in the scheme approved by BIFR. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> DPCO notifications setaside The Karnataka high court last week quashed two notifications issued under the Drug Price Control Order by the National Pharmaceutical Pricing Authority in 2003. A small scale drug firm, Ishaan Labs Ltd, had challenged the notifications. It argued that the fixation of the price of its medicine Glipzide was without reference to the norms for calculating packing material costs and it wanted revision of norms for calculating process loss, conversion costs and packing charges. The high court noted that some of the issues have already been decided by some other high courts, like the Allahabad high court in the Cipla case. However, appeals from those cases are pending before the Supreme Court. The high court also noted that the Supreme Court has not decided the questions raised in those appeals regarding the pricing and therefore, the high court could decide the present issue. The high court judgment asserted that judicial review can be exercised in fixation of prices of medicines and to check arbitrariness. While allowing the writ petition, the court allowed the authorities to issue fresh notifications keeping in view its observations. |
| Anil Ambani cuts salary by 2/3rd to ~5.5 crin 2011-12 |
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New Delhi, 12 August Anil Dhirubhai Ambani Group (ADAG) Chairman Anil Ambani has taken a huge cut in his total remuneration from his four main companies in 2011-12 at about ~5.5 crore, lower by nearly two-third from the previous year. Ambanis cumulative remuneration as chairman of these four companies — Reliance Communications (Rom), Reliance Power (R-Power), Reliance Infrastructure (RInfra) and Reliance Capital (RCap) — stood at a little over ~17 crore in 2010-11. Ambani does not take salary from any of these companies, but gets sitting fees for attending meetings of the boards and other committees. Besides, he is entitled to commission payable to directors, according to the rules of the respective companies. According to the latest annual reports of these companies, Ambani did not even take any commission from three companies — R-Power, R-Cap and Rcom — last financial year. At Rcom, Ambani had waived his commission for 2009-10 and this was the third consecutive year in 201112, when he did not take any commission from this company. Industry experts say many top executives of Indian companies have volunteered for pay cuts, and even no salaries, in the past few years as talks of austerity measures has gained momentum amid adverse economic conditions. Among other leading industrialists, Sunil Bharti Mittal as Chairman and MD of Bharti Airtel took a 22 per cent pay cut with a total remuneration of ~21.3 crore in the last year. IT giant Wipros chief Azim Premjis remuneration also nearly halved to ~1.9 crore in 2011-12. Anils elder brother Mukesh Ambani has capped his annual pay package as Reliance Industries Ltd Chairman at ~15 crore a year for four years now. An analysis of remuneration details in the annual reports of ADAG companies shows that Anil Ambani was paid sitting fees of ~80,000 at RPower, ~1 lakh each at R-Infra and R-Cap and ~2.6 lakh at RCom during 2011-12, resulting into a total of about ~5.4 lakh. At R-Infra also, Ambanis remuneration for 2011-12 included only sitting fees of ~1 lakh, while he did not get any payment towards salary and perquisites or commission for the year. Anils elder brother Mukesh Ambani had capped his annual pay package as Reliance Industries Ltd Chairman at ~15 crore a year for four years now. PHOTO: BLOOMBERG |
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Company Secretary, Chennai
email csarengarajan@gmail.com
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