Tuesday, April 2, 2013

[aaykarbhavan] Business standard news updates 2-4-2013




comment- E- tribunals will help in identifying  and resolve the issue.
 
Another tribunal gone to seed


It has been the constant gripe of the legal profession that the government is continuing to set up specialised tribunals, some 50 by one count, but ignoring them after passing the law. The Supreme Court has described their plight in several judgments, the latest being the predicament of the debt recovery tribunals in its

February judgment, Union of India vs DRT Bar Association. Currently, the worst scenario is in the topless Securities Appellate Board and the Telecom Disputes Settlement and Appellate Tribunal.

During court hearings involving tribunals that are deprived of presidents, staff and infrastructure, judges have been even more vocal. A few months ago, a bench hearing the sinking state of the inter- state water disputes tribunal asked the government: " How long can you sleep? You want the court to wake you up from the slumber. Why do you compel us to do something which we refrain from doing? If this is the situation, then may God help you and God help this country!" The Delhi High Court has not invoked divine help yet, but only fired sarcastic darts at the mandarins as another atrocious case of executive neglect unravelled before it last fortnight. This time, it was in avital field, that covered by the Protection of Plant Varieties and Farmers' Rights Act of 2001. After 12 years, even the transitional provisions for setting up a tribunal have not been implemented. After a long description of government negligence, the judgment in the case,

Nuziveedu Seeds Ltd vs Union of India, ended with " a sanguine hope that at least the transition policy is implemented on an urgent basis".

Recognising the urgent need for protection of plant varieties and the right of farmers and plant breeders to encourage development of new varieties, India ratified the agreement of Trade- Related Aspects of Intellectual Property Rights in 1994. The 2001 Act was passed to give effect to it. What followed was a sordid story. It was not till four years later that some of the provisions were brought into force. They only dealt with procedural aspects. Substantial provisions were notified ayear later.

The Act has a transitional provision.

According to it, the Intellectual Property Appellate Board ( IPAB) established under the Trade Marks Act will exercise jurisdiction of the plant varieties tribunal till the one under the 2001 Act is established. Despite the lapse of almost six and a half years, there is no sight of the tribunal being constituted or implementation of the transitional provision.

This is in addition to the hiatus period of five years from bringing into force the provisions of the 2001 Act. On top of that, there was aproblem about the appointment of a technical member, who should be expert in plant varieties, not trademarks and patents.

These facts came to be highlighted when two seed companies brought their disputes before the high court. In the absence of a forum, the high court took it upon itself the burden of deciding the issues in writ petitions.

The court asked the government to explain the delay in implementing the law, or at least the transitional provisions. An affidavit filed on behalf of the agriculture ministry dragged in the Department of Industrial Policy and Promotion.

To complete the mess, the ministry asked IPAB to suggest the procedure for appointment of the technical member.

Meanwhile, IPAB was reluctant to take up the work of the plant varieties tribunal as that board lacked infrastructure even for its own work. So another affidavit was called for from the government. This one put forth the " sensitiveness" of the issues, the lengthy process required to sort them out, inter- departmental correspondence, and the earnest efforts being done by all concerned. As usual there were several committees like the expenditure finance committee and the appointments committee to oversee the operations. They had not been assigned any time limit to complete their roles. The judges observed: " So much for the interest in protection of plant varieties and rights of farmers!" The high court judgment lamented that " almost four years hence, there appears to be no development.

Not only that, even now no date has been specified as to when the transitional provision would be given effect to".

One major problem in drafting laws seems to be the mindlessness of lawmakers who put the cart before the horse. Before passing a Bill, a number of steps should be taken and considerable groundwork is required. The impact of the law at several levels, the expenses involved in infrastructure and staff, and the generation of litigation are serious issues. But in the hurry to pass Bills ( often one a minute on the last day of a disrupted Parliament session), all these are short- circuited and a new statute carrying a tribunal in its womb is born. While it is on the ventilator, the regular courts, already crippled in several ways, are further burdened with the new laws which involve technical and specialised knowledge.

Even transitional provisions in plant varieties and farmers' rights law have not been enforced in 12 years

OUT OF COURT

MJ ANTONY

 

comment - The following news item appears to be shareholders activism for good corporate governance.
 
Brokers move for winding up of DSE


Management says accounts passed with proxy support in the extraordinary general meeting, denies allegations

NSUNDARESHA SUBRAMANIAN New Delhi, 2 April

Asignificant section of the broker shareholders of Delhi Stock Exchange (DSE) have issued notices calling for an extraordinary general meeting ( EGM) to decide on winding up of the company. They want the board to apply for voluntary winding up under the new framework announced by the Securities and Exchange Board of India ( Sebi).

"We have also sent a copy of the notice to Sebi," said B B Sahney, one of the senior- most shareholders and a former director of DSE. Broker shareholders hold 49 per cent in the exchange while corporate and institutional holders own the remaining.

Sahney said the latest move is the culmination of a series of runins between minority shareholders and the management, led by Chairman V K Gupta and his deputy M N Verma. In December, in an unprecedented event, that caught the management by surprise, the shareholders rejected the balance sheet and the profit and loss account citing irregularities and fraud.

"There was a secret ballot and the resolution was rejected with overwhelming majority," Sahney, who has been a DSE shareholder for five decades, said.

VK Kapur, a shareholder, said, "The accounts did not present a true and fair state of the company in terms of accounting standard ( AS) 10, auditor's qualifications over the years about discrepancies in fixed assets and certain disclosures to be made." Following this the management called an EGM with the specific agenda of passing the accounts.

MN Verma, a retired revenue service officer and vice chairman, DSE, said, " We had not anticipated such a move by a small group of shareholders. So, the accounts were not passed in the AGM. Following this, we consulted with lawyers and other shareholders and called for an EGM. In this EGM, we had the proxy from big shareholders like Omaxe and Parsvnath, who hold several lakh shares each. With these proxy votes, the accounts were passed smoothly." Paramjeet Singh, another shareholder, who was present at the EGM contests this version. According to him, the resolution was not proposed at all, neither was it seconded. " The proxy comes into play only after the voting commenced. But the chairman just said the resolution is passed and left the dais. That is not valid under law," Singh said.

Singh alleged that the management has employed staff with hefty packages while the exchange has not been functional for the past seven years.

"There are technology officers and HR personnel drawing salaries of 2- 3 lakh per month.

What is the need for such staff when there is not a single share traded for the past seven years?" Verma denied allegations of irregularities and said the dispute was over not providing for amissing asset worth 11 lakh, which was decided to be provided for in the current year.

But shareholders are worried about eroding value. Sahney said the value of DSE shares are plummeting. " Each share has a book value of 60 but the market price is less than 15. Who will buy when they are seeing value being scrapped from the exchange in this manner. We left the exchange with 100 crore in reserves, every year they are depleting it. This year they have shown losses of 11 crore. What is the scope for such a huge loss when there is no trade?" he asked.

The exchange has been trying for a few years now. Floated in June 1947, DSE was second only to the Bombay Stock Exchange in its heydays. In the 1990s, it had as many as 3,895 companies. However, the advent of computerised trading and requirement of demutualisation stalled its growth. Hopes of a revival reached its zenith in 2007, when DSE attracted interest of some corporate shareholders and the demutualisation process, where broker holding was brought down to 49 per cent, was completed.

For full story, visit www. businessstandard. com

HEATED EXCHANGE

|Accounts for FY12 rejected by shareholders in AGM on December 27, 2012 |Extraordinary general meeting called by the management headed by chairman V K Gupta |Accounts declared as passed with proxy support; shareholders cry foul |Broker shareholders allege mismanagement, irregularities |Brokers issue notice for voluntary winding up under new Sebi rules

 


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CS A  RENGARAJAN,, B.Com ,FCS, LLB, PGDBM
Company Secretary, Chennai
CONVENOR, CHENNAI WEST STUDY CIRCLE ICSI-SIRC
email csarengarajan@gmail.com
mobile 093810 11200

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