Ministry working on corporate fraud detection system

Mumbai, May 27The ministry of corporate affairs (MCA) has started working on the second generation MCA21, which will help in the early detection of frauds committed by companies in the corporate world. Anurag Goel, secretary, ministry of corporate affairs said.

After addressing a conference on 'Capital market regulation and corporate governance' organised by Confederation of Indian Industry (CII), Anurag Goel said that the ministry has started working on the second generation MCA21 and the work is expected to be completed within the next two years. This will be an elaborate information system, which will maintain detailed data on fraud committing companies. The analysis of the data will help in receiving an early indication of a company committing a fraud, he said.

It may be mentioned here that MCA21 is an e-governance project, which enables electronic filing, storage, retrieval, processing, and transmission of transactions, including incorporation of a company, filing of annual and statutory returns.

Earlier, addressing the gathering at the conference, Goel said that efficient capital markets are a prerequisite for any developing economy. Indian capital markets have seen crucial reforms both, regulatory and operational, over a period of time. An important factor responsible for making Indian capital markets one of the best regulated markets is corporate governance.

Among others, M Damodaran, former chairman, Sebi, also addressed the gathering.

No exemption for the disabled from attending classes

BANGALORE: The Karnataka High Court on Tuesday held that even the physically challenged students should have the minimum attendance if they are to be permitted to appear for examinations.

Justice B.S. Patil passed the order on a petition by a student from Kolar district who had challenged the refusal by the authorities to permit him to appear for the sixth semester commerce examination. The student said he was severely handicapped (75 per cent) and he could not attend classes for the B.Com course.

He urged the court to direct the authorities to permit him to appear for the examination slated to commence from June 5, 2008.

The Government opposed the petition saying that the student had 100 per cent attendance shortage. It said all students were governed by the Karnataka Rules of 2006 which made it mandatory for students to have at least 60 per cent attendance in each subject. These rules had been revised last year and all educational institutions intimated about it.

It said even the physically challenged had to abide by the rules if they wanted to attend school or college. If any one did not want to attend classes, he or she is free to take up correspondence course. Moreover, the attendance rules did not make any distinction between a physically fit or physically challenged student. Students had to attend classes and have the minimum eligibility if they wanted to appear for the examination.

The Government made it clear that all students, irrespective of the class or community to which they belonged must meet the eligibility criteria.

Justice B.S. Patil accepted the arguments of the Government and dismissed the writ petition, saying that even the physically challenged had to meet the minimum standards prescribed by the authorities regarding attendance if they wished to appear for the examination.

In a related case, Mr. Justice Patil dismissed a petition by a student of MHM College in Udupi seeking a direction to the authorities to permit him to appear for the supplementary examination slated to commence from June 5.

The petitioner, Karthik Shetty, said he was not allowed to take the first year Pre-University Course examination on the grounds that he did not have sufficient attendance.

He said he wanted to appear for the supplementary examination and urged the court to direct the authorities to permit him to take the examination.

Mr. Justice Patil dismissed the petition, saying that Karthik did not have a minimum of 60 per cent attendance in the first year and, hence, he was ineligible to appear for the supplementary examination.

Can PIOs approach Indian court against verdict given in U.S. ?

SLP filed against ruling declining to interfere with U.S. court order

New Delhi: The Supreme Court on Tuesday decided to examine an important question, whether Persons of Indian Origin (PIOs), who had dual citizenship could approach Indian courts against an order passed by a family court in the U.S.

Special leave petition


A vacation Bench comprising Justice C.K. Thakker and Justice L.S. Panta issued notice to Rana Roy, a U.S. citizen on a special leave petition from his divorced wife Nandini Chowdhuri against an order passed by the Calcutta High Court declining to interfere with the U.S. court order.

According to Ms. Chowdhuri, she was married to Mr. Roy and they have a seven-year-old daughter. All of them are PIOs and U.S. citizens. The U.S. court granted divorce to the couple and the daughter stayed with the mother.

Ms. Chowdhuri remarried and in the new wedlock a child was born to her. She visited India to see her ailing father in Kolkata, where she admitted the daughter in school. As per the directions of the U.S. court, she was to send her daughter to Mr. Roy during vacation.

Visiting rights


Ms. Chowdhuri filed a petition in a court in Kolkata to restrain Mr. Roy from enforcing his visiting rights and from taking the child to the U.S. After the trial court refused to pass an interim order, she filed an appeal in the High Court.

Initially the High Court restrained the father from enforcing his rights. However, a Division Bench of the High Court by its order dated April 30 said: “We do not propose to enter into the question whether an Indian court can interfere with the order passed by a competent American court in the facts of the present case. It is not a case where the appellant or the child will suffer irreparable loss and injury if the ad interim injunction is not granted nor is it a case, where the child’s interest will be jeopardised.”

‘Fact suppressed’


“It is apparent that the appellant suppressed the fact that a competent American court had passed orders for the betterment of the child and also for sending the child to America during vacation. We vacate the interim order passed by another Bench of this court,” the Bench said and directed the trial court to dispose of the matter as early as possible. The SLP is directed against this order.

Notice issued


Ms. Chowdhuri, contended that since she was a PIO, the Indian court was competent to pass a restraint order against Mr. Roy.

The vacation Bench issued notice to Mr. Roy and posted the case for further hearing in July.

SC reprieve for Reliance Petroleum

The Supreme Court has held that second hand cranes imported by Reliance Petroleum Ltd from Europa BV of Holland in knocked down condition for setting up crude petroleum refinery were exempt from Customs duty.

The Customs authorities had questioned the application of certain exemption notifications dated March 1, 1997 and June 13, 1997 granting exemption to various imported goods, including second hand mobile cranes required for setting up oil refinery.

They had maintained that a crane when placed on a vehicle was a `motor vehicle' and would fulfil the description of a mobile crane or a `material handling equipment,' thus was not eligible for concessional duty. The court rejected these contentions and stated that the crane imported by the company in the knockdown condition would attract the benefit of the exemption under the notifications.

SC reprieve for Reliance Petroleum

The Supreme Court has held that second hand cranes imported by Reliance Petroleum Ltd from Europa BV of Holland in knocked down condition for setting up crude petroleum refinery were exempt from Customs duty.

The Customs authorities had questioned the application of certain exemption notifications dated March 1, 1997 and June 13, 1997 granting exemption to various imported goods, including second hand mobile cranes required for setting up oil refinery.

They had maintained that a crane when placed on a vehicle was a `motor vehicle' and would fulfil the description of a mobile crane or a `material handling equipment,' thus was not eligible for concessional duty. The court rejected these contentions and stated that the crane imported by the company in the knockdown condition would attract the benefit of the exemption under the notifications.

United India Insurance appeal dismissed

The Supreme Court has dismissed the appeals of United Insurance Company which had refused to renew mediclaim policies in high claim cases of senior citizens.

The court stated that the company's denial was highly arbitrary. Though the insured were not entitled to automatic renewal, the public sector companies should have been fair. The claimants had been hospitalised repeatedly and the company declined to renew their insurance.

The court said: "Only because the insured had started suffering from a disease, the same would not mean that the said disease shall be excluded. If the insured had made some claim in each year, the insurance company should not refuse to renew insurance policies only for that reason."

The parties are not required to go into all the formalities. Since the policy contemplates terms for renewal, it cannot be placed at par with a case of first contract.

Ponds India vaseline a drug: SC

The Supreme Court held last week that white petroleum jelly sold by Ponds India (now Hindustan Unilever Ltd) under the name Vaseline was a drug and not a cosmetic even if it had no curative value.

Therefore it should be taxed as a drug and not cosmetics under the UP Trade Tax Act. The revenue authorities had argued that since the product was applied for care of the skin, it came within the purview of the definition of "cosmetics" and not within the definition of "medicine".

The court rejected this view and ruled that Vaseline was a pharmaceutical preparation as it was used for cure and treatment of various skin disorders and not for beautification or care of the skin in the normal circumstances. Vaseline does not contain any perfume. A cosmetic ordinarily would contain some perfume, the judgment explained.

Hospital, not doctor, to pay for negligence

NEW DELHI: The state consumer commission has ruled that the hospital,
not the doctor, will be liable to compensate a patient in case of a
botched-up surgery or any other kind of medical negligence.

Delivering the judgment, Justice J D Kapoor said: "Whenever a patient
lands in any hospital, nursing home or medical centre, he is directly
availing the services of the said hospital...and not the treating
doctor. Hence, if the patient suffers due to medical negligence or
carelessness of the doctor, the liability will fall on the hospital."

The complaint filed by a patient, Mohammed Azmal, claimed that he was
admitted to the hospital in 1996 because of stomach pain. He was
diagnosed with gallstones and told by the doctors that the gall
bladder was to be removed through laparoscopy. Azmal agreed to undergo
the procedure for a package deal of Rs 37,500.

But the doctor botched the keyhole surgery. An endoscopy report after
the operation revealed a duct that was not sealed properly and
resulted in accumulation of fluid in the stomach. Three more
operations had to be performed on the patient whose condition had
become critical. This raised the bill to almost Rs 1.6 lakh.
In its defence, the hospital pleaded that the consulting doctor was
not an employee of the hospital and the hospital was not responsible
for any alleged negligence or deficiency in service in diagnosing and
giving treatment on the part of the consultant doctor. It also pleaded
the ailment required close investigation and detailed enquiry, hence
there was no question of a package scheme.

The hospital added the complainant was told that his gall bladder was
inflamed due to a stone and therefore the lap chole method
(laparascopic removal of the gall bladder) may not be feasible and
conventional surgery would have to be done.

Quashing this plea, Justice J D Kapoor asked that had lap chole not
been feasible, why was the patient subjected to this method?

Swiss Banking Association report 2007

Naman Sood on Apr 15, 2008

Deposits in Banks located in the territory of Switzerland by nationals of following countriesTop 5India---- $1456 billion
Russia----- $470 billion
UK-------- $390 billion
Ukraine $100 billion
China------ $96 billionNow do the math India with $1456 billion or $1.4 trillion has more money in Swiss banks than rest of the world COMBINED.
Public loot since 1947: Let us bring back our money

M R Venkatesh | April 15, 2008 | 09:34 IST

It is one of the biggest loots witnessed by mankind -- the loot of the aam aadmi (common man) since 1947 by his brethren occupying public office.It has been orchestrated by politicians, bureaucrats and some businessmen. The list is almost all-encompassing. No wonder, everyone in India loots with impunity and without any fear.What is even more depressing in that this ill-gotten wealth of ours has been stashed away abroad into secret bank accounts located in some of the world's best known tax havens. And to that extent the Indian economy has been striped of its wealth.Ordinary Indians may not be exactly aware of how such secret accounts operate and what are the rules and regulations that go on to govern such tax havens.

However, one may well be aware of 'Swiss bank accounts,' the shorthand for murky dealings, secrecy and of course pilferage from developing countries into rich developed ones.In fact, some finance experts and economists believe tax havens to be a conspiracy of the western world against the poor countries. By allowing the proliferation of tax havens in the twentieth century, the western world explicitly encourages the movement of scarce capital from the developing countries to the rich.

In March 2005, the Tax Justice Network (TJN) published a research finding demonstrating that $11.5 trillion of personal wealth was held offshore by rich individuals across the globe. The findings estimated that a large proportion of this wealth was managed from some 70 tax havens.

Further, augmenting these studies of TJN, Raymond Baker -- in his widely celebrated book titled Capitalism's Achilles Heel: Dirty Money and How to Renew the Free Market System -- estimates that at least $5 trillion have been shifted out of poorer countries to the West since the mid-1970s. It is further estimated by experts that one per cent of the world's population holds more than 57 per cent of total global wealth, routing it invariably through these tax havens. How much of this is from India is anybody's guess.What is to be noted here is that most of the wealth of Indians parked in these tax havens is illegitimate money acquired through corrupt means.

Naturally the secrecy associated with the bank accounts in such places is central to the issue, not their low tax rates as the term 'tax havens' suggests. Remember Bofors and how India could not trace the ultimate beneficiary of those transactions because of the secrecy associated with these bank accounts?

Cell co fined 50 lakh for 'pushing' calls

CELLULAR SERVICE providers can no longer offer schemes exhorting
subscribers to make 'extra' calls to be eligible for lucrative
contests. Declaring it as a "deceptive and unfair trade practice"
prohibited under the Consumer Protection Act, the Delhi State Consumer
Disputes Redressal Commission has imposed a penalty of Rs 50 lakh on
Vodafone Essar Mobile Services for its 'Baaton se banaiye sona, bees
minute mein' scheme.

Under the scheme announced in July 2007, Vodafone pre-paid or
post-paid subscribers whose talk-time was more than 20 minutes a day
were eligible. Those eligible stood to win 10 gold coins every day of
the contest and the 'bumper prize' of a Maruti SX4.

Directing Vodafone to "discontinue such a practice forthwith and not
to repeat it", the Commission, headed by Justice J.D. Kapoor, said:
"It is clear that the contest/lottery is being held not with a view to
enrich the phone users, but merely to ensure that they make more calls
and thereby generate more revenue and profits (for Vodafone)."

M.P.Varghese etc. etc. Vs. Mahatma Gandhi University (High Court of Kerala. Decided on 04.07.2007)

- For coming within the definition of 'Public Authority' under Section 2(h), either control or financing by the Government to be satisfied.

-Aided private colleges are bodies controlled and substantially financed by appropriate Government.

-Coleges are also privy to information relating to students and staff the information does not have the character of private or sensitve information

Transfers and promotion of employees not information held in 'fiduciary' relationship

Canara Bank Vs. The CIC & Anr [W.P. (C)No. 9988 of 2007 (L) High Court of Kerala

- Information as defined in S. 2(f)-is not confined to those mentioned in S.4

- All citizens have a right to information, not circumscribed by S. 4 at all

- Obligations laid down under s. 4 are to be compulsorily performed apart from other liability on part of the public authority to supply information available with them as defined under the Act subject to the exceptions laid down in the Act.

+ Information requested by employee of Nationalised Bank relating to transfer and promotion of employees (clerical staff) of the Nationalised Bank can be furnished to the employee by the bank

+ Such information does not pertain to any fiduciary relationship of the Bank with anybody coming within the purview of S. 8(1) (e)

+ Such information cannot be said to be held in interest by Bank on behalf of its employees-informed citizenry and transparency of information which are vital to the functioning of the Bank.

+ Such information does not pertain to any fiduciary relationship of hte Bank within the dictionary meaning of the word 'fiduciary'

+ Such information would not cause unwarranted invasion of privacy of other employees and therefore not exempt u/s 8(1)(j)

+ Information regarding transfers of clerical staff of a Nationalised Bank for a period of 5 years cannot be said to be that voluminous requiring tremendous man power and time.

+ In any event, the Act does not exempt voluminous information from disclosure.



THERFORE, HELD THAT INFORMATION WITH RESPECT TO TRANSFER AND PROMOTION OF EMPLOYEES MUST BE FURNISHED BY THE NATIONALISED BANK.