A division bench of the Calcutta High Court stayed distribution of the 290 acres of land allotted to 57 vendors of car components till disposal of the cases challenging the vesting of the land by the government
Kolkata: The Calcutta High Court today granted a stay on distribution of land allotted to vendors at Singur beside the Tata Motors’ (TML) Nano project plot by the West Bengal government, reports PTI.
A division bench, comprising justices PC Ghosh and MK Chowdhury, stayed distribution of the 290 acres of land allotted to 57 vendors of car components till disposal of the cases challenging the vesting of the land by the government.
Of the 57 vendors, 31 component manufacturers had moved the court seeking a stay on distribution of the land allotted to them.
The bench had earlier stayed distribution of 545 acres of land leased to TML on an application by the auto maker, which has appealed against the single bench order upholding the vesting of the Singur land leased to it.
The land leased to TML was vested by the West Bengal government vide the Singur Land Rehabilitation and Development Act, 2011, along with the total 997 acres of land acquired by the state in 2006 for the Singur Nano car project.
TML had left Singur for Sanand in Gujarat citing law and order issues in October 2008.
Justice IP Mukerji had on 28th September upheld the vesting of the land by the state government vide the Singur Act rejecting the challenge of its constitutionality by TML.
Submitting for TML on its appeal, senior counsel S Pal stated that the principle of compensation has not been specified in the Singur Act, thus making the Act flawed.
He further submitted that the trial court had in its order directed incorporation of certain points from the Land Acquisition Act, 1894 into the present Act made by the state government with regard to compensation to be paid to TML.
Mr Pal contended that the court can only interpret the law on its constitutionality and cannot rewrite the law which he alleged had been done by incorporation of the points.
He further claimed that the state had discriminated against TML and hence, fundamental right under Article 14 (Equality) of the Constitution had been violated.
The Group has alleged that NSE issued certain circulars in contravention to the rules and guidelines of the SEBI and thus favoured brokers over investors
Delhi-based Investor Protection Group (IPG) has filed a writ petition in the Delhi High Court (HC) against the National Stock Exchange (NSE), requesting to give directions to the Securities and Exchange Board of India (SEBI), to conduct an in-depth investigation into the alleged illegalities committed by the NSE. The petition is scheduled to be heard on 16th November.
In a release, IPG said, “We have asked court to direct SEBI to conduct a thorough investigation into the illegalities committed by the NSE and investigate if the acts of NSE are biased and are responsible for plotting loopholes in the system and to initiate appropriate legal action including cancellation or suspension of the registration/ licenses of NSE, if the same is established.”
According to the IPG, the Exchange deliberately issued certain circulars, in contravention to the rules and guidelines issued by SEBI, favouring the brokers and not to the investors. The group has also prayed to declare “those clauses of the circulars as null and void.”
Explaining the dubious role of NSE, the Group alleged that, “NSE acts as an informer to the brokers whereby they retrieve the critical information/ complaint from client and provides the information to the broker, but do not provide the complete documents /information to the client from brokers.”
It adds that, “Clients are made to fight their cases with incomplete information and as a result loose their case. NSE also does not support or provide any information about your account till they are forced by the Arbitrators.”
It has also alleged that illegal and unauthorized trading is carried out by the stock brokers under shelter of NSE. SEBI is also been named in the writ petition, because according to the group, such illegal trading are not monitored by the SEBI, as its responsibility as a stock market regulator.
The Delhi-based group has also alleged NSE for allowing brokers to make agreements/ contracts on their own without the mandatory signature of the clients required at the time of registration. The writ petition has been referred to a division Bench of Delhi HC in the category of Public Interest Litigation (PIL).
IRDA may allow agents to sell products of more than one company similar to opening bancassurance to two insurers. Will it help agents increase remuneration or confuse customers and undermine the intension of the change? Will it increase mis-selling?
Insurance Regulatory and Development Authority (IRDA) plans to allow agents to sell products of more than one insurance company just as they are considering opening bancassurance to allow selling insurance products of two companies. There are arguments from both sides, but private insurers will stand to benefit more than LIC.
An official from the Life Insurance Corp of India (LIC) said, “Customer buys LIC product due to trust in the company. If agents sell insurance products of more than one company, they will be seen as mere individual and no longer carry the goodwill of LIC. The customer will get suspicious and not make buying decision. Even if 2% of the agents indulge in mis-selling to earn higher commission, it will ruin the whole system. As such, insurance is push product in India and takes lot of efforts by the agents to make a sale.”
Private insurers on the other hand have lot to gain as they may be able to tap into the huge pool of about 13.5 lakh agents of LIC. Their interest will mainly be the big agents of LIC who can drive volumes and help penetration. There has been steep decrease in the number of agents in life insurance business and opening of tied agency will only help private insurers. According to Life Insurance Council, “The number of agents came down from 3 million in 2009-10 to 2.65 million in 2010-11.”
Amitabh Chaudhry, managing director and chief executive, HDFC Life, said, “I know the regulator has brought this up in a recent interaction with media. However, I think it is a bit early to comment without getting to know more about this. On the face of it, such a move will help agents to offer more choice, which is good for the customer. It might also help bring agents back to the industry since the completion of a licensing process will enable them to get two licenses which is a positive for the agent”.
“We have seen almost three lakh agents have gone out of the pool in the last year since the economics of life insurance business doesn't enable them to go out and connect with customers, provide right financial advise and service the customer over the long term. The small and mid-sized agents who were instrumental in spreading life insurance across the country are not willing to get into the industry. Will allowing agents to sell products of two life insurance companies redress that? Also, will we have safeguards against unintended consequences of such a move like agents churning the customer portfolio between two insurers? I don't think we can answer these till we have a more detailed proposal from the regulator. If it does manage these issues, I am sure the industry and the agents will welcome it,” Mr Chaudhry added.
The bigger question is whether IRDA will really open the tied agency model? According to a life insurance agent, “IRDA talked about it when it came in existence. Due to opposition from LIC they (IRDA) put it off for 10 years. Over 90% of LIC agents work part-time and allowing them to sell other insurer products will help in increasing their remuneration. Ultimately, the choice should be left to customer and agent. Today, agent cannot talk about products from other insurance company and hence cannot offer best insurance to a customer. Moreover, if brokers are allowed to sell all insurance company products, why not agents?”
“General insurance agent association had in the past recommended to IRDA about allowing agents to sell mediclaim and other general insurance products from more than one insurance company. IRDA argument in the past for not allowing was about insurance company spending on agent training. At that time they were thinking of opening of tied agents if they had completed certain number of years in the business,” said another agent who sells general insurance products.
Life and general insurance agents also sell other financial products like mutual funds and there may be no real need for them to be tied to one insurance company. In UK the tied agency model has vanished. Are there any local circumstances that prevent from India to adopt the same?
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