Nation
Gujarat HC dismisses Essar plea challenging insolvency proceedings
The Gujarat High Court on Monday dismissed Essar Steel's writ petition challenging the RBI directive to a consortium of banks led by the State Bank of India to initiate insolvency proceedings against the company for its high non-performing assets.
 
Justice S.G. Shah issued an oral order stating that no relief could be granted to the steel major. The court's detailed order was expected later.
 
Essar Steel, in its July 4 petition, challenged the Reserve Bank of India's (RBI) direction to banks to refer cases of 12 companies, including Essar, with high NPAs directly to the National Company Law Tribunal (NCLT) and initiate insolvency proceedings. The central bank's June 13 directive was issued through a press release.
 
The company had claimed that a unilateral action was being initiated when it was in a restructuring mode and objected that it was being clubbed with the other 11 major defaulting firms at such time. The steelmaker had also alleged that it was being singled out.
 
The RBI's counsel disputed both stating that it was not true that the company was discussing restructuring of repayments with banks, while insolvency proceedings would in fact help the company to shape up and not close it down. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Ramesh Bajaj

1 week ago

All defaulters should be made to pay their dues.

Nifty, Sensex make new highs – Monday closing report
We had mentioned in Friday’s closing report that Nifty, Sensex were in consolidation mode. The major indices of the Indian stock markets were range-bound on Monday and closed with small gains over Friday’s close. The trends of the major indices in the course of Monday’s trading are given in the table below:
 
 
With the onset of quarterly results and Parliament's monsoon session, the Indian equity markets traded with gains during the mid-afternoon session on Monday.  On the NSE, there were 799 advances, 863 declines and 312 unchanged. On the BSE there were 1,299 advances, 1,378 declines and 178 unchanged.
 
Indian markets opened at record high. Both the Nifty and the Sensex opened 'gap-up' and hit levels of 9,920 and 32,131 respectively (intra-day). The Nifty50, which opened with a gap, hit a fresh record high of 9,920 on Monday but pared gains as investors preferred to book some profits at higher levels. Sensex firmed up 74 points aided by fresh buying by participants and availability of more foreign capital. BSE mid-cap and small-cap were trading in the green while healthcare and FMCG (fast moving consumer goods) were trading in the red.
 
Upcoming quarterly results and Parliament's monsoon session, as also the direction of foreign funds flow will set the course for the equity indices in the coming week, market observers opine. With markets already at dizzying heights, potential triggers like news on monsoon's progress and global trends like monetary policy review by major international central banks could unleash "volatility", analysts feared. The markets will focus on earnings this week though the expectations remain muted for the last quarter. Markets are trying to analyse the earnings impact due to GST disruption, pointed out market analysts. The worry on rising PE (price-earning) ratio of benchmark indices is being overwhelmed by larger domestic fund flows and a buoyant global economy. Companies like Reliance Industries, Ultratech Cement, ACC, Wipro, Bajaj Auto, Kotak Mahindra Bank, Jubilant FoodWorks and Ashok Leyland are expected to announce their quarterly results in the course of the   week.
 
Industry body Assocham on Sunday said the Banking Regulation (Amendment) Ordinance has empowered the Reserve Bank of India (RBI) to take up "bad loans worth about Rs8 lakh crore" for resolution by March 2019. According to an Assocham study, the move has the potential to bring down the non-performing asset (NPA) levels and "significantly improve" the financial health of banks. "Somewhat bitter medicine came in the form of the Ordinance promulgated by the President in May," Assocham's Secretary General D.S. Rawat said. "The government gave wide-ranging legislative powers to the RBI to issue directions to lenders to initiate insolvency proceedings for the recovery of bad loans that have reached unacceptably high levels." In case of a default, the recent Ordinance has authorises RBI to direct lenders for initiating insolvency resolution process under the provisions of the Insolvency and Bankruptcy Code (IBC), 2016. Bank Nifty closed at 24,015.05, up 0.32%.
 
Mahindra & Mahindra on Saturday said the Life Insurance Corporation of India (LIC) has brought down its stake to less than 10% in the company by divesting around two per cent of its holding in the firm. After the stake sale, the life insurer now has 9.958 per cent stake in the company, it said in a regulatory filing. The insurance firm has sold more than 1.24 crore shares through market sale, the company added. Mahindra & Mahindra shares closed at Rs1,383.30, up 0.44% on the BSE.
A plethora of events, such as hopes of a rate cut by the Reserve Bank of India (RBI), fresh inflows of foreign funds and the onset of the quarterly earnings season, had pushed the Indian equity markets to a record high during the week ended Friday.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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Appeal Courts Are Being Burdened
The Supreme Court had some statistics compiled last year. The results were not encouraging. Its raison d’être was vitiated. It was simply not allowed to do its primary function, that of an appellate court.
 
Like schools and colleges, courts too have their hierarchies. At the top of the pyramid is the Supreme Court of India—that red-stone building ever present on TV. Its word is, literally, the law.
 
In litigation, one starts at the base, with the ‘lowest’ court, from which one can move to higher courts, if need be, while appealing. Of course, the higher courts have reserved some matters for themselves, such as where the amounts in dispute are very high, in matters of public interest or when the Constitution needs to be interpreted… But.
 
You be the judge on this issue. A Parsi couple wants a divorce. They live in Mumbai. They approach the family court in Bandra. Should the court hear them?
 
It cannot. For some reason, Parsi matrimonial matters are the sole preserve of the Bombay High Court. Not only that, it has the only jury in India, thankfully in an advisory role. This is supreme irony for a community that had one of its own as an accused in a case that led to the withdrawal of the jury system in Bombay—the Cavas Nanavati case, resurrected recently in the movie Rustom.
 
It is easy to understand how courts are distinguished. In Mumbai, the Court of Small Causes deals only with Rent Act matters and ‘leave & licence’ cases, besides some cheque-bouncing cases. The magistrates’ courts look into crime cases and municipal and other small fines. This court starts at 8am and judgement is summary. It works all year round.
 
Then there are the tribunals. These are meant for specific cases like bank loans, company disputes and public premises. Railways and motor accidents tribunals have their own courts. Most of these also work perennially. ‘Consumer courts’, not the correct terminology, deal with complaints relating to insufficient or slip-shod products and services. Then there are district courts that have multiple responsibilities.
 
What is listed above is by no means complete; but it can be compacted into one word: ‘jurisdiction’. It means that specified legal problems have to go to a particular court. One does not go to KEM Hospital to study engineering or chemical technology. Or go to the JJ School of Arts to study law.
 
There is also what is called territorial jurisdiction. If your home is in Pune, you cannot take that dispute to Mumbai, let alone Delhi. In some cases, especially in serial crimes over many states, other rules may apply; but we need not expand on them at this moment. In divorce cases, the wife can choose the place of hearing.
 
Then there is pecuniary (money) jurisdiction. The court of small causes once was for disputes over small amounts. Today, in Mumbai, all matters of less than Rs1 crore have been transferred from the High Court to the City Civil Court. Each court has a working band, in terms of amounts.
 
We have not lost track of the title. Lower courts are the first stop—the courts of first instance. They must act as trial courts: allow and weigh evidence, examine witnesses, summon people to court; in short, the nuts-and-bolts of the case. They need to pass intermediate orders, injunctions and proclaim judgements.
 
Next, one moves the superior courts in what is called ‘appeals’. Appellate courts should not be burdened with the nitty-gritty that is the proclaimed province of the lower courts. They are not meant to hear evidence, but to dissect points of law, the apprehension being that once the evidence is in, a matter of facts heard by the earlier judge, he, junior as he may be, may have erred in interpreting the law. Loading the superior courts as trial courts is becoming endemic; another reason for the backlog.

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