The UP government would now have to invite objections from farmers, who have the option of either returning the money to reclaim their land or forfeiting any claim
The Allahabad High Court on Friday quashed the Uttar Pradesh government\'s notification for use of emergency powers to acquire land for Reliance Natural Resources Ltd’s (RNRL) Dadri power project, side-stepping a provision for inviting objections from landowners, reports PTI.
The state government would now have to invite objections from farmers, who have the option of either returning the money to reclaim the land or forfeiting any claim.
However, the agitating farmers and RNRL gave different interpretations of the order. Anil Ambani group official JP Chalasani contended that land acquisition for the Dadri project has not been set aside as claimed by the other side.
Passing the order, a division bench comprising Justice Ashok Bhusan and Justice Sudhir Aggrawala said that all "subsequent proceedings consequent to the notification of 11 February 2004, including the notification under Section 6 of 25 June 2004 are quashed".
"The Collector (of Gautam Buddh Nagar, where the Dadri village is situated) shall issue notice in newspapers having wide circulation by not giving less than 30 days\' period for filing of objections", the court said.
The court held that the notification dated 11 February 2004 is "partly quashed" since it invoked emergency powers under Section 17(1) and 17(4) of the Land Acquisition Act meant for public purpose.
Besides, the state, which acquired over 2,000 acres of land, had bypassed Section 5A, which provides for inviting objections from the landowners.
"The petitioners (landowners) are liable to refund the compensation received from the respondents", the court said.
"However, it will be open to those who have no objection to the acquisition to indicate so, and in that event they may seek exemption from the Collector from refunding the compensation", the court added.
The court also made it clear that the Collector shall take into account only objections of those who have returned the money.
The 7,800MW project, land for which was acquired by the Mulayam Singh Yadav government in 2004, has become a bone of contention between the Ambani brothers, Mukesh and Anil, who are involved in a bitter legal battle in the Supreme Court over supply of natural gas.
The Anil Ambani group has charged Reliance Industries Ltd (RIL) of reneging on its commitment to supply gas, which it claimed had rendered the project non-bankable.
RIL, on the other hand, had argued in the apex court that the project was not on the ground and hence, the gas could not be supplied.
Osian claims this part payment is about 90% of the invested capital. Investors, however, are still in confusion over the final NAV
The long wait for some Osian Art Fund investors seems to have finally ended. However, investors have received only part payment of the redemption amount, while they continue to be anxious about the net asset value (NAV) returns and full payment.
In November 2009, Neville Tuli, founder-chairman and chief executive of Osain, had told Moneylife that he had informed all unit-holders of Osian Art Fund that the NAV of the scheme would be Rs112.29, including dividend payout. This message, Mr Tuli told Moneylife, was sent out to investors on 8 October 2009.
However, investors have a different story to tell.
“I have received 75% part payment of the redemption amount (considering an NAV of Rs112). The official mail stated ‘here is 90% of the investment, which is a part payment towards full payment’,” said Deepak Daftari, one of the investors in the Fund.
However, Osian officials now claim that they have been shelling out a repayment of 90% of investor capital, and not part payment of the redemption amount.
In an email to Moneylife, Mr Tuli said, “90% of all investors’ capital is being returned in the first phase, and once the final audited NAV is completed, the remaining amount will be sent.”
While Mr Daftari has received 75% of the amount invested, another investor has received only 73% of the invested amount. “I had invested Rs10 lakh in the Fund. I have received the part payment of Rs8,50,000, while the total amount to be paid is Rs11,20,000 keeping in mind an NAV of Rs112,” the investor said, preferring anonymity .
When asked about the reason for part payments, Mr Tuli said, “The difficulty in selling all the inventories and in realising the dues during the downturn has been the reason for this situation, along with the overriding priority of protecting our unit-holders’ capital.”
However, what remains a larger concern is the NAV which is being stated at present. While the NAV for the month of July was stated to be around Rs112, investors have now been informed that the NAV to be considered would be lower at Rs110.
“We were told that the NAV for the month of July was Rs112, which was declared in October this year. The NAV has gone down much lower at Rs110. I don’t understand how the NAV can go down, once the fund was closed in July,” added Mr Daftari.
Mr Tuli replied, “The NAV for final payment was always (supposed) to be the final audited NAV as per the redemption guidelines.”
However, when Moneylife had questioned Osian in October 2009 on the status of the final NAV, we were told, “The Fund matured in August 2009. The Osian Art Fund will return nearly Rs115 (as NAV). NAV has ranged from Rs145 to Rs115, highest in 2007, lowest in 2009.”
The thirty-six month close-ended scheme announced in July 2006 made a quiet exit with returns of 5% per annum. However, investors believe that the returns they would receive could be lower at 3% to 4% per annum. As of July 2006, the total corpus held by the fund was Rs102.40 crore and it had 656 unit holders spread across 39 cities in India.
As per the Osian Art Fund prospectus, the fund distribution had to commence from 10 July 2009. With a stipulated period of 120 days, the redemption of the fund had to be completed by 10 November 2009. However, the company now claims redemption before 10 December 2010 was always part of the redemption guidelines.
— Amritha Pillay
The Bombay Stock Exchange today launched its mutual fund trading platform, ‘BSE StAR MF’, but there is no clarity yet on the cost structure
Following closely on the heels of its rival, the National Stock Exchange (NSE), the BSE has inaugurated ‘BSE StAR MF’, its independent mutual-fund trading platform. More than 20 fund houses have already confirmed their participation in this venture. While schemes from seven-eight fund houses will be available for trading immediately, others are expected to start trading in the next few days. These fund houses are also expected to join hands with NSE for its trading platform.
Both the Central Depository Services Ltd (CDSL) and National Securities Depository Ltd (NSDL) have confirmed their participation as depositories for the new venture. NSDL has initially decided to waive all trading charges on the BSE platform. Karvy and CAMS will provide Registrar and Transfer Agent (R&TA) services.
Although investors now have the added benefit of being able to access their neighbourhood broker for buying, selling and redeeming mutual fund units, a lot of ambiguity still prevails on the cost of trading on this new platform. Industry experts claim broker charges will be on par with normal commission on equities, i.e., around 0.50% of the transaction value. Moneylife had earlier pointed out the possibility of investors actually ending up shelling out more through the broker route than if they approached a mutual fund distributor. However, Deena Mehta, managing director of Asit C Mehta Investment Intermediates, claims otherwise. “We will only charge brokerage at 0.50% for every transaction”, said Mrs Mehta, adding that no additional charges will be levied.
Commenting at the launch, Madhu Kannan, MD & CEO, BSE, said, “Mutual funds have become an essential vehicle for investors to channelize their savings. Given the breadth of our nationwide network, we are positive that investors will find value in this platform. The BSE’s new StAR platform will offer a low-cost inclusive network to all mutual funds and intermediaries in the mutual fund industry.”
BSE’s mutual fund platform, which is more of an order-routing mechanism, will take advantage of over 40,000 terminals spread across India to extend services to mutual fund investors.
Brokers are anticipating good volumes, even from retail investors. An official from a leading fund house, who did not wish to be named, said, “Initially, the response may not be huge, but we do believe that, eventually, investors will come in large numbers as certain modalities are ironed out and things become clearer.”
Describing the difference between the two rival platforms of BSE and NSE, Mrs Mehta said, “The BSE platform is mainly browser-based, providing access anywhere, while the NSE operates on the NEAT system, a dedicated point-to-point connectivity-based system.”