The law intern has challenged the Supreme Court's 5 December 2013 full court resolution in which it was decided that no complaint against its retired judges will be entertained
A former intern, who has made sexual harassment allegations against Justice Swatanter Kumar, on Monday moved the Supreme Court seeking inquiry against the retired judge.
A bench headed by Chief Justice P Sathasivam, before whom the matter was mentioned for urgent hearing, agreed to take up the case on 15th January.
The law intern, in the petition, challenged the apex court's 5 December 2013 full court resolution in which it was decided that no complaint against its retired judges will be entertained.
The petitioner also submitted that a proper forum be constituted to conduct inquiry in such cases and her complaint be also looked into by the apex court like it was done in the case of sexual harassment allegations against Justice (retd) AK Ganguly.
The intern has made Justice Kumar, Secretary General of the Supreme Court and Union of India parties in the case.
She submitted that Justice Kumar was a sitting judge at the time of the alleged incident and the apex court must look into the complaint as per Vishaka guidelines.
Justice Kumar, who is currently heading the National Green Tribunal, has described the allegations as "incredulous and false" and "some kind of conspiracy".
Speaking at a Moneylife Foundation seminar, noted lawyer Arvind P Datar, who took market regulator SEBI through its battle with Sahara, spoke about the many ways in which companies evade the long arm of the law to dupe people and the necessity of speedy justice to convict the culprits
“After practising for three decades, one thing that I was repeatedly struck was the enormous delay in bringing the guilty to book. One almost has paid a premium on defaulters,” lamented Arvind P Datar, senior advocate of the Madras High Court, and also a prolific writer and the author of several seminal works.
Landmark judgments like the one in August 2012 order ordering two companies of the Sahara group to refund Rs24,000 crore to investors, are rare cases where the trial has moved fast. “But the fact of the matter remains that a group can raise Rs24,000 crore outside the purview of Securities and Exchange Board of India (SEBI), take money from three crore depositors and call it a ‘private placement’,” said Mr Datar, who represented SEBI in the case. He further said, “Ultimately what started in 2008 is at the final stages in 2014. But this case is an exception and has moved faster than other cases which have lingered for a number of years.”
“I can keep multiplying examples where people have committed frauds but nothing has happened. This is the unfortunate part where corporate frauds are concerned,” said Mr Datar who practices in the Supreme Court of India with taxation, company law and constitutional law as his specialisation.
The Sahara case was constantly stone-walled right from the beginning—issues whether the regulator SEBI has jurisdiction to whether the scheme was a private placement or public placement and so on and so forth. After the Supreme Court ruled that a refund should be paid to depositors, Sahara claims that out of the Rs24,000 crore that need to be refunded, Rs22,000 crore has already been repaid. The Supreme Court has now asked Sahara to reveal the source of the Rs22,885 crore with which it claimed it had refunded its investors, or be ready to face inquiry by the Central Bureau of Investigation (CBI) and the Registrar of Companies (RoC).
When the case started, Mr Datar contested Sahara Group's claim that its OFCD (optional fully convertible debenture) were not a public issue and therefore, cannot be regulated by SEBI. "Does SEBI have powers under Section 55A (of the Companies Act)? My answer is yes. If OFCD is a security under the Securities Act, then it comes under the SEBI Act. And if it comes under the SEBI Act, then SEBI has jurisdiction. SEBI can (therefore) pass a special order to regulate unlisted companies,” Mr Datar claimed before the Securities Appellate Tribunal (SAT). Sahara had been ordered by SEBI to refund the money its two group companies had raised from the public through an OFCD issue. Mr Datar further explained how the Sahara companies' OFCDs that were issued to the public were actually "a public offer dressed up as a private placement".
Speaking on the sordid state of the judicial system, Mr Datar said, “On one hand you do not prosecute known cases of fraud and easy cases of fraud, don’t reach convictions, and therefore you generate contempt for the law. How does the industry survive? On one hand you penalise the productive sector and on the other hand you keep ignoring corporate frauds. At the end of the day things must improve, but a change will only happen if we mobilise a change.”
Far too many Indians, who have burnt their fingers in the capital market, are losing enormous sums of money in seemingly safe investments that turn out to be mere ponzis. Mr Datar gave examples of numerous cases of corporate frauds such as the Rajat Gupta insider-trading episode in the US, the teak plantation scam, the Nidhi schemes in Maharashtra, the Satyam scam and several other such cases.
Mr Datar spoke about Rajat Gupta, who became the managing director of McKinsey & Co at an age of 48, and was later on the board of Goldman Sachs, Procter & Gamble and several other companies. “He was a spectacular achiever in every sense of the word. But just three phone calls finished his entire career,” narrated Mr Datar. Being a director, Gupta was privy to confidential information and he used this insider information to conduct trades on which he made enormous returns. Post-this, 70 prosecutions and 55 convictions took place against Gupta, sending his career crashing down. What is more important to note is that the charge-sheet was filed in October 2011, the trial started in October 2012 and on 8 January 2013 he was sentenced to two years prison. “That is the speed in which the conviction happens. And there are several such high-profile cases, like the Enron scam, where there were speedy trials,” explained Mr Datar.
However, in India, the scenario is different. All over the country there are several schemes which defraud consumers and investors. One such scheme was the teak plantation schemes. Giving another example, Mr Datar said, “In Chennai, four lakh families saw their savings wiped out in one such schemes which amounted to over Rs1,100 crore. Keeping in mind the magnitude of the fraud, the Madras High Court started what is called the Economic Offences Wing (EOW), to deal with such frauds. But after as many as 14 years, there has been not one conviction.”
“What amazes me is this, if company fails to payback a deposit, the magistrate must fine twice the amount of the deposit, pay 100% to the investor and keep 100% for the state or sentence the defaulter to five years of prison. In my life, I have not seen anyone going to jail for not repaying depositors. Companies just find ways to delay the trials,” he said.
One other case is that of Satyam. Elaborating on the case, Mr Datar said, “We have got the laws, we have got the regulations, but the basic sections are not implemented. Over the period of six to seven years of fudging the accounts, in the last year before Satyam went bust, the company showed totally Rs5,200 crore of fictitious income abroad. Just a few days back Ramalinga Raju, former founder-chairman of Satyam and his family members were convicted for IT fraud and it took seven years to do that.”
Was there another route to speedier justice? Mr Datar said, “According to the Company Act, there is simple section of just three lines—Section 628, which says if there is false statement in any document, prospectus, balance sheet or profit and loss account, the person can be sent to jail for two years. Similarly Ramalingam Raju, could have been convicted for two years based on his submission in a letter to the board that the fixed deposits were non-existent. It was an open and shut case, but it was not done.”
Answering a question on what amounts to fraud? Arvind Datar says “Fraud is defined under the Indian Contract Act as suppressing the truth, false suggestion, making a promise without intention of keeping and act of deceit.” Does silence amount to fraud? “Even this is answered. Silence will amount to fraud if there is a duty to speak,” Mr Datar told the audience.
Here is a letter sent by Mr Arvind Datar on his lecture...
My lecture was on "Corporate Frauds: Penalising the honest, rewarding the Guilty". On this topic, I covered the lack of conviction/punishment of promoters/directors who were responsible for non-payment of deposits and filing false prospectus. I had also referred to several statutory provisions which were not applied and major undisputed violations that remained unpunished. Reference was also made to the Satyam case.
At the end of the lecture, I gave a brief summary of the Sahara case. As the contempt proceedings are still pending, I had completely refrained from commenting on the merits of the case. I had also made it clear that the topic of 'Corporate Frauds’ did not cover the Sahara Group. Even during the Q&A session, I had ensured that there was no comment or discussion on the merits of the Sahara case or about the Sahara Group.
Eating habits in emerging markets are following a dangerous trend of the West, and many will be obeses in no time. If you want to reduce (or avoid) obesity, do skip the samosas or fries and order the saag or dal makhani instead
One of the problems of living in a town is that the limited variety of restaurants available that otherwise would be available in a larger city. My town is a tourist destination. It has more and better restaurants than comparable towns including a variety serving food of various countries from Mexico to China. Sadly it does not have any Indian restaurants. So when I have the opportunity to travel to the nearest city, I like to eat at a restaurant run by my friend from New Delhi. The food is excellent but I give up on the samosas. My body mass index (BMI) is a kilogram away from 25. Unlike many Americans, I give up on anything that is fried in oil. Fat creates fat and many of my fellow American citizens are just that. Unfortunately, people in emerging markets are following the trend.
There are around 570 million overweight and obese people in developed countries. The definition of overweight is having a BMI of over 25. A BMI over 30 is considered obese. In the US alone, an astonishing 70% of adults are either overweight or obese. The obesity rate is now up to 36% of the population for adults and 20% for children. (BMI is a measure of body fat based on height and weight that applies to adult men and women)
Overeating is no longer just a disease of rich countries. Developing countries’ waistlines have been expanding as fast as their economies. The number of people in emerging markets who are either overweight or obese has exploded to more than 900 million, tripling in 30 years.
It is not surprising that levels of obesity rise with incomes. Bahrain, Saudi Arabia and United Arab Emirates (UAE) all have obesity rates of 30%, and are catching up to the US. Kuwait has actually surpassed the US. Almost 90% of the population are overweight and 35% are obese.
Middle-income countries like Mexico and China have particularly high obesity rates. South Africa has a higher obesity rate than the UK. People in south-east Asian countries are also becoming heavier, with people in Indonesia, Thailand and Myanmar are 20% to 40% overweight and Malaysia has the highest levels of obesity at 15%.
South Asia is not nearly as bad as some of its neighbours. Obesity and overweight levels are the lowest in the region and malnutrition is a greater problem, at least for the poor. Higher income groups in India though are packing on the pounds.
Why are developing countries becoming supersized? While it is easy to blame everything on McDonalds and Coke, the reasons are more complex. The most obvious is money.
People with more cash can obviously eat more. But, it is what they are eating that is adding to their waistline. The popularity of Western music and fashion has sadly brought along ‘Western diets’. These diets are heavy in refined carbohydrates, sugars, fats and animal-sourced food. They are probably a genetic not a cultural preference. They are also more available than ever. Better distribution and the industrialisation of the food chain makes these irresistible tasty treats accessible to more people—at lower prices.
Another part of the problem is urbanisation. Urban environments replete with cars, metros, and computers don’t require us to move on our own as much. The result is more empty calories, but less exercise.
Some developing countries are also burdened with cultural preference for more curvy figures. In parts of Africa, Middle East and South Asian cultures, chunky is definitely in. It is considered both healthy and attractive.
Almost all of us have a genetic preference for fattier foods, but some populations are more susceptible to the diseases that result. For example, Mexicans drink 40% more sugary drinks than Americans, but this does not explain that difference in rates of diabetes. In Mexico 16% of the adults suffer from diabetes. However, it is over 50% more than the United States, where 10% of the population is afflicted.
The reason for the difference? Genes. Specifically, Neanderthal genes.
Non-African populations carry about 2% of Neanderthal genes, as a result of interbreeding when both species lived side-by-side in Europe about 30,000 years ago. Apparently the Neanderthals’ biochemistry was more efficient in storing fat. If you inherit a specific gene (SLC16A11), you have a much higher probability of getting diabetes. Native Americans apparently have a higher amount of this genetic configuration and passed it on to their Mexican descendants.
It is not just the Mexicans who have genetic issues. South Asians have a higher tendency to store fat in the abdomen and organs, leading to a higher incident of chronic diseases at lower weights.
It is not just the genes that may favour bad diets. Politicians are also part of the problem. It is difficult to legislate restrictions on unhealthy foods as witnessed by the media storm that surrounded New York City’s mayor Michael Bloomberg’s attempt to limit size of sugary drinks. There are also large farm and food lobbies that encourage over production of wheat, sugar and vegetable oils.
The economic impact is growing as fast as midriffs. In the US alone, obesity-related illnesses eat up $190 billion dollars, or 21% of annual medical spending. Treating the obese costs 30% more than treating the slender. Global spending on obesity is rising at 17% per year. The health care costs for developing countries could easily overwhelm their health care systems and put an unsustainable burden on their economies.
The solution? Probably the easiest for most countries is to go back to basics. Eat local. Eat cheap. In my travels through 40 countries I have been privileged to sample many of the local dishes. Many of the local recipes especially in developing countries often contained a lot more vegetables and less sugar and fat than a typical western diet. No doubt this was due to the fact that many people simply could not afford meat. In other countries religious concerns encouraged a wonderful healthy and delicious vegetarian cuisine.
The solution to the world obesity epidemic is actually deceivingly simple. In South Korea, the government launched an education campaign encouraging people to eat traditional cooking and it was able to lower obesity rates. Avoid British food at all costs. It will kill you. So next time, skip the samosas and fries and order the saag or the dal makhani.
(William Gamble is president of Emerging Market Strategies. An international lawyer and economist, he developed his theories beginning with his first-hand experience and business dealings in the Russia starting in 1993. Mr Gamble holds two graduate law degrees. He was educated at Institute D'Etudes Politique, Trinity College, University of Miami School of Law, and University of Virginia Darden Graduate School of Business Administration. He was a member of the bar in three states, over four different federal courts and has spoken four languages.)