Citizens' Issues
Mumbai's horse-drawn Victorias to go from June 2016
Justice Menon and Justice Oka ordered the BrihanMumbai Municipal Corporation to shut down all the stables housing these horses after one year
 
The horse-drawn Victorias, a familiar sight for joyrides in Mumbai's tourist areas, will become history from June 2016 after the Bombay High Court on Monday termed them "completely illegal".
 
A division bench comprising Justices A.K. Menon and A.S. Oka directed the government to come up with a rehabilitation scheme for the some 700 families which will be affected by the decision -- as well as the horses.
 
The government has been directed to ascertain the exact number of families to be hit by the ban and submit its rehabilitation scheme to the court by December 31.
 
Justice Menon and Justice Oka ordered the BrihanMumbai Municipal Corporation to shut down all the stables housing these horses after one year.
 
The judges' order came on a PIL filed by NGO Animal and Birds Charitable Trust and others in which the People for the Ethical Treatment to Animals (PETA) was an intervenor.
 
In May 2014, the Mumbai Traffic Police had ruled that the Victorias were not a means of public conveyance and sought a ban on them.
 
A medical report by the PETA submitted to the high court said that in the first six months of 2009, there were 64 to 119 cases of injuries to horses every month besides cases of cruelty on the animals.
 
The BMC told the court that since 1973, no new licence to ply Victorias had been issued.
 
The PIL cited various issues including malnutrition of the horses, overwork, lack of proper care, their poor living conditions, and injuries and cruelty by the owners and handlers.
 
The division bench, while ordering the rehabilitation of the horses, asked the government to consider any offer for the purpose coming from any animal welfare NGO.
 
Presently, according to figures filed before the court, there are around 170 horses and 130 Victorias which ply mainly in a restricted area of south Mumbai between Colaba and Nariman Point.
 
The carriages were an integral part of Mumbai commute for a long time before they were overtaken by cabs, buses, trams and suburban trains.
 
Over the years, since they were suitable only for short distances and not popular during monsoon, they became unviable both for the operators and customers.
 
As Mumbai's traffic grew in leaps and bounds, the Victorias were relegated to certain designated areas of Mumbai though they continue to be used regularly in places like Gorai, on the city's outskirts.

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Government companies exempted from managerial remuneration limits
In an attempt to retain or attract talent, the central government has exempted government companies from the limits pertaining to managerial remuneration, it was announced here on Monday.
 
According to a statement issued by the corporate affairs ministry, private companies have also been allowed to accept deposits from members without creating deposit repayment reserve, offer of circular and others.
 
The ministry has also issued the final notifications under Section 462 of the Companies Act, 2013 providing exemptions to government/private/nidhi and charitable companies formed under section 8 of the Act (formerly called section 25 companies).
 
As per the notification, government-owned companies have been exempted from the limits pertaining to managerial remuneration, restriction on maximum number of directorships and disqualification of directors in certain cases.
 
The provisions in respect of nomination and remuneration committee have also been relaxed in respect of their applicability to directors/managerial people, the statement said.
 
Similarly flexibility is provided to government companies by modifying the provisions relating to loans to directors, loans and investments by companies and related party transactions.
 
The exemption for government companies to retain the suffix "Ltd." even if incorporated as private limited company, has been continued as per the exemption available under Companies Act, 1956.
 
Modifications in the provisions relating to place of holding general meetings have also been made.
 
According to the statement, provisions in respect of rotation of directors and right of persons to stand for directorship are exempted for wholly owned government companies, while provisions on forming opinion about integrity, expertise/experience of independent directors have been modified to provide flexibility to concerned ministry/department.
 
For government companies engaged in producing defence equipment, the provisions of section 186 (loans and investments by companies) and Accounting Standard-17 (Segment Reporting) will not be applicable.
 
As for the private companies, the exemptions relax the provisions pertaining to related party transactions; shorter period for offering securities to members through rights offer; simple majority approval for employee stock option plans and easier procedure for holding annual general meetings, the statement said.
 
The government has also provided flexibility to private companies in the types of share capital that could be issued and exemptions from filing board resolutions.
 
The requirement of mandatory consent of shareholders with regard to certain transactions relating to sale of undertaking, investments, borrowings and others have been omitted.
 
Keeping the auditors happy, the government has exempted one person/dormant companies and those with less than Rs.100 crore share capital from calculating the limit of 20 companies for audit, as per the statement.
 
Private companies not having any investment by any incorporated body have been allowed to extend loans to directors subject to certain conditions relating to bank borrowings and default thereof.
 
An interested director of a private company can now participate in the board meeting after declaring his interest.
 
Charitable companies have been allowed to give 14 days notice for holding general meeting instead of 21 days and have also been exempted from provisions dealing with appointment of independent directors, nomination and remuneration committees.
 
The charitable companies need not have independent directors on their audit committees and the restrictions on the number of directorships does not apply to them.
 
These companies are allowed to hold board meetings once in six months instead of four meetings in a year, as prescribed for other companies.
 
On the other hand, provisions relating to serving of documents to members of Nidhi companies and payment of dividend have been modified to provide more flexibility.
 
According to the statement, provisions relating to private placement have been partially relaxed for such companies.
 
These companies have also been exempted from the requirements of section 62 which relates to further issue of share capital, and the notice amount of Rs. 100,000 provided under section 160 has been reduced to Rs. 10,000 for these companies.
 
Provisions of section 185 in respect of loans to directors have been relaxed for these companies with the condition that loan is given to a director or his relative in his capacity as member and the disclosure is made in the accounts.

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Reverse Mortgage Ads Can Leave Consumers with False Impressions
Here's what you need to know before you apply for a reverse mortgage
 
Reverse mortgages, also known as home equity conversion mortgages (HECM), are heavily marketed to those who are in or near retirement. They allow homeowners over the age of 62 with significant equity in their homes (i.e., much of their home has been paid off) to tap into that equity in the form of a loan. But the ads you see about these loans may not tell the whole story and this week federal officials have issued an advisory to consumers warning them about the risks that aren’t detailed in some ads.
 
How reverse mortgages work
The loan is called a “reverse mortgage” because the monthly payment is coming from the bank or mortgage company to a homeowner rather than the other way around as in a typical mortgage. Homeowners can also elect to receive the loan as a lump sum. The loan can then be used to finance repairs to the property, pay for expenses, or just supplement income. In some cases, the proceeds from the reverse mortgage are used to make monthly mortgage payments or cover annual property tax costs.
 
The dangers
The reverse mortgage market grew 1300 percent between 1999 and 2008 and currently comprises about one percent of the traditional mortgage market, with more than 600,000 outstanding loans. With this growth come scam artists who try to plunder nest eggs that have been painstakingly saved over a lifetime.
 
Congress directed the Consumer Financial Protection Bureau (CFPB) to conduct a study on reverse mortgages as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. A study published in June, which focused on 97 television, radio, print and Internet ads, found that consumers were left with the misleading impression that reverse mortgages are a government benefit and would allow them to stay in their homes for their entire lives.
 
Said CFPB Director Richard Cordray:
 
A reverse mortgage does not carry such guarantees. A consumer can tap into the equity too early and run out of funds. In addition, with a reverse mortgage, the consumer still has to pay property taxes, homeowner’s insurance, and property maintenance fees. All of these costs can be significant. And if a consumer does not meet these obligations, he or she can still end up in foreclosure. Most of the advertisements reviewed failed to mention such risks. Or if they did, they were so buried in the fine print that consumers did not pick up on these key aspects of the loan.
 
The language in some ads suggests that the products are a kind of entitlement for seniors that won’t have to be repaid. The reality is that these products have real financial impacts and do have to be repaid, usually when you die or when the home is sold – or, in the worst case scenario, if you neglect to pay homeowner’s insurance and/or tax bills, at which point you could face foreclosure. Beware that reverse mortgages may also come with high fees that further draw down on the equity of the home.
 
Also, while legitimate HECMs are backed by the Federal Housing Administration, the government does not endorse or promote any particular product or company. So, beware of ads that claim some kind of affiliation with the government.
 
High pressure sales
High-pressure sales tactics are sometimes used to try to convince homeowners to cash out their home’s equity in order to invest in risky business ventures or to buy high-ticket items with the proceeds. Sometimes, a consumer may be dealing with a con artist who will steal their money and walk away. Unscrupulous lenders, in a practice that is illegal, will also try to push other products such as annuities or long-term care insurance along with the reverse mortgage. The elderly have even been used as “straw seniors” in property flip scams.
 
 
How to Protect Yourself
If you or a loved one is interested in a reverse mortgage, get the facts straight before signing any documents. Be careful when responding to unsolicited ads for reverse mortgages. By law, you must meet with a reverse mortgage counselor before you apply in order to understand and compare costs, payment options, and fees associated with the loan. Make sure you choose a counselor independently and be wary if your lender chooses one for you. To find a counselor, visit http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call 1-800-569-4287.
 
CFPB is also advising consumers to consider three main points before taking out a reverse mortgage:
Reverse mortgages are not home loans. 
Advertisements may fail to tell the whole story about risks associated with the loans. 
Consumers need to have a plan in place in case they outlive the loan money.
 
The agency has also issued a guide for consumers considering reverse mortgages.
 
For further information on fraudulent schemes that target seniors, you can check out the FBI’s page.
 
This story was updated from a previously published post. 
 

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COMMENTS

B. Yerram Raju

2 years ago

In India both the retirees and the banks did not pick up this scheme. The scheme by design is made unattractive and there are no such Ads in India for this product. For a reader from abroad this article makes sense.

Alok Tholiya

2 years ago

ML or someone must study cases of reverse mortgage in India.

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