Companies & Sectors
PSUs spending more money in contesting cases: NCDRC

According to the national consumer forum, PSUs spend more money on contesting cases than the amount they might have to pay to the claimant despite having large number of legal personnel under their employment

New Delhi: Public sector undertakings (PSUs) are behaving "penny-wise, pound-foolish" and spending more money in fighting cases than they might have to pay to the claimants, the apex consumer forum has said, reports PTI.
The National Consumer Disputes Redressal Commission (NCDRC) made the observation while pulling up Haryana Urban Development Authority (HUDA) for "gross negligence, deliberate inaction and lack of bonafides" in delaying by 204 days filing of a plea against a state consumer commission's order.
The NCDRC also imposed a fine of Rs50,000 on HUDA while blaming the legal staff of the PSUs for not examining cases properly and forcing litigants to approach courts, resulting in a rise in frivolous litigation.
"It is a well-known fact that courts across the country are saddled with large number of cases. PSUs' indulgences further burden them. PSUs spend more money on contesting cases than the amount they might have to pay to the claimant. In addition thereto, precious time, efforts and other resources go down the drain in vain.
"PSUs are possibly an apt example of being penny wise, pound-foolish. Rise in frivolous litigation is also due to the fact that PSUs though having large number of legal personnel under their employment, do not examine the cases properly and force poor litigants to approach the court," it said.
The HUDA had challenged an order of Haryana State Consumer Commission directing it to pay 12% per annum interest on the amount paid by an allottee for a plot of land alloted to her in 1995 but possession of which was not given to her.
The apex consumer body came down heavily on HUDA for its inordinate delay in filing its revision petition saying "no sufficient grounds are made out for condoning the long delay of 204 days in filing the present revision petition." 
"...present revision petition being barred by limitation is hereby dismissed with cost of Rs50,000," the bench headed by Justice VB Gupta said adding that the amount be deposited in the 'Consumer Legal Aid Account'.




5 years ago

PSUs are in the august company of organisations in the private sector which sometimes fight on prestige and are less concerned about ‘justice’ or costs involved. The immediate measures from the side of government and judiciary to improve the position could include:

• Segregating cases which need to be decided within a year and taking them on a priority basis by the courts now in position.
• Leaving the remaining cases to new Special Courts to be put in place at all levels depending on the number of pending cases.
• Ensuring vacancies of judges are filled in time
• Making it compulsory for government and public sector organizations to expedite procedures where they are on either side of matters before courts. This is necessary as there is laxity on their side as cost and delay seldom affects the individuals who handle cases in government and public sector. This position is slowly creeping into big corporates also.
• Come to some ‘out of court’ amicable settlement where the cases involve senior citizens, their entitlements like pension or salary arrears for periods they served organisations and cases are in courts on disputes of interpretation of rules/regulations or missing records.
• Making necessary legislative changes to reduce procedural delays
• Simultaneous efforts to encourage concerned parties to settle issues out of court. This method would bear fruit where party on one side of the dispute is government or quasi-government organizations.

New Railway Minister hints at possible fare hike

To ensure that the vast infrastructure of the railways does not collapse and stop functioning, we have to increase fares and assure the public that we are going to improve the services, says Pawan Kumar Bansal

New Delhi: New Railway Minister Pawan Kumar Bansal on Monday gave ample hint of a possible passenger fare hike to improve services in the railways, reports PTI.


"Fare will not be increased for the sake of increasing fare. If fare will be increased, then it will be for providing better services to the passengers," Bansal said when asked whether passenger fares will be hiked in the near future.


"The improvement in services will have to be commensurate with the increase in fare," he said after assuming charge at Rail Bhawan.


At present, the railways are facing financial crunch and funds earmarked for many of the ongoing projects are being curtailed.


Justifying the need for a such step, the Railway Minister said, "We have to ensure that the vast infrastructure of the railways does not collapse and stop functioning... So we have to increase fares and assure the public that if there will be any hike, the public will also appreciate it because we are going to improve the services."


However, he did not go into the nitty-gritty of a possible passenger fare hike. "I have just assumed charge...I will discuss the issue threadbare."


The new Minister of State for Railways Adheer Kumar Choudhury, who also assumed charge, favoured a hike in passenger fares.


"Prices have increased in every why not in the railways. Common people will not oppose it (fare hike) if services will be proper," said the West Bengal Congress leader and a known critic of TMC chief Mamata Banerjee.


Choudhury said, "Rail services have fallen in the last few years. There are increasing number of complaints with regard to the services. Safety and security is a big concern for the railways and I think these areas need attention."


On the issue of Dedicated Freight Corridor (DFC), Bansal said, "We have to expeditiously work on DFC as it will benefit the people. All the regions of the country will get their due from the railways."


He also promised to improve the ticket reservation system to ensure genuine passengers get confirmed tickets.


"We will try to improve the ticket reservation process with the help of technology so that there is less problem in getting tickets," he said.


Emphasising on the need safety and security, Bansal said, "We are aware of the fact that the primary concern is the safety of passengers. We have to do our best to ensure security of the passengers. Cleanliness is also important besides punctuality. We have to give a clean environment in the trains."


Bansal said, "It is our endeavour to strengthen the physical and financial position of the railways. We have to move with the times."


Ministry of Corporate Affairs: Relay race or musical chairs

SD Israni charts out the short and tumultuous history of the MCA. The last three and a half years has witnessed four changes at its helm and has failed to even pass the Companies Bill.

The Sunday reshuffle of the Union Cabinet of the United Progressive Alliance (UPA) government saw several changes in cabinet portfolios with some ministers promoted and others demoted or relegated. One of the ministries, ministry of corporate affairs (MCA), was in the public eye due to its pivotal role in the Gadkari affair, where information has been pouring into the public domain, with great regularity. 
MCA has had a chequered past during its short existence of little under a decade. Prior to 2004 it was known as Department of Company Affairs (DCA), and was a mere department of the Government of India, which had been part of different ministries from time to time right since its creation. Depending upon the thinking of the government of the day and its political exigencies, DCA used to be tagged along with different ministries. For a long time DCA was a part of ministry of heavy industries; then part of the law ministry; then part of the finance ministry. However, right until the year 2004, DCA was never thought of as an independent ministry and, rightly so, the main job of the DCA was the administration of the Companies Act along with some other enactments.
During the tenure of UPA-1, one of its staunch supporters was the redoubtable Lalu Prasad Yadav. His right hand man at that time was Prem Chand Gupta, or PC Gupta in short, and he had to be accommodated as a minister in the Union Cabinet. The government hit upon the idea of divesting the DCA from the ministry of finance and designated DCA as a separate ministry vide Cabinet Secretariat Notification No.DOC.CD-160/2004 dated 27 May 2004, to function under Minister of State with independent charge. So, with a little flourish of the pen DCA donned a new name — Ministry of Company Affairs. Prem Chand Gupta, who was not made a full-fledged cabinet minister, was very clear that he had to be an independent minister, so he was given independent charge of the Ministry of Company Affairs. I still recall the fact that the minister was fussy about the fact that he had independent charge and that should be boldly mentioned everywhere including at each and every function, meeting or a seminar. Later on he became a full-fledged minister, and the ministry was then re-christened to Ministry of Corporate Affairs (MCA). Mr Gupta held the position till 22 May 2009, when the country had its general elections. One must admit that he did take a lot of personal interest in the functioning of the ministry and did try to speed up the disposal of matters.
While the first innings of the UPA government gave stability to the MCA, the second innings has done the reverse. The last three and a half years has witnessed four changes at the helm of MCA. The game of musical chairs started with Salman Khurshid. He was the Union Minister of State (with independent charge) of corporate affairs and minority affairs when he took over as minister on 29 May 2009. However, in the Cabinet reshuffle of 2011, he gave up MCA and was elevated as Cabinet minister for law and justice, and minority affairs. Before Mr Khurshid could do much for the ministry it was time for him to move on.
Now it was the turn of Murli Deora, who was until then the petroleum minister, to take charge of MCA. One must admit that though Mr Deora was a minister in charge of MCA for relatively a very short time, he made an impact not only on the functioning of the ministry but also simplified many of the provisions that were the bane of the corporate sector. In his true businessman style he was keener on finding solutions to the problems faced by businessmen. His initiative resulted in simplification of several provisions of the Companies Act, 1956, by making the full use of the rule making power which hitherto the babus were not very much inclined to do so.
However, in 2011 Mr Deora had to make way for Mr Veerappa Moily, a lawyer and a senior Congress leader who promised a lot. He went on a whirlwind tour of the country trying to generate a new found enthusiasm and promising a new company law without any further delay. Once again before Mr Moily could display any results for all his efforts, he shifted to the important Ministry of Petroleum and replaced by Sachin Pilot, a young and upcoming Congress leader. Hopefully, the new young minister Mr Pilot, who has over a year before the 2014 general elections process commences, will be able to do better than his seniors.
While on the one hand the UPA government has been proclaiming the importance of MCA, but at the same time the game of musical chair seems to be suggesting something else. The ministry has miserably failed to get the Companies Bill passed during the last half a decade. Instead the Companies Bill finds itself renamed, with the change in the year being reflected in the name.  
For more articles from SD Israni, click here.
(Dr SD Israni, advocate & partner, SD Israni Law Chambers, is one of India’s leading authority on corporate, commercial and securities laws. He was a member of the Naresh Chandra Committee for simplification of Company Law relating to private and small companies. He has been on SEBI's committee on disclosures (called the Malegam Committee) and the one on buy-back of shares. Dr Israni has been a member of the Legal Affairs Committee of the Bombay Chamber of Commerce and Industry, Indian Merchants' Chamber and Indian Council of Arbitration. Dr Israni is an active member of the Institute of Company Secretaries of India and was on its Central Council for four terms and headed the Capital Markets Committee of the ICSI.)


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