The forum’s order came on the complaint by Delhi resident Pulastya Pramachala who had alleged that he had filed the refund request in April 2010, but it was not processed for over two years and then was rejected in May last year on the ground that he had filed the claim late
Pulling up the Indian Railways for taking over two years to process a passenger’s refund request and then ‘illegally’ rejecting it, a Delhi consumer forum has directed it to pay a compensation of Rs50,000 to the complainant.
The New Delhi District Consumer Disputes Redressal Forum held Indian Railway Catering and Tourism Corporation (IRCTC) directly responsible for the delay as the refund request for cancelled ticket was to be forwarded to the railways zone concerned by IRCTC.
“We hold all the opposite parties (chairman of the Railway Board, general manager of Northern Railways, chief commercial manager of South East Railways and IRCTC) guilty of deficiency by taking unduly long time in processing the refund claim of complainant and then rejecting it illegally.
“The opposite party (IRCTC) has contributed directly to the delay and harassment and inconvenience to complainant and his family,” a bench presided by CK Chaturvedi said and directed the parties to jointly and severally pay Rs25,000 as compensation to Delhi resident Pulastya Pramachala along with Rs25,000 as cost of litigation.
The forum asked the chairman of Railway Board to examine the rules and regulations governing time limit for claiming refund and processing it “so that consumers are not made to litigate for refund”.
The forum also observed that the Railways acted “penny wise and pound foolish” by spending public money to defend such cases in courts and said the Board should direct Indian Railways “to make the refund in court (forum) on first hearing itself rather than contesting such cases”.
The forum’s order came on the complaint by Pulastya who had alleged that he had filed the refund request in April 2010, but it was not processed for over two years and then was rejected in May last year on the ground that he had filed the claim late.
IRCTC had contended in its defence that refund claim was rejected as it was not filed within 12 hours of cancellation of ticket as per the rules and regulations governing ticket cancellation.
The forum rejected the contention, saying that as per the Railway Act, 1989, the Railways “in no case can refuse refund of a cancelled ticket”.
“It (Railways) cannot make rules or regulations or time limits for presenting refunds, in a manner which would lead to refusal of refund on grounds of late presentation. It can only prescribe the cancellation charges, etc,” the bench said.
The forum also noted that the Railways has set a time limit of a few hours for passengers to file the claim, but it has laid no such limit for itself.
“The complainant in this case sent a number of emails, requests and contacted service centres, wasting his time, money and effort, with all anxiety and distress for absolutely unreasonable delay of two years in getting a reply that the request has been rejected.
"Such an unreasonable delay is total imperfection in rendering services,” the forum noted and also directed Indian Railways to refund the ticket fare after deducting the applicable cancellation charges.
A strong downmove may have started which may take the Nifty to 5,940 and then to 5,850
The market closed the week with minor gains amid high volatility throughout the week on account of the expiry of the May F&O contract and the release of the GDP numbers for the last quarter of 2012-13 and the full fiscal. The dismal GDP numbers saw the benchmarks tumbling over 2% on Friday, their single day percentage fall in nearly 14 months. Timely arrival of the monsoon rains is expected to give the market its short-term direction.
The Sensex settled 56 points (0.28%) higher at 19,760 and the Nifty rose a mere two points (0.04%) to close the week at 5,986. The benchmarks closed in the positive on three of the five trading days. For the month of May, the Sensex climbed 1.31% and the Nifty gained 0.94%.
A strong downmove may have started which will may take the Nifty to 5,940 and then to 5,850.
The benchmarks settled 1.66% higher on Monday on support from the oil &gas, consumer durables and healthcare sectors. The market ended in the green on Tuesday on support from its Asian peers. The indices closed with minor losses on Wednesday, ahead of the F&O contract expiry.
Late buying in fast moving consumer goods and auto stocks helped the market close in the positive on Thursday. Poor economic growth, coming in at a decade low of 5% for FY’13, saw the market tumble over 2% on Friday.
The BSE Consumer Durables index (up 4%) and BSE Auto index (up 3%) were the top sectoral gainers. The top losers were BSE Realty (down 6%) and BSE Bankex (down 2%).
The key gainers on the Sensex were Tata Motors (up 9%), Sun Pharmaceutical Industries (up 8%), Hero MotoCorp (up 6%), Coal India (up 5%) and BHEL (up 4%). The main losers were Cipla (down 9%), Tata Steel (down 7%), State Bank of India, GAIL India and Hindalco Industries (down 5% each).
The Nifty was led by Tata Motors (up 9%), Sun Pharma (up 8%), Hero MotoCorp (up 6%), Coal India (up 5%) and BHEL (up 4%). The main laggards on the benchmarks were Cipla (down 9%), DLF (down 8%), IDFC, Tata Steel (down 7% each) and Bank of Baroda (down 6%).
India’s economic growth slowed to 4.8% per cent in the January-March quarter and fell to a decade's low of 5% for the entire 2012-13 fiscal on poor performance of farm, manufacturing and mining sectors. Gross domestic product (GDP) had expanded by 5.1% in January-March quarter of the last fiscal and stood at 6.2% for the 2011-12 fiscal.
Reserve Bank of India (RBI) governor D Subbarao on Thursday said that the central bank is concerned about the country's current account deficit (CAD) and high retail inflation. The result of the high current-account deficit has been the depreciation of the rupee, he added.
Among companies which declared their corporate results in the week, Larsen & Toubro’s (L&T) net profit fell 6.9% to Rs1,787.94 crore on 9.9% rise in total income to Rs20,686.93 crore in Q4 March 2013 over Q4 March 2012.
Coal India (CIL) reported almost 35% rise in the consolidated net profit at Rs5,413.9 crore for the fourth quarter ended 31 March 2013compared to Rs4,013 crore for the comparable period of the previous fiscal. The consolidated net sales of the PSU went up to Rs19,904 crore from Rs19,418 crore in the quarter under review.
In international news, US markets alternated between gains and losses during the week amid speculation about whether the Federal Reserve will continue the current pace of buying $85 billion of debt each month or cut its purchases.
Yesterday, when the Sensex was down 455 points, Infosys an index stock was up 3.32% while TCS and HCL Technologies were flat. On Saturday, Infosys announced that NR Narayana Murthy would come back as the executive chairman. A case of insider trading? We will never know because Infosys is a holy cow and there will be no probe
On Saturday, Infosys has announced that its main founder NR Narayana Murthy who was on a retirement, will be returning to the company as executive chairman of the board and as an additional director for five years beginning from 1 June 2013. It also said that Rohan, his son, will be joining the $7 billion company as his father’s executive assistant. This is strange because Mr Murthy is widely seen as a professional manager, who once headed a corporate governance committee of Securities and Exchange Board of India (SEBI). In addition, Rohan was never known to be interested in running Infosys.
More intriguingly, while the press statement by Infosys was released on Saturday, yesterday the BSE Sensex tanked 455 points, or 2.25%, but Infosys, a Sensex stock, actually rose by as much as 3.32% during the day.
As a matter of perspective, this was the highest percentage decline in the Sensex in 14 months and the highest rise for Infosys in one and half months, both happening on the same day! Did all software stocks rise yesterday? No. Tata Consultancy Services (TCS) and HCL Technologies were flat. Worse, ever since Infosys crashed by as much as 20% on 12th April, after declaring poor results and muted guidance, there has not been single positive factor that could drive the shares up. The stock has been moving sideways in a narrow band. There was absolutely no reason for the stock to rise yesterday. No material information was released to the public.
Clearly, someone knew that Narayana Murthy is coming back and that many investors will see this as a positive development. There is a prima facie suspicion of insider trading.
Two block trades did take place on the National Stock Exchange (NSE), according to web portal moneycontrol.com. One block deal took place on NSE at 15:28 hours, or two minutes before market closing. Another block deal took place at 15:18 hours, or 12 minutes before market closing. The value of these deals were Rs5.77 crore and Rs6.25 crore, respectively.
While taking over an executive chairman, Narayana Murthy said, “This calling was sudden, unexpected, and most unusual. But, then, Infosys is my middle child. Therefore, I have put aside my plans-in-progress and accepted this responsibility. I am grateful to Mr KV Kamath—the chairman, the board, and every Infoscion for giving me this opportunity. I intend to do my best to add value to the Company in this challenging situation.”
Amazingly, just last month, he had denied the possibility of returning to Infosys. When the Mint newspaper had asked him about it, Mr Murthy said, “I think as I said, sitting where I am, looking at the data, I don’t see that happening. I think it’s all speculation.”
According to the press release, Mr Murthy will be earning a token salary of Re1 only.
Infosys said, “In order to function more effectively Mr Murthy intends to create the chairman’s office to assist him during his tenure and has requested the board to permit him to put together a team for this function. The team will include his son, Dr Rohan Murthy, as Mr Murthy’s executive assistant.”
After the company’s March quarter results, Nomura Research had said that in the light of a lower-than expected fourth quarter performance by Infosys, it expects consensus earnings, multiple downgrades, and management’s outlook of pricing and margin pressure in the near term.
Infosys reported net profit of Rs2,394 crore for fourth quarter of FY2012-13, registering a marginal 3.4% year-on-year (y-o-y) growth and 1.1% sequentially, as per Indian accounting standard. Its consolidated revenues for the quarter under review, however, rose 18% y-o-y to Rs10,454 crore and flat (0.3%) sequentially.
Infosys’ management indicated to Nomura that there were delays in deal ramp-ups and deal closures in 4Q. While 4Q volume growth at 1.8% q-o-q was better than 3Q (1.5% q-o-q), pricing decline of 0.7% q-o-q and cross currency impact of 0.4% q-q impacted revenue growth.
On pricing, the management had stated, “There is pricing pressure in the non-discretionary portfolio (63% of revenue) and management expects this to get worse in the near term.”
According to Nomura, Infosys’ management expected the environment to be challenging and was finding it difficult to predict margins in the short-term as there are unknowns like pricing, cost of hiring onsite given likelihood of visa shortage and investments required to be made to push growth.
Coming back to the appointment of Narayana Murthy, veteran banker KV Kamath would step down from his position as chairman of Infosys and take up the role of lead independent director. In the statement, Mr Kamath said, “The board has taken this step keeping in mind the challenges that the technology industry and the company faces and in the interest of all stakeholders, particularly shareholders large and small, who have asked for strengthening of the executive leadership during this challenging time. Murthy’s entrepreneurial and leadership record and the long experience he has had as a technology pioneer makes him eminently qualified to lead the company and provide strategic direction at this point in time.”
S Gopalakrishnan, who was serving as the executive chairman, would be re-designated executive vice chairman and would primarily focus on key client relationships and broader industry issues, the statement said.
SD Shibulal would continue to be the managing director and CEO of the company, it said.
In August 2011, Kamath was appointed chairman, succeeding Murthy, who was made the chairman emeritus post his retirement. Also, the then CEO and MD S Gopalakrishnan (Kris) was elevated as the executive co-chairman, while COO SD Shibulal filled in Kris' position.
It remains to be seen how the market reacts to Mr Murthy’s appointment as an executive chairman. In five out of last eight quarters, analysts have been consistently way off the mark in estimating Infosys's results despite continuous interaction with the management. However, this stunning saga not only shows the quality of analysts but also shows how things have changed at Infosys. (When will analysts be realistic in their expectations about Infosys?)
There was a time when Infosys set the standards on corporate reporting in India. It was the first company to start reporting quarterly results much before it became mandatory. Also, for years, Infosys surprised the market with its conservative guidance and superlative actual results. It believed, in the words of founder NR Narayana Murthy, in the principle of under-promise and over-deliver.
Now, since Narayana Murthy is back at the helm, it would be interesting to see if he would be able to keep his words again.