RTI Judgement Series
RTI Judgement Series: Non-cooperation between government departments leading to encroachments

Various departments in Delhi went around stating that they feel it was an illegal encroachment but did not make any comment, leaving the appellant and the CIC wondering whether there was any governance structure at all. This is the 100th in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while expressing displeasure over the passing on the responsibility and lack of coordination in sharing information between government departments, directed the commissioner for planning at the Delhi Development Authority (DDA) to share the layout plan of with Sub-Divisional Magistrate (SDM) at Punjabi Bagh, Nangloi in Delhi.


While giving this judgement on 15 September 2009, Shailesh Gandhi, the then Central Information Commissioner said, “The Commission is aghast at the complete absence of any coordination amongst various government officers even when a citizen points out an encroachment. This method of complete non-cooperation and refusal to give each other adequate information shows the reason why encroachers and illegal activities can thrive and the government is unable to deliver the most basic requirements.”


New Delhi resident Vijay Kumar, on 24 August 2007 sought information regarding encroachment of public land from the Public Information Officer (PIO) of Municipal Corporation of Delhi (MCD). Here is the information he sought under the Right to Information (RTI) Act...


1. Whether any action has been taken to remove the illegal encroachment of and by Jyotish Karyalay at the T-point of Rohtak Road and Shiv Mandir Road, Madipur, New Delh-63 located at the north-east corner of the boundary wall of DDA SFS Flats (Punjabi Bagh Apartments), opposite Arihant Nagar, New Delhi-63, and to reclaim the public land on which the encroachment is constructed.

2. If any action has been taken to remove the said illegal encroachment, the same may please be intimated.

3. If no action has been taken so far, the reason thereof may be informed.

4. It may also be intimated as to when the action to remove the illegal encroachment and reclaiming the public land will be taken.


In his reply, the PIO of MCD stated, “It is to inform you that the matter pertains to Public Works Department (PWD). The copy of the same has been sent to the secretary of the PWD for sending information directly to the applicant under intimation to this office.”


Vijay Kumar then filed his first appeal. In his order, the First Appellate Authority (FAA) said, “The matter pertains to the PWD and the application has already been sent to secretary (PWD), the appellant has been asked to approach the concerned department for seeking information.”


The RTI application was shunted around. The only information was provided by the executive engineer (EE) at the Flyover Project Division at PWD (NCTD), Nangloi in Delhi on 1 July 2008. He stated, "It is intimated that though the above mentioned property appears to be constructed illegally on public land, the said property holder has produced some documents in support of his claim for the land. The documents produced by him are being sent to the revenue department to check the authenticity of the documents, in case the encroachment is proved the same will be removed.”


The EE sent this reply to SDM at Punjabi Bagh, Nangloi.


Not satisfied with the reply, Vijay Kumar then approached the Commission with his second appeal.


During the hearing, Mr Gandhi, the then CIC, observed that this was a classic case of how there was an absolute vacuum with respect to knowledge or willingness to identify responsibility for illegal encroachments. “Various departments have gone around stating that they feel it is an illegal encroachment but cannot make any comment. The respondents from land revenue state that DDA should has the records, whereas the DDA representative states that this information is with the revenue department. The appellant is left wondering whether there is any governance structure at all,” he noted.


He then directed the EE of Flyover Projects to send copies of documents produced by the land holder (as mentioned in his letter on 1 July 2008) to Vijay Kumar and the Commission before 30 April 2009.


The CIC, while allowing the appeal, also directed MS Agarwal of the DDA to give a copy of the layout plan superimposed on the Sirza to VP Mishra, Tehsildar at Punjabi Bagh. “...Agarwal and Mishra will give a joining report explaining whether the charge of encroachment is true and identify who has the information. This report will be sent to the appellant and the Commission before 5 May 2009,” it said.


During the hearing, Agarwal from the DDA showed some notings from a file which seem to indicate that the land belongs to DDA and there is an illegal encroachment. A photocopy of the file was given to Vijay Kumar, the appellant, Mishra, the tehsildar from Punjabi Bagh and the Commission.


However, the Commission did not receive any report from the PIOs. Vijay Kumar also on 22 June 2009 informed the CIC that he had not received any report as directed by the Commission and the DDA and the tehsildar were placing the responsibility on each other.


The tehsildar, in a letter on 4 May 2009 to the CIC stated that plan has not been provided to him as directed by the Commission and therefore he was unable to take any further action on this matter.


During the hearing Agarwal from the DDA showed some file notings which seemed to indicate that the land belongs to the DDA. However, the deputy director for land management at west zone had informed the Commission vide letter dated 4 May 2009 the concerned property does not fall under the jurisdiction of the DDA.


Since it was not clear to which public authority the concerned land belongs to, the Commission decided to initiate an enquiry in the matter under Section 18(2) of the RTI Act.


During the hearing on 15 September 2009, nine officers from PWD, DDA and MCD were present. All the officers universally proclaimed that none of them knew anything about this plot of land.


After hearing this, AK Gupta, EE of PWD stated that he was aware that it (the land) was encroached but was unable to get any help from other departments in terms of information to prove the encroachment.


Ashish, SDM, at Punjabi Bagh stated that for the want of layout plan the identification is held up. He stated that if the layout plan is provided, he would be able to give the information whether it is an encroachment or not within a day.


Ajay Gautam, EE of MCD stated that it is in the right of way of the PWD and MCD has nothing to do with while Chandrama Shah, deputy director of DDA stated that the layout plan would be available with DDA, Planning.


Expressing anguish over the lack of coordination amongst various government departments, Mr Gandhi said this method complete non-cooperation and refusal to give each other adequate information shows the reason why encroachers and illegal activities can thrive.


He then directed Alok Kumar, the commissioner for planning at DDA to send the layout plan of this area to Ashish, the SDM of Punjabi Bagh before 23 September 2009. “Ashish will then ensure that the information is sent to the appellant (Vijay Kumar) within seven days of receiving the layout plan. Ashish will also send a compliance report to the Commission before 10 October 2009 and inform the EE, PWD,” the CIC said in its order.




Decision No. CIC /SG/A/2008/00159/2835Adjunct


Appeal No. CIC/ SG/A/2008/00159



Appellant                                            : Vijay Kumar,

                                                            New Delhi


Respondents                                               : 1. BP Mishra

                                                                Tehsildar (PB)

                                                                Office of the Sub-Divisional Magistrate

                                                                Punjabi Bagh, Main Rohtak Road

                                                                Nangloi, Delhi 110041


                                                            2. Dy. Director (LM) WZ

                                                                Delhi Development Authority

                                                                Lands Management (WZ)

                                                                Subhash Nagar, Delhi 110018


                                                            3. Asst. Commissioner (WZ) & PIO

                                                                Municipal Corporation of Delhi

                                                                West Zone, School Building

                                                                Vishal Enclave, Rajouri Garden

                                                                New Delhi 110027


                                                            4. ADM(West) & PIO

                                                                Govt. of NCT of Delhi

                                                                Old School Complex

                                                                Lawrance Road, Ram Pura

                                                                New Delhi 110035


                                                            5. Secretary & PIO

                                                                Public Works Dept, GNCTD

                                                                Delhi Secretariat, I.P. Estate,

                                                                New Delhi 110002


iGate facing unsettled tax demands worth Rs738 crore in India

iGate, which was in news for sacking of its chief executive Phaneesh Murthy over non-disclosure of his alleged affair with a subordinate, said these demands are not tenable and the Nasdaq-listed firm has approached the requisite appellate authorities

After WNS and Infosys, iGate is the latest to face tax issues in India with the US-based outsourcing firm having an ‘unsettled’ tax demand of $132.7 million (about Rs738 crore) for assessment years 2004-05 to 2009-10.


iGate, which was in news for sacking of its chief executive Phaneesh Murthy over non-disclosure of his alleged affair with a subordinate, said these demands are not tenable and the Nasdaq-listed firm has approached the requisite appellate authorities.


“As of 31 March 2013, the company has open tax demands of 132.7 million dollars for relevant assessment years 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10,” the firm said in a filing to US Securities and Exchange Commission (SEC).


On the tax demands, the filing says: “The assessment order demand is raised mainly on account of disallowance of certain benefits under Section 10A of the Indian Income Tax Act and transfer pricing adjustment on account of interest on delayed recoveries from associated enterprises.”


Although, iGate has paid an amount of 14.16 million dollars in relation to these demands, which are pending at various levels of appeals, management considers these disallowances as not tenable against the company and therefore no provision for tax contingencies has been established related to unpaid amounts, the filing added.


When contacted, an iGate spokesperson said: “Majority of the unsettled tax demand for the mentioned period is mainly on account of disallowance of Section 10A benefits of the Indian Income Tax Act. The management considers these demands as not tenable and the matter is pending at various levels of appeal.”


Under the Indian Income Tax Act, 1961, iGate Global and iGate Computer are eligible to claim an income tax holiday on profits derived from the export of software services from divisions registered under Special Economic Zones (SEZ) arrangements, the filing said.


Profits derived from export of software services from these divisions registered under the SEZ scheme are eligible for 100% tax holiday during the initial five consecutive assessment years, followed by 50% for the subsequent ten consecutive assessment years from the date of commencement of operations by the respective SEZ, it added.


The Customer Is Always right. But There Are Exceptions

The widespread problems of Indian customers will stop only when regulators put in place a formal process to redress investor grievances meaningfully by forcing companies indulging in mis-selling or fraudulent practices to compensate investors for their losses and impose exemplary damages for needless harassment.

Our regular readers know that Moneylife is proud of its pro-investor stand and has a string of successful interventions on behalf of ordinary savers. But are savers always right? Here are a few examples of other kinds of customers that we come across, albeit rarely (all names changed).

Customer1: Krishnan writes to Moneylife’s insurance helpline expressing shock that his insurer had rejected his mediclaim because he omitted to disclose an angioplasty that he went through before buying the policy. When we told him that the insurer was well within its rights to reject his policy, he quickly came back with a modified story. He now wanted to approach the insurance ombudsman claiming that “my agent has misled me and forged my signature on the form.” Where did this allegation come from? Isn’t this mischievous?

Customer2: Kumar is happy with the returns on a unit-linked insurance product. After three years, he buys it again, this time in his grandson’s name. But now, the market is not doing well and the ULIP’s net asset value is pathetic. Kumar claims he was mis-sold the second ULIP. How does one believe the claim?

Customer3: Mr Patel and his family have been trading in stocks and shares for over 30 years and had long-term investments in several depository accounts. Then a broker convinced them that they could speculate in the derivatives market with the core portfolio as a kind of margin/surety. He promised them a fat return with no further investment. They fell for it and signed a power of attorney empowering the broker to trade in their accounts.

Worse, they did not check their accounts regularly, nor enter into a written agreement to say that the core portfolio would remain untouched. The broker quickly ran up huge volumes in their books and a loss of Rs15 lakh in three accounts which he threatened to adjust against their core portfolio. Clearly, these are not financial illiterate investors but greed got the better of them.

Why else would they not document their transactions? Why would they believe that a broker would choose stocks and make money for them without a portfolio management fee? Tens of thousands of investors were cheated in this manner during the market mania that crashed in 2008. That it happened again in 2012 only shows that temptation gets the better of good sense.

Customer4: Cindy and her friends are all qualified professionals. One is a company secretary and another is a chartered accountant. They, too, like the Patels, entrusted their money to a sub-broker who offered to make handsome returns for them by speculating in the derivatives market. It so happened that this sub-broker was among the most reckless and dubious in the market.

During the crash of 2008, his terminals were shut down for overtrading. Subsequently, he has been expelled from the two exchanges and has dozens of regulatory and punitive orders against him; there are multiple arbitration awards he has not honoured and the debt recovery tribunal has ordered liquidation of the company.

Clearly, with no likelihood of getting anything from the brokers, Cindy and her friends hope to collect from the clearing member for giving ‘unlimited exposure’ and funding to their own dubious sub-broker by flouting various regulations. Can they make a case? It may require a long legal battle.

Customer5: In each of these cases, the individuals have suffered a loss. Now, consider this case. We received a letter from Dr Sheela Naik asking us to publish her experience with a “very, very reputed portfolio management company (PMC)” in which she had invested since 2003.

In 2011, she noticed investment in a loss-making company and began to ask the PMC for an explanation. She says that she did not receive an answer nor was the stock sold. Dr Naik alleges a ‘a staggering’ loss of Rs3 lakh or 30% over a two-year period from just one scrip. Consequently, she asked the company to close her portfolio account and demanded a compensation for the loss incurred.

We found this story shocking enough to write to the company. We were in for a surprise. The PMC chairman pointed out that the good doctor was meticulously calculating her losses, but not her profit. She had earned a return of 17.59% compounded annually between 2003 and 2010 when the Sensex had returned 11.77%.

In fact, while the doctor pointed out a ‘staggering’ loss of Rs3 lakh, she ignored a total profit of Rs32.95 lakh made over the few years. “I am a practising doctor and hence quite ignorant of the financial intricacies,” says the doctor, who is sharp enough to calculate her losses while ignoring her profit.

In fact, Dr Naik is one of the reasons why Moneylife Foundation invests so much of time on spreading financial awareness. Consumers who do not understand the returns that they can expect from equity investment over a long term and are blinded by the expectations created in a bull market are just as ignorant as those who do not understand markets.

Also, portfolio management, by its very definition, comprises a basket of securities of which some may give high returns and others may not. Even in the loss-making stocks that Dr Naik complained about, the PMC had an explanation for holding on—almost all of them offered a decent dividend yield and had the potential to appreciate over time. But, the doctor who does not understand portfolio management or ‘financial intricacies’ is quick to malign the service-provider—without knowing the pathetic performance of many other portfolio managers.

Moneylife has reported several stories about PMCs destroying the wealth of high net worth individuals. We have fought a long battle with Securities and Exchange Board of India (SEBI) culminating in ruling from the Central Information Commission (CIC) under the Right to Information Act directing the regulator to post the PMS performance of all companies on its website.

SEBI has now posted the data in a manner that is virtually impossible to access, leave alone compare. It is not clear who SEBI is shielding, but were this information available, the dissatisfied doctor could have been shown comparable data to cool unreasonable expectations.

Unfortunately, while we have a situation where large segments of the shadow financial economy remain outside supervision any or regulation—from real estate to chain-money schemes promising high returns, even in the regulated segments (banking, insurance or capital markets), customers get the short shrift. There is neither uniformity of regulations, systematic enforcement nor collaboration among regulators. Consequently, the incidence of brazen mis-selling, misrepresentation and downright cheating that Moneylife comes across is so high that when consumers occasionally try to pull a fast one on companies, our first reaction is to give them the benefit of doubt.

Frankly, it is not easy for a tiny media company like Moneylife to play this role of handling customer grievances. But the widespread problems of Indian customers will stop only when regulators put in place a formal process to redress investor grievances meaningfully by forcing companies indulging in mis-selling or fraudulent practices to compensate investors for their losses and impose exemplary damages for needless harassment.

Sucheta Dalal is the managing editor of Moneylife. She was awarded the Padma Shri in 2006 for her outstanding contribution to journalism. She can be reached at [email protected]



Suiketu Shah

4 years ago

Sound correct financial literacy in India is as rare as a non top 5 player winning a Grand Slam tennis tournament.In this contrext moneylife is doing a superb job nationwide and one must crack down hard on sodapops like HDFC Securities and HDFC Bank who come to their customers are tell them not to read moneylife and based on their "expert" judegment tell customers to invest in a punter stock like Hexaware by selling Infosys.They are nothing but financial terrorists.

Suiketu Shah

4 years ago

One again reenforces my happiness at having taken yr advise in Feb 2012 to avoid WMCompanies9Wealth management compnies).After 16 months of follwing kensource and ml,I am very happy to see my equity portfolio getting in line and earning nice returns on antelope/lion category(from kensource)in a total stress-free manner with all decisions taken by us.

People boast of "multibaggers".Kensource has so many multibaggers in its list every few months.Keep it up!Great work.


Anil Agashe

4 years ago

Congratulations for this other side story. The instances given are stark and the tendency to pass the blame and not giving credit when due is rampant in our society. Such people also need to be exposed.


4 years ago

I think Investors need to be made financially literate. The true meaning of Investing(Not Saving or Gambling) will then be understood.
Take the case of the Dr. mentioned above, clearly everyone wants to make money and NEVER lose it.
Every one feels they know everything and they start Investing in High risk (derivatives/options) instruments without knowing how they work and how they can wipe out your entire wealth.
Finally when people will start paying for financial advice to reputed and experienced financial Advisors/Planners and not just work on tips/advice from sub brokers/ part time agents, will they understand the true meaning of Long Term Investing.
Till then the customer is ALWAYS right!

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