SC paves the way for setting up company law tribunal

Once established, all company-related matters pending with the CLB, BIFR and various high courts across the country will be transferred to the National Company Law Tribunal

Upholding the validity of amendments made to the Companies Act in 2002, the Supreme Court (SC) today paved the way for the establishment of the National Company Law Tribunal (NCLT) to deal with matters related to companies, reports PTI.

Once the tribunal is established, all company-related matters pending with the Company Law Board (CLB), Board for Industrial and Financial Reconstruction (BIFR) and various high courts across the country will be transferred to the NCLT.

Ruling on a petition filed by the government against an order of the Madras High Court (HC), a five-judge Constitution Bench headed by Chief Justice K G Balakrishnan today upheld the validity of the 2002 amendment with certain conditions.

The Bench, which included Justices R V Raveendran, D K Jain, P Sathasivam and J M Panchal, delivered the judgement on an appeal filed by the Centre against the Madras HC verdict.

Earlier, the amendment to the Companies Act, 1956 to set up the NCLT was rendered unconstitutional by the Madras HC on several counts.

The NCLT, which was to take over the functions hitherto performed by the BIFR, the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and the CLB, was proposed in the Companies (Second Amendment) Act, 2002.

As per the proposal, all company-related matters pending in different high courts were to be transferred to the NCLT.

The central government had moved the SC against the Madras HC ruling six years ago. The apex court had completed hearings in the case more than a year ago.
 

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Equity MFs continue to bleed, record redemption of Rs1,133 crore in April

Equity funds record redemption of Rs1,133 crore in April compared to Rs196 crore in the corresponding period last year, while debt funds witnessed inflows of Rs1,77,773 crore

Equity MFs have been bleeding over the last six months and they could not buck the trend in April. Equity schemes saw redemptions of Rs1,133 crore in April 2010 compared to Rs196 crore for the corresponding period last year, while assets under management (AUM) of equity schemes are up 63% at Rs1,76,830 crore in April compared to Rs1,08,507 crore in the corresponding period last year.

Investors have preferred to put their money in debt funds during the start of the year and have steered cleared of equity schemes. During April 2010, debt funds or fixed income schemes have recorded inflows to the tune of Rs1,77,773 crore. In March 2010, debt funds saw Rs1,64,487 crore in redemptions.

Equity-linked savings schemes (ELSS) recorded net outflows to the tune of Rs106 crore in April 2010. In March, ELSS schemes witnessed net inflows of Rs641 crore while the BSE Sensex was down 1% between 1st April-30th April.
Net inflows of all schemes stood at Rs1,85,956 crore in April 2010 compared to net outflows of Rs1,62,165 crore in March 2010. The total AUM of all schemes stood at Rs8,08,541 crore in April compared to Rs5,93,516 crore in the corresponding period last year.

According to the monthly data released by the Association of Mutual Funds in India (AMFI), the average AUM in the month of April 2010 grew by 40% at Rs7,69,165 crore compared to Rs5,51,300 crore in the corresponding period last year.

Equity funds have witnessed continuous redemptions since August 2009 to the tune of Rs7,970 crore except in January and February 2010 which recorded inflows of Rs1,514 crore and Rs980 crore respectively.

Industry experts cite market uncertainty as the main reason for investors shifting to debt funds. Institutional investors have also parked their money in fixed-income funds in April. 
 

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COMMENTS

chetan batia

7 years ago

1. Uncertainities - globally
2. Amt of profits made during the last 1 year
3. DTC coming with new tax rules next year
4. loads of money flowing nto hybrids like MIP's, again due to reason 1 above & past performance of MIP's, combined
5. results have not lowered the PE's

Ravindra Shetye

7 years ago

I was surprised to see this article. Personally I am quite happy about the rewards of the Equity Funds and investing more. With the current inflation levels debt instruments lead you nowhere.

SC asks Sebastin to file fresh petition in High Court for early hearing

The Supreme Court, ruling in favour of A Sebastin, has asked him to file a fresh petition in the Bombay High Court, seeking an early hearing in a case related to his severance from the NSE

The Supreme Court has asked A Sebastin, a former employee of the National Stock Exchange (NSE), to file a renewed petition in the Bombay High Court, which seeks for an early hearing of a case related with various dues of Mr Sebastin from the NSE. This is the second time the apex court has ruled in favour of Mr Sebastin.

Earlier, the Supreme Court, while dismissing an appeal of the NSE, had passed strictures on the Exchange. The Supreme Court dismissed NSE’s petition for quashing the orders of the Bombay High Court and asked the Exchange and its top brass to face a criminal case in the Mumbai Metropolitan Court.

Mr Sebastin had filed a petition in the Bombay High Court requesting an early hearing of his application related with dues owed to him by the NSE. However, the High Court rejected his application. Mr Sebastin filed a special leave petition in the Supreme Court, which on 12 April 2010 asked him to file a fresh petition in the High Court for early hearing of his appeal.

The Supreme Court order dated 12th April said: "As the earlier rejection of the interim prayer was on the assumption that an early hearing application will be entertained, it is always open to the petitioner to renew his prayer for interim relief in accordance with law."

Mr Sebastin is likely to file his fresh petition in the High Court after the summer vacations.

Mr Sebastin, a compliance officer with the NSE, had resigned from the bourse in October 2008. Later he joined Multi Commodity Exchange of India Ltd (MCX) and came under a nasty personal attack from the NSE. The Exchange has still not cleared various dues of Mr Sebastin, except his provident fund (PF), since holding back PF is illegal.

The NSE, through a clarification, had said that Mr Sebastin’s “services were terminated” because he “had not met the company’s requirements.” It also indicated, without being specific, that the employee had failed to complete “severance” formalities.

Mr Sebastin, however, has evidence of a formal handover of charge, an exit interview and an email assurance that he would be relieved. He says that the public notice was issued after he sent a legal notice to the NSE on 4 April 2009, demanding severance benefits like PF and gratuity.

The NSE credited his PF account immediately after receiving a legal notice but till date had not paid other dues, including gratuity, super-annuation, leave travel allowance (LTA), medical allowance, leave encashment, additional ex-gratia and salary for 14 days in November 2008, together amounting to about Rs32.50 lakh.

Since the Exchange is flush with funds, derived from profits of a well-preserved, near-monopoly commercial position, it can afford to fight a case right up to the Supreme Court. However, the question is whether this was necessary and whether it merely reflects its bullying antics, as has now been proved by the High Court and Supreme Court judgements.

We sent an email to the NSE requesting details of the Exchange v/s Sebastin case, such as legal expenses, cost of public notice and other costs. But Divya Malik Lahiri, the recently-appointed head for corporate affairs and communications, NSE, replied in one line saying, “I am sorry, I won’t be able to comment on these things."

According to industry sources, the public notice published in various business newspapers would have cost the NSE about Rs20 lakh-Rs25 lakh. Also hiring the top legal brains for fighting cases from lower courts to the Supreme Court is also not without a financial burden that the Exchange may have to bear with. {break}

The Sebastin Case

In October 2008, A Sebastin, a compliance officer in NSE, resigned from his job and joined MCX. On 6 April 2009, the NSE issued a ‘public notice’ in all leading business newspapers with the employee’s photograph announcing that anyone dealing with the “said Mr A Sebastin” would do so at their own risk.

Normally, such notices are published only if an employee is guilty of financial fraud or a serious betrayal of trust. However, there is no such mention. Instead, the NSE issued a clarification in response to media queries, saying that Mr Sebastin’s “services were terminated” because he “had not met the company’s requirements.” It also indicated, without being specific, that the employee had failed to complete “severance” formalities.

Mr Sebastin, however, has evidence of a formal handover of charge, an exit interview and an email assurance that he would be relieved. He says that the public notice was issued after he sent a legal notice to the NSE on 4 April 2009, demanding severance benefits like PF and gratuity.

Holding back PF is illegal, so the NSE reportedly credited his PF account immediately after he served the legal notice but simultaneously issued him a termination letter followed by the public notice, almost six months after he had quit the Exchange.

We published the case under the title "Vindictive Action?" on our website www.suchetadalal.com; it has received 28 comments (so far) from readers. One reader, Mr Golak, said: “NSE should try to find out why NSE ex-employees are willing to join MCX-SX and sort out the problems rather than take this kind of vindictive action. As an organisation, it has failed to come out of the whims of a few people who run the Exchange on their own sweet terms.”

Another reader, Mr Satish Swaminathan, commented, "If there is attrition, then the human resources (department) should be pulled up for explanations and probably try to get to the root cause and address it. I also fail to understand how the NSE is proposing to beat its competition by stopping people and being vindictive when they join a competing firm.”

“It is highly unethical behaviour by a highly professional company like NSE. Such a step by any company cannot be justifiable as employees are a company’s human assets and not physical assets,” said ‘SS’, another reader.
 

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COMMENTS

DWARIKA PRASAD

6 years ago

Pl give your details of SLP No. and date of order by SC.My notice of motion is also pending before Bombay High Court.

DWARIKA PRASAD

6 years ago

By direction of supreme court to file fresh application before Bombay High Court does not imply early hearing direction to decide the payment of terminal benefits.Pl come out in what way the direction of SC will be helpful to take up the case for final hearing?
-Dwarika Prasad
General Manager
ONGC
Mumbai
Mobile No.9869222046

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