Consumer Issues
Scams of Car Service Dealers
Be careful and do not fall for their pitches when you go for routine servicing
With urban real estate costs high, and showing no signs of declining, car sales flattening out and utilisation going down, one of the only remaining income streams for service dealers is a variety of scams foisted on you—if you are not careful about reading the fine print when your vehicle goes for routine servicing or maintenance. Here are some of these:
•  Nitrogen in tyres has to be the biggest scam going. With normal driving, or even fast driving, there is no real benefit on existing standard tyres fitted on standard rims. Only if you are headed out to a race track will it make sense to pay thousands of rupees for what they claim is nitrogen gas.
• Alignment and wheel balancing, ideally done once every 15,000-20,000km, unless there is sign of heavy wear & tear on tyres, for which again there can be multiple other causes. Every which way, if you end up paying more than Rs500 to align and balance all four tyres, then you are paying too much.
• Clutch overhauling scam. Clutch does not need overhauling if it goes slightly ‘hard’. Clutch needs overhauling if your engine starts ‘slipping’, i.e., when you press down hard, the engine roars ahead, while the car follows not so quickly.
• Steam cleaning of air-conditioner ducts. This one takes the cake. All they do is take your car, turn your temperature controls at hottest, run fan at highest for five minutes, and then let the car cool down for half-an-hour.
Don’t fall for these scams. I have written multiple pieces on how to take care of your car before, and after, the rains. If you follow them, hopefully, you will be fine.

Car Pooling Urgently Needed

About 30-40 years ago, when the total production of motor-cars in India was around 70,000-100,000 per annum, the Motor Vehicles Act and amendments, as they stood then, had a very interesting provision for optimal utilisation of existing roads and vehicles. You could, on the payment of a moderate and reasonable fee, convert your private car into a commercial taxi for a few months, and then, after paying the required insurance top-up fees, be street legal as a taxi too.
This way, in peak seasons, private cars otherwise lying around unused could, and often were, used as legitimate private taxies. As long as they satisfied the basic criteria on fitness and permits required, regardless of age, you could wrap an additional registration plate over the existing one and earn some money as well as keep an asset from blocking expensive public real estate. What ails most Indian cities nowadays is the large number of private cars lying underused—often not used at all, for whatever reason. On the other hand, with parking rates and drivers’ salaries going up, in some cities, there appears to be a shortage of good quality cabs. There is an obvious fit here. Which will also be an income-earning opportunity to those who have bought cars but don’t use them all the time.

Second-hand Car: More Insights

A friend of mine bought a used car recently from another friend of his. The car was in good shape and condition, about five years old, but had been lying abandoned and unused for the past three years or so. During this period, the car's insurance had lapsed; apart from that, it needed some minor repairs, and cleaning. Two issues that he came to me for advice were:
• Weird smell emerging from the air-conditioner. He had tried to use some fragrances but they didn’t appear to work. A quick servicing of the AC by a specialist fixed that, but what came out of the ducts was like a mini decayed forest, certainly unhealthy. And that is a point to remember if cars have not been used for a while.
• Synchronising the expired insurance for the purchased car while taking benefit of existing ‘no claim bonus’ for the old car he sold as scrap and re-registering it. To do that, he had to first take insurance in the previous owner’s name, then place the documents for re-registration and, simultaneously, transfer the previous ‘no claim bonus’ to the newer car. Bit of a hop-step-jump that, but that’s how it is.

Parking Troubles

Parking cars on roads comes naturally to many of us, in India. One can understand if the urge to double-park, as it is called in other countries when you pull over and stop on a road for whatever reason, overtakes us when we are on the move. But, to assume that it is a birthright to double-park even for overnight parking on roads which have multiple forms of traffic—from pedestrian to cycles to motor vehicles—on a regular basis, needs to be figured out.
Overnight parking has become a major issue in Delhi, the more ‘posh’ the locality, the more acute the parking ‘problems’. With what were single-unit houses becoming four- to eight-family habitats, over the past few decades, along with basements doubling up as offices and additional ‘servant's quarters’ coming up on the terraces, it is not unusual to see 12-16 cars, and an equal number of two-wheelers, adorn the road space outside a 300-400-square metre plot.
It gets even worse where there are smaller plots and in smaller cities. Likewise, in markets and bazaars all over India and not just Delhi. As a result, roads and pavements outside homes and offices are like war-zones, protected by man and machine and video cameras at a level not seen on the LoC (line of control) or international border between India and Pakistan.
In some parts of Delhi, the problems are so severe now that, after about 10pm or so, people just park anyhow anywhere, blocking the option of not just emergency vehicles accessing the streets, but pretty much all movement. Traffic jams inside inner ‘colony’ roads become gridlocks and parking rage is replacing road rage. It gets difficult to write about new cars and bikes when there is a parking war going on outside at 6:30 on a cold winter morning!

Reversing Safely

While looking out of the window from where I live and work, the most common sight is that of motor-cars trying their level best to squeeze into tight parking slots by any means possible. Often, this means huge usage of power-steering, and change of locomotion from forward to reverse gears, multiple times. All this provides continuous recreation to the vast variety of idlers who collect when such drama is going on. Power-steering has made multiple movements easier; but, at one time, many of us born to non-assisted steering, would take great pride in being able to slot a car into a parking bay in one smart move, regardless. (But not many people now even remember pre-power-steering  cars!) There are many online websites that teach you how to reverse into tight parking spots. Take a look at them. It will save you a lot of tyre and steering system wear & tear, to start with. Plus all those idle loafers will not laugh at you.
(Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved in helping small and midsize family-run businesses re-invent themselves.)



Harish Kohli

2 years ago

I have quite a bit of experience on the service stations carrying out unnecessary repairs. In on instance they called me to say that the brake pads have to be replaced. When I complained to the GM and told him the pads were replaced during the last servicing and the car has been driven only 1,000 Kms, the pads became alright.
An issue I would like your opinion on is regarding the manufacturers recommended service schedule after every, normally, 10,000 Kms. Tasks to be done and consumables/parts to be changed at each service are specified. Even if the vehicle has hardly logged, say 2,000 kms, I am asked to change the oil, filters, coolant, spark plugs, overhauling of fuel system, alignment etc. I reluctantly agree to change theoil & filters but not for the other works. Where do I stand with respect to the warranty, particularly the extended warranty. Can it be declined because of my refusal to follow the recommended schedule?


Veeresh Malik

In Reply to Harish Kohli 2 years ago

Thank you for writing in.

The previous generation of Indians and Indian cars, the Ambassadors and Premiers, typically needed a service ever 1600kms or so. From that to 10000kms has been a very rapid change.

In the bargain, however, there is this huge fleet of low-usage cars which run up huge servicing bills because the authorised service stations charge basis timeline recomendations and not mileage done.

Will warranty get impacted?

That depends on manufacturer to manufacturer and there is no one clear answer to that question.

Shall attempt to address this issue in a future article.

Harish Kohli

In Reply to Veeresh Malik 2 years ago

Namaste Veereshji, An article on this subject will be appreciated.By the way, now that we follow kilometer instead of miles, hasn't there been any word to replace milometer and mileage? I get foxed when I have to use these words.

In a lighter vein I can't help commenting on your statement "The previous generations of Indians and Indian cars ..........." Well I think the service schedules for the "Previous Indians" and the new Indians could be reversed. Do Fast Food companies have any comments?

Nifty, Sensex may try to rally – Tuesday closing report
A close above 8,560 may mean a short rally in Nifty. Bank Nifty has to close above 18,450 for the first sign that the downtrend is ending 
We had mentioned in Monday’s closing report that NSE’s CNX Nifty may continue to weaken unless it manages to close above 8,600. After opening low on Tuesday, the 50-share index started moving gradually higher. However, the momentum weakened after a few hours and Nifty headed lower during 11.30am and 1.30pm. Thereafter, the benchmark witnessed a sudden surge and hit high of the day. However, the indices immediately gave up the entire gains and closed lower for the fifth consecutive session. 
The S&P BSE Sensex opened at 28,209 and moved in the range of 28,130 and 28,455, while Nifty opened at 8,537 and moved between 8,536 and 8,628. Sensex closed at 28,162 (down 30 points or 0.11%), while Nifty closed at 8,543 (down 8 points or 0.09%). Bank Nifty opened at 18,348 and moved from the low of 18,290 to the high of 18,546, but could not manage to stay in the green and hence, closed lower. Bank Nifty closed at 18,331 (down 118 points or 0.64%). NSE recorded a volume of 71.79 crore shares. India VIX fell 4.19% to close at 13.6725.
As per the indicative calendar for issuance of Government dated securities, the Indian government will borrow Rs3.6 lakh crore from the market during the first half of the fiscal year 2015-16 (1 April 2015 to 30 September 2015). At the time of announcing the government's indicative borrowing calendar, the Reserve Bank of India (RBI) said that it has also been decided to elongate maturity by issuance of security up to 40-year maturity.
The Asian Development Bank (ADB) said in a report that it expects India's economic growth to accelerate to 7.8% in the fiscal year ending 31 March 2016, driven by an improved performance in the industry and services sectors, which have benefited from business-friendly structural reforms. ADB expects gross domestic product (GDP) growth of 6.3% in both 2015 and 2016 for Asia.
Coming back to Indian stock markets, Natco Pharma (6.50%) was the top gainer in ‘A’ group on the BSE. IDFC initiated coverage of stock with outperformer rating and setting a target price of Rs2,730. The stock hit its 52-week high last week at Rs2,291.40. NIIT Technologies (6.37%) was the top loser in ‘A’ group on the BSE. It informed that a dispute has arisen between one of the company's subsidiaries and its client in the APAC region, which may result in claims and counter claims. The company is exploring various options to resolve the dispute. In line with the company's accounting policy, the company shall be providing up to a value of US $ 10mn., towards unbilled revenue, during the current quarter.
Bharti Airtel (2.86%) was the top gainer in the Sensex 30 pack. It was in the news for its partnership with Amazon Web Services to offer its cloud computing services to customers in India. Tata Motors (3.27%) was the top loser in the Sensex 30 stock.
The US indices closed Monday flat with a negative bias. 
Asian indices showed mixed performance. KLSE Composite (1.01%) was the top gainer, while Hang Seng (0.39%) was the top loser.
Chinese manufacturing activity dropped to an 11-month low. The preliminary HSBC China Manufacturing Purchasing Managers Index fell to 49.2 in March, compared with a final reading of 50.7 in February, HSBC Holdings PLC said today.
European indices were trading flat with positive bias. US Futures were trading in the green. Greece’s Prime Minister Alexis Tsipras and German Chancellor Angela Merkel are making an attempt to find ways to help Athens reach a deal with creditors that will keep it from falling out of the euro. After an hour of talks, the two leaders reportedly indicated no breakthrough in resolving Greece's debt troubles or its increasingly contentious negotiations with its European Union partners, who are demanding fresh reforms before offering more money to Athens.
Germany's private sector grew in March at its strongest rate since July 2014. Markit's flash composite Purchasing Managers' Index (PMI) jumped to an eight-month high of 55.3 in March from 53.8 in February. France's private sector expanded for the second straight month in March, a survey showed today.


E-voting rules - New mess everyday!
The MCA has just amended the rules on e-voting. It has the potential of raising thousands of new queries
The rules on e-voting system posed challenges of its own when introduced last year and Ministry of Corporate Affairs (MCA) was forced to make it optional considering the barrage of queries and clarifications the rules demanded.  As soon as the industry was settling down with the rules on e-voting, MCA amended the rules on e-voting vide Companies (Management and Administration) Rules, 2015 issued on 19th March, 2015 ( new rules). The first reading of the amendments has the potential of raising a thousand new queries on the changes. Rule 20 as applicable on e-voting has been substituted by the new provisions as introduced by the amendment of 2015.
The new rules on e-voting will have to be complied with for all general meetings in respect of which notices are issued after the date of commencement of this rule. That is to say, all notices issued for general meeting after the publication of the rules in the official gazette will have to comply with these rules.  
All companies with equity shares listed on recognised stock exchange or companies having not less than thousand members will have to provide its members facility to exercise their right to vote on resolutions proposed to be considered at general meetings by electronic means.
The new rule also states that the rule shall not apply to companies referred to in Chapter XB or Chapter XC of SEBI ICDR regulations along with companies with less than 1000 members. Chapter XB of the ICDR regulations is on issue of specified securities by small and medium enterprises and Chapter XC of the ICDR regulations is with regard to listing on the Exchange made possible without bringing an initial public offer by SMEs. The provisions of e-voting will not be applicable to listed SMEs, which means general meetings will be conducted by using means such as show of hands, poll, ballot paper etc. 
The new rule does seem to suggest that voting through electronic means at the meeting is optional. This also means additional cost burden for companies to introduce voting through electronic means for members at the meeting – technologically enabling the meetings to provide for the option and also explaining the modus operandi to the members to put the option to use. 
This was seemingly even suggested by the Bombay High Court in the matter of amalgamation of Wadala Commodities Ltd and Godrej Industries Ltd, where Justice GS Patel under Para 24 (a) stated the following:
“All provisions for compulsory voting by postal ballot and by electronic voting to the exclusion of an actual meeting cannot and do not apply to court-convened meetings. At such meetings, provision must be made for postal ballots and electronic voting, in addition to an actual meeting. Electronic voting must also be made available at the venue of the meeting. Any shareholder who has cast his vote by postal ballot or by electronic voting from a remote location (other than the venue of the meeting) shall not be entitled to vote at the meeting. He or she may, however, attend the meeting and participate in those proceedings.”

Concept of cut-off date for remote e-voting - 

The new rule talks about a cut-off date which is defined to be a date not earlier than seven days before the date of the general meeting for determining eligibility to vote by electronic means or in the general meeting. Assume the general meeting is on 30 September 2015, cut-off date can’t be beyond 23 September 2015.
Rule 20 (4) (v) (e) – requires the Company to state in the public notice the manner in which the persons who have acquired shares and become members of the company after the despatch of notice may obtain the login ID and password.
However, Rule 20 (4) (f) (D) states that a person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting in the general meeting.
Going by this, if the Company cannot follow the practice of keeping the same date taken for determining names of shareholders for despatch of notice as cut-off date for e-voting. . Companies will be required to have a cut-off ( or determination date or record date) date for despatch of notice, for remote e-voting as well as mode of voting at the meeting and one for dividend. 
There is no question of providing such facility to persons who have become members after the cut-off date. If so was the case, the concept of cut-off date and identifying members of the company for attending the general meeting itself would become completely redundant. In view of the above discussion, it would be a prudent step to have same record date, which is fixed by the Company for the purpose of dividend, to be the record date for the purpose of e-voting and voting by poll too. The agencies offering e-voting platform shall refer the list of shareholders as on record date, upload the same and generate user id and password for such shareholders. The shareholders as on cut-off date who are unable to vote electronically may attend and vote at the AGM by way of poll or electronic means as the case may be.

Modus operandi for remote e-voting and e-voting at general meeting

Rule 20 (4)(vi) states that the remote e-voting facility will be open for not less than three days and shall close at 5:00 pm on the date preceding the date of the general meeting. The rule seems to indicate that the remote e-voting facility will be open till a day preceding the general meeting. Formerly, the rules specified the minimum and maximum number of days for which the facility may be offered. However, considering the cost and complexity, the Companies may consider keeping open for maximum three days. Assuming the general meeting is on 30 September 2015, the remote e-voting facility may be kept open from 27th to 29th September, 2015 thereby complying with both of aforesaid requirements.
The proviso to Rule 20 (4)(viii) indicates that the remote e-voting facility will be blocked on the day preceding the general meeting. However, if the same electronic voting system is being used for providing voting through electronic means during the general meeting as well, then the said facility shall be in operation till all resolutions are considered and voted upon in the meeting. The facility may be used for voting only by members attending the meeting and who have not exercised their right to vote through remote e-voting. 
The rule seems to fail to make distinction between remote e-voting and voting at the meeting through electronic means. Remote e-voting is to stop one day prior to the general meeting at 5.00 pm however, where the Company opts to provide same electronic voting system will remain operative for voting through electronic means. How will the company create a distinction between those members who have voted from remote e-voting and those who will be exercising the voting through electronic means at the meeting?  Sure enough the system will have to close for the company to make a note of such members who have exercised the right to vote already. Rule 20 (4)(xiii) seem to indicate that there will be closure period for remote e-voting  and before commencement of general meeting for the scrutinizer to make an account of all the shareholders who have exercised their right to vote through remote e-voting. The voting through electronic means shall re-open after the scrutinizer has taken account of the members who have voted through remote e-voting. The Company may consider re-opening the same on commencement of e-voting.
Now comes the challenging part. How will the agency ensure that while the e-voting has been allowed at general meeting, no member is accessing the portal through remote e-voting and casting vote at the same time? The agency providing the facility will have to ensure this possibly by de-activating the login ids of members other than those attending the general meeting as the scrutinizer would have taken record of those who have already voted through remote e-voting. 

Trouble of amending resolutions

The new rules indicate that resolution cannot be withdrawn where voting through electronic means is provided, but not sure whether amendment to the resolution is possible or permissible. The rule seems to be silent on the issue. 

Voting at meetings

Rule 20 (4)(xi) seems to indicate that at the meeting voting through electronic means or using ballot or polling paper will have to be allowed for all those members who are present at the general meeting but have not exercised their voting rights already.
Considering the level of complexity and challenges involved, it seems that Company may opt for the time tested method of providing poll at the meeting. Since, it will be cumbersome to provide electronic voting booths at the venue. Several shareholders who may not be technologically sound will require guidance. Of course the AGM will turn into a long drawn process.

Announcing results 

Oddly unlike the current practices where the Chairman announces whether the resolution is passed or not, in future the results of the resolution will be announced not later than three days from the meeting. Once the scrutinizer gives his consolidated report of the total votes cast in favour or against, within three days from the conclusion of the general meeting, the Chairman or a person authorised by him in writing, shall declare results forthwith. 
While the results of the voting on resolutions will be announced three days from the general meeting, the resolution will be considered to be passed on the date of the general meeting. This will surely contradict with requirement of clause 35A of equity listing agreement where companies are required to report the voting results within 48 hours of conclusion of general meeting. In case of equity listed companies, the results will be needed to be given within 2 days from conclusion of general meeting.
The transformation of law was to transpire to be facilitating and in sync with the global developments such that companies had the ease of doing business. The laws could be updated to get rid of the redundancy. 
The law cannot take away the essence of the meeting and be mindless, impulsive and reactive. It seems the MCA has goofed up yet again with this new rule as well. 
(CS Nidhi Bothra is executive vice president while CS Vinita Nair is practising Company Secretary and look after corporate law division at Vinod Kothari Consultants Pvt Ltd)


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