According to the PIL, glorification of politicians linked to the ruling establishment, in order to attain political mileage at the cost of public exchequer, is violative of Article 14 of the Constitution
The Supreme Court on Wednesday set up a committee to frame guidelines for preventing misuse of public funds by the Government and its authorities by issuing advertisements to get political mileage.
A Bench headed by Chief Justice P Sathasivam said that substantive guidelines are needed to regulate such advertisements at the cost of public exchequer. The apex court constituted a four-member committee comprising NR Madhava Menon, former director of Bhopal-based National Judicial Academy, TK Viswanathan, former secretary of the Lok Sabha, senior advocate Ranjit Kumar and Secretary of Information and Broadcasting Ministry (I&B).
The Bench asked the Committee to submit its report within three months.
The court passed the order on a public interest litigation (PIL) filed by Common Cause and Centre for Public Interest Litigation (CPIL), a non-governmental organisation (NGO), pleading it to frame guildelines.
The petition has sought issuance of guidelines for curbing ruling parties from taking political mileage by projecting their leaders in official advertisements.
Counsel, appearing for Common Cause, had earlier said that the glorification of politicians linked to the ruling establishment, in order to attain political mileage at the cost of public exchequer, was violative of Article 14 of the Constitution.
Counsel, representing CPIL, had told the court that there was nothing wrong in issuing advertisements and informing the public about the programmes of the Government.
However, he had said such advertisement campaigns become arbitrary and malafide when aimed at gaining political mileage.
Reliance Life branch office had mis-sold ULIPs worth Rs12 lakh to a retired railway employee with the lure of “fantastic contest”. Moneylife intervention helped to recover money along with penal interest. Recently, IRDA has charged penalty from Reliance on payouts for contests & foreign tour packages
About two years ago, Reliance Life Insurance had mis-sold Highest NAV ULIPs worth Rs12 lakh to Arvind Injamuri, 65, a standard 9th failed, retired railway employee living at Solapur. Reliance employees had dangled the carrot of a TVS Scooty Pep on bringing in policy premiums of Rs7.5 lakh. In the process, the company shared with him the very lucrative “Fantastic Contest” that it was running for its advisors. These schemes that insurers run for their agents and distributors are the biggest incentive for mis-selling with incentives that escalate from Rs150 cash voucher to a Honda City car.
Recently, Reliance Life was levied a penalty of Rs1.77 crore by IRDA. One of the charges was contests and foreign tour packages offered by Reliance Life. Extra payouts were made towards contests, apart from commission, to some individual agents. The regulator noticed instances where payments other than eligible commission/ brokerage were made to corporate agents and brokers in the name of contests and other related activities. Further, expenses towards foreign tour packages were also incurred, Rs71 lakh during 2010-11 and Rs103 lakh during 2011-12, on some of the brokers and corporate agents. During 2010-11, huge payments of Rs1282.14 lakh were made towards “Referral Fees –Contests” against referral fee of Rs126.72 lakh.
Reliance Life’s “Fantastic Contest” highlighted by Moneylife in Arvind Injamuri’s case has posisbly drawn the attention of the regulator.
Moneylife Foundation had taken up the issue with Insurance Regulatory and Development Authority (IRDA) after examining the policy documents of Mr Injamuri while the magazine wrote a cover story (19 April 2012) on the case. Mr Injamuri got justice when Reliance was forced to return his money with along with Rs1.75 lakh interest, which is about 7.5% per annum.
This issue of gross mis-selling was on top of the list of life insurance memorandum submitted to IRDA chairman, when he addressed the Moneylife Foundation event on 16 May 2012. Moneylife Foundation wrote to the chairman of IRDA about this cheating on 31 July 2013, but there was no response to us.
Finally, on 23 January 2014, we filed an RTI application. To our utter disbelief, IRDA’s CPIO responded stating that the information sought is ‘third party information’ which needs a written consent from ‘Raj Pradhan’, who had written letters to the IRDA chairman on behalf of Moneylife Foundation.
After giving the necessary “consent from Raj Pradhan” and filing first appeal, IRDA has shared the required information. The proof of Reliance Life mis-selling is clear from the fact that employment of Reliance Life Colaba branch (Mumbai) Sales Manager Swapnil Gugale was terminated. But, Reliance Life had initially denied any mis-selling and denied Injamuri’s plea for cancellation. Due to Moneylife Foundation’s intervention and IRDA taking up the matter, the insurer informed that since the customer is claiming that he wanted the policy in his own name and he is not eligible for the policy, they have accepted the cancellation request and made the decision in favour of the customer as an exception.
If IRDA had levied penalty for mis-selling ULIP to entice Mr Injamuri for putting his retirement fund, Reliance Life may have been judicious about dealing with corporate agent AB Capital and monitored their activities. This would have prevented the mass fraudulent selling with fake “interest free loan” offer. Reliance Life replied to IRDA on 22 August 2013 that they received 2,141 complaints against corporate agent AB Capital. Reliance Life has paid over Rs22.20 lakh to 31 people duped by AB Capital after Moneylife Foundation intervention.
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How you can get ripped off by the staff of insurance company themselves!
Prithvi Information Solutions, the Andhra Pradesh based IT company, which had attracted many foreign institutional investors, has now had the ignominy of having the assets of its founder, Madhavi Vuppalapati auctioned by the Sheriff of King County, US, to recover over $17million owed to Kyko Global
On 24th April, the Sheriff of King County, US will sell personal assets of Madhavi Vuppalapati, founder of Prithvi Information Solutions Ltd, a listed company, to recover over $17 million owed to Kyko Global Inc a Canadian company. Kyko Global had alleged that Prithvi and its affiliates created fictitious, counterfeit customers to get an advance payment of $17 million from them. Interestingly, while such drastic action has been initiated overseas, there isn't a peep from the Indian regulators -- the Securities & Exchange Board of India (SEBI) or the Ministry of Corporate Affairs (MCA) or even the serious frauds office. The Indian media too, barring this publication, has been completely silent. The only sign that things are drastically wrong with Prithvi Info is the dive in its share price to Rs6.50 from Rs14, its 52-week high, reached on 1 November 2013.
As for the auction at King Court, the Sheriff's office had issued a notice on 14 April 2014 about the sale of personal property of Madhavi Vuppalapati. The property to be auctioned includes rights, title and interest to Vuppalapati's silver coluured 2006 Lexus RS4005D, jewellery, miscellaneous household items, an American Eagle 1/10th ounce gold coin in box, $50 American Express gift cheque, and assorted gift cards in red box. The Sheriff will also takeover Vuppalapati's 345 share certificates in Prithvi Catalytic Inc, which are listed for sale on 29th April. Prithvi Catalytic, formerly known as Catalytic Software Inc, was brought by Prithvi Info in 2010. Last month, the US Bankruptcy Court for Western District of Pennsylvania, while warning Prithvi Catalytic not to use name change to conceal its status as a chapter 11 debtor, allowed it to change its name to Abilius. (How & Why Prithvi Catalytic changed its name to Abilius)
While the auction is serious ignominy for the Hyderabad-based company, it is unlikely to recover even a fraction of the sum owed to Kyko Global, which had filed a case of fraud against Prithvi Info in Washington. In its order on 6 September 2013, the US District Court in Seattle said, “Judgment should be entered against Prithvi Information Solutions Ltd, Prithvi Information Solutions International LLC, Prithvi Catalytic Inc, Prithvi Solutions Inc, Madhavi Vuppalapati, DCGS Inc, Inalytix Inc, Avani Investments Inc, Ananya Capital Inc, EPP Inc, Financial Oxygen Inc, Huawei Latin American Solutions Inc and L3C Inc in the amount of $1,75,68,854 plus prejudgment interest accruing at the rate agreed to between the parties at 2.45% per month in the total amount of $7,96,776, as confessed to by the Defendants.”
In November 2011, Kyko said it entered into an agreement with Prithvi for certain factoring services. As per their agreement, Prithvi was to sell to Kyko some of its customer account receivables for IT services and authorise direct payment on those customer accounts receivable to be made to Kyko. This was in exchange for a portion of the amount outstanding from its customers to be paid immediately by Kyko.
Prithvi Information Solutions claimed to have a number of customers who had availed its services, but they turned out to be completely false. The court documents list out some of the companies that were falsely misrepresented, including big names in business, like Dick’s Sporting Goods, Enterprise Product Partners, Financial Oxygen, Huawei, and L3 Communications.
When Kyko tried to contact the alleged customer companies directly for payments, it discovered that some of them were associates of Prithvi, who had posed as clients and created and executed the verifications. When Kyko requested Madhvi Vuppalapati to be put in touch directly with the representatives of the five clients, she turned down the request saying that it will be detrimental to their relationships with these clients.
Over the next two years, Vuppalapati and her associates continuously deceived the unsuspecting Kyko, in the process and kept them in the dark, Kyko alleged. Finally, while attempting to collect outstanding dues, Kyko came to know, through its own internal investigation that Prithvi had created fictitious customers to deceive Kyko and extracted more monies from it.
In order to get the money back, Kyko filed a lawsuit on 16 June 2013 against Prithvi Information Solutions at the US District Court in Seattle. The court immediately issued an order temporarily restraining 19 companies and individuals, including Madhavi Vuppalapati, her husband, Anandhan Jagaraman, Prithvi Information Solutions and others, from 'transferring, liquidating, converting, encumbering, pledging, loaning, selling, concealing, dissipating, disbursing, assigning…' all of their assets. This Order freezing the assets also applied to third parties such as banks or other financial institutions.
On 8 August 2013, Kyko moved the court for issuance of judgement in amount against defendants in pursuant to confession of judgement and the motion was granted by the court.
In September 2013, Kyko filed a Writ of Garnishment against Prithvi Information Solutions. Kyko claimed damages of $18,431,765.90 ($18.43 million) inclusive of balance of judgement, prejudgement interest and interest of judgement from 9 June 2013 to 23 September 2013.
Earlier this month, the Bankruptcy Court in the US directed Madhavi Vuppalapati to make herself available for an examination under the Federal Rule of Bankruptcy Procedure before 8 May 2014.
In January, Kyko Global filed an application before the District Court at Ranga Reddy in Andhra Pradesh seeking execution of a decree sanctioned by the US District Court.
In the petition Kyko Global said that pursuant to a judgement by the US District Court at Western District of Washington, Seattle, Prithvi Info entered into a settlement agreement and agreed to pay $18 million to the company. Following this agreement, the US District Court on 6 September 2013 ordered a judgement be entered for $17.57 million, plus prejudgement interest accruing at the rate agreed to between the parties at 2.45% per month in the total amount of $796,776, as confessed to by Prithvi Info Solutions.
Kyko Global sought attachment of Hyderabad-based Prithvi House, the registered office of Prithvi Information Solution.
As Madhvi Vuppalapati failed to make the payment to Kyko, on 12 February 2014, the Court sent notice directing Sheriff to do auction and sell her personal assets including her Lexus car, jewellery and miscellaneous household items.
Read more stories about Prithvi Information Solution and its frauds here,