DRT  Legal  Solutions

(Debts Recovery Tribunal Legal Solutions) is an India based

Law Firm specializing in DRT, Securitisation, Sarfaesi, IBC, NCLT, Borrowers and Guarantors Solutions in Debts Recovery Tribunals,

Pioneers in Counter-claims and Damage Suits based on Law of Torts and Law of Damages 

Phones (India) - Mobile - +91-9691103689, Off. & Res. +91-731-4049358

E-mail :- ramkishandrt@gmail.com  Web Site :- www.drtsolutions.com

 DRT Solns. - Letters to Editor, Debt Recovery Tribunal

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Expert in:- DRT, Counterclaim, securitization, debt recovery tribunal, NCLT  matters

 

 

 

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DRT Cases particularly those who have just received notices u/s 13(2) or 13(4) will be greatly benefited if they ring to us at Mob - 9691103689 (from 11AM to 6 PM on weekdays:- You get instantaneous advice on the said mobile no.

Best Approach in DRTs for Borrowers & Guarantors :-  (1) If you are our client, our consultation is available to you at any time on 24/7 basis. (2) We encourage you to acquire basic knowledge so that you may interact with us as well as your advocate properly. (3) We insist that you must always be present in the Court along with your advocate. You get instantaneous advice on our mobile no. 9691103689 .

Safeguards under Sec 14 of Sarfaesi Act - Pl contact us on phone as soon as you received notice under Sec 13(2) of Sarfaesi Act, we shall advice you for necessary precautions and safeguards.

For reference of such judgments please click DRT Judgments Favourable / Useful to Borrowers

Our Weekly Mails are DRT Guide and gold mine of practical information for the borrowers and guarantors :- The visitors of this web site particularly Borrowers and Guarantors will be immensely benefited by our weekly mails, all previous issues from 1st one till the last one may be viewed by clicking Drt Solutions Weekly Mail for Borrowers & Guarantors  Separate web pages have been created to contain these mails in batches of 10 so that pages open up fast. These mails are DRT Guide and gold mine of information on current topics giving lot of practical suggestions and comments. Any new comer to this site must go through all the weekly mails right from the issue no 1 to the latest. If possible please spread the reference of this web site and the weekly mail among the persons, borrowers and guarantors who are the bank victims. If anyone desires to get these mails regularly, he may write to us for inclusion of his e-mail ID in the regular mailing list. The weekly mail is issued on every Friday morning 6 AM. The particular issue of the weekly mail is first published on the web site and then mails are sent. These weekly mails have become quite popular among the borrowers and guarantors in the country as we are getting huge no of mails appreciating the same. We welcome suggestions for improvements as well as the topics on which more information is required.

Important Announcement - Video Arguments presented in Indian Court for the First Time :- We are pleased to announce that on 10th October 2007, proposed 'Computer Presentation' was held for the first time in the country by Mr. Ram Kishan before Hon'ble District Judge, Indore and the 'Video Arguments' were submitted and shown to the said Judge on 15.10.07. Thus a history has been made in the Judicial Management in our country. We have prepared two DVDs, one showing the method and system for such presentation, its advantages with a practical application. Another DVD showing the actual presentation before the District Judge, Indore on 10th October 2007. we have prepared an article titled 'Computer Presentation & Video Arguments' vide click here Court Technologies IT Presentation Video Arguments

DVDs containing Video Record of DRT Conference at Indore and Chennai:- All the proceedings were video recorded and the DVDs containing the same are available. Any one desiring to have the DVDs may send through e-mail their postal address, name of the company, and if possible details of the pending DRT case or Securitisation case and the amount involved, name of concerned person and his contact details including phone nos etc. to us. During these conferences, eminent DRT experts using PowerPoint Presentation dealt with all the aspects of Bank Litigations and Borrowers Defence. The participants from all over the country were highly impressed and benefited from the knowledge thus gained.

Important Tip to Old and New Visitors:- A visit to new page Synopsis Video Interview - BS Malik, Sr. Supreme Court Advocate will be highly useful. You may take out the print and study the same. Listening to the video interview will be further useful. You may select the clips for replay for discussions with your colleagues as well as the advocates

 DRT, drtsolutions, Debt Recovery Tribunal, DRT matters, DRT WS, DRT Legal Opinions, DRT Arguments, DRT Documents, Appellate DRT, Bank litigations, Securitisation, Counter-claims, NPAs Settlements, checking of bank accounts and documents etc., expertize in all these matters past 14 years being a Leading Law Firm. Legal BPO and offshore BPO is our new activity for which we have launched new web site www.usindolegal.com

Highlights:- All problems of Debt Recovery Tribunals i.e. DRT and Securitisation Act are tackled by us. People from all over the country are phoning us, then visiting and getting their problems solved. Please visit Home Page and other Pages also

 

Contents of the most of the letters below will be useful in framing legal defence in DRT as well as against the Securitisation Act

Video CD containing Interview of Mr. B.S. Malik, the Supreme Court Advocate as well as Our Client available from us:- This video interview will be immensely useful to industrialists, borrowers, guarantors and bank litigants in DRTs. 

Our Client files damage suit of Rs. 1825 Crores against a bank and a financial institution in Chandigarh:- Our Client, an eminent Supreme Court Advocate (practice more than 25 years in Supreme Court) has filed a damage suit of Rs. 1825 Crores in Chandigarh on 13.01.05 against a bank and a financial institution. The said damage suit was drafted by us and it runs in 118 pages having documents of 537 pages. In a video interview lasting more than 30 minutes on 23.01.05, the said Mr. Malik appreciated our legal concepts, our drafting and our knowledge and experience about application of law of torts to banking, industrial sickness, drt, counter-claim, securitisation act and calculations of damages.

 

Subject wise Classification & Reach:-

To reach the text, please click on the dates of publication as under:-

(1) Lenders' Liability :- 19.12.02, 10.12.02 7.12.025.12.02,  4.10.02

(2) Counter-claim :- 19.12.02 7.12.025.12.02,

(3) Securitisation Act :-10.12.02, 7.12.025.12.02 5.8.0224.07.02 20.7.02

(4) Law of Torts :- 19.12.02, 10.12.02, 7.12.025.12.02,  19.3.02 7.8.01 

Note:- If you desire to go to full 'List of Mini Articles' please click here

Introduction:- We have been interacting with industrialists, bankers, advocates, judges, experts in bank litigations, authors of books and similar concerned authorities throughout the country past more than 13 years.. Our articles on Industrial Sickness date back to 1989 and thereafter. We have been active on the court rooms since then. The practical knowledge and experience thus gained equips us to render legal opinion or express our views instantaneously on the current topics relating to DRT, Securitisation Bill, bank litigations, Bank documents, counter-claims, banking, industrial sickness, BIFR and all related  legal matters. Subsequently after publication of my two articles in the Financial Express i.e. first 'Who's afraid of debt recovery tribunals?'  (FE dated 20.6.01, copy available in one of the web pages of this site, if you desire to read the same, please click here ) and second 'Debt Recovery Tribunals: There's a way out for defence of guarantors' (FE dated 5.7.01, copy available in one of the web pages of this site, if you desire to read the same, please click here ) We received tremendous response to these articles including several queries. We have tried to reply such queries  in Our following Mini Articles which were published in the Financial Express in form of Letter to the Editor. For your convenience, you can click the body of the chosen title if you desire to read the text. The bold title were given by the Financial Express due to its being prominent and current subject:-

List of Mini Articles

Note:- (1)  If you desire to go to top of the page, please click here

              (2) If you desire to read the text of any or more of the following mini articles, please click   on the body of the relevant title 

Date published                            Title

  (01)  15.06.01                Good Amendment            

  (02)  07.08.01                Recourse to Law of Torts

  (03)  21.08.01                Are DRTs working well?

  (04)  28.08.01                Defiant banks, arrogant babus

  (05)  06.09.01                Reviving sick cos through tribunals

  (06)  11.09.01                Implementation holds the key - II

  (07)  14.09.01                Old wine in reSICAled bottles

  (08)  01.10.01                Private vs public banks

  (09)  03.10.01                Fighting corruption

  (10)  11.10.01                Court versus Tribunal

  (11)  15.10.01                Access sought for DRT route

  (12)  18.10.01                Compromise route is sensible

  (13)  20.10.01                FIs at crossroads

  (14)  24.10.01                Strength of mind

  (15)  27.10.01                Warning signs of SSI sickness

  (16)  31.10.01                Backlog in lower courts

  (17)  03.11.01                Drive out Satans

  (18)  12.11.01                Wilful defaulters

  (19)  13.11.01                Sick companies

  (20)  20.11.01                Stand-still recoveries

  (21)  23.11.01                Rule of law

  (22)  01.12.01                Unlikely revival

  (23)  05.12.01                Legal reforms

  (24)  19.12.01                Chinese model

  (25)  20.12.01                Back to 1991

  (26)  26.12.01                Legal reforms in banking

  (27)  29.12.01                Legal conduct

  (28)  03.01.01                Going solo makes sense

  (29)  10.01.02                Silver lining

  (30)  11.01.02                Enter the dragon

  (31)  17.01.02                Filip to industry

  (32)  21.01.02                Success needed in banking too

  (33)  22.01.02                Fear is the key to governance

  (34)  24.01.02                SBI's sorry state of affairs

  (35)  28.01.02                DRT litigations

  (36)  30.01.02                Reviving sick SSIs

  (37)  31.01.02                Agenda needed for good governance

  (38)  02.02.02                Beating about the bush

  (39)  16.02.02                Free entrepreneurs

  (40)  19.02.02                PSBs need privatisation

  (41)  27.02.02                Small Sector's Sorry State

  (42)  15.03.02                NPA Recovery And Growth

  (43)  19.03.02                Law Of Torts

  (44)  21.03.02                Wrong Move

  (45)  30.03.02                Another Bank Strike

  (46)  30.05.02                Meagre Debt Recovery

  (47)  20.06.02                Why Blame DRTs Alone

  (48)  22.06.02                Best Mode Of Taming NPAs

  (49)  25.06.02                DRTs For Big Loans

  (50)  26.06.02                Bankers'  Wrongdoings

  (51)  29.06.02                Ineffective DRTs

  (52)  04.07.02                Way To Go With E-court

  (53)  13.07.02                Unending Saga Of Scams

  (54)  20.07.02                Inequitous Ordinance

  (55)  24.07.02                Debt Ordinance Plan

  (56)  05.08.02                Empowering Lenders - Letter on Ordinance

  (57)  30.08.02                NPA Burden

  (58)  18.09.02                IT For Legal Community

  (59)  20.09.02                Modern Law Schools

  (60)  04.10.02                Lenders' Liability Bill

  (61)  11.10.02                Stalled Debt Recovery

  (62)  28.11.02                Debt Definition

  (63)  02.12.02                DRTs' Performance

  (64)  05.12.02                Real Wilful Defaulters

  (65)  07.12.02                Lenders' Liability 

  (66)  10.12.02                When Lenders Act Tough

  (67)  19.12.02                Weak Ground

  (68)  23.12.02                Petty Corruption

  (69)  26.12.02                Blow To India's Pride

  (70)  30.12.02                Banking Reforms

  (71)  26.03.03                Go by Guidelines

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(01) The following our Mini Article was published in The Financial Express dated 15.06.01 page-6 in the column 'Letters to the Editor'

 

Good Amendment

 

In order to provide relief to genuine borrowers at the insistence of the Supreme Court of India, the central government has already amended the Debt Recovery Act. The said borrowers can now raise their counterclaims against the lending bank if there is any wrongdoing such as breach of statutory duties as laid down in Reserve Banks guidelines or breach of duty of care.

In fact a small scale industrial unit with bank borrowings of Rs 17 lakh had already filed a counter-damage-suit of Rs 29 crores against a nationalized bank based on the law of torts and the law of damages and compensation. On account of such well defined legal provisions, bank borrowers need not be afraid of Debt Recovery Tribunal anymore.

Ram Kishan

On e-mail

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(02) The following our Mini Article was published in The Financial Express dated 07.08.01 page-6 in the column 'Letters to the Editor'

Recourse to Law of Torts

APROPOS the article, 'Public FIs dragging the economy down' by P N Vijay, (FE Aug 2), whatever be the solution, serious thought is to be first given to the reform of the consciousness of the bureaucracy in the government and in banks Including other instrumentalities.

The said bureaucracy seems totally free of any responsibility or accountability. The only way to correct their misconception and improper conduct is through a possible recourse to the Law of Torts by the public. According to this law, nobody has the right to injure others intentionally or innocently, failing which compensation is recoverable.  

The victims of banks and the Unit Trust of India should file their damage suits against the said wrong doers in civil courts under the Law of Torts claiming compensation for the injury, loss and damages. A scare of damages alone will make the concerned bureaucracy sit up, stop talking and instead concentrate on work sincerely with responsibility and accountability. Any further delay will only spoil the future solutions whether through the means of directed economy or market economy.

Ram Kishan

on e-mail

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(03) The following our Mini Article was published in The Financial Express dated 21.08.01 page-6 in the column 'Letters to the Editor' 

Are DRTs working well? 

    APROPOS the news Item 'Banks recover Rs 2,583 crore through DRTs (Aug 17), it is stated therein that the cumulative amounts under the OTS (one time settlement) system for all state- run banks stood at Rs 2,111.37 crore at end - June 2001. Obviously, the credit goes to the said OTS. The real performance of the debt recovery tribunals (DRTs) is yet to be seen. Progress would have been better had the government followed the recommendations of the Tiwari Committee which mooted the concept of DRTs in 1984. 

    The original recommendations were that the DRTs should be manned by persons having specialized knowledge in the functioning of banks, institutions and industry; that no court fee ought to be required; that intermediation of lawyers, except in suitable cases, be avoided. All these matters are still under consideration of the apex court. Till such time the final verdict is given, the borrowers and guarantors have no legal defence except set-offs, counter-claims or counter-suits based on the Law of Torts. This has become all the more relevant due to the forthcoming Company Law Tribunal and the abolition of the Board for Industrial and Financial Reconstruction along with its appellate body. 

Ram Kishan

on e-mail

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(04) The following our Mini Article was published in The Financial Express dated 28.08.01 page-6 in the column 'Letters to the Editor'  

Defiant banks, arrogant babus  

                        THIS refers to the article 'Beyond the fiasco in Unit Trust of India' (Aug 25). It is relevant to quote Mr Kanwal Rekhi's statement that "compared with the US, the Indian financial sector is in a mess because the US is ruled by entrepreneurs and India is ruled by bureaucracy". In our country, all efforts are made to safeguard banks (via the conditions of multiple securities and numerous other guarantees) but nobody bothers about the safety of entrepreneurs. Real security is the entrepreneur's freedom to generate productivity, not documents. A narrow and lopsided approach has made the bureaucracy in banks and financial institutions arrogant and many of them are even breaking laws. The Reserve Bank, since 1976 has issued several guidelines which have even been made statutory by the apex court of the country, but bankers do not always follow the said guidelines. 

 When the banks do not listen to RBI, why should UTI listen to Sebi? Only the application of the Law of Torts by borrowers, guarantors and investors will usher in the required sense of responsibility and accountability in the bureaucracy in the financial sector. This is the only solution. Meetings by the babus in North Block will not be able to find any effective solution. As a nation we are in deep slumber, waiting for the worst to happen i.e. the day when the public will be scared of depositing any money in these banks and institutions. 

Ram Kishan

on e-mail

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(05) The following our Mini Article was published in The Financial Express dated 06.09.01 page-6 in the column 'Letters to the Editor'  

Reviving sick cos through tribunals 

APROPOS the commentary on 'Companies (amendment) bill, 2001: speeding up rehabilitation of sick  cos' (Sept 3), the proposed tribunals are intended to replace the Bureau of Industrial and Financial Reconstruction and its appellate body as well as high courts in respect of judicial functions and processes relating to sick companies. This is complex and will involve a heavy workload. The imposition of a time limit of 6 months will certainly impact the quality of the judgments. The industrial community, particularly their associations like CII, Ficci and local units, should be very cautious so that the proposed tribunals are properly headed by competent technical members and experts. 

 In this connection, it has been pointed out in the past that the industrial community was not vigilant at the time of formation of the debt recovery tribunals, which were also required to be manned by persons having specialized knowledge in the functioning of banks, financial institutions and industry. Instead, retired district judges head them. Will the judicial community accept the heading of district courts by businessman? 

Will the government instruct civil courts to decide the suits instituted by businessmen within 6 months as in DRTs or the proposed national tribunals?

The principles of justice, equity and good conscience under the law of torts demand that the matters relating to sick industrial companies should be heard and decided by reasonable and prudent persons having knowledge of the field. Then only would the formation of such high powered tribunals be termed as a step in the right direction. Industry bodies should vehemently oppose the rehabilitation of sick companies by unqualified people. If timely action is not taken immediately, the proposed tribunals will have the same detrimental effects as the BIFR. 

Ram Kishan

on e-mail

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(06) The following our Mini Article was published in The Financial Express dated 11.09.01 page-6 in the column 'Letters to the Editor'  

Implementation holds the key - II 

APROPOS ‘Implementation holds the key, concedes PM' (Sept 8), during the past 54 years the key word was 'freedom' and everybody, right from a peon to the President of India, enjoyed it. But now we're in troubled waters. Proper implementation can be carried out only by people who, by their very nature or thanks to the system they work in, are responsible and accountable. The latter two, however, are utterly lacking in the entire implementation machinery of the nation. Only the application of the Law of Torts can usher in the desired level of responsibility and accountability. 

This law, in brief, states that nobody has the right to injure others and if he does so, intentionally or innocently, he will have to compensate the injured person. In the developed world, this law occupies the top most level but in our country it is hardly important. In the US, tort costs are 2.2 percent of GDP. In India, the nexus between neta and babu has never liked the Law of torts. But the public can use this tool to free themselves from the tyranny of excessive bureaucracy. 

Ram Kishan

on e-mail

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(07) The following our Mini Article was published in The Financial Express dated 14.09.01 page-6 in the column 'Letters to the Editor'  

Old wine in reSICAled bottles 

THIS refers to the article ‘Unknown vintage in reSICAled bottle’ (Sept 11) which voices the impressions of the legal community. The malaise is due to the sub-standard processes of drafting and introduction of legislation. The babus  in the law ministry have never paid any attention to such processes existing either in British India or in UK or USA. Nowhere are such frequent legislations or amendments thereof carried out. In this regard, it was heartening to note that the AP Govt under Mr Chandrababu Naidu engaged a private law firm to draft an AP Act. 

The abolition of the Board for Industrial and Financial Reconstruction along with its appellate body and assigning their work to the new Tribunal (which will also handle the winding up of companies), hitherto being handled by the high courts, is too complex a process to be carried out successfully particularly when there only procedural and cosmetic changes have been made in the existing provisions. 

The scenario is prima facie defective  until there is ‘no fault insurance’ for business risks and honest implementation of the ‘law of torts’ for responsibility and accountability. Till such time, the various time limits would continue to look nice on paper but actual results would be worse than in the BIFR era.

Ram Kishan  

                                                                                                                     on e-mail

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(08) The following our Mini Article was published in The Financial Express dated 01.10.01 page-6 in the column 'Letters to the Editor'  

Private vs public banks

 

THIS refers to the news item 'Private banks outdo PSBs in productivity in 2000-01' (Sept 28). The statistics presented therein should open the eyes of the bureaucrats in the ministry of finance and the Reserve Bank of India. The management, employees and unions of public sector banks, as well as the Indian Banks Association, should see the writing on the wall. The average profit per employee in private banks has gone up by 10.9 per cent whereas the same has gone down by 11.76 per cent in PSBs despite VRS. 

Each employee in a particular private bank transacted business of Rs 1966.2 7 lakh in 2000-2001 against Rs 148.20 lakh in a certain PSB. It is high time that the government expedited banking and financial reforms for the efficient utilization of capital as well as to augment the competitiveness of Indian industry. Our nation has already paid a very heavy price since 1969 when banks were nationalized. 

Ram Kishan

on e-mail

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(09) The following our Mini Article was published in The Financial Express dated 03.10.01 page-6 in the column 'Letters to the Editor'  

Fighting corruption 

THIS refers to 'Kerala pilot-study on corruption puts borderline cases to shame' (Oct 1). Various developed societies have devised ways and means to control corruption. In the US, the bribe-giver is jailed for a longer term than the bribe-taker. In China, corruption cases are decided in a week and the guilty person is shot dead. In Sweden, the tax returns of a person can be scrutinized by anybody including the neighbours, enabling constant supervision of sources of Income and assets. In Singapore, children are so thoroughly educated about this menace that they do not hesitate to complain against their corrupt parents. The European countries and the US have accorded top importance to the law of torts which makes public servants, fearful of legal action, more responsible. 

In India, the neta-babu nexus does not want corruption to be eliminated. Political parties do not like electoral reforms by which contributions will be received only through cheques. The general public prefers corrupt processes so that their job is done quickly by greasing palms. A serious drawback of the present state of affairs is that corruption will engulf the entire society soon. We are doing nothing but creating a hell for our children if we do not develop an anti-corruption mindset and adopt harsh measures as .other countries have done.

.                                                                                       Ram Kishan

                                                                                                        on e-mail

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(10) The following our Mini Article was published in The Financial Express dated 11.10.01 page-6 in the column 'Letters to the Editor'  

Court versus Tribunal

 

THIS refers to the article 'Court vs Tribunal - the dilemma' (Oct 9). In our country, the government, through its agencies and instrumentalities, is the major litigant. Public servants are not afraid of committing actionable wrong-doings because they know that the established judicial process is very time-consuming as well as expensive. Wherever the bureaucracy in a particular agency is pitched against the public, the agency impresses upon the government the need to create a tribunal. With passage of time, the tussle between the principles of natural justice and procedural law like the Civil Procedure Code has become an added factor leading to the lax functioning of tribunals. Ultimately, the entire scenario boils down to the conduct of the citizens which include the public, bureaucrats and the officers of the court.

 The importance of the law of torts must be recognized and the law must be implemented. Only then will a minimum standard of conduct be achieved. Consequently, there will be fewer wrong- doings by public servants and civil courts will function more efficiently. In that eventuality, there will be no such dilemma and summary jurisdiction like tribunals will not be needed to the extent they are needed at present

                                                      Ram Kishan

on e-mail

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(11) The following our Mini Article was published in The Financial Express dated 15.10.01 page-6 in the column 'Letters to the Editor'   

Access sought for DRT route 

THIS refers to the news item 'NBFCs seek access to DRT route to recover NPAs' (Oct 12). The tribunals are required to be guided by the principles of natural justice with due regard to equity, justice and good conscience. Keeping these aspects in view, the apex court has rightly emphasized the inclusion of counterclaims and setoffs, which were incorporated by the government since January 2000. 

All these provisions do not preclude the application and operation of the law of torts. The defendant/borrowers are free to exercise their right of defence by pleading the relevant facts, circumstances .and consequences leading to their adverse situation of non-payment or delayed payment of dues along with injury, damages or impact of wrong doings, if any. The defence includes wrong appraisals, breach of statutory duties like violations of RBI guidelines, breach of duty of care, negligence, infringements of rights, misfeasance, non-feasance and other torts. 

The seemingly expeditious process should be utilized by the consumers of public finance to put across their point of view particularly in the absence of no-fault insurance and the existence of an irresponsible and unaccountable bureaucracy. Perhaps the changed judicial scenario will highlight the real reasons for the generation of non-performing assets. The conduct and Culture of lenders and borrowers both are expected to undergo a salutary transformation with a clear impact on the judicial process. The non-bank financial institution should not be under the impression that its debt recovery would be a cake walk. Or that the appointment of nodal officers can mask the wrong doings, if any, of the bank bureaucracy. 

Ram Kishan

on e-mail

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(12) The following our Mini Article was published in The Financial Express dated 18.10.01 page-6 in the column 'Letters to the Editor'   

Compromise route is sensible 

THIS refers to the news items 'RBI panel on defaulters to submit report soon' (Oct 13) and 'NBFCs seek access to DRT route to recover NPAs' (Oct 12). It is informed that under the One Time Settlement scheme, over 6.5 lakh accounts involving nearly Rs 3,500 crore have been settled through the compromise route. 

Further it is stated that Rs 2,585 crore was being recovered through debt recovery tribunals. Thus, major recoveries have been through the OTS and the impact of the DRTs has only been to create pressure. The real performance of the DRTs cannot be otherwise. 

After all, the judicial process, howsoever expeditious, has its limitations. More so, when the defendant/borrowers are increasingly aware about the scope of their rights to defence with the application of the law of torts in the areas of counterclaim and setoffs. 

Sensing the same, the banking bureaucracy has rightly concluded that banks would continue to explore the compromise route for settlement of dues under their normal policy. The best recovery is out of the profit's generated from running businesses. 

Market forces i.e. continuously falling credit deposit ratio will force banks to help their wealth- producing-borrowers in all possible ways. That would be better than either OTS or DRT. The added benefit would be gainful utilisation of existing resources, prevention of unemployment and wealth generation. 

Ram Kishan

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(13) The following our Mini Article was published in The Financial Express dated 20.10.01 page-6 in the column 'Letters to the Editor'

FIs at crossroads 

    THIS refers to ‘Reincarnation of financial institutions’ (Oct 17). Controls through market forces, growing exposure to technologically- savvy competition, and high costs of poor infrastructure have reduced the value of FIs’ assets. The solutions offered by those who matter are generally cosmetic and superficial. 

    Building up qualitatively sound society takes time but there is no other solution. We have chosen to be a modern democratic society, which functions properly only if reigns supreme and citizens behave appropriately. Until we recognize these aspects, we will fail to progress. As matters stand, there is no conscious effort in this direction and therefore, FIs and banks will continue pressurizing the government to bear their losses. A tile will come when the government will be unable to rescue them and only alternative left will be privatization. 

Ram Kishan

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(14) The following our Mini Article was published in The Financial Express dated 24.10.01 page-6 in the column 'Letters to the Editor'  

Strength of mind 

This refers to article ‘The learning organization: Getting business value from knowledge' (Oct 18). Modern society is fast transforming itself into a knowledge society, thanks to the spread of the internet. Henceforth, knowledge management will be the most sought-after tool. In this context, the mental capacity of humans interacting with knowledge machines i.e. computers will be the key limiting factor. The threshold of the said factor can be enhanced by transcendental meditation, leading to the ultimate development of consciousness. 

Ram Kishan

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(15) The following our Mini Article was published in The Financial Express dated 27.10.01 page-6 in the column 'Letters to the Editor'   

Warning signs of SSI sickness 

THIS refers to 'Banks, FIs to spot signals on SSI sickness' (Oct 24). Way back on December 14, 1978, RBI had proclaimed in its statutory guidelines that "the problems faced by sick small-scale units and small entrepreneurs need to be tackled with greater awareness and understanding. Banks should establish a separate cell at the top level for looking into such complaints and for taking effective follow-up action." Since there was no perceptible impact on bank bureaucracy, RBI in another mandatory guideline dated December 4, 1979 cautioned the chief executives of the banks that "banks were advised by us in 1976 to set up appropriate machinery... to provide monitoring and counseling assistance to sick units and to make use of the information system to detect incipient sickness so that preventive measures could be taken in time. We, therefore, once again impress upon the chief executives... to give this matter their personal attention and see that the banks tone up immediately their machinery for monitoring sick units with a view to restoring them to health. “Again nothing worthwhile happened and such sermons were repeatedly issued on 6th Nov 1980, 15th July 1981, 23rd Sept l981, 28th April 1982, and 12th April 1983. 

The banks weren't exactly listening so, on 7th Oct 1985, the RBI in its statutory guideline stated that "the bank (i.e. RBI) will view seriously lapses on the part of banks which do not adhere to these instructions scrupulously". Several circulars followed this one, and the one under reference is on the same lines as the 1976 circular. The bureaucracy in public sector banks simply does not bother about RBI's instructions. No action is taken if its circulars/guidelines are flouted. The entrepreneurs we left with no alternative but to file damage suits under the law of torts claiming compensatory, aggravated and exemplary damages for such willful breach of statutory duties and infringement of rights of the entrepreneurs. The function which should have been performed by the RBI and central government has to be performed by the judiciary, as in several other spheres of our society. 

Ram Kishan

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(16) The following our Mini Article was published in The Financial Express dated 31.10.01 page-6 in the column 'Letters to the Editor'   

Backlog in Lower Courts 

THIS refers to the article 'Delays in lower courts mess up judicial system' (Oct 23). The Supreme Court has improved its efficiency by resorting to technology. As for the lower courts most delays there are on account of wrongful conduct of the advocates, who resort to various legal provisions in an attempt to prolong cases. Since the judges are overburdened, they are unable to do much about these delaying tactics. 

The litigants are highly ignorant of legalities and hence the lower courts continue to have huge backlogs. In such a system, only the financially strong parties are able to use the judicial machinery to get relatively fast legal redress. With the passage of time, factor like more educated litigants, greater number of trained judges, application of information technology, reform in general conduct due to the application of law of torts for everybody etc. will improve disposal in lower courts. Judicial pronouncements cannot and should not be subject to evaluation and correction through parameters like quantum of disposal, targets, fast-track and summary trials. Otherwise the quality of decisions will add to the burden of superior courts by way o revisions, appeals etc. 

Ram Kishan

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(17) The following our Mini Article was published in The Financial Express dated 03.11.01 page-6 in the column 'Letters to the Editor'   

Drive out Satans 

THIS refers to ‘Time to drive out Satans from the temples of modern India’ (Oct 31). While the conclusion – that the Satans be replaced with private entrepreneurs, and the market forces be allowed to keep the latter disciplined – is correct, this remedy is incomplete. The bureaucracy which is a beneficiary, and therefore facilitates wrongdoings, will not change its ways. A weak system allowed the babus to milk public sector undertakings for their self-interest. In fact, the front line leaders of our democratic setup did not pay enough attention to creating a system in which the politician and the bureaucrat could not indulge in corrupt practices, for fear of punishment. 

If we continue to ignore this aspect, the wrongdoers will continue their looting and keep enjoying their free lunches. Modern democracy can survive and develop only when the rule of the law is supreme amd all citizens, including politicians and bureaucrats, abide by certain standards of conduct. Such conduct can be achieved by taking recourse to the law of torts. Damage cases under this law can be filed against the culpable bureaucrats and politicians. This is the same law under which Captain Satish Sharma and Mrs Sheila Dixit were personally fined Rs 50 lakh and Rs 60 lakh respectively by the Supreme Court. It is only when the neta and the babu are disciplined that the entrepreneur will be able to face market forces fairly. 

Ram Kishan 

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(18) The following our Mini Article was published in The Financial Express dated 12.11.01 page-6 in the column 'Letters to the Editor'   

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Wilful defaulters

THIS refers to the news item 'Willful bank defaults rise four-fold; amount soars to Rs 4,600 cr' (Nov 9). The Reserve Bank list is prepared on the basis of the sole version of financial institutions and banks. The RBI does not make any inquiry, neither does it countercheck their version with the version of the borrowers. 

It is a well-known fact that the public sector lending institutions and banks are duty bound to obey statutory RBI guidelines issued since 1976. In many cases, there are open and willful violations of these guidelines by the banks and FIs. Further, while there is no 'no fault' insurance of borrowers, the institutions and banks have multiple safeguards and securities (such as support from the government, mortgages, collaterals, personal guarantees, institutional credit guarantees, margins etc). This is against all principles of equity, justice and good conscience. Most security documents are one sided and hence are liable to be held illegal ab initio even if signed.

Under the law of torts, the institutions and banks are bound to discharge their duty of care if there is any prejudice to the rights of the borrowers under the particular facts, circumstances and consequences. The legally sound borrowers have full rights to resort to these defences combined with counterclaims 

That is why the institutions, banks, RBI as well as debt recovery tribunals are inherently more inclined towards settlements rather than legal battles. Ultimately the bureaucracy in the FIs and banks will have to act responsibly and display accountability combined with financial acumen. It must be recognized that production, productivity and utilization of resources are better modes of recovery than the coercive legal route which may\ boomerang on them.'                    

 Ram Kishan

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(19) The following our Mini Article was published in The Financial Express dated 13.11.01 page-6 in the column 'Letters to the Editor'   

Sick companies 

THIS refers to 'The system encourages businesses to turn sick' (Nov 8). The system comprises of, and is operated by the concerned people. The permit-license raj and the neta-babu nexus only enhanced corruption by creating more hurdles. We now desire to transform the system from being 'bureaucracy-centric' to 'business-centric'.  If we want businesses to face market forces, the bureaucracy will have to be honest, law abiding and responsible. The moment the bureaucracy is transformed, the said nexus will break down. The second pre-requisite is an introduction of no-fault insurance as in developed countries. Finally, we need efficient and independent judicial machinery, whereby the corrupt and irresponsible businessmen can be weeded out.

Ram Kishan

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(20) The following our Mini Article was published in The Financial Express dated 20.11.01 page-6 in the column 'Letters to the Editor'   

Stand-still recoveries 

THIS refers to 'Settlement scheme for loan defaulters to cards' (Nov 13). The first phase of the One Time Settlement scheme for bigger borrowers is nearly over and hence the government has turned its attention to smaller borrowers. But the recoveries will be peanuts compared with those arising from bigger borrowers. Bank recoveries have virtually reached a stand-still now. This is the right time to pay attention to the law of insurance and law of damages. All businesses face risks. Insurance companies should introduce plans for business failures and 'no fault' insurance. Project appraisers should insist on such provisions. The Reserve Bank should caution banks and financial institutions about the imposition of damages for breach of statutory RBI guidelines. If such essential conditions are not created, entrepreneurs will not be attracted to new business propositions. 

Ram Kishan

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(21) The following our Mini Article was published in The Financial Express dated 23.11.01 page-6 in the column 'Letters to the Editor'    

Rule of law 

THIS refers to the articles 'Making money in the great game of social advancement' (Nov 19) and 'Primitive accumulation versus the rule of law' (Nov 20). While we were being ruled by the Mughals and British, the progressive societies were making advancements in the fields of law, science and industry. When we encountered a democratic framework, it was entirely new to our culture. With a servile anti-establishment mindset and a Nehruvian socialist direction, the new ruler — the neta took birth and the babu conspired with him for mutual benefit. Now globalization has broken their nexus.  

Only recourse to fundamentals will provide permanent solutions to all our problems. This lesson may be learnt from the experiences of mature democracies and developed societies. 

The modern democratic framework is based on rule of common law which starts with a certain standard of conduct to be adhered to by all citizens. Any violation of such conduct is regarded as injury and everybody becomes fearful of committing wrongful acts. 

As a result, corruption comes down, productivity rises and more wealth is generated. This is why US per capita Income is 200 times more than ours. In the US, the bribe giver is awarded four times more punishment than the taker. In China, the corrupt guilty are shot dead. In Sweden, one can freely check the income-tax returns of one's neighbour, whether he is a minister, collector or Judge. Ultimately, it is the supremacy of rule of law with a free application of the law of torts which will check the unbridled citizens. 

Ram Kishan

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(22) The following our Mini Article was published in The Financial Express dated 01.12.01 page-6 in the column 'Letters to the Editor'  

Unlikely revival 

THIS refers to news item 'Jalan promises further steps for revival' (Nov 30). While our approach to solving problems is bureaucracy- centric, the need is for a business-oriented approach. If we have a plethora of problems, so do other nations like China but they have quickly transformed and aligned themselves with a modern way of thinking. Those who are in the driver's seat i.e. politicians and bureaucrats have first to reform themselves. Then only can meaningful courses of future action be devised and implemented. Having said that, since this could not be achieved in half a century since independence, it is unlikely that it would happen now. The only course left for the sufferers is to drive the so- called drivers to face penalties and be accountable. Public servants must be made to think, act and behave like public servants. And the collective consciousness of citizens has to be awakened.         

                                                                                                                Ram Kishan

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(23) The following our Mini Article was published in The Financial Express dated 05.12.01 page-6 in the column 'Letters to the Editor'   

Legal reforms 

THIS refers to the news Item 'Jaitley for change in legal framework' (Dee 4). It Is heartening to note that the government desires to reduce the life of a civil case to one year. In reality, the processing time of a civil case depends on the conduct of the officers of the court, that is judges and advocates. In the Indian context, the standard of this conduct is quite poor. To boost the same, Mr Jaitley's colleagues will have to first reform their own conduct. Before joining Parliament, they take an oath to abide by the Constitution. But their performance over the past 50 years has been proved to be unsatisfactory. Unless our politicians and their accomplished bureaucrats set an example by abiding by the rule of the law, the officers of the court are neither expected nor compelled to reform their conduct as laid down by public servants.

                        Ram Kishan

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(24) The following our Mini Article was published in The Financial Express dated 19.12.01 page-6 in the column 'Letters to the Editor'  

Chinese Model 

India must draw lessons from China the way it tackled its non- performing assets. The Chinese started work on the manufacturing sector way back in 1979 and now they have distinct lead over India. With their determined implementation and integrated approach, they would successfully tackle the problem of accumulated non- performing assets. We have been talking about the need for setting up an Asset Reconstruction and Asset Management Company for the past several years but due to irresponsible and unaccountable national management, the implementation has been most tardy. While we cannot copy the Chinese methods, the democratic setup in India can achieve such results only when our leaders seriously consider reforming their conduct and consciousness. Under the present circumstances, the only method is large scale application of the Law of Torts which is the most acclaimed tool for reformation of conduct has been proven by developed nations. 

Ram Kishan

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(25) The following our Mini Article was published in The Financial Express dated 20.12.01 page-6 in the column 'Letters to the Editor'  

Back to l991 

THIS refers to the news item 'Bye, bye fiscal deficit target; 1991 calling' (Dee 19).The impact of national mismanagement is now appearing in several spheres such as poor internal security, unbridled corruption, uncontrollable industrial sickness and non performing assets, growing unemployment, etc. The warning bells sounded by the report of Morgan Stanley should be an eye opener but the present national leadership as usual will hardly pay any serious attention to it. The country is being driven to a state of intense painful survival for everybody, whether they be small investors, big business or large industrial houses.

Ram Kishan

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(26) The following our Mini Article was published in The Financial Express dated 26.12.01 page-6 in the column 'Letters to the Editor'  

Legal reforms in banking 

THIS refers to the news item 'Bankers meet today to discuss slew of legal reforms (Dee 24). A plethora of legal reforms are long overdue m the banking sector. It is heartening to note that legal and operational officers representing public, private, foreign and cooperative banks will dwell upon the said legal reforms and the proposals and recommendations will be sent to the Reserve Bank and the centre. But the RBI has been emphasizing several important aspects of industrial and financial legal provisions in its various statutory guidelines, and the same have not been implemented fully despite it issuing numerous warnings. This is because well- defined penalty clauses do not exist in the banking sector. It is high time that the said banking laws are drafted in such a manner that they are based on principles of equity, justice and good conscience and have sufficiently effective penal provisions for wrong doers. 

This is the opportunity to usher in the ever felt absence of responsibility and accountability. This is the basic frame work on which the effectiveness of implementation depends, It is high time that we Incorporate the basic tenants of the law of torts in the proposed banking laws so that the requisite standard of conduct is realized by the borrowers as well as the lenders. This will be a test for RBI and the centre if they are really keen for quicker industrialization with least possible non-performing assets. 

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(27) The following our Mini Article was published in The Financial Express dated 29.12.01 page-6 in the column 'Letters to the Editor'  

Legal conduct 

THIS refers to the editorial 'Justice delayed is...' (Dee 26) and the news item in the same issue 'Watch ethics not bottom line'. The Civil Procedure Code 1908 Is a most litigated  enactment, the useful provisions of which have been highly misused by defence lawyers In trial courts. This can only be prevented by competent, vigilant, and trained judges. There is an acute need for extensive training .of judges, reduction in their work load, quicker introduction, off information technology and better emoluments. Conduct based upon the law of torts will regulate clients, advocates as well as the judges. Such is the first step in the democratic setup to control the undesirable behaviour of corrupt politicians and bureaucrats on account of whom one-sided contracts are entered into and resultant but infructuous litigations are fought. There is no other way to create a productive and prosperous environment for coming generations. The side-effects would be fewer, faster and quality litigations providing solutions and directions for complex problems of modern industrial society. 

                                                                        Ram Kishan

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(28) The following our Mini Article was published in The Financial Express dated 03.01.02 page-6 in the column 'Letters to the Editor'   

Going solo makes sense 

THIS has reference to the news Item 'SBI to go solo in corporate finance' (Dee 31). The decision of the State Bank of India is a reflection of ground realities. Even consortium banking, which was a forerunner to multiple banking, has been an utter failure in spite of the apex bank. Despite several statutory Reserve Bank guidelines, public sector banks never bothered to abide by them as the RBl never imposed any penalty. The consequences have been huge numbers of litigations, counter-suits and counter-claims. The matter will have to be decided by the judiciary. 

Basically, consortium or multiple banking results in divided responsibility or nobody's responsibility. Under these circumstances and given past results, SBI's decision needs to be welcomed by corporates. It is also expected that other banks will follow suit. The RBI may amend guidelines suitably. 

                                                                                                                        Ram Kishan

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(29) The following our Mini Article was published in The Financial Express dated 10.01.02 page-6 in the column 'Letters to the Editor'   

Silver lining 

THIS refers to the CEO survey carried in the analysis titled 'Seeing light, steering for recovery' (Jan 7). While everybody is impatiently desirous of quick initiatives and action, we should be equally serious about laying down the proper foundations which would make for effective implementation of our decisions. The feedback from outside observers is that India is bureaucracy-centric as opposed to being business oriented. The old British model continues, though Britain itself has reformed, but we have neither done the same nor have wanted to. In the near future, further postponement will be vehemently resented. It Is time we introduced the law of torts which alone would reform the mindset of irresponsible and unaccountable bureaucrats and politicians.

                                                                        Ram Kishan

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(30) The following our Mini Article was published in The Financial Express dated 11.01.02 page-6 in the column 'Letters to the Editor'   

 

Enter the dragon 

THIS refers to the news items 'China's success is cumulative effort of 50 years, say experts' and 'India needs more manufacturing focus' (Jan 8). China's Continuous and sustained efforts has resulted in a per capita income of $ 1,000 dollars as compared with India's 450 dollars. This should be an eye-opener for the leaders and policy makers in our country. If we have a serious thinking and a plan for the next 50 years, the foremost item which should need everybody's attention is reform in our conduct which should result in requisite pattern of responsibility and accountability. 

The laws should be such that citizens including bureaucrats, politicians and businessmen should be afraid of damages if they cause any injury or wrong doings to others. This is the first step for any democratic framework. If we have not done it during the past 54 years, we should do so now and see the results in the next 50 years. There is no other approach as may be proved by the developed economies like the US and Europe. In that eventuality, there will be logical attention to manufacturing which alone sparks numerous activities for explosive generation of internal resources as in China.                                                          

                                                                        Ram Kishan

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(31) The following our Mini Article was published in The Financial Express dated 17.01.02 page-6 in the column 'Letters to the Editor'   

Fillip to industry 

THIS refers to the news Item 'RBI says economy has lost speed, but not halted' (Jan 15). Our emphasis, particularly over the last five years, has been more on recovery of bank overdues, control of non-performing assets and expeditious proceedings In the Bureau of Industrial and Financial Reconstruction and debt recovery tribunals. Creation, promotion and development of industries has been accorded a back seat. The results are obvious. 

While new entrepreneurs are scared of setting up new Industrial units, existing entrepreneurs are having a tough time saving their skins from the bureaucracy. It is well known that the manufacturing industry is the prime engine of growth of a modern economy, and the entrepreneur its heart and soul. We not only lack in physical infrastructure but also emotional support and encouragement to entrepreneurs.

A fillip to manufacturing can be attained only if the managers of the country, ie the politicians and bureaucrats, transform their conduct. We need to usher in responsibility/accountability and the law of Insurance for risk coverage. Such reforms have to be first applied to the above managers and then to the public. This is the only route for nation building in modern times. Till the desired standard of conduct is achieved, the general public will continue to suffer. The financially strong citizens will apply pressure through the court of law as may be seen from the explosive growth of Industrial litigations, counter-suits and counter-claims. In the meantime, global competition will pressure us to implement the final stage of reforms. Perhaps our democratic setup with the present leadership cannot do better than this. 

                                                                        Ram Kishan

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(32) The following our Mini Article was published in The Financial Express dated 21.01.02 page-6 in the column 'Letters to the Editor'  

 

Success needed in banking too 

THIS refers to the article 'Telecom: The success story of reforms' (Jan 17). It is well understood by everybody that most of the productive activities of the country are suffering due to huge delays in implementation of banking reforms. The public and the industrial community in particular should cite the example of the success of telecom reforms by which tremendous benefits have accrued to the consumers in cost, efficiency and quality of services. Nationalized banks should be privatized quickly on the same lines. Side by side serious attention should be paid to reform the conduct of politicians, bureaucrats and businessmen. The bench mark should be the International Corruption Index according to which India presently occupies 71st position among 91 nations. Voters should give this agenda the highest priority. 

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(33) The following our Mini Article was published in The Financial Express dated 22.01.02 page-6 in the column 'Letters to the Editor'  

Fear is the key to governance 

THIS refers to the news item 'Respect for rules only can improve corporate governance' (Jan 20). The former Chief Justice of India and chairman of the Centre for Corporate Governance Mr M N Venkatchaliah has timely pronounced that fear of violation of norms can alone improve the corporate governance and he called upon the legal community to create such an atmosphere.  

This is perfectly true also for the governance of the country whose managers are the politicians and the bureaucrats. All this boils down to reform of the conduct with the tool of fear operating through legal provisions combined with criminal law to be applied widely First on the top echelons of society i.e. politicians, bureaucrats and businessmen. The test for implementation should be the extent to which our corruption index of 71 among 91 nations can be brought down. A time-bound programme and achievement can alone convince the voters about the true law abiding conduct of the politicians. Then  only they deserve to be called as public servants in our democratic set up and the improvement in the per capita income would be the yardstick to measure their duties for which they have all got together to up their emoluments and perks tremendously. .They must practice first among themselves as well as among the bureaucrats they control, before they preach the innocent citizens. 

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(34) The following our Mini Article was published in The Financial Express dated 24.01.02 page-6 in the column 'Letters to the Editor'  

SBI’s sorry state of affairs 

THIS refers to the news item 'SBI staff plan stir over unpaid bills' (Jan 22). Non-payment of overtime bills for the past one year by the biggest bank of the country is a sign of gross mismanagement and poor corporate governance. Recently, the foreign branch of this bank had to pay a penalty of Rs 36 crore, which was levied upon it because it had failed to ~ observe prescribed systems and procedures. In our country no such penalty has ever been imposed by the regulator and prescribed statutory RBI guidelines have been openly violated since 1976, despite the issuance of repeated warnings. As a result, the bank is facing several counter-damage suits and counter-claims from borrowers and guarantors in courts. As per the 2001 survey 2001 of India's best banks published by The Financial Express in December 2001, SBI's rank in 2000- 01 has worsened from 30th to 41st as compared with the previous year. Moreover, the decision to go in for a VRS must have been arrived at after considering all factors by the management and the staff. Hence it cannot be cited as the reason for enhanced workload. 

The performance of SBI and other nationalized banks actually reflects the performance of our bureaucracy. It is high time these banks are privatized without further delay so that the government's equity is brought down below 26 per cent and their boards are reconstituted with professionals. In that eventuality not only will their performance and service improve, but the employees will also give up their agitations (which inconvenience the public) and put in their best.

Ram Kishan

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(35) The following our Mini Article was published in The Financial Express dated 28.01.02 page-6 in the column 'Letters to the Editor'  

DRT litigations

THIS refers to the news items 'DRTs to hold Lok Adalat for bad loans settlement on Jan 20,'and 'Vittal proposes probity Index for banks wary of corruption tag' (Jan 17). While the settlement route undertaken via the establishment of debt recovery tribunals is appreciated, the sums realized are peanuts compared with the non-performing assets. A thorough study of the judgments delivered by the DRTs reveals that on account of absence of 'no fault' insurance and scanty application of common law for arriving at the cost of irresponsible and unaccountable conduct, the problems faced by entrepreneurs are not receiving proper judicial attention resulting in incomplete decisions.

The resort to provisions of counter-claims and set-offs consequent to last year's amendment of the DRT Act will somewhat address such problems, but the judicial route is time-consuming and expensive as the case may travel back and forth from the DRTs to the Supreme Court via appellate DRTs and high courts. Since our standard of conduct is wanting, not much should be expected from the DRT litigations. 

On the other hand, recent attempts to coerce recoveries have created a scare among the entrepreneurs and they are shying away from setting up new units or expanding existing units. As a result there is virtually no growth in manufacturing capacity, and in certain sectors there is a serious reduction. Clearly, there is need for an overhaul of the judicial process.

Ram Kishan

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(36) The following our Mini Article was published in The Financial Express dated 30.01.02 page-6 in the column 'Letters to the Editor'  

Reviving sick SSIs

THIS refers to the news item 'Norms on rehabilitating sick SSIs revised’ (Jan 25). The Reserve Bank of India has been issuing its guidelines on industrial sickness since 1976. There have, been rampant violations of these statutory guidelines by 'the nationalized banks since then, despite the RBI issuing periodic reminders and warnings of punitive actions.  

Since no strict action is initiated against them, banks feel that they are free to take any arbitrary or unconstitutional decision. They do not even bother about judicial actions as the process is highly time consuming, cumbersome and expensive. Moreover, the SSIs are not financially capable to contest the legal counter-actions. Further, in our country there is no no-fault insurance. On the other hand,  the bank. .bureaucracy has devised multiple safeguards for Itself such as mortgage, guarantees, margins, DICGC guarantees and now the recompense clause. 

The RBI lays down various time limits for viability studies and rehabilitation but in practice the bankers never follow these time limits because the guidelines do not have any penalty clause in case of Violations. Under these circumstances, the bank officials have become arrogant and careless in dealing with the problems of sick units. 

                                                                        Ram Kishan

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(37) The following our Mini Article was published in The Financial Express dated 31.01.02 page-6 in the column 'Letters to the Editor'  

Agenda needed for good governance 

THIS refers to the article India Inc looks at public issues again' (Jan 28). Modern management as a science took birth and grew to prominence in the last century. It was nurtured and shaped by the great organizations like General Motors in the beginning and General Electric recently. The ethical values were and will continue to be the foundation of good management or governance. 

It is time the corporate governance in new born democracies like ours be paid attention by the biggest stake owner, that is the public. The public as their creator to the form of the voter can truly set the agenda for proper governance in the country.    

                                                                         Ram Kishan

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(38) The following our Mini Article was published in The Financial Express dated 02.02.02 page-6 in the column 'Letters to the Editor'  

Beating about the bush
        This refers to the news item 'Banks go all out to meet priority sector goal'(January 30). It is stated that the foreign private banks take the Inter-bank participatory certificate route aggressively in the face of mounting Reserve Bank pressure.
        This is yet another illusory method of our working. The goal should be real, effective and practical advances to the priority sector. The Reserve Bank of India should not encourage lip service.
        The proposed method will result only in unproductive exercise of year-end achievement of targets on paper.
        The so called win-win situation is only for foreign banks, public sector banks and Reserve Bank of India without any real flow of credit to the needy priority sector. Efforts should be to control the cost factor as other nations like China are doing.
        The Chinese team headed by their Premiere Mr. Zhu Rung during its recent visit to India studied and found that many of our manufactured products are four times costlier.
        This should be an eye opener to our industry captains, politicians and the bureaucrats.
Ram Kishan
on e-mail

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(39) The following our Mini Article was published in The Financial Express dated 16.02.02 page-6 in the column 'Letters to the Editor'  

Free entrepreneurs

       THIS refers to the news item 'Remove the fetters that hold back entrepreneurs' (Feb 14). The observation of Ms Indira Nooyi is a reiteration of how the modern world looks at the Indian attitude towards enterprise.

      Our society does not like the growth of superior mind. It does not believe in supporting entrepreneurship. On account of numerous horror stories of unending struggle, entrepreneurs prefer to call it quits. Those who cannot are here much against their wishes.

       The managers of the country ie the politicians and the bureaucrats are not bothered about our extremly poor share in the world trade, or the very low per capita income.

       The widening gap with the developed world and for that matter, even with the Asian tigers has not had much impact on our national consciousness.

        We have to wait for a new leadership to stir our society for national advancement. Let's hope the utterances of the likes of Ms Nooyi may have some effect on the politicians in power.

Ram Kishan

on e-mail

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(40) The following our Mini Article was published in The Financial Express dated 19.02.02 page-6 in the column 'Letters to the Editor' 

PSBs need privatisation 

        This refers to news items 'SBI chief calls for level playing field for PSBs' and 'Officers to join bank strike'(Feb 16). Privatisation is the real remedy for improving the performance of public sector. These banks suffer from governmental bureaucracy. The public has tasted the benefits of privatisation in the case of the telecom sector as a result of which the quality, service, cost and spread have all improved. The Indian telecom sector is now poised to grow locally as well as globally.

        The SBI chief and the PSB officers should not forget the fine of Rs. 36 crores imposed by the US federal  authorities for violation of prescribed procedures. On the other hand the RBI has not taken any tangible or punitive action against the PSBs since 1976 for continuous violations of statutory RBI guidelines except issuing repeated annual warnings of serious actis. The public is now impatient for privatisation.

Ram Kishan

on e-mail

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(41) The following our Mini Article was published in The Financial Express dated 27.02.02 page-6 in the column 'Letters to the Editor' 

Small Sector's Sorry State

    This refers to the news item 'Sops For Small Scale Sector Likely In Budget' (Feb 25). This sector is in dire need of timely and adequate credit from banks and financial institutions. Since relatively small funds are advanced to this sector, these are dealt with by the branch managers. The Reserve Bank of India, has, since 1976, repeatedly warned banks to pay attention to the credit problems of the SSI sector aptly called 'priority sector' but the bank babus neither abide by the statutory RBI guidelines nor pay any attention to the woes of the small scale industry.

    It is high time that representatives from SSI associations visit China, Italy, United States etc, prepare a report to be made public, and ensure its implementation in a transparent and honest manner.

    The existing process of formation of RBI committees headed by the RBI or bank officials needs to be reformed so that the final implementation is business centric rather than bureaucracy centric.

    All other sops in areas such as taxation or rationalisation of norms would not have material effect till such time the credit delivery problems are solved. After that the government has to put in place globally competitive infrastructure so that the SSIs become appropriate feeders to the large manufacturing sector.

Ram Kishan

on email

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(42) The following our Mini Article was published in The Financial Express dated 15.03.02 page-6 in the column 'Letters to the Editor' 

NPAs Recovery and Growth
    This refers to the news items 'Jaitley stresses on need for faster NPA recovery to achieve 8% growth' and 'Bureaucracy is hurdle to development in India: Kurien' (March 13). At a seminar on companies law and Sica, the law and company affairs minister Arun Jaitley said that there is urgent need for a legal framework that will enable faster recovery of non-performings assets which in his opinion is crucial for achieving 8% growth in the coming years. He disclosed that the government was coming up with legislations on foreclosure that would enable the banks and FIs to realise their dues faster instead of waiting for more than ten years as at present. Emphasizing on insolvency laws for winding up of sick companiew within two to three years,he said that the revival process should start as soon as symptoms of sickness are detected. He furher informed that proposed bill envisages on revival initiatives when networth is eroded by 50 per cent.
    In this context when one goes through the existing RBI Guidelines sincc 1976, all these aspects had all been already covered. The existing law also has been adequate. What is lacking--and it continues to be the case--is the lack of implementation by the bureaucracy in banks, RBI and judiciary. The statement of Mr. Kurien is a bitter truth.
    The famous non-resident Indian Kanwal Rekhi had already said that difference between India and US is that India is ruled by bureaucracy whereas US is ruled by business. The contentions and utterances of Mr. Jaitley are nothing but old wine in new bottles. Growth can only be achieved by quickest privatisation of banks and FIs,
     The example of telecom sector -- as a result of which the cost, quality and spread of service have tremendously improved -- should be a lesson. The intervening period of delay in privatisation of finance sector will only invite huge number of counter-claims due to wrong doings of the bureaucracy making the recovery difficult and highly time consuming. 
Ram Kishan
on e-mail 
Comments:- NPA Recovery is getting top most priority at the instance of bank lobby. Accordingly, several new legislations have been enacted solely for NPA Recovery. No doubt NPA Recovery is important but you can not forget other aspects and concentrate only on NPA Recovery. As per various provisions of law, until an unless all out efforts have been made for revival and rehabilitation of sick industrial or business unit, recourse to NPA Recovery is illegal. The actions, if any for NPA Recovery will be held without any jurisdiction. The very basis of NPA Recovery in such case is questionable.

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(43) The following our Mini Article was published in The Financial Express dated 19.03.02 page-6 in the column 'Letters to the Editor' 

Law Of Torts
    This refers to the news item 'IBA Defers Inclusion Of Arbitration Clause In Loan Documents' (March 16) 
    It is reported that the Indian Banks Association has deferred the incorporation of an arbitration clause in bank loan documents because it is of the view that the incorporation of such a clause is neither feasible nor cost effective.
    A senior IBA official carries a notion that the DRT Act does not permit any arbitration clause with the  documents.in respect of loan amounts of Rs. 10 lakhs and above. Further he is of the view that it will not be cost effective in respect of loan amount below Rs. 10 lakhs. His contention is that for this purpose amendment of  DRT Act is required.
    The view and contentions of the IBA are misconceived. The DRT Act and for that matter any other legislation under our constitution does not preclude the principles of justice, equity and good conscience. Inclusion of arbitration clause in the loan documents is covered by such principles and specific provision or amendment of the DRT Act is not needed.
    The Bank of India has acted rightly by already deciding to include the said arbitration clause in their loan documents. The IBA official is further mistaken to hold the view regarding loan amount below Rs. 10 lakhs. The DRT Act applies to loan amounts of Rs. 1 lakh and above.
    The present trial of cases of Rs. 10 lakhs and above is regulated by the notification issued by the Ministry of Finance. When the infrastructure of the DRTs is properly established, the limit would be successively be brought down to Rs. one lakh.
    The dire need of the hour is wide scale understanding, recognition and application of common law like law of torts to inculcate the attitude of responsibility and accountability in the mental state of bank bureaucracy so that proper appraisal is carried out and once the loan is sanctioned the project is fully supported in thick and thin situations.
    Bankers acting only as fair weather friends and leaving the assisted unit in lurch during odd times particularly when the finances are urgently needed, would amount to violations under the law of torts resulting into counter-claims due to consequent injury, loss and damages. 
Ram Kishan
on e-mail  

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(44) The following our Mini Article was published in The Financial Express dated 21.03.02 page-6 in the column 'Letters to the Editor' 

Wrong Move

This is with reference to item 'RBI Permits Charging Interest Compounding On Agri Advances' (March 15) which reveals that the RBI has asked the banks and FIs to move over to charging of  interest at monthly rests by April 1, 2002. The borrowers will have to rework their costs and the prices will further go up. The bank rates to be cut should take into account the enhanced earnings of the banks and FIs and hence the said rates will have to be brought down further. The effective rates ultimately will have to be globally competitive. From a practical angle, our system is not yet become efficient enough to adopt charging of interests at monthly rests. The Indian economy being already high cost will become further costlier and hence uncompetitive. .
Ram Kishan
on e-mail

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(45) The following our Mini Article was published in The Financial Express dated 30.03.02 page-6 in the column 'Letters to the Editor' 

Another Bank Strike

    This refers to the news item 'Bank Staff To Strike Work On April 16' (March 27). It is learnt that the bank employees in the country have planned to strike work on April 16 to press their nine-point charter of demands.
These demands include ending retrenchment, putting an end to outright sale and disinvestment of shares of public sector undertakings and abrogation of anti-labour laws. The public has become sick of the repeated strikes or strike threats by the bank staff.
    The government must expedite the privatisation of the public sector banks so that the benefits similar to telecom sector may also accrue to the economy in general and consumers in particular. There has been tremendous improvement in service, cost and spread of telecom services in the country due to privatisation.
    Another example is that of recently opened insurance sector which is now seen to have fresh air of activities. The bank staff should see the writing on the wall and concentrate on cost reduction, technology upgradation, bringing down the interest rates etc. so that the Indian economy as well as the banks become globally competitive. All these objectives are negated by the proposed strike call. The bank employees are already extremely highly paid compared with per capita income of Rs 1800 of Indian public. Their strike is not justified. 
Ram Kishan 
on e-mail

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(46) The following our Mini Article was published in The Financial Express dated 30.05.02 page-6 in the column 'Letters to the Editor' 

Meagre Debt Recovery

    This refers to the news item 'Bad Loans Worth Rs. 1,10,000 Crores Stuck With DRTs' (May 21) according to which only Rs. 752 crores, Rs. 1,185 crores and Rs. 2,153 crores were recovered through DRTs respectively in 1999-2000, 2000-2001 and 2001-2002. The major portion of the said recovery is on account of One Time Settlement scheme. The real performance of the debt recovery tribunals is yet to be seen. The lesson to be learnt for the present and the future is that the banks and the financial institutions have been the real losers as they did not play their part properly when the projects were originally appraised, did not abide by the statutory RBI Guidelines in vogue since 1976 and now they desire expeditious recovery through summary jurisdiction of the DRTs.
    The process is going to boomerang due to violations of the statutory RBI Guidelines, violations of common law and principles of natural justice resulting into counter-claims for loss and damages. The avid emphasis on the recovery has an adverse impact on the industrialization and consequent negative impact on employment, law and order and social development. These are the reasons as to why the management of Ajanta Clocks and recently JK Group are setting up their shops in China and winding down their Indian business. The bureaucracy in banks, the financial institutions and the government must understand that the best recovery is through running of the business. The recovery  by coersive and one sided litigation particularly when there is no 'no fault' insurance and rampant violations of the statutory RBI Guidelines is going to be meagre.     
Ram Kishan 
on e-mail 

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(47) The following our Mini Article was published in The Financial Express dated 20.06.02 page-6 in the column 'Letters to the Editor' 

Why Blame DRT Alone?

    This refers to the news items 'How Not To Recover Bank Debts' (June 14) and 'Cases Involving Rs. 8,014 Cr Pending With DRT' (June 13)  The major portion of NPAs consist of investments in textile and steel sectors which were financed with the 'consent' of politicians and bank bureaucrats at the top. We have to wait till the relevant assets are transferred to asset reconstruction companies under formation. Despite being summary jurisdiction combined with focussed attention, we can not expect much from the Debt Recovery Tribunals. Legally competent defendants have enough remedies due to statutory violations of the RBI Guidelines as well as the breach of duty of care by the banks and financial institutions resulting into counter-claims, adjudication of which will further consume the time of the DRTs, ADRTs, High Courts and the Supreme Court. In the mean time, as soon as the public sector banks are privatised, the approach to industrial financing will undergo a vast change being more business-like. Till then our democratic setup is destined to move at a slow pace. In light of these facts, circumstances and consequences, the recovery of bank over dues will continue to be tardy and meagre. The DRTs alone cannot be blamed for the same, Rather our whole system, our attitude and conduct are responsible.
Ram Kishan
on e-mail.

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(48) The following our Mini Article was published in The Financial Express dated 22.06.02 page-6 in the column 'Letters to the Editor' 

Best Mode Of Taming NPAs

    This refers to the news item 'Setting Up Registry Vital For Tackling NPA' (June 20)  While it is appreciated that all out efforts are being made for expeditious recovery of bank over dues, control over the securities, boosting efficiency and effectiveness of legal machinery etc., least attention is being paid to the best mode of recovery i.e. helping the industry to generate surplus and focusing on the legal safety of the entrepreneur. On the one hand, the bankers have multiple securities such as mortgage, collateral, margins, control over the account operation etc., But there isn't any legal protection of the entrepreneur nor is there any scheme for 'no fault insurance'
    The bureaucracy in the country allows open loot of the public wealth evident from various acts of chief ministers. The highest judiciary keeps quiet though all actions can be taken su moto. On the other hand, everybody is after profits of the industry. The culprits should not be spared __ whether they are chief ministers or bureaucrats or businessmen. Side by side all out efforts should be made for vigorous industrialization so that industry as well as the industrialists grow.  
Ram Kishan
on e-mail

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(49) The following our Mini Article was published in The Financial Express dated 25.06.02 page-6 in the column 'Letters to the Editor' 

DRTs For Big Loans

    This has reference to the news item 'IBA Wants Select DRTs To Handle Big Loans' (June 22). The suggestion of the IBA for creating exclusive financial jurisdiction in DRTs for the recovery cases say above Rs. one crore, is to be appreciated. In order to improve the quality of such adjudication and to achieve true finality of judgments, it is proposed to implement the original recommendation of the Tiwari Committee vide page 77 of its report i.e. 'These tribunals should be manned by persons having specialised knowledge in the functioning of banks, financial institutions and industry'
    Whent the presiding Officer of the DRTS or the chairperson of the ADRTs are thus are experts and when the principles of justice, equity and good conscience expressed through counter-claims are applied, the true picture of industrial financing, appraisal, observance of RBI Guidelines, duty of care of sick units particularly in the light of 'no fault insurance' will emerge and perhaps would boomerang on the banks themselves. In the meantime, the IBA in the best national interest,  should expedite privatisation of the financial sector. The example of the telecom sector should be an eye opener for everybody by which there is all round improvement in service, its quality, variety, coverage and marked reduction in costs. All the national activities are impatient to have earliest possible privatisation of banks. In that eventuality there will not be any need of special DRTs or even common DRTs. In fact with the reforms in the judiciary, the civil courts themselves will be able to handle all such cases with proper efficiency.
Ram Kishan
on e-mail

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(50) The following our Mini Article was published in The Financial Express dated 26.06.02 page-6 in the column 'Letters to the Editor' 

Bankers' Wrongdoings

    This refers to the lead article 'When Banks And Borrowers Collude' (June 24) This article should be an eye opener for the supporters of the public sector banks. The collusion between the bankers and borrowers started from the stage of the appraisal of the project. Had the bankers been true to their duty and paid attention to the RBI Guidelines existing since 1976, many of the industrial loans would not have  been sanctioned. A major portion of the said non-performing assets amounting to Rs. 1,10,000 crores belong to textile and steel sector and more than 80 percent amount is only accumulated interest. The loans for unviable projects were duly sanctioned with the bankers being in league. The bankers have full powers to check the withdrawal of particularly larger sums but intentionally no such checks were applied. If bankers were sincere, honest and true to their duties, other person how so ever corrupt he may be, could have not got sanction leave alone disbursement and withdrawal facility.    
    This malady is same in all bureaucratic setup imbibed with governmental culture such as PSBs. The only tool to correct the malaise is the application of the Law of Torts which creates a fear of damages in the minds of the operating executives when they violate the law such as statutory RBI Guidelines in case of bankers. Under similar violations of procedures, the US Federal  Reserve imposed penalty of Rs. 36 crores on the State Bank of India  which as a result became extremely careful. But in our country, the RBI has not taken any action despite rampant violations since  1976. Crying wolf against the businessmen will not correct the bankers in collusion in creating the major portion of NPAs. Other effective remedy is earliest possible privatisation of public sector banks operating under competent regulator as well as judiciary. In such eventuality also the application of the Law of Torts is required even for the said regulator and judiciary. 
Ram Kishan
on e-mail

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(51) The following our Mini Article was published in The Financial Express dated 29.06.02 page-6 in the column 'Letters to the Editor' 

Ineffective DRTs

    The refers to the news item 'Banks Seek More Powers For DRTs' (June 27). Apart from the strength of the staff, what is essentially needed is suitable and competent presiding officers of the debt recovery tribunals and chairpersons of the ADRTs. The DRTs were born out of the recommendations of the Tiwari Committee which, in its report published by the Reserve Bank of India in 1984 at page 77 recommended that these tribunals should be manned by persons having specialised knowledge in the functions of banks, financial institutions and industry.  When other tribunals like income tax, consumer forum, regulatory authorities etc. can have technical presiding officers and members, why are the DRTs headed by only judicial members?
    The DRTs' officers of the court i.e. judges and advocates need to be well versed in industry, banking and financing as well as the common law like the Law of Torts. Only then will they have real understanding of project appraisals, working capital finance, RBI Guidelines, potentially viable sick units etc,
    If the DRTs and ADRTs are not headed by suitable persons, the various counter-claims now being made by the borrowers under the Law of Torts will not be adjudicated upon with the required standards of quality resulting into time consuming process of appeal to ADRTs, High Courts and Supreme Court.
    The DRTs ultimately are going to reveal the wrong doings of the public sector banks which are so badly managed as any other public sector unit. The only solution is earliest possible privatisation. In that eventuality, the DRTs will not be needed. Till such time, the borrowers and guarantors will continue to adopt the tool of the Law of Torts against an irresponsible and unaccountable bureaucracy including that in banks and financial institutions.
Ram Kishan
on e-mail 

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(52) The following our Mini Article was published in The Financial Express dated 04.07.02 page-6 in the column 'Letters to the Editor' 

Way To Go With E-court

    This refers to the news item 'E-Court To Be Set Up Within Two Months:CJI' (July 2) The Chief Justice of India has made a historic announcement. In this E-court, the cases can be filed and processed electonically.
    The filing of the applications, documents, evidences, written arguments and delivery of the judgments will be accomplished through electronic media. The parties, advocates and witnesses can remain in their places of stay and the litigation process will be accomplished without their movement.
    Apart from saving time, there will be tremendous boost in efficiency of the judicial machinery apart from saving the costs. Further there will be no need of having benches of the apex court elsewhere in the country.
    The fall out effects of the technology on the High Courts will result in a chain reaction reaching upto trial court. This technology is already in working condition in US where documents can be filed electronically from any place in any court in the country. In UK the court judgments are announced on the internet within few hours of their delivery.
    These countries started digitisation of their court records as early as 1970. We have a very long way to go but the announcement by the CJI is a great leap forward. 
Ram Kishan
on e-mail

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(53) The following our Mini Article was published in The Financial Express dated 13.07.02 page-6 in the column 'Letters to the Editor' 

Unending Saga of Scams

This refers to the news item 'Inactivity of FinMin,Sebi,RBI, Et Al  Led to Stock Scam:JPC' (July 10) The conclusion of the JPC is that if action had been taken on the recommendation of the last JPC, the last year's scam would not have happened. In fact if the regulators and supervisors would have done their part of duty in 1976 itself,-- curbing rampant violations the statutory RBI Guidelines first issued then -- the first scam would have not seen the light of the day. The verdict of the JPC is a reconformation of the fact that India is ruled by bureaucracy which has a nexus with corrupt politicians and businessmen. That is why the index of  Transparency International places us  at 151 position among 191 corrupt nations. .
Ram Kishan
on e-mail

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(54) The following our Mini Article was published in The Financial Express dated 20.07.02 page-6 in the column 'Letters to the Editor' 

Inequitous Ordinance

    This refers to the news item 'FIs to slap takeover notices' (July 17). A study of the Securitisation Ordinance reveals several anomalies, inequities and in-built contradictions. The legislative machinery has been influenced by the bureaucracy of FIs and banks. Everybody had high hopes of SICA and the debt recovery tribunals but still, as per RBI guidelines, credit cannot be withdrawn from assisted units until alternate avenue of finance is made available. There are several other breaches of the guidelines. How about an honest appraisal and check up of funds utilisation?

Ram Kishan

on e-mail

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(55) The following our Mini Article was published in The Financial Express dated 24.07.02 page-6 in the column 'Letters to the Editor' 

Debt Ordinance Plan

    This refers to the news item 'RBI wants action plan from banks on debt ordinance' (July 20). The senior bankers have rightly pointed out that rules must be framed first before drawing out the action plan. In fact, the said Ordinance contains several legal anomalies, inequities and self-contradictions. It would be in fitness of things that the RBI and the the ministry of finance review the Ordinance impartially in light of the legal stipulations of the Constitution and the principles of justice, equity and good conscience.

    A legally sound enactment will not only avoid unnecessary litigations, it would help in catching the real culprit who may be a borrower or a lender. One of the obvious mistakes everybody seems to make is that as per established law of interpretation of statutes, any barring of court in any legislation does not include high court or Supreme Court.

     Hence the bankers should understand that any hurried illegal action on their part will be questionable in these courts. Further, the said Ordinance will not be applicable to existing borrowers and guarantors as it cannot have retrospective effect due to existing documentation being different from the provisions of the Ordinance.

    For future applicability, the lenders will have to revise their security documents w which will not be an easy task. Until and unless these matters are sorted out, preparation of any action plan will be infructuous.

Ram Kishan

on e-mail

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(56) The following our Mini Article was published in The Financial Express dated 05.08.02 page-6 in the column 'Letters to the Editor' 

Empowering Lenders

    This refers to Sucheta Dalal's article 'Does The Ordinance Empower Lenders?' (July 29) The rationale of the said Ordinance is laudable but the implementation will boomerang on the lenders. The bureaucratic mindset prevailing in the banks and financial institutions is neither rule minded nor business centric. Moreover, several anomalies, contradictions will give numerous opportunities for the affected parties for questioning the vires of the said legislation. The banks and the FIs will be flooded with counter-claims.
    Any new legislation in UK and USA is first issued as a draft for examination and for soliciting comments of the affected parties. Only after corrections are made, it is introduced on sample basis in some territory. It is then modified suitably and extended widely. Any prejudicial or coercive legislation will ultimately prove to be a double edged sword for the bureaucracy. The fate of said Ordinance is not going to be much different than that of BIFR under SICA and DRT Act 1993.
Ram Kishan
on e-mail

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(57) The following our Mini Article was published in The Financial Express dated 30.08.02 page-6 in the column 'Letters to the Editor' 

NPA Burden

    This refers to the article 'How Large Is The Financial Sector Hole?' and the news item 'The Default Saga: The Small Stars' (Aug 28).  While all actions are being taken to expedite recoveries and settlements through the legal process using the tools of DRT Act and Securitisation Ordinance, nothing substantial is being done to devise preventive measures for the future. This problem was first attacked by the RBI in 1976, which issued several statutory guidelines since then. But the implementation by the banks and FIs was very tardy. The Tiwari Committee appointed by the RBI in 1984 submitted its detailed report on basis of which the SICA, BIFR and DRT were borne. Despite all these the impact on growth of NPAs has been insignificant.
    The root cause is the inefficient and corrupt bureaucracy in banking, judiciary, regulation acting hand-in-glove with corrupt businessmen. The only solution is the earliest possible privatisation of the banks and FIs. The achievements in the telecom field should be an eye opener for the government to spearhead much delayed reforms in the financial sector
Ram Kishan
on e-mail

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(58) The following our Mini Article was published in The Financial Express dated 18.09.02 page-6 in the column 'Letters to the Editor'

IT For Legal Community

    This has reference to the 'Law & Justice' page (eFE Sept.16) On account of the initiatives of the Supreme Court and the National Informatics Centre, the Indian judicial system has embraced the fruits of modern technology as a result of which the pendency in the apex court has come down by 80 per cent. This needs to be emulated by all the high courts. Side by side information technology (IT) applications must be introduced in law colleges so that the legal community of the future will be well educated and trained accordingly.
    Various Bar associations must start training sessions for their existing members. Judges, advocates and the professors in law colleges must take interest in introducing the IT in high courts and district courts. In the US, the digitization of law records and court judgments started as early as 1980. The technology is now better and cheaper. Our young generation is also becoming e-competent. The government is aiming at establishing institutes of law on the lines of IITs and IIMs. The General Agreement on Tariffs and Trade will permit the operation of foreign law firms with effect from 2005. Thanks to these measures our legal system will achieve global standards in at least judicial infrastructure within the next decade....
Ram Kishan
on e-mail
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(59) The following our Mini Article was published in The Financial Express dated 20.09.02 page-6 in the column 'Letters to the Editor'

Modern Law Schools

    This refers to the news item 'Law Minister Calls For Law Schools On Lines Of IITs, IIMs' (Sept.7) It is heartening to note that top politicians are beginning to realize the importance of top level education in law. It will take 10 to 15 years for a visible impact. Perhaps it is for the first time in the country that an industrial association like Ficci has joined hands with the Bar Association of India to organize a national seminar on legal and judicial reforms. Better legal education of the advocates and judges will certainly improve their productivity. Come 2005, we shall have global law firms and overseas lawyers presenting tough competition to Indian advocates. All this was long overdue past 55 years but better late than never.
Ram Kishan
on e-mail
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(60) The following our Mini Article was published in The Financial Express dated 04.10.02 page-6 in the column 'Letters to the Editor'

Lenders' Liability Bill

    This refers to the news item 'Top Indian Delegation In US ...(Sept.30) The delegation should have included equal number of representatives from the industry so that proper care could be taken from the draft stage to include legal provisions based on principles of equity, justice and good conscience. The incomplete delegation -- comprising of only bureaucrats and bankers -- will produce only inequities and contradictions. The resultant legislation will be defective ab initio. It will be rushed by way of an Ordinance and a Bill which may be questioned in various High Courts due to its obvious constitutional illegalities. The judicial review by the High Courts and the Supreme Court will entail years.
    The DRT Act 1993 was similarly questioned in 1994 and the final verdict of the Supreme Court was given as late as 2002 and still there are several flaws. The public servants i.e. the politicians in power and the bureaucrats first will have to understand and imbibe in their conduct the democratic way of life, thinking and acting based on our constitution. Otherwise aping the developed countries like the US by select few will not be able to achieve an acceptable and practical piece of legislation. Relevant legal knowledge through the internet will easily bust their designs and machinations.
Ram Kishan
on e-mail
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 (61) The following our Mini Article was published in The Financial Express dated 11.10.02 page-6 in the column 'Letters to the Editor'

Stalled Debt Recovery

    This refers to the editorial "Recovering Debt' and news item 'RBI Lists Out Early Warning Signals To Arrest NPA Slide (Oct.10). The creation, running and growth of manufacturing industries is an ultimate a team work of a modern society. All the players and stake holders should have a dedicated approach for creation of surplus as well as safety of everybody and more so of the entrepreneur, While all out efforts are being made to safeguard legally the banks and financial institutions, nobody is keen to devise legal protection for the entrepreneur. He is left in the lurch with no option but to adopt illegal means to survive in time of adverse situations.
    In our country there is no 'no fault' insurance. The bureaucracy is not business oriented and highly corrupt. Such system is bound to result in high cost and hence uncompetitive products highly prone to create NPAs. RBI has been crying since 1976 for expeditious actions on incipient sickness and warning signal were laid down but till date there is no action on violations.
    On the other hand the benchmark for the law is one of the highest in the world in form of our constitution and hence the Supreme Court has to ensure that no injustice is caused to any body even if it means delay in debt recovery. Such judicial system ultimately will reveal the wrong appraisals and violations of statutory RBI guidelines which when evaluated will appear in form of counter-claims being more than the alleged debt due. What more can be expected from nationalized financial sector? Nothing less than earliest possible privatisation will remedy the ever worsening perspective of NPAs. But that will also essentially need efficient judicial and legislative system. Till such wholesome system is evolved, the debt recovery will continue to be a mirage and scanty as at present since 1976 along with ever-growing NPAs.
Ram Kishan
on e-mail

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(62) The following our Mini Article was published in The Financial Express dated 28.11.02 page-6 in the column 'Letters to the Editor'

Debt Definition

    This refers to article "Defining 'Debt' For Recovery Purposes' (Nov 25) The definition of 'Debt' in the DRT Act 1993 was amended in the year 2000.  Through the same amendment, the provision of counter-claim was introduced in the sec. 19 of the said act at the instance of the apex court With new provisions, the Tribunal has to pass final orders both on the original claim and the counter-claim. With such connotations, the definition of 'Debt' was rendered more harmonious with the counter-claim.
    The process and procedure of law is constantly developing and evolving to meet the complex problems of the modern industrial society. Since the appeal has been made extremely difficult in the DRT Act due to requirement of 75 per cent of deposit, the adjudication in the Tribunal has to be completed comprehensively in all respects in the Tribunal itself. With the provision of counter-claim, the entire DRT litigation will consume longer time but the outcome would be more meaningful and salutary to meet the ends of justice particularly in respect of industrial finance, rehabilitation of sick units, documentation, loss and damages, duty of care, statutory duties, lenders' liability etc.
    So far virtually there was no litigation on these aspects in our country. With the application of common law, the bureaucracy will be subjected to better fixation of responsibility and accountability through the litigation process of the new enactments like the DRT Act and NPA Recovery Bill. In this context, it is not surprising that the quality and content of the debt related arbitration may also improve. Hence the legislative intent in amending the definition of 'Debt' may be quite useful to the lenders as well as to the borrowers.
Ram Kishan
on e-mail
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(63) The following our Mini Article was published in The Financial Express dated 02.12.02 page-6 in the column 'Letters to the Editor'

DRTs' Performance

    This refers to news item 'Despite NPA Act, DRTs Still A Non-starter' (Nov. 29) A mature democratic society is governed by the rule of law operating without any bias or partiality to any of its constituents -- otherwise progress gets stinted. This is what is happening in our country. During the last few years, greater emphasis has been placed on debt recovery as if it is root of all evils. In a recent 'Asian Non-performing Loan Report for '2002', the international consulting firm Ernst & Young has stated that the Indian NPAs are only 8 per cent of GDP as against China's 45 per cent, Japan's 28 per cent and Asian countries' 29 per cent.
    On the other hand our manufacturing growth has slowed down and is hardly one third that of China. The entrepreneurial attraction to manufacturing and new industries is at the lowest ebb with far reaching repercussions on wealth generation, employment creation, support to service sector and general law and order. The foreign investors are openly criticising the rampant corruption due to bureaucrat- centric governance of the country.
    Compared with emphasis on NPA recovery, can we have equal or more emphasis on eradication of corruption at the stages of sanction, settlement and adjudication of loans? Are we serious about 'no fault insurance' and 'lenders' liability' enactments? Do we respect wealth creators more than the middlemen and public servants? Are we more strict about the corrupt politicians and bureaucrats?
    We have already missed the bus for introducing reforms in seventies. Another opportunity in 1991 has been handled half heartedly. Now all attention is being diverted to NPA recovery in lieu of nurturing new entrepreneurs and solving the problems of existing ones. We have to be strict with the wilful defaulters but we should be equally strict with the corrupt bureaucrats and the politicians. In the context of such balanced approach only the performance of DRTs should be seen.        
    With the existing judicial provisions when the appeal in DRT has been made extremely difficult due to impractical deposit of 75%, the real adjudication in DRTs taking into account counter-claims is definitely going to take considerable time.
Ram Kishan
on e-mail

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(64) The following our Mini Article was published in The Financial Express dated 05.12.02 page-6 in the column 'Letters to the Editor' and deals in Lenders' Liability, Counter-claim, Securitisation Bill, Law of Torts, NPA is no Problem, Entrepreneur is to be respected, Corruption Solution, Mardia Chemicals, Violations of RBI guidelines and Key to Industrial Development.

Real Wilful Defaulters

    This refers to the news items 'Bailed Out By FIs, Modern Group Turns On Lenders' and 'India's Biggest Defaulters Defiant First Victims Of A New Law' (Dec. 3) The media is doing an yeoman's service to bring about the stories of the real wilful defaulters. As per the RBI list published on the internet, there are nearly 8000 suit filed accounts all of which may not be wilful defaulters and some may be genuine sufferers. They are trying to put their side of the story by way of counter-claims. But as the industrial litigation in our country is in its infancy, it  will take time to accept the said stories of the innocent victims of the system.
    Our country is tolerant towards corrupt and unproductive elements like the politicians and bureaucrats. If one visits the modern colonies, most of the costliest buildings will be found belonging to these elements. The glittering weddings of their children are attended by one and all without raising an eyebrow. The foreign investors openly talk about the corruption and hurdles being created by such elements.
    On the other hand due to factors like liberalization, recession, high cost economy, corruption, absence of no fault insurance and lenders' liability enactments, open wrong doings of the banks and FIs, etc. when major portion of the NPAs have been created, the entrepreneurs are solely being held responsible. The entire system is after them. India is a barren land for the entrepreneurs. 
    It is interesting to note that our NPAs are only 8 per cent of our GDP as against 45 per cent of China and 29 per cent of Asian countries. We are focusing heavily on recoveries at the peril of fillip to the industries knowing fully well that our manufacturing is terribly gone down. It is duty of the media to devote its space in a balanced manner in the best interest of the nation and the society instead of playing the same tunes as that of politicians and bureaucrats.
Ram Kishan
on e-mail
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(65) The following our Mini Article was published in The Financial Express dated 07.12.02 page-6 in the column 'Letters to the Editor' and deals in Lenders' Liability, Counter-claim, Securitisation Bill, Law of Torts, Banking Reforms, Bank Privatisation, Chinese Lead, Mardia Chemicals, and Violations of RBI guidelines.

Lenders' Liability

    This refers to the article 'Lenders Should Share The Blame' (Dec. 5) This can only be brought about by suitable enactment. The Lenders Liability Act was to be simultaneously legislated along with the Securitisation Bill but the bureaucracy in the ministry of finance at the instance of the bankers lobby ensured that such enactment is not drafted at all leave alone placing before the Parliament. Till this is done, the banks and financial institutions will have to face numerous counter-claims in the DRTs and the concerned bank officials will find it difficult to justify their violations of statutory RBI guidelines, breach of duty of care, negligence and other wrong doings resulting into creditors turning into debtors.    
    The coercive enactments like summary jurisdiction of DRTs and Securitisation Bill are double edged swords. The scuttling of Lenders' Liability Act has added fuel to the fire. Some of the financially strong borrowers will definitely be befitted by such legal battles. All others methods like asking the lenders to be fair and to look into each and every case to determine where the fault lies will have no effect. This has been amply proved as may be seen from rampant violations of statutory RBI Guidelines since 1976 and numerous annual reminders and warnings.
    Apart from counter-claim, another solution is earliest possible privatisation of the financial sector. On this front the things are taking inordinately huge time as virtually there is no competent corporate governance in the country. All these are resulting into painful situation for the masses due to ever increasing gap with the Asian countries like China. Hence the industrial litigants have no choice but to raise and contest their counter-claims vigorously.
Ram Kishan
on e-mail 
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(66) The following our Mini Article was published in The Financial Express dated 10.12.02 page-6 in the column 'Letters to the Editor' and deals in Lenders' Liability, Counter-claim, Securitisation Bill, Law of Torts, Banking Reforms, Chinese Lead, NPA is no Problem, Mardia Chemicals, Violations of RBI guidelines, Key to Industrial Development.

When Lenders Act Tough

    This refers to the article 'Lenders Act Tough, Defaulters Cough Up' (Dec. 2) it's a good sign that some of the real wilful defaulters have started making some payments against their NPAs. With coercive enactment like NPA Recovery Bill and summary courts like DRTs, the legal arm of the borrowers has been spurred to plead wrong doings of the banks and financial institutions through the remedy of counter-claims in DRTs. Since the appeal has been made extremely difficult, the trials in DRTs are expected to be more comprehensive. The settlement limit of Rs. 10 crores is too small to realize large amounts. Under these facts and circumstances, the recoveries are not going to be substantial.
    As regards the Securitization Bill, the SFCs were armed with similar powers of sec. 29 but the results have been tardy. The banks and the FIs are not well equipped to take over the units or their management on regular basis and hence the recovery through this route will also not make worthwhile dent on the overall NPAs.
    The best recovery is only out of profit generation. The lender should help in growing the business of borrower. The test of real help is in difficult periods where the PSBs utterly fail. Their characteristics can only be changed by privatisation for which the essential pre-requisites are competent regulator and efficient legal process. Incidentally the Indian NPAs are only 8 per cent of GDP as against 45 per cent of China and 29 per cent of Asian countries. In a growing and developing economy and due to fast business transformations, our level of NPAs should not be regarded as alarming. Hence the government should expedite 'lenders' liability', 'no fault insurance' and 'social securities' enactments apart from legal reforms to create suitable privatisation infrastructure for the financial sector. In that eventuality only, the credit in the industrial sector will pick up. 
Ram Kishan
on e-mail
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(67) The following our Mini Article was published in The Financial Express dated 19.12.02 page-6 in the column 'Letters to the Editor' and deals in Lenders' Liability, Counter-claim, Law of Torts, Mardia Chemicals and Violations in RBI guidelines.

Weak Ground

    This refers to news item 'Mardia Chemicals Chief Offers To Resign '(Dec. 10) The ICICI Bank has engaged one of the public sector consultancy firms to take over management of few of defaulting industrial units like Mardia Chemicals. During the boom time, the same bank appreciated and extended huge  loans to these units after due appraisals. The interest bearing loans create a duty of care on part of the lender on account of which during conditions beyond the control of the borrower if the lender withdraws or does not assist, injury is caused creating huge loss and damages, counter-claims for which are normally much greater than the loan. Hence the securitisation measures can not be enforced as there is no debt due.
    The borrower can also advance defence of other wrong doings such as violations of statutory RBI guidelines in force since 1976, violations  of constitutional provisions enshrined in fundamental rights, negligence, voidable security agreements contained in one sided documents signed on dotted lines, loss in business opportunities, malicious litigations etc. The debt recovery tribunals will have to call the bankers in the witness box to confirm these factual wrong doings. The Constitution and all other derived enactments support only the entrepreneurs and industries. The instrumentalities of the State have  no safe guards against the said wrong doings.
    Under such facts, circumstances, the abrupt take over of the unit or its management will prove to be futile and legally abortive ab-initio. The banks have no other choice but to render proper service to the their industrial clients. The borrower is legally on strong footings as our country does not have 'no fault insurance' and 'lenders liability' enactments.
Ram Kishan
on e-mail

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(68) The following our Mini Article was published in The Financial Express dated 23.12.02 page-6 in the column 'Letters to the Editor'

Petty Corruption

    This refers to the article 'A First Estimate Of Petty Corruption' (Dec 20) On the relevant report of the Transparency International (TI) there are editorials and articles in every paper. But nobody is bothered about the solution. Perhaps, we Indians have a liking for corruption to continue or we are waiting for the neta babu to suggest solution which in this case they will not do as they are heavily involved in this activity. The money involved is much bigger than all NPAs and the damage done is much serious.
    The conscientious citizens and responsible media are well aware of the reasons for corruption. Only solution is proper legislation to check it as other nations have done it. Either we ask the TI or use our own brains. Since black money is involved, the legal method will be to authorize the supervision of the corrupt persons by the nearby citizens. First of all, as in Sweden, the citizens should be empowered to have copies of the Income Tax returns of  such elements. Group of nearby citizens will check up the assets and ask source of income. Important cases will be reported to the media, which will highlight the same for information of the masses and authorities. We can have summary trials in specially created 'Corruptions Removal Courts' armed with special legislation for speedy acquisition and disposal of 'Corruption Properties' 
    In China the corruption investigations are carried out in a week and guilty is shot dead. In USA, the bribe giver is jailed for four times a longer period than the bribe taker. In Singapore the children are taught that the corruption is the worst crime and they become the watchdog for their parents.
    Will the responsible media devote some of its space this year to come out and implement suitable solution for this well known 'public loot' this year before the next report of the TI?
Ram Kishan
on e-mail

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(69) The following our Mini Article was published in The Financial Express dated 26.12.02 page-4 in the column 'Letters to the Editor'

Blow To India's Pride

    This refers to the new item 'Philips Sees China As Centre For R&D' (WSJ; Dec. 20) This should open the eyes of the bureaucrats and politicians of our country. Once upon a time, the Indian setup of Philips - a manufacturing unit in West Bengal - was quite sizable. Even in-house R &D was being done there. Our Indian electronics engineers were recognized. It is solely the fault of our government that Philips has shifted the entire base to China. There are 23 factories of Philips in China. They are now going to have a R&D base for Asia.
    It is our habit to find fault with others including industries and entrepreneurs. We are simply after non-performing assets and recoveries. As a result our manufacturing infrastructure is being wiped off having great impact on employment, export and law and order. Given a chance, our entrepreneurs and industrialists will prefer to run away to places like US and China which respect business, wealth creation and entrepreneurship.
Ram Kishan
on e-mail
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(70) The following our Mini Article was published in The Financial Express dated 30.12.02 page-6 in the column 'Letters to the Editor'

Banking Reforms

    This refers to the news item 'Heavy Hand Of Govt In Bank Management Must End: Singh' (Dec.28) It is heartening to note that the Planning Commission member is vouchsafing the cause of freeing the banks from the shackles of the governmental bureaucracy. The banking reforms are overdue since 1991 as outlined in the Narasimhan Committee Report. Just compare with the telecom sector which has brought tremendous benefits to the consumers and the nation in quality, cost and spread. All the activities in the country are tremendously suffering due to inordinate postponement of privatization in the financial sector. Initially the bill for reducing the stake of the government was highly delayed and now it is pending past 18 months. The President of India is requested to issue an Ordinance immediately for such a nationally important step as every day delay is causing heavy cost to the nation as well as the sufferings to the nation.
Ram Kishan
on e-mail
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(71) The following our Mini Article was published in The Financial Express dated 26.03.03 page-6 in the column 'Letters to the Editor'

Go by Guidelines

    This refers to the analysis aptly captioned 'It is not enough getting notice; recovery matters' (Mar 24) The various public sector banks have issued more than 10,000 notices under the Securitisation Act involving assets more than Rs. 8,000 crores but the actual recoveries have been less than even 1 per cent The high hopes of the bank officials have been greatly shattered. Similarly the performance of the debt recovery tribunals (DRTs) over the past 10 years have been utterly poor.
    Given that the Securitisation Act and the DRTs have not brought about the results intended by the bank bureaucracy, the solution is to follow the path prescribed by the Reserve Bank since 1976 in its various guidelines. The said guidelines have never been seriously adhered to by the bank officials despite several, repeated annual reminders by the RBI as well as the pronouncement by the Supreme Court that the said guidelines are statutory.    
    The essence of the RBI Guidelines is based on a professional approach to the industrial finance i.e. realistic appraisal, provision of timely and adequate finance, quick rehabilitation of sick units etc. The best and most appropriate recovery is out of generated funds through running of the business or industry. Any other mode such as coercive tools like Securitisation notices or summary proceedings will  only be unproductive exercises but without any significant recoveries.
    On the other hand the counter-claims filed by the borrowers and guarantors will rip open the wrong doings of bank officials due to violations of the statutory RBI Guidelines, duty of care etc. The analysis as above should be an eye opener to the top management in banks and the ministry of finance.
Ram Kishan
on e-mail

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Application of Law of Torts in claiming Damages from Municipal Corporations for demolition of structures, closure of shops etc:- In many parts of the country, the Municipal Corporations are demolishing structures like shops and houses which existed for number of years. The shops existing for number of years are proposed to be shut down. The affected persons should claim Damages under the Law of Torts, which would be substantial. It is learnt that in Delhi itself about 5 lac shops are to be closed down and about 25 lac persons would be out of jobs. All these persons should file damage suits in the civil court. Since the damages would be substantial, the suits may be filed as Indigent Persons. Since the damages would attract interest, the usual delay by the civil courts will not affect the final outcome. The affected shop owners may discuss the details with us on phone.

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