Monthly Archives: September 2018

Save Aarey Forest

For those who came in late

Mumbai’s lush green Aarey Forest is under threat due to various development projects – the foremost being the cutting of 3,500 trees for the construction of a car shed for the upcoming Mumbai Metro 3. Activists along with actors and artists and many others have been petitioning CM Devendra Fadnavis to relocate the car shed to another area and help Mumbai retain its green space.

However, a lot of people are misunderstanding that we are against the Mumbai metro and the government. What we are against is a lack of conversation and transparency from the government. Here is a quick fact check.

1. Are we against the metro?

NO. We are against the cutting of 3,500 trees for the metro car shed. This is where the parking of the trains will be done. It’s alarming why the trains will be parked in the middle of a forest at the cost of thousands of trees. Also, the idea of a Metro Station at Aarey is purely ridiculous, because there are hardly any people living there! The government added this station so that it can build commercial activities around it in the future. To put this in perspective, have you ever imagined trains being parked in New York’s Central Park or a train station inside the park built after cutting its trees? It’s the green lung of New York and the government does every bit to save it. So why can’t we?�� In fact, Mumbai might need 10 lines of metro in the future, but if we don’t stand up to the cutting of trees right now, there wont be any green patch left for Mumbaikars in the future. It’s not development, it’s suicide.

2. We all need a Metro. Trees jaaye bhaad mein. (To hell with the trees.) They will grow again.

There are seven options of land available to the government where there is Barren land to build this parking shed and station WITHOUT cutting trees. Still, it has chosen Aarey Forest – the only remaining lungs of Mumbai! The reason? Shh… Shhh… Smelling a rat here?

The 3,500 trees will not grow again, but there is a chance the government will cut more trees again. It already has a lot of commercial projects lined up after the trees are cut, including a zoo. Yes, a fuckin’ zoo in the middle of a forest. Not just a zoo, about 100 hectares of land for a rehabilitation township is reserved in Aarey. So, it does not stop at the metro shed! Remember the full-page ads run by the MMRCL in every leading newspaper in Mumbai and Gujarat some months ago for the metro? It claimed no commercial activity will be planned in Aarey, then why make a metro station in Aarey? Daal mein kuch kaala hai? (Is there something fishy?) Has the Indian population ever held any politician to his word? Fadnavis knows like every other politician that public memory is short and people don’t care if they are swindled.

3. But the government is replanting trees, what’s your problem buddy?

So, it basically wants to cut what is 100 years old and then replant a sapling, which might give enough oxygen to save a dying Mumbai after 100 years. Excellent! It’s like removing all the old politicians from this country overnight, and putting toddlers in charge of the country. (I believe they will govern better though.)

4. Are we anti-BJP? Is there any political party involved in this?

NO. We are a volunteer group of students, artists, painters, actors, musicians, CEOs, Dalits, Adivasis, Dabbawalas, farmers – trying to make sense of this horrible idea of destroying a forest for a parking shed for a train. Whether the ruling party was BJP, Congress, AAP or any other, we would have still done this protest as we need air to breathe. PM Narendra Modi gave a speech on World Environment Day, that destruction of nature at the cost of development is dangerous and the citizens should stand against it. We are just doing that. We believe anybody who is not following this should be held accountable. Looking at what’s happening in Delhi with the toxic air (the city does not have a forest to save itself), it’s important to raise our voice NOW to save Aarey.

5 Aarey is not a forest, it’s a milk colony.

Have you been to Aarey and explored it? Dont get fooled by its area. It works, thrives and survives as a forest. It has more than 5 lakh trees, an active ecosystem, rare birds, animals, its own lakes, farms, and its own community of people. Also, have you ever seen leopards and snakes in other parks before? The forest department is deliberately concealing information and altering the facts since some time now. Almost 30% of this space has already been given for commercial projects that we know of, like for Film City, Royal Palms etc. The metro is a step towards allocating more and more land for profit.

6. If it has 5 lakh trees, cutting of 3,500 trees will make no difference. Its only 1%!

What happens if you lose an eye? Or a finger? It was easy for Dronacharya to screw Eklavya’s life by taking his shooting thumb. These 3,500 trees are that thumb. The epicentre of the earthquake in Gujarat was in Kutch, but buildings collapsed in Ahmedabad, 500 km away. Do you need more metaphors? It’s not only trees that are cut – it’s the birds, animals, surroundings, and the total ecosystem. It will be a chain reaction so horrible for this already struggling city. This will surely be the tipping point.

7. Is the government ready for a conversation? It must have valid reasons to cut Aarey, right?

NOT YET. All we are asking for is a conversation with the government, BMC, MMRCL, CM and ask them WHY Aarey?? Till now even after almost 500 days of asking the question and inviting the CM to have a conversation with us, we have heard no answers from the authorities. We understand why, as they do not have a justified answer! Why would they choose Aarey over 7 other places? WE DONT KNOW YET.

8 Are we funded by political parties opposing the BJP?
On the contrary every political party which said it stood with the citizens in their fight has deserted the cause. Citizens have contributed in every small way to raise money to save Mumbai’s last remaining green space. We can barely afford the litigations cost and the lawyers who are fighting it are doing so because they too feel it is a noble cause unlike MMRCL and the Govt which engage high profile lawyers who are known to charge 11 (Eleven ) Lakhs per appearance . We do not have access to unlimited public funds to squander away to cover up illegalities.
If you cannot align with the selfless battle the citizens are engaged in, the least you can do is not malign them.
PLEASE SHARE WIDELY
#SaveAareyForest #weneedaarey #mumbaineedsAarey #AareyforMumbai#greenlungofmumbai

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motor insurance cover – accidents

Insurance Regulatory Development Authority (IRDA) has vide its circular dated 20th September, 2018 mandated the general insurance companies carrying on motor insurance business to provide compulsory personal accident cover for owner driver of minimum Rs.15 lakhs. The previous limit was Rs.1.00 lakh and Rs.2.00 lakhs respectively for two wheelers and four wheelers. This is pursuant to a Madras H.C. judgment in this regard to provide higher cover. The insurance premium for this enhanced cover is set at Rs.750/- per annum. People can however, take higher limit also if they want. Such higher limit policies may be in multiples of Rs.1.00 lakh or Rs.5.00 lakhs. The gist of the IRDAI circular follows here.

General Regulation (`GR`)-36 of India Motor Tariff(`IMT`), 2002 mandates General Insurance Companies carrying on motor insurance business to provide Compulsory Personal Accident (CPA) Cover for Owner-Driver under both Liability Only and Package policies. The owner of Insured vehicle holding an `effective` driving license is termed as Owner-Driver for the purposes of this section. The Cover is provided to the Owner-Driver whilst driving the vehicle including mounting into/ dismounting from or traveling in the insured vehicle as a co-driver.

  1. Currently, the Capital Sum Insured (CSI) under this section for Motorised Two Wheelers and Private Cars/Commercial vehicles is Rs. 1,00,000/- and Rs. 2,00,000/- respectively. However, a few General Insurers have been offering Add on covers under Package policies with higher CSI over and above the stipulated CSI, on payment of additional premium at the option of the Insured. TheGeneral Insurance Industry, through its Council, had also taken up the increase for higher CSI underCPA Cover for Owner-Driver in July, 2017 for consideration of IRDAI.
  2. In the meantime,the Hon’ble High Court of Judicature at Madras has, vide its judgement dated 26thOctober, 2017 in the matter of Civil Miscellaneous Appeal No. 1428 of 2017 (United India Insurance Co Ltd Vs R. Rekha & Ors), issued directions to IRDAI which reads as under.

 

“Enhance the Compulsory Personal Accident Cover from the existing Rs.1,00,000/- to at least not less than Rs.15,00,000/- so that the amount of Rs.15,00,000/- will add to some succor or solace to the victims of road accidents, who are the owner of the vehicle, who may incidentally sustain bodily injury or death. Further, an option can be given to the insured/owner of the vehicle to pay higher premium amount to get enhanced compensation over and above Rs.15,00,000/- in case the owner of vehicle so desires to such enhanced compensation in the event of any untoward motor accident which may result in bodily injury or death. “

  1. In accordance with the above directions of the Hon’ble High Court of Judicature at Madras,the Authority, in exercise of the powers conferred by Section 14 (2) (i) of the IRDA Act 1999 and in consultation with the stakeholders, hereby issues the following modifications to General Regulation (GR) -36 of India Motor Tariff,2002 on Compulsory Personal Accident Cover for Owner-Driver.

(i) All General Insurers carrying on motor insurance business shall provide CPA Cover for Owner-Driver under Liability Only, under Section III of Package Policies to all classes of vehicles and Bundled Covers wherever applicable.

(ii) A minimum Capital Sum Insured (CSI) of Rs.15,00,000/-shall be provided under CPA Cover for Owner-Driver under Liability Only, under Section III of Package Policies to all classes of vehicles and Bundled Covers wherever applicable at the premium rate of Rs. 750/- per annum for annual policy. This rate will be valid until further notice.

(iii) A higher CSI may be provided over and above Rs.15,00,000/-through Optional Covers under Liability Only and under Section III of Package Policies/ Bundled Covers on payment of additional premium at the option of the Insured.

(iv) In view of the above changes, the current Add on covers offering enhanced CPA Cover for Owner-Driver under Section III of Package Policies and Bundled Covers up to CSI of Rs.15,00,000/-shall stand withdrawn. However, Insurers willing to offer CSI over and above Rs.15,00,000/- may revise/file Add on cover under Liability only, Package Policies and Bundled Covers. It is suggested the higher CSI in such Add on cover may be in multiples of Rs.1,00,000/-. or Rs.5,00,000/-.

(v). As regards premium payable for CPA cover under long term motor policies, insurers may price them in line with their current approach for pricing. Should the Authority find the pricing approach in variance from their general pricing philosophy/approach and not in line with actuarial principles, suitable direction may be issued by the Authority. Insurers may start issuing such covers effective from the date of receipt of this circular even while ensuring that the filing for these is done under File and Use Guidelines on or before 25th October, 2018.

(vii). All other extant provisions applicable for Motor Third Party Insurance shall continue to apply.

This Circular shall come into effect immediately. Please acknowledge this circular and confirm having noted its contents.

This is issued with the approval of the competent authority.

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ECBs – liberalisation

RBI has vide its notification dated 19th September, 2018 liberalised the External Commercial Borrowing policy to the following extent:

(i) ECBs by companies in manufacturing sector: As per the extant norms, ECB up to USD 50 million or its equivalent can be raised by eligible borrowers with minimum average maturity period of 3 years. It has been decided to allow eligible ECB borrowers who are into manufacturing sector to raise ECB up to USD 50 million or its equivalent with minimum average maturity period of 1 year.

 

(ii) Underwriting and market making by Indian banks for Rupee denominated bonds (RDB) issued overseas: Presently, Indian banks, subject to applicable prudential norms, can act as arranger and underwriter for RDBs issued overseas and in case of underwriting an issue, their holding cannot be more than 5 per cent of the issue size after 6 months of issue. It has now been decided to permit Indian banks to participate as arrangers/underwriters/market makers/traders in RDBs issued overseas subject to applicable prudential norms.

 

So this is a boost for manufacturing sector in line with the Make in India policy of the government. 


RBI notification can be found at https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11375&Mode=0

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strike off companies

Presently when any company has been struck off by the MCA for any reasons, the only option available is to file a petition with the NCLT to revive the company. This is a time consuming process as well as effort involved. Many such companies have been rendered as “strike off” stage due to various reasons beyond the control of the existing Directors.
Now since July 2018 the additional filing fees for annual forms is on the basis of Rs.100 per day calculation and it is going to hurt companies to remain as non compliant. Filing of petition with NCLT involves time and cost and also clogging of the judicial system with routine applications. NCLT is already over burdened due to the number of cases filed under the Insolvency & Bankruptcy Code, 2016 and other petitions like mergers, amalgamations, oppression cases. In such scenario what is the justification for routine applications involving revival of strike off companies to be filed with NCLT it is not clear and not justified also.
Many companies have various reasons and these are legacy reasons which are genuine in nature due to which they failed in filing the annual documents.Admitted that they are non compliant and have suffered much due to the Director’s DIN becoming de-activated. MCA should now look at an easy process for revival of strike off companies at the ROC/ RD level without involving the judicial bodies in this regard. They can levy a fine or penalty similar to the compounding fines and close the matter. Anyways MCA is gaining due to higher fees from the per day fee structure so the companies are already being penalised in this regard. They should not be further penalised by forcing them to seek redressal from the judicial courts of the country.

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LLP incorporation

MCA has vide its notification dated 18th September, 2018 streamlined the process of incorporation of Limited Liability Partnerships (LLP) in India. Hitherto, for more than 10 months, the LLP incorporation had come to a standstill as MCA had stopped issuing stand-alone Director Identification Number (DIN) to individuals.

1) Now name reservation for a LLP can be done by a web service called LLP-RUN. Unfortunate part is that this RUN will be governed by their Central Reservation Centre (CRC) which is a retrograde step, in my view. That section is manned by totally incompetent people who have no idea at all about business incorporation.

2) Form 2 for incorporation of LLP will be replaced by FiLLiP which will carry the DIN allotment process also. So this is good move.

3) Similarly minor amendments have been made to Addendum to Form 2 (which will be known as Addendum to Form FiLLiP, form 5 (notice for change of name), form 17 (conversion of general partnership firm into LLP) and form 18 (conversion of a private company/ unlisted public company into LLP) consequent to the above amendments. It would be interesting to note form 18 amendments as with the proposed mandatory demat of securities of unlisted public limited companies from 2nd October onwards, many unlisted public companies will seek to convert themselves into LLPs / private companies to avoid that compliance. They might seek to convert themselves into private companies but there is always a lurking fear the mandatory demat of securities could be extended to private companies as well, in the future.

All these changes will take effect from 2nd October, 2018.

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7.05 kms in marine drive

7.05 kms in marine drive promenade, one of the world’s great places to run. Had a slight back niggle so was not sure whether to go or not, but since it was the first of MRR’s 7 Islands Run, thought it better to go and do some small mileage. As usual continued with nose breathing, but here i found it little more difficult along the sea coast probably due to the salty content in the atmosphere.

160918

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managerial remuneration

MCA has vide its notification dated 12/9/2018 notified the sections 66 to 70 of the companies amendment act, 2017 with effect from 12th September, 2018.

Briefly sections 66 to 70 above amends the following provisions of the companies act, 2013

  • Appointment of senior citizens as Managerial Personnel

Section 196 (3) (a) provided that no company shall appoint or continue the employment of any person as managing director, whole-time director or manager, who is below the age of 21 years or above 70 years. One proviso was provided that with special resolution it was possible to appoint a person as managing director even if he has crossed 70 years of age.

Now, another proviso has been added that even if the special resolution is not passed, but the votes cast in favour exceeds the votes cast against the resolution, if the Central Government is satisfied then approval for such appointment can be granted.

  • Managerial remuneration without govt. approval

Section 197 provides for payment of managerial remuneration to the managerial personnel. Now central government approval is not necessary for payment of managerial remuneration above 11% of the net profits of the company, subject to the provisions of Schedule V.  Also the company may vide special resolution passed at the general meeting provide for payment of more than 5% remuneration to one managing director or 10% to all of them together or remuneration payable to the non-executive directors also above the 1%/ 3% limit provided in that section.

Another proviso has been added that where the company has defaulted in its dues to banks/ financial institutions or non-convertible debenture holders or any other secured creditor, then prior approval of such banks/ financial institutions/ non-convertible debenture holders/ secured creditors will have to be obtained by the company before obtaining the general meeting approval.

Where the profits of the company are inadequate, then the company shall pay managerial remuneration only in accordance with the provisions of Schedule V. Here also the requirement of obtaining central government approval has been done away with.

Further sub-section (9) provides further leeway, in that where the managing director receives remuneration in excess of the limits specified in the section or without approval required under this section, then he shall refund such sum to the company within a period of two years or any lesser period allowed by the company and till that time, hold the moneys in trust for the company.

Further sub-section (10) provides that the company shall not waive recovery of any sum refundable to it under sub-section (9) unless approved by the company by a special resolution within two years from the date the sum becomes refundable. Therefore waiver special resolution has to be passed within two years from the date from which the sum becomes refundable.

Another proviso has been added to sub-section (10) that where the company has defaulted in its dues to banks/ financial institutions or non-convertible debenture holders or any other secured creditor, then prior approval of such banks/ financial institutions/ non-convertible debenture holders/ secured creditors will have to be obtained by the company before obtaining the general meeting approval for waiver of recovery of excess remuneration.  

Sub-section (11) has been amended reiterating that in case of no profits or where profits are inadequate, then Schedule V will be applicable without having to seek Central Government approval.

A new sub-section (16) has been added, mandating the auditors of the company to make a statement in his auditors’ report whether the remuneration paid by the company is in accordance with the provisions of this section and whether remuneration paid is in excess of the limit laid down in the section and such other details as may be prescribed. Since this sub-section has been notified on 12th September, 2018, it will become applicable to all auditors’ reports signed and dated after this date.

A new sub-section (17) has been added, that all pending applications with the central government shall abate and the company shall within one year from the commencement of this section take approval from the shareholders in a general meeting.

  • Calculations of net profit:

A couple of changes in section 198 w.r.t calculation of net profits. Credits shall be given for profits, by way of premium on shares or debentures of the company which are issued or sold by the company if the company is an investment company. In other cases, it is not allowed.

Credit is also not given for any amount representing unrealised gains, notional gains or revaluation of assets.

  • Company to fix limit with regard to remuneration:

Section 200 heading says “Central Government or company to fix limit with regard to remuneration”. The amending section 69 of the companies amendment act, 2017 removes the words “the Central Government or” appearing at two places in the section, which has been removed, but the heading remains the same. MCA forgot the heading, which is a goof up.

So now Central Government has no role to play in the remuneration matters of a company in India. So ideally this section i.e. section 200 should have been abolished altogether.

  • Amendment of section 201:

So now the result of all these amendments is that company has to go to central government only in one case in section 196 where the resolution for appointment of a managerial personnel above the age of 70 years has not been passed with special resolution, but the persons voting in favour is more than persons voting against the said resolution. Accordingly the amendments in section 201 reflect those changes.

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10.38 k in Aarey Forest

10.38 kms after a long time in the beautiful, verdant, green, full of oxygen Aarey Forest. This was the first time i was running on a hilly route whilst breathing through nose only. The pace slowed down for sure, but i could keep at it for almost 95% of the route. Aarey Forest is such a beautiful place for walkers, joggers, runners, cyclists et al, but the roads are so badly maintained. Its a heaven in the middle of a major metropolis.

130918

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exchange of mutilated notes

RBI has vide its notification dated 7th sept 2018 enabled exchange of mutilated notes in the Mahatma Gandhi (New) series at bank branches and RBI offices. Exchange can be done even if the notes are smaller in size compared to earlier series.

RBI has goofed up by changing the size of the currency note without understanding its ramifications especially with respect to the size of the trays in the ATM machines. They perforce have to issue a notification in this regard because otherwise bankers will be clueless and in the end result, the commoners will suffer due to the ignorance of the bankers and the consequent harassment that follows.

RBI notification can be accessed at their site.

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Compulsory demat – for unlisted public companies

MCA has vide its notification dated 10th September, 2018 mandated that with effect from 2nd October, 2018
1) every unlisted public company shall issue its shares only in dematerialised form;
2) facilitate dematerialisation of all its existing securities;
3) shall make necessary application to the depository in this regard;
4) shall secure International Security Identification Number (ISIN) for each type of security and inform its security holders accordingly;
5) shall make timely payment of fees to the Depository and Registrar & Share Transfer Agent (RTA) in accordance with tripartite agreement into between them;
6) shall maintain security deposit of not less than two years’ with the Depository & RTA in such form as may be agreed between the parties;
7) shall comply with the regulations or guidelines or circulars or instructions, if any, issued by SEBI w.r.t dematerialisation of securities of unlisted public companies;
8) shall submit a half yearly audit report u/r 55 of SEBI (Depositories & Participants) Regulations, 2014 to the ROC.
Every shareholder of an unlisted public limited company, shall with effect from 2nd October, 2018 shall
1) get his/her/ its securities dematerialsed before transfer
2) who subscribes to any securities after the aforesaid date, shall ensure that his securities are dematerialised.
The grievances of a security holder of an unlisted public company shall be filed before the Investor Education & Protection Fund. The IEPF Authority is empowered to initiate action against any unlisted public company, depository, RTA.

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