Monday, August 6, 2001,
Chandigarh, India

Y O U R  M O N E Y

How to buy a house
Once an intending purchaser, after ascertaining his budgetary limits, has closed down the priorities over the choice of location, size and category of the house/flat, he has to keep some other important points while going for a bargain.

Beware of unauthorised colonisers
The recent announcement of the Chief Secretary of Punjab to develop new satellite towns near Ludhiana in Doraha, Mullanpur, Goraya and Sahnewal to decrease the pressure of population on the mega city, has generated a lukewarm response among colonisers, property dealers and customers. 

  • PUDA approved colonies
  • Unapproved colonies

  • Old colonies

Investment tips
Q: I hold 200 shares of Satyam Computer Services bought at about Rs 200 each. Should I continue to hold them or I should disinvest them at the current level?




Consumer has right to information
Pushpa Girimaji
URING the month of March last year, Mr K.B. Lal submitted a proposal for “Nav Bharat” plan for senior citizens floated by the Life Insurance Corporation and paid Rs 17,465 towards the policy. However, the LIC returned the money after two months on the ground that it was refusing him the policy. It did not assign any reason for doing so, forcing Mr Lal to file a complaint before the Insurance Ombudsman in New Delhi.



How to buy a house
R. P. Malhotra

In a nutshell

* Ascertain the resale aspect

* Update your knowledge of prevailing price

* Verify ownership title

* Check legal position of property

* Check allotment conditions governing resale

Once an intending purchaser, after ascertaining his budgetary limits, has closed down the priorities over the choice of location, size and category of the house/flat, he has to keep some other important points while going for a bargain.

One of the foremost points to be kept in mind at the time of purchasing a house is to ascertain the resale aspect of the property. Property at a strategic location and of clean title can always be traded quickly at a good price. The intending purchaser should check the orientation of the property under question. A corner house situated in the wind direction and facing park or on the wide street is considered to be the best-termed orientation.

A best-located house should not be too close to the market, school and hospital but it should have easy proximity to these places.

The house near the main road/railway line or sewerage canal should not be preferred to avoid noise and pollution. The social matrix of the surroundings where the house is located should also be looked into as the atmosphere where your children will be raised is going to matter most.

Before finally going for a bargain, one must update oneself about the authenticity of the prevailing price factor of the property. A reputed real estate agent matters much in this direction. Established real estate consultants should always be preferred over the part-time jobbers sans any permanent office because an agent of repute, having an establishment, can’t afford to trick his customers.

After the price check, next comes the verification of the ownership title of the property in question by scrutinising the documents pertaining to the property. The transfer of property act 1882 makes it obligatory on the part of the purchaser to exercise due diligence and make all reasonable enquiries about the title and ownership of the property intended to be purchased.

The purchaser is required to check whether the property, he is going to buy, is free from all kind of encumbrances, lien, charges and limitations such as prior sale, mortgage, litigation, court orders, restriction of sale under trusts, right of charges and minor rights.

Encumbered property with legal embargos, limitations and a property purchased from a seller not having a legal title or authority to sell may result in the purchase to be declared void in an action by the real owner having the actual right to the property.

Again, a well-established and reputed real estate agent, well versed with property documentation, can play a vital role in safe guarding the interests of the purchaser. The purchaser may go for the freehold property, with clear transferable title, without having any embargo on sale and can get the absolute ownership of the property transferred in his name through a sale deed duly registered in the office of the Sub Registrar of the area.

In case of non-transferable properties, the purchaser has the option of having the ownership rights transferred in his name through the indirect sale documents such as General Power of Attorney, will, affidavit and agreement to sell duly registered and executed before the Sub Registrar of the area.

The revenue authorities of Chandigarh and its adjoining cities of Panchkula and Mohali have formulated building bylaws to ascertain the proper and planned use of the buildings in their respective territories. Any violations in the building plan against the bylaws lead to resumption proceedings, penalty as compounding fee or demolition of the unauthorised portion of the building by the authorities, as the case may be. Misuse of the building also attracts similar penal proceedings under the building bylaws. The intending purchasers must check the legal position of the property at the time of purchase.

The authorities in the Chandigarh trio complex have also introduced a policy of charging extension fee from those plot owners who have not completed the building within a stipulated time schedule as prescribed in the allotment letter of the plot. This fee gets enhanced year after year accumulating to a considerable amount.

This amount being the sole liability of the seller, the purchaser must ensure to deduct this amount along with other pending dues to be paid to the department before making final payment to the seller, especially in case of bargain through GPA. In case of Chandigarh, extension fee is exempted to the house owners having obtained the permission to connect sewerage prior to 22.1.1993.

The purchaser must ensure to check the copy of sewerage connection permission while scrutinizing the original papers pertaining to the property.

In case of defence quota or other concessional/priority allotments, where the resale is allowed subject to certain conditions, the purchaser should be extra cautious to check the allotment conditions governing the resale.


Beware of unauthorised colonisers
Manoj Kumar
Tribune News Service

PUDA approved colonies


Rate of land/sq yd


1. South City Rs 2000-3000 Along the Ferozepur road

2. Basant Vihar

Rs 2200-2500 On Jawadi road

3. Sarabha Nagar Ext.

Rs 1500-2000 Pakhowal road
4. Sector 32 Rs 1200-1500 Chandigarh road

5. Shaheed Bhagat Singh Nagar

Rs 3500-4000 Dhandra road

Unapproved colonies

6. Lohara, Dhandari

Rs 600-650 Chandigarh road

7. Mundia, Dhamia

Rs 600 Chandigarh road

8. Jaspal Bungar

Rs 650 Chandigarh road

9. Unnamed colonies near Gill village

Rs 700-750 Dhandra road

10. Azad nagar

Rs 800-900 Bhadhareke road
Old colonies

11. Model Town Extension

Rs 7000-10,000  Near bus stand

12. Gurdev Nagar

Rs 8000-10000 Near PAU

The recent announcement of the Chief Secretary of Punjab to develop new satellite towns near Ludhiana in Doraha, Mullanpur, Goraya and Sahnewal to decrease the pressure of population on the mega city, has generated a lukewarm response among colonisers, property dealers and customers. In fact, the property rates in the approved and unapproved colonies have been stagnating here for the past two-three years due to the recession in the industry and the mushrooming of unauthorised colonies on all sides of the city.

The major colonies, which are coming up on the outskirts of the city, are South City on the Ferozepur road, Basant Vihar, Sarabha Nagar Extension, Shaheed Bhagat Singh Nagar on the Dhandra road, Pakhowal road and Sector 32 on the Chandigarh road and other colonies on the Ludhiana- Khanna road. These colonies are approved by the Punjab Urban Development Authority (PUDA) under the PUDA Colonisers Act, 1995, and are being developed by the approved colonisers with all modern facilities.

A survey of the approved and unapproved colonies by The Tribune team revealed that out of around 50 new developing residential colonies in Ludhiana, only 20 per cent are approved by the PUDA and the rest are being developed by the unauthorised colonisers in connivance with some PUDA officials. There is a marked difference between the land prices in the approved and unapproved colonies, besides the facilities in them.

The land rates in the unapproved colonies in Dhandari, Mundia, Lohara, Dhamia colonies and unnamed ones on the Tajpur road are just Rs 600-650 per square yard. The plot size varies between 50-100 square yard and the civic amenities are almost non-existent. The colonies are mostly inhabited by the migrant labourers and the lower income groups. On the other hand, the land prices in the PUDA approved colonies are between Rs 2000-3000 per square yard with several civic amenities.

Mr Y.P.S. Bhalla, Managing Director of the South City project says: “We are selling plots at a rate of Rs 2,000-3,000 per square yard and providing international level facilities such as school, marketing complex, wide roads, water supply, cinema, club, sewerage, street lights, etc.

He pointed out that the rates of the real estate had been almost stagnant in the city for the past 2-3 years due to slump in the hosiery market and mushrooming of the unapproved colonies. The rates of property that were around Rs 1,200 per square yard in 1995-96 had increased to Rs 2,000 square yard by 1998-99, however, after that period, the rates had increased marginally.

Mr Harcharan Lamba, a coloniser and General Secretary of the Punjab Builders and Colonisers Association, admits that the rates of the property have not picked up for the past many years. He said, “The demand for residential plots is from need- based buyers. The National Housing Policy of the Central Government has given a boost to the industry by providing tax incentives. However, the share of speculative buying in the whole real estate market is negligible.”

The banks and the LIC are providing liberal loans for housing. Mr Raman Khetar Pal, Vice-President, PNB Housing Finance, disclosed that loans were available at a rate of 10.75 to 14.75 per cent depending upon the category of loan and risk factor. The LIC and the HDFC are the major lenders in the market. The Income Tax Department is providing rebate on housing loan up to 20 per cent of the principal amount with a maximum limit of Rs 60,000 for all savings claimed at IT rebate in addition to the total interest payments on the housing loans, he said.

Enquiries made at the Sub-registrar office revealed interesting facts. There is a marked difference between the market rate of land and the rates quoted for the purpose of registration. The average difference between both rates is anywhere between 100 and 300 per cent. Sources said the high rate of the stamp duty for the registration was the main cause of under voicing in the prices.

Mr Kultar Singh Jogi, President, the Punjab Colonisers and Property Dealers Association (unapproved colonisers), said: “The stringent conditions of the PUDA Colonisers Act have resulted in the mushrooming of unauthorised colonies. PUDA does not differentiate between the HIG, MIG or LIG colonies while charging the development charges. There is more margin in developing unauthorised colonies, which are mostly sold to the lower strata of the society at lower prices. Secondly, one has to just get a bail of Rs 5,000 while caught violating the Act.”

The colonisers suggest that PUDA should strictly check the growth of the unapproved and illegal colonies, besides making amendments in the PUDA Colonisers Act. Otherwise after a few years, approved colonies would be surrounded by the sea of slums and there would be no place free from pollution and squalor.



Investment tips
Lalit Batra

  • Satyam Computer
  • Pfizer
  • DSQ Software

Q: I hold 200 shares of Satyam Computer Services bought at about Rs 200 each. Should I continue to hold them or I should disinvest them at the current level?

— Surinder Singh, Panchkula

Satyam Computers is one of India’s leading software companies. Its expertise lies in legacy applications, client server projects, e-business and telecom solutions. The company has been shifting its revenue model from a low-end service provider to offering end-to-end technology solutions. Satyam has benefited from this transition in terms of better growth opportunities and higher margins.

The company in the quarter ended June 2001 has reported a total income of Rs 411.9 crore — an increase of 73.6 per cent over that of the parallel quarter last year. The net profit surged by 141% to Rs 121.46 crore on the quarter-to-quarter basis. Though the company has been reporting excellent results, its share price has taken a beating due to concern over its two loss-making subsidiaries, Satyam Infoway and Vision Compass Inc. Starting June 2001, the company is required to show a consolidated balance sheet with its subsidiaries. This will put a strain on its balance sheet. But if during the current year Satyam Infoway shows cash profits, it will give a big boost to the share price of Satyam Computers. So should hold on the stock while keeping a close watch on the performance of Satyam Infoway.

Q: I hold 50 shares of Pfizer bought at a price higher than the current market price. Do you advise me to buy more shares at the current level so that I can lower my per share cost?

— Ramesh Kumar, Mohali

Pfizer India is the 40% affiliate of $26.9 billion Pfizer Inc. It has 2.5% share of the Indian formulation market. Some of the well-known brands of the company include Becousules, Corex, Protinex, Dolonex, and Terramycin. During the last few years, the company has undertaken operational restructing and voluntary retirement schemes. These have begun to yield results. For the quarter ended May, 2001, the company has reported a 35.8 per cent increase in its net profit to Rs 12.63 crore on the sales of Rs 76.72 crore. The company’s subsidiary Duchem Labs has done well after it turned around. Duchem Labs is slated to merge with Pfizer in the current fiscal. The company’s joint venture with Shantha Biotech has also been doing well. Moreover, its new products such as Magnex, Magnamycin and Minipress XL, have been growing at a fast pace.

Post merger (with Duchem Labs) Pfizer will be Rs 600 crore company with a market share of 3.5 per cent. It is the fastest growing multinational pharma company with a sales growth of around 19%. The company’s stock is currently quoting at the Rs 430 level. Since there is nothing wrong with the fundamentals of the company, the stock can be bought in small lots to get the benefit of any new declines.

Q: I bought 500 shares of DSQ Software at Rs 100 a share just before the introduction of the rolling settlement system. The company has recently been delisted from the BSE and the NSE. What is the future of this company?

— R.S. Sidhu, Chandigarh

DSQ software was set up in the year 1992. The company provides IT consulting and software development services in diverse application areas. It has offshore software development centres based in Chennai, Mumbai, Bangalore and New Delhi. The company boasts of a list of clients, some of which, like Deutsche Bank, Bank of America, Computer Associates and Cisco, belong to the elite list of Fortune 500. Though it has been churning out a fairly good performance, the shareholders are a disappointed lot today. The reason for this is that the company, apart from being delisted from the BSE and the NSE, last Thursday was being traded at Rs 34 down by 98 per cent from the last year’s high.

This is due to the fact that the promoter, Mr Dinesh Dalmia, has been accused of being involved in price manipulation of the scrip with some of the Kolkata brokers. Moreover, the company recently acquired Fortuna Technologies and issued capital without informing the two Indian stock exchanges (BSE and NSE). This led to its being delisted from these stock exchanges. To top it all, the company’s performance for the latest quarter, ending June, 2001, has been dismal. The company reported a 62 per cent fall in its net profit to Rs 9.6 crore on revenue of Rs 80.45 crore. Considering all these factors the investor should exit from the company as soon as its stock is again listed on the exchanges.


Consumer has right to information
Pushpa Girimaji

DURING the month of March last year, Mr K.B. Lal submitted a proposal for “Nav Bharat” plan for senior citizens floated by the Life Insurance Corporation and paid Rs 17,465 towards the policy. However, the LIC returned the money after two months on the ground that it was refusing him the policy. It did not assign any reason for doing so, forcing Mr Lal to file a complaint before the Insurance Ombudsman in New Delhi.

The Ombudsman’s observations in this case highlight the scant respect shown by the insurer towards the consumer’s right to information. Apparently, on October 30, 1999, the LIC had issued detailed instructions on the eligibility criteria for this scheme, which included certain minimum health requirements and as per these guidelines, Mr Lal was not eligible for the policy. But this information about the eligibility criteria was not provided in the brochure issued by LIC. Nor did the agent inform Mr Lal about them. As a result, Mr Lal not only took the trouble of filling up the proposal form and sending the money towards it, but also underwent unnecessarily, a series of medical tests required for the policy. And then after refusing the policy, the LIC did not think it fit to give him any explanation for it.

After hearing both parties, Mr N. K. Verma, Ombudsman, Delhi and Rajasthan, pointed out that if only adequate information about the policy was available to Mr Lal, he would not have been forced to undergo certain medical tests unnecessarily. He, therefore, asked the LIC to reimburse the cost of medical examination to Mr Lal and also pay interest at 12 per cent per annum on the amount of Rs 17,465 that the LIC had kept with it for two months. (K. B. Lal vs LIC, date of award, February 9, 2001).

Today, the business of insurance is not restricted to the LIC and the subsidiaries of the GIC alone. With 14 new insurance companies coming into the market, the consumers have a choice of insurance products. However, in order to buy the right policy that is best suited to one’s needs, a consumer should know the advantages and disadvantages of various policies, the terms and conditions, the exclusion clauses, the add-ons, in short every bit of information that is relevant to a policy.

In fact, in the aftermath of the Gujarat earthquake, it was found that many of the affected people did not have an earthquake cover, even though they had a standard fire and special perils policy. The reason was obvious: earlier, if you bought a fire insurance then you also automatically got earthquake cover. However, in May 2000, the Tariff Advisory Committee effected a reduction of 22 per cent in the fire insurance premium and provided for earthquake risk as an add-on cover for a nominal amount. But obviously, consumers were not told about this by the insurers or their agents.

Similarly, I remember the case of Kumari Virbala P. Shah, who could have got the ‘pregnancy clause’ in the insurance policy waived by paying an additional sum of Rs 5 per thousand of the assured amount. This clause denied the nominee, the full insured amount in case the death was directly or indirectly attributed to pregnancy. Hero too, the agent did not inform the policy holder of this and subsequently, the LIC repudiated the claim of the nominee on the ground that her death in a London hospital two days after delivering a child was attributable to pregnancy. Finally, it was left to the child, after attaining the age of 21, to fight the case before the consumer court and get the insured amount from the LIC (CERC vs LIC, FA 187 of 1992, NC).

The consumers, however, need not despair. While the Consumer Protection Act specifies six basic rights of consumers, the Regulations on the Protection of Policy Holders’ Interests, being formulated by the Insurance Regulatory and Development Authority, will further expand on these rights with specific reference to consumers of insurance services. Once these are notified, an insurer had no option but to respect the rights of consumers.


Standard deduction
R. N. Lakhotia

Q: I am an ex-serviceman drawing pension from defence and also drawing salary on my re-employment at present.

Whether I am eligible to take benefit of standard deduction on both side income, like salaried person getting family pension, are benefited.

— H.S. Sandhu, Sector 22-B, Chandigarh

You will be eligible for standard deduction on your salary income u/s 16(i). In respect of your income from family pension, a separate deduction will be available to you @ 1/3rd of the pension amount subject to maximum of Rs 15,000. The deduction in respect of family pension amount is as per Section 57 of the Income-Tax Act, 1961.


Q: I am a bank employee I have received arrears for the financial year 1997-98, 1998-99 and 1999-2000 in April 2000 Rs 40,000. I have made investments upto Rs 60,000 in the years 1997-98, 1998-99 and 1999-2000 whereas my investments upto Rs 50,000 were sufficient to meet my tax liabilities thus I have invested Rs 10,000 more in each of the above years. My questions are:-

i) If I bifurcate my arrears in the previous years whether the tax benefit of 2,000 will be available to me for my extra investment of Rs 10,000 in each of the above years.

ii) If so, how can I avail this benefit in this financial year for the assessment year 2001-2002.

— Surjit Singh, Brij Nagar

As per Section 89(1) read with Rule 12A of Income-Tax Rules, your employer can grant you the benefit of tax relief in respect of arrear salary. For this purpose, you should submit Form No. 10E to your employer and bifurcate the arrear salary in different years. The additional investment which has already been made in the earlier years will be considered for the purpose of tax rebate in different years.

Disability rebate

Q: I am in Government service income-tax payee and having more than 40 per cent permanent partial disability. Can my employer give me rebate for Rs 40,000 under 80-U.

— H.R. Goyal,

Mohalla Pathshala

The deduction for permanent physical disability u/s 80-U amounting to Rs 40,000 can be granted to you by your employer. For this purpose please comply with the formalities regarding submission of the certificate from Oculis or a physician or a surgeon working in Government Hospital. Also go through in greater details of the list of permanent physical disabilities for the purpose of section which are mentioned in Rule 11D of the Income-Tax Act, 1961. To enable you to get this benefit, the permanent physical disability should be of more than 50 per cent in one limb.

Medical allowance

Q: I am a college lecturer in Punjab. I am getting Rs 250 per month as a F.M.A. I met with an accident on March 21, 1999 in which both my legs were fractured. Since then I am going under treatment in Sir Ganga Ram Hospital, Delhi and spending a lot on my treatment. For six times (one in Government Hospital + 5 times in Ganga Ram Hospital) I have been hospitalised and operated. I have spent a lot and still going under treatment. I am neither getting nor reimbursed my expenses from the Government on my treatment. Kindly let me know, do I get any rebate from the Income-tax. I shall be obliged to you.

— Dr Devinder Kaur, Malwa Colony

I do have full sympathy for the accident suffered by you and the treatment which you are having. Unfortunately, under the Income-tax law, it is not possible to avail any tax deduction on the medical expenses so incurred by you.



Inflation dips
New Delhi, August 5
Annual inflation rate made yet another fall by 0.14 percentage points to 4.96 per cent for the week ended July 21 even as primary and manufactured products became costlier. The WPI, however, stood unchanged at the previous week’s level of 160.8 during the period. The index was 153.2 a year ago. PTI

SBI forex
Kolkata, August 5
The State Bank of India is fast losing its hold in forex market operations if its continuous decline in exchange profit for the past three years is any indication. From a high of Rs 569 crore exchange profit in 1998-1999, the country’s largest bank’s profit came down by 42.18 per cent to Rs 329 crore in 1999-2000 from Rs 569 crore in 1998-1999 and dipped to Rs 304 crore in 2000-2001, SBI sources said. It shows that during the period starting 1999 to 2000-2001, SBI’s exchange profit came down to almost half showing a decline of 46.58 per cent. PTI

Allahabad Bank
Patiala, August 4
Allahabad Bank is planning to open 100 more retail banking boutiques during the current year seeking an encouraging success in the scheme introduced by bank last year. The bank officials said that 57 new retail banking boutiques will be opened throughout the country in the last week of August to give greater thrust in retail financing in future. OC

Uco Bank
Shimla, August 5
Uco Bank has decided to introduce new schemes including ‘Uco Trader (revised) scheme’ under which loans upto Rs 100 lakh would be available to meet the requirement of business class in the state. PTI

CII seminar
Mumbai, August 5
The CII western region is organising a two day seminar on “Enter Media 2001” here on August 7 and 8. UNI

Home | Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Editorial |
Business | Sport | World | Mailbag | In Spotlight | Chandigarh Tribune | Ludhiana Tribune
50 years of Independence | Tercentenary Celebrations |
121 Years of Trust | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail |