Monday, April 1, 2002, Chandigarh, India

National Capital Region--Delhi



Y O U R  M O N E Y

Investor grievances & procedure for redress
on receipt of share, debenture, bond certificate, refund order, dividend etc are some of the general complaints from investors. Redressal of complaints is easy if they are properly handled. We give below a few guidelines in this regard.


Bicycle market still untapped
Mr Satish Kumar DhandaLUDHIANA: When other bicycle and parts’ manufacturers here are shifting to auto and other sectors, Mr Satish Kumar Dhanda, a name in bicycle industry, is trying to explore the untapped markets by producing high-quality and low priced bicycles. He is known for his intensive knowledge of domestic and foreign markets, and ability to convince the policy makers with down to earth knowledge.


Market loses ground on year-end considerations
iquidation of positions by traders ahead of the end of the fiscal year and concerns that technology companies may come out with conservative guidance for the new financial year when they announce that fourth quarter results, dogged the bourses last week.


Debar advocates from arguing before consumer courts
n round one, the lawyers have won and the consumers have lost. What happens in round two depends on the lobbying power of consumers and consumer groups.


Tax deductions
Q: I am a retired employee. My date of birth is May 10, 1936. So I became senior citizen in May, 2001. My pension during the assessment year 2001-2002 is Rs 85,112. I am earning an interest of Rs 26,520 annually from the monthly deposit scheme of post office.


  • Tyre puncture
  • Ad dampener
  • Disinvestment jitters

Karl Taro Greenfeld
Karl Taro Greenfeld, the newly appointed Editor of the Asian edition of Time magazine, poses with a toy bunny at his Hong Kong office. With his pony tail, trendy clothes and candour about former drug abuse, the 37-year-old Greenfeld, who was born in Kobe, Japan, and grew up in Los Angeles, may appear more at home in New York's wild and varied media set than in button-up Asia. The photo taken on March 29, 2002. — Reuters

Hyderabad is all set to launch the country's first Netphone.
(28k, 56k)



Investor grievances & procedure for redress
Hartaj Singh

Non receipt of share, debenture, bond certificate, refund order, dividend etc are some of the general complaints from investors. Redressal of complaints is easy if they are properly handled. We give below a few guidelines in this regard.

Public issue matters

(1) As far as possible stick to your best sub broker who offers post issue service rather than those who attract with spot incentive.

(2) Use block letters while filling up application form.

(3) Preserve a Xerox copy of original application form along with acknowledgement slip duly stamped by bank.

(4) In case of abnormal delay for allotment/refund order you may call for status of your application in allotment list from your sub broker and follow up with registrar either directly or through tour sub broker with following particulars.

  • Application No.
  • Name of Applicant
  • No of securities applied for
  • Cheque No./date/amount
  • Cheque/DD drawn on

Name of Bank/branch where application was deposited

You may send a xerox copy of application with acknowledgement slip with the above information by courier/Registered post to speed up action.

(5) If your grievance is not redressed even after above letter, you may send your complaint to Regional Office of SEBI under whose jurisdiction the company falls. SEBI will send you acknowledgement card with their reference upon receipt of your complaint. Similar complaint may be forwarded to respective Stock Exchange where the issue is slated to be listed. In case of BSE or NSE, it is to be lodged in their format. These complaints (SEBI/BSE/NSE) are to be sent in duplicate and copies may be marked to company/Registrar.

(6) After expiry of the time limit mentioned on acknowledgement cards of SEBI/BSE/NSE, you may send reminders to those authorities to take up effectively.

(7) In all probability, if step by step action is initiated, problem would be resolved. As a matter of chance if it is still persisting, you may lodge your complaint at Consumer’s Disputes Redressal Forum. You may even send a legal notice through your advocate. It may be noted that legal route is always expensive and time consuming as such it should be initiated as a last resort.

B) Secondary market matters

In case of complaint against a broker/registered sub broker or a company traded on the exchange. The complaints should be addressed to the Investor Grievance Cell (IGC) of the respective stock exchange. The investors are therefore required to furnish relevant contract or purchase/sale notes for referring their case to the IGC. In case of complaints against trading members/registered sub broker, the following documents need to be enclosed.

Copies of contract or purchase/sales notes.

Statements of accounts

Acknowledgement of securities delivered to the trading member (TM).

Copies of previous correspondence with the TM

Copies of previous correspondence with the company/registrar

The IGC forward the complaints received from investor to TM/the respective companies for necessary action at their end. The TM/company is required to file a response within 21 days. Further the exchange takes care of investors claim which arise out of non-settlement of obligations by TM for trades executed on the exchange. The investor protection fund (IPF) is used to settle claims of such investor whose trading member has been declared a defaulter.

The maximum amount of claim payable from the IPF to the investor where the TM through whom the investor has dealt is declared a defaulter is Rs 5 lakh.

C) Investment in companies fixed deposits

If the company defaults in payment of principal and/or interest. An investor can file an application with company law board. An application has to be filed on a specified form along with an application fee of Rs 50 is to be paid by Demand Draft drawn in favour of The Pay and Accounts Officer, Department of Company Affairs, New Delhi/Mumbai/ Kolkata/ Chennai, as applicable depending upon the place of complainant’s location.

Application is to be filed with the concerned bench of the CLB and bank draft is to be made payable at the same place. CLB would fix a date of hearing and provide an opportunity to the complainant to be present, ask the company’s representative to explain reasons for non payment and having heard them issue necessary directions. Through this means many investors have managed to recover their dues from companies.

Petition to consumer dispute redressal forum

A depositor may file an application with the District Consumer Disputes Redressal Forum. Here the procedures are quite simple and no court fees need to be paid. The application is to be filed on plain paper giving full facts of the case; Xerox copies of supporting documents like terms and conditions under which deposit was made, company’s reply to correspondence etc are to be attached.

There is no need of engaging a lawyer. The complainant depositor will have to be represent before the Consumer Forum as and when hearing takes place. If the applicant is not satisfied with the decision delivered by the District Forum, he may go in appeal to the State Consumer Disputes Redressal Forum and thereafter to National Consumer Dispute Redressal Forum.

Civil suit

Investor may file a civil suit also but there are legal and procedural hassles involved with it and it is expensive also and is usually long drawn and should be resorted to only if the other options fail.

The following table would provide you the guidance in this regard.
Grievance Redressal
Nature of grievance Can be taken up with

In case of any Public Issue, non-receipt of


Refund order


Interest on delayed refund.

— Dept. of Company Affairs

Allotment Advice

— Dept. of Company Affairs

Share certificates

— Stock Exchange

Duplicates for all of the above

— Registrars to the issue

Re-validations. — Registrars to the issue

In case of a listed security, non-receipt
of the certificates after:








—  Dept. of Company Affairs


—  Stock Exchange


—  Stock Exchange

Duplicates of securities

— Stock Exchange
Regarding/listed Debentures, non-receipt of  — SEBI

Interest due 

— Dept. of Company Affairs

Redemption proceeds 

— The Debenture Trustees

Interest on delayed payment 

— Stock Exchange

Regarding bad delivery of shares 

Bad delivery cell of the stock exchange.

Regarding shares or debentures in unlisted companies

Dept. of Company Affairs

Deposits in collective investment schemes like plantations etc.

Units of Mutual Funds SEBI
Fixed Deposits in Banks and Finance Companies Reserve Bank of India

Fixed Deposits in manufacturing companies

Dept. of Company Affairs



Bicycle market still untapped

LUDHIANA: When other bicycle and parts’ manufacturers here are shifting to auto and other sectors, Mr Satish Kumar Dhanda, a name in bicycle industry, is trying to explore the untapped markets by producing high-quality and low priced bicycles. He is known for his intensive knowledge of domestic and foreign markets, and ability to convince the policy makers with down to earth knowledge.

Mr Satish Dhanda, Managing Director, Sadem Bicycles, is considered as the pioneer in manufacturing multi-speed chainwheel and hubs. A post-graduate of Panjab University, he is currently producing more than 50,000 bicycles annually and parts with an annual turnover of Rs 15 crore. As a chairman of the Engineering Export Promotion Council (EEPC), he is actively associated with the R& D projects, market research and industry’s efforts to boost exports. Sharing his experiences, he says:

Initial phase of career

Initially I wanted to join the Indian Army but failed to join it. Later I did MA in Political Science and Economics besides BA, LL.B. Though my father was running a spinning mill, but I wanted to start my own unit independently. Because of the dominance of cycle and hosiery units in Ludhiana, I had limited option to join either of them. So in 1965, I started a cycle parts unit with a capital of Rs 10,000, taken as a loan under SBI’s pilot scheme. Within next two years, I entered the export market in the USA, and by 1971 expanded to Europe and Latin America covering 26 countries. In fact, I had realised that replacement period in domestic market for a cycle was much higher than in any foreign market, so I started concentrating on exports.

Major achievements

All of us used to feel that there was an unlimited export market for cycles, whatever we produced, would be easily sold in the market. The up-gradation of technology came later on, with the imposition of strict quality controls by different governments. Consequently, we had to improve our products and cut down costs. I enthused my workers to specialise in mountain, city and all terrain bikes fitted with 18-21 speed system. The company also entered into a contract with Shimano company of Japan for making components for MTB bicycles. Now we are producing aluminum alloy rims and frames as well. I want to devote at least next three years to ensure sustainable growth of exports and expansion of domestic market through policy interventions.

Problems I face in my career

After the imposition of higher import duty up to 12 per cent by the EU in 1995, I lost competitive edge, like other local exporters, to producers of China, Taiwan and Japan. Our group was forced to cut down production from one lakh cycles per annum to just 50,000. Now I am trying to shift my supply to the domestic market, under Kelvin brand. Secondly, I failed to patent my innovations, which were later copied by others.

Secret of success

I feel that I have a passion to create things in a planned and an innovative manner after thorough study of the market. I am trying to concentrate on developing market for kids’ cycles in the urban areas. Recently, we introduced fun trailer children’s bicycle and double suspension bicycle to cater to this growing market. Further, at the government policy level, I am making efforts to get Ministry of Commerce’s sanction to grant benefits under special export zone policy to the cycle cluster of Ludhiana. I firmly believe that there is a tremendous scope for the development of cycle market, which has been claimed as a ‘sun down’ industry by the pessimists, in the vast rural areas of the country.

What should be done by the government to boost bicycle industry

The government should impose sales and excise duty only at the final stage of production. The movement of all the raw material in the state should be allowed without any hindrance. Secondly, to increase total tax collections and absorption of local labour in the industry, it should invest in training, housing schemes for labour and in establishing anti-pollutant treatment plants in collaboration with industry. Like Tamil Nadu Government, other states can provide subsidised cycles to girl students to spread literacy and indirectly increase in demand for cycles. (As told to Manoj Kumar)


Market loses ground on year-end considerations
Lalit Batra

Liquidation of positions by traders ahead of the end of the fiscal year and concerns that technology companies may come out with conservative guidance for the new financial year when they announce that fourth quarter results, dogged the bourses last week. Selling by mutual funds to raise money to pay annual dividends and apprehension over the shifting of the market to the shorter T+3 settlement cycle, (from April 1, 2002 from T+5 settlement) also added to the fall. Last week of the fiscal year was a shortened week (just three trading days) as the market remained closed on Monday for Moharrum and on Friday for Holi and Good Friday.

The Sensex, during the last week of the fiscal year 2001-02, shed 46.76 points or 1.32 per cent to settle at 3,469.35 compared to the previous week’s closing at 3,516.11. For 2001-02, the Sensex shed 135.03 points or 3.7 per cent from its close 3,604.38 on March 30, 2001. Attractive valuations saw the Sensex bounce back from more than eight-year low at 2,594.87 that it reached on September 21, 2001 in the aftermath of the September 11, 2001 terrorist attacks on the USA.

Reports on Friday that the Income-Tax Department has sent notices to about 100 brokers asking them to send in details of all transactions of over Rs 20,000 each that took place up to February, 2002, will impact the market sentiment. The brokers have been given just three days to submit the details and they will be required to submit similar details every month from March 2002 onwards. Analysts say the criteria of trades of Rs 20,000 will cover most of the clients of the brokers. This is going to adversely affect the sentiment at bourses in the short run.

Even as the broad market remained subdued, stock-specific activity was witnessed last week. The oil sector hogged the limelight on the eve of its de-regulation, which becomes effective from next week April 1, 2002. Most oil sector stocks, including oil exploration and refiners, surged last week on expectations that their margins will go up after the de-regulation of the section with free pricing. The banking stocks also hogged the limelight during the latter part of the week.


The stock market is abuzz with talk that software major Infosys will come out with conservative guidance for the financial year 2002-03 when it announces its fourth quarter results on April 10, 2002.

As per market expectations, Infosys will give a guidance of conservative 15-20 per cent growth in revenues for the next year as against 30 per cent guidance for 2001-02. Moreover, the US recovery is not yet confirmed and there is always a lag effect of one or two quarters for the Indian IT companies to start getting orders. Besides, many US companies have cut IT spending projections for 2002-03, which remains a cause for concern for Indian IT companies. Infosys lost 2.48 per cent last week to settle at Rs 3,735.45.

Zee Telefilms

Zee gained 5.3 per cent for the week on expectations that the company will enter a strategic tie-up with foreign media major in the foreseeable future. The company said some time ago that it was scouting for a strategic business partner (a foreign media major) which would possibly take an equity stake in the company. The scrip seemed to be in the bullish orbit for the time being. The stock closed the week at Rs 167.8.

Coming fortnight

As far as the broad market is concerned, it is the correction mode. The Sensex can go down by another 100 points from its current level. Most of the mutual funds are selling in the market currently to raise money to pay yearly dividends. They year-end effect has also resulted in fall in trading volumes on the bourses. Thus a subdued trend will prevail on the bourses for a week or so as the recent Income-Tax Department notices will adversely impact market sentiment.

The undertone of the market, meanwhile, remains optimistic. With successful divestment of Hind Zinc, some action is expected in the PSU stocks, which are on the block for immediate dinvestment. Oil sector PSUs will be in the limelight with the dismantling of the APM for petroleum products. ONGC is likely to be the major beneficiary. Long-term investors can go bargain hunting if the market loses further ground.

by Pushpa Girimaji

Debar advocates from arguing before consumer courts

In round one, the lawyers have won and the consumers have lost. What happens in round two depends on the lobbying power of consumers and consumer groups.

If you look carefully at the Consumer Protection (Amendment) Bill that was passed by the Rajya Sabha this month, you will realise what I am talking about. Well, when the Union Ministry of Consumer Affairs introduced the bill in the Rajya Sabha on April 26 last year, it contained a clause that sought to restrict the appearance of advocates before the consumer courts. This proposed amendment said the opposite party appearing before the consumer courts shall not be entitled to be represented by a legal practitioner, unless the complainant himself or herself is a lawyer or engaged a lawyer or has no objection to the opposite party engaging a legal practitioner. And the explanatory memorandum accompanying the Bill said this was meant to “reduce the possibility of protracted proceedings”.

As expected, the proposal invited the displeasure of legal practitioners who even threatened to go on a nationwide agitation in protest against it. However, what was not expected was the sudden decision of the Union Ministry of Consumer Affairs to drop this clause in the amendment Bill that was already before the Rajya Sabha.

Consumer opposition to the predominance of lawyers in these quasi-judicial forums meant to resolve consumer disputes is not new. Even in 1993, when the law was last amended, consumers had campaigned for a ban on lawyers appearing before these courts. And this demand was not without reason. When the CP Act came into being, what was promised was a simple, quick and inexpensive consumer dispute resolution mechanism that allowed consumers to present their complaint without the help of a lawyer. However, consumers found the reality to be vastly different.

Complainants soon found, much to their discomfort, that the consumer forums were dominated by lawyers. They not only turned the procedure highly technical, but began to seek and get repeated adjournments, thereby delaying the process of justice. As these courts began to resemble regular law courts in every respect, consumer groups started demanding that advocates be barred from arguing before these courts.

A comprehensive study sponsored by the Union Ministry of Consumer Affairs and conducted by the Indian Institute of Public Administration in 1994 on the functioning of these forums also confirmed the worst fears of consumers. Among the reasons pinpointed by the IIPA for delayed justice before these courts were (a) granting of too many adjournments at the request of advocates (b) delaying tactics adopted by opposite parties or the advocates and (c) technical and time-consuming procedures needlessly adopted by the courts. The study also said the highly formal and ‘court-like’ atmosphere in these forums and the hyper technical procedure discouraged consumers from arguing their own case as they felt that it would be better to engage an advocate in order to win the case. And that made filing a complaint before the consumer forum, an expensive proposition.

As several other studies conducted by consumer groups as well as individual consumers reinforced these points, the Consumer Affairs Ministry seriously considered the demand of the consumers and eventually, in consultation with the Law Ministry, decided that it was best to restrict the role of advocates before these courts. But obviously the decision was short-lived.

However, consumers need not feel disheartened. The Bill will now be considered by the Lok Sabha and that gives consumers an opportunity to convince MPs to re-introduce the clause before passing it, provided of course they have the necessary stamina to take on the advocates and the various ministries that provide public utility services and are often dragged to consumer courts for deficient service..

Having said that, I must give consumers some good news too. Two changes were made by the government in the bill that was eventually passed by the Rajya Sabha: one unwelcome and the other, highly welcome.. I have so far written about the first. The second change that should really make consumers happy pertains to the proposed amendment to Section 3 of the CP Act. This amendment that sought to restrict consumer choice in respect of redressal forums and considerably reduce the jurisdiction of the consumer forums, had been strongly opposed by consumer groups. Even the Parliamentary Standing Committee that had examined the bill had criticised it and recommended that it be withdrawn. This has been done.

In fact, this particular amendment to Section 3 was not in the Bill drafted by the Union Minister for Consumer Affairs at all, but was later added at the behest of his Cabinet colleagues. Following strong consumer opposition, the Ministry of Consumer Affairs wanted it withdrawn. Apparently, the minister had to sacrifice the clause on advocates in order to get the nod of his Cabinet colleagues for dropping the amendment to Section 3.

However, consumers still have time to convert defeat into victory. But advocates are an influential lot and so consumers need to employ considerable lobbying skills to push their cause.

by R. N. Lakhotia

Tax deductions

Q: I am a retired employee. My date of birth is May 10, 1936. So I became senior citizen in May, 2001. My pension during the assessment year 2001-2002 is Rs 85,112. I am earning an interest of Rs 26,520 annually from the monthly deposit scheme of post office. I have also an income of Rs 36,000 per annum from the house rent. In June, 2001 I invested Rs 2.50 lakh in the Fixed Deposit with the State Bank of India for a period of three years, the interest of which will be paid after maturity. Besides this, I also invested Rs 1.80 lakh in Fixed Deposit with Punjab Tractors and they deduct the income-tax @ of 20 per cent on dividend at sources.

What type of deductions I am eligible under the income-tax law and under which Section? How could I absolve myself from tax liability by making future investment in a lucrative schemes keeping in view my age factor.

— Kartar Singh Ghai,


Ans: On the facts stated a by you, you will not be liable to any income-tax mainly because you are a senior citizen. You are entitled to tax rebate of Rs 15,000 u/s 88B of the Income-tax Act, 1961. Please remember that from your pension income you are entitled to standard deduction @ 33 1/3rd%. Similarly, in respect of the monthly income from the Post Office you will be entitled to a tax deduction of Rs 9,000 u/s 80L. Out of your rental income you will be eligible for a standard deduction for repairs, etc. to the tune of 30 per cent of the rental income. Thus, after calculating the gross income and the deductions as also deducting there from the tax rebate permissible to a senior citizen your tax liability will be nil.

IT return

Q: My wife travelled to USA alongwith myself, air tickets purchased by me and overseas expenditure met by our son, working in USA. I retired from services, filing the IT returns regularly. In this case, is my wife required to file the IT return under 1/6 scheme and apply for P.A.N., when she (house lady) has no source of income.

— Tarsem Jain, Patiala

Ans: Your wife will not be required to file her income-tax return because the expenditure on foreign travel has been met by your son.


Q: What is the definition of HUF? What is exemption limit for HUF?

— H.S. Brar, Moga

Ans: The definition of HUF means Hindu undivided family. The exemption limit of income-tax for HUF is Rs 50,000. The rate of income-tax payable by HUF is exactly the same as applicable to an individual. Similarly, the exemptions and deductions which are permissible to individual tax payers are equally application to tax entity in the form of HUF.


Tyre puncture

The grapevine has it that the Mumbai based broking house that quietly acquired a fair chunk of the shares of a laid back tyre manufacturing company that was caught napping, is now getting set to negotiate the sale of that stake to one of the company’s competitors. Watch this space.

Ad dampener

While all and sundry in the market are waiting with bated breath for a TV channel’s proposed promising revised content mix, there are strong whispers that the persons who matter, the advertisers are hitherto unimpressed. They prefer to remain ‘starry’ eyed, it seems.

Disinvestment jitters

The corporate cocktail circuit in the capital is abuzz with rumours that there just might be the proverbial last minute slip between the cup and the lip as far as the much touted PSU disinvestment schedule is concerned. Havent’ we heard that one before somewhere, sometime?


Inflation falls
New Delhi, March 31
Inflation fell marginally by 0.07 per cent to 1.44 per cent for the latest reported week due to sharp fall in the prices of primary commodities and marginal increase in the price of manufactured products. The index was, however, as high as 6.70 per cent in the same period a year ago. PTI

New Delhi, March 31
Escorts group cellular company Escotel will repay Rs 70 crore of its debt to banks and financial institutions in the 2002-03 fiscal, a senior company official said. Out of the total outstanding debt of Rs 850 crore from banks and FIs, we would be repaying Rs 70 crore in the 2002-03 fiscal”, Manoj Kohli, Chief Executive, Escotel Mobile Communication Ltd told. PTI

SBI debit card
Mumbai, March 31
The State Bank of India (SBI) is planning to introduce its debit card in May after the test-marketing of the product in April. SBI Chief General Manager Mr B Behera told UNI that the bank, in its Mumbai circle, is currently running a pilot project on debit card with 60 vendors. UNI

New Delhi, March 31
In a significant step towards cancer management, Dabur group, leader in the field of oncology, has launched the country’s first Molecular Diagnostic Lab to help in customising cancer treatment. UNI

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