Tag: Madras High Court

HC deplores “administrative arrogance” of SBI officials, BFSI News, ET BFSI

Banking & Finance

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Chennai, The Madras High Court has deplored the “administrative arrogance” on the part of the officials of the leading premier public sector bank State Bank of India towards its customers. What prompted Justice S M Subramaniam, who slammed the bank officials, was a statement of the officials that the customers (in this case the stamp vendors) are at liberty to approach any other bank for their transactions.

“The above statement in the counter filed by the State Bank of India is to be construed as an irresponsible one. The SBI is a public sector bank and the authorities are the public servants. The petitioners are depositing cash in the government accounts on behalf of the government through Treasury Challans issued to them.”

“The statement portrays the ‘administrative arrogance’ on the part of the authorities in exercise of their powers and the tenor of the statement is a threat to the public administration, as the stamp vendors have no option but to deposit money only in government accounts at SBI branches,” the judge said and directed its Assistant General Manager to initiate appropriate disciplinary proceedings by conducting an enquiry and find out on what circumstances such statements were allowed to be made in the counter affidavit filed before the High Court.

The judge also directed the bank’s general manager to sensitize his subordinates in this regard to develop good conduct with the customers and the citizens. These employees/officials must be reminded that from and out of the transactions through the customers and citizens, their salaries are paid. Thus, they are expected to maintain good conduct always and honour the rights of the customers, the judge added.

The judge made the observations while allowing a batch of writ petitions from the stamp vendors, who prayed that the SBI authorities waive off fully the cash handling charges collected from them in pursuant to an official communication from the State Treasury authorities issued in March 3, 2016 and consequently forbear the relevant SBI branches in the City from collecting any cash handling charges forthwith from the petitioners for purchase of stamp papers.

The judge declared the collection of cash handling charges from the stamp vendors/petitioners by the SBI as illegal and without any authority and directed it not to do so, while the stamp vendors deposit cash in government accounts through treasury challans.

The highest authority of the SBI was also directed by the judge to communicate this order, along with necessary circular/instructions, to all SBI branches and upload the same in its official website, to enable the citizens to know their rights. PTI COR SA APR APR



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HC judge appoints retired judge to settle claims made by depositors, BFSI News, ET BFSI

Personal Finance

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The Madras High Court has appointed Justice N Kirubakaran, a retired judge of the High Court, as Commissioner to take over the entire affairs relating to settlement of claims made by the depositors, who were allegedly cheated by the Ambattur Nadargal Dharma Paripalana Sangam here.

The Commissioner shall cause public notice within a week in two vernacular dailies calling upon persons, who had invested amounts in the petitioners fund to file necessary formal applications along with proof of such deposit and after verification of the said claims, shall settle the amounts due to the depositors.

Justice M Dhandapani made the appointment while granting anticipatory bail to two admins of the Sangam, who apprehended arrest following complaints from the investors.

“Considering the facts and circumstances of the case and also taking into consideration the affidavit filed by the petitioners stating that they would settle the amount due to the victims and abide by any condition that may be imposed by this Court, to give a quietus to the entire issue and also to have the matter settled so that all the depositors, who have invested money in the fund are not deprived of their hard earned money, in the interest of justice, is inclined to appoint a retired judge of this Court as Commissioner to settle the deposits between the depositors and the petitioners,” the judge said.

The entire exercise of receiving the claims, scrutinising and settling the same shall be completed within three months.



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Madras High Court withdraws order on bumper-to-bumper insurance

Banking & Finance

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The Madras High Court has withdrawn its order on bumper-to-bumper insurance following submissions made by counsels of Insurance Regulatory and Development Authority of India (IRDAI), General Insurance Corporation of India (GIC) and the Society of Indian Automobile Manufacturers (SIAM) that the Court’s direction may not be conducive and suitable for implementation in the current situation.

Upon hearing the submissions made on behalf of IRDAI, GIC and SIAM, it would appear that the order dated August 4, 2021 mandating the coverage of bumper-to-bumper policy may not be logistically and economically feasible for effective implementation in the present legal dispensation, said Justice S Vaidyanathan in his order issued on Monday.

It was submitted that the directions issued by the Court in Paragraph 12 and 13 of the order have unintended impact, causing severe repercussions on the society and therefore, the directions issued may be withdrawn in the interest of policyholders, automobile industry and public at large.

Further, the issue of long-term third-party insurance coverage has been mandated by the Apex Court in September 2018, and IRDAI has been periodically monitoring the changing scenario from time-to-time. Hence, there is no need for issuance of such compulsory directions, it said.

 

The Court heard the submissions of senior counsels MB Raghavan for IRDAI, S Arunkumar for GIC and N Vijayaraghavan for SIAM, who stated in one voice that the views expressed by this Court on August 4 in respect of protective coverage to uninsured innocent victims, such as gratuitous occupants in a private car and pillion riders, will be duly taken care in consultation with IRDAI to safeguard the interest of innocent victims, which is the anxiety of the Court.

‘Better insurance’

Raghavan submitted that IRDAI will consider better and fuller insurance coverage to all unfortunate victims, be it drivers, owners or gratuitous occupants or pillion riders, as the case may be and prayed for suitable modification or withdrawal of the directions issued by this Court on August 4.

“Considering the overall submissions made by the parties, including Vijayaraghavan and taking into account the concern of the IRDAI, this Court feels that the direction issued by this Court on August 4, in Paragraphs No. 13 may not be conducive and suitable for implementation in the current situation. Therefore, the said direction in Paragraph No. 13 is hereby withdrawn for the present,” the order said.

 

“This Court hopes and trusts that lawmakers will look into this aspect and examine the need for suitable amendment in the Act, relating to wide coverage of vehicles to protect the innocent victims,” it stated.

In view of withdrawal of the direction regarding bumper-to-bumper policy, the Circular dated August 31, issued by the Joint Transport Commissioner, Chennai, also stands cancelled. The Registry is directed to remove Paragraph No. 13 from the earlier order of this Court dated August 4 and issue a fresh copy of the order to the parties concerned, the order said.

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All you wanted to know about bumper-to-bumper insurance

Personal Finance

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Shyam, who is on the verge of buying a car, finds himself discussing more about car insurance than the car itself.

Manohar: So Shyam have you finalised the car you want to buy?

Shyam: Yes, but that seems far easier than deciding on an insurance plan to go with it. The dealer informs me that something called ‘third party’ insurance is mandatory and now a new bumper-to-bumper cover is all over the news.

Manohar: Yes, the Madras High Court has issued an order mandating bumper-to-bumper insurance cover every year, apart from providing cover for the driver, the passengers and the owners of the vehicle for five years. These are to be purchased over and above the third party insurance.

Shyam: How are they different from each other?

Manohar: Well first, you must be aware of mandatory third party insurance which provides cover against liability from damage to third parties. Most motor insurance policies have add-ons available to insure the driver, the owner and the passengers in line with the court order.

Specifically, personal accident policy covers the owner-driver, the paid driver and the passengers.

Shyam: Then, what is bumper-to-bumper cover?

Manohar: In the current parlance, bumper-to-bumper cover is also known as zero depreciation cover. This add-on allows you to cover the parts of a car, except tyres and batteries, against damage. And as the name suggests, no depreciation will be charged onthe value of the car while deciding on the claim amounts.

Any claim without a zero depreciation add-on is settled by adjusting for the wear and tear of the part captured by the depreciation charge. This makes the cost of replacing that part higher. Bumper-to-bumper insurance can land a claim amount closer to the actual value without depreciation. However, this policy does not cover engine damage caused by water ingress and oil leakage.

Shyam: So, what should one expect?

Manohar: Well since the order has been passed only recently, there is not much clarity on how it will be implemented.

The court itself has placed the order on hold as insurers asked for time to design an appropriate product. For one, the issue of buying the cover upfront for five years has to be clarified. The pricing and the availability of such a comprehensive product too will be something to watch out for.

Shyam: Seems like we have to wait and watch for more clarity on this.

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Bank accounts can’t be attached at the cost of Right to Business: Madras HC

Banking & Finance

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The Madras High Court has held that bank accounts cannot be attached in matters related to GST violation if it is at the cost of doing business. “It is made clear that the attachment proceedings cannot be at the cost of right of provision under Article 19(1)(g) of the Constitution of India,” a single bench of Justice C Saravanan said, while disposing the matter of Chennai-based Marg Human Resources Private Limited.

As a part of the Right to Freedom, Article 19(1)(g) says, “All citizens shall have the right to practice any profession, or to carry on any occupation, trade or business.”

Fraudulent ITC

The petitioner approached the Court after Director General of GST Intelligence (DGGI) issued an order attaching three bank accounts pursuant to a search and investigation ordered against the said company. The allegation against the company was that it had fraudulently availed of input tax credit on fictitious invoices to discharge the GST liability.

The petitioner submitted that the attachment orders have completely strangled the business of the petitioner. It is submitted that the petitioner was employing about 15,000 employees with security guards who were deployed in various industrial units in and around Chennai and Karnataka. It was also said that apart from the ₹5.68 crore which have been appropriated so far against the projected demand of ₹21 crore, the petitioner has agreed to pay another sum of ₹1 crore, within a week.

Also read: E-Invoicing: Simplifying compliance for the taxpayer

Defending the action by the Tax Department, its counsel submitted that the petitioner has indulged in large scale fraud and therefore, the department was compelled to initiate proceedings under Section 67 (deals with inspection, search and seizure in case of violation) of the CGST Act, 2017. He emphasised that the law entitles the Department to order provisional attachment of any assets to protect the interest of the revenue. He also informed that the attachment orders merely freeze the power to debit the account and there is no restriction for receiving the amount.

‘No prejudice to petitioner’

The counsel said that for the last few months, the customers/clients of the petitioner company have directly paid the salaries/wages to the employees including the amount due under the Provident Funds Act and therefore the “continuance of the impugned attachment orders will be of no prejudice to the petitioner.” Tax Department also said that the Directors of the company breached the bail order. After going through all the arguments, the bench noted that nearly 27 per cent of proposed/estimated tax due has already been discharged.

Also read:Monetary policy must remain accommodative

“After all, there is a mechanism provided under the Act for proper adjudication of the tax due and determination under Sections 73 and 74. Therefore, there is no meaning in attaching the bank accounts further,” the Bench said, while asking the I-T Department to complete the investigation and issue appropriate show cause notice.

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