The modern thinking Indian

The recession word is haunting markets the world over. The US was already in recession, and given its status as the driver of the world economy, it is not a good portent for the rest of the economies all over the world. Other economies are starting to get badly affected; the collapse of an economy such as Iceland typically is of concern only to the natives, but a recession in countries such as Germany (the largest powerhouse of the European Union), slow growth in Japan, reduced growth in China, all of these are very bad portents that the situation will get much worse before it gets better.
In India, things are getting bad. Reduction in inflation to less than 9% is the only bit of good news, else the shake in consumer confidence has had a drastic effect. Entire industries such as textiles (hit by loss of exports), IT (because of reduction in IT spending in the US), Consumer Goods / Auto (because of loss in confidence and hence reduction in spending), Realty (massively hit because people are unwilling to commit), Airlines (massive losses so far), and numerous other industries are being hit.
So, in the space of a few months, the Government and the RBI are trying to reverse all the measures they took earlier, such as a tight credit scene (they were trying to cut inflation, but also cut industrial growth due to the tight credit squeeze), the Government is willing to give measures to improve the lot of airlines, banks, mutual funds, and so on; with this being an election year, the Government will also try to ensure that they will do what they can to bring back the good times. The biggest question is about whether the Government can do anything substantial, other than wait for these recession times to pass over.

Labels: Economy, Equity, Finance, Problems, Property, Stock Market

In the mix of the many dowry related laws and court clarifications / edicts, add another one. This one is something that strikes to make sure that family settlements are all equitable, and also rectifying one part of the provisions of the the dowry law. The current dowry laws are harsh, and put a lot of the onus of proving innocence on the husbands in case of dowry related deaths within 7 years of marriage. As with many laws, this one is subject to misuse. If the husband is not on good terms with his in-laws, and his wife dies within 7 years of marriage (and it becomes alleged that he was demanding dowry), then the law essentially puts the onus of proving innocence on the husband. This is not a very comforting feeling, given the basic provisions of fairness which all laws must meet (and let us be clear, such laws were made harsh because of the large number of dowry related deaths and harassment cases in today's society). So this judgment of the court is a welcome clarification:

Supreme Court on Monday ruled that asking for the wife's share in ancestral property from in-laws would not come under the definition of "dowry". This judgment could become a small but significant breather for husbands, on whom the courts virtually impose the onus of coming clean on dowry death charges if their wives die an unnatural death within seven years of marriage and there had been past allegations of harassment.
"Demanding her share in the ancestral property will not amount to a dowry demand," said a bench comprising Justices Arijit Pasayat and Harjit Singh Bedi while dismissing a man’s appeal seeking acquittal in a dowry death case.

We still need to go a long way towards getting rid of the evils of dowry from today's world, but making harsh laws (that open themselves up to misuse at the hands of people out to subvert law) is not a recommended course of action. All such cases should need proper investigation, including the guidance of experts as well as NGO's.

Labels: Court, Dowry, Judicial, Law, Property, Women

It seems to be a story that keeps on repeating itself over and over; you hear of people being harassed by loan recovery agents for repayment of loans, or of somebody's vehicle being taken away from them anywhere where the vehicle can be found, and so on. In extreme cases, the pressure or violence of the recovery agents can lead to injury or death of the person having taken the loan. The financing company or bank having advanced the loan would take recourse to goons or musclemen and they would use or threaten force in this regard.
For the last 2-3 years, this practise has been challenged in court, and there have been a number of decisions in this regard. Here's another substantiating the same point that a loan recovery company cannot use force for loan recovery. Since a loan agreement is a civil contract, recovery of loan amount or the assets bought against the loan also can happen only when there is a court order:

Unless a bank or a financial institution is equipped with a court order to repossess a vehicle which it has given on loan, it has no authority to go to the residence of the borrower to take away the vehicle by force. This was observed by the state consumer commission in a recent order.
Taking strong exception to the method adopted by a finance firm to recover dues in the form of a few unpaid instalments from a consumer who took the money to purchase a vehicle, the commission headed by Justice J D Kapoor directed Citicorp Finance (I) Limited to pay Rs 50,000 to one Jan Mohammad, a resident of Mehrauli, for the mental agony, harassment and public humiliation he faced. It was observed by the commission that no financier or bank had the authority to forcibly take possession of the vehicle as the loan agreement or hire purchase agreement were civil contracts and therefore had to be enforced through civil remedy. In other words, through intervention of the court.

It may be argued that the judicial system in India is slow and cases take a long time to settle; however that cannot be an argument for using force or illegal means. A company needs to act in the constraint of the law, so they need to use greater discretion when deciding loans, or they need to go in for more out-of-court settlements in such cases.

Labels: Court, Governance, Law, Policy, Property, Responsibility

For decades, the Indian Government and the legal system has been lopsided in favour of tenants, with the Rent Control Act being one-sided to protect tenants. The Act has reduced property rights, not letting landlords get their property back when they need the property for their own use, and not letting them raise rents in accordance with annual inflation trends. The Rent Control Act has scared landlords so much that there are many property owners who cannot envisage letting out their currently vacant properties for fear of not getting these properties back, or who let out properties on 11 month leases and get them vacated within 2 years so that properties do not get tenants who refuse to let go.
This situation had prevented the healthy growth of the market for tenancy and led to an artificial scarcity; so there was a great jubilation among property owners when the law was weakened some time back; the change allowed landlords to get their property back when they could demonstrate that they needed the property for their own needs, however, this was only for residential properties. Commercial properties were excluded. So you had the case where prime properties in commercial centers such as Connaught Place were on rent for decades old rentals of Rs. 100 per month; the landlord could only watch as their properties were used by tenants to make big money and they themselves got a pittance as rent. This would lead to a situation where the landlords would not invest anything on maintenance for these buildings. Finally the Supreme Court has corrected this, letting owners of commercial properties evict their tenants when they could prove that they needed the building:

For 50 years, tenants in shops and commercial premises in many prime areas of Delhi have had the upper hand over landlords. They lived without fear of eviction and paid a paltry rent as they were protected by laws that froze the amount negotiated decades ago. This special protection was because the law said that a tenant could be asked to vacate only residential premises, and not commercial property even if the premises were required for personal use. But all this has changed.
The court said the restriction on eviction of tenants from commercial premises was inserted in the law 50 years ago mainly because of the limited commercial space available in the city at that time. But that was a long time back. Now the scenario has undergone a sea change and a fairly large number of buildings and premises were now available on rent for non-residential and commercial purposes. Restricting landlords from seeking eviction of tenants from shops was no longer justified, the Bench said.

This is a judgment that was long awaited by landlords. There is no equitable reason why a landlord cannot get his / her property back when they need it. This judgment does not go all the way, given that it still does not give a way for a landlord to get rents raised to reflect current prices; one byproduct of this judgment however will be that landlords will try whatever tactic that they can to show that they need this property for their personal use and get the tenants evicted.

Labels: Cricket, Judicial, Law, Neighbourhood, Property, Reform