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Punish The Fraudulent Promoters

Akhilesh Bhargava



A key initiative of banks, struggling to resolve the huge NPA crisis, is to take the defaulting companies to the insolvency court i.e. the NCLT. The first step that the NCLT takes, upon admitting any bankruptcy plea, is to appoint an Insolvency Professional (IP), who supersedes the board of directors of the company. Upon such appointment by the NCLT, the IP is now in charge of the company, and he immediately takes charge of its business, assets/liabilities and its entire state of affairs. In other words, the promoter/board of directors is dismissed and the company is now put under the supervision/management of an IP, whose responsibility is to serve the interests of the company and its various stakeholders, including creditors, lenders and the shareholders.

The IP thereafter examines the viability of the company’s operations and whether, it should be liquidated, or it should be restructured/revived, including by changing the management of the company. As we are seeing in the cases before the NCLT, many companies are found to be viable, but need a change of management, which is happening under the auspices of the NCLT. These have included companies like Bhushan Steel, Electro Steel, Binani Cement, Alok Industries etc., where instead of liquidating/dissolving the company, it has been found prudent to revive the company by takeover of management, as is happening in the case of Bhushan Steel being taken over by Tata Steel.    

But such takeover of a defaulter company by a new management does not mean that the NPA and the huge loss incurred by banks and other creditors is a closed chapter. Merely in the case of Bhushan Steel’s takeover by Tata Steel, the loss to the lenders and the creditors is about Rs.25000 crores, which is a humongous sum of public money lost. Many creditors of Bhushan Steel who could be SMEs will perhaps go bankrupt, due to these losses suffered. The promoters of these companies need to be thoroughly investigated and severely punished, because in most cases, the companies have defaulted on their bank loans, due to criminal misconduct and malpractices of the promoters, which includes siphoning of money, misappropriation, frauds and misuse of funds. Such company promoters are often powerful/influential businesses, but their criminal and fraudulent acts cannot be allowed to go unpunished. So while a new management takes charge of a company, a parallel investigation must be conducted into its state of affairs, not just to punish the fraudsters, but to also seek to recover their illgotten booties, which truly belong to the company and the public that they cheated.

It is heartening to note that over a dozen companies which are undergoing bankruptcy resolution before the NCLT are being investigated by banks and other agencies, for fraudulent activities, which including siphoning and diversion of funds. Banks are undertaking forensic audits, to punish these wilful defaulters and to hopefully recover their funds from them. As a result of such investigation, the SFIO arrested Mr. Neeraj Singhal, the former promoter of Bhushan Steel, for alleged diversion of Rs.2000 crores, from loans taken from various banks. He did it through advances given to a web of bogus/shell companies. The SFIO is investigating various other companies and other arrests of company promoters are imminent. It is because of these dubious promoters and their complicit auditors that lakhs of crores of rupees of public money has been lost and they deserve appropriate punishment under the law.     


Why the SC appointed AK Patnaik to head the investigation in Alok Verma case?

Arti Ghargi




Justice Patnaik was a part of a two-judge bench formed in March 2016 for the 2G spectrum case.


The high voltage drama in India’s premier investigating agency Central Bureau of Agency got a sane turn with Supreme Court ordering a probe into the matter. The CBI bloodbath that happened post-midnight on Tuesday saw the two topmost officials being removed from their posts. The warring officers i.e. CBI Director Alok Verma and Special Director Rakesh Asthana were sent on “forced leave” while the entire team of officials probing corruption case against Asthana was transferred overnight. The breakneck reaction by the government thus raised questions whether there was any cover-up.

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However, CBI Director Alok Verma moved to the Supreme Court challenging his removal and demanded an urgent hearing in the matter. The Supreme Court today took up the matter for hearing and ordered a probe into the matter under the supervision of retired Supreme Court Judge AK Patnaik. It has also ordered that the probe must be completed within 10 days and the report to be submitted to the apex court during the next hearing on November 12. The court has also prevented the interim director of the CBI Nageshwar Rao from taking important decisions in policy matters.


CBI Director Alok Verma and Special Director Rakesh Asthana

While there has been no immediate relief for Alok Verma, the silver lining is a probe has been initiated in the matter. What is more interesting is the retired Supreme Court judge AK Patnaik will be monitoring the probe.

Who is AK Patnaik?

AK Patnaik will be heading the committee investigating allegations of corruption against CBI chief Alok Verma. The former Supreme Court judge was born on June 3, 1949. He graduated in Political Science from Delhi University and studied Law from Cuttack. Patnaik became a member of the Odisha Bar Association in 1974. About 20 years after stepping in the law profession, he became an additional judge in Odisha High Court in 1994. However, he was soon sent to the Guwahati High Court where he became a permanent judge the very next year. He worked there for seven years before being sent to his home state in 2002.

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Subsequently, in March 2005, Justice Patnaik was made the Chief Justice of Chhattisgarh High Court. In October the same year, he was appointed Chief Justice of Madhya Pradesh High Court. The then Chief Justice of the Supreme Court, Justice Ramesh Chandra Lahoti had praised his work as the Chief Justice of the Chhattisgarh High Court. In November 2009, he was made the judge of the Supreme Court. Five years later Justice Patnaik retired in June 2014. The most discussed case in Justice Patnaik is Justice Soumitra Sen’s case.


What is Soumitra Sen case?

Justice Soumitra Sen was charged with misappropriation of money and misrepresenting facts. Justice Patnaik was a part of the three-member committee of judges set up to investigate the allegations. In its report, this committee accused Justice Sen of “wrongful behaviour”. There were allegations on Sen of misusing nearly Rs 33 lakhs and being the court receiver when a legal case in dispute between the Steel Authority of India and the Shipping Authority of India was ongoing.


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The Chief Justice of India and the Chairman of the Rajya Sabha had created committees to investigate the allegations. The committee reports said that Soumitra Sen was the first receiver when he was a lawyer and later as a judge. During his tenure as a judge, he continued withdrawing cash and issuing a check from the same bank account in which he had received money as a lawyer. After the report came out CPM leader Sitaram Yechury presented a proposal in the Rajya Sabha to remove Soumitra Sen. The proposal was passed by the Upper House with a majority.

It was for the first time in India’s history that such a resolution was passed against a High Court judge. This proposal was to be taken up by Lok Sabha, but before that, Soumitra Sen resigned.


2G, Spot Fixing case:

Though Soumitra Sen case was the highlight of the career of AK Patnaik, he has also handled other high stake cases including the 2G scam case which led the undoing of UPA government and Spot Fixing case. Justice Patnaik was a part of a two-judge bench formed in March 2016 for the 2G spectrum case. Apart from this, Justice Patnaik was also included in the Supreme Court bench that heard the plea demanding an alternate provision to NOTA and spot-fixing in the IPL.


Image Source: Web

After retirement, Justice Patnaik was proposed to be made the President of the Odisha State Human Rights Commission, but he refused. Justice Patnaik was also involved in a bench, which gave the verdict that if a legislator or MP is convicted in a criminal case, he/she will not be able to contest elections for six years.

Among the law fraternity, he is regarded as a judge with high integrity and stickler of discipline. This probably explains why CJI Ranjan Gogoi appointed him to head the investigation which will have a significant impact on the prestige of India’s premier investigative agency.


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India Reacts

Should MJ Akbar step down as a minister following sexual harassment allegation?

Arti Ghargi



MJ Akbar

In the lights of these allegations, should MJ Akbar step down as a minister? HW News brings you reactions from across the people.


India’s #MeToo movement that started with Tanushree Dutta breaking her silence on workplace harassment on the sets of the film ‘Horn Ok Please’ at the hands of actor Nana Patekar, has hit the Indian politics and media too.

In a slew of accounts that came out as a part of #MeToo movement recounted some horrifying incidents where women were sexually harassed at the workplace. While women in media have named a number of male journalists/media persons breaking their silence, scores of women have named journalist turned politician and now MoS External Affairs in the Modi government-MJ Akbar as a sexual predator.

As many as 9 women from different media organization have accused MJ Akbar of sexual harassment. These survivors’ accounts paint a stomach-churning pattern to his sexual abuse – set up job interviews with aspiring women journalists in hotel rooms, repeatedly call them to his office cabin for meaningless conversation and chatter, entice them with major stories, send them out of the workplace and meet them at a hotel at odd hours.

In the lights of these allegations, should MJ Akbar step down as a minister? HW News brings you reactions from across the people:

Nilanjan Mukhopadhyay, Journalist:




“He should absolutely step down from the post. This casts a big shadow on the Modi government which boasts of campaigns like “Beti Bachao, Beti Padhao”. The women’s accounts need to be heard.”


Seshadri Chari, BJP NEC:


“The allegations made against the MoS for External Affairs Mr MJ Akbar are of very serious nature. So going by these allegations and given the fact that Narendra Modi govt is seriously engaged in maintaining the decorum and dignity of the government, it would be in the best interest of the govt that Mr MJ Akbar should consider demitting office. The fact that allegations have been made but so far no serious charge has been framed nor any FIR been filed officially, these all the facts on the sideline. So it will take a long time for the allegations to be taken to the court of law and it will take even more time to prove. but irrespective of that the govt needs to maintain its standards of high probity and therefore in the best interest of the government and the situation,I think Mr MJ Akbar owes an explanation and subsequently it will be right on his part if he thinks he should step down and allow the matter to take a logical course.”


Nawab Malik, NCP Spokesperson:

Atal Bihari Vajpayee

“Those who have accused, should go to the authorities and file a lawsuit. The allegations should be taken seriously and examined. If there are so many allegations, the minister resigns. If such allegations seem to be taking place, then they should resign while taking moral responsibility. Take action by filing a lawsuit, it is our demand.”

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India Reacts

#FuelPriceCut: Is ₹ 2.50 cut in fuel price enough?

Arti Ghargi



₹ 2.50

With the petrol prices already breaching the ₹ 90-mark in various cities, is ₹ 2.50 cut in fuel price by the central government enough?


Finance Minister Arun Jaitley on Thursday announced that the central government will reduce the excise duty on fuel prices by 1.50 rupees.

Addressing a press conference, Arun Jaitley announced that the Union government will reduce the excise duty by Rs.1.50 while the Oil manufacturing Companies will also absorb a reduction of 1 rupee.” The announcement of the Finance minister will lead the rising fuel prices in the country to decrease by 2.50 rupees.

The Union Finance minister further added that the Union government will be writing to the state government to also reduce the VAT on the fuel prices similar to the central governments. Arun Jaitley further informed that cut in excise duty will be applicable immediately.

Petrol on Thursday was being sold at Rs 84 per litre in Delhi while diesel is being sold at Rs 75.45 per liter. In Mumbai on Thursday petrol is being sold at Rs 91.34 per liter and diesel at Rs 80.10 per liter.

With the petrol prices already breaching the ₹ 90-mark in various cities, is ₹ 2.50 cut in fuel price by the central govt. enough? HW News brings you reactions from across the political parties:


Sachin Sawant, Congress Spokesperson:

Triple talaq


“First burden people with tons of weight, then remove few grams and start patting own backs claiming concern about people. This is BJP’s strategy. The government should answer why have they kept RS 9 drought cess even when there is no drought for 3 years? Why only petrol and not diesel? The government should put petrol and diesel under GST.”


Nawab Malik, NCP Spokesperson:


“The government has taken the decision of reducing the price of petrol and diesel by ₹ 2.50. It is nothing but misleading the people. During the UPA government, the excise duty on petrol was ₹ 9. This government increased it to ₹ 19.48. The excise duty on fuel was increased from ₹ 3 to ₹15.33. We challenge the BJP government, if it is serious about giving the people relief then it should implement the UPA-era excise duty on fuel again.”


Sambit Patra, BJP Spokesperson:


“The Modi government is fully sensitive towards the problem of rising petrol and diesel prices. The government cares for Common man and thus has reduced up to ₹5 on Petrol and Diesel. Even the BJP-ruled states are now cutting down on the prices. The Prime Minister himself is monitoring the situation.”


Sanjay Singh, Rajya Sabha MP, AAP:

fuel price


“It is good that the government decided to reduce the fuel prices by ₹2.50. But Mr. Jaitley should first clarify that from tomorrow the prices won’t again rise by 10 paise, 25 paise, 45 paise, and 50 paise etc.  It shouldn’t be like “Chaar din ki Chandani aur fir andheri raat”. In the last four years, the Modi government has increased 443% tax on diesel and 213% tax on petrol. Now that elections are around the corner in three states, the government is cutting on the taxes. A similar thing also happened during Gujarat elections as well.”

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