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anithagkl
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Joined: 25 Jan 2005
Posts: 44

PostPosted: Thu Apr 24, 2008 11:39 pm Reply with quoteBack to top

Santhosh, you made a very valid point, giving and taking advance happen in all businesses and charging an interest is normal (the interest should be nominal) , but when the particular business is regulated by a body and there are norms, then they have to follow the rules. I asked the particular question (that Tea Board officials are aware that brokers take interest) because I wanted to know what was the stand taken by the Tea Board. May be it was irrelevant. I thought it would help when we go to court.
Tea manufacturers have to take advance from the brokers to make their weekly payments towards wages, tealeaf, etc (unless they have a huge working capital).
Gopenath, most factory owners are broke, they need money to follow up on cases and even filing FIR’s. Most feel that it will not help them. Some have even borrowed huge sums from banks. Though mismanagement is one of the reasons for the losses, the brokers siphon of most of the money without the owners realizing it. Most of them want to revive their businesses, so they want to be in the good books of the brokers because without them you cannot trade tea.
To do something about all this some associations have been formed, but they are unsure about how to move about it.
INDCO factories are run by the Govt. An IAS officer oversees the business. INDCO factories sell tea in a different auction center (Tea serve), which was introduced by the Govt some time back. All the 13 INDCO’s sell tea here directly (no brokers involved). Some of the teas are packaged as ‘Ooty Tea’ and sold in ration shops. If a private tea manufacturer wants to sell here, he has to get a no objection certificate from the broker he sold with earlier. The broker will not give the certificate unless his dues are cleared. Most manufacturers have given blank cheques and documents to these brokers who in turn file cases when a manufacturer wants to defect. Another problem is that very few buyers participate in the auctions in Tea Serve. Most go to CTTA (Coonoor Tea Trading Association) auction center (auction center where brokers are involved) because they get tea for a lower price here than Tea serve (nexus between brokers and buyers). In this way even the prices in Tea serve has to come down. Though world tea trade and quality play an important role in deciding tea prices, the role of brokers in deciding the prices cannot be ruled out.
Believe me, after filing FIR’s and sending RTI application the brokers have stopped harassing the manufacturers. They are now moving very cautiously. Before this, cheque cases were filed in places as far as Raipur. Imagine going to Raipur every month to attend court!
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l_santhosh
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Joined: 16 Oct 2002
Posts: 143

PostPosted: Fri Apr 25, 2008 4:27 am Reply with quoteBack to top

Anitha,
There is no such norm(as far as we know) to regulate interest on advances.
Because of that , charging interest (any rate) is not a violation.
The official merely mentions that.
It does not in any way prove that the Tea Board is aware of the practice(of charging interest on advances by brokers).
This argument of ours will not hold in court.

What you say..."that after filing FIRs....brokers have stopped harassing.." is our first victory. icon_smile.gif
It will encourage more of us to join the movement.
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gopenath
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Joined: 12 Feb 2007
Posts: 573

PostPosted: Fri Apr 25, 2008 4:46 am Reply with quoteBack to top

Dear Mrs.Anitha,
Sorry a confuse in addressing you. Well, I am getting clear views about things happening. Its my duty to thank you for such replies which needs patience. And also I should never hesitate to apologise to put questions. I am unable to do anything physically in this regard but I am fully concerned about the issue and our people. Let this be apart.
Its fine that your movement have created a threat among the brokers. Now my next set of questions are,
Do you have any informations about how tea trade goes in other states of country like Kerala, Assam. Does brokerage play role there?
What exactly is the objective of this movement? Is it whether to control the brokers or to come up with a new firm? Because, I hope the owners who are already in the hands of these brokers are definitely helpless. You mentioned that the Government itself provides lisence to these brokers. If we proove the corruption of these, how are things gonna change? Would these brokers be replaced by a new set? Any way we do not know how the Tea Board takes action, provided the officers are fair enough. People like Nazeem will definitely be a head ache.
I wonder your activities and courage. Lets hope for the dawn.......

Gopenath.
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anithagkl
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Joined: 25 Jan 2005
Posts: 44

PostPosted: Sat Apr 26, 2008 2:36 am Reply with quoteBack to top

Santhosh,  I misunderstood your previous post about charging interest on advances. I thought you said that charging interest is okay. Maybe I read too fast. I went through your post again. Actually the whole purpose of our struggle is useless if interest can be charged. We are saying that interest should not be charged.
Even if interest is charged, there is a law to regulate interest rates. It is the Tamil Nadu Prohibition of Charging Exorbitant Interest Act Act No.38 of 2003. It is under this Act that the FIR’s were filed (refer to my Feb3rd post).
The Section 3 of the Act says that ‘No person shall charge exorbitant interest on any loan advanced by him’.The TAMIL NADU MONEY LENDERS ACT, 1957 says: Every moneylender shall obtain a license for doing business and it shall be to each shop separately and that Money lender denotes a person whose main or subsidiary occupation is the business of advancing and realising loans. This does not include banks or a Co-operative Society..
Gopenath, please call me by my name. Brokers play the same role they play here in Coonoor, in all the tea growing states. In fact in today’s paper (‘The Times of India’) there was an article on tea. It was about the the e-auctions going to be introduced by the Tea Board ‘…tea brokers fear an electronic exchange will mean an end of their livlihoods……Brokers are concerned,too. Some say that an electronic exchange will allow planters and factories to bypass them and sell directly to the market,..’ 
When we bypass brokers and sell tea directly we will surely realize a higher price and low transaction costs. There will be more buyer participation and hence more competition, this greater competition ensures that the true price is discovered. The purpose of our movement is to abolish brokers, and to increase the price of tea.
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anithagkl
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Joined: 25 Jan 2005
Posts: 44

PostPosted: Sun May 11, 2008 1:01 am Reply with quoteBack to top

To obtain more information about the menace of interest, the following information has been sought from the CPIO:
To
Shri.P.K.Lahiri,
Secretary, (Coordinating CPIO),
Tea Board of India,
14, B.T.M. Sarani (Brabourne Road)
Kolkota-700 001.

Sir,
Sub: Application under Right to Information Act, 2005.
Ref: 1) My application under RTI Act, 2005 dated 11-02-2008.
2) Secretary & CPIO, Tea Board of India’s reply letter No. MISC/LC/2007/1315 dated 27th February 2008.
3) My application under RTI Act, 2005 dated 06-03-2008.
4) Secretary & CPIO, Tea Board of India’s reply letter No. MISC/LC/2007/108 dated 17th April 2008.
*******
Please find enclosed a Postal Order for Rs.10/- with a request to furnish the following information under Right to Information Act, 2005.

Vide ref (4), your kindself had replied that claiming of interest by the Tea Brokerage Firms on advance payments made to tea manufacturers is not a violation of the norm stipulated for broker by Tea Board since such norms do not specify that advance should be interest free.

Please provide me the information about the total quantity of tea sold by each Tea Brokerage firm in the auction centers from 01-01-2007 to 31-12-2007, total turn over of each Tea Brokerage Firm from 01-01-2007 to 31-01-2007 in Rupees, total income earned by way of commission on the tea sold by each Tea Brokerage Firm from 01-01-2007 to 31-01-2007 in Rupees and total income earned by way of interest by each Tea Brokerage Firm from 01-01-2007 to 31-01-2007 in Rupees.

Have the accounts of all the Tea Brokerage Firms audited for the period from 01-01-2007 to 31-12-2007 (or 01-04-2007 to 31-03-2008)? Please provide the dates on which licenses of all the Tea Brokerage Firms have been renewed for the calendar year 2008.

Thanking you,
Yours faithfully,

(D.ANITHA)
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l_santhosh
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Joined: 16 Oct 2002
Posts: 143

PostPosted: Sun May 11, 2008 8:30 pm Reply with quoteBack to top

Anitha,
So still we haven't received a reply from Smt. Roshni Sen?
It's been more than 20 days, right?
I think a proper reply from the official to that RTI appl. of yours will give us vital info...looking forward to it.
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ebhari
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Joined: 31 Dec 1999
Posts: 279

PostPosted: Mon May 19, 2008 1:29 pm Reply with quoteBack to top

Anitha and all our folks,

Been sometime since I logged on, too many things going in my head, sorry for the delay. In Business parlance, lending money and charging interest is accepted worldover, with clauses attached. Charging interest on advance is something I never heard of, is new to me. I've been into business, been in physical receipt of advances for the companies I worked in the past 8 years, never heard about such a thing as "Interest on advance paid". Even when the consignment delayed, as a supplier, we never paid any interest. All of us know that these middlemen are cheating, and cheating in open daylight, ripping lives apart. We need a solid legal angle to tackle this issue. I will re-check this with attorneys in the weekend and advise you. I shall also check if any landmark decisions have been passed by SC in this respect.

Regret my delay in responding. Please keep up the good work. God bless.

_________________
Emerald Bhojan Hariharan.

DREAM. INSPIRE. EVOLVE.
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anithagkl
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Joined: 25 Jan 2005
Posts: 44

PostPosted: Wed May 21, 2008 10:16 am Reply with quoteBack to top

In the meanwhile, I have placed on record with the Central Bureau Of Investigation requesting to investigate into the fraudulent activities of Tea Board. It is reproduced below:
To
The Superintendent of Police,
Economic Offence Wing,
Central Bureau of Investigation,
Rajaji Bhavan,
Besant Nagar,
Chennai-600 090.

Sir,
Sub: Large-scale economic offence in tea industry –regarding.
Ref: 1) My application under RTI Act, 2005 to Secretary & CPIO, Tea Board of India dated 11-02-2008.
2) Secretary & CPIO, Tea Board of India’s reply letter No. MISC/LC/2007/1315 dated 27th February 2008.
3) My application under RTI Act, 2005 to Secretary & CPIO, Tea Board of India dated 06-03-2008.
4) Secretary & CPIO, Tea Board of India’s reply letter No. MISC/LC/2007/108 dated 17th April 2008.
********
With regard to the above subject and references, I would like to bring the following for your kind information and necessary action.

The Tea Board of India is a regulatory body for the tea industry like the Securities and Exchange Board of India (SEBI) for the stock market. Unlike SEBI which does not allow Stock Brokers to advance money to sellers of shares, bonds, etc and charge interest from them till its realization, the Secretary of Tea Board of India has openly declared that claiming of interest by Tea Brokers from tea manufacturers is not a violation. This trade practice is one of the main reasons for huge difference between the auction rate and market rate for tea in India. Thus Tea Board has allowed Tea Brokers to earn by means of both commission and interest. Neither the tea growers nor the consumers are benefited. There is a loss of crores of Rupees in terms of evasion of sale tax, income tax, etc to exchequer in the trade of tea. The Tea Board of India has not taken any action. However, in the case of stock market, the buyer and the seller buy and sell shares at the same rates and the Stock Brokers only take commission for the transaction. The information obtained by applying under RTI Act, 2005 has exposed the role of Tea Board of India in this illegal trade practice, which has completely ruined the tea industry in India.

In reply to my application under ref (1), copy of which is enclosed as Annexure-1, the Secretary & CPIO, Tea Board of India under ref (2), enclosed as Annexure-2, has informed that no Tea Brokerage Firms are entitled to lend money to any tea producing company or tea estate in accordance with the clause 21 of the Norms for licensing of Brokers in Public Tea Auctions. He has further informed that Tea Brokerage Firms may make advance payments to tea manufacturers against tea for sale in the relevant Auction Center and/or against sold tea-awaiting payment of prompt in accordance with the clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions.

Vide ref (3), copy of which is enclosed as Annexure-3, it was requested to provide information as to whether Tea Brokerage Firms can charge interest on the advance payments made to tea manufacturers against tea for sale in the relevant auction center and/or against sold tea awaiting payment of prompt in accordance with the clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions.

Vide ref (4), copy of which is enclosed as Annexure-4, the Secretary & CPIO, Tea Board of India has replied that claiming of interest by the Tea Brokerage Firms on advance payments made to tea manufacturers is not a violation of the norm stipulated for broker by Tea Board since such norms do not specify that advance should be interest free.

The reply given by the Secretary & CPIO, Tea Board of India, vide ref (4) is contradictory to the reply given vide ref (2). While vide ref (2), it is mentioned that Tea Brokerage Firms cannot lend money to tea manufacturers as per Clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions; vide ref (4), it is mentioned that claiming of interest by the Tea Brokerage Firms on advance payments made to tea manufacturer is not a violation of the norm stipulated for broker by Tea Board since such norms do not specify that advance should be interest free.

The reply given by the Secretary & CPIO, Tea Board of India is misleading. Under the circumstances, the following questions arise:

1. If Tea Brokerage Firms are not entitled to lend money to tea manufacturers, but can claim interest on advance payments made to them, what is the difference between lending and advance payments in clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions?
2. If the norms do not specify that advances made to the tea manufacturers by the Tea Brokerage Firms should be interest free (as replied by the CPIO vide ref (4)) and the clause 21of the norms clearly specifies that Tea Brokerage Firms cannot lend money to tea manufacturers but can only advance against the tea to be sold in the relevant Auction Center and/or awaiting payment of prompt, why is the Tea Board not interpreting the norm that Tea Brokerage Firms should not charge interest on the advance payments to the tea manufactures?
3. Is Tea Board of India abetting the Tea Brokerage Firms in circumventing the clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions and allowing the Tea Brokerage Firms to extract exorbitant rates of interest from the tea manufacturers?
4. If no, Have Tea Brokerage firms registered under Money Lender’s Act or Pawn Brokers Act? Is the income by way of interest been reflected in the annual turn over of the brokers, while submitting for renewal of their licenses up to 31st December of every year? Does Tea Board of India have the authority to accept the Tea Broker’s income by way of interest, while giving renewal for Tea Broker’s license every year?

These applications submitted under RTI and the replies furnished under the above said references are being keenly watched by thousands of tea growers and tea manufacturers on the Internet who are hoping for some respite. Hence, Lakhs of small tea growers are indirectly affected because of the existing trade practice. The regulatory body namely the Tea Board of India has completely failed in its duty to protect the industry for its own personal gains. Hence I request that suitable investigation may be taken in the interest of lakhs of tea growers and the industry.

Thanking you,
Yours faithfully,

(D.ANITHA)
Haveri
22/04/2008

Copy submitted to:
1. The Director, Central Bureau of Investigation, Block No.3, 4th Floor, CGO complex, New Delhi-110 003.
2.The Superintendent of Police, Anti Corruption Bureau, Central Bureau of Investigation, Shastri Bhawan, 3rd Floor, 26 Haddows Road, Chennai 600 006.
3. The Chairman, Tea Board of India, 14, B.T.M. Sarani (Brabourne Road),
Kolkota-700 001.
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l_santhosh
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Joined: 16 Oct 2002
Posts: 143

PostPosted: Tue May 27, 2008 9:28 pm Reply with quoteBack to top

I agree with Hari completely.

Then, I've been thinking over this for some time now -
"The Secretary & CPIO, Tea Board of India, has informed that Tea Brokerage Firms may make advance payments to tea manufacturers against tea for sale in the relevant Auction Center and/or against sold tea-awaiting payment of prompt in accordance with the clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions."

I'm late to realise that making advance payments is legally allowed.
But, I presume there are no rules that make charging interest on these advances illegal/ punishable. Or atleast we do not know if such a rule exists.
But when the rule says that advances can be paid(by brokers to factories), should it explicitly mention that interest should not be charged? I don't think it needs to be mentioned so. But I don't know.
Or, is that implicit?
And because it is only implied(and not explicitly mentioned), are the brokers playing the fool with us?

The questions are disconcerting. And we will know the answers only if we have a proper reply from Smt. Roshni Sen.
That's one reason I'm eagerly waiting for it.
And Anitha, if we have not received a reply from her still, can we get answers from some other source? I will send the same(as the one you've sent) RTI appl. to Smt. Sen this Saturday.

As to your request for a CBI enquiry, you rock!!
However, I just feel we should keep our moves a secret(which goes against our typical innocent ways)...so that we can shock our enemies. It is such an effective ploy in Chess.
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anithagkl
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Joined: 25 Jan 2005
Posts: 44

PostPosted: Fri May 30, 2008 8:20 am Reply with quoteBack to top

Santhosh, Please send your application to the CPIO and secretary of Tea Board and not to Smt. Sen because she is the appellate authority. She will not entertain RTI applications directly.

Reg CBI-Since we are asking information in black and white on issues pertaining to powerful people, I thought there is a need to keep CBI informed. This would also enforce seriousness in the minds of the Tea Board officials in providing information in future. I even thought that this would be a protective measure to our mission in unearthing many more societal evils.
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ebhari
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Joined: 31 Dec 1999
Posts: 279

PostPosted: Wed Jun 04, 2008 10:02 am Reply with quoteBack to top

Dear All,

Discussed with attorneys, there is no specific definition of "Interest on advance paid" as per them. They did put up lot of hard work, Im sure.

In India, they said, its all based on "Case-to-Case" basis. It means, what is something right in one instance may be wrong in another.

Looking at the overall scheme of things, they said our fight is justifiable which means we go ahead.

So, let's pull up the socks and look up. Carry on the good work.

Regards,
Hari.

_________________
Emerald Bhojan Hariharan.

DREAM. INSPIRE. EVOLVE.
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l_santhosh
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Joined: 16 Oct 2002
Posts: 143

PostPosted: Tue Jun 10, 2008 5:57 am Reply with quoteBack to top

Namaskaara ellagu!!
Anitha, I've sent the RTI appl. to Mr. Lahiri...could do it only yesterday as I was travelling last week.
Hope we will get a proper reply for that.
And here on, I don't think our sending RTI application should just be for mounting pressure. We should make sure that we get reply to every application that we send.
Hmm...makes life interesting!! I've got that from a couple of websites including RTIs main site.
So if we don't get a reply within 30-45 days, we will have to take it up with authorities so that action could be initiated(and it has been, in many cases) against those who've not responded or responded with half-baked details. Atleast, I want to try that.

Okay..Hari...that's interesting - no specific definition of "Interest on advance paid"
So that means there is nothing called "Interest on advance paid" ?? Right?
If that's the case, what's going on with us, if not cheating?

Then, here is a site I found very interesting.
http://www.rtiindia.org/
There seems to be a lot of knowledge sharing there.
It could really help us...I just got registered!!
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ebhari
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Joined: 31 Dec 1999
Posts: 279

PostPosted: Wed Jun 11, 2008 3:11 pm Reply with quoteBack to top

Santosh,

The judicial system has certain grey areas across all cases which I term as "incomprehensible loopholes" which are exploited to the greatest degree by miscreants, convicts, unethical and unlawful people.

While saying that there is no specific definition of Interest on advance paid, I mean to say that as per the Indian Judicial system "there is no proper definition" to the said term. It has not been defined. But, in no way does it mean that the party on the other side (Here, I mean the money lenders) would not play that "incomprehensible loophole" to their favour when we file the case.

In an ideal governance system, such loopholes would not exist. But we are people living in a democratic yet overtly corrupt environment. Things change overnight, under the tables and at a wink.

Attorneys at this point of time can only give the macro level perspective looking at the overall scenario. They would not divulge into minute details till the parties come for interrogation. In this aspect, I admire the work of Anitha, yourself and all other folks currently collecting information and data which will enable a strong litigation lateron. (At times, Iam ridden by a sense of guilt that I could not participate as much I would like to given my personal & professional circumstances).

The macro level perspective is certainly in our favour and that is a positive news. We are convinced that we are being cheated and that's why we are going ahead. WE MUST GO AHEAD. Iam going to have more broad based discussions with Attorneys in the days to come getting into the specifics.

_________________
Emerald Bhojan Hariharan.

DREAM. INSPIRE. EVOLVE.
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gopenath
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Joined: 12 Feb 2007
Posts: 573

PostPosted: Wed Jul 16, 2008 12:31 am Reply with quoteBack to top

Hello Anita,
Its long time you are into this forum. Whats up in the scene? Did you recieve any information from any of the organisation regarding the case? What happened to the CBI? Did you hear anything?

Gopenath.
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l_santhosh
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Joined: 16 Oct 2002
Posts: 143

PostPosted: Wed Jul 16, 2008 2:52 am Reply with quoteBack to top

Still now, I haven't received a reply from the CPIO.
It's been 40 days.
..will update after my next action shortly!!
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