Bounced Cheques :

Story first published on:  NDTV :October 16, 2013 20:13 (IST)

New Delhi: Courts cannot impose a fine of more than twice the amount in bounced cheques, the SupremeCourt has held, stressing that the limit is inviolable and should be respected.

"First and foremost is the fact that the power to levy fine is circumscribed under the statute to twice the cheque amount.

"Even in a case where the court may be taking a lenient view in favour of the accused by not sending him to prison, it cannot impose a fine more than twice the cheque amount. That statutory limit is inviolable and must be respected," a bench of justices T S Thakur and Vikramajit Sen said.

It set aside the Calcutta High Court order which had directed a person to pay Rs. 1,49,500 against the cheque amount of Rs. 69,500.

In this case a trial court had sentenced a person to six months imprisonment and directed him to pay compensation amounting to Rs.80,000 in a cheque bounce case.

The accused, Somnath Sarkar, then approached the High Court which directed him to pay an additional Rs. 69,500 to the complainant and his jail term was waived.

Mr Sarkar then moved a mercy plea before the Supreme Court saying that he was not capable of paying the amount.

The court after hearing his plea set aside the High Court order and reduced the amount of Rs. 69,500 to Rs. 20,000.

"The High Court has, in the case at hand, obviously overlooked the statutory limitation on its power to levy a fine," the bench said.

Funding your business idea

Meera siva :BL: 12 Oct 2013

Having customers endorse your product increases the odds of getting funded.

Say, you have a business idea and you believe it has great potential. 

But like yours, there are hundreds of ideas chasing funds.

“Success rate is low and currently only one in ten companies gets funded,” said Raju Venkataraman, Chairman of TiE, Chennai 2013, an entrepreneur network. So, how do you beat the odds and take your business idea to the next stage?

GAIN CLARITY

Successful entrepreneurs advise you to do a lot of preliminary work before approaching an investor.

Usually, you may see a problem and come up with a solution. However, you need to work on refining the problem and solutions.

“It takes two years to learn the business and learn from the mistakes made,” said Baskar Ethirajan, co-founder Indianstage.in, an online ticketing service for live shows. He advises that clarity on what is unique about their solution, on the target market and the revenue model is a must, before approaching an investor.

Also, you must talk with people who will help validate your ideas and strategies. Founders advise that a start-up also needs a good team, to add to the credibility.

The founder must be able to understand all aspect of the business - from selling to managing the finances of the company.

When you feel external advice and funds are needed to help propel your idea further, there are early or seed stage investors you can approach.

FINDING INVESTORS

These angel investors are usually successful entrepreneurs or HNIs who are interested in helping in the growth of start-ups.

According to Baskar, most angels provide advice in addition to funding, typically work closely with the start-up and do a lot of hand-holding. You may be able to connect with angels through networks such as Mumbai Angels and Indian Angel Network.

The Chennai Angels network suggested that founders can look at media news and publications, references from investors or financial advisors.

Entrepreneur networks, such as chapters of TiE, The Startup Centre and accelerator programs also provide advice and help connect with investors.

Those who do not seek mentoring, but only funds can look at sources such as banks for loans. Government funding may also be available for start-ups, which have the tenacity and patience to convince the government, said Raju.

PITCHING FOR FUNDS

After you identify the investor, prepare well by understanding what they expect from you. You need apitch which summarises the business briefly. This is essential because there may only be a limited time available to present your case initially in person.

Baskar suggests that founders should try to personally meet the investors and talk to them one on one. This helps establish trust, which goes a long way in building a relationship.

A common mistake made by those looking for funds is to approach too many forums at the same time.

“Ideally an entrepreneur should identify potential investors and/or groups and then approach them one by one. It will help him improve his pitch as well as give enough time for follow-ups,”said Pratyush, founder of PlusTxt, an SMS messaging platform.

He also noted that while you must meet as many people as possible, you must not ask for funds upfront. If they like the idea, funding follows on its own.

INCREASING ODDS

However, even when investors may be interested in the idea, they may hesitate to fund.

For instance, most investors look at the size of the market opportunity and may only want to fund those ideas that have a large potential. Also, when it comes to funding, having a customer endorse the product carries a lot of weight, compared to a paper idea.

You may also increase your odds of getting funds by approaching the right investors.

For example, the Chennai Angels has a preference for ventures from South India. Similarly, some angel investors may prefer certain sectors as they have a passion for those.

Raju noted that IT industry is favoured as it is not capital intense; manufacturing and FMCG/retail business models are also becoming favourites , if they are focused on tier 2 and tier 3 cities.

Paying attention to cash-flows like following up on dues also help build a better business case when approaching investors.

You must be prepared to wait three to six months to get funding. And if funding is rejected, you need to understand the concerns and address the issues, for the well being of your business.

(This article was published on October 12, 2013)

Know your bankers

Anush Kapadia : The Hindu ;17 Oct 2013

India needs to have development banking that speaks the voice of the people

India’s economic model is broken. The dominant, liberal, economic philosophy fails to answer our defining question: how do we develop democratically? The cookie cutter, laundry list reform agenda is a distraction. We can look nowhere for intellectual bailouts via off-the-shelf solutions. We need our own answers to rescue our system from its lurching stimulus-response.

It now seems clear that the sum total of forces at play, intellectual as well as political, have led our system to an equilibrium that simply cannot hold. The private-sector oligarchs have attempted to carry a load that is beyond them, and the state has been reduced to limply ameliorating the model’s intrinsic harshness. It’s time for a serious rethink.

Much like 1991, our present crisis is the result of the overheating of an internal debt engine and a perilous turn to foreign borrowing at the margin. In the 1980s, the government’s domestic source of borrowing overheated as the nationalised banking system became saturated with government debt, forcing the government to borrow in foreign currencies at short maturities. Staking on thin ice, things duly fell apart with the fall of the Berlin Wall.

This time, it's the private sector that is overleveraged, saturating the capacity of the ill-equipped commercial banking system to lend to large, long-term projects and again resulting in a turn to foreign debt. In the context of a widening current account deficit, this could spill over into a banking crisis as firms buckle, and therefore fiscal strife as bailouts are required.

INSIDERS RULE

Our reality is of course far from liberal. Insiders rule. Yet, by rendering government as merely a fetter, the dominant philosophy unwittingly serves to naturalise oligarchy. There is, it need hardly be said, much government bungling. But if the common sense desires a nightwatchman state, it is not only utopian but functionally undemocratic. This common sense might be leavened with calls for inclusion, but this view blends a noble, ameliorative sentiment with the bad faith of barely-disguised patronage, neither of which have transformative energy.

Stuck between the short-termism of a patronage-fuelled polity and the utopianism of economic liberalism, our system lurched towards a solution: pair the nationalised banking system with the balance sheets of the oligarchs to do heavy-lifting of development. Commercial banks were drafted in to do the work of long-term funding for large projects in infrastructure. When these banks inevitably proved too small, foreign debt filled the gap.

It might well have come off, but the odds were heavily against it. The mushrooming of corruption scandals was a sign that the balance of power between the state, its banks, and the oligarchs was malfunctional for development.

BALANCE OF POWER

In most cases of rapid growth, substantially large banks have invariably driven heavy industrial or infrastructural projects; take German universal banks of the 19th century or the East Asian development banks of the mid-20th. The key was a balance of power between the lender and borrower that enabled discipline and scale. Yet in India, oligarchical power blunts banks' discipline on investment even as banks’ resources were limited by unproductive pre-emption through compulsory government debt purchases.

So the oligarchs came to be overleveraged on two fronts, economic and political. Connections secured projects, and substantial financial leverage was deployed to execute them. But their political bets were far from hedged. Just as central planning failed to insulate economics from politics, the nexus between the oligarchs and the ruling combine — corruption — failed to insulate investment from accountability. The exposure of excessive self-dealing on all sides further slowed things down as the polity raged.

Our economic model now stands exposed. With balance sheets too small to weather the nation’s stormy politics, the leviathans of the private sector have been shown up as having shoulders too narrow to bear the load of development. This of course is the old saw of development planning, now seemingly proved right. Under Indian political conditions, it appears that only the Leviathan of the state has the risk-bearing capacity to do the job.

FOR US

We have come full circle. There are no short cuts through public-private partnerships or other contrivances to insulate economics from politics. Democracy demands getting politics and economics pulling in the same direction. Anachronistic as it may sound, we need to reinvent development banking, and get it right by setting it on the firm ground of popular consensus. We need more than a mere regulatory state; we need a developmental state running a sound development bank.

Our model of development depends on a degree of insider capture that is not only undemocratic but exposes us to the fissile material of global capital. Ironically, even the giants of the private sector are too small to deal with political risk, while the banking system doesn’t have the scale thanks to the debt dynamics of our politics. So we turn outward, and again pay the price. But the people are the real bankers of our government. Now let’s get the government banking for the people.

(Dr. Anush Kapadia is a lecturer in international politics at City University, London.)

Manangement Tip of the Day :Tips on Having Difficult Conversations

HBR :October 17, 2013

Don't Delay That Tough Conversation Any Longer

It's often difficult to have conversations about sensitive subjects. 

Whether you need to tell someone you disagree with her approach or are upset by her behavior, it's all too easy to put it off in hopes of finding the "perfect time." 

Chances are, that time will never come.

 You'll be better off if you stop procrastinating and make the conversation happen.

 Request a time to meet. 

Use a non-threatening medium, such as email or voicemail, to ask what time would be best to discuss a sensitive matter. 

You'll likely still worry before you sit down with the person, but by framing the conversation upfront, you'll have taken some of the charge out of it.

Adapted from "How to Overcome Communication Fears" by JD Schramm.

Mighty October : Success is verymuch nearer to you..

Success is verymuch nearer to you..