Thousands Lose Jobs, Wages As Restive Kashmir’s Tourism Economy Dwindles

June 22, 2017

At the Dal Lake in Srinagar, Rizwan Ahmad Bhat stands next to his shikara (a traditional boat), named Do Badan Ek Jan (two bodies, one soul), waiting for tourists. Last year this time, the lake was packed with visitors exploring its waters and the views of the surrounding Zabarwan hills.

A Shikara wala navigating his boat at Dal Lake, Srinagar. Until July 2016, nearly 1.3 million tourists had poured into Kashmir over the year. This year, at the height of the tourist season, only a few thousand arrivals have been recorded.

This summer, the lake and its shores are empty of tourists and the smartly-dressed boatman is upset. “Look at our empty boats,” said Bhat, 31. “We have nobody to take on a ride.”

Rizwan Ahmad Bhat, standing near his Shikara (boat) at Dal Lake in Srinagar. His Shikara hardly gets any visitors this summer.

Half-a-dozen other boatmen, dressed in T-shirts and jeans, stood around, listening to the conversation. They complained that the media is scaring tourists away from Kashmir. “When people watch TV, they think Kashmir is burning and we should not go there,” said one of them, and others agreed.

Until July 2016, when young militant leader Burhan Wani’s killing sparked a prolonged chain of violence in the Valley, Bhat and other boatmen used to earn Rs 1,000-Rs 1,500 a day. Now they count themselves lucky if they make Rs 400 a day.

It is the same story at Ali Shah Carpets on Saida Kadal Road, 7 km off Srinagar’s city centre. Unsold rugs and shawls worth crores of rupees are piling up to the dismay of general manager Rafiq Ahmad Shah. “Tourism is a flop this year, so is our production,” he said. Orders were given to artisans in winter for summer sales as no one had foreseen crisis.

The ebbs and flows of violence and tourism

Tourism is important for Jammu and Kashmir’s economy, contributing 8% to the state’s gross domestic product. In 2016, the state had recorded 1,299,112 (1.29 million) tourists. The sector employs over 100,000 people, directly and indirectly, according to approximate industry estimates.

The 33-hectare Tulip Garden in Srinagar is the new addition to Kashmir’s tourism spots since 2008. However, in recent months, after the national media have been swamped with stories of violence in the Valley, tourist arrivals declined.

But tourism is also highly sensitive to issues of law and order. In recent months, the national media have been swamped with stories of violence in the Valley and between April and early June this year, only a few thousand tourists arrived, said tourism officials who did not wish to be named.

The Valley has seen a decline in insurgency-related violence in recent years but there has been a rise in street violence, mostly stone-pelting, as IndiaSpend reported on May 30, 2017. Tour operators and tourism officials argue that this violence is too sporadic and localised to affect travellers.

For tourists, however, any trouble, big or small, is avoidable. Bengaluru resident Badri Raghavan scrapped a long-awaited Kashmir vacation with his wife and three children in June 2017 though the cancellation cost was steep. The family’s plans had included a houseboat stint on the Nageen lake in Srinagar and homestay in Sonamarg.

“The tour operator insisted that it is safe but if I have all of seven days in hand for a vacation why would I spend it looking over my shoulders all the time?” said Raghavan.

Tourism figures for the Valley have had a direct link with its law- and-order situation. Kashmir was a strong favourite among national and international tourists until 1988, with over 700,000 arrivals. But in 1989, armed violence began in the Valley and the numbers dropped by 200,000. That year, there were 1,500 violent incidents which included bomb blasts and firing.

In 1990 and 1991, there were 4,211 and 3,780 violent incidents reported, respectively, thereby bringing tourist arrivals to a meager 6,287 tourists, a 98% decrease from tourist arrivals since 1989.

In 1995, violence eased in the Valley and in early 1996, assembly elections were conducted after eight years of governor’s rule. With a civilian government in place, tourist confidence too returned. In 1998, over 100,000 visitors arrived in Kashmir.

Four years later, India and Pakistan were at the brink of war following the December 13, 2001 attack on Parliament. Assembly elections held in the same year in Jammu and Kashmir in September were also marred by violence. Consequently, tourist inflow declined sharply in 2002, falling to 27,356.

With the start of the India-Pakistan peace process in 2003, and up until 2012, tourist figures climbed steadily to over 1.3 million. In 2015, the numbers fell below 1 million, but this time because floods had devastated Kashmir in September the previous year, affecting its tourism infrastructure badly.

Source: Department of Tourism, Government of Jammu & Kashmir

Note: Includes domestic & foreign tourists

Hotels fully booked last year; now, only 25% occupancy

Two top sales officials at two leading Srinagar hotels, who requested anonymity, said April-June occupancy is down by 70-80% this year compared to 2016.

“From April to June last year, we had no vacancies at all given the huge influx of tourists,” said one of the hotel officials, requesting anonymity. “But this year, we have just managed 25% occupancy. It is because of the fear psychosis being created about Kashmir, especially by TV channels.”

Currently, only 15 of 80 rooms in his hotel have guests staying in them.

In recent years, media portrayal of events as well as non-events in Kashmir have become a serious concern for Kashmiris, especially for those who rely on tourism and related activities.

“In a place like Kashmir, tourism inflow is often dependent on peace. But the media reportage about Kashmir is disrupting tourism by creating a false narrative about the situation in Kashmir,” Mahmood Ahmad Shah, director-tourism, Kashmir, told IndiaSpend. “In winter itself, TV channels were predicting the start of a bloody summer in March.”

Most early bookings were cancelled last year and there were hardly any new bookings this year, according to one of the two hotel officials IndiaSpend spoke to.

Tour operators also accused the media of prompting a Kashmir “boycott”. “Messages like ‘avoid travelling to a place where Indian flags are burnt’ were being circulated on WhatsApp group (sic). Who would dare to come now?” Farooq Kuthoo, secretary-general of the Travel Agents Association of Kashmir, was quoted as saying in The Hindu on July 6, 2017. The newspaper went on to quote a Gujarati student activist Rimmi Vaghela: “There is a concerted effort to shoo away Gujaratis from travelling to Kashmir this year online. Besides the social media, the vernacular press in Gujarat plays up the incidents of violence like never before.”

Prominent Kashmiri human rights activist Khurram Pervez tweeted recently:

At a recent leadership training session for academics at the Kashmir University, the trainer asked an academic from Rajasthan for the first word she associates with Kashmir. ‘Militancy’ was the answer. For the Kashmiri academics in the classroom, this seemed like a reflection on how Kashmir is portrayed in the media, an assistant professor later said.

“We are the victims of media propaganda,” said Abdul Hamid the manager of a hotel in north Srinagar. “A stone-pelting incident takes place somewhere, someday in Kashmir and it is shown repeatedly on TV for days together as participants on talk shows keep debating stone-pelting and militancy in Kashmir. This is creating a negative message about Kashmir.” Only three of the hotel’s 14 rooms had guests.

Either unemployment or wage cut for workers

The tourism crisis has affected workers more than owners, said Hamid. “Hotel owners at least get tax rebates when the tourism industry suffers, but most workers are either laid off or have their salaries slashed up to more than 50%,” he said.

In his late 20s, Shabir Ahmad from Tangmarg (Baramullah), was employed as a service boy by a Srinagar hotel in March 2015. He was asked to either accept a 60% wage cut or leave. “I preferred to stay as I have no other skill,” said Ahmad. “Now, I and other employees are just hoping that the tourist inflow to valley improves.”

Foreign tourists scarce, exacerbating tourism woes

Many countries including US, UK, Germany and France issued travel advisories against Kashmir.

“We used to love dealing with foreign tourists because they stay for days and weeks together,” said Tariq Ahmad Patloo, a houseboat owner at Dal Lake pointing to the pages of his old log books at his houseboat New Sea Palace. “Now, our houseboat gets just three-four foreign tourists a year.”

Tariq Ahmad Patloo showing the entries of foreign guests during 1980s from an old log book of his house-boat New Sea Palace.

Between 1990 and 2005, the number of foreigners travelling to Kashmir remained way under 20,000. It witnessed a steady increase after an improvement in the security situation across Kashmir.

In 2011 and 2012, the number of foreign tourists was 32,110 and 37,166 respectively. But, from 2013, this number declined again.

(Parvaiz is a Srinagar-based journalist.)

Courtesy: India Spend

Indo-Pak Cricket: Dilemma of an Indian Muslim Child

June 21, 2017

A very sorry state of affairs, poignantly addressed

Representation Image

It was 1978 or 79. I was 9 or10 years old. We used to stay on ground floor in a 4 floors building. Pakistan Cricket Team was in India. India won a match (or was it the series? Don't really remember). It was Diwali season. We had crackers at home (precisely the Lakshmi bombs. Aah!!! this I remember) As soon as we won, and this I remember completely, I came out in my garden and burst the bombs. I heard my friend, who stayed on the 2nd floor (he is no more. God Bless his soul) calling me out.

"Tu kyon baja raha hai? Pakistan toh haar gayee", he said.

I didn't understand what he meant. Who else, but my dad would know the answer to this, I thought, because he was the one who would answer all my questions in detail, always. But that day, I found him wanting. He just said,
"Bewakoof hai. Tum zyaada mat socho iss baare mein".

And I didn't think about it. My friends however, (I don't remember any Muslim friend from my childhood, except a 'Khan' who was a class mate) time and again, made me aware that this was a perennial issue, and never allowed me to forget about it. Though they meant no harm, it did hurt me.

As a Muslim child, during any India Pakistan match, I would not know how to react. Dil se, I was always an India fan, and disliked Pakistan, but by then I was keenly aware that even my friends, to a certain degree, associate me with Pakistan, and therefore to it's victory or loss. It was very confusing for a young Muslim boy, son of a man, who called himself a proud Indian.

By the time you grow up, you sort out your 'small' mental issues. I did too. I still dislike Pakistan (the only country I dislike) and love my country (though there are other countries I love too, but my love for those countries doesn't raise any suspicion, luckily). So what I see today, doesn't surprise me at all.

"Ohh, Rafiq is first and last a Muslim", some would say. "Self-pity is a part of their make-up". I don't care.

My worry is this. In those days, there was no social media, no photo-shop, so the impact was relatively less. A child who was not exposed to such innocent taunts as I was, remained unaffected. Now, no child is spared. A Hindu child today, is as much corrupted with such hate filled thoughts, as a Muslim child. They carry it with them to the schools, to the playground, to all such places where they should learn to love, learn to grow, learn to co-operate, learn to become human. Our hatred have made us the enemies of our own children. The issue is no more 'small'.

My father was aware of the issue, he thought it wise, not to expose his little son to this corrupt thought. Do we have such fathers today among us?

PS – When I went to see Bhaag Milkha Bhaag, a young father sat next to me with his very small daughter. When the child saw the scene where a Sikh family is killed in Pakistan, during partition, the clearly affected child asked her father, "Inko kyon maara?" The father very slowly (and carefully) said, "Sab Politics hai beta. Tum badey hokar samajh jaaogi". So yes, we have such fathers still around. I remain hopeful.

From Facebook Page of Rafiq Lasne

P.N. Bhagwati: Judging a Judge from a Human Rights Perspective

June 21, 2017

Bhagwati, J. has been celebrated as the pioneer of a comprehensive human rights jurisprudence in India. He has dramatically transformed constitutional understandings of the right to life and fundamental freedoms through judicial innovations and the introduction of a substantive rule of law. Here, we attempt to critically evaluate Bhagwati, J. from a human rights perspective for his contribution to constitutional law in India.

Darkest Hour for Human Rights in India
It is important to keep Bhagwati, J.’s decision in the infamous ADM Jabalpur case while tracing the trajectory of his subsequent judgments. Also known as the Habeas Corpus case presided over by the five senior-most judges of the Supreme Court, the judgment of April 28, 1976 has been condemned as a mortal blow to the cherished dreams enshrined in our Constitution. Bhagwati, J. concurred with the majority in closing the doors of justice for detenues during Emergency. Not only were Fundamental Rights, including the right to life and personal liberty, suspended; the Apex Court had effectively refused to fulfill its constitutional mandate of protecting the People against actions of the executive. The common man was terrorized with the hues of Emergency painting the nation in colors of silence, preventive detention, and human rights violations.

Active complicity of Bhagwati, J., though conceded to be an “act of weakness”, cannot be treated as a mere black spot on his career; “the instances of the Apex Court’s judgment violating the human rights of the citizens may be extremely rare, but it cannot be said that such a situation can never happen”. An apology rendered by Bhagwati, J. in 2011 does not diminish the bleakness of that judicial moment. However, Bhagwati, J.’s subsequent activist role in rewriting various constitutional articles ought to be appreciated, perhaps dichotomously, for his commitment to human rights activism.

Bhagwati and the Golden Triangle
Bhagwati, J.’s change of heart and judicial conscience is evident in his post-Emergency judgments. He immortalized Maneka Gandhi in a judgment that upheld her fundamental freedom to move and travel under Article 19(1)(d) by carving out the golden triangle of constitutional jurisprudence. By developing a substantive procedure established by law under article 21, Bhagwati, J. subjected any law, which may satisfy constitutional tests of article 21, to the tests of articles 14 and 19 as well:

“The law must therefore be now taken to be well-settled that Article 21 does not exclude Article 19 and that even if there is a law prescribing procedure for depriving a person of personal liberty and there is consequently no infringement of the fundamental right conferred by Art. 21, such law ill so far as it abridges or takes away any fundamental right under Article 19 would have to meet the challenge of that Article. Equally such law would be liable to be tested with reference to Art. 14 and the procedure prescribed by it would have to answer the requirement of that Article.”

Notwithstanding Bhagwati, J.’s political allegiance to the ruling government creeping into his judicial determinations, the Supreme Court judge has attempted to re-imagine his role in the judiciary through an unwaveringcommitment to socio-economic justice in upholding the constitutional validity of Article 31-C, which made any law enacted for the purpose of effectuating directive principles immune to judicial review under Articles 14 and 19, in the case of Minerva Mills v. Union of India.

Bhagwati: Father of Public Interest Litigation
While many regard the advent of Public Interest Litigation to bean act of judicial populism, Anuj Bhuwania argues that such populism of mirroring the political philosophy of the ruling government is one that preceded the Emergency. The legal aid movement spearheaded by Bhagwati, J. and Krishna Iyer, J. was an integral component of Mrs. Gandhi’s Twenty-Point Programme and the active role played by constitutionally mandated repositories of justice fell just about short of legitimating the Emergency regime. The rhetoric of the ‘People’ was yet another emulation as the judiciary attempted to refurbish its tainted image post-Emergency, by proclaiming itself to be the custodian of the Directive Principles of State Policy. In the case of State of Rajasthan v. Union of India, Bhagwati, J. eloquently upheld the proclamation of Emergency in the State of Rajasthan by surmising:

“There is a wall of estrangement which divides the Government from the people and there is resentment and antipathy in the hearts of the people against the Government…the Legislative Assembly of the State has ceased to reflect the will of the people…”

As he laid fertile ground for judicial innovations to follow, Bhagwati, J. justified relaxing rules of standing and “…devising new strategies for the purpose of providing access to justice to large masses of people who are denied their basic human rights and to whom freedom and liberty have no meaning.” The Judges’ Transfer case is apt to explain the assumed role of the judiciary by Bhagwati, J. as an “arm of the socio-economic revolution” to “perform an active role calculated to bring social justice within the reach of the common man”. Bhagwati, J.’s preoccupation with substantive justice enabled him to carve out avenues to disregard rigidity in procedural technicalities in order to effectively and meaningfully tackle issues of poverty, illiteracy and suffering. In assuming epistolary jurisdiction and encouraging people’s participation in adjudication, Bhagwati, J. fostered an era of unprecedented judicial activism that reprimanded prison authorities and the State machinery for keeping under-trial prisoners in jail for periods longer than the maximum term for which they would have been sentenced if convicted. He concisely articulated the purpose of public interest litigation as an attempt to “ensure observance of social and economic programmes, legislative as well as executive, framed for the benefit of the have-nots and the handicapped and to protect them against violation of their basic human rights, which is also the constitutional obligation of the executive.” Bhagwati, J. effectively imprinted juristic activism in the form of public interest litigation with the “insignia of an individual justice”.

He shifted focus to protecting the constitutional entitlements of bonded labor, child labor, children in observation homes, and workers in stone quarries, amongst others. Significantly, in the case of M.C. Mehta v. Union of India, Bhagwati, J. elucidated the function of the law to inject respect for human rights and the social conscience. This dynamic role of the law was used by the Supreme Court justice to create a new principle of absolute and non-delegable liability of corporations and factories that posed a potential threat to the health and safety of workers and people in surrounding areas for the social cost or harm caused by them. Bhagwati, J.’s focus on the outcome of social justice and human rights of the have-nots arguablyenabled him to justify deviation from procedural fairness. This gave way for subsequent justices of the Supreme Court to blatantly subvert procedure, such as the substitution of the petitioner with judge-appointed amicus curiae, disregard for evidentiary rules, heavy reliance on socio-legal commissions of enquiry, and refusal to lay down guidelines on the judiciary’s brief in regard to public interest litigation.

Bhagwati: The Death Penalty Abolitionist
An often-muffed aspect of human rights discourse is the death penalty debate, and Bhagwati, J. has proven to be a staunch abolitionist in this regard. His dissent in the case of Bachan Singh v. State of Punjab is memorable for his ethical and constitutional stand against capital punishment, as he dismissed the myth that the death penalty serves any social purpose of retribution, reformation or deterrence. In unhesitatingly holding death penalty to be violative of articles 14, 19 and 21 of the Constitution, Bhagwati, J. emerged as a true proponent of human rights law. This dissenting opinion deserves particular commendation for using international human rights instruments to buttress persuasive arguments that primarily focus on the individual and the prerogative of State instrumentalities to protect such an individual from State sanctioned infliction of human anguish and suffering. Significantly, Bhagwati, J. established a watershed moment for a conscientious judiciary that unpeeled layers of judicial abstraction and legal positivism by acknowledging that the death sentence has a certain class complexion:

“…it is largely the poor and the down-trodden who are the victims of this extreme penalty. We would hardly find a rich or affluent person going to the gallows. Capital punishment, as pointed out by Warden Duffy is “a privilege of the poor”…This circumstance adds to the arbitrary and capricious nature of the death penalty and renders it unconstitutional as being violative of articles 14 and 21.”

Bhagwati: The Realist
Bhagwati, J. died on June 15, 2017. With a mixed legacy of a grand people-oriented rhetoric and oscillating judicial outcomes ostensibly determined by the political ideology of the State, Bhagwati, J. exemplifies the workings of legal realism in the courtroom. It is about time we stop clinging onto the myth that exercise of judicial discretion is guided solely by legal principles. There is a growing need to study the social philosophy of judges to understand the politics, behavior, and reasoning of a Court that shapes the law of the land.

(The authors are students, Jindal Global Law School )

With 18,390 Narmada Dam Oustees “yet to be rehabilitated”, how can GOI be “satisfied” with R&R, ask Citizens

June 21, 2017

Citizens including supporters of the Narmada Bachao Andolan met the Minister, Water Resources and Invited her, Uma Bharati and Secretary to the Minister to Evaluate the Government's False Claims on Rehabilitation

A high-level civil society delegation, which met delegation Minister of Water Resources Uma Bharati, Secretary, Ministry of Water Resources, Amarjit Singh and Joint Secretary Sanjay Kundu on June 20, has been told that the Narmada dam’s gates were closed down after "evaluating" the recommendations made of the environment and rehabilitation and resettlement (R&R) sub-group.

The delegation conisted of Vimal Bhai from Matu Jan Sangathan, Manoj from All-India Kisan Sabha, Madhuresh Kumar, and Himshi Singh and Uma from National Alliance of People’s Movements, the delegation was further told that they were “satisfied” with the recommendations of the two subgroups.

The delegation met the minister and officials even as NBA leader Medha Patkar alleged that the closure of the Narmada dam’s gates in Gujarat, “except two because of a technical problem”, will lead to “submergence and related forcible eviction, in effect washing off somewhere around 18390 families of 141 villages as per the Madhya Pradesh government gazette notification of May 27.”

Patkar, in an email alert to Sabrangindia has said, the actual numbers are at the highest flood level are “much higher as per field surveys”, yet Vijay Rupani, chief minister of Gujarat and Prime Minister Narendra Modi have “announced a large celebration at the dam site at the end of July and Narmada Yatra across Gujarat.”

What is shocking is, said Patkar, the Madhya Pradesh chief minister Shivraj Singh Chouhan “hasn't uttered a word, rather has given silent consent to take a toll on more than 2.5 lakh in the submergence area.”

The Government of India response came even as the delegation sought copies of the recommendations by the sub-groups “so that inaccuracies be exposed and brought to the notice”, a Narmada Bachao Andolan (NBA) source, which organized the civil society meeting at the ministry, said.

It added, “The delegation told the minister and the government officials that the Ministry was ‘willfully’ choosing to read the Supreme Court judgment ‘in a certain light’ neglecting ‘the complete failure to prepare R&R sites and has buckled under the political pressure.”

The delegation also sought recommendations of the report of the six teams of the Central Water Commission, which made a visit to R&R sites on June 7-9 and submitted their report on June 11. NBA said, its activists “confronted the six teams, which went to Dhar and Badwani districts, and asked them to visit certain sites; yet they dodged the activists.”

In a statement following the meeting, which was preceded by a demonstration on the ministry’s gates in Delhi, the NBA said, “It is shameful that the lives of the people affected by the dam in Madhya Pradesh are only numbers for them and there is a complete abdication of their responsibility to monitor the situation on the ground.”

“This was amply visible in the conversation between the delegation and the ministry officials, who continued to ask for numbers and names of the sites. The Ministry has every data with them and they have simply chosen to close their eyes and put the stamp on the false information given by the government of Madhya Pradesh”, the statement alleged.

Asking the minister and the secretary, Ministry of Water Resources, to “to face the people in Narmada Valley and see for themselves R&R claims”, the NBA called the closure of “undemocratic and unjust”.

“This paves the way for imminent submergence of 192 villages and one township of Madhya Pradesh this monsoon”, it said, adding, “Citing Supreme Court order of February 2017, the decision has been taken to close down the gates without verifying actual ground conditions in Madhya Pradesh.”

Pointing out that “the claims of the almost complete disbursement of the compensation, as per the Supreme Court judgment, is not true, since a number of applications are still pending in front of the Grievance Redressal Authority in Madhya Pradesh”, the NBA said, “In these matters, the claims of the project affected families for disbursement of the appropriate amount for the land lost hasn’t been settled yet.”

No, the Attack by Naxals on the CRPF Killing 25 personnel in Sukma is Not a Human Rights Violation: CRPF

June 21, 2017

The Government of India’s powerful Central Reserve Police force (CRPF) – whose roles include crowd control, riot control, counter-insurgency operations, and dealing with left-wing extremism – has denied that the Naxal attack on April 24, 2017 in Chhattisgarh was a human rights violation.

In the brutal attack on a team of 90 CRPF personnel who were on duty, sanitising a stretch of the public road being constructed in the Burkapal-Chintagufa area of Sukma district, at least 25 CRPF personnel died in ambush, while scores of others were injured.

According to surviving CRPF jawans, an unspecified number of militants are also said to have been killed in the attack. Later, the media reported on the preliminary findings of an internal inquiry conducted by the CRPF to determine what went wrong that cost so many human lives.

Based on media reports on preliminary findings of an internal inquiry conducted by CRPF to determine what went wrong that cost so many human lives, well-known right to information (RTI) activist VenkateshNayakinvestigated, using the Right to Information (RTI) Act, from the CRPF whether it considers “unfortunate deaths of serving CRPF personnel” in the incident as a “prima facie” case of “violation of the human rights of the CRPF personnel”.

Nayak, who is with the Commonwealth Human Rights Initiative, New Delhi, also sought a photocopy of the report of the inquiry conducted by CRPF into the circumstances surrounding the attack.”

An official CRPF reply has denied that the murderous attack amounted to human rights violation, stating, “There appears to be no violations of human rights”. The reply received by Nayak under RTI can be read here.

It added, the inquiry report into the incident contained “various security and tactics related issues” and therefore “cannot be shared under RTI Act because it might adversely affect CRPF's strategic response.”

Explains Nayak in an email alert to Sabrangindia, “The Constitution of India guarantees several fundamental rights to all citizens. However, when a citizen enters any of the notified security forces, some of their fundamental rights are curtailed, so long as they are in service.”

“Article 33 of the Constitution empowers Parliament to restrict or abrogate any of these fundamental rights in the case of citizens joining the armed forces (army, navy, air force etc.) and forces involved in the maintenance of public order (such as the police)”, he adds.

According to Nayak, the CRPF Act, 1949, including the Schedule of The Police Forces (Restriction of Rights) Act, 1966, validate restrictions on CRPF personnel.

However, insists Nayak, “They continue to have the fundamental right to life while in service. Clearly, the murderous attack in April by left-wing extremist groups amounts to violation of their human rights by non-state actors. By denying this reality, the CRPF may be doing injustice to its own personnel.”

Ironically, says Nayak, the CRPF reply comes in the face of attack occurs, at a time when “self-appointed conscience-keepers of the ‘nation’ and advocates of a belligerent brand of ‘nationalism’ operating through TV news channels (official spokespersons of ruling political parties and news-anchors alike) accuse human rights advocates of not raising their voice against the violation the human rights of security personnel.”

Suggesting the RTI reply make these “pontificators of nationalism” to question the government's attitude towards such incidents, Nayak wonders, “Why does the Government and in this case, the CRPF, fight shy of treating these attacks as ‘human rights violations’ of their personnel?”

What the CRPF treats as "human rights violations" under the RTI Act is one of the questions that will come up for examination next month in two of my Writ Petitions filed before the Delhi High Court.

This is how VenkateshNayak went about his investigation:

CRPF denies that the Sukma attack amounts to violation of the human rights of its personnel

A couple of weeks after the attack, I sought the following information from the CRPF, under The Right to Information Act, 2005 (RTI Act):

"Apropos of the enclosed news report, I would like to obtain the following information under the RTI Act, from your public authority, as prima facie,it pertains to allegations of violation of the right to life of the CRPF personnel who were killed in the attack that occurred on 24 April, 2017 in Sukma, Chhattisgarh:

1) A clear photocopy of the report of the inquiry conducted by the CRPF into the circumstances surrounding the said attack on the CRPF personnel along with annexures, if any.

I am a citizen of India. I have attached an IPO (bearing #38F 122978) for Rs. 10/- towards payment of the prescribed application fee. The reports of the unfortunate deaths of serving CRPF personnel in the said incidents prima facie may constitute allegations of violation of the human rights of those CRPF personnel. Therefore I believe this is a fit case for disclosure of information under the second proviso of Section 24 of the RTI Act. Kindly obtain the approval of the Central Information Commission prior to disclosing the information described above as is the statutory requirement under the said proviso of the RTI Act." [emphasis supplied]

Recently, in June, taking refuge under Section 24 of the RTI Act, the Central Public Information Officer (CPIO), CRPF has sent a reply denying that the murderous attack amounted to human rights violation.

Section 24 of the RTI Act exempts 26 intelligence and security organisations from ordinary obligations of transparency like other public authorities. However they are duty bound to give information pertaining to allegations of corruption and human rights violations. Information about allegations of human rights violations can be given only with the approval of the Central Information Commission. Exempt agencies like the CRPF simply do not provide any information at all even if it is related to allegations of corruption or human rights violation. Often they simply deny the existence of such allegations.

The CRPF CPIO's reply to my RTI application is reproduced below:

"b) In the instant matter, there appears to be no violations of Human Rights as well as facts of the case do not attract the allegations of corruption. Moreover your application does not make any reference to such allegations. Hence this department is not liable to provide any information in this regard to you under RTI Act-2005." [emphasis supplied]

The CPIO of CRPF also said that the inquiry report into the incident contains various security and tactics related issues and cannot be shared under RTI Act because it might adversely affect CRPF's strategic response. (The CPIO's reply, the RTI application, the attached news report of the deadly ambush are in the attachment.)

What is problematic with the CRPF's RTI reply?
The CRPF's CPIO has held that the deaths of the 25 personnel in the ambush do not amount to violation of their human rights by non-State actors even though I had specifically pointed out this connection in my RTI application. This reply is hugely problematic for the following reasons:

1) Part III of the Constitution of India guarantees several fundamental rights to all citizens. Some fundamental rights such as the rights to life and equality before the law, are guaranteed even for individuals who are not Indian citizens. However, when a citizen enters any of the notified security forces, some of their fundamental rights are curtailed, so long as they are in service. Article 33 of the Constitution empowers Parliament to restrict or abrogate any of these fundamental rights in the case of citizens joining the armed forces (army, navy, air force etc.) and forces involved in the maintenance of public order (such as the police).

The Police Forces (Restriction of Rights) Act, 1966enacted by Parliament, restricts three categories of fundamental rights of every member of a notified police force:

i) Personnel of police organisations notified in the Schedule of the Act cannot become a member of any trade union, labour union or political association or any other society, association, institution or organisation unless they are part of the force or have been set up for social, recreational or religious purposes [restriction on the fundamental right to form associations or unions guaranteed by Article 19(1)(c)];

ii) Police personnel are prohibited from communicating with the press or publishing a book, letter or document unless it is about the discharge of official duties and with proper authorisation or if it is purely artistic, literary or scientific in character [restriction on the fundamental right to freedom of speech guaranteed by Article 19(1)(a)]; and

iii) Police personnel are prohibited from participating in any meeting or taking part in any demonstration organised by any body for political purposes [restriction on the fundamental right to freedom of assembly guaranteed by Article 19(1)(b)].

As the CRPF Act, 1949 is included in the Schedule of The Police Forces (Restriction of Rights) Act, 1966– all three restrictions apply to CRPF personnel as well. As this is a law duly enacted by Parliament, such restrictions are treated as being reasonable and have been upheld by Courts in umpteen cases.

However, nowhere in The Police Forces (Restriction of Rights) Act, 1966 is the right to life and liberty guaranteed under Article 21 of the Constitution restricted for CRPF personnel or the members of other police forces listed in the Schedule. They continue to have the fundamental right to life while in service. Clearly, the murderous attack in April by LWE groups amounts to violation of their human rights by non-State actors. By denying this reality, the CRPF may be doing injustice to its own personnel.

2) There is another reason why this denial is problematic. Every time such an attack occurs, self-appointed conscience-keepers of the "nation" and advocates of a belligerent brand of "nationalism" operating through TV news channels (official spokespersons of ruling political parties and news-anchors alike) accuse human rights advocates of not raising their voice against the violation the human rights of security personnel. Instead of barking up the wrong tree, these pontificators of nationalism must question the Government's attitude towards such incidents. Why does the Government and in this case, the CRPF, fight shy of treating these attacks as "human rights violations" of their personnel? Surely, there must be a reason for it. If such attacks causing the deaths of security personnel are not treated as "human rights violations" committed by non-State actors, why paint human rights advocates as villains even though they always condemn such incidents in unequivocal terms?

In response to another RTI application of mine, sent in May 2014, during the United Progressive Alliance (UPA) regime, the CRPF denied that there was any human rights violation when its personnel posted on election duty in Chhattisgarh and Bihar, died due to attacks launched by LWE groups. This policy of denial continues under the present National Democratic Alliance (NDA) regime. It is high time the Government made a clean breast of its understanding of attacks on security personnel- as "human rights violations" or merely as "criminal offences". Surely, "the people" in the "times now", as citizens of the "Republic" have the right to know – what rationale determines the Government's attitude towards such murderous attacks? (pun intended)

In Dalit Girl’s Rape, Gujarat Police Fail to Register FIR, Protests to begin from June 26

June 21, 2017

Gujarat police failed to register a complaint of rape and reduced crime to 'eve teasing.' On June 10, a Dalit girsl from Bural Village in Banaskantha district was allegedly raped by Gajubha Darbar whilre returning from a farm after releaving herself. Eleven days later, the Gujarat police has failed to register a complaint of rape.

Jignesh Mevani, convenor, Rashtriya Dalit Adhikar Manch, and Chirag Patel and Reshma Patel of PAAS have warned of a stir on June 26 if the government does not direct the Deesa Rural police to lodge a rape case by June 25 in a case of a Dalit girl of Bural village in Banaskantha district.

“If PI DD Gohil, PSO Galbabhai and Women Police Constable (WPC) Sharmishtha of the Deesa rural police station are not suspended and an atrocity case lodged against them, we will stage a blockade on the bridge over river Banas on June 26,” Mevani said while talking to mediapersons in Ahmedabad on June 20 in the presence of the 18-year-old victim.

Mevani said, “She was raped by Gajubha Darbar while returning from a farm after relieving herself on June 10. Though 10 days have passed since the incident, Deesa rural police are yet to lodge a rape complaint. They have lodged an eve-teasing complaint. Though the victim's family requested for a medical examination the same day, she wasn't sent for the same.” He said,

“The PSO kept them waiting by saying PI DD Gohil was not at the police station. When the kin approached advocate Madhabhai, they were told to meet Gohil at Dhanera crossroads, 24km from the village. Upon reaching there, Gohil asked them to present a caste certificate and SLC to lodge a complaint.” Mevani added, “Even WPC Sharmishtha slapped the victim twice and asked her to sign on the FIR that they will write. Finally, they lodged an eve-teasing case under Section-354 of the IPC instead of Section-376 (rape).”

Swacch Bharat: A Policy to Eliminate India’s Toilet-less Peoples

June 21, 2017

In India, a mere 34% of the population has access to improved sanitation in 2010 compared to 92% in Sri Lanka, 64% in China, 56% in Bangladesh, 48% in Pakistan and 44% in Bhutan. Even Pakistan is better than India in this regard.

Representation Image India Today

When Narendra Modi, as prime minister of India, initiated his ‘Clean India’ (Swacch Bharat) campaign nobody would have conceived that it opened up murderous possibilities. The symbol being used for this campaign are Mahatma Gandhi's spectacles, a man who stood for non-violence, resolutely.

For that matter, a number of things were not imagined would actually take place after Narendra Modi's ascension to power – new reasons and tools to harass some people, some of which could become fatal.

For example, people would be beaten up, or could be even killed on the suspicion of having consumed beef. Then, if a Muslim boy and Hindu girl chose to marry, then in the name of ‘Love Jihad’, he (for sure) or sometimes, the couple may have to scurry for cover. The police have been especially empowered — if police suspected a man accompanying a woman of harassing her then Anti-Romeo squads were ready and waiting to jump upon him. Kashmiri students studying in other states of India could and have been beaten up at the slightest provocation, after being labelled anti-national, etc.

More serious intractable problems like famers' suicides, malnourishment of children, human trafficking of girls and women from Nepal and Bangladesh through India, people including children begging on major street crossings of national and state capitals, daily corruption at government offices, schools and hospitals have not been raised by the ever vigilante mobs allied to the current ruling dispensation. To whip up a frenzied sense of ‘ultra-nationalism’, hunger, poverty and unemployment do not have potential; ‘Love Jihad’ and ‘anti-Muslim’ rhetoric is a far more potent weapon.

The manner in which Communist Party of India (Marxist-Leninist) activist Zafar Khan was lynched to death in Pratapgarh, Rajasthan is not just shocking, the muted reaction against such increasing barbarism forces us to ask, what kind of society do we want to create?

On the morning of June 17, 2017 employees of Nagar Parishad of Pratapgarh were taking photographs of women belonging to the Mehtab Khan slum defecating in the open with the objective of ‘shaming them’. This deplorable act was part of government policy. Zafar Khan who was also a resident of this slum decided to protest. The accompanying Commissioner Ashok Jain instigated his Dalit sanitation employees to beat Zafar to death. A resurgent India under the new ruling dispensation has found a new reason to lynch people.

Do the women who defecate out in the open enjoy doing so? When they don't have toilets at home where are they supposed to go to relieve themselves? If people don't have toilets who is supposed to build toilets for them? If anybody was to be punished for open defecation of women in Mehtab Shah slum it should have been the government officials whose responsibility it was to create these toilets in the first place. If the land on which the slum was built was government land and possibly personal toilets could not have been built on it then the government should have got a Sulabh toilet built there.

Let’s compare India's situation with her neighbours in South Asia: it becomes clear that successive governments in India have not given priority to construction to toilets. The figures are stark: In India, a mere 34% of the population has access to improved sanitation in 2010 compared to 92% in Sri Lanka, 64% in China, 56% in Bangladesh, 48% in Pakistan and 44% in Bhutan. Even Pakistan is better than India in this regard.

In India the caste system further prevents Dalits from using available toilets. For example, a number of Dalit domestic workers who do different chores like cleaning, cooking or baby sitting in mostly upper caste middle class or upper middle class households do not have permission to use the toilets inside these homes. They have to find some bush, tree or wall outside to relieve themselves.

It is the government officials who are responsible for the death of Zafar Khan. The Rajasthan Chief Minister Vasundhara Raje Scindhia, who termed it as an unfortunate incident, should have resigned taking moral responsibility.

The Commissioner of the Nagar Parishad of Pratapgadh, Ashok Jain follows a religion, which lays special emphasis on non-violence. Jains are known to take care so that no micro-organism gets killed because of them. The Jain monks tie a piece of cloth around their mouth and nose for this reason. Jains don't eat onion and garlic to keep their passions under check. Yet Ashok Jain didn't seem to have any qualms to instigate ‘his men’ to get Zafar Khan murdered.

Narendra Modi'a cleanliness drive has, by now, completed three years. Citizens have been charged with a new cess to fund this campaign. Large amountsof public money was spent. The ground reality, however, doesn't seem to have changed. The cows are eating as much plastic on the roads as they were doing before and the amount of untreated sewage that flows into river Ganga in Varanasi remains the same as before. The Clean India campaign is a complete and abject failure. People (celebrities) got themselves photographed with brooms. But these photographs were not taken with members of the the Valmiki community, actually responsible for the demeaning job of daily cleaning our sewers after entering them. The credit for whatever cleanliness we see around us goes to the Valmiki community.

In all likelihood, more money was spent in publicising rather than actual cleaning in the Clean India campaign.

The policy of Narendra Modi has created a new category of discrimination in India. It mostly overlaps the rich-poor or caste-outcaste divide – the toileted and the toilet-less. By eliminating the toilet-less people India can claim to have increased the percentage of population with access to sanitation. It is a lie that statistics even, can tell.

Banks May Lose ₹4,300 crore on Loans to Kingfisher Airlines

June 21, 2017

SBI expected to go over ₹900 crore in the red from loans to Mallya's grounded airline.

A consortium of 14 banks is expected to lose nearly ₹4,300 crore on account of loans given to the grounded Kingfisher Airlines that was headed by Vijay Mallya who is currently a fugitive from law in the United Kingdom. This has been disclosed in an internal document prepared by the country's biggest bank, the State Bank of India, which alone stands to lose ₹900 crore. The actual losses may well be even higher than these estimates.

The author wishes to acknowledge the anonymous whistle-blower who provided the internal assessment report used in this article to the editor of the Economic and Political Weekly.

Credit: Kurush Pawar, via CC BY S.A- 2.0, Flickr

Fourteen banks, 13 of which are public sector banks, stand to lose nearly ₹4,300 crore on account of the loans they have advanced to the grounded Kingfisher Airlines (KFA). Of this amount, the State Bank of India (SBI), India's largest bank and the biggest lender to the KFA, expects to make a loss of over ₹900 crore. This was revealed in an internal assessment prepared by a senior SBI official in December 2016. The assessment, which was not put out in the public domain, was recently shared with the Economic and Political Weekly by a whistle-blower.

The assessment of loss was prepared on 7 December 2016 by Govind Subbanna, chief general manager of the SBI's Mumbai-based "mid corporate group" and submitted as a memorandum to the bank's "Special Committee of the Board for Monitoring Large Value Frauds (₹5 crore and above)" for its meeting that was scheduled and held nearly two months later on 17 February 2017.

Analysing various assets pledged by the KFA as security against loans, the memorandum concludes that not only does the market value of these assets amount to just ₹1,565 crore, but the recoverable value works out to only ₹1,071.64 crore against an exposure of around ₹4,457 crore. The total loss to the SBI and the other banks is calculated as the difference between their individual exposures and their share in this recoverable value. SBI, which has the largest exposure to the KFA amounting to ₹1,202 crore, declared the loan as a non-performing asset in 2011 and classified it as a "fraud" in September 2016. The memorandum pegs the bank's recoverables at arund ₹200 crore. This assessment offers a first peek into the losses that Indian banks stand to incur on loans disbursed to the beleaguered airline, which was grounded in 2012 by India's aviation regulator, the Directorate General of Civil Aviation.

A detailed questionnaire was sent to the SBI chairperson Arundhati Bhattacharya by email and also by regular post on 17 May 2017. On 8 June, a spokesperson of the SBI responded to the questionnaire sent by the EPW through email stating that, "It is a policy of the Bank not to comment upon Individual accounts and it's treatment [sic]."

Large Exposure
As many as 17 banks had extended term loans to KFA between 2009 and 2012, a period when the airline's business steadily deteriorated and it found itself unable to repay its dues. In 2010, 14 of these banks formed a consortium to pursue these loans together. On 21 December that year, the consortium of banks signed a Master Debt Recast Agreement (MDRA) with KFA. The MDRA merged all the loans into a single term loan. Various assets that KFA had pledged to the banks as security were also pooled together. To this the MDRA added a personal guarantee offered by Vijay Mallya and a corporate guarantee by United Breweries (UB) (Holdings), a listed company which is a parent to the KFA.

In the case of a recovery, banks agreed to share the proceeds proportionate to their respective share in the total exposure. The SBI memorandum in the possession of the EPW uses the total outstanding exposure as on 31 January 2014 to calculate banks' respective shares. As on that date, the airline owed ₹6,955 crore to the banks, including interest. Thirteen of these are public sector banks, facing 99% of the total exposure, led by the SBI (26.9% share), followed by IDBI Bank (12.7% share), and Punjab National Bank (11.7%) (see Table 1 for all the banks' exposures). Axis Bank, the only private lender, has a mere 0.8% share in exposure.

For the purpose of loss calculation, the memorandum considers SBI's exposure to be ₹1,201.19 crore and not ₹1,874.66 crore due on 31 January 2014. The SBI spokesperson did not clarify how and why this reduction came to be. Assuming that this was on account of some recoveries the banks made in the intervening period, and further assuming that these recoveries were shared with other banks in terms of the MDRA, we have adjusted the consortium's total exposure based on the fall in SBI's exposure. Accordingly, the total exposure is assumed to have reduced from ₹6,955.97 crore to ₹4,457.11 crore.

Many Assets Deemed Worthless
The memorandum's calculation of losses is based on its analysis of how much value can be recovered from KFA's assets that were pooled under the MDRA. Interestingly, it does not consider recoverable value of the guarantees made by Mallya and UB (Holdings), even though these were also a part of the MDRA. We will come to that later.

The total market value of all current and fixed assets of KFA are shown to have a write-down value (WDV) of ₹395 crore as on 31 March 2013. But this entire asset base is worthless, according to the memorandum. While the WDV of current assets of the company, including spares, consumables and book debts, was ₹186.12 crore on 31 March 2013, their realisable value is considered zero. According to the memorandum, this is because "the spares are spread across various airports and the value, quantity and quality of the same is unascertainable as on date."

Similarly, while the WDV of KFA's fixed assets, such as ground support equipment, was ₹131.09 crore as on 31 March 2013, the memorandum finds them worthless because "these are not easily identifiable and spread over at various airports, as the company is defunct since December 2012." The third set of assets deemed worthless are two helicopters owned by the airline, whose WDV was ₹78 crore on 31 March 2013. The "DGCA … informed that these two helicopters are stationed at Juhu Aerodrome, Mumbai. These are in unserviceable condition. Hence realisable value is considered 'nil,'" the memorandum states.

Kingfisher Airlines Properties
Two real estate properties of the airline were pledged to the banks: Kingfisher House, the airline's erstwhile headquarters near the Mumbai airport, and the Kingfisher Villa in Goa. The Goa villa was sold in March 2017 to Sachiin Joshi, a businessman, for ₹73 crore, after three auctions failed to find buyers (PTI 2017b). These were held in October 2016, December 2016 and March 2017 at reserve prices of ₹85.29 crore, ₹81 crore and ₹73.1 crore respectively.

Joshi's purchase, which has been described as a "private transaction," was not reflected in the memorandum since it was prepared three months earlier, in December 2016. The price Joshi paid is slightly higher than the memorandum's recovery estimate of ₹68.23 crore, but lower than the true market value of ₹85.29 crore, which it attributed to a July 2016 valuation by P C Gupta, a valuer.

Kingfisher House in Mumbai still has no takers. The memorandum states that its market value is ₹106.95 crore based on a June 2016 report by Bhide Associates, a consultancy firm. It estimates the recovery value to be ₹85.56 crore. In the last auction held in March 2017, the House failed to find bidders for a reserve price of ₹103.5 crore (PTI 2017a).

Kingfisher Brand Worth ₹266 Crore?
Despite its pessimism about KFA's physical assets, the SBI memorandum is strangely upbeat about the airline's brand value. KFA owns nine trademarks such as the 'KFA's trademark, logo, and taglines like "Fly Kingfisher" and "Fly the good times." Their patent registration restricts their use to the airlines business only, and not to beer or water. The SBI memorandum reports that the market value of these nine trademarks is between ₹6.37 crore and ₹313.8 crore based on valuation conducted in 15 different business scenarios by RBSA Valuation Advisors LLP, which submitted its report on 28 February 2015. The memorandum states a very wide range of the recoverable value of these trademarks: between ₹5.4 crore and ₹266.7 crore.

This is surprising. The realisable value of these trademarks is what a buyer would be expected to pay to use these trademarks on another airline. Obviously, the buyer would expect to recover this expenditure by gaining advantage of the "Kingfisher Airlines" brand. This seems improbable, as has been evident from the consortium's failure to sell these trademarks. In April 2014, the consortium of banks led by SBI invited expressions of interest from the public for purchasing the nine trademarks. "The response to the public notice was not evident," according to the SBI memorandum.

Then, the consortium tried to sell the trademarks at two auctions: the first, held on 30 April 2016, had a reserve price of ₹366.7 crore, while the second was held on 25 August 2016 at a reserve price of ₹330.03 crore. Both failed. After the first auction failed, a Press Trust of India (PTI) report quoted an anonymous banker saying, "It is better to start a new airline company than to buy this brand and revive it." After the second auction failed, an anonymous intellectual property rights expert told the PTI: "[The] value of trademark [sic] of the entire group has gone down to almost nothing and nobody will like to buy it."

Yet, the SBI memorandum seems upbeat about selling the trademarks, and proposes now to value and auction the nine trademarks separately. It is not clear if this excercise has begun.

Trademark Attraction
The SBI does not seem to have learnt from banks' earlier encounters with Kingfisher's brand values. In 2011, a year before it was grounded, the KFA brand was valued at nearly ₹4,100 crore by consultancy firm Grant Thornton. This valuation, which the consultancy had said was only for "internal purposes" and not an investment advice, was nevertheless used by the airline as collateral to borrow more money from banks such as IDBI Bank, which, as a charge-sheet prepared by the Central Bureau of Investigation (CBI) has revealed, preferred the brand valuation as a collateral over tangible assets such as shares of United Spirits, a well-to-do sister concern which is under the UB Group. The CBI later arrested former IDBI Bank chairperson and other senior officers.
In 2016, the Serious Fraud Investigation Office of the Ministry of Corporate Affairs sent a notice to Grant Thornton for its brand valuation, according to a report in Mint newspaper (Sanjai and Upadhyay 2016). The consultancy clarified to the publication that it stood by its valuation which was "appropriate in the context of when it was done and the purpose for which it was done" (Upadhyay 2016). Going by this, the question arises as to whether the SBI should be pinning hopes on a brand valuation of KFA prepared in 2015. After all, between then and when the memorandum was signed, the airline and its founder have arguably become national icons of corporate defaulters to public sector banks (even though they are nowhere the largest). Several warrants have been served on Mallya, who has since resigned his membership of the Rajya Sabha or the upper house of Parliament and moved to the United Kingdom in an apparent self-exile, and from where he now faces extradition.

Shares of United Spirits
ICICI Bank, which had lent ₹450 crore to the airline, sold its entire exposure to SREI Venture Capital's Indian Global Competitive Fund in July 2012. ICICI's loan was backed by shares of United Spirits. In 2014, when its share price increased following news of its partial sell-out to Diageo Plc, IGCF sold all its pledged shares of KFA and earned ₹1,341 crore. After adjusting ₹690 crore against its exposure in KFA, it deposited the remaining ₹651.15 crore in the Karnataka High Court.

The banks now want this balance amount. They filed a suit in a civil court in Bengaluru to this effect, but this plaint was dismissed on 16 July 2016. The banks have challenged this verdict before the Karnataka High Court (SBICap Trustee Company Ltd v IDBI Trusteeship Services Ltd and others, 2016). Their petition had not been admitted at the time of writing this article on 11 June. Yet, an amount of ₹651.15 crore has been included in the SBI memorandum as a "receivable," and forms a substantial chunk of the total ₹1071.64 estimated recovery of the bank.

Likely Losses
This is the reason we argue that SBI has overstated its recoveries. Excluding the amount pending before the Karnataka High Court, the consortium's recoveries fall to ₹420 crore and their losses work out to ₹4,037 crore, with SBI losing ₹1,160 crore out of its exposure of ₹1,201 crore. Additionally, assuming that KFA's trademarks are worthless gives us the worst-case scenario, under which the bank consortium's losses are ₹4,303 crore as their recoveries fall to ₹153 crore, which is the value of both the real estate properties (see Table 2).

Other Recovery Cases
As we mentioned, the memorandum surprisingly does not analyse recoveries from the guarantees offered by Mallya and UB (Holdings). In fact, after it was prepared, the consortium initiated two court cases that can tilt all these calculations.

In 2013, after the loan to KFA was classified as an NPA by most banks, the consortium had filed an application before the Debt Recovery Tribunal (DRT), Bengaluru (SBI and Ors v Kingfisher Airlines Ltd and Ors, 2017) demanding a recovery of ₹6,203.35 crore invoking these two guarantees and additionally dragging Kingfisher Finvest (India) Ltd, a 100% subsidiary of UB (Holdings), for recovery. The demanded amount was based on KFA's dues as on 31 May 2013. In its application, the consortium sought payment of interest at 15.2% per annum from 1 June 2013 until the date of payment. On 19 January 2017, the DRT ruled in favour of the banks ordering Mallya, KFA, UB (Holdings) and Kingfisher Finvest Ltd to "jointly and severally" pay the demanded sum to the banks.
The other legal victory against KFA was in a suit that the consortium along with engine and oil suppliers (who had also claimed unpaid dues of about ₹524 crore) filed before the Karnataka High Court to "wind up" UB (Holdings) for failing to discharge its obligations as a corporate guarantor. On 7 February 2017, the high court ruled in favour of the petitioners and ordered an official liquidator to take charge of the company's assets and proceed with their sale.
It is not clear why the SBI memorandum did not take into account the probablity of winning these cases, even as it considered ₹651 crore as a receivable when their claim over the amount has not even been admitted by the high court. Both these court victories came after the memorandum was prepared but well before it was presented to the Special Committee of SBI's board on 17 February 2017. The documents made available to the EPW suggest that the memorandum was not updated to reflect recoveries resulting from these victories.

This is surprising. After all, the consortium spent considerable resources and several years fighting these legal battles. Instead, the SBI memorandum only mentions the DRT case as part of a timeline of developments in the KFA account. The timeline does not mention the winding up petition at all. In the questionnaire sent to SBI chairperson Bhattacharya, we asked why this was so. We had also asked if the memorandum had been updated, or if the committee took cognisance of the court victories and ordered a fresh study. Since SBI has a policy to not discuss individual accounts, we do not know the present position.

To speculate, it is possible that the banks are pessimistic about any actual recovery from these assets. For instance, the assets of UB (Holdings) may not be sufficient for banks to recover their dues. As the high court judgment remarks on its winding up petition, the quantum of the consortium's claims renders UB (Holdings) "commercially insolvent and a mere skeleton (with) … some assets and liquidity" (IAE International Aero Engines AG and others v United Breweries (Holdings), 2017).

Hoping for a One-time Settlement?
Perhaps this is why the consortium of banks has never closed their doors on a one-time settlement with KFA and Mallya. In March 2016, Mallya, on behalf of Kingfisher Airlines, UB (Holdings) and Kingfisher Finvest offered a settlement amounting to ₹4,000 crore, which consisted less of actual cash and more of an array of receivables such as a recall of pre-delivery payments to Airbus, and some financial claims the company has made in court against an engines supplier. These offers were made after the banks had reached the Supreme Court with a request for Mallya to declare, on oath, all his financial interest in India and abroad, including those of his family. (The banks had landed at the Court's doors after this request was not considered by the DRT and subsequently the Karnataka High Court.)

This offer was rejected by the banks for lacking bonafide intentions, a claim that the Karnataka High Court judgment (on UB Holdings' winding up petition) supported by saying that Mallya's proposal showed "lack of bona fides" as it was "hedged" with conditions that were "practically impossible of compliance." The court judgment mentioned that Mallya made a second offer, which was also rejected by the banks (IAE International Aero Engines AG and others v United Breweries (Holdings), 2017). Yet, the consortium has reiterated that it is still open for a settlement, but that they require a proof of bonafide intention from Mallya. Before the Supreme Court, the consortium has demanded that Mallya can prove this by declaring all his assets on oath and making a "substantial" deposit before the Court (State Bank of India and others v Kingfisher Airlines Ltd and others, 2016).

On 9 May 2017, the Supreme Court found Mallya guilty of contempt of court for not declaring these assets, but ordered him to be present before the Court on 10 July 2017 for contempt proceedings. Interestingly, the guarantees offered by Mallya and UB (Holdings) are themselves under legal challenge. In 2013, before the banks had approached the DRT, Mallya and UB (Holdings) filed a civil suit in the Bombay High Court claiming that they were coerced into offering their guarantees, and appealed that these guarantees be termed invalid. They have additionally appealed for a decree that the liability under the guarantees is limited to ₹1,601.43 crore "based on admissions by the consortium of lenders" (UB (Holdings) 2016).

This is unlikely to go through. The Karnataka High Court referred to the coercion claim as "sham and moonshine" remarking that it was more likely that the banks were the ones being coerced (IAE International Aero Engines AG and others v United Breweries (Holdings), 2017). Still, according to its status on the Bombay High Court website, the suit is still is at a "pre-admission" status even though four years have passed; the last hearing in the case was in June 2015 (United Breweries (Holdings) and others v State Bank of India and others, 2013).

Open Questions
The revelations of the memorandum, and the means by which it has been brought to light, raise important questions about SBI's self-confessed policy to not reveal details about its loan to KFA. As we described earlier, the memorandum records a fall in SBI's exposure to the airline from ₹1,874.66 crore in 2014 to ₹1,201 crore in December 2016. The Karnataka High Court judgment mentions that ₹544 crore were recovered from stock sales. But that does not justify the ₹673 crore reduction in KFA's liabilities to SBI alone.

In November 2016, the DNA newspaper published an "exclusive" story that the bank had transferred several bad loans, including those of KFA, to the Advance Under Collection Account or AUCA, which, as the publication described, is "a bin for toxic loans," a mechanism through which non-performing assets are taken off the bank's balance sheet without ending recovery efforts. As SBI head Bhattacharya clarified later, this does not amount to a write-off. (Rai 2016a, 2016b).

But the memorandum in our possession reveals that the KFA loan was moved to the AUCA as early as March 2014. That even two years later this information was considered "exclusive" shows that we know far less about this murky topic than the SBI is willing to disclose even in its internal documents.

CASES CITED
IAE International Aero Engines AG and Others v United Breweries (Holdings) (2017): Company Petition No. 57/2012, Bengaluru: High Court of Karnataka.
SBICap Trustee Company Ltd v IDBI Trusteeship Services Ltd and Ors (2016): Writ Petition 42942-42943/2016, Bengaluru: High Court of Karnataka.
State Bank of India and others v Kingfisher Airlines Ltd and Others (2016): Special Leave Petition (Civil) No. 6828-6831 of 2016, New Delhi: Supreme Court of India.
State Bank of India and Others v Kingfisher Airlines Limited and Others (2017): OA No. 766/2013, Bengaluru: Debt Recovery Tribunal, Karnataka.
United Breweries (Holdings) and Others v State Bank of India and Others (2013): Suit No. 311/2013, Mumbai: High Court of Bombay.

REFERENCES
PTI (2016): "No Takers for Brand Kingfisher, Trademarks," 30 April,http://www.thehindu.com/business/No-takers-for-brand-Kingfisher-trademar….
— (2016): "Kingfisher Auction Finds No Takers Again, Trademark Is Worth 'Almost Nothing,'" 26 August, http://www.firstpost.com/business/kingfisher-auction-finds-no-takers-aga….
— (2017a): "Any Takers? Lenders to Auction Kingfisher House in Mumbai, Goa Villa Today," 6 March, http://www.business-standard.com/article/companies/any-takers-lenders-to….
— (2017b): "Vijay Mallya's Kingfisher Villa in Goa Finally Sold for ₹73.01 crore," 8 April, http://www.rediff.com/business/report/vijay-mallyas-kingfisher-villa-in-….
Rai, Dipu (2016a): "DNA Exclusive: SBI Writes Off Loans of 63 Wilful Defaulters," DNA, 16 November, http://www.dnaindia.com/india/report-sbi-writes-off-loans-of-63-wilful-d….
—(2016b): "Write-off: Will SBI's Play on Words Help Recover Loans?" DNA, 17 November, http://www.dnaindia.com/money/report-write-off-will-sbi-s-change-in-term….
Sanjai, PR and Jayashree P Upadhyay (2016): "Kingfisher Airlines Brand Valuer Grant Thornton Now in Dock," Livemint, 15 March, http://www.livemint.com/Companies/ha3FlmyHooYZLVRDoIic8O/Kingfisher-Airl….
UB (Holdings) (2016): "Annual Report 2015–16."
Upadhyay, Jayashree P (2016): "Grant Thornton India Stands by Its Kingfisher Airlines Brand Evaluation," Livemint, 15 March, http://www.livemint.com/Companies/V2o6bVq02wdz9nU4VQws4K/Grant-Thornton-…

Nihar Gokhale (nihargokhale@gmail.com) is an independent journalist and researcher.

This article was first published on Economis & Political Weekly

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No, the Attack by Naxals on the CRPF Killing 25 personnel in Sukma is Not a Human Rights Violation: CRPF

In Dalit Girl’s Rape, Gujarat Police Fail to Register FIR, Protests to begin from June 26

Swacch Bharat: A Policy to Eliminate India’s Toilet-less Peoples

In India, a mere 34% of the population has access to improved sanitation in 2010 compared to 92% in Sri Lanka, 64% in China, 56% in Bangladesh, 48% in Pakistan and 44% in Bhutan. Even Pakistan is better than India in this regard.

Banks May Lose ₹4,300 crore on Loans to Kingfisher Airlines

SBI expected to go over ₹900 crore in the red from loans to Mallya's grounded airline.

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