Daily News (In Short)-13-August-2015

*# Maggi is back: Bombay HC quashes ban

In a major relief to Nestle India, the Bombay High Court on Thursday quashed the FSSAI order banning Maggi for six weeks. The order states that principles of natural justice were not followed and so the ban should be set aside. Meanwhile, even as Nestle continues to maintain that the decision to ban its product was arbitrary, the government's claim from the company for selling "defective and hazardous" Maggi noodles may exceed Rs 640 crore as it is tabulating further damages to be sought.
The case has been heard for over a fortnight with Nestle India denying the claims of Food Safety and Standards Authority of India (FSSAI) that the instant noodle has excesses lead content.
According to PTI, a division bench of Justice VM Kanade and Justice Burgess Colabawalla said that the "principles of natural justice" and procedures were not followed in the case. According to this report in The Times of India, the court also added that a show-cause notice was not issued before the ban.
The High Court also said that the samples were not tested at accredited laboratories raising doubts on the results. The court allowed Nestle to send five samples of each variant of noodles for fresh testing to three labs in Punjab, Hyderabad and Jaipur. If lead content is found below permissible limit by the three labs, Nestle will be allowed to manufacture Maggi noodles in India, the Bombay HC said, reported PTI.
The judges refused to grant stay on their order on a plea made by food regulators. They said the company had given an undertaking that it would not manufacture or sell Maggi noodles till the results of the three labs were received.
"The fresh tests would also take some time. Hence, there was no need to grant a stay on the order," the judges said. The HC held that the petitions filed by Nestle challenging the nation-wide ban on Maggi noodles was maintainable and that it (the high court) had the jurisdiction to hear it under powers derived by it under Article 226 of the Constitution.
FSSAI and FDA had earlier banned Maggi noodles saying the samples of noodles tested by them contained 'lead beyond permissible limit'.
Nestle had argued that its product did not contain 'lead' in excess of permissible ceiling and challenged the tests by FSSAI and FDA, while the food regulators had said that the lead content in the noodles detected during the tests in reputed laboratories was harmful to public health.
FSSAI had issued the order banning Maggi noodles on June 5, this year while FDA had issued similar order the next day. During a previous hearing in the court, Justices Kanade and Colabawala had asked both the sides to give their consent for fresh independent test. However, the parties could not arrive at a consensus to the suggestion mooted by the HC which today ordered fresh tests.
Nestle's lawyer Iqbal Chhagla had earlier said the company was agreeable to the suggestion, but the tests should be conducted in the presence of a renowned scientist and the samples available with the company should be used.
Darius Khambata, appearing for FDA, had contended that one of the samples must be from the lot collected by the state FDA. "For us, consumer interest is most important...this
litigation may go on but we feel that the issue should be resolved amicably and, therefore we suggested the parties to agree to a fresh independent test," the bench observed.
The Nestle lawyer alleged that FSSAI and FDA had violated followed principles of natural justice by not giving a hearing to the company before banning nine variants of Maggi noodles on the ground of lead content in these products were in excess of the permissible limit.
Also, though only three variants were tested, the regulators banned all nine variants of Maggi noodles, Chhagla had argued. He had said there was no substance in FSSAI's allegation about the company destroying evidence by burning Maggi stock.
"On the contrary, we have acted on the instructions of the food regulators by destroying Maggi product," he said.
Nestle, which had to recall the popular noodles brand after orders from the food safety regulator FSSAI, is the first foreign firm in India to face a class action suit, which was filed by the government yesterday under an hitherto unused provision of the three-decade old Consumer Protection Act.
The Consumer Affairs Ministry has filed a 45-page complaint before the National Consumer Disputes Redressal Commission (NCDRC) to seek Rs 284.45 crore in basic damages and further Rs 355.50 crore in punitive damages, resulting in total damages of Rs 639.95 crore sought from the Swiss giant.
The first hearing of the case is expected on 14 August. The government also wants Nestle India to pay interest at a rate of 18 percent per annum till the date of actual payment, while it has also asked the consumer forum to order the company to take remedial measures for wrong labelling and misleading advertisements.
In a statement issued today, Nestle India said, "We are disappointed with the unprecedented step of filing of a complaint before the NCDRC against Nestle India." The company also said it maintained "highest standards of food quality and safety in the manufacture of all its products" and it has a stringent program to test the ingredients that go to make Maggi noodles.
In its petition, the ministry said it is in the process of "tabulating further damages" and will seek additional damages when further facts and data emerges. The amount claimed will be deposited in the Consumer Welfare Fund in the interest of consumers, the ministry said. The government has based its damage claims on Nestle India's total revenue in 2014, which stood at Rs 9,485.32 crore, of which Maggi and its variants accounted for 30 percent share at Rs 2,845.59 crore.
Maggi noodles, a popular brand of noodle manufactured in India, was banned in different states after a high level of lead along with excessive amounts of taste enhancer such as monosodium glutamate (MSG) were allegedly detected in the food item.
Lead content in 14 of 27 samples in India was allegedly found to be 2.8 PPM to 5 PPM (particle per million), which is above the prescribed limit of 2.5 PPM. Presence of excess lead is harmful for health, PTI had reported. Nestle had earlier claimed that its own tests had reported that the Maggi noodles were safe for consumption and none of the countries, where it sold the product, including in the UK, Australia and Singapore had any problems with it.

*# GST Bill: India Inc petition falls flat

India Inc’s efforts to persuade Parliamentarians to pass the Goods & Services Tax-related Constitution Amendment Bill went in vain on Wednesday as the Rajya Sabha could not take up the Bill. With just one sitting left in the session, the possibility of the Bill getting passed during the Monsoon Session looks remote.

Top industrialists led an online petition to bring normalcy in the Rajya Sabha, so that GST-related legislation could be passed. However, after a couple of adjournments, when the Deputy Chairperson called for a discussion on the Constitution Amendment Bill, Congress MPs shouted slogans and encircled the Well, leading to adjournment of the House for the day.

The Bill was moved on Tuesday, but could not be taken up due to disruptions.

While industry chamber CII was instrumental in an online campaign, FICCI also lent its support for the passage of the Bill. FICCI President Jyotsna Suri said passage of key legislation is urgently needed to boost business sentiment, encourage greater domestic investments and create over a million jobs each month.

“GST is one such reform, which, once implemented, can add over 1.5 percentage points to GDP growth. We look forward to progressive dialogue and political consensus on key socio-economic issues in Parliament to further the national growth agenda,” she said.

However, the move by India Inc did not go down well with senior Opposition MPs. JD(U) President Sharad Yadav raised the issue of the online petition in the Rajya Sabha.

‘Working for rich people’

Alleging that corporate houses are intervening in the functioning of Parliament, Yadav said that it was clear that the system was now working in favour of rich people.

“There has been an allegation that Parliament, elected by 125 crore people, is controlled by a few moneybags. Now, that charge has been vindicated (through the complaint of India Inc). How dare they take such a step of running the country’s Parliament,” he asked.

Finance Minister Arun Jaitley was quick to rebut the charge. “Do you think that the common man in the country has no interest in running the House? Do you think that those who voted for you do not want Parliament to function,” asked Jaitley.

Opposition leader Ghulam Nabi Azad and CPI(M) General Secretary Sitaram Yechury condemned the move by corporate houses. “We want the House to function and, if somebody is expressing their interest, especially businessmen — for the first time, I have heard them say such things — it is okay. But they cannot interfere with our work,” Yechury said.

The Monsoon Session concludes on Thursday and unless a special session is called, the Bill will be taken up only during the Winter Session.

*# Scores dead, hundreds injured as shipment of explosives detonate in China - video

An AFP reporter at the scene saw shattered glass up to three kilometres (two miles) from the blast site, after a shipment of explosives detonated in a warehouse, raining debris on the city and starting huge fires.Images showed a monumental blast soaring into the air, walls of flame enveloping buildings, ranks of burned-out cars, and shipping containers scattered like children's building blocks.

Paramedics stretchered the wounded into the city's hospitals as doctors bandaged up victims, many of them covered in blood after the impact of the explosion was felt for several kilometres, even being picked up by a Japanese weather satellite.

"The fireball was huge, maybe as much as 100 metres tall," said 27-year-old Huang Shiting, who lives close to the site.

"I heard the first explosion and everyone went outside, then there was a series of more explosions, windows shattered and a lot of people who were inside were hurt and came running out, bleeding," he told AFP.

Images obtained by AFP showed residents, some partially clothed, running for shelter on a street strewn with debris.Citing rescue headquarters, the official Xinhua news agency said 44 people were killed, including 12 firefighters.

Scores of firefighters were already on the scene before the explosion, responding to reports of a fire, and at one city hospital a doctor wept over the remains of a firefighter still in uniform, his skin blackened from smoke, as he was wheeled past, along with two other bodies.

*# Bihar polls: NCP may go alone, pull out of anti-BJP alliance

Barely a day after the announcement of the grand alliance to take on the BJP-led NDA in Bihar, the Nationalist Congress Party (NCP) has threatened to walk out of the coalition accusing the big parties of making unilateral decisions.
The NCP indicated on Wednesday night that it may pull out of the so-called secular alliance in Bihar, just hours after NCP chief Sharad Pawar held a meeting of all regional parties, including Nitish Kumar's Janata Dal (United), at his Delhi residence.

The bonhomie of a 'chai pe charcha' among the NCP, Samajwadi Party and the JD (U) turned sour since the Pawar-led party was offered just three seats for the Bihar assembly elections slated for mid-October. Of the total 243 seats, the ruling JD (U) and the Rashtriya Janata Dal will contest in 100 seats, and the Congress will fight for 40.

At the meeting at Pawar's residence - also attended by the Trinamool and the National Conference - the regional parties had reportedly decided to give another try for a federal front and extended support to the anti-BJP alliance in Bihar.

But, the seat-sharing formula seems to have disrupted the NCP's equations.

NCP leader Tariq Anwar said he had convened a meeting of party leaders to decide the future course of action. He added the party could even go alone in the state.

"I wanted to be with the JD (U)-RJD-Congress alliance, but... they don't want the NCP," Anwar said.

"We have always advocated an alliance to stop the BJP, but it does not mean we will compromise with our dignity. If the alliance does not need us, we will look for other options. We have fought alone earlier also and that may happen again this time," said Anwar, adding offering three seats was akin to "insult with the party and was totally unacceptable".

An angry Anwar told HT that the party would not accept anything less than 12 seats.

"Bare bhai (Lalu Prasad) and chhote bhai (Nitish Kumar) have distributed the seats among themselves. Congress put pressure and so it got a good bargain. We were ignored as we did not speak up. This is no way of stitching an alliance," he added.

When chief minister Nitish Kumar announced the seat sharing plan on Wednesday, there was no mention of the NCP though it was later presumed that the remaining three seats would go to it. The Samajwadi Party of Mulayam Singh Yadav, which had fielded candidates in last assembly elections, has also got no seat in the grand alliance.

Anwar said it was apparent that both JD(U) and RJD do not require any Muslim or Dalit face in Bihar. "They seem to have taken Muslims for granted. They feel Muslims would be under compulsion to vote for them to defeat the BJP," he added.

"Though defeating the BJP has always been the main focus of our party, this does not mean we will go with anyone even if we are made to feel unwanted. Nobody consulted us before the announcement."

"The NCP has called a party workers' meeting on August 16 and we will collectively take a decision on our next step, but nothing less than 12 seats will be acceptable to us," he added.

Anwar said he had apprised NCP chief Pawar of the developments and even he was surprised. "We had expected a fair game and reasonable distribution of seats, though we never put any condition. But what has happened in the grand alliance is not worth accepting and that does not augur well," he added.

NCP spokesperson Anil Kishore Jha said the party would soon come out with its action plan for Bihar elections.

*# Kacheguda rail travellers can now order from KFC

Fast-food chain Kentucky Fried Chicken (KFC) has joined hands with Indian Railways to provide food to passengers travelling on trains. The service is currently available on trains originating from Kacheguda. Consumers can order for a KFC meal, while planning their travel on the Indian Railway Catering and Tourism Corporation (IRCTC) official site www.irctc.co.in. A password will then be sent by KFC to the consumer’s mobile phone which will have to be mentioned at the time of delivery. The first order was served to HV Krishna Reddy who was travelling from Kacheguda to Tadipatri. KFC India spokesperson said “We believe that partnership with IRCTC is a huge opportunity that will allow us to expand our horizons and reach out to millions of consumers while they are crisscrossing the country.

The service was started last month when we delivered our first order to passengers travelling from New Delhi. We are excited to launch our services to passengers from Kacheguda.” The service will be expanded to Visakhapatnam and Bangalore (Yeshwantpur) stations over the next 10 days. The service, for now is limited to trains which lack pantry cars and will subsequently be expanded to trains like Rajdhani and Duronto.

*# Watch out Flipkart and Amazon! E-commerce is set for next round of disruption

The recent statement by Softbank’s Nikesh Arora that the valuation of e-commerce companies is ‘far ahead of reality’ may be the first indication that the bubble has reached its peak. Though the statement is self serving, Softbank has recently moved out from funding startups to do more of late stage funding. And a statement from Nikesh Arora will certainly depress funding at late stage. But the issue is much larger as not only is e-commerce funding inflated but the sector is set for another round of disruption.
This disruption is coming from many directions. Regulatory, legal, incumbent retailers, and even the ecosystem is fast changing with the emergence of new players.
Small retailers and organised retail are now both lobbying against the FDI in e-commerce, an interesting coming-together of two rival section of the industry. Earlier the small retailers were lobbying against FDI in organised retail but they soon realised that their biggest competitor is now e-commerce companies who are willing to offer discounts and offer free delivery to customers.
e-commerceThe ecosystem is fast changing with the emergence of new players
Organised retail players saddled with expensive real estate and huge debt are already witnessing sluggish sales as consumers are fast moving online to meet their requirements. For instance, consumers visit shop, compare prices online resulting in loss of sales at malls. As a result of this, small brands are exiting malls to sell their goods only online.
Organised retail players, who invested heavily in building large malls, too, are also struggling. Experts say, that over the next three years malls will have to reinvent themselves. They will have to devote 60-70 percent of their space for food and entertainment segment and the remaining to accommodate high-end brands.
Even branded manufacturers are rebelling against the e-commerce companies as this fast-growing online medium has been affecting their traditional distribution channels. Dealers ranging from consumer durables and mobiles to home furnishing etc are up in arms as consumers are getting products at prices lower than what a dealer offers.
In a bid to help dealers avoid a squeeze on their margins, several brands have prohibited e-commerce companies from selling their products online. On the other hand, several new brands are bypassing the dealer or distributor route, and are selling their products through an online distribution model.
To stay in the competition, organised retailers are planning to roll out their own omni-channel strategy of delivering products at home. Some are even tying up with e-commerce retailers to deliver, like the recent arrangement between Snapdeal and Shoppers Stop. The old organised retailers are trying to ride on the logistic networks that e-commerce companies have developed.
Free delivery is something that is expected to change sooner or later, as it is the biggest cost factor for e-commerce companies. Currently, the companies are bearing all the cost of delivery while the consumer is benefiting from the same. Organised retailers are planning to use their stores as quasi-warehouses or logistics hub, and unlikely to offer free delivery. Most organised retailers are publicly listed and do not have the resources to offer such services.
Besides, the discounts and select exclusive deals on mobiles, the top e-commerce retailers like flipkart.com, amazon.in or snapdeal.com have almost identical inventory. And this is where the next round of disruption is expected to take place. Till now the rush was to increase branded retail items, but the organised retail understood long time back that more needs to be done to stay in competition. The customer is always looking for differentiated products, especially, in categories like fashion, home furnishings or lifestyle, differentiation is the key.
This is where the next round of e-commerce retailers like justdial.com or kraftly.com are expected play a major role. Justdial.com is looking at creating an e-commerce platform for all the small businesses for B2B trade. Meanwhile, Kartrocket.com that used to build websites for small retailers and home businesses has launched a mobile platform called www.kraftly.com. Now, both these companies will be able to offer unique products, but not on the volume front.
In a way the long tail has caught up with e-commerce as a producer selling even a single product will get a platform to showcase.
Moreover, platforms like kraftly.com are leveraging communication platform like Whatsapp to reach out to customers and resellers. Until now, the social media platforms have not been used to build e-commerce platform, but it is a killer application if it is used smartly.
Kartrocket.com allows its resellers to use Whatsapp to upload pictures of their products on their site. In China, wechat.com is the preferred platform for creating e-commerce websites, and most small producers use it very actively.
While e-commerce companies are discovering their mobile apps, the new players will move to mobile social media platform to launch their services.

*# Google’s Alphabet could stifle innovation

A conference attendee looks through "Cardboard," a viewer that enables the user to view content from a smart phone in 3D, during the Google I/O developers conference in San Francisco, California May 28, 2015. 
With the reorganization, the tech giant’s unprofitable ventures will become more evident to investors.

Google surprised analysts and investors this week when the tech giant announced the creation of a new holding company called Alphabet and the separation of its search, maps, YouTube, Gmail, and other core businesses into a discrete division, which will retain the original name and be run by Sundar Pichai.

From a purely shareholder value standpoint, it’s a smart move.

Google  GOOG -0.14%  has become as synonymous with technological experiments, such as Internet-delivery balloons, cancer detection pills, drones, and robotics, as with Internet search. That’s a problem for Google investors, who invest primarily in its current suite of products and only tangentially in possible future products – many of which might never take off. It’s also a difficult portfolio to manage because of its diversity and a tough story for the market to follow.
By separating its speculative ventures into independent divisions, Google is hoping to create a more organized structure for its businesses as well as a partial shield for its core business from the vagaries of experimentation. Even though the core business, fueled by advertising, would still fund R&D for the entire enterprise, the other divisions will now face greater investor scrutiny by virtue of being separate and (at least collectively) more transparent. By the last three months of this year, the company plans to report separate financial results for its Google business and Alphabet divisions, according to The Wall Street Journal.

What this means is that the impact of the company’s unprofitable ventures on its overall bottom line will become more evident and could lead to those divisions being sold or shut down, thereby enhancing returns for shareholders. That’s particularly relevant for Google’s so-called ‘moonshots,’ such as self-driving cars and smart contact lenses.

But while this could encourage the company to pursue rational strategic alternatives for individual divisions and be good for optimization of the stock price, it could also put a serious damper on the spirit of innovation. Excessive analyst and shareholder focus on original R&D at Alphabet, especially when the payoff may be years away or indirect, could be detrimental to pure creativity.

Another consideration is that while the conglomerate model might work for companies like Berkshire Hathaway  BRK 0.00% , whose portfolio of financial services, energy, and manufacturing firms arguably don’t require a tremendous amount of R&D, technology companies that thrive on cutting- edge discoveries are ill-served by this. It’s also not easy to manage a conglomerate, a fact that was borne out when the popular business model fell apart in the period from the 1970s to the 1990s.

To be fair, Google’s move could also spur fundamental research by attracting (and allowing) outside investments for its explorative projects through private placements or tracking stocks, which are tied to discrete business lines within a larger company, and it’s unclear just how granular the company’s financial reporting will eventually be. It’s entirely possible that the new structure will turn out to be mostly cosmetic and have little impact on how Google co-founders Larry Page and Sergey Brin spend Google’s money.

But if the company’s aim really is to insulate its core business from exposure to experimental research, then it’s hard to see how the spigot isn’t going to be tightened eventually. That could be bad news for the tech world.

*# Rahul Gandhi steps up attack on FTII issue, to approach President Pranab Mukherjee

Congress sources said he would lead a delegation to President Pranab Mukherjee to seek his intervention over the ongoing students's stir against the appointment of actor Gajendra Chauhan as chairman of Film and Television Institute of India (FTII).

"I don't know what qualities the government sees in him (Chauhan). It is thrusting mediocrity on the country. We will not allow it," said Rahul who had earlier also visited FTII to support the demand of the students who want Chauhan to be removed.

*# BSF wants more men along Indo-Pakistan border to prevent infiltration

The recent skirmishes on the Indo-Pakistan border and a series of infiltrations leading to terror strikes on forces have prompted the government to plan an overhaul of security apparatus in the border areas. The Border Security Force (BSF) guarding the International Border (IB) with Pakistan has communicated to the Union home ministry that increasing the strength of the force is an urgent need for a long-term solution to combat terrorists and Pakistani forces on the border.
"There is a view that the BSF deployment along the International Border should match with the Army's along the Line of Control. The BSF's per-kilometre deployment is much less than that of the Army," said a government official. "In the last two years most infiltrations have occurred on the IB which is guarded by BSF and so it is felt that urgent measures are needed," the official added.
Also Read: Pakistan violated ceasefire 192 times this year: Centre 

Sources said keeping in mind the continuous ceasefire violations by Pakistani forces and infiltrations by terrorists urgent measures are being deliberated that need to be implemented without delay. "Bridges over nullahas and riverine gaps will be constructed for better patrolling. After identifying the vulnerable points for infiltration a decision has been taken to enhance security measures," a home ministry official said.
Plugging chinks
Sources said about eight to 10 points have been identified along the International Border from where terrorists have infiltrated recently. Securing these points have been a challenge for BSF and other than increasing the strength of the force, which is a long-term measure, relying more on better technology for better surveillance is also being planned. A laser wall along the border is also being planned.
If somebody tries to cross the border the wall can detect it and an alarm will set off. Hi-tech handheld thermal image devices, night vision devices, battlefield surveillance radar, underground monitoring sensors are some of the other solutions being discussed.
These measures are being planned for the International Border which has been more vulnerable to infiltrations and it will continue to be so in the future.
Terrorists from Pakistan are attempting to find new routes to infiltrate from across the border.
The traditional route through the LoC in Jammu and Kashmir is not the only point of infiltration. Inputs indicate that infiltration bids along the International Border could be made by terrorists backed by Pakistani forces.
Infiltration
In the last two years there has been an increase in infiltrations and cross-border firing. In 2014, the number of ceasefire violations was 583; and in 2013 it was 347.Over 250 ceasefire violations by Pakistan along the border have been reported this year.
There has been an increase in the incidents of ceasefire violations in the past months.
The Centre has also issued a high alerty across all border areas keeping to ensure the smooth passage of all Independence Day functions in sensitive areas.

*# Pakistani terrorist Naved to be shifted to New Delhi today

The National Investigation Agency probing the Udhampur attack is expected to shift lone Lashkar-e-Taiba terrorist caught in the encounter, Mohammad Naved, to New Delhi in a special plane on Thursday afternoon.
On Tuesday, a special National Investigation Agency-designate court had granted 14 days remand of Naved alias Usman alias Qasim Khan to the NIA. Naved was brought to Jammu on Monday from the Kashmir Valley by the team headed by senior superintendent of police Atul Kumar Goel, chief investigator of the case. The NIA is now likely to take over a dozen of people identified by Naved into custody for interrogation.
Four accomplices of a Pakistani terrorist captured after the August 5 Udhampur terror attack were arrested from the Kashmir Valley last week. The National Investigation Agency (NIA) made the arrests after Usman alias Qasim Khan was brought to the valley to identify those who helped him reach Udhampur where he was caught.  

Belonging to Faisalabad in Pakistan, Naved was overpowered by villagers after he and a fellow Pakistani terrorist shot dead two Border Security Force troopers on the Jammu-Srinagar highway in Udhampur district.

Labels