continuing wrongs and recurring/ successive wrongs

The principles underlying continuing wrongs and recurring/ successive wrongs have been applied to service law disputes. A `continuing wrong' refers to a single wrongful act which causes a continuing injury. `Recurring/successive wrongs' are those which occur periodically, each wrong giving rise to a distinct and separate cause of action. Supreme Court in Balakrishna S.P. Waghmare vs. Shree Dhyaneshwar Maharaj Sansthan -[AIR 1959 SC 798], explained the concept of continuing wrong (in the context of section 23 of Limitation Act, 1908 corresponding to section 22 of Limitation Act, 1963) :

"It is the very essence of a continuing wrong that it is an act which creates a continuing source of injury and renders the doer of the act responsible and liable for the continuance of the said injury. If the wrongful act causes an injury which is complete, there is no continuing wrong even though the damage resulting from the act may continue. If, however, a wrongful act is of such a character that the injury caused by it itself continues, then the act constitutes a continuing wrong. In this connection, it is necessary to draw a distinction between the injury caused by the wrongful act and what may be described as the effect of the said injury."

In M. R. Gupta vs. Union of India [1995 (5) SCC 628], the appellant approached the High Court in 1989 with a grievance in regard to his initial pay fixation with effect from 1.8.1978. The claim was rejected as it was raised after 11 years. This Court applied the principles of continuing wrong and recurring wrongs and reversed the decision. This Court held :

"The appellant's grievance that his pay fixation was not in accordance with the rules, was the assertion of a continuing wrong against him which gave rise to a recurring cause of action each time he was paid a salary which was not computed in accordance with the rules. So long as the appellant is in service, a fresh cause of action arises every month when he is paid his monthly salary on the basis of a wrong computation made contrary to rules. It is no doubt true that if the appellant's claim is found correct on merits, he would be entitled to be paid according to the properly fixed pay scale in the future and the question of limitation would arise for recovery of the arrears for the past period. In other words, the appellant's claim, if any, for recovery of arrears calculated on the basis of difference in the pay which has become time barred would not be recoverable, but he would be entitled to proper fixation of his pay in accordance with rules and to cessation of a continuing wrong if on merits his claim is justified. Similarly, any other consequential relief claimed by him, such as, promotion etc., would also be subject to the defence of laches etc. to disentitle him to those reliefs. The pay fixation can be made only on the basis of the situation existing on 1.8.1978 without taking into account any other consequential relief which may be barred by his laches and the bar of limitation. It is to this limited extent of proper pay fixation, the application cannot be treated as time barred........."

To summarise, normally, a belated service related claim will be rejected on the ground of delay and laches (where remedy is sought by filing a writ petition) or limitation (where remedy is sought by an application to the Administrative Tribunal). One of the exceptions to the said rule is cases relating to a continuing wrong. Where a service related claim is based on a continuing wrong, relief can be granted even if there is a long delay in seeking remedy, with reference to the date on which the continuing wrong commenced, if such continuing wrong creates a continuing source of injury. But there is an exception to the exception. If the grievance is in respect of any order or administrative decision which related to or affected several others also, and if the re-opening of the issue would affect the settled rights of third parties, then the claim will not be entertained. For example, if the issue relates to payment or re-fixation of pay or pension, relief may be granted in spite of delay as it does not affect the rights of third parties. But if the claim involved issues relating to seniority or promotion etc., affecting
others, delay would render the claim stale and doctrine of laches/limitation will be applied. In so far as the consequential relief of recovery of arrears for a past period, the principles relating to recurring/successive wrongs will apply. As a consequence, High Courts will restrict the consequential relief relating to arrears normally to a period of three years prior to the date of filing of the writ petition.

Licensing of knowledgebase

Licensing of knowledgebase: -

Kb: - Includes readily available and commercial knowhow, process and/or process improvements, technology, technique and a new product. May or may not embody IP.

- unencumbered or encumbered

Licensing of Kb: - granting licensee the right to use the Kb for making or selling the resulting product(s) either for commercial/ captive purpose or as otherwise agreed to.

Financial aspects: - varies on case to case basis on the following factors:

(a) Cost of Development:-

(1) Direct input:-

(i) cost of

(a) Deployed CSIR staff mandays as per CSIR prescribes rate and

(b) Temporary staff deployed at actual cost + 40 % OH

(ii) Cost of consumable raw materials/consumable/ physical inputs/services/utilities with 25% OH (toward

expenses for purchase, storage, handling etc.

(iii) equipment usage cost/ cost of equipment procured specially for the projects :-

(a) Existing one to be charged on pro-rata based on as annual usage charges upto 20% of cost of equipment and installation. Where cost cannot be ascertained the charges are to be decided by CA.

(b) New equipment is to be charge with an additional procurement and handling charges of 5% of the cost of the equipment.

(iv) Contingencies including external payment for facilities/services

(v) Cost of Securing of IP right for Kb; and

(vi) Cost of publicity

(2) Indirect inputs:-

(a) Notional amortization of investment on the staff, equipment, facilities deployed for the projects; and

(b) Intellectual inputs.

(b) Cost associated with Kb demonstration

© estimate of net benefit to be derived by the licensee:- money to be saved by the licensee by productivity improvement such as saving in raw materials, energy, time, labour, capital etc. or the additional profit to be realized due to better quality of products or reduction in pollution etc. or the net profit from the exploitation of Kb.

(d) Size & number of potential clients: - based on exclusiveness of license and alternative competing sources.

(e) Comparative cost of competing Kb in the market (if applicable)

(f) Potential for unauthorized use of the specific Kb subjected to; (by piracy or otherwise)

(g) Opportunity value: - estimated amount that can be realized by cashing upon the circumstantial/ contingent aspect prompting the utilization of Kb by the licensee. (Expressed in terms of absolute money value or as a % of profits anticipated or of value addition envisaged.)

Differential costing:-

- Cottage/tiny industry

On token lumpsum charges even below the cost incurred on development of Kb (as decided by MC)

No royalty

Non-exclusive license

-SSI on direct cost, when non-exclusive to more then one client the cost could be divided by such no of clients to arrive at the cost/client.

-medium/large industry as per normal cost

Price decided for specific Kb should be reviewed periodically, atleast every three years for revision, if any required.

Licensing of intellectual property

Licensing of intellectual property:-

IP: - patents, copyright, trademark, design & computer software.

Types:-

(1) unencumbered:-

(a) In- house development. Ownership & licensing vest in CSIR

(b) Through contract R&D and subsequently rendered unencumbered as per agreement. Ownership & licensing as per agreement

(2) Encumbered: - Through contract R&D with total/ partial finance support & with/without technical support from client. Ownership & licensing as per agreement

Licensing of IP : - granting licensee the right to further develop the IP or to utilize the IP to make the resulting product(s) either for commercial/ captive purpose or as otherwise agreed to.

Financial aspects: - varies on case to case basis on the following factors:

(a) Cost of Development:-

(i) cost of

(a) Deployed CSIR staff mandays as per CSIR prescribes rate and

(b) Temporary staff deployed at actual cost + 40 % OH

(ii) Cost of consumable raw materials/consumable/ physical inputs/services/utilities with 25% OH (toward

expenses for purchase, storage, handling etc.

(iii) equipment usage cost/ cost of equipment procured specially for the projects :-

(a) Existing one to be charged on pro-rata based on as annual usage charges upto 20% of cost of equipment and installation. Where cost cannot be ascertained the charges are to be decided by CA.

(b) New equipment is to be charge with an additional procurement and handling charges of 5% of the cost of the equipment.

(iv) Contingencies including external payment for facilities/services

(b)Cost of securing the IP: - with minimum floor price of 5 Lakh per IP. Concession in exceptional circumstance with approval of DG

©Cost of maintaining IP

(d)IF: - charges for CSIR investment over a period of time, in building up and sustaining the extent level of expertise, knowledgebase and facilities. Charges should be commensurate with quantum and quality of CSIR’s resource input and also the likely benefits to be derived by the clients on implementation of the project results

(e)Service Tax on (a) to (d)

Vigilance Awareness Week from 3rd November to 7th November, 2008

Consultancy Project

Consultancy: - institutional, in area of expertise preferably its trust area. Comprises scientific, technical, engg., or other proff. Advice/ assistance based on the available knowledge base / expertise of the Lab., and envisaging only minimum use of lab. facilities for essential experimentation and computation to meet the objectives of the consultancy assignments. It covers

(1) Scientific, technical, engg. or other proff. Advice.

(2) Literature survey and preparation of feasibility studies, technology forecasting/ evaluation reports etc.

(3) Interpretation of test result and data provided

(4) Risk and hazard/ environmental impact analysis, pollution abatement/ control measures etc.

(5) Assistance in erection, commissioning, operation, troubleshooting, productivity improvements, energy conservation, waste utilization etc.

(6) Customized HRD program

(7) Technical advice (one time) such as troubleshooting, problem resolving, quality control etc.

Financial aspects:-

(1) Direct expenses:-

(i) cost of

(a) Deployed CSIR staff mandays as per CSIR prescribes rate and

(b) Temporary staff deployed at actual cost + 40 % OH

(ii) Cost of consumable raw materials/consumable/ physical inputs/services/utilities with 25% OH (towards expenses for purchase, storage, handling etc.

(iii) equipment usage cost/ cost of equipment procured specially for the projects :-

(a) Existing one to be charged on pro-rata based on as annual usage charges upto 20% of cost of equipment and installation. Where cost cannot be ascertained the charges are to be decided by CA.

(b) New equipment is to be charge with an additional procurement and handling charges of 5% of the cost of the equipment.

(iv) TA/DA:-

(a) at CSIR rates with exception to reimburse total expenditure with prior approval of Director

(b) Air travel to non-entitle G.S on functional basis & if it is expedient to do so in public interest.

(v) Contingencies including external payment for facilities/services

(vi) Others (if any)

(2) Intellectual fees: - charges for CSIR investment over a period of time, in building up and sustaining the extent level of expertise, knowledgebase and facilities. Charges should be commensurate with quantum and quality of CSIR’s resource input and also the likely benefits to be derived by the clients on implementation of the project results. There is no upper ceiling but it should in no case be less than the estimated manpower charges, except in case of consultancy offered against open tender, where the IF could be decide by the CA keeping in view the potential competition. For cottage and small scale units (as per govt. definition) the minimum IF could be 30-50% of manpower charges. Not to be charge in case of sister lab. Project.

(3) service tax on (1) & (2)

Project charge = (1) + (2)

Total project cost = (1) + (2) + (3)

Term of payment: - the laboratory shall obtain an advance of not less than 50% of the project cost on or before signing the agreement and the balance in installments linked to suitable milestones/deliverables as defines in the project/ agreement. However, in case of projects from govt. dept. /agencies, PSE, investigational job by Govt., court, statuary authorities etc. and project secured against open tenders, the term of payment may be as per the mutual agreement.

General condition:-

(1) Contractual obligation shall be that of CSIR.

(2) Staff involvement shall be approved by director/MC

(3) As far as possible ‘the team of consultant’ selected for consultancy work should have confidence of the client.

(4) Fair distribution of consultancy work among eligible staff

(5) Consultancy assignment costing less than 50000.00 should not be encouraged except in deserving case with discretion of director.

(6) The total number of days devoted by staff member to consultancy work should not exceed 50 mandays in a financial year.

Contract R&D

Contract R&D:- All R&D activities undertaken and executed under specific contractual arrangements agreed upon for the purpose. The projects should fall within the purview of approved research areas of the laboratory. It includes:-

(1) Sponsored R&D:-

(a) Fully externally funded having specified R&D objective. (Exception to full funding of SSP could be made with the approval of CA for specific nationally relevant projects related to defence, health, social welfare and the like)

(b) Well defined expected project output/result

© culminating into generation of IP/ Knowledgebase.

(d) Can also include process design and engg. , process modeling & simulation, application of computational methods , developments of software etc.

(e) Can be multi-clients also

(2) Collaborative/ cooperative R&D:-

(a) Partially funded by the client

(b) Supplemented by provision of inputs such as expert manpower, engg. , Production/ fabrication of product in bulk for testing/ trials, creation of infrastructural inputs etc.

© could be in advanced areas of research, for upscalling /proving of laboratory level know-how, technology development or generation of IP etc.

(d) Output/ result definition depends on nature of the project.

(e) Can be multi-clients also

(3) Grant-in-aid R&D:-

(a) projects involving a grant by way of financial inputs , either full or in parts , assistance in kind e.g. equipment, training etc.

(b) To supplement laboratory efforts in ongoing or new R&D projects or for creating new capabilities/ facilities.

© For generating database, sophisticated equipments for testing and infrastructural facilities.

Financial aspects:-

(1) Direct expenses:-

(i) cost of

(a) Deployed CSIR staff mandays as per CSIR prescribes rate and

(b) Temporary staff deployed at actual cost + 40 % OH

(ii) Cost of consumable raw materials/consumable (chemicals, glasswares, stationary, raw materials, component & other store items) with 25% OH (towards expenses for purchase, storage, handling etc.

(iii) Cost of physical inputs/services/utilities (water, steam, gas, electricity, workshop, drawing office etc.) with 25% OH (towards installation, maintenance etc.)

(iv) equipment usage cost/ cost of equipment procured specially for the projects :-

(a) Existing one to be charged on pro-rata based on as annual usage charges upto 20% of cost of equipment and installation. Where cost cannot be ascertained the charges are to be decided by CA.

(b) New equipment is to be charge with an additional procurement and handling charges of 5% of the cost of the equipment.

(v) TA/DA:-

(a) at CSIR rates with exception to reimburse total expenditure with prior approval of Director

(b) Air travel to non-entitle G.S on functional basis & if it is expedient to do so in public interest.

(vi) Contingencies including external payment for facilities/services

(vii) Others (if any)

(2) Intellectual fees: - charges for CSIR investment over a period of time, in building up and sustaining the extent level of expertise, knowledgebase and facilities. Charges should be commensurate with quantum and quality of CSIR’s resource input and also the likely benefits to be derived by the clients on implementation of the project results. Should in no case be less than 40% of total expenses excluding the cost of equipments and other capital investments at the cost of client. For cottage and small scale units (as per govt. definition) the minimum IF could be waived with the approval of CA. Not to be charge in case of Govt. funded & sister lab. project.

(3) service tax on (1) & (2)

Project charge = (1) + (2)

Total project cost = (1) + (2) + (3) (exception to full funding of SSP could be made with the approval of CA for specific nationally relevant projects related to defence, health, social welfare and the like)

Term of payment: - the laboratory shall obtain an advance of not less than 25% of the project cost on or before signing the agreement and the balance in installments linked to suitable milestones/deliverables as defines in the project/ agreement. However, in case of projects from govt. dept. /agencies, PSE, and project secured against open tenders, the term of payment may be as per the mutual agreement.

10 ways to survive office politics

1.Live at peace with others
The easiest way to avoid problems with politics is to get along with people. I'm not saying you need to hug everyone and sing songs, and I'm not saying you have to be a pushover for everyone. You can be pleasant and professional, while at the same time being assertive when necessary. If you have a concern, focus on the issue, not on the person. If you have to refuse a request, explain why and try to come up with alternative solutions.
Living at peace with others also means being careful about choosing sides during office power struggles. Aligning yourself with one faction or the other will prevent you from working effectively with people from the "other" side, thereby hampering your productivity and thus your performance. It's even worse if "your" faction loses out. Instead, try to focus on your tasks, dealing with people in either faction on the basis of the tasks alone, and avoid talk on the political issue that separates the groups.

2.Don't talk out of school
Three can keep a secret if two of them are dead.
—Benjamin Franklin
Does your organization have issues? Have people told you things in confidence? Then keep those matters to yourself. Talking to outsiders about issues within your organization makes all of you look bad to that outsider. Furthermore, your boss or your boss's boss will not appreciate that behavior. People will find out that you spoke about what they told you, and they'll lose confidence in you and respect for you.

3.Be helpful
We all have responsibilities and objectives, and those things should receive priority. Nonetheless, if it doesn't take too much time, being helpful to others can reap benefits for you. Does someone need a ride in the direction you live? Did your co-worker leave headlights on in the parking lot? Is someone having trouble building an Excel macro? If you can help that person, especially if you can do so without taking too much of your time, you benefit yourself as well as the other person. By doing these things, you're building political capital and loyalty. In doing so, you reduce the chances that you will be the victim of political intrigue.

4.Stay away from gossip
I never repeat gossip, so listen carefully.
—Old joke
Nothing destroys the dynamics of an office more than gossip. Stay away from it, because nothing good comes from it. Just be sure you avoid the "holier than thou" attitude of lecturing your co-workers on the evils of gossip. You'll make them lose face, and they'll resent you. Instead, try subtly changing the subject. For example, suppose the group is talking about Jane's problems with her child, and of course Jane is absent from the group. Do some free association and try to come up with some topic that's related to Jane or her child, but won't involve gossip. Then, make a comment about that topic.
For instance, suppose you know that Jane's child is involved in a sports league. Mention this fact, thereby linking the child and the league. Then, shift the conversation so that you're now talking about the league rather than Jane's child. You could ask when schedules will be published, or if they need parent volunteers. If you do it right, no one will even notice that you've moved them away from the gossip.

5.Stay out of those talk-down-the-boss sessions
Suppose your co-workers start complaining about the boss. If you join in, it makes you look disloyal to the boss. If you don't, it looks awkward in the group. What can you do? As with the situation of gossip, try changing the subject by linking the boss to another topic, then talking about that topic instead. Or you could simply respond to your co-workers with a smile and a tongue-in-cheek, "Come on, aren't we exaggerating? [name of boss] really isn't THAT bad." Be careful, though, because it could be taken as an admission by you that the boss is bad.

6.Be a straight arrow
The best way to keep out of trouble politically is to be seen as someone who doesn't play office politics -- in other words, a straight arrow. Do what you say you're going to do, alert people to problems, and admit your mistakes. Others will respect you, even if they don't always agree with you. More important, you have a lower chance of being a victim of politics.

7.Address the "politics" issue openly when appropriate
Many times, when I do organizational assessments, I sense anxiety on the part of client staff. To address this anxiety, I tell people I interview that I'm not there to get people fired. I'm there to help the organization function better. It might not completely allay their fears and suspicions, but at least I've brought up the issue and addressed it.
Think about doing the same thing if you believe politics is an underlying theme at your company. Tell people you're not interested in scoring political points but only in getting the job done. It might not work, but unless you bring the matter up, there's no chance at all that they will believe you. So if a co-worker is unavailable, and you have to act on that person's behalf, consider saying to that person, "I had to act because of your absence. I wasn't trying to go behind your back and I wasn't trying to show you up."

8.Document things
Nothing saves a job or career more than having a written record. If you believe a matter will come back to haunt you, make sure you keep a record of the matter, either via e-mail or document. Documentation is also an effective way to highlight of your own accomplishments, which can help you when your performance evaluation is conducted.

9.Set incentives to foster teamwork
If you're a manger or senior executive, take a close look at your incentives. Are you unwittingly setting up your staff to work against each other? Do your metrics address only individual departments, or do they also address how departments could benefit the larger organization?
For example, suppose the hardware department of Sears reduced all its prices by half. If you measured only profitability of the department, you would conclude that it is performing horribly. However, that measurement would neglect to account for increased volume in all other departments because of the hardware department.
If you reward employees in a department based only on how well that department does, you may inadvertently cause destructive competition among departments. Each one will be competing against every other one, and all the departments could end up in a worse position. To minimize this possibility, give employees incentives based not only on department results but on organization results as well. That way, employees from different departments have more motivation to work together and less motivation to engage in destructive politics.

10.Set an example for your staff
People in an organization look to leadership to see how to act. Do you want your staff to refrain from negative politics? Do you want to see collaboration and teamwork instead of petty rivalries, jealousy, and back-stabbing? Act the way you want your staff to act, and they will follow you.

Courtesy :- Calvin Sun (TechRepublic)

Calvin Sun works with organizations in the areas of customer service, communications, and leadership. His Web site is http://www.calvinsun.com and his e-mail address is csun@calvinsun.com.

Performance Audit on Procurement of Stores and Inventory Control in Department of Space by CAG

Planning for procurement

• Out of a total procurement budget of Rs.8636.18 crore of Departmentof Space (DOS) during 2001-02 to 2006-07, the unutilised budget increased consistently from Rs.83.28 crore in 2002-03 to Rs.438.28 crore in 2006-07. The extent of savings was as high as 30 to 38 percent in some years in certain Centres, indicating serious deficiencies in procurement planning and management.[Para 2.6.1& 2.6.2]
  
• Procurement planning of DOS was deficient as it placed orders on piecemeal indent basis. Assessment of requirement and cost estimations by indentors were inaccurate, leading to large number of indents not resulting in purchase orders and wide variations between indent value and order value. Non-consolidation of similar purchases also resulted in uneconomical purchases and extra expenditure of Rs.93.95 lakh. [Para 2.7.2.1, 2.7.2.2 & 2.7.2.3]
  

Competitiveness in the tendering process

• Procurement practices adopted by DOS did not ensure adequate transparency and competition as 67 per cent of procurements amounting to Rs.996 crore were made on proprietary/ single tender basis. There were instances of proprietary purchases being made for routine items and also in cases where more than one source of supply was available.[Para 2.7.3.1 ]

Fairness and objectivity in the selection process and award of contract

• In violation of codal provisions and CVC guidelines, negotiations were held with other than lowest bidders resulting in placement of irregular purchase orders in eight cases, amounting to Rs.44.58 crore.Non-award of contract to the lowest bidders resulted in extra expenditure of Rs.3.42 crore in two cases.[Para 2.7.4.1]
  
• ISAC awarded contract to a supplier who was not found technically suitable and thus, extended undue favour by awarding contract worth Rs.4.27 crore. In other two procurements, ISAC extended undue favour to the suppliers in award of contract worth Rs.9.99 crore by changing the selection criteria after invitation of bids. Changes in terms of purchase order/contracts in other three cases benefited suppliers to the tune of Rs.1.87 crore. [Para 2.7.4.2, 2.7.4.3 & 2.7.4.4]
  
• Delay and inefficiencies in processing and finalisation of tenders resulted in avoidable additional expenditure of Rs.2.70 crore in two cases due to procurement of stores at higher rates, after expiry of initial validity of offer.[Para 2.7.4.4]
  

Efficiency in Post Contract Management

• There were significant delays in inspection of the stores received.Non-replacement of rejected items at ISAC resulted in unfruitful expenditure of Rs.8.73 crore in five cases. Moreover, non-installation/ delayed installation of equipment in six cases for period ranging from 5 to 60 months at LPSC and ISAC resulted in blocking of funds and idling of equipment worth Rs.12.43 crore.[Para 2.7.5.1 & 2.7.5.2]
  
• Advances in 1177 cases, worth Rs.437.73 crore, paid to foreign and indigenous suppliers were pending for 1 to 15 years and more. No interest was charged on these long pending advances by DOS.[Para 2.7.5.3]
  
• There was lack of monitoring of adjustment of advances and renewal of Bank Guarantees. Non renewal of 147 cases of Bank Guarantees amounting to Rs.83.65 crore may expose the organisation to financial risks in cases where suppliers default in making supplies/executing work orders. [Para 2.7.5.4]
  

Inventory Control

• ISAC did not revise its procurement policy for Bonded Stores since the last decade which resulted in blocking of funds worth Rs.600 crore.[ Para 2.8.1]
  
• There was overstocking in 9055 categories of electronic, electrical, electro-mechanical components (Bonded Stores) worth Rs.75.02 crore, resulting in infructuous expenditure due to obsolescence of items. No physical verification of Bonded Stores was conducted in ISAC after 1995-96.[Para 2.8.2, 2.8.4]

Summary of Recommendations

• To reduce delays, DOS should prescribe appropriate time frame for each stage of procurement viz., indenting, sanction, issue of purchase order, and supply. Such a time frame should be prescribed after taking into account the type of material to be procured and the sources of supply.
• DOS should streamline the system of assessment of requirement by the indentors by maintaining a centralised database of various items, their specifications, status of technology and availability in market, prevailing costs, sources of supplies etc, to ensure accurate projection of requirements and realistic estimation of cost.
  
• DOS should prepare annual procurement plans by consolidating requirements of all the end users in advance to avoid delays, repetitive procurements, maximise value for money by availing quantity discount and enhancing competition. DOS should strictly follow codal provisions in selection and award of contracts by placing orders on the lowest qualified bidder.
  
• To ensure transparency in the procurement process, DOS may consider going in for limited tendering for generic products where more than one supplier is available in the market.
  
• DOS may build up a database of vendors to bring in more competition in the procurement process and reduce proprietary/single tender procurements.
  
• DOS should ensure compliance to the CVC guidelines during evaluation of tenders.
  
• DOS should strictly follow codal provisions in selection and award of contracts by placing orders on the lowest qualified bidder.
  
• DOS should avoid inordinate delays in processing and finalisation of tenders to ensure timely procurement and avoid extra expenditure due to subsequent escalation in price.
  
• DOS should avoid inordinate delays in the placement of purchase orders and ensure strict compliance to the codal provisions for relaxation of terms and conditions of contracts.
  
• DOS should streamline its system of inspection of materials as delayed/non inspection deprived DOS of the opportunity of preferring damage/warranty claims and seeking replacement of rejected items.
  
• DOS should avoid delays in installation/commissioning of equipment by ensuring timely availability of site, infrastructure, etc.
  
• DOS should ensure that advance payments to suppliers are made only in exceptional circumstances subject to payment of interest at appropriate rates.
  
• DOS should make efforts to recover long outstanding advances from the defaulting suppliers.
  
• DOS should closely monitor adjustment of advances and renewal of Bank Guarantees to minimise its financial risk in cases of default on part of the suppliers in meeting their obligations under the contract.
  
• DOS may consider revision of its purchase procedures so as to make it consistent with the provisions of General Financial Rules, 2005.
  
• DOS may review its policy to stock Bonded Stores items on actual need basis and past consumption pattern. The procurement policy drafted in 1995-96 needs be reviewed in the present scenario.
  
• DOS should ensure that physical verification of all types of stores is conducted periodically to reduce inventory cost and make inventory management more efficient.
  
• The items declared as obsolete/ surplus/ un-serviceable should be immediately disposed off to avoid their intrinsic value from diminishing and thus incurring avoidable carrying costs.

Other comments

• Rule 161 of GFR, 2005 emphasises the importance of fixing time frame at different stages of procurement. Such a time frame will also make the concerned purchase officials more alert.
• Planning for procurement involves realistic and timely assessment of requirements, making proper cost estimates, conducting market surveys to identify the possible sources of supply, clubbing similar requirements to avoid repetitive tendering and obtain quantity discounts, selecting appropriate mode of procurement and formulating most suitable strategy to ensure timely availability of goods and services, as per the requirements of end users.
• As the estimated rate is a vital element in establishing the reasonableness of prices, it is important that the same is worked out in a realistic and objective manner on the basis of prevailing market rates, last purchase prices, economic indices for the raw material/ labour, other input costs etc., wherever applicable and assessment done based on intrinsic value.
• Competition is the key element of the procurement policy framework and promotes value for money. Effective competition requires non-discrimination amongst suppliers in procurement and the use of competitive procurement process.
• As per Rule 154 GFR “procurement from a single source may be resorted to only in emergency cases and in cases of availability of the sole supplier for the required goods, with the approval of the competent authority”.
• Good procurement practices offer all interested suppliers a level playing field to compete and thereby, directly expand the purchaser’s options and opportunities. A good procurement process should not only be fair but should be seen to be fair.
• Efficient post contract management includes immediate inspection of stores, their installation and commissioning, taking proactive action for replacement of rejected stores, monitoring of financial transactions to safeguard the interest of the organisation, by ensuring that the securities furnished by the suppliers are kept safely and updated periodically.
• The formulation of appropriate policy and procedures relating to inventory control and management assumes greater significance, especially in the context of the organisations where the level of procurement is very high. An efficient inventory management not only facilitates smooth operations of an organisation, but also optimises the level of inventory, thus, impacting expenditure on stores. This also involves physical verification of inventory on regular intervals which facilitates identification of surplus/obsolete/ unserviceable items and thus, efficient disposal.

Source here

Misuse of LTC to NER by cash back scheme of travel agents

All Indian Central Govt Group A and B employee with family can travel to northeast region by Air on LTC. Many travel agency using this opportunity to make benefit by enrolling the central government employees to various travel package.

Travel agency can arrange you free lodging, traveling and food on same LTC. Many travel agents are also offering cash back package in hidden form.

Central Government employee should avoid this money cash back scheme, as this can bring you trouble in future.Government intention is to make people travel in north east region, but if you use this opportunity for making money by cash back scheme, it will be treated as forgery.

Here is a sample from a travel website on the cash back offer

"I am group A employee. My question is if for example i plan to go to gangtok and darjeeling, is there any package tour that is available that include both travel and accomodation but the money can be claimed under LTC. I know i can claim the air fare money using LTC. I do not want to pay for accomodation and was wondering if some package deal (under LTC) will cover the accomodation charges.

Answered by: RVS Cruise | On: 28 Sep 2008	Answer Rank: 8
Dear Sir I would hereby like that we provide the best deal in LTC's where u get almost 20,000 Cash Back Per person plz call on 09910779633/09210341855 Thanks Richy R" Link here

RBI’s Appeal to Public

The United Forum of Reserve Bank Officers and Employees has given a call to its members to apply for mass casual leave on Tuesday, October 21, 2008. The Reserve Bank of India has stated that such action on their part amounts to cessation of work and concerted refusal to work. Apart from such action being uncalled for, in the absence of due notice, it amounts to an illegal strike.

The Reserve Bank has also stated that the strike is likely to cause some disruption of normal work of the Reserve Bank on that day, including the payment and settlement system. While it will endeavor to maintain normal services, the Reserve Bank has advised members of public to complete their transactions, if any, with the Reserve Bank on October 20, 2008 itself.

Alpana Killawala
Chief General Manager

Press Release: 2008-2009/521

Letter of Credit - Essential Information

Letter of credit (L/c) is the most preferred payment option for exporters. Compared to other payment options, L/c has many safeguards for sellers and at the same time assurance for buyers. It is usually issued by larger banks and contain a promise to pay a seller (beneficiary) upon receipt of goods by a buyer if certain conditions outlined in the letter have been met.

What is Letter of Credit ?

Letter of Credit or (L/c) is a legal document to arrange payment between a buyer(importer) and seller (exporter). The bank, as intermediary, ensures security for both parties, giving the exporter confidence that the importer is capable of paying for the goods while assuring the importer that payment will be made to the exporter only after the terms outlined in the letter of credit have been met.

Analysis of typical L/c Transaction

• Step 1 After successful negotiation on price, specification, quality etc, Buyer selects a seller and places order for specified goods

• Step 2 Seller accepts the order

• Step 3 Buyer and Seller agrees on terms and conditions of the sale. Buyer instructs its bank to open a L/c incorporating previously agreed terms of sale

• Step 4 The buyer's bank prepares a Letter of Credit (L/c), including all instructions to the seller's bank concerning the shipment and sends the L/c to the seller's bank, requesting confirmation. The seller may request confirmation from a confirming bank for added security.

• Note: There are often delays at above two steps for various reasons like buyer does not have sufficient funds or seller requests change in L/c terms. Amendments are issued to incorporate changes in L/c terms.

• Step 5 The Seller's bank prepares a letter of confirmation to forward to the seller along with the L/c. The seller reviews carefully all conditions in the L/c specially shipment schedule in consultation with his freight forwarder.

• Step 6 The seller arranges the goods and hand over to freight forwarder for delivery at appropriate port or airport.

• Step 7 Once goods are loaded/shipped, the forwarder completes necessary documentation and hand them over to the seller. The seller then presents the documents to his bank, informing full compliance with terms and conditions of L/c.

• Step 8 The seller's bank reviews the documents. If they are in order, the documents are airmailed to the buyer's bank for review and passing necessary documents to buyer. The buyer gets the documents needed to claim the goods.

• Step 9 The buyer's bank returns accepted draft and informs buyer. Buyer pays bank.

• Step 10 The seller's bank gets payment and pays seller.

The letter of Credit Ensures that:

Payment to the seller will only be made after the terms of the L/c have been met. The documents, which have been reviewed by the bank's experienced staff, are in order. The seller is assured of the buyer's ability to pay and, as a result, a better price and more advantageous

Closer look at some key terminology

Irrevocable Letter of Credit

An irrevocable letter of credit cannot be amended or cancelled without the consent of the issuing bank, the confirming bank (if any), and the beneficiary. The payment is guaranteed by the bank if the credit terms and conditions are fully met by the beneficiary. The words "irrevocable documentary credit" or "irrevocable credit" may be indicated in the L/c.

Irrevocable and Without Recourse Letter of Credit

The irrevocable letter of credit received from an advising bank may be indicated as "irrevocable and without recourse documentary credit". The words "without recourse" mean that the advising bank will not be able to recover the money paid to the beneficiary in case the issuing bank does not pay the advising bank.

Revocable Letter of Credit

A revocable letter of credit can be amended or cancelled by the issuing bank at any time without the consent of the beneficiary, often at the request and on the instructions of the applicant (buyer). There is no security of payment in a revocable letter of credit. The words "this credit is subject to cancellation without notice", "revocable documentary credit" or "revocable credit" usually are indicated in the L/c. Obviously, this type of L/c is highly risky from the beneficiary point of view.

Confirmed Irrevocable Letter of Credit

An irrevocable letter of credit opened by an issuing bank whose authenticity has been confirmed by an advising bank (usually a prime world bank) and where the advising bank has added its confirmation to the credit is known as confirmed irrevocable letter of credit. The words "we confirm the credit and hereby undertake ..." or "we add our confirmation to this credit and hereby undertake ..." normally are included in the L/c. An exporter whose method of payment is a confirmed irrevocable L/c is assured of payment even if the importer or the issuing bank defaults. The confirmed irrevocable L/c is particularly important from buyers in a country which is economically or politically unstable. In a confirmed letter of credit, the exporter or the importer pays an extra charge called the confirmation fee, which may vary from bank to bank within a country. The fee usually is added to the exporter's account. The exporter may indicate in the sales contract that the confirmation fee and other charges outside the seller's country are on the buyer's account.

Unconfirmed Irrevocable Letter of Credit

An irrevocable letter of credit opened by an issuing bank but not confirmed by an advising bank (usually a prime world bank) is known as an unconfirmed irrevocable letter of credit. The promise to pay comes from the issuing bank only, unlike in a confirmed irrevocable L/c where both the issuing bank and the advising bank promise to pay the beneficiary.

Restricted Negotiable Letter of Credit

In a restricted negotiable letter of credit, the authorization from the issuing bank to pay the beneficiary is restricted to a specific nominated bank.

Freely Negotiable Letter of Credit

In a freely negotiable letter of credit, the authorization from the issuing bank to pay the beneficiary is not restricted to a specific bank, any bank can be a nominated bank as long as the bank is willing to pay, to accept draft(s), to incur a deferred payment undertaking, or to negotiate the L/c. The words "this credit is not restricted to any bank for negotiation" or "this credit may be negotiated at any bank", or similar words, may be indicated on the L/c.

Revolving Letter of Credit

When a letter of credit is specifically designated "revolving letter of credit", the amount involved when utilized is reinstated or replenished. In other words, once supply has been made and beneficiary receives payment for the shipment, the L/c amount becomes available again without issuing another L/c and usually under the same terms and conditions. The revolving L/c is used for regular shipment of a large quantity over a period of time (several months).

Latest Negotiation Date

The latest negotiation date is the last day of the period of time allowed by the letter of credit for the presentation of documents to the bank. The latest negotiation date may not necessarily be the L/c expiry date. For example, the latest negotiation date can be July 31, 2001 or 15 days after the date of shipment, whichever comes first. In case the L/c does not stipulate the latest negotiation date, it is within 21 days after the date of issuance of the transport documents, but on or before the L/c expiry date.

Expiry Date and Place

The expiry date and place is the last day of validity of the credit and the place allowed by the letter of credit for the presentation of documents for payment, acceptance or negotiation. In case the validity of an L/c is stated in a period of time, for example "this credit is valid for three months" or "this credit is available for two months" or "this credit is good for one month", but does not specify the date from which the time is to run, its validity starts from the issuance date of L/c by the issuing bank. The bank normally discourages stating the L/c validity in a period of time. In case the expiry date and/or the latest negotiation date falls on a day on which the bank is closed for reasons not including the acts of God, strikes, riots, civil commotions, lockouts, insurrections, wars or any other causes beyond the bank's control, the expiry date and/or the latest negotiation date is extended to the succeeding first day on which the bank is opened. Such extension, however, does not extend the latest date of shipment.

Latest Shipment

The latest shipment---latest date of shipment or last date for shipment---is the last day of the period of time allowed by the letter of credit for shipment, dispatch or taking in charge.

Transferable Letters of Credit

A letter of credit can be transferable or non-transferable. The L/c usually indicates "transferable" in the case of a transferable credit. In the absence of such indication, the L/c is deemed to be non-transferable. In a transferable letter of credit, the first beneficiary (the exporter) may request the paying, accepting or negotiating bank to make the credit available in whole or in part to one or more second beneficiary or beneficiaries. The second beneficiary can be another exporter, trader or manufacturer. The L/c is expressly designated "transferable" by the issuing bank on instructions of the applicant. The letter of credit that was transferred or made available to the second beneficiary is known as the transferred credit. The bank that makes the transfer is known as the transferring bank.

Non-transferable Letter of Credit

In a non-transferable letter of credit, the beneficiary cannot transfer the credit to other beneficiary. The L/c usually indicates "non-transferable" or "not transferable. " Even if such indication in not there, the L/c is deemed to be non-transferable.

Management of Administrative Cadre and its interface with the Scientific Cadres in CSIR

CSIR had invited views from the Labs on "streamlining of Administrative Cadre in CSIR" because of following reasons

1. On many occasions the administrative cadre appears to be constrained to play a role of facilitator to R&D work being carried out in CSIR.
2. These cadres are perceived to be bogged down by their own inter-cadre problems among Administrative, Finance, Stores & Purchase and Stenographic cadres and perceived bottleneck of career progression in some of the cadres.
3. The spate of merger and demerger among the different cadres which has created an inconsistency with regard to seniority in different cadres which has not been settled satisfactorily.
4. The adequacy of administrative staff in different labs across the CSIR system and the basis of sanctioned staff strength across the administrative cadres in the CSIR is unexplained.
5. The system of transfer for Common Cadre Officers often results in disruption of smooth functioning in the labs and disturbance in personal and family life of these officers and
6. The system of assessment followed in CSIR with the component of interview for promotion has often resulted in complaints and court cases.

Based on the above reasons following queries had been sent to the Lab for reply:-

1. Number of administrative staff in different categories
   
2. Estimate of the labs for the requirement of staff
3. Status of assessment/promotion of different categories of staff and views of the lab on the system of assessment to be followed for the administrative cadres
4. Views of the lab on the merger and extent of merger of administrative cadres and isolated cadres
5. Transfer policy of Common cadre officers
6. How much freedom do the labs wants in appointment and retention of adminstrative staff and at what level
7. What kind of induction training and subsequent training do the labs suggest for staff of administrative cadre

Kindly comment

Provisions Governing Employment Under The Union And The States :

The Government servant holds office during the pleasure of the President but security of tenure is specifically assured to him. Articles 309, 310 and3 11 of the Constitution a& the provisions which apply to the cases of employees serving the Union and various States.

Article 309 empowers Legislature to enact laws subject to the Constitution for regulating recruitment and conditions of service of' persons appointed in connection with the affairs of the Union or of any State and also empowers the President or the Governor or such person as may be directed by him to make rules subject to the provisions of the Constitution for regulating recruitment and conditions of service of persons so appointed.
The provision of Article 310 (1) is that except as expressly provided by the Constitution every person who is a member of a Defence Service or of a Civil Service of the Union or of an All India Service holds his post under the Union during the pleasure of the President and every person who is a member of a Civil Service of a State, holds his post during the pleasure of the Governor of the State. To safeguard the service of a member of a Civil Service of the Union or of an All India Service or of a Civil Service of a State, Article 311(2) provides that no such person shall be dismissed or removed or reduced in rank except after an enquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of these charges, provided that where it is proposed after such enquiry to impose upon him any penalty, such penalty may be imposed on the basis of the evidence and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed.
A subsequent amendment of Article 31 l(2) has restricted the protection earlier provided to a Government servant and purports to widen the Doctrine of Pleasure. The curtailment of the safeguard of enquiry is couched in the following language :
Provided further that this clause shall not apply-
( a ) Where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge: or
( b ) Where the authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing, it is not reasonably practicable to hold such inquiry: or
( c ) Where the President or the Governor, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to hold such inquiry.
Clause (3) of Article 311 provides that if, in respect of persons as aforesaid, a question arises whether it is reasonably practicable to hold such inquiry as referred to in Clause (2), the decision there on of the authority empowered to dismiss or remove such person or to reduce him in rank shall be final.