Corporate Governance.docx

TABLE OF CONTENTS

Chapterization

Page

No.

Disclaimer………………........................................................................ Disclaimer………………................................................. .............................................3 ......................3 Acknowledgement………………….…………………………...................................4 Table of Abbreviation ........................................... .................................................................. .............................................. ................................5 .........5 Chapters

I.

Chapter Chapter  ! Introd"ctio Introd"ction... n........ .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... ........5 ...5 #rief introd"ction of the research pro$ect %esearch ðodolog' (b$ects of research )cheme of Chapteri*ation

II. III. I. I. . I.

Chapter Chapter + ! Internati International onal ,egal %egime %egime for --s/ An (verview (verview..... .......... .......... .......... .......... .......... .......0 ..0 Chapter Chapter 3 ! )"i 1eneris 1eneris )'stem. )'stem...... .......... .......... .......... .......... .......... ......... ......... .......... .......... .......... .......... .......... .......... .......... .......... ........ ...3 3 Chapter Chapter 4 ! -rotect -rotection ion (f 2ew -lant -lant arieties arieties In India... India........ .......... .......... .......... .......... .......... .......... .......... .......0 ..0 Chapter Chapter 5 ! Concl"sion Concl"sion..... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... ......++ .++ %eference... %eference........ .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .........+ ....+4 4

Disclaimer

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This pro$ect report has been prepared b' the a"thor as a st"dent of 3rd 'ear "nder the five 'ear ##A.,,.#  -rogram in the &AT) ,aw )chool for academic p"rposes onl'. The views e6pressed in this report are personal to the st"dent and do not reflect the view of  commission or an' another person7 law school or an' of its staff or personnel. An' for  academicall' p"blishing of this article then it m"st be a"thorit' from the respective law school in an' manner. This report is the “Adarsh o!sing Societ" Scam. #aharashtra$ and the same or an' part thereof ma' not be "sed in an' manner whatsoever7 witho"t e6press  permission of the &AT) ,aw )chool in writing.

Div'ansh )harma &83##A,,#9:

AC%NO&LED'E#ENT

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I feel highl' elated to work on this d'namic and highl' important topic that is “Adarsh o!sing Societ" Scam. #aharashtra$ This topic instantl' drew m' attention and

attracted me to research on it. I am fort"nate to be provided with an opport"nit' to write m' paper "nder the kind s"pervision of &iss %";ia''ah 2aa* Asst. -rof.7 &AT) ,aw )chool and I am thankf"l to her for providing me with the appropriate g"idance while writing the paper. This paper wo"ld not have been possible witho"t her val"able inp"ts7 honest remarks and earnest effort to g"ide me thro"gho"t the drafting of the paper. I wo"ld like to e6tend m' sincere thank to her for giving me her val"able time to view m' research from her b"s' sched"le. I am highl' indebted to the librar' staff to help me find the relevant books and  $o"rnals7 and other officials and office staffs7 who have also e6tended their help whenever  needed. I wo"ld like to e6tend m' sincere thanks to m' friends and for their review and honest remarks. )o7 I hope I have tried m' level best to bring in new ideas and tho"ghts regarding the  basics of this topic. 2ot to forget m' deep sense of regard and gratit"de to m' fac"lt' adviser7 &iss. %";ai''ah 2aa* who pla'ed the role of a protagonist. ,ast b"t not the least< I thank all the members of the &AT) ,aw )chool and all others who have helped me in making this  pro$ect a s"ccess.

Chapter () *ntrod!ction

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Adarsh o"sing )ociet'7 a 3=store' "pscale residential comple6 in Colaba7 &"mbai7 sho"ld have originall' ho"sed war heroes and war widows who lost their spo"ses d"ring the ::: >argil ?ar. #"t the occ"pants of the apartment comple6 b"ilt on defence land ended "p being  b"rea"crats and relatives of politicians who were in no wa' connected with the >argil war. The p"rpose of this report is to highlight "nethical practices involved in one of the well= known scams in India = The Adarsh o!sing Societ" Scam . This societ' is a cooperative societ' in &"mbai and the scam dates back to @ebr"ar' +99+. At that time7 a re;"est was made to the then Chief &inister of &aharashtra for allotment of land in Colaba area of  &"mbai for the constr"ction of this ho"sing societ'. Colaba is one of the most posh areas in &"mbai having 2ariman -oint in its vicinit'. The welfare of serving and retired personnel of  the Defence )ervices was the main motive behind the allotment. #"t over a period of 9 'ears7 some b"rea"crats7 militar' officers and politicians went ahead to mo"ld the r"les in their favo"r7 so as to get the flats allotted to them at m"ch lowered prices. The Comptroller  and A"ditor 1eneral of India +9 report to the -resident pointed o"t The episode of Adarsh Co=operative o"sing )ociet' reveals how a gro"p of select officials7 placed in ke' posts7 co"ld s"bvert r"les and reg"lations in order to grab prime government land= a p"blic  propert'= for personal benefit.B The allegations against the three former Chief &inisters of  &aharashtra7 )"shil >"mar )hinde7 the late ilasrao Deshm"kh and Ashok Chavan are still in process b' the Central #"rea" of Investigation C#I7 Income ta6 IT department and nforcement Directorate D.

O+,ecti-es o paper/)

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The paper has been designed to f"lfil following ob$ectives7 which co"ld contrib"te and facilitate to enhance the "nderstanding following/= . ?hat is Adarsh )cam +. ?ho was its Creator 3. ?hat black mark it create on &"mbai 0e-ie1 o literat!re/ All the data so"rces are secondar'7 which is taken from librar'7 book 

 $o"rnals and internet.  0esearch #ethodolog"/)

The doctrinal method of research has been "sed7 which involve collection of data from both primar' and secondar' so"rces. The researcher has relied on primar' so"rces like International Charters7 resol"tions of the international bodies and committees related thereto and )econdar' so"rces like books written b' vario"s eminent a"thors and articles fo"nd in the $o"rnals and websites7 e=$o"rnals. 8se of internet also became ver' relevant to find o"t the most "pdated7 relevant and apt information which helped me in e6ploring the s"b$ect from vario"s dimensions.

Scheme o Chapterization

The complete pro$ect is divided into @ive chapters. The first chapter is an introd"ction to the research pro$ect. The second foc"ses on ,egal @rame ?ork. The third one is the st"d' on role of )"i generis plant variet' protection s'stem and its importance. The fo"rth chapter deals with the protection of new plant varieties and legal regime in India . And in last chapter the  pro$ect is been concl"ded on the basis of st"d'7 research and information. NAT20E AND %*ND OF 0ESEA0C

The doctrinal research methodolog' wo"ld be "sed in anal'sing the 2at"ral reso"rce acco"nting and to see its international prospective. ,imitation of the st"d'/ The research has been completed in appro6.  week 

Chapter 3

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The Adarsh o"sing )ociet' is a posh7 3=store' b"ilding constr"cted on prime real estate in Colaba7 &"mbai7 for the welfare of war widows and personnel of IndiaBs &inistr' of  Defence. (ver a period of several 'ears7 politicians7 b"rea"crats and militar' officers allegedl' conspired to bend several r"les concerning land ownership7 *oning7 floor space inde6 and membership get themselves flats allotted in this cooperative societ' at below= market rates. The scam was "nearthed in 2ovember +99 which forced the then Chief &inister of  &aharashtra7 Ashok Chavan7 to resign. In +97 a report of the Comptroller and A"ditor  1eneral of India CA1 said7 EThe episode of Adarsh Cooperative o"sing )ociet' reveals how a gro"p of select officials7 placed in ke' posts7 co"ld s"bvert r"les and reg"lations in order to grab prime government land = a p"blic  propert' = for personal benefit.F In Gan"ar' +97 the &aharashtra government set "p a two=member $"dicial commission to in;"ire into the matter. The commission was headed b' retired igh Co"rt $"dge G"stice G A -atil7 with 2  2 >"mbhar acting as member secretar'. After deposing 0+ witnesses over + 'ears7 the commission s"bmitted its final report in April +93 to the &aharashtra government. The report highlighted +5 illegal allotments7 incl"ding ++ p"rchases made b' pro6'. The report also indicted fo"r former chief ministers of &aharashtra/ Ashok Chavan7 ilasrao Deshm"kh7 )"shilk"mar )hinde and )hiva$irao 2ilangekar -atil7 + former "rban development ministers/ %a$esh Tope and )"nil Tatkare and + top b"rea"crats for vario"s illegal acts. The allottees incl"ded Dev'ani >hobragade. The Central #"rea" of Investigation C#I7 the Income Ta6 Department and the nforcement Directorate D are c"rrentl' investigating allegations that three former   chief ministers of &aharashtra = )"shilk"mar )hinde7  ilasrao Deshm"kh and Ashok Chavan = were involved in the scam.

BAC%'0O2ND OF TE  ADA0S C O OPE0AT*4E O2S*N' S OC*ET5 A serving )"b=divisional (fficer in the Defence states (ffice D( &"mbai7 )hri %amchandra )onelal Thak"r7 addressed a letter to the Chief &inister of &aharashtra in +99+ as Chief -romoter of the Adarsh Co=operative o"sing )ociet'. This letter was regarding the allotment of 3054+ s;. metres of land in #lock 2o I of the #ack #a' %eclamation )cheme ##%7 Colaba7 &"mbai. The ma$or reason for this allotment was ;"oted as the welfare of  serving and retired personnel of the Defence )ervices in n"mero"s comm"nications among 6

the )ociet'7 Defence a"thorities and the 1overnment of &aharashtra from time to time. %ela6ations were so"ght in favo"r of the societ' from time to time on the gro"nds of 1irlsB hostel for wards of Arm' officers posted in far=fl"ng areas7 welfare of >argil ?ar heroes7 welfare of ?ar=widows and of soldiers who have served their motherland. #"t grad"all' it  became clear that there was no place for an' girlsB hostel or an' other facilit' for welfare of  servicemen. It is ;"ite obvio"s that tho"gh references to widowsB and >argil eroesB were repeatedl' made7 the' didnBt have the financial capabilit' to meet the cost of the flats in this societ'.

4*OLAT*ONS The Adarsh o"sing Cooperative )ociet' was constr"cted in the Colaba area of &"mbai. The Indian Defence forces consider this area to be a sensitive coastal area and there are man' Indian Defence establishments here. ice Admiral )an$eev #hasin7 Commander7 ?estern 2aval Command7 pointed that the  b"ilding posed a ma$or sec"rit' concern as it overlooked man' militar' installations in that area. e wrote a letter in G"l'7 +99 to Defence &inistr' seeking action against the promoters and the officers involved in overlooking the constr"ction itself since +993. In the aftermath of   2ovember7 +990 terror attack on &"mbai via sea ro"te7 the again highlighted the sec"rit' concerns posed b' this 99=metre tall b"ilding. This b"ilding has also violated the Coastal %eg"lator' Hone C%H II limit of a height of 39 metres beca"se it is ne6t to a planned helipad and militar' installations. In a letter to the Defence &inistr' and the Arm'7 ice Admiral #hasin mentioned that despite repeated intimations to vario"s concerned departments of &aharashtra 1overnment to not iss"e a 2o (b$ection Certificate2(C or an (cc"pation Certificate (C7 it came to notice

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that the &"mbai &etropolitan %egion Development A"thorit' &&%DA had iss"ed an (C to Adarsh )ociet' b"ilding. The in;"ir' ordered b' Defence &inister A > Anton' also didnBt r"le o"t the involvement of  some officers with b"ilding promoters at gro"nd level7 tho"gh it appeared to be a criminal conspirac'. It is not s"rprising as the scam took place over a period of 9 'ears and had to re;"ire the active involvement of man' high ranked officials. &an' r"les were bent or flo"ted to allow the constr"ction. )ome of the e6amples are obtaining 2(C from Arm' for  constr"ction of b"ilding in s"ch a sensitive *one7 modif'ing the &&%DA development plan and obtaining another for residential development in Coastal %eg"lation Hone. )ome of the  big names who were allotted flats were the former Arm' chiefs 1enerals 2 C i$ and Deepak  >apoor7 e6=2av' chief Admiral &adhavendra )ingh7 former Arm' ice Chief ,t 1en )hantan" Chowdhar'7 former 8nion &inister and )hiv )ena &- )"resh. All efforts made b' some honest officers were ignored b' the senior officials. As stated b' former defence estate officer and original whistleblower in Adarsh o"sing )cam7 )a"rav %a'7 EThe principal director7 defence estates so"thern command was the advisor of 1(C in C )o"thern Command ,t 1eneral )ihota7 who was a member of Adarsh. &an' senior defence estate officers in so"thern command and D1D were also members and had vested interest in dil"ting m' ob$ections and observationsF. e had also indicated to his seniors that the societ' was d"bio"s and had also ob$ected the initial 2(C b' Arm'7 terming it as a sec"rit' threat. The constr"ction of this societ' also violated some of the r"les laid down b' &inistr' of  nvironment. The state environment department had informed the C#I that it never gave clearance to the societ'. The department stated that some environment related clearances had  been given directl' b' the state 8rban Development Department 8DD on its own and it was onl' after a 2on=1overnmental (rganisation 21( wrote to it in +9907 that the

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department got to know abo"t this. After repeated reminders b' C#I to 8DD seeking clarifications7 8DD replied sa'ing that it was not aware of an'thing.

Stages in Adarsh Scam 

@irst proposal of the came "p before the )hiv )ena= #G- government with 2ara'an %ane as the Chief &inister.

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)econd application came "p the following 'ear7when was ilasrao Deshm"kh as Chief &inister.

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At this time7 the allotment application was so"ght in the name of providing homes for  war widows and veterans

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(n the list of beneficiaries who got flats were Ashok Chavans relatives7 incl"ding his mother=in=law.

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In )eptember that 'ear7 the &&%DA had given the occ"pation certificate to Adarsh o"sing )ociet'.

&hat 1as o!nd66 

Adarsh was granted additional floor space inde6 of an ad$acent plot that had been reserved for a b"s depot.

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The Adarsh b"ilding flo"ted environmental laws. It was fo"nd that both the 8nion &inistr' of nvironment and @orests and the &aharashtra Coastal Hone &anagement A"thorit' were in the dark abo"t who e6actl' gave clearance to the 3= store'ed  b"ilding

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@lat of cost between %s J Crore to 0.5 Crore 7 however members of )ociet' paid %s J9=05 ,akh for each flat.

Alleged -iolations The Adarsh )ociet' high=rise was constr"cted in the Colaba localit' of &"mbai. This is considered a sensitive coastal area b' the Indian Defense forces and is the location of  9

vario"s Indian defense establishments. The societ' is also alleged to have violated Indian environment ministr' r"les. The scam is notable for the fact that it was enacted over a period of ten 'ears and re;"ired the active involvement of s"ccessive officials in man' cr"cial posts. %"les and reg"lations across man' departments and ministries7 both at the Centre and the state of &aharashtra7 were flo"ted or bent to allow for the constr"ction of the b"ilding. )ome of the more blatant transgressions incl"ded/ obtaining a 2o (b$ection Certificate 2(C from the Arm' towards constr"ction of the b"ilding in a sensitive *one7 getting the &"mbai &etropolitan %egion Development A"thorit'  &&%DA development plan modified7 and obtaining another 2(C for residential development in a Coastal %eg"lation Hone7 often thro"gh manip"lation of records and misrepresentation of facts. fforts b' honest officers to  bring this to the notice of top officials were ignored. The iss"e was first raised in a newspaper  report in +993 b"t did not evoke an' official reaction. In +997 it was again raised b' vario"s newspapers and T channels. K"estions were raised abo"t the manner in which apartments in the b"ilding were allocated to b"rea"crats7 politicians and arm' personnel who had nothing to do with the >argil ?ar and the wa' in which clearances were obtained for the constr"ction of  the b"ilding of the Adarsh )ociet'. It had led to the resignation of the then Chief &inister7 Ashok Chavan. )ome of the c"rrent allottees of the flats in the Adarsh co=operative societ'  b"ilding have offered to ret"rn their flats7 den'ing allegations that the' were allotted flats  beca"se the' infl"enced or helped7 in some manner7 the constr"ction of the societ' b' violating the r"les. In an interview to The ind" p"blished on +J &arch +9+7 1eneral >  )ingh7 the Chief of Arm' )taff ascribed man' of the attempts to malign him d"ring his ten"re to7 amongst others7 those he described as Ethe Adarsh lobb'F7 those directl' connected to the scam7 as well as those who were affected b' his efforts to rid the arm' of corr"ption.

*ss!es Adarsh o"sing )ociet' has defended its actions as similar to other ho"sing societies s"ch as )amata7 E2'a' )agarF L likes in which Eserving and retired $"dges alread' owned homes in &"mbai b"t transferred these in names of their children to become eligible for apartments in )amata L 2'a' )agar.F. Also7 2'a' )agar )ociet' is constr"cted "pon a plot of land reserved for o"sing the ?ar Disabled.

Arrests 10

@ollowing the Co"rtBs criticism7 the C#I carried o"t eight arrests incl"ding two retired &a$or  1enerals T> >a"l and A% >"mar7 retired brigadier && ?anchoo7 former 1eneral (fficer  Commanding1(C of &aharashtra7 1"$arat and 1oa7 Adarsh promoter >anhai'alal 1idwani and -radeep 'as7 the then cit' collector and c"rrentl'7 finance secretar' e6pendit"re in the 1ovt. of &aharashtra. Accordingl'7 on ++ &arch +9+7 the Chief  &inister of &aharashtra7 -rithvira$ Chavan anno"nced in the legislative assembl' that the two IA) officers whose names have fig"red in the scam7 -radeep 'as and Gaira$ -hatak have  been s"spended from government service. According to newspaper reports7 man' of the arrested hold more than one flat in the societ' in fictitio"s names. @ormer Congress &,C >anhai'alal 1idwani was reported to have as man' as ten flats7 which he had bo"ght on behalf of top politicians. 1idwani and his son had  been earlier arrested on J &arch +9+7 b' the C#I for tr'ing to infl"ence C#I officials investigating their alleged involvement in the Adarsh scam. In a f"rther twist to the case7 the C#I officers arrested their own law'ers7 G > Gagiasi and &andar 1oswami. Gagiasi allegedl' asked an Air India AI official7 one of the acc"sed in the case7 to pa' a bribe of %s 5 million in e6change for dil"ting charges levelled against him. The pett' cash books maintained b' Gagiasi helped "nearth the conspirac'. In addition7 %s +.5 million was allegedl' paid to 1oswami. e was the )pecial Co"nsel in the &inistr' of ,aw and G"stice and at present is working as %etainer Co"nsel for C#I. According to C#I so"rces7 the tainted AI official approached the C#I for dil"tion of the case filed against him. Gaira$ -hatak and %amanand Tiwari were arrested b' the C#I on 3 April +9+7 for their alleged involvement in receiving illegal gratification in the Adarsh o"sing )ociet' )cam.

Bail

(n +: &a' +9+7 a special C#I co"rt granted bail to seven of the nine arrested acc"sed in the Adarsh scam since the C#I failed to file a charge sheet within the stip"lated J9 da's from the time it took them in c"stod'.

CB* special co!rt re,ects CB* plea

1overnor of &aharashtra >. )ankaranara'an< in a latest development re$ected the  proposal of Central #"rea" of Investigations to grant sanction to prosec"te former Chief  &inister Ashok Chavan for having favo"red Adarsh )ociet' b' wa' of allotment of  additional @loor )pace Inde6 M@.).I.N illegall'. It is stated in the C.#.I.

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*n7!ir" +" a 8!dicial Commission

(n : Gan"ar' +97 1overnment of &aharashtra appointed a two=member $"dicial commission7 "nder the Commissions of In;"ir' Act7 :5+7 to investigate alleged irreg"larities and corr"ption. It was decided that the commission wo"ld be led b' a retired #omba' igh Co"rt  $"dge GA -atil while former )tate Chief )ecretar' - )"bramanian wo"ld be the member. The CommissionBs terms of reference were to investigate all aspects7 incl"ding land ownership and allotment7 permissions given to Adarsh. The Commission was given three monthsB time to complete the investigation. (n +O G"ne +9+7 while deposing before the two member panel probing the scam7 ilasrao Deshm"kh7 8nion &inister and former Chief  &inister of &aharashtra contended that land was allotted to the ho"sing societ' after getting clearance from the %even"e Department7 passing the b"ck to his s"ccessor7 Ashok Chavan who headed the department then.

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