February 2005
Index
1
2
Messages: Managing Partner’s message
Comment: On holy cows and shareholders contracts
3
Comment: The way of the Dragon
4
5
6
(The sanctity of Joint Venture Agreements in Indian law)
(The Layman’s guide to the Chinese legal system)
Comment: Contrived crimes
Lifestyle:
(Conversion of commercial disputes to crimes in India)
In quest of Kinnaur
(A road journey through the inner Himalayas)
Initiative: Our workshop schedule
1
1
5
8
11
17
(Workshops for the business community)
Managing Partner’s Message
As our country continues to progress rapidly through the New Year, we
have been privileged to share in the excitement of a society in the midst of
change. Here are some of the things that we have witnessed in the last two
months:
1. Our Senior Partner Mr. P.S.Dasgupta and the Swiss law firm
Homburger have steered Holcim’s acquisition of Ambuja Cement. This
is by far the largest Mergers and Acquisitions deal that India has ever
witnessed. It has also raised complex issues pertaining to India’s
Takeover Code. Once the transaction achieves culmination, we hope to
have the opportunity to bring some of our learning to our readers
through the pages of Ensouth.
2. Over the years, we have advised Indians and foreigners on a multitude
of joint venture transactions. We have also dealt with the
consequences of those that have gone bad. This issue has acquired a
special significance in the face of the Ambani imbroglio. Ensouth now
addresses the question of enforceability of shareholders agreements in
Indian law.
3. In December last year, I spend one week in Shanghai and spoke to a
cross section of business and legal professionals. Ensouth carries this
1
time a simplified overview of the Chinese legal system as seen through
the eyes of an Indian lawyer.
4. Notwithstanding the tremendous progress India has made towards
transforming itself into a civil society, business continue to carry the
perception that crimes can be contrived out of commercial disputes.
This time, Ensouth examines if this is true.
5. In our leisure section, we reproduce one of the great Himalayan
journeys, into the land of the celestial ‘Kinnars’, north east of Shimla,
reproduced from the article published in ‘Namaskaar’ magazine.
6. Finally, in continuance of the successful interactions we have had with
the business community in the last few months, we share with you our
workshop schedule for the next three months.
2. Comment-1
The following column was printed in the December 27th, 2004 issue of
Business World.
Of holy cows and shareholders contracts
The sanctity of Joint Venture contracts in Indian Law
Ranjeev C Dubey
It amazing how the seemingly easiest legal questions are sometimes
the hardest to answer. Other than a 100% buy out, every M&A transaction
generates a shareholders agreement by which company owners bind
themselves to special rights and obligations. How far these agreements are
enforceable in Indian law is the questions I seem to answer most often at the
commencement of every other M&A transaction.
It’s a fair questions: after all, the relationships between co-owners will
most likely be the single most dominant factor influencing the future of the
corporate entity. To understand this issue, let us first examine what a
shareholders agreement typically does.
In Indian law every shareholder is at complete liberty to exercise his
shareholder’s ‘power’ as he sees fit: he has absolutely no obligation to
protect the ‘interest of the company’, however that exotic gobbledegook is
defined. This means that if it serves a shareholder’s purpose, he can take the
company down to push his own agenda; brinkmanship in shareholders
disputes being a very good example. Given this legal reality, how then is one
to protect value in the company? The answer is a shareholders agreement
that sets out the limits within which shareholders may exercise their
shareholders rights.
2
In practical terms, every shareholders contract provides the manner in
which a company is run and this includes (1) the constitution of the board,
(2) quorums of board meetings, (3) decisions the board may not take
without the consent of all partners, (4) quorums of shareholders meetings,
(5) decisions a shareholders meeting may not take without consent of all
partners, (6) solutions if the board or the shareholders are deadlocked, and
(7) a mechanism by which partner disputes may be resolved without eroding
company value.
In Indian law, such an agreement does not sufficiently protect value in
a company. Courts here have ruled that while partners in a company may be
bound to each other because they have a signed a shareholders agreement,
the company certainly is not. This means that the company, ‘steered’ by the
controlling group of partners, can ignore the contract and proceed at its will.
What a shareholder contracts then gets you is litigation between partners,
but it does not stop the company from doing what it wishes. This means that
in practice, shareholders agreement or no shareholders agreement, the
majority shareholders can bulldoze the minority
One common solution to this problem has traditionally been to make
the company a signatory to the shareholders agreement. This works in many
jurisdictions but again, not in India and for two reasons.
First, any party is free to violate a contract if it is ready to pay the
price in damages as a court may some day determine (in this lifetime or the
next!). There are any numbers of circumstances where a company may find
it commercially wise to breach its contractual obligations and meet a greater
agenda. Money does not always compensate a wrong, especially money that
does not show up in this lifetime.
Second, the Rolta judgment (of the Bombay High Court) has added
another twist to this issue by in effect holding that directors have fiduciary
duty to a company, not the agreement of the owners. This is a case where by
a truncated shareholders agreement to which Rolta Motors was a party,
owners of Rolta Motors had agreed that for so long as the Plaintiff had shares
in the company; the Board of the Company would be limited to three
directors. Subsequently, Rolta Motor sought to induct an additional director
on to its Board. On reviewing previous case law, the Bombay High Court held
that Directors both drew their rights and their duties from the law and the
Articles of the Company alone. Consequently, a shareholders agreement
could not be used to restrict the discharge of their fiduciary duty to the
Company.
This whole business of fiduciary duty to company versus harsh reality
of being appointees of the owners has been the bugbear of directors since
companies were first conceived and 200 years of legal pronouncements have
not sorted this one out. That apart, I can make some sense of this
pronouncement in the context of a widely held listed company but how we
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are to draw a distinction between a company and its shareholders in
operational matters when the company has only two owners is frankly too
exotic for my nightmares-on-mean-street paradigm. Rolta did make one
exception though. It indicated that the court’s decision may well have been
different if the shareholders agreement had been written into the Articles of
Association of the company.
Many M&A lawyers have long taken the view that we need to write
shareholders agreements into the Articles of the company but own my
reasons for making this recommendation are not Rolta’s. In my experience, a
Court will stop a decision that violates the Articles of a Company dead in its
tracks but a decision that breaches a contract but is not ultra vires (beyond
the powers of) the Company is harder to stop, though the aggrieved party
could probably sue and collect some damages if and when the litigation cows
finally come home. Rolta has provided additional justification for doing this,
because now, by writing shareholders contracts into Articles, we are going to
cast a fiduciary duty on the directors to see that this agreement is honored.
That gives us lawyers several more people to drag to court and sue in their
personal capacity.
However, since this is the law after all that we are talking about (need
we remind ourselves), this too is not the end of the matter.
Section 9 of the Companies Act states that its provisions shall override
the Articles of a Company, its resolutions and the resolutions of its directors.
It also says that to the extent that the Articles are ‘repugnant’ to the Act, the
Articles will be void. So what is ‘repugnancy’? If the Act says it takes two
directors to constitute a quorum of a Board meeting but the Articles say one
director can constitute a quorum, are the Articles repugnant to the quorum?
The courts have held that this is a repugnancy. What if the Articles say you
need three directors to constitute a valid quorum of a Board meeting? Is that
a repugnancy? The courts have held that it is not. The principle seems to be
that additional conditions or more stringent norms are legal but slackening of
the Act is not. In simple terms, more is Okay, less is not. Since 3 directors is
more restrictive than two, the Articles are legal.
Now all this is easily understood in the context of simple numbers but
what about something a little more obtuse. How about information rights?
The Companies Act both enforces and limits the information directors can
demand from a Company. What if a shareholders agreement gives expanded
information rights to directors? Is that more or less? I am sure I have no
idea.
Take another example. Are veto rights to directors to simply overrule
the majority on a resolution legal? Put this way, may be not but we need not
say it this way: we can say: “the affirmative vote of a director of each party
shall be necessary for a board to validly pass a resolution.” It sound better
and can be passed of as a more stringent condition but shorn of the rhetoric,
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what is it if it is not a veto? Since the law requires Board Resolutions to be
carried by a simple majority, is this sort of provision more or less?
In truth, Indian courts have never definitively answered these
questions. All we can do then is console ourselves by saying that in a
dynamic world where even settled principles of law get unsettled as times,
tides and people change, it may not be worthwhile worrying too much about
the legal questions that have not been settled. By which token, for the
moment, if an investor in an Indian company gets all the shareholders and
the company to sign a shareholders agreement, and then gets it written into
the Articles of Association of the Company, I think the investor should be
doing alright.
3. Comment-2
The following column was printed in the January 15th, 2005 issue of
Business World.
The way of the Dragon
A layman’s guide to the Chinese legal regime
Ranjeev C Dubey
Times change and how: early in 2003, most stakeholders of the Indian
business community were writing alarmist obituaries to the eminent demise
of Indian manufacturing at the hands of the fire breathing Chinese dragon.
By Diwali of 2004, we were all speaking of finding synergy between Indian
knowledge and linguistic skills with Chinese organizational skills. Before the
year was out, I was retained to close a cross border joint venture between an
Indian and a Chinese company. I don’t know what I expected to find when I
spend a week in Shanghai in December with a group of experienced Chinese
lawyers but I am sure I did not expect to learn that China did not have a
coherent legal regime in a way that I understand the idea.
Without claiming either adequate knowledge of or training in the
subject, let me share with you my understanding of the Chinese legal
system.
Chinese law has no difficulty understanding the idea of a ‘natural
person’ – people like you and me – but the concept of a ‘legal person’ – like
companies and Hindu Undivided Families – is not well developed. Naturally,
the powers, functions and duties of these legal persons remain undefined.
Article 41 of the General Principles of the Civil Law for instance stipulates
that a legal person must have (1) sufficient funds; (2) Articles of Association;
(3) an organization and premises; and (4) the ability to bear civil liability
independently. However, there is no general consensus on whether or not
legal persons can own, manage and dispose of properties independently. The
absurdity can be quite bewildering at times.
5
Take Article 2 of the Law on Industrial Enterprises Owned by the
Whole People, which provides that State-owned enterprises must obtain the
status of a legal person in accordance with the law and bear civil liabilities as
regards the property that the State has authorized it to operate and manage.
At the same time, it stipulates that the property of such an enterprise is
owned by the ‘whole people’. As I read it, this means that these enterprises
shall be entitled to deal with their properties to the extent that the states
authorizes them to do so. As a lawyer for a third party dealing with such an
enterprise, I would worry a great deal about what is authorized and what is
not. More worrying though is the thought that the “corporate veil” does not
meaningfully exist in China: there is no clearly demarcated distinction
between the company and its shareholders.
Actually this whole problem is rooted in a far deeper problem.
Remember that not so long ago, China was communist and denied private
property rights. While ‘economic’ China, pragmatist as always, has sailed a
long distance away from those misconceived shores, ‘juristic’ (or more
bluntly ‘rhetorical’) China has failed to keep pace, and has still not accepted
the idea of private ownership of property in a constitutionally meaningful
way. Article 11 of the Constitution for instance can do no better than state
that "the State protects the legitimate rights and interest of the private
economy". And what pray is legitimate? And who is to determine whether
something is or is not legitimate? My legal training tells me that there is a
very clear distinction between what I have a constitutional right to and what
the state promises to do for me in some generic amorphous way. India has
its directive principles too but I would trust in my fundamental rights a whole
heap more.
If you think about it, the entire private economy in China is built up on
little if any legal foundation. Without the right to own what they do, they
really have no right to exist. Which is why private business in China
subscribes to less than 1% of official bank credit. What you have then is
private business tapping into a national network of underground banks,
people who are prepared to lend against highly specious collateral security,
people who operate on personal relationships, not on declared lending policy
or the economic fundamentals of the borrower.
Naturally then, any debate about contractual obligations, contractual
comfort, risk profiling or liability indemnification between an Indian company
and a Chinese one immediately trans-mutates into a debate about the
legitimacy of the Chinese company as a corporate entity, to state nothing of
the credibility of its balance sheet. That also opens the door to the larger
debate: if we do have a dispute on what the law really is, who is going to
resolve it? This is where I made my most amazing discovery yet.
Chinese courts are not authorized to interpret the laws of China! China
has adopted what is called the principle of legislative interpretation. This is
rooted in the idea that those who make the law are in the best position to
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interpret it. This means that Chinese courts are empowered to implement the
law but not interpret it. In truth, I can’t imagine a case where it is possible to
apply a law without first asking, “what is the law?” If that is not an
interpretation issue, what is? What you have in the result is a dysfunctional
system that any smart defense lawyer can spin “interpretation” webs around
and defeat a claim.
It gets worse. Given the general indifference with which a cohesive
logical legal system is held in China, it is no surprise that the Courts function
poorly if at all. Courts are not necessarily or even substantially manned by
trained legal persons – meaning judges don’t have a law degree – and the
rules of procedure are rudimentary. Chinese administrators do not
understand the distinction between executive and judicial powers and they
are just as likely to knock on the door and start to settle a dispute between
private parties without invitation. In practice, untrained petty officials can
and do assume jurisdiction to settle disputes without express authority, rules
or petition, banana republic style!
So who interprets the law then? The Constitution entrusts this task to
the NPC Standing Committee. In practice, the NPC Standing Committee is yet
to formally interpret any law at all. Even when it has been asked to do so, it
has steadfastly refused. NPC Standing Committee’s paralysis has left the
courts with the task of applying laws that no one will interpret for them.
Since 1981, the Supreme People’s Court of China has issued thousands of
pieces of judicial interpretation to guide lower courts but given the reality of
‘legislative interpretation’, it is debatable if these interpretations are legal.
How then is a dispute in a cross border contract to be resolved? In
China, as in many other countries, the answer is arbitration. Till 1994, China
International Economic and Trade Arbitration Commission (“CIETAC”)
handled all disputes with cross border implications on an exclusive basis.
There were till 1994 two separate systems of arbitration in China: one for
domestic economic cases and the other for foreign-related cases.
In August 1994, the new Arbitration Act of the PRC established a fairly
contemporary system of dispute resolution in arbitration and this applied to
both domestic and international arbitration. Following the promulgation of
the new Arbitration Act, the General Office of the State Council issued a
Notice stating that other arbitration commissions may also exercise
jurisdiction over cross border disputes if contending parties so chose. In a
flash, the China International Economic and Trade Arbitration Commission
and the China Maritime Arbitration Commission, both established under the
China Council of the Promotion of International Trade were to the task.
CIETAC was really upset. CIETAC asked the NPC Standing Committee to
interpret the Arbitration Law and asked two questions: (1) whether the
Notice issued by the General Office of the State Council constitutes an
administrative regulation; and (2) whether the Notice is in compliance with
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Arbitration Law. Predictably, NPC has maintained a deathly silence on the
issue.
It is alarming that Chinese law is unclear on very basic subjects:
things that an Indian lawyer would take for granted. What is worse is that
there is no functioning mechanism by which clarity can be achieved. Then
there is the problem of dispute resolution: whom do you go to for redress
and what power do they have? To top it all, even if you get an arbitral award
in your favor, there is no clarity on how it is to be enforced. Decree executing
courts suffer from the same disabilities as decision-making courts.
Where then is the solution? To give China a wide miss and find
business opportunities elsewhere? I think not. Profit after all is a reward for
managing risk and not for practicing abstinence! Indian business needs to
seize the opportunity but it needs to do so understanding the legal issues
here, without assuming that China’s legal regime is anything like India’s. In
effect, this only means better legal help.
At end, here is a little sobering thought: if India has indeed missed the
foreign investment bus to China, it sure isn’t because the Indian legal regime
is archaic, inadequate or uncertain.
4. Comment-3
The following column was printed in the February 14th, 2005 issue of
Business World.
On Contrived Crimes
The sanctity of Joint Venture contracts in Indian Law
Ranjeev C Dubey
Condemnable as the event doubtless was, the national feeding frenzy
of outage which followed the judicial remand of Bazee’s CEO took attention
away from the fact that police ‘victimization’ of business of this order of
magnitude remains the exception rather than the rule. What is more
dangerous for the business community is the perception that criminal
processes can be commonly used in India to settle commercial scores.
Consider a contemporary example.
The Lord Swaraj Paul of Marlylebone, founder of the Caparo group and
a peer of the House of Lords since 1996, now finds himself facing criminal
charges in an Indian court as a result of a fairly routine shareholders dispute.
UK’s Caparo group holds 60% of the equity of an Indian JV Company, of
which Suzuki’s Indian company holds 20% and the ‘Jindal group’ of
Companies, headed by M.D.Jindal, holds the balance. Back in 2002, Jindal
demanded that he be retained as Chairman for life of the Indian JV Company
and made allegations of mismanagement against the Caparo group in
granting inter corporate loans to group companies. Allegations of
8
mismanagement in this company are of course quite incredible because it is
a very profitable company, appropriate board resolutions were passed before
the loans were given and the loans have also long been returned. Jindal took
this matter to the Company Law Board and lost.
While the CLB petition was still pending, M.D. Jindal filed a criminal
complaint before the Metropolitan Magistrate alleging that at a shareholders
meeting, Lord Paul “tried to intimidate him and tried to physically assault the
complainant”. It bears mention that both men – Lord Paul and Jindal - are
more than seventy years of age! He then alleged that Angad Paul called him
up after the meeting and threatened to kill him. In another train of
allegations, he accuses the entire Board of conspiring to misappropriate
moneys by lending them to group companies. Finally, he alleges that the
minutes of the Board Meeting were forged because his objections were not
recorded. On this basis, Jindal alleges Conspiracy, Criminal breach of trust,
misappropriation of Company funds, forgery of board minutes and criminal
intimidation against Lord Paul, Angad Paul, the Board of Directors, even the
Company Secretary.
All this laughable triviality would have been amusing were it not that a
court has actually taken cognizance of the private complaint and issued
notice on all the accused. At first sight, this seems a damning indictment of
the legal environment in which Indian business operates. Is it?
As I write, this morning’s newspaper reports that American actor
Wesley Snipes lost a bid to get a federal judge to cancel an arrest warrant
stemming from an Indiana paternity suit in which a women claims he
fathered her son. In any civil society, what will you have a judicial system do
if a complaint containing serious allegations against a celebrity is filed? Any
system is capable of abuse: should we provide blanket immunity from
prosecution or arrest without exception to all shareholders, directors and
managers? Will that rule apply to cattle fodder consuming politicians too?
You can make a fetish out of cynicism.
The question better asked, and one I frequently deal with, is this: “Is
criminal process commonly used to achieve commercial ends in India?” My
answer is a resounding “no” and I will give my reasons.
The normal trigger for a criminal prosecution in India is the ‘FIR’ or
First Information Report. In a country where the press is vociferously free, it
takes an extraordinarily courageous SHO to record an FIR without good
reason. The common Indian allegation is that that the police record too few,
not to many, FIR’s. Jindal did not succeed in getting an FIR recorded.
Second, why would a business adversary bother with a criminal case
unless he can seriously inconvenience or embarrass his opponent? A criminal
case that does not result in arrest, bail, harassment or embarrassment is not
worth the candle. Arrests are only possible in ‘cognizable’ cases. By their
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very nature, the technical ingredients of cognizable crimes, and the standard
of proof required, is such that it is very difficult to make a credible allegation
of a crime in a commercial context. You don’t have a credible criminal case
only because you want to contrive one.
The truth is that most complainants hell bent on filing criminal cases in
commercial matters end up filing motions with magistrates, as Jindal did. In
some ways, this route is inherently fairer because at the very inception of the
criminal process, a legally trained magistrate examines the allegations in a
complaint, the supporting evidence and oral testimonies before he ‘takes
cognizance’ and summons the accused. Justice frequently gets done right
there. Not always though and it is this gross miscarriage of justice that Lord
Paul is now experiencing.
Unfortunately, getting summoned by a criminal court in India is a huge
inconvenience because every accused must attend every hearing. Being late
to reach the court is not an option because warrants of arrest are issued
pretty regularly. What are the options?
Essentially there are two. First, an accused may apply for permanent
exemption from personal appearance and let the case go on. The difficulty
here is that to get such an order, an accused must first submit to jurisdiction.
This at the very least means some expense and inconvenience in traveling to
the court but very likely, it also means a great spectacle. Who wants to be
seen to be accused of a crime in an Indian court or deal with attending
tamasha? (A indigenous form of expressionist folk theatre)
There is an alternative though. Since the early 1990’s, an accused
wrongly accused of an offense could approach the Magistrate and ask for
recall of the summons. Not any more. In the Adalat Prashad decision late last
year, a three-judge bench of the Supreme Court has held that once a
Magistrate issues summons, he cannot review this interlocutory order. That
leaves the accused with only one remedy: to seek to quash the entire
proceedings under the inherent powers of the High Court. This is a difficult
business. Since a trial is yet to occur and evidence is yet to be produced, the
court will assume that all allegations made are true and then evaluate if a
crime has been committed. In a country where conviction rates are
abysmally low, how are you going to convince a court that a case should not
even be tried: that evidence should not even be produced and evaluated?
Which takes us to the last of the questions: where the quash remedy
fails, what does one do. In truth, compromise is now the only alternative, in
Indian parlance, “compounding of offense”. Again, this is no simple matter.
Since a crime is an act that vitally impacts society generally, and not just the
victim, the majority of crimes cannot be compounded without the permission
of the Court, which you may or may not get.
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Ironically, this rigorous rule hugely protects business from false
criminal cases. It is always possible to run into a rabid opponent but in most
situations, a business adversary files a criminal case because he expects to
generate intolerable pressure and force a settlement. A case that cannot be
settled is no tool at all: indeed such a case hampers compromise because it
is a counter that cannot be bargained away. It is true that criminal
allegations are very powerful and destructive but in a commercial context,
what use is a weapon you cannot control?
5. Lifestyle
The abridged version of this article was published in the
October 2004 issue Namaskaar, Air India’s in-flight magazine.
Great Road Journeys
Quest for Kinnaur
Ranjeev C Dubey
Viewing the vast expanse of the Satluj valley from the crow’s nest
edge of Narkanda bazaar, two hours east of Shimla, we prepared to
commence our discovery of Kinnaur district. After a quick breakfast, we
headed out, lapping up the miles as we descended northwards through the
Deodar tree line past Kumarsain, till we joined the left bank of the Satluj at
Sainj. Turning east, we then ran with the river to a very pleasant surprise by
the name of Rampur.
Rampur is a picture perfect
Himalayan
market
town,
straddling either side the fast
flowing Satluj river, where the
sound of the waters rushing over
the mirror smooth basalt rock is
never far away. This bustling
prosperous district headquarters,
once the capital of the small hill
state of Rampur Bushehr, dates
its prosperity to events occurring
in the 17th and 18th century when
these
hills
experienced
a
prolonged period of considerable
violence between the Gurkhas,
Kashmir based Afghan warlords,
Tibet and local Rajputs. The eventual eclipse of Gurkha expansionism
following the execution of the Treaty of Sagauli with the British only then
encouraged Sikh ambition under the able guidance of Maharaja Ranjeet
Singh. When Ranjeet Singh’s able general Zoravar Singh took Ladakh and
threatened Tibet, Tibet rushed to ring itself with its own buffer states. Rajah
Kehar Singh of Bushehr, in exchange for military support, extracted wide
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ranging trading concessions in perpetuity. As Shimla grew as a seat of British
power, much of Bushehr state’s Tibet trade addressed the occupants of
Shimla, a trade best commemorated in the Lavi fair which at one time was a
show piece of Tibetan Shah Toosh, semi precious stones, handicrafts, horses,
yaks and almost everything arriving overland from Kashghar and Yarkand.
Rampur today remains a great place to stock up on everything: shoes, ships
or sealing wax, cabbages and (Gypsy) Kings!
Purchasing ludicrous quantities of fruit at steal prices, we continued
our journey north, spanning Jhakri, at the lower limit of the 1020 MW Nathpa
Jhakri Hydro-electric Project. At Jeori, we turned north and went 17 km up
the mountain to the first of our destinations: Sarahan.
Permeated to the core with that mystical magical presence of the spirit
of the land, nestling in a thick forest of Oak and Deodar, Sarahan was once
the ancient capital of the Bushahr state. Sarahan is the Shonitpur of
antiquity, where Krishna fought a pitched battle with its ruler Banasur, a
devotee of goddess Bhimakali. Banasur’s daughter Usha fell in love with a
prince who appeared in her dreams. Despairing of her obsession, she
consulted her mantic friend Chitralekha who recognized the prince as
Aniruddha of Dwarka, flew magically to him in the night, abducted the prince
in his sleep and performed a gandharva vivah with Usha. Aniruddha was Lord
Krishna’s grandson and he was infuriated. A fierce battle ensued, Banasur
was defeated but in the end, there was a happy ending, Shonitpur was given
as dowry to Usha, and Aniruddha ruled it for a long time.
Sarahan’s greatest attraction today is its 800-year-old pagoda roofed
wood built Bhimkali temple perched high up overlooking the eastern Satluj
valley under the watchful eye of the 5227 m Shrikhand Mahadev peak to the
west. It’s
a very moody
very Himalayan
place, beautiful in
a simple magical
way. The temple
is built in the
Indo-Tibetan
architectural
style, and is one
of the last few
surviving temples
made entirely of
timber. The origin of the temple is to be found in the Markandya Purana.
Legend has it that Durga had promised her devotees that she would liberate
the Devtas from the Asuras (which she did in her Bhima Devi aspect) and
would thereafter dwell amongst them forever. In the Dwapar Yuga, the saint
Bhimgiri visited this place carrying a stick with which he had offered
‘aryadha’ to the goddess. At this place, the stick became exceedingly heavy
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and he was unable to move it. Interpreting this as a sign, he immediately set
out to build a small temple which has grown with the ages.
The main temple today is a study of simplicity and beauty. It is
accessed through the lower courtyard through six beautiful silver coated
doors made by Kinnauri silver smiths during the reign of the Maharaja Padam
Singh (1927-47). The pagoda roofs of the main temple have projecting
timbers, which end in cornices featuring animistic icons. The sanctum is
housed on the first floor and is the abode of the one meter Ashtadhatu
(8metal allow) deity surrounding by a parikrama, protected by fine filigree
work within which only pujaris step. The second storey of the temple houses
a deity of goddess Parvati and is surrounded by other lesser local deities. The
entire inner courtyard overflows with bougainvillea and flowering shrubs and
the cobbled paving combine under a deep blue sky to form a very tranquil
scene of spiritual bliss.
This complex also has three other major temples. The first of these,
the temple of Raghunath is also 800 years old and was built when Raja Beej
Singh defeated and slayed the Kulu raja and took the Raghunath idol as
booty. The second, the temple of Narsingh is built in the Shikhara style and
houses a marble statute of the lord. Finally, there is the Lankra Veer temple,
which curiously is devoid of any deity but has a wooden pole attached with a
trishul and prayer flags. There is a deep well in this temple and it is said to
have a secret escape door that connects through a long cave to an as yet
undiscovered exit. Human sacrifice was normal here in the old days
whereafter, it is said, the bodies were thrown into the well.
After paying our obeisance at the temple, we spent the rest of the day
discovering the beauty around Sarahan. We found green fields waving their
celestial message with the gentle breeze, small villages exhibiting that quaint
indigenous architectural style, thick forests, and that unique spirit of the very
soul of Kinnaur.
Amongst the least known districts of Himachal Pradesh, Kinnaur lies
between Tibet to the east, Spiti to the north, Kulu to the west and Uttarkashi
to the south. It offers a great many picturesque valleys for the adventurous
traveler, not least of which are the river valleys of Satluj, Spiti, Baspa, Jaiti
and Tirung. The people of Kinnaur claim their roots from the very depth of
antiquity. They practice a religion with no name, a mixture of Buddhism and
Hinduism, much of it animistic where each village has its own local deity,
some of them demons. The Buddhist Lamas hold a prominent position in
Kinnauri society and polyandry is still common. The most ancient inhabitants
of the area are believed to be the ‘Kinners’, minstrels or heavenly musicians,
also sometimes called ‘Gandharvas’, a race of beings half human and half
bird, inhabiting a semi-celestial region where earthly saints, once they
achieved perfection, consorted with these super beings.
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Archeologically, it is surmised that a branch of Aryans, called Khashas,
penetrated the Himalayas from central Asia through Kashghar and Kashmir
to dominate this area about 2000 BC. Later about the 14th century, Bhotia
tribes began a mass migration from Tibet giving rise to the unique local
culture. Kinnauris today remain great singers and dancers and almost any
fair, of which they have one practically every month, is good illustration of
this talent. The whole area is well known for its chestnuts, walnuts, pears,
apples, apricots, grapes and ‘chilgoza’ pines.
Descending back to Jeori next morning, we continued our way north
till we came upon the awe inspiring suspension bridge at Wangtu, hanging
precariously between the sheer faces of two near vertical cliffs over the
raging waters of the river. Although Kinnaur and Spiti were opened to tourist
traffic in 1987, a devastating cloudburst in 1998 wiped out five miles of
inhabitation and created an artificial lake that wrecked further destruction
when it burst. The entire landscape is scarred to this day and Wangtu Bridge
was not rebuilt for nearly two years. This make shift bridge is truck legal but
one at a time alone and every gust sets the bridge swaying wildly and the
truck then on the bridge goes with the flow. It’s a wild ride, adrenalin centric
and very exciting to the brave.
An hour up from Wangtu, we hit Karchham, at the confluence of the
Baspa with the Satluj, and turning southeast, entered what is undoubtedly
one of the prettiest valleys in the western Himalayas. The Baspa river rises
bang on the Indo Tibetan border and flows over 95 km to its confluence at
Karchham at 1830 m. Its resultant valley is inhabited up to Chitkul (3475 m)
and it is possible to drive up that far. Turning up this valley, we slowly
ascended through the thick forest along its gushing waters to as far as
Sangla, stopping around every bend to capture another bit of it on celluloid.
There is an idyllic quality to
the Baspa valley, a quiet
sense
of
solitude
and
restfulness, a kind of déjà vu
of
some
long
forgotten
mystical experience. When we
struck camp that night by the
waters, we felt a kind of
homecoming, to a kind of
place we knew.
Sangla is situated on the
right bank of Baspa river, 17kms up from Karchham.
There is a small Baring Nag
temple
here,
a
small
monastery and a Tibetan
Wood Carving center many tourists want to ‘do'. Sangla village is built on a
stiff slope, the houses rising one behind the other in a picturesque stage set
14
type scene. We found our purpose in walking its meandering lane, peeping
into the many courtyards and bylanes, absorbing the spirit that pervaded this
simple place. Later in the afternoon, we opted to give our driving legs a
break and walked up to Kamru village. Kamru is superlatively picturesque,
sitting out on a flat ledge in a verdant sea of green, its wooden fort rising
sentinel above the pagoda roofed settlement houses to watch over its
inhabitants under the benign gaze of the Kinnar Kailash mountain.
Kinnauri Rajas were traditionally crowned in this fort, and it now
features a temple dedicated curiously to Kamakshi Devi. The Pujari had no
explanation for this oddity, telling us only that the idol had been sourced
from Gauhati.
Our second night at Sangla was a stormy one, wind lashed and wet,
and while we were reminded of the fickle faith of the gods, the day dawned
clear and we set out the drive up to the road head of the valley at Chitkul.
The higher stretches of the valley are even more dramatic in their beauty.
We found cultivation throughout, the fields stretching to the very edge of the
valley to meet the thick forests that spilled off the sheer slopes of these
massive mountains. Chitkul is the very quintessence of Kinnauri reality, a
small open village of stone built cottages, thinly populated by a handsome,
simple, welcoming people. It sits high over the river, gazing placidly over the
valley views to the east. There are 3 temples to the local goddess Mathi here,
simple hill structures of faith, rather than flaunting egotism, the main one of
which we were told was 500 years old. “Timelessness” here is not a touristy
cliché: there is this intense feeling of something eternally still, eternally
unchanged.
Back at the camp, we were invited to go angling. India's first trout
breeding farm was set up in Sangla way back in 1926. Besides April, October
is the best time to angle for Brown and Rainbow Trout and we didn’t think we
wanted to face the rushing June waters. There are saffron fields here as well,
but we found our spot of solitude in slowing the pace, gazing up at the
mountains and preparing for the journey ahead.
Retracing our route back to
Karchham the following morning,
we then struck out northeast again,
spanned Powari, once the favorite
resting ground of Lord Dalhousie,
then Recong Peo, Kinnaur's sub
divisional headquarters, and turning
west, ascended up the mountain to
our next destination: Kalpa. Kalpa
is a delightful destination in the Hill
station genre, split between its
close built old settlement part and
15
the more open, deodar nestling resort part. Chini Bazaar is Kalpa’s numero
uno meandering destination, featuring quaint shops, copious shopping of the
bric-a-brac type and all the local color that anyone would expect from a small
Himalayan settlement. The 800-year-old wood built very Hindu temple of a
quite unique indigenous design is Kalpa’s best-known monument. The
pagoda roofed temple structures were almost entirely carved with simple
motifs and painted in bright life affirming colors. There are scenes from the
epics, images of deities, tantric symbols, animals, and so much of that joie
de vivre that simplicity confers upon mankind. We sat out in the courtyard of
the temple as afternoon gently tip toed away the day, gazing up at the holy
6050 meter snow clad Kinnar Kailash peak, the winter abode of lord Shiva,
so close we thought we could reach out and touch it.
Kalpa is a place to walk, hike, sip copious quantities of beverages in its
many small garden restaurants and experience the silence of restfulness. On
our last night at Kalpa, the moon was near full and we sat out after dinner to
contemplate the holy peak. The cloud cover was surprisingly low for summer
and we spotted a small stratocumulus formation about the peak changing
shapes constantly. Somewhere in one frozen moment, it took on the form of
a beckoning hand, its finger crooked. We stood amazed, rejecting the
invitation, seeking shelter in cynicism, leaving the sublime issue swaying
mesmerizingly atop Shiva’s abode.
FACTFILE
Narkanda
The HPTDC run Hotel Hatu has been Narkanda’s residence of choice for
twenty years now offering 16 double rooms for Rs. 1000/- in season.
Mahamayan, down in the bazaar, now offers an alternative with 8 doubles for
Rs. 600/- in season. Advance booking is desirable but not necessary as most
tourists are day-trippers.
Sarahan
HPTDC’s Hotel Shrikhand facing the Shrikhand Mahadev peak offers 21
doubles for Rs. 3000/-and is generally booked out well in advance in season.
All other options in Sarahan are of the guesthouse genre – Bashal, Sagarika
and Snow View – and cost less than 500/- at the height of the season.
Advance booking with HPTDC is essential.
Sangla
Although there are now three quality luxury camp operators in Sangla,
Banjara Camps - the pioneers who started it off - remain the most popular
and most expensive at Rs. 1400/- per head per person per day. The others
are new, get spill traffic and will negotiate to under Rs. 1000/- per person
per day. There are a half dozen guesthouses in town, all offering rooms
under Rs. 300/- and not worth a look. Booking in advance is now
unnecessary.
16
Kalpa:
Kalpa offers four hotels in the Rs. 1000 range: Kinnar Kailash, Timberline,
Blue Lotus and Kinner Villa. There are a half a dozen guesthouses too but at
Rs. 200/- a room can only be used in a crises. Kalpa sees a lot of Kinnar
Kailash parikrama traffic in summer so advance booking is probably
desirable.
5. Initiative
Our Workshop schedule Feb 2005 to May 2005 is set out below.
Details at http://www.iallm.org/
1. Understanding Joint Ventures: Structuring,
Drafting, Negotiating and closing Win-Win Joint
Ventures and shareholders agreements.
2. Understanding Asset and Business Buy
outs: Structuring, Risk Assessing, Drafting.
Negotiating and closing Asset Acquisitions.
3. Making Effective Business Partnerships:
Structuring, Drafting, Negotiating and closing
Win-Win Business Alliances
4. Winning Legal Wars: The Business Managers
guide to Law, Litigation and Strategy
-x-
17
February 12, 2005
March 12, 2005
April 16, 2005
May 14, 2005