OPA At Your Service

Questions and Answers

Clarification of electricity bills

Question: I am a consumer of electricity from LECO (Pvt) Ltd, Nagoda, Kandana, bearing ACC/No - 0205337902 Meter No. 2739594

1. Meter Reading on 10=9-8=17905
Meter reading on 13-10-08=18077
Units used = 172 Amount Rs. 2549/50

2. Meter Reading on 13-10.08=18077
Meter Reading on 09.11.08=18242
Units used 165 Amount Rs. 3307.50

Since the number of Units used was less, I expected the amount to be less. But on enquiry I was told that the bills are calculated at the rate of units used for a day. According to the bill, the reading has been done four day’s earlier than the last date. If the reading is done after 30 days, the bill will be less.

If the reading was done on 13.11.08, I would have consumed about 175 units. The bill would have been Rs. 2600.

I certainly need a justifiable explanation why pay more for their luxuries.

P. W. KARUNANAYAKE - Kandana

Answer: The method of calculating the bill, the units as consumed for the period for calculation and the tariff have been changed with effect from November 1, 2008. On the new basis the charge will be calculated for the exact number of days from one meter reading to another as 26 days or 33 days.

It will not be prorated for 30 days as in the past and you will not experience such problems. In the past they calculate the rate of consumption per day based on the units consumed and the number of days then at this per day rate, they pro-rate for 30 days.

From 10/9/08 to 13/10/08, for 33 days, rate per day is 5.212 units, thus projected for 30 days, is 156 units. (Rs. 2549/50).

From 17/10/08 to 9/11/08, for 26 days, rate per day is 6.346 units thus projected for 30 days is 190 unit (Rs. 3307/50).

Thus we feel that there is no error on the calculation of your bills.

New tariff

No. of units Rate/Unit Fixed Charge

0-30 Rs. 3.00 Rs. 60/=
31-60 Rs. 4.70 Rs. 90/=
61/90 Rs. 7.50 Rs. 120/=
91-180 Rs. 16.00 Rs. 180/=
181-650 Rs. 25.00 Rs. 240/=
601-up Rs. 30.00 Rs. 240/=

Fuel ADJ Charge

Units consumed for 30 days exceeds 90, additional 30% if units consumed for 30 days is below 90, Discount of 30%.

Benefits given to the pensioners

Question: The Minister of Education through Circular No. 2005/04 has extended the period of Automatic promotion up to 31.12.2008.

Further, Secretary MMND Bandara has instructed that all who are in different grades in the Ceylon Teachers Services, including the Pensioners who have retired under existing regulations to be promoted without further delay.

The above circular has created an anxiety in me. I have retired on 01.01.1991. I would like to know whether I will be benefited by the above circular.

M.M. MEERA SAIBO, AkkaraiPattu

Answer: We did contact the Education Department on this matter but unfortunately they are unable to provide a straight forward answer as to whether a teacher who retired on 01.01.1991 is entitled to this automatic promotion or not.

Apparently, it is on a case by case basis, may be for those who are retired.

Therefore, you have been requested to write to the Zonal Education Director of the Zone where you last worked and retired from or even to the Secretary Ministry of Education. “Isurupaya” Battaramulla, giving all relevant details.

They will reply you. It may be worth your writing to the Secretary of the Ministry as it appears that you may be entitled to this promotion from the conversation we had the Department.

Deduction of medical expenses for tax purposes

Question: The Daily News OPA column is very useful to the readers in general? My question is I am a 75 year old tax payer.

I would like to know from the Inland Revenue Department whether medical expenses could be deducted from my Taxable Income by submitting the bills.

GUNASEKERA - Nugegoda

Answer: The answer to your question is regrettably no. You are not allowed to deduct any medical expenses from your taxable income. However, if you have a medical insurance policy, the premium paid by you towards such medical insurance can be deducted under qualifying payments.

If your income is from a company then the company meeting your medical expenses can claim it from the tax payable by the company.

If it is your own company you may benefit through the Company tax payable

Pension after conviction

Question: After going through your answer I was compelled to get a clarification from you regarding my pension also.

As I mentioned in my earlier question which appeared in the Daily News of December 4, 2008, I was dismissed from service by the head of the Department. Thereafter I was not given my pension which I did not ask for. In the Court I pleaded for my bribery charges and I was convicted.

The punishment given me was a fine of Rs. 2,000 and a term of 2 years imprisonment suspended for five years. This verdict was given in 1995. From the date I was interdicted in 1992 up to date I was not involved in any offense. Now I wish to know whether I am entitled to claim my pension as 16 years have lapsed.

You are kindly requested to answer my question as early as possible.

D. SIRISENA - Gokarella

Answer: Once you are convicted and the penalty of your pension right is imposed, we are sorry to say that it is a penalty for life.

Even after 16 years you are not entitled to a pension. However, nothing is lost in you appealing to the Public Service Commission (PSC) through the Department where you worked last.

Nomination of beneficiary for NRFC account

Question: NRFC account holders are permitted by the respective bank to nominate beneficiaries to receive their funds after death.

It will be appreciated if you will inform whether the beneficiaries nominated and approved by the bank could obtain the relevant amounts without filing a testamentary case in district Courts if the total amount in the NRFC account of the deceased exceeds Rs. 500,000 in local currency.

Concerned Depositor, Colombo

Answer: Yes your nominee as approved by the bank, will be entitled to the funds available in your NRFC account even if it is above Rs. 500,000.

There will be no need for a testamentary case or a District Court order for your nominee to be entitled to the funds.

However, your nominee cannot operate this account but can request for the closure of the account with proof of your demise (Death Certificate) and the funds to be paid to him or her or he or she can transfer the funds to his or her own account or open a new account, a rupee Fixed deposit account or a current account but not an NRFC account.

Unless he or she already has an NRFC account where transfer may be possible.

The most important fact to note is that nominees can only benefit from a Savings Account or Fixed Deposit account as for current account no nomination will be accepted. NRFC accounts are savings or Fixed deposit accounts mostly with the exception of BOI Companies. Therefore, you have no problem.

Role of banks

Question: A private limited company obtained Rs. 4 million from a bank as packing credit loan for export and mortgaged properties valued Rs. 30 million which does not belong to the Company.

The company was trading successfully for several years and repaying the loans and interest on time.

At one stage the company incurred a loss which made the company to default repayment of loans.

The company subsequently regained business and sought trade finance to service their orders to repay the loans progressively from the profits earned.

Whereas the bank refused any fresh loans unless the past dues were fully settled with interest which exceeded the loans capital and at the same time referred the company and its directors to C.R.I.B.

C.R.I.B. has done maximum damages to the company and its directors that prevented the company from borrowing from any other institution to revive their business.

A Bank then sold the property and wrote the deed in the name of the bank officer by executing parate action for recovery of a sum of Rs. 25 million as against that loan amount of Rs. 4 million initially borrowed.

Subsequently, the bank sold the property for more than Rs. 50 million but failed to pay the excess amount realised from the sales to the company or to the owner of the property is it justifiable?

In this respect

1. As to what course of action the owner and the company jointly or severally should take for the severe loss and damages sustained by the company and the owner of the property?

2. On what ground the sale of the property can be nullified?

3. What is the time limit allowed from the date of default to sell the property?

4. What is the time bar for a bank for taking action?

5. If the accrued interest exceed the capital borrowed, can the Bank file action for recovery?

6. Is the accrued interest exceeds the capital borrowed can the Bank’s file action for recovery?

7. If the Bank entitled to recover a sum 5 times more than the sum borrowed?

AHMED, Colombo 1

Answer: They say Banks are those who offer you an umbrella and take it back when it starts raining.

1. Your company can file action since the Bank has been unreasonable as your claim.

2. You cannot nullify the sale of property as banks are legally allowed to sell the property in order to recover the loan and interest.

3. There is no time limit; it depends on the particular Banks, procedure and the Banks willingness to give you more time to settle the outstanding.

4. There is no time bar for the Bank to take action.

5. Whether the accrued interests exceeds the capital borrowed or not, the Bank can file action or take steps to sell the property and recover the dues.

6. It depends on how long the default is and the interest rate agreed and whether the Bank has charged interest on interest overdue.

7. The Bank can recover the capital, interests and the legal cost whether it is 5 times or not will depend on the number of years and the interest rate.

However, within the time lag you can file action against that Bank and at least claim the excess amount realized from the sale of the property. It is best that you contact a lawyer as we cannot comment without knowing or verifying the correct position. The Courts can get the bank to refund any interest charged on interest overdue.

Send your questions

The Organisation of Professional Associations of Sri Lanka (OPA) will cover questions in all professions and subjects of common interest to the public in the “Daily News OPA At Your Service” page every Thursday. Please make your question brief. Questions can be directed to the OPA on e-mail:opasrilanka@gmail.com Fax: 2559770 or write to the Professional Centre, 275/75, Prof. Stanley Wijesundera Mawatha, Off Bauddhaloka Mawatha, Colombo 7”.