(viii)     ANNUAL REVIEW

10.12.  An annual report upon outstanding loans and advances will be submitted by the Accountant-General for review by the Government

 

 

III.       LOANS AND ADVANCES TO GOVERNMENT EMPLOYEES

 

Note.   It is not permissible to sanction loan or advance to a Government employee which involves a breach of any of the canons of financial propriety (see rule 2.10). In any case in which a cash grant would be within the powers of sanction of a particular authority, the grant of an advance not exceeding the cash grant will not require the sanction of a higher authority.

 

(i) GENERAL

10.13.  Advance for -

(A) purchase of a plot or a built up house ;

(B) construction of a house ;

(C) repayment of a private loan taken for the purchase of a plot, or a built up house or construction of a house ;

(D) repairs and enlargement of a house ; and

(E)  purchase of a conveyance ;

may be granted in accordance with the terms of these rules to all employees who hold substantive appointment under the Government.

 

Provided that in the case of a Govt. employee who does not hold substantive appointment under the Govt. but has rendered at least ten year of continuous service, the advance for the purchase of a plot or a built up house, construction of a house or repayment of a private loan taken for the purchase of a plot, or a built up house or construction of a house and repair and enlargement of a house may be granted subject to the following conditions that :-

 

(i)     he does not hold permanent appointment under the Central Government and or any other State Govt. and

(ii)   the sanctioning authority is satisfied that he is likely to continue in the service of the Govt. at least till the house for which the advance is sanctioned is built and/or mortgaged to the Government.

           

Provide further that advance for the purchase of conveyance may be granted to a Government employee holding substantive post on temporary or officiating basis subject to the conditions that :-

 

(i)     he furnishes adequate surety of a permanent government employees in addition to hypothecating his conveyance and

(ii)   the Department in which the Government employee is working also certifies that such a Govt. employee will continues in service for a sufficiently long period to enable full recovery of the advance together with interest accrued there on before termination of his service, and

 

(B)       for Note 1, the following note shall be substituted, namely :-

 

Note 1.            For the purposes of determining the quantum as well as admissibility of various advances pay shall include substantive or officiating pay, personal pay, special pay, dearness pay and family pension”.

 

            Provided that in the case of a Government employee holding substantive appointment on temporary or officiating basis, advance for the aforementioned purposes may be granted subject to the following conditions:-

 

(i)     he furnishes adequate surety of a permanent Government employee in addition to mortgaging his plot or house or hypothecating his conveyance, as the case may be ; and

(ii)   the department in which the Government employee is working also certifies that such a Government employee will continue in service for a sufficiently long period to enable full recovery of the advance together with interest accrued thereon before termination of his services.

 

Explanation -  For the purpose of this rule, the term substantive appointment means appointment on regular basis irrespective of the fact whether it is against a temporary or permanent post and that the appointment is not made as a stop-gap, adhoc or provisional arrangement.

 

Note 1.            Pay for the purpose of determining the quantum as well as limit of admissibility of various advances shall include substantive or officiating pay, personal pay, special pay and dearness pay.

 

Note 2.            The amount, of advance to be recovered should be fixed in whole rupees except in the case of last instalment where the remaining balance including any fraction of a rupee shall be recovered.

 

10.13(A)          (1) The recovery of loans shall be made in accordance with the norms prescribed under the rules under which loans are sanctioned but the grant of all advances shall be so regulated that the concerned Government employee is able to carry home a minimum of forty percent of the “Gross Salary” which shall include substantive pay, officiating pay, personal pay, special pay, dearness pay and allowances including additional dearness allowance, adhoc relief salary” of the concerned employee, the following deductions shall be made from his gross salary :-

(i)     Compulsory Contribution towards Provident Fund as required under the rules. If an employee contributes an amount over and above the minimum prescribed in rules, the excess contribution shall not be taken into account for working out the deductions.

 

(ii)   Payment of instalments for refund of advances from Provident fund.

 

(iii)  Payment of income tax.

 

(iv) Payment of instalments for refund of advance or loans, already granted under these rules.

 

            (2) A Government employee whose “Carry Home Salary” falls short of forty percent of his “Gross Salary” at the time of grant of any advance, shall not be eligible for such advance.

 

10.14.  The last pay certificate granted to a Government employee under transfer must specify the original amount of such advances, the mount repaid and the balance together with interest, if any, accrued in accordance with rule 10.15 remaining due.

 

10.15.  The interest on advances shall be charged at such rate as may be fixed by the Government from time to time. The interest shall be calculated on the balances outstanding on the last day of each month. In cases, where, under rule 5.1, pay bills for a month are disbursed before the end of the month, an instalment in repayment of an advance received through the pay bill will be taken as having been refunded on the 1st of the following month, the normal date for disbursement of pay.

 

Note 1.            The interest shall be rounded off to the nearest rupee that is less than fifty paise be ignored, while fifty paise and above shall be taken as a rupee.

 

Note 2.            In case the advance is drawn in more than one instalment, the rate of interest applicable shall be determined with reference to the date on which the first instalment is drawn.

 

Note 3.            No interest shall be charged in the case of those advances which the Government may decide to grant interest-fee to its employees.

 

Note 4.            In cases where the competent authority finds that the loanee has misutilised the loan or has not fulfilled all or any of the conditions of the sanction or has retained the amount of loan beyond the period specified for utilisation, penal interest shall be charged at such rate as the Government may decide from time to time.

 

Note 5.            No interest shall be charged in respect of the period beyond the date of death of the Government employee.

 

Note 6.            The responsibility of calculating the interest rests with the drawing, and Disbursing Officer who makes the recovery of the last instalment of the principal amount of loan or advance. In the case of a Government employee on foreign service or on deputation, the interest shall be calculated by the parent department. For calculating the interest the Drawing and disbursing Officer may, however, obtain the details of recoveries, if any, made by the previous Drawing and Disbursing Officer, or obtain such particulars from the audit Officer as he may require for this purpose. The drawing and disbursing officer or the Audit Office, as the case may be, shall furnish the necessary particulars. The Audit Office, shall however, check the correctness of interest recovered in post audit.

 

(ii) HOUSE BUILDING ADVANCES

(a)        Advance for purchase of a plot and construction of a house.

10.16   Advance to Government employees for the construction of house are regulated by the following rules :-

(i)     Advance may be made under proper sanction (vide Rule 10.1) to Government employees who desire to build houses for occupation by themselves in or outside Punjab where they intend to settle down. No advance is ordinarily permissible to a Government employee who is likely to retire before complete recovery can be effected.

(ii)   All such advance must be bonafide required for the purpose of building suitable houses for the personal residence of the Government employees concerned and if the amount of advance is more than what shall be actually expended for the purpose, the surplus shall be refunded to Government.

(iii)  The advance should be drawn in four instalmetns as under :-

(a)   first instalment equal to twenty percent of the advance at the time of starting construction ;

(b)  second instalment equal to twenty percent of the advance after the house has been constructed up to the plinth level ;

(c)   third instalment equal to thirty percent of the advance, after the house has been constructed up to roof level ; and

(d)  fourth instalment equal to thirty percent, i.e., the balance amount of advance after the roof has been completed.

 

Satisfactory evidence should be produced by the Government employee to show that the amount of the instalment of the advance, has actually been utilised for the purpose for which it was drawn, before the next instalment is paid. The repayment of advance shall commence from the eighteenth issue of pay after the first instalment is drawn or from the pay of the month immediately following the date of completion of the house, whichever is earlier.

 

Note.   A certificate furnished by the concerned Government employee certifying that the amount drawn has been utilised by him will be a sufficient proof of the amount having been actually utilised.

 

(iv)       Government employees drawing pay less than nine hundred seventy months pay subject to a maximum of sixty thousand rupees and those drawing pay not less than nine hundred rupees may be allowed advance not exceeding sixty* months, pay subject to a minimum of sixty thousand rupees and maximum of one lac and twenty-five thousand rupees.

 

Note 1.            The practice of sanctioning the second house building advance for building another house should be stopper. In case a second advance is required, the first house should be sold and sale proceeds applied towards the payment of the first advance along with interest accrued thereon. If there is any difference between the sale proceeds and the amount of the first advance and interest thereon, this difference should be taken into account while sanctioning the second advance. The difference plus the second advance should not exceed the admissible amount of house building advance.

 

Note 2.            When two persons jointly build a house i.e. husband and wife, father and son, both being Government employee, each one may be granted separate loan subject to the conditions laid down in these rules and further subject to the condition that the amount of loan so granted to both shall not exceed a maximum limit or one lac an twenty-five thousand rupees or the estimated cost of construction, whichever is less.

 

Note 3.            The advance admissible under this rule for the purchase of plot shall be calculated on the basis of the pay drawn by the Government employee at the time he applies for the grant of an advance. Where a Government employee has already obtained an advance for the purchase of a plot, the admissibility of the remaining House Building Advance for the construction of the house shall be calculated on the basis of the pay drawn by the Government employee at the time he applies for the remaining advance for the construction of the house. In the case of a Government employee who has already obtained advance for the purchase of plot either to the admissible extent or less, the admissible advance for the construction of the house shall be calculated on the basis of the pay drawn by the Government employee at the time of the submission of the application by him for the purpose of advance for the construction of the house minus the amount of the advance actually drawn by him for the purchase of plot. The other conditions with relation to the calculation of the extent of the admissible advance shall remain the same.

 

(v)        Recovery will be made in one hundred and eighty equal monthly instalments from Government employee drawing pay less than nine hundred rupees per month and one hundred and fifty equal monthly instalments from those drawing pay not less than nine hundred rupees from the pay bill of the concerned the advance may, however, permit any smaller number of instalment if the Government employee receiving the advance so desires. In case the number receiving the advance so desires. In case the number of instalments once fixed is desired to be altered, the Government employee will be required to execute a fresh mortgage deed altering the amount and number of instalments originally agreed upon. It will not be necessary to re-execute a mortgage deed if the number of instalments was not originally specified. In case the service of the concerned Government employee falls short of the period of the instalments of principal and f interest, the balance amount of instalments may be recovered from the gratuity payable to him at the time of his retirement. For the purpose of determining the gratuity, the emoluments which the Government employee was receiving at the time of sanction of the advance should be taken into account. In case gratuity falls short of the balance amount of instalments due, the monthly instalment will be increased so as to ensure recovery of the balance together with interest in full from gratuity at the time of retirement of the concerned Government employee. In case where the balance amount of instalments can not be recovered in full even after withholding the payment of the entire amount of death-cum-retirement gratuity admissible to the Government employee concerned, the same may be recovered from the amount due to him on account of leave encashment at the time of retirement. The amount of interest calculated under rule 10.15 will be recovered in one or more instalments, each such instalment being not appreciably greater than the instalment of the principal. The recovery of the interest will commence from the month following that in which the repayment of the principal and been completed. Where a Government employee dies while ins service and with out repaying the loan obtained by him or any part of it for construction, repair or purchase of plot or house, or interest accrued upon, such loan or part thereof or interest accrued there upon which remains unpaid, shall be written off with the sanction of the competent authority.

 

(vi)       In order to secure Government from loss consequent on a Government employee dying or quitting the service before complete repayment of the advance, with interest accrued thereon, the house so built, together with the land it stands upon, must be mortgaged to Government by whom the mortgage will be released on liquidation of the full amount due.

 

Note.   The mortgage bond will be prepared in P.F.R. Form 12 or P.F.R. Form 14 as the case may be and the re-conveyance in P.F.R. Form 13.

           

The mortgage bond is exempt from duty chargeable under section 40, clause (b) of Schedule  1 of the stamp Act. It should, however, be duly registered.

 

(vii)      The Government employee must satisfy the sanctioning authority regarding his title to the land upon which the house is or is proposed to be built :

 

Provided that where the land on which the house is proposed to be built with the help of advance is solely owned by the wife, husband, father or son of the Government employee or is owned by the Government employee jointly with his wife, her husband, father, mother, son or daughter the advance may be sanctioned on the presentation by such owner or owners as the case may be, of an affidavit to the effect that he/she is the owner or they are the owners of the said land and the same will be mortgaged in favour of the government of Punjab as and when so required, and the Government employee will give an undertaking for the repayment of the advance :

 

Provided further that if such land is owned by the Government employee jointly with his wife, her husband, father or son, the advance to the Government employee will be released only after the owners of the land have executed the mortgage deed -

 

(a)   in Form PFR 14-A, if the land is lease hold ; or

(b)  in Form PFR 12-A, if the land is lease hold ; or

 

Provided further that if such land is solely owned by the wife, husband, father or son of the Government employee, the advance to the Government employee will be released only after the owner of land has executed the mortgage deed and the Government employee has given the undertaking -

 

(a)        in Form PFR 14-B, if the land is lease hold ; or

(b)        Form PFR 12-B, if the land is lease hold.

 

Note 1.            This rule does not preclude the grant of an advance to a person who does not possess full proprietary right in the land upon which he intends to build, provided the sanctioning authority is satisfied that the applicant has a lease of which the un-expired portion is of a term and value sufficient to justify the grant of the advance and that there is no danger of the lease lapsing or of Government being unable to dispose of it, should it become necessary to foreclose the mortgage. In examining the mortgagor’s title care should be taken to see that the lease does not prevent any sub demise by the lessee (the mortgagor). The mortgage bond in such cases will be prepared in P.F.R. Form 14.

 

In cases in which ground rent, municipal taxes and similar does are payable to local authorities on account of land taken on lease, the sanctioning authority may, at its discretion, ask the Government employee taking the advance to produce for inspection receipts for these payments within fifteen days of their falling due. If the sanctioning authority finds that such dues have not been paid by the borrower steps may be taken to recover the said dues including interest thereon, if any, from the pay of the Government employee concerned for payment to the parties concerned.

 

Note 2.            The applicant’s title to the property should be examined by the sanctioning authority before the advance is actually paid, and in cases where there is any doubt as to the validity of that title, the Revenue and Registration authorities, or if technical legal advice is necessary, the Legal Remembrance should be consulted. It should be seen that in the case of a house building advance, he has undisputed title to the land on which it is proposed to build and that in case of an advance for the purchase of a house, he will obtain such title as soon as the purchase price is paid ; that there will be no legal obstacle in either case of the property being mortgaged to Government and the Government will have the right of foreclosing on the conditions mentioned in the mortgaged bond.

 

Note 3.            The Head of the office in case of non-gazetted Government employee and the controlling officer in case of gazetted Government employee should attach a certificate with the bill for drawing the first instalment of the advance to the effect that mortgage deed in P.F.R. Form 12 or P.F.R. Form 14, as the case may be, has been executed by the government employee, taking the advance and that it has been duly registered.

 

(viii)      A Government employee quitting or removed form the station where he has built a house, before the whole amount due has been liquidated will continue to be liable to the deduction of his monthly instalment until the advance with interest accrued thereon has been repaid; but with the special sanction of Government he may be allowed to dispose of the house provided he is thereby enabled to clear off at once the whole amount due or to transfer it to any Government employee of his own or higher rank, the future deductions being made from the pay of such Government employee.

 

(ix)       Applications for advances must be made through the applicant’s departmental superior, who will record his option as to the necessity for the assistance solicited. The applicant must certify that the sum is to be expended in building only, and pledge himself that, should there by any surplus funds after the house is completed, they will be at once refunded to Government. See also rule 10.20 infra.

 

Note.   Advance may also be given, where considered necessary, for the purchase of land on which a house is to be constructed, if the other conditions laid down in this rule are satisfied and the total amount of advance for the purchase of land shall not exceed twenty five percent of the total advance admissible for the construction of the house. This advance will be given subject to the condition that land will be purchased within three months from the date of drawal of the advance and in case this is not done the entire amount of the advance together with interest thereon shall be recovered in lump sum. The charges on stamp paper and Registration Fee shall also be considered as legitimate and valid expenses in connection with the purchase of a plot while accounting for the utilisation of the House Building Advance.

The Government employees should sign an agreement in P.F.R. Form 15 at the time of taking an advance for the purchase of land and the amount should not exceed  what is required for the purpose. A mortgage deed in P.F.R. Form 12 or P.F.R. Form 14 as the case may be, should be executed before any further advance is drawn for the purpose of constructing the house. The mortgage deed must be registered within four months of its execution.

           

The mortgage  bond should be kept in the safe custody of the authority sanctioning the advance and should not be released without a report from the Accountant-General that the advance has been fully repaid.

           

In order to save Government from loss, the applicant’s title to the property should be carefully examined by the sanctioning authority and the instruction laid down in Appendix 13 should be followed.

           

The Intention of the terms of agreement in P.F.R. Form 15 will be met if the head of the office satisfies himself that the house is actually began within five months of the advance being drawn the departmental superiors of the grantee of the advance should also satisfy themselves that the building operation are completed within 18 months of the date of drawal of the 1st instalment.

           

In the case of advance taken for the purchase of land only the repayment shall commence from the fourth issue of pay after the advance is taken and in the case of advance taken for the purchase of land and for the construction of a house thereon, the repayment shall commence from the eighth issue of pay. The repayment in each of these two cases shall be completed within eight years.

           

(x)        In addition to the deeds required to be executed under rules 10.16 and 10.17, the following categories of applicants shall also furnish a surety bond in P.F.R. Form 16 executed by a permanent Government employee of the State before the sanctioned advance or any part thereof is actually, disbursed :-

 

(a)   all applicants who are not permanent Government employees ;

(b)  all applicants who are due to retire from service within ten years following the date of application for the grant of an advance ; and

(c)   all applicants who are permanent Government employees but are not covered by sub-clause (b) above if they require the advance for the purchase of a ready built house or for repayment of private loan taken for purchase of land for constructing a house or for the purchase of house

 

Note 1.            The liability of the surety will continue till the house built or purchase is mortgaged with Government or till the advance together with interest due thereon is repaid, whichever is earlier.

 

Note 2.            Utilisation of the advance for a purpose other than that for which it is sanctioned shall render the Government employee liable to disciplinary action under the Service Rules apart from his being called upon to refund to Government forth with the entire advance drawn by him.

 

Note 3.            See also below rule 10.13.

(xi)       The house shall be maintained in good repair at his own cost by the Government employee concerned. He shall also keep it free from all encumbrances, and shall continue to pay all the Municipal and other local rates and taxes regularly until the advance has been repaid to Government in full. The Government employee shall furnish an annual certificate to this effect to the Head of Department.

 

(xii)      After the completion of the house, annual inspection may be carried out by any officer authorised in this behalf by the Head of Department concerned to ensure that it is maintained in good repair until the advance has been repaid in full. The Government employee concerned shall afford full facility for such inspection to the officer deputed for the purpose.

 

Note.   Furnishing of the false certificate will also render the Government employee concerned liable to suitable disciplinary action apart from his being called upon to refund to Government forthwith the entire advance drawn by him.

 

(xiii)      Advances to Government employees for construction of houses shall not be granted under more than one scheme, i.e. advances or loans should be sanctioned to them either under these rules or under any of the house-building scheme for the time being in vogue.

 

(b)        Advance for purchase of a house.

 

10.17.  An advance may be made to a Government employee in exceptional circumstances, for the purchase of a house ; the general principles of Rule 10.16 being applicable, and the Government employee being required, in addition to a mortgage deed ,to deposit with Government satisfactory evidence of a clear title to the house. See also rule 10.20  infra.

 

Note 1.            An advance drawn under this rule may include not only for the cost of the house purchased but also for the cost of any repairs or improvements  which the purchaser of the house may desire to make . the charges on stamp paper and Registration fee shall also be considered as legitimate and valid expenses in connection with the purchase of a house accounting for the utilisation of the House Building Advance.

 

Note 2.            The advance may be drawn in full at once, but satisfactory evidence should be produced before the Accountant-General to show that amount advanced for the purchase has been spent within 3 months of its drawal and the amount advanced for repairs or improvements (see note 1 above) within a further period of 2 months. A certificate to this effect from the head of the office will ordinarily suffice. The repayment in this case shall commence with the eighth issue of pay after the advance is taken and be completed in one hundred and fifty or one hundred and eighty monthly instalments as the case may be. Interest will be calculated in accordance with rule 10.5 and the recovery thereof will be made as laid down in clause (v) under rule 10.16.

 

Note 3.            The Head of the office in the case of a non-gazetted Government employee and the Controlling Officer in the case of gazetted Government employee shall attach a certificate with the bill to the effect that he has secured and retained with him an agreement in P.F.R. Form 15 signed by the Government employee taking the advance pending execution of the mortgage bond in P.F.R. Form 12 or P.F.R. 14, as the case may be, after the house is actually purchased. The fact of execution and registration of the mortgage bond should also be intimated to the Accountant General as soon as possible.

 

Note 4.            Omitted.

 

(c)        Advance for repayment of a private loan taken for purchase of a house

 

10.18.  An advance may also be given for the purpose of repaying a private loan taken by a Government employee expressly (I) for the purchase of land for building a house or (ii) for the purchase of a house, provided :-

(1)  that the usual conditions specified in the Note under clause (ix) of rule 10.16 and in rule 10.17 and the notes there under are satisfied

(2)  that the applicant has through his private loan acquired an unencumbered title to the land or the bonus purchased ; and

(3)  that the original loan for the purchase of the land or the house, as the case may be, was taken not more than eighteen months before the date of receipt of the application for an advance to discharge the private debt.

 

Note 1.            See also Rule 10.20 infra.

 

Note 2.            The recovery in cases mentioned in this rule will commence from the eighth issue of pay after the advance is drawn and will be completed in one hundred and fifty or one hundred and eighty equal monthly instalments, as the case may be.

 

(d)        Advances for repairs and enlargements

 

10.19 * Subject to the general principles laid down in rules in 10.15, 10.16 and 10.17, advances may be made under the following conditions to a Government employee to enable him to effect repairs, enlargements or both to his/her house :-

 

            (ii)        The Government employee shall be entitled to one advance only for enlargements or for carrying out repairs or for both to a house ancestral or built, or purchased with Government advance or acquired out of his own resources, provided five years have elapsed since its acquisition or final drawal of the advance, if built with Government advance. The advance may also be granted for the house which is not solely owned by the government employee but is property of  a Hindu Undivided Family of which he is a co-partners mortgage the property in P.F.R. Form 17.

 

            (iii)       The advance shall be equal to hundred month’s pay of forty thousand rupees whichever is less, and shall be recovered in hundred equal monthly instalments, and repayment will commence from the fourth issue of pay after the advance is drawn.

 

(e)        Instructions for dealing with application for advance for construction,      purchase or repair of houses, etc.

 

10.20 (I)          As the gross amount of advance in favour of the Government employee will be issued by the Sanctioning Authority within a period of forty-five days from the date on which the funds are earmarked and a copy thereof supplied to the Department of Finance (Loans). If a copy of the sanction is not received in the Department of Finance (Loans) within this period, the funds so earmarked will be treated as cancelled and a fresh authorisation shall have to be obtained from the Department of Finance. After the sanction has been issued the first instalment shall be drawn within two months from the date of issue of sanction or by thirty first day of March, whichever is earlier, failing which sanction will lapse and a fresh certificate of availability of funds shall have to be obtained from the Department of Finance (Loans). Any amount which remains undrawn by thirty first day of March, shall lapse and a fresh certificate of availability of funds and also the sanction to drawal advance shall be obtained before it is drawn in the following year.

 

            To avoid inconvenience and lapse of funds it is important that sanctioning authorities should not send applications to the Department of Finance for report as to the funds being available unless they are satisfied that the amount applied for, if made available, will be drawn before the end of financial year. Similarly when a sanctioning authority comes to know that any advance in regard to which the Department of Finance has reported that funds are available will not be sanctioned or will not be drawn from the treasury within the financial year, the Department of Finance should always be informed so that the funds made available for the purpose may be diverted to other applicants.

 

            (2)        In case of those Government employees, who are nearing retirement the amount of the instalment payable monthly may be so fixed as to ensure the recovery of the entire amount before the date of retirement.

 

4.         In the said rules, in rule 10.19 for clause (iii) the following clause shall be substituted, namely :-

            “(iii) The advance shall be equal to hundred months pay or forty thousand rupees whichever is less, and shall be recovered in hundred equal monthly instalment, and repayment shall commence from the fourth issue of pay after the advance is drawn”.

 

 

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