The Railway Services (Conduct) Rules, 1966 - Part 4
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The Railway Services (Conduct) Rules, 1966
Part 4
Rules 16 to 17
Rule-16. Investment, lending and borrowing:
(1) No railway servant shall speculate in any stock, share or other investments;
Provided that nothing in this sub-rule shall apply to occasional investments made through stock brokers or other persons duly authorised and licensed or who have obtained a certificate of registration under the relevant law.
Explanation: Frequent purchase or sale or both of shares, securities or other investments shall be deemed to be speculation within the meaning of this sub-rule.
(2) No railway servant shall make, or permit any member of his family or any person acting on his behalf to make, any investment which is likely to embarrass or influence him in the discharge of his official duties. For this purpose, any purchase of shares out of the quotas reserved for the directors of companies or their friends and associates shall be deemed to be an investment which is likely to embarrass the Railway servant.
Refer: Rule 16(1) & 16(2) substituted vide Railway Board's letter No. No. E(D&A)96GS1-8 dt. 17-01-97 i.e. ACS-50/R-I.See 13/01/1998 for ACS renumbering.
(3) If any question arises whether any transaction is of the nature referred to in sub-rule(1) or sub-rule(2), the decision of the Government thereon shall be final.
(4) (i) No railway servant shall, save in the ordinary course of business with a bank or a public limited company either himself or through any member of his family or any other person acting on his behalf-
(a) lend or borrow or deposit money, as a principal or an agent, to or from, or with, any person or firm or private limited company with whom he is likely to have official dealings or otherwise place himself under pecuniary obligation to such person or firm or private limited company ; or
(b) lend money to any person at interest or in a manner whereby return in money or in kind is charged or paid;
Provided that a railway servant may give to, or accept from, a relative or a personal friend, a purely temporary loan of a small amount free of interest, or operate a credit account with a bonafide tradesman or make an advance of pay to his private employee;
Provided further that nothing in this sub-rule shall apply in respect of any transaction entered into by a railway servant with the previous sanction of the Government.
(ii) When a railway servant is appointed or transferred to a post of such nature as would involve him in the breach of any of the provisions of sub-rule(2) or sub-rule(4), he shall forthwith report the circumstances to the competent authority and shall thereafter act in accordance with such order as may be made by such authority.
Railway Ministry’s decision: Loan taken from LIC by the Railway servants against their Insurance policies will be covered by the exception provided in the above rule and permission of the government will not be necessary. (E(D&A) 68 GSI/21 dt. 21/11/1968)
Railway Board’s important letters on Rule 16
No.E(D&A)92/GS/1-2 dt. 7/21-05-92
Sub: Railway Services(Conduct) Rules, 1966-Transaction in sale and purchase of shares and debentures. etc.
A copy of the Department of Personnel's O.M. No. 11013/6/92-Ests.(A) dated 8.4.1992 relating to intimations of transactions in sale and purchase of shares, debentures, etc. is enclosed. Sub-Rules (3) & (4) of Rule 18 and Sub-Rule (1) of Rule 16 of the CCS(Conduct) Rules 1964 mentioned in the enclosed O.M. correspond to Sub-Rule (3) & (4) of Rule 18 and Sub Rule (1) of Rule 16 respectively of the Railway services (Conduct) Rules, 1966.
The instructions contained in the enclosed O.M. dated 08.04.1992 may be brought to the notice of all concerned for compliance.
Please acknowledge receipt.
Copy of Ministry of Personnel, Public Grievances & Pensions, Department of Personnel & Training. O.M. No. 11013/6/91-Ests(A) dated 8th April, 1992.
Sub: CCS (Conduct) Rules, 1964-transactions in sale and purchase of shares and debentures etc.
1. As the Ministries/Departments are aware, the provisions of sub-rule(4) of Rule 18 of the CCS(Conduct) Rules, 1964 provide that the Government or the prescribed authority may, at any time, by general or special order, require a Government servant to furnish within a period specified in the order, a full and complete statement of such movable or immovable property held or acquired by him or on his behalf or by any member of his family as may be specified in the order. Such statement shall, if so required by the Government or by the prescribed authority, includes the details of the means by which or the source from which, such property was acquired.
2. Sub-Rule (1) of Rule 16 also provides that no Government servant shall speculate in any stock, share or other investment. It has also been explained that frequent purchase or sale or both, of shares, securities or other investments shall be deemed to be speculation within the meaning of this sub-rule.
3. It has been brought to the notice of the /Government that a number of employees are investing in shares, securities and debentures etc. frequently with a view to enable the administrative authorities to keep a watch over such transactions, it has been decided that an intimation may be sent in the enclosed proforma to the prescribed authority in the following cases:-
(i) Group 'A' and 'B' Officers- If the total transactions in shares, securities, debentures or mutual funds scheme etc. exceeds Rs. 50,000/- during the calendar year.
(ii) Group 'C' & Group 'D' Officers- If the total transactions in shares, securities, debentures or mutual funds scheme etc. exceeds Rs. 25,000/- during the calendar year.
4. It is clarified that since shares, securities, debentures etc. are treated as movable property for the purpose of Rule 18(3) of the CCS(Conduct) Rules, 1964 if an individual transaction exceeds the amount prescribed in Rule 18(3) , the intimation to the prescribed authority would still be necessary.
The intimation prescribed in para 3 will be in addition to this, where cumulative transaction(s) i.e. sale, purchase or both in shares, securities, debentures or mutual funds etc. in a year exceed the limits indicated in para 3.
5. In so far as the personnel serving in the Indian Audit and Accounts Department are concerned, these instructions are being issued after consultation with the Comptroller and Auditor General of India.
6. Ministry of Agriculture etc. are requested to bring these instructions to the notice of all concerned authorities under their control.
Form for giving intimation under Rule 18(4) of CCS(Conduct) Rules, 1964 for transactions in shares securities, debentures and investment in mutual fund schemes etc.
1. Name and designation.
2. Scale of pay and present pay.
3. Details of each transaction made in shares, securities, debentures, mutual funds scheme etc. during the calendar year.
4. Particulars of the party/firm with whom transaction is made:-
(a) Is party related to the applicant?
(b) Did the applicant have any dealings with the party in his official capacity at any time or is the applicant likely to have any dealing with him in the near future.
5. Source or sources from which financed:-
(a) Personal savings.
(b) Other sources giving details
6. Any other relevant fact which Applicant may like to mention.
Declaration: I hereby declare that the particulars given above are true.
Station: Signature:
Date: Designation:
No.90/E(O)II/20/6 dt.17.01.1991
Sub: Railway Services Conduct Rules, 1966 Accepting large amounts as loan.
A large number of cases are being reported to the Board involving large amounts of interest free loans taken from friends and or relatives and seeking permission for the transaction.
In such cases Railway should satisfy themselves about the bonafides of the transaction in accordance with the extant instructions circulated vide Boards letter No. E(D&A)87 GSI-1 dt. 13.2.90 and ensure that all the formalities laid down in this regards have been followed. A sentence to this effect may also be included in all the communications which have to be made to Rly. Board for information only.
No. E(D&A)90 GS1-1 dt. 13-02-1990 ED(estt.) d.o. to AGM/ER
Sub: Railway services(conduct)Rules, 1966 permission to accept interest free loan gift etc.-clarification thereof.
1. Kindly refer to your d.o. No. SP/CR/BG/3510 dated 11.01.90(annexed) addressed to Secretary, Railway Board on the above subject.
2. We have had occasion to recently consider the issue raised in your d.o. letter in consultation with the DOP, who are having identical rules. A railway servant is not required to obtain any prior sanction for accepting loan even if it exceeds "small amount" an interest except in cases where the prohibition laid down in rule(16(4)(i) is attracted. This prohibition comes into play if the railway servant concerned lends or borrows etc. from a person, firm or company with whom he is likely to have official dealings or places himself under pecuniary obligation to such person, firm or company.
3. However, with the amendment made to Rule 18(3) relating to transaction in immovable property vide Boards letter No.E(D&A)87 GS-1-12 dated 30th October, 1987, all loans exceeding the prescribed limits are required to be reported etc. under Rule 18(3). I hope the position is now clear with the clarifications given above. Above clarification of ED/estt was in response to d.o. letter of AGM/ER. The letter is quoted below.
Copy of Shri M.M.L. Sharma, Addl. General Manager, Calcutta’s D.O. letter No. SP/CR/BC/3510 DATED 11.01.90 addressed to Shri A.N. Shukla, Secretary(E),Railway Board.
Sub: Railway Services Conduct Rules, 1966 Permission to accept interest free, loan, gifts, etc.-clarification thereof.
Ref: Boards letter No.E(D&A)88 GS1-5 dt. 10.08.1988.
As per Boards letter No.E(D&A)88GS1-5 dated 10.8.1988, powers have been delegated to GMs/AGMs/SDGMs in respect of Sub-rules (3),(4) & (5)of Rule 13, Rule 16(4)and Rule 18(2) vide items 1 & 2. In view of the fact that the limit of interest free temporary loan has been raised to Rs. 10,000/-only (vide item 3 of the Bd's said letter)this railway, as usual, has been referring the matter pertaining to int. free loan beyond Rs 10,000/-to Railway Board for approval, in spite of the delegation of powers stated above. Since quite in a number of cases Board's communication has not been received yet and we have a confusion as to whether all cases of int. free loans irrespective of amount (in connection with immovable property/gifts etc. etc.) should be dealt with locally as per Board's letter dt. 10.8.88, a line in confirmation enlightening the points raised would be highly appreciated.
It is scarcely necessary to cite here that in the absence of Board's approval on the cases already sent, not only have we been receiving series of reminders from the officers concerned but in some cases, the proposed transactions had to be cancelled by many of them. The clarification is all the more necessary to comply with the time limit imposed vide Board's letter no.E(D&A)89 GS1-11 dt. 24.10.89.
Board's reply may kindly be expedited.
No.E(D&A)88/GS/1-17 dt. 06-01-1989
Sub: Railway Services (Conduct) Rules 1966-Transactions relating to acquisition/ disposal of buildings(residential or otherwise) under Sub-rule(2) of Rule 18 -submission of ‘building plans’.
Attention is invited to Railway Board's letter No. E(D&A)76 GS1/2 dated 30.4.76 relating to the form/application to the prescribed authority for the building of or addition to house and form of report after completion of the building or additions in a house. Attention is also invited to Railway Board's letter No. E(D&A)86 GS1-9 dated 08.10.86 under which forms for obtaining permission and or giving intimation in respect of transactions in immovable property under Rule 18(2) have been prescribed. It has now been decided that wherever there is transaction involving acquisition of disposal of any building (residential or otherwise), including construction of a house/building or effected additions thereto, the Railway Servant concerned while reporting the transaction or seeking permission for the transaction under Rule 18(2) should submit "building plans" showing the plinth area/covered area of the building and/or addition to the building involved in the proposed transaction. It is considered that submission of such a 'building plan' would assist in assessing the approximate cost of construction etc. as well as provide a record for a future check to ensure that the transaction is carried out through bonafide sources and with the permission/knowledge as the case may be, of the Government.
The above instructions may be circulated to all Railway servants under your control.
No. E(D&A)88 GS1-5 dt. 10-08-1988
Sub: Railway services(Conduct)Rules 1966-Redelegation of powers of Railway Board and definition of the term “Small amount” used in Rule 16(4)
1. In exercise of the powers conferred by Rule 24 read with Rules 2(a)(ii) of the Railway Services(Conduct) Rules 1966, the Railway Board hereby directs as follows:
(a) Powers exercised by the Railway board under sub-rules (3),(4) and (5) of Rule 13 shall also be exercisable by G.M.s of all Indian Rlys./Production Units, Director General /RDSO and the Chief Administrative Officers in respect of Gazetted Officers under their control. The report of gifts and application for permission to accept gifts must contain full particulars of the persons giving the gifts including their permanent income tax number, where monetary gift is involved, full details of the cheque/Bank draft, if any through which the gift is made should be given.
(b) The powers exercised by Railway board under 16(4) relating to sanction for lending/borrowing to or from a person/company having official dealing with the Officer concerned, or lending to any person at interest etc. shall also be exercisable by General Managers of Indian Railways/Production Units, Director General (RDSO) and Chief administrative Officers in respect of Gazetted officers under their control. Such powers of the Railway Board shall also be exercisable by Addl. GMs /Sr.D.G.Ms on Zonal Railways in respect of Gazetted Officers below the S.A. Grade.
2. Under Rule 18(2) of the Conduct Rules, transactions in immovable property can be made only with previous knowledge of the Government and previous sanction of the government has to be obtained if such transaction is with a person having dealings with the Railway servant concerned. Government for this purpose , is the Railway Board in the case of Group ‘A’ and ‘B’ Officers. However, the powers of the Railway Board in this regard have been delegated to G.M.s subject to the condition that in all such cases of reporting of transactions/sanctions to transactions relevant details shall be sent to the Railway Board. Such details should continue to be sent to Railway Board’s office.
3. In the proviso to Rule16(4) of the above rules, it is laid down that a Railway Servant may give to accept from a relative or a personal friend a purely temporary loan of a “small amount” free of interest. The question of defining the term “small amount” has been under consideration . It has been decided that , for the present , the term “small amount” may be taken to mean amounts up to Rs.10,000/- in the case of Gazetted Officers and Rs. 5000/- in the case of all other Railway staff. It is also decided that where transactions involving giving or taking of loan is involved requiring report to the competent authority, it is incumbent on the Railway Servants concerned to furnish full details of the cheque/draft on the bank concerned, through which transaction is effected. It is pointed out in this connection that under the present law, payments exceeding Rs.10,000/- cannot be made in cash and have to be made through cheque or bank draft only.
The above instructions may also please be brought to the notice of all Railway Servants.
No. E(D&A)85 GS1-4 dt. 12-12-1985
1. Under Railway Board’s letter No. E(D&A) 79GS1-5 dated 15-06-1979 clarifications in regard to sub-rules 2&3 of Rule 18 of the Conduct Rules were communicated. As per these clarifications, transactions entered into by the spouse or any other member of the family of a Railway Servant out of his or her own funds(including Stridhan, Gifts, inheritance etc.), as distinct from the funds of the railway servant itself, in his or her own right, would not attract the provisions of sub-rules (2)&(3) of Rule 18 of the conduct rules.
2. With reference to the aforesaid clarifications, an apprehension has been expressed that a railway servant could irregularly acquire immovable/movable property with money received from ‘dubious sources’ but may not intimate such transactions to the Government on the plea that the property was his wife’s property in which his funds have not been used.
3. It is not possible to place an obligation on the railway servants to inform or seek permission for transactions entered into by the spouse or other members of the family in their own right and from their own funds. This is because sub-rules(2) & (3) of Rule 18 of the Conduct Rules are applicable only to transactions made by Railway Servant in their own name, etc. and not to those made by their spouse/family members exclusively in their own right, from their own funds and it will , therefore, mean going beyond the scope of the statutory rule if an obligation as aforesaid were to be placed. It is , however, pointed out that if any case comes to notice where there are grounds to suspect that the railway servant has illegally channelised his own funds for a transaction in the name of some other person it is always open to the Competent Authority to call for such explanation and to make such investigations as may be necessary to establish the facts regarding the resources used for raising the funds.
Rule-17. Insolvency and Habitual Indebtedness:
(1) A railway servant shall so manage his private affairs as to avoid habitual indebtedness or insolvency. A railway servant against whom any legal proceeding is instituted for the recovery of any debt due from him or for adjudging him as an insolvent shall forthwith report the full facts of the legal proceedings to the Government.
Note: The burden of proving that the insolvency or indebtedness was the result of circumstances which, with the exercise of ordinary diligence, the railway servant could not have foreseen, or over which he had no control, and had not proceeded from extravagant or dissipated habits, shall be upon the railway servant.
(2) The following procedure shall be followed in the case of non-gazetted railway servants:-
(i) The report required under sub-rule (1) above shall be submitted by the railway servant to his immediate superior who should forward it through the normal channels to the authority competent to remove or dismiss the employee from service. Except where such authority requires guidance or clarification from a higher authority, it shall consider and pass appropriate orders thereon. A railway servant desiring to seek the benefit of the Insolvency Act shall apply to the Head of his Department, or to such authority as the Government may specify in this behalf, for permission to file a Schedule in a Court of Law. At the same time, he shall explain in such form as the Government may prescribe in this behalf all the circumstances which led to his financial embarrassment. The said authority will then consider his case in the light of those circumstances.
If the railway servant can prove that the indebtedness was the result of circumstances, which, with the exercise of ordinary diligence, he could not have foreseen or over which he had no control, and did not proceed from extravagant or dissipated habits and if as the result of investigation, the said authority considers that sufficient justification exists for the retention of the employee in service, he may permit him to have recourse to the court. Otherwise he should take steps either to dismiss or remove the employee from service as the circumstances of the case may warrant. If a railway servant asks for permission to seek the benefit of the Insolvency Act for a second time such permission may not be granted by an authority lower than the General Manager or Head of Office, who, if he decides to retain the employee in service, shall report the circumstances to the Railway Board for information. As the Railway Co-operative Credit Society is often a creditor in such a case and other railway servants are sureties for the debtor, the said authority will, in deciding whether or not the debtor should be retained in railway service, consider the effect of his dismissal or removal on the railway and on his fellow employees.
(ii) A railway servant who seeks the assistance of the Insolvency Court without the previous permission of the competent authority shall render himself liable to removal from service.
(iii) A railway servant who is arrested for debt is liable for dismissal.
(iv) Steps will be taken from time to time by the head of an office to ascertain from pay-sheets, etc., whether any railway servant under him are in habitual state of indebtedness. If a moiety of the pay of a railway servant is being frequently attached for debt, has been continuously so attached for a period exceeding two years or is attached for a sum which under ordinary circumstances he could not repay within two years, such railway servant shall be considered liable for dismissal.
(v) Every case falling under (iii) or (iv) shall be considered in the light of the instructions contained in clause(i) above before it is finally decided whether or not the railway servant concerned should be dismissed or removed but in exceptional circumstances such railway servant should not be retained in service.
(3) A railway servant shall also report to the Government or to such authorities as may be specified in this behalf the facts when a portion of his salary is constantly being attached, has been continuously attached for a period exceeding two years or is attached for a sum which, in ordinary circumstances, cannot be paid within a period of two years.
(4) When a moiety of a railway servant's salary is attached, the report by his superior officer to the Government competent authority should show what is the proportion of the debts to the salary how far they detract from the debtor's efficiency as a railway servant; whether the debtor's position is irretrievable; and whether in the circumstances of the case, it is desirable to retain in the post occupied by him when the matter was brought to notice, or in any post under the Government.
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