Interest Bearing Advances

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Master Circular No. 50   CONTENTS     No. Subject 1 Introduction 2 House Building Advance 3 Purposes 4 Eligibility 5 Conditions For Grant Of Advance 6 Competent Authorities 7 Amount Of Advance 8 CostCeilings 9 Repaying Capacity 10 Interest 11 Rates of Interest 12 Disbursement 13 Creation of Second Charge 14 Repayment of Advance 15 Reconveyance 16 Duties of Head of Department 17 Insurance 18 Residual Powers   Link to  Chapter 11 of IREM Vol. I   Other Railway Boards Orders on the Subject Interest Bearing Advances                                 1.         The instructions issued by the Railway Board, from time to time, on the subject of various Interest bearing Advances are contained in several letters. These instructions in respect of the following advances were consolidated and issued in the form of Master Circular No.39, in 1991;   i)    Advance for purchase of conveyance, i.e. cycle scooter, motor cycle and Car. ii)   Advance for purchase of Personal Computer. iii)  Advance for purchase of table fan. iv)  Advance for purchase of warm clothing.      Consolidated instructions in respect of House Building Advance, which is an interest bearing advance but which could not be included in Master Circular No.39 of 1991, are contained herein.   2.         HouseBuildingAdvance               Grant of House Building Advance is regulated by the rules, laid down by the Ministry of Urban Development for Central Govt. employees in general. These instructions apply mutatis-mutandis to railway employees.   3.         PURPOSES               The advance is admissible for the following purposes:   i)                    *Construction of a new house on a plot owned by the official or by the official jointly with his/her spouse. Or   ii)         *Purchasing a plot and constructing a house thereon, or   iii)         *Purchasing and constructing or acquiring a house flat through Cooperative Housing Societies/Self-financing Scheme/Housing Boards/Development Authorities, Other statutory or semi Govt. bodies and outright purchase from private parties.   iv)        *Enlarging  living accommodation in an existing house  owned by  the  official or by the official  jointly  with  his/her spouse,  subject  to cost ceilings laid down. or (*No. F(E)  Spl. 78 /Adv3/1 dated 19.04.1978)   v)         Repayment of loan or advance taken from non-Govt. sources  to build  the  house, even if the construction  has  commenced.      (F(E)Spl.89/Adv3/9 dated 31.05.1989) vi)        Constructing  residential portion only of the building on  a  plot which is earmarked as a shop-cum-residential plot, in a residential colony, subject to cost ceilings.   NOTE: 1.       Advance is permissible for purchase of a house under the Self Financing Scheme of Indian Railway Welfare Organisation. F(E)Spl.91/Adv3/6 dated 24.04.1991.   2.       In the case of a plot owned by the official jointly with his/her spouse, both husband and wife should be willing to mortgage the land/house in favour of the President of India, as a security for repayment of the advance. The application on such a case should be accompanied by a letter from the husband/wife, as the case may be, that if the HBA applied for is sanctioned, the husband/wife will mortgage his/her share of the land/property jointly with his/her spouse, as security for repayment of advance.    3.       HBA is not permissible for purchase of land only.   4.       HBA is not admissible for acquiring a house on hire-purchase basis, but on conversion of hire-purchase of flats/houses into outright purchase this becomes permissible, provided the purchase is made from State Housing Boards or similar Govt. controlled bodies. F (E) Spl.89/Adv3/7 dated 08.05.1989.   5.       HBA is not admissible for payment of a earnest money or initial registration deposit, to be placed with Cooperative Societies/Self financing schemes.   4.         ELIGIBILITY   i)   All permanent railway personnel   ii)   All other officials with not less than 10 years service, provided they do not hold permanent appointment under a State Govt.   iii)   Members of All India Services deputed for service under the Central Govt/Company/ Association/Body of individuals, wholly or substantially owned or controlled by the Central Govt.   iv)  Central  Govt. servants on deputation to another  Department or on foreign service.   v)   IES officers on deputation, and   vi) Other officials made eligible in HBA rules, issued by the Ministry of Urban Development.   Note: 1.     When both husband and wife are Central Govt. servants and both are eligible for grant of advance and its payment, the advance will be admissible to only one of them. Railway Board’s letter No.78/Adv3/1 dated 19.04.1978 as amended from time to time. 5.         CONDITIONS FOR GRANT OF ADVANCE   i)    Advance is admissible for constructing a house at the place of work or at a place where the applicant wants to settle down finally after retirement.   ii)   Only one advance is admissible under these rules during  the entire service.   iii)   The cost of the house to be built/purchased (excl. the cost of land) and if it is proposed to enlarge living accommodation in an existing house, the total cost of existing structure (excluding cost of land) with proposed additions/expansions should not exceed cost ceiling limits. In individual cases, the cost ceiling limits may be relaxed upto a maximum of 25{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a}.   iv) The official should not have availed of any loan or advance from other Govt. sources for the purpose. However, if he undertakes to repay the outstanding loan/advance with interest in one instalment, he may apply for advance under HBA rules.   v)   The total amount of withdrawal from SRPF/GPF and the advance under these rules should not exceed the cost ceiling limits laid down.   vi) The official or his/her spouse/minor child should not already own a house in the town/urban agglomeration where the house is proposed to be constructed or acquired with the advance from Govt. If however the official is a member of HUF which owns a house at the same place, he may be granted advance under these rules but the amount will be restricted to 60{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} of the normal entitlements.                  (F(E)Spl.84/Adv3/2 dated 12.04.1984 & F(E)Spl.84/Adv3/2 dated 25.02.1985)   vii) The applicant must possess clear title of the land. The land may be owned by the official or his/her spouse jointly with official.  It should be free from encumbrances and attachments.   viii) It the advance is for purchase of ready built house flat from private parties, the house/flat should be new and unlived in. The applicant should get it valued at his own cost by registered valuers.        Rly.Board’s letter No. F (E) Spl.78/Adv3/10 dated 28.07.1978   6.         COMPETENT AUTHORITIES    Sanction of HBA to non-gazetted staff may be accorded by HODs concerned/DRMs. F(E)Spl.74/Adv3/10 dated 08.02.1977. Sanction of HBA to Gazetted officers (except HODs) may be accorded by the Addl.GM…………….. (Except HODs) …….. G.M.s will accord sanction of HBA to HODs, including SDGM and Addl. GMs                      (No. F(E)Spl.74/Adv3/10 dated 02.09.1980).        For sanction of HBA to the GMs/Officers of equivalent rank/DG, RDSO, approval of Board should be obtained and sanction letter should be issued under the signature of Secretary, Railway Board should be issued under the signature of Secretary, Railway Board.           (F(E)Spl.82/Adv3/1 dated 24.03.1982)   7.         AMOUNT OF ADVANCE    The maximum amount of advance shall be   a)     50 times the basic pay p.m. at the time of sanction, Railway Board’s letter No. F (E) Spl.87/Adv3/12 dated 09.07.1987.  or   b)    estimated cost of the land-cum-house/flat, or   c)    amount  calculated as per the repaying capacity of  the official, or   d)    Rupees 2.5 lakhs. whichever is the least.   Note :    The  maximum  amount admissible  for  enlarging  living accommodation in an existing house is Rs.60,000/-.    In rural areas, the amount of advance shall be restricted to 80{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} of the true cost of land and construction of house or cost of enlarging living accommodation in an existing house. This can be relaxed to 100{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} if HOD certifies that the concerned rural area falls within the periphery of a town/or city.   8.         COST CEILINGS   Cost ceilings for the purpose of HBA have now been revised to make in 150 times the basic pay of the railway servant concerned subject to a minimum of Rs.2.5 lakhs and a maximum of Rs.6 lakhs. These orders take effect from 01.11.1991. In deserving cases, the above cost ceilings may be relaxed upto a maximum of 25{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} based on merit by GMs/HODs of zonal Railways/HODs empowered to sanction HBA. (E) Spl.91/Adv3/15 dated 13.12.91).   Note:  Pay of both husband and wife who are employed in Central/State Govt. public undertakings,  Sami Govt. institutions or local bodies will be taken into consideration for the purpose of computation  of  cost ceiling limits.     9.         REPAYING CAPACITY   For the purpose of calculating the eligibility of advance, the repaying capacity will be calculated as below:   Officials retiring after 20 Yrs. : 35{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} of basic pay   Officials retiring after 10 Yrs. : 40{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} of basic pay;  but not more than 20 Yrs.        60{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} of DCRG may be adjusted.   Official retiring within 10 Yrs. : Upto 50{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} of basic pay;                                                            70{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} of DCRG may be adjusted.    While calculating repaying capacity, maximum no. of instalments for recovery of the Principal may be taken as 180 and for  recovery  of  the interest as 60 in the  case  of  officials retiring after 20 Yrs. The approximate interest amount should be calculated on the basis of the rates of interest prevailing on the date of sanction. The additional interest of 2.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} above the prescribed rates of interest will not be taken into account for the purpose of computing the repaying capacity. Subsequent upward revision of DCRG limits will not entitle the railway servant to any enhancement of HBA, in case the same has already been released by the time of revision of DCRG limits.        (F(E)Spl.87/Adv3/12 dated 09.07.1987)   10.       INTEREST The advance carries simple interest from the date of payment of first instalment.Interest is calculated on the balance outstanding on the last day of each month. No interest will be charged beyond the dated superannuation or the date of death.  A higher rate of interest at 2.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} above the prescribed rate will be shown in the sanction, with a stipulation that rebate of 2.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} will be allowed in the interest for prompt repayment and observance of all other conditions attached to the sanction including those relating to the recovery of the amount.        F (E)Spl.80/Adv3/4 dated 08.07.1980 11.       RATES OF INTEREST    For advances sanctioned from 01.06.1971 to 31.03.1974        6{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} For advances sanctioned from 01.04.1974 to 05.08.1976        6.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a}  For advances sanctioned on or after 06.08.1975, following differential rates will be charged.     06.08.1975 to 31.05.1981 01.06.1981 to 31.03.1984 01.04.1984 to 24.11.1985 For the first 25000 6.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 7{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 7{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} For the next  25000 8{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 8. ½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 8. ½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} For the next  25000 10{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 10. ½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 10. ½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} For the next  50000     12{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a}               From  25.11.1985 onwards, the basis for recovery  of  interest has  been  changed. It is leviable on the total amount of loan sanctioned, as given below:   Amount of loan sanctioned 25.11.85 to23.6.87 24.6.87 to25.7.90 26.7.90 onwards Upto Rs.25000 7{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 7{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 7.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 25001 – 50000     7.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 7{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 7.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 50001 – 75000 8{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 8{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 9{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 75001 – 100000     8.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 8{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 9{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 100001- 125000 9{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 9{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 10{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 125001- 150000 – 9{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 10{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 150001- 2000000 – 10{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 11{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 200001- 225000 –     10.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a}     11.½{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 225001- 250000 – 11{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} 12{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a}                        F(E)Spl.87/Adv3/12 dated 09.07.1987 & F(E)Spl.90/Adv3/12 dated 16.08.1990   In the process of recovery, the portion of loan carrying higher rate of interest will be treated as having been refunded first.   Concessional rate for promoting small family norms:   The rate of interest will be half per cent less for an employee who himself or his spouse undergoes sterilisation and satisfies the conditions prescribed in Ministry of Railway’s letter                   No. F(E)Spl.79/Av3/15 dated 28.09.1979 and F(E)Spl.90/Adv3/11 dated 10.08.1990. This is applicable only in case of officials who under went sterilisation on or after 01.09.1979, even after the release of first installment of HBA. The rebate however will be admissible from the date of sterilisation. Persons who have had twins after the birth of their first two children are also eligible for receiving the incentive, although they have 4 children. Rebate of 11.2{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} is also admissible if sterilisation is had after one child. Rebate shall not be admissible if operation is undergone after drawal of final instalment of HBA.   12.       DISBURSEMENT   Advance for purchase of ready built house will be paid in one lump sum, as soon as the applicant executes an agreement in the prescribed form. The official should ensure that the house is purchased and mortgaged to the Government within 3 months of drawal of the advance. Advance for purchase/construction of new flat may be paid either in one lump sum or in convenient installments at the discretion of the Head of Department. The official should execute the agreement in prescribed form before the advance/first installment of advance is paid to him. The amount drawn by the official should be utilised for the purchase/construction of the flat within one month. (F(E)Spl.86/Adv3/7 dated 04.08.1986 & F(E)Spl.86/Adv3/2 dated 17.03.1986) Advance for construction/enlarging living accommodation, etc. shall be payable in two instalments of 50{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} each. The first installment will be paid after the plot and proposed house/existing house is mortgaged and the balance on the construction reaching plinth level.   (No. F(E)Spl.91/Adv3/3 dated 06.03.1991) In the case of advance for purchase of plot and construction of house, the advance will be disbursed as below:    Single starved house :- After the agreement  in  prescribed form  is  executed  and production of surety  bond,  20{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a}  of  the advance  or  the actual cost will be disbursed  for  purchase  of  plot.  The balance amount will be disbursed in two equal installments, the first after the mortgage is executed and the second on the construction reaching plinth level.    Double Stored house : – 15{459fecfca4475f09f90d8e5f2511a3c5c1949f070046c1e8cc6bde8835d5da4a} of the advance or the cost of plot will be disbursed on executing the agreement.  The balance amount will be disbursed in two equal instalments, the first on executing the mortgage deed and the second on the construction reaching plinth level.               In the case of purchase of ready built flats under the self financing schemes of statutory bodies, semi Govt.  bodies  etc. including IRWO, the amount of HBA permissible will be  sanctioned on receipt of an assurance from the authority that on  completion of  the flat,  its possession will be handed over to   the Govt. Servant concerned but payment thereof as and when made will be endorsed to the authority directly on the applicant executing an agreement to repay the loan and interest thereon. He will also produce two sureties from permanent Govt. employees of comparable status who are not likely to retire in the near future. The payment will be released to the authority in installments, on pro-rata basis, calculated with reference to the total cost of construction (Excluding the earnest money or the initial regn. deposit) and the amount of HBA sanctioned, as and when demanded by them, consistent with the progress of construction. The demand notice from the authority for release of each installment of HBA should be accompanied by a certificate from the Engineer of appropriate status as may be determined by that organisation, certifying completion of that much percentage of total work for which the demand has been made. On completion of the flat, the Govt. servant concerned, will mortgage the flat to the President of India. The cost of the flat, over and above the ceiling limit of advance, will be borne by the Govt. servant concerned. If the Govt. servant wants to withdraw from the scheme or is unable to meet the balance amount representing the difference between the HBA sanctioned by the Govt. and the actual cost of the house, the amount of house building advance will be refunded forthwith to the Govt.  by  the Authority. With a view to safeguarding the interests of the Govt., the authority will enter into a tripartite agreement in the prescribed form. The authority will maintain a separate account for each Govt. servant and adjust the payment of advance against the cost of construction of the particular category of flat applied for by the Govt. servant concerned.   13.       CREATION OF SECOND CHARGE               To meet the balance cost of house/flat, Govt. servants may create a second charge on the property subject to the following conditions:   (No. F(E)  Spl.82/Adv3/6   dated 01.01.1983   and   F(E) Spl.82/Adv3/6 dated 08.06.1983).        1.    Prior permission of the Head of the Department should be obtained for the second year.        2.   The second charge can be create only in respect of loans to be granted for meeting the balance cost of house/flat.    3.    The loan to be granted should be by recognised financial institutions such as:   a) Banking institutions, including Co-op. Banks.   b) Financial corporations set up by the State Govts. which provide loans for house construction.    c) Apex cooperative housing finance institutions such as Delhi Co-op Housing Finance Society.   d) Public companies formed and registered in India with the main object of carrying on the business of providing long term for constructing or purchase of house in India for residential purposes like the Housing Development Finance Corporation Ltd.    The total amount of the HBA granted by the Govt. and the loan raised from these institutions taken together should not exceed the prescribed cost ceiling limit applicable to the Govt. servant concerned.   14.       REPAYMENT OF ADVANCE   Repayment advance with interest thereon shall be repaid in full by monthly installments within a period not exceeding 20 Yrs., i.e. the maximum no. of instalments is 240.   The amount to be recovered shall be fixed in whole rupees. If there is any fraction of a rupee it shall be recovered in the last instalment.   The recovery should commence as follows:   i)   In  the case of advance for purchase of  land and construction of house, from the pay of the month  following  the completion of the house or from the pay of  24th month after the date on which the advance for purchase of plot was sanctioned, whichever is earlier. ‘No.F(E)Spl.75/Adv3/8 dated 16.02.1976)   ii)  In the case of advance for construction of house, from the pay of the month following the completion of the  house  or from the pay of 18th month after the date of disbursement of first installment of the advance, whichever is earlier.   iii) In the case of purchase of ready built house/flat from the pay of the month following that in which the advance is drawn.   The advance may be repaid in a shorter period also if the official so desires.    The entire advance shall be recovered in full, with interest thereon before the retirement of the official.   Recovery shall not be held up or postponed without the prior concurrence of the Govt.   If a Govt. servant cases to be in service for any reason other than normal retirement/ superannuation or if he dies before repayment of the advance in full, the entire outstanding amount will become payable forthwith. If however the house has not been completed and mortgaged by that time, the Govt, may, in deserving cases, permit repayment of the outstanding amount with interest in suitable instalments.   Failure to repay the advance for any reason whatsoever either by the Govt. servant or his successors, as the case may be will entitle the Govt. to enforce the mortgage and take action to recover the outstanding amount.   15.  RECONVEYANCE     After the advance together with interest thereon is repaid in full, the property mortgaged to the Govt. will be reconveyed to the official in the prescribed format. The reconveyance deed shall be executed by the Head of Department who generally accepts the mortgage deed on behalf of the President.  Registration of reconveyance deed is compulsory. The expenses in connection with the execution and registration of the reconveyance deed shall be borne by the official concerned. After the reconveyance deed has been executed and registered, it shall be made over to the official concerned along with the mortgage deed, sale deed and other documents deposited by the official.  In case a Govt. servant dies intestate and the advance is recovered from gratuity or otherwise, reconveyance may be made to the legal heir.  If there are more than one legal heir, the reconveyance can be done in favour of one of them, after obtaining no objection affidavit from others.   16.       DUTIES OF HEAD OF DEPARTMENT   1.    He should scrutinise the application and satisfy himself about the facts stated therein.   2.     He should ensure from the title deeds that the applicant possesse a clear title to the property in question.   3.    He should see that the property is free from encumbrances.   4.   In the case of purchase of land and construction of house, the HOD should get (1) the agreement in the prescribed form executed by the official, and (2) surety bond from a permanent Central Govt.  Servant of status not lower than that of the applicant before the disbursement of first installment. The mortgage deed should be got executed and registered before the second installment is paid.   In the case of advance for construction of houses, mortgage deed in the prescribed form should be got executed and registered before payment of the first instalment. Further, the proposed construction is in accordance with approved plan & specifications.   In the case of advances for purchase of ready built houses flats, agreement and surety bond should be got executed before payment of the advance and mortgage deed shall be got executed and registered within 3 months of disbursement of the advance.    In the case of advances to acquire houses through membership of Coop Group Housing Societies, personal bond, an agreement to mortgage the house/flat followed by deposit of title deeds  (as and when available) and a promissory note in respect of the amount of Principal plus interest at the specified rates should be obtained before payment of the HBA.    In all cases, sale deeds and other original documents should be obtained along with the mortgage deed and kept in deposit with the HOD.    In addition to the agreement/mortgage deed, surety from an approved permanent Govt.  servant should  be obtained  in  the following cases:   a) all applicants who are not permanent Central Govt. servants.   b) all applicants who are due to retire within a period of 18 months from the date of application.   c) all applicants who are permanent Central Govt. servants who require the advance for the purchase of a ready built house.    In the case of advance for constructing/purchase of ready built house/flat, the HOD should obtain adequate collateral security wherever the land on which the flats stand is not mortgaged in favour of the President of India.   In all cases, HOD should satisfy himself that the Govt. servant establishes his markable title to the property in accordance with the procedure prescribed by the Govt. before execution of the mortgage deed.    If the terms of sale do not vest title to the land in favour of the Govt. servant till a house is erected on the land it should be ensured before execution of the agreement that the Govt. servant will be in a position to acquire a clear and marketable title free from all encumbrances on erection of the house.   It should see that the mortgage deed and the reconveyence deed on release of the mortgage are duly registered within 4 months from the date of their execution.  Registration is not necessary in the case of surety bonds and agreements under HBA Rules.     He should see that the house is insured as per the rules immediately on purchase/completion and that the premium receipts are regularly obtained for inspection.    He should ensure that the House is maintained in good repair and the necessary municipal rates and taxes are paid regularly and the requisite certificates furnished annually until the advance has been repaid in full.     He should ensure that the monthly recovery of installments towards repayment of the advance commences from the due date and is made regularly from the monthly pay/leave salary/subsistence allowance bills of the official.   He should ensure that the amount if any drawn by the official in excess of the expenditure incurred is returned by the official forthwith together with interest if any die.    17.  INSURANCE     Immediately on completion of construction/purchase of house/flat, the Govt. servant shall insure the house with the recognised agents of LIC, for and less than the amount of advance and shall keep it so insured against damage by fire, floods, and lightning till the advances together with  interest thereon  is repaid in full and deposit the policy with the HOD. Renewal of insurance will be done every year and premium receipts produced for inspection of HOD regularly.                 (F(E)Spl.79/Adv3/11 dated 31.07.1979)             Condonation of non-insurance.               Heads of Departments/Authorities empowered to grant HBA are competent to condone the period of non-insurance upto one year and only cases of non-insurance in excess of that period are required to be referred to min. of Urban Development. It has to be ensured that the irregularly is not deliberate on the part of the Govt. servant but due to circumstances beyond his control.                   (F(E)Spl.85/Adv3/15 dated 23.02.1985)   18.       RESIDUAL POWERS     All cases involving relaxation of rules/orders and cases in which doubts persist are required to be referred to Ministry of Urban Development, through administrative Ministry. Ministry of Urban Development is the nobal Ministry for grant of HBA, and residual powers vest with them.   19.       While referring to this Master Circular, the original circulars mentioned herein and the provisions of the Code/Establishment Manual should be read for a proper appreciation. This circular is only a consolidation of existing instructions/and should not be treated as a substitute of the original circular. In case of doubt, the original circulars should be relied upon as authority.   20.       If any circular having a bearing on the subject which has not been superseded, has been lost sight of in the preparation of this Circular, the said circular which has been missed through oversight should not be ignored, but should be treated as valid and operative.   21.       The letters and other references on the basis of which this circular has been prepared are indicated in the annexure.

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