Conduct Rule No.17: Insolvency And Habitual Indebtedness
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 proceeding 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 channel 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. 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 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 is often the 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 this 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 debit 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 him in the post occupied by him when the matter was brought to notice; or in any post under the Government.