IREC Rule No.944: Deductions

944.  Deductions:-

(1)   Subject to the condition that no deduction may be made which reduces the credit by more than the amount of any contribution made from railway revenues with interest thereon before the amount lying to the credit of the subscriber in the fund is paid out of the fund, deduction may be ordered there from;

(i)    By the President in the case of Group ‘A’ or Group ‘B’ servants and the controlling officers in other cases;

(a)  Of any amount, if a subscriber has been dismissed from the service for grave  misconduct; provided that if the order of dismissal is subsequently cancelled,  the amount so deducted shall on his reinstatement in the service be replaced at  his credit, In the fund;

(b)   Of any amount, if a subscriber resigns his employment under the Governments  within five years of the commencement thereof otherwise than by reason of superannuation or declaration of competent medical authority that he is unfit for further service:-

Provided that no order regarding the withholding or deductions from the amount of Government contribution to provident fund shall be made unless the Railway servant has been given a reasonable opportunity for making a representation in the matter.

[Authority: No.F(E)III/75-PF-1/9, 27.08.1976]

Railway Ministry’s Decision-1: The dismissal from service of  railway servant consequent on his conviction by a criminal court for  an offence which is neither against the Railway nor connected with his work as a railway servant is really  for  grave  misconduct and is covered by sub-rule 1 (i) above.

[Authority: No.E(D&A)57/RG/6-31, 19.06.1957]

(ii)   By the controlling officer of any amount due under a liability incurred by the subscriber to the Government. In respect of Group ‘C’ and Group ‘D’ railway servants, the powers of the controlling officer may be exercised by heads of departments, Divisional Railway Managers and Deputy Chief Mechanical Engineers holding independent charge of workshops provided the deduction does not exceed 10% of the contribution made from railway revenues with interest thereon lying to the credit of the subscriber in the fund.

Provided that in the case of recovery of a house building advance, the amount advanced, with interest thereon, outstanding and remaining unpaid, when the sum standing to the credit of any subscriber/creditor falls due for payment (including the amount of special contribution to Provident Fund credited to the subscriber’s account at the time of his retirement), shall be deducted there from by the Controlling Officer; but such deduction shall not exceed the total amount of any contribution, including special contribution to Provident Fund, credited from Railway revenues to the account of a subscriber .

[Authority: No.F(E)III/72 ADV. 3/13, 25.01.1979 & No.F(E)III/78PF-1/1, 23.01.1979]

Railway Board’s Decision-2: The position in regard to making deductions in case of dismissal, removal or resignation from service is as follows;

(i)   The words ‘Grave Misconduct’ appearing in sub-rule (1) (i) (a) above embrace cases of dismissal and not merely cases of dismissal for reasons of ‘Serious Misconduct’. While a particular offence may be serious enough to merit dismissal by itself it may not be grave enough to justify the forfeiture or the whole or part of the Government Contribution in addition to dismissal from service and loss of special contribution to provident fund in consequence thereof. The question as to which case is grave enough to merit forfeiture of Government contribution to Provident Fund and to what extent this should be done is, therefore, one which must be decided by the Controlling Officer on the merits of each individual case. The relevant provisions in the Act / Rules are only of a permissive nature and the Controlling Officer can exercise his discretion in the matter.

(ii)    Government contribution cannot be withheld in cases of removal from service whatever the reasons for such removal may be, as it would be ultra vires of the Provident Funds Act to do so.

(iii)  Case of a Subscriber who quits service within 5 years of the commencement of his service by resignation, should be regulated by the provision of sub-rule (1)(i)(b). The question regarding the types of cases in which the Government Contribution should be withheld and the quantum thereof is to be decided by the Controlling Officer on the merits of each case. No deductions should normally be made under this rule in cases where the resignation (a) is on grounds accepted by the Controlling Officer as good and sufficient from the point of view of the Administration or (b) has been caused by circumstances clearly beyond the control of the Railway servant; and

(iv)  A subscriber cannot be said to have incurred a liability unless the loss caused to Government by his carelessness is or has become legally recoverable. The term ‘Legally Recoverable’ would mean that the amount due under a liability should either be indisputable or admitted. This would mean that the claim should be of such a nature as a Court or Law would have no difficulty in entertaining and passing a decree thereon, should it go before it in the form or an action for recovery. If, on the other hand, the claim were to be of a nature that can be successfully challenged by the defendant sought to be made liable meaning thereby that the action be thrown out by a Court of Law, the Government will not be advised in treating the claim as a liability incurred by the subscriber within the meaning or Section 6 of the Provident Funds Act, 1925. Whatever is sought to be recovered should also be an ascertained sum and not a liability that may or may not arise out of a disputed set of circumstances.

[Authority: No.F(E)52/PF-43(8), 05.11.1953, 21.06.1956, No.F(E)57/PF 43(2), 05.07.1958 & No.E(D&A)57/RG-6-57, 19.06.1958]

(2)   The head of the department in the case of a Group ‘A’ or Group ‘B’ servant and a Group ‘A’ or Group ‘B’ railway servant in the case of a Group ‘C’ or Group ‘D’ railway servant may order that the payment of any contribution by Government to the Account of a subscriber and the interest thereon be postponed for a period of 15 months, if commercial debits are involved, and 6 months, if the commercial debits are not involved, so as to enable the recovery of any sums due under sub-rule (1) (ii), which may not have been ascertained and advised to the Accounts Officer in time to enable him to make the recovery before the payment falls due. In no case the amount of railway servant’s own subscription along with interest thereon may be so withheld.

[Authority: No.F(E)III/68/PF-1/16, 12.05.1969]

(3)      If the subscriber’s conduct is under inquiry for an alleged irregularity or loss of railway funds, no part of the contribution to his account from railway revenues together with interest thereon shall be paid before orders are passed on the report of inquiry unless the controlling officer directs otherwise.