The Central Civil Services (Conduct) Rules, 1964
RULE 16. INVESTMENT, LENDING AND BORROWING:
Government of India Decisions
(1) Wherever any rule stipulates the obtaining of prior permission from Government in any matter, such prior sanction must invariably be obtained by Government servants before making any move, requests for ex-post-facto sanction to be severely discouraged.
Attention is invited to the provisions of rule 14(3) (now Rule 16 (4) and 15 (now Rule 18) of the Central Civil Services (Conduct) Rules, 1955, in which it has been stated that Government servants should not lend money to any person possessing land or valuable property within the local limits of their authority or at interest to any person and that they should not acquire or dispose of any immovable/movable property without the previous sanction of the prescribed authority. Instances have come to the notice of the Government where certain Government servants have entered into transactions regarding movable and immovable property without the previous sanction of the prescribed authority and they have afterwards sought ex-post-facto sanction. Such a procedure renders the provisions of the rules completely ineffective and defeats the purpose for which the rules have been framed. The Ministry of Finance etc., are, therefore, requested to impress upon the Government servants concerned the need to adhere to the provisions of the rules strictly and to obtain the sanction of the prescribed authority, wherever necessary, before entering into such transactions.
2. These instructions will apply, mutatis mutandis, to the provisions of the other rules which require previous knowledge, consent or sanction of the prescribed authority.
[MHA OM No. 25/25/61-Estt. (A), dated 26.06.1961]
(2) Surety.
Senior Officers cautioned not to approach their subordinates for standing surety for loans taken by them or by their relatives.
The Ministry of Home Affairs have examined the question whether it would be proper for Government servants to stand surety for loans taken from private sources by their official superiors. Where a Government servant stands surety for loans taken by his official superiors or their friends or relatives, it might create an impression that official pressure has been exerted for this purpose. Apart from this, the superior officer will be putting himself under obligation to the subordinate and such a situation is not conducive to efficient office management and maintenance of discipline. It has, therefore, been decided that all officers should be advised not to approach their subordinates for standing surety for loans taken from private sources either by them or by their relatives or friends.
[MHA OM No. 25/5/66-Ests.(A), dated 25.05.1966]
(3) Purchasing shares out of the quotas reserved for the friends and associates of Directors of Companies not allowed.
A Question has been raised whether Government servants can purchase shares of Companies out of the quotas reserved for the friends and associates of the Directors of Companies. The provisions of Rule 16 (2) make it clear beyond doubt that a Government servant should be circumspect in the matter of making investment and there is room for the inference that purchase of shares in a Company out of the quota reserved for friends and associates of Directors is likely to embarrass him in the discharge of his official duties at some time or other. In the circumstances, keeping in view the provisions of Rule 16 (2), Government servants should not purchase shares out of the quota reserved for friends and associates of Directors of Companies.
[C.S. Deptt. of Personnel, No. 25/9/72-Ests.(A), dated the 18th September, 1976]
(4) Fixed Deposits with Banks and Companies.
1. Fixed Deposits with public limited companies, whether in the private sector or the public sector, will be covered by the saving clause in the Rule 16 (4) of the CCS (Conduct) Rule, 1964 as public limited companies receive deposits from the public on authorization given by the Government under the Companies (Acceptance of deposit from the public) Rules, 1975. However, where the amount of deposit with a public limited company exceeds the monetary limits laid down in Rule 18 (3) of the CCS (Conduct) Rules, 1964, then a report to prescribed authority in regard to the deposit will be necessary under that rule.
2. Deposits with private limited companies and firms are in the nature of loans to these companies and firms and they should be regulated with reference to the provisions of Rule 16 (4) of the CCS (Conduct) Rules, 1964.
3. Fixed Deposits with Bank are, as already provided in Rule 16 (4) of the CCS (Conduct) Rules, 1964, exempted from the operation of this rule. However, in regard to Fixed Deposits with Bank also, a report should be made to the prescribed authority under Rule 18 (3) of the CCS (Conduct) Rules, 1964, if the monetary limit laid down therein are exceeded. The clarification contained in para 4 of this Department Office Memorandum No. 11013/12/76-Ests.(A) dated 04.10.1976 will stand modified to this extents.
[D.P. & A.R.’s OM No. 11013/5/81-Estt. (A), dated 12.05.1982]