Refusal of DDO to sign Bank loan form
Imdadur
(Querist) 09 October 2017
This query is : Resolved
Sir,
I am a regular employee of FCI which is a public sector undertaking under Central government. Our salary is disbursed by the DDO to sbi and form 16 is also issued by the DDO. I have completed 6 yrs of service in FCI. Now when i have submitted loan form from sbi to DDO, he refused to sign. Now i am in a dilemma, i need loan for my marriage. Kindly suggest what can i do?
Sudhir Kumar, Advocate
(Expert) 10 October 2017
No legal solution is there.
why is the signature of DDO required. Does the bank required deduction from salary.
Imdadur
(Querist) 10 October 2017
Sir,
Thank you for your reply sir. Whenever we take loan from bank as an govt employee DDO sign is required as a condition if the loan gets unpaid by the employee it may be recovered from terminal benefits of the employee. The loan gets deducted from the salary account of the employee by SBI. All our pf, pension and income tax is deducted by the DDO, i have completed my 6 yrs so i am also eligible for gratuity or terminal benefits. But the DDO doesnt want to sign.
P. Venu
(Expert) 10 October 2017
Yes, this is a usual practice in many organisations and Government Departments.. However, this has been a mere formality. The DDO has no power to deduct the defaulted loan amounts from the salary or the terminal benefits. Hence the DDO cannot technically be faulted for not signing the form and taking up the impossible responsibility.
P. Venu
(Expert) 10 October 2017
Sorry for the repeated posting.
Rajendra K Goyal
(Expert) 10 October 2017
After signing, DDO can not escape its legal liability to recover the loan and pay to Bank / recover from terminal benefits of the employee.
Practically such instances are rare.
Rajendra K Goyal
(Expert) 10 October 2017
Has the DDO mentioned any reason for declining ? Whether such letter has been provided by your Branch previously.
Imdadur
(Querist) 10 October 2017
@p venu: This loan is not departmental loan sir. The loan will be deducted by the Bank automatically not from my office. Whereas, for any defaults the office may be instructed for recovery.There is no circular for not siging as DDO on the papers.For a govt employee is this correct that he is bound to take loan from a private bank.
Imdadur
(Querist) 12 October 2017
Please help sir.
Guest
(Expert) 12 October 2017
@ Rajendra K Goyal,
Very vague advice on your part, when you say, "after signing, DDO can not escape its legal liability to recover the loan and pay to Bank / recover from terminal benefits of the employee.". Even if DDO signs the loan form, he does not enjoy any power to recover even a single penny out of the salary of the employee, as of recovery on behalf of a third party. He can recover only departmental dues of IFC.
Guest
(Expert) 12 October 2017
@ Imdadur,
DDO is not obliged to sign a loan form of the employees from outside lenders. Even signing of loan form, as a guarantor to make recovery will attract disciplinary action against the DDO.
P. Venu
(Expert) 12 October 2017
A DDO can, officially, effect only those deductions authorised by Law, not otherwise. [In respect of DDOs under the Central Government, they are bound by the provisions of Central Government Account ( Receipts and Payments) Rule]. PF, IT etc. are authorised deductions. As against loans and debts, recovery could be effected, only if the same is attached by a Competent Court.
Guest
(Expert) 12 October 2017
Rightly advised by Mr. P. Venu. A DDO, even if signs a loan form, cannot recover even a single paisa for and on behalf of a third party, except with the Court Attachment, if ordered by a Court of Law. If he tries to make recovery on behalf of an outsider lender, his action is tantamount to indiscipline on account of which disciplinary action can be taken on him.
Sudhir Kumar, Advocate
(Expert) 13 October 2017
While fully agreeing with above views of Mr Goyal, Mr Dhingra and Mr Venu, I will add that :-
(i) It is not at all mandatory for govt servant to take such undertaking from DDO. All he is required is to intimate the administration within one month of transaction on prescribed proforma and in case the financial transaction is with persons/body having official dealings then prior permission of HOD (now DDO) is required. Some come out of misconception.
(ii) There is absolutely no compulsion on DDO to render such undertaking as sought by you and by bank.
Imdadur
(Querist) 18 October 2017
Sudhir kumar sir: Now a days banks dont give loan without DDO's signature. And the loan taken will be recovered from my salary automatically by the Bank and this loan is not send by the ofice to thw bank. By signing the DDO is just confirming my service, address, salary and there is an agreement that is to be signes by me that any recovery to be made will be recovered from my terminal benefits. I have been working from last 6 yrs. My cpf accumulated is more than 3 lakhs. If these things are not enough for taking a 5 lakh rupees from Bank?. DDO's reponsibily in case of partially check off personal loan is minimal only to verify the employee details and in case of transfer or resignation he have to intimate the bank.
Sudhir Kumar, Advocate
(Expert) 19 October 2017
DDO has no obligation to dance to the tunes of the bank from simply because you applied for loan there (no other bank).
The DDO appears to be ware that he canot make any deduction towards outstanding loan without court order.
Rajendra K Goyal
(Expert) 20 October 2017
JIGYASU - Legal analyst
In your profile you have mentioned:
Quote "
As a Legal Analyst, I may be knowing much more than the most well qualified and experienced lawyers/ Experts, but still I claim myself to be a lifelong JIGYASU (learner). : Unqote"
http://www.lawyersclubindia.com/experts/experts_profile.asp?member_id=389278
Have you shown your knowledge of law in your above post? Does it contains more legal aspect than any other expert can provide ?
Doubt your knowledge has contributed something positive.
Guest
(Expert) 20 October 2017
Remove your black goggles, you will see my contribution. Also you cannot judge some one else's contribution through a child of merely 2 years, as you appear from your picture of goggled child.
Imdadur
(Querist) 20 October 2017
Sudhir Sir. While taking loan i have to sign in an agreement for any sort of deductions from my gratuatity or terminal benfits.DDO has complete right after that. I am taking loan from the branch from where our salary is disbursed. My account is also at that branch only.
Sudhir Kumar, Advocate
(Expert) 22 October 2017
DDO has no powers to agree deduction from gratuity without court order. He cannot take a risk of paying loan from his own salary and gratuity if loanee is dismissed from service and there is no gratuity or his successors not able to recover from gratuity due to one reason or the other.
DDO is behaving perfectly correct.
Department has no obligation to be guarantor for your private loan.
P. Venu
(Expert) 22 October 2017
Even a court has no powers to attach gratuity or pension. Moreover, even if a particular signs, he is only assuming personal responsibility. It is not binding on his successor in office.
Rajendra K Goyal
(Expert) 22 October 2017
JIGYASU - Legal analyst
Very easy to comment on others..
Peep into yourself before commenting on others.
You seem to be a Self-glorified ignorantly arrogant expert rather an legal analyst.
Guest
(Expert) 22 October 2017
No undue stretching of the thread please.
Guest
(Expert) 22 October 2017
Another childish post by Mr. Rajendra K Goyal, as a number game!
