Insolvency & government job

Download the extent service rules of the employee and relate.

Genrically speaking:

A Government servant shall so manage his private affairs as to avoid habitual indebtedness or insolvency.

For generic reference and a general cue you may go thru:

https://www.referencer.in/CS_Regulations/CCS(Conduct)Rules1964/Rule_17.aspx

https://www.referencer.in/CS_Regulations/CCS(Conduct)Rules1964/GOI_Decisions_17.aspx

Thanks to Kumar Doab. Thanks for giving Links.  I have enquired with the client. Later I came to know that her net salary is Rs. 47,976/- per month.  But after decuting the installments for loans and other deductions,, she is getting only Rs. 12,393 per month.  

SALARY PARTICULARS:

Basic Pay—23,675

DA—5931

HRA—6,535

City Compensatory Allowance --350

Medical Allowance--1000

Telangana Increment—485

Conveyance Allowance—1000

DEDUCTIONS:

Professional Tax—200

Employee Welfare Fund—200

Self Funding Medical Scheme—100

Group Insurance Scheme—15

Income Tax—5000

Education Advance(9/10)—750

Festival Advance—750

Employee Provident Fund—4633

Canara Bank (personal loan)—(16/60)—17,000

LIC No. 688347211--3443

LIC No. 68874392—3492.

Gross—47,976 (Minus)  Total Deductions—35,583 =  Net Pay—12,393.

My query is whether CCS rules will apply for State Government Employment.  

Whether there will be any excemptions in the Income Tax for HRA, LIC etc since she is paying Rs.5000 for Income Tax.  

To 

Jigyasu: 

She has taken personal loan basing on her Salary Slip. Already amount of Rs. 17,000 is regularly deducting.  16th instalment  is running out of 60 instalment.  She want to file Insolvency Petition. Whether the State Government Job will be effected, If  yes, in what way. 

Personal laon may not neccessarily be secured.

It could  in a sense and connotation that salary slip has been submitted.

For service rules check with concerned employee.....and preferably get a copy.

You are welcome.

@ Advocate Ravinder,

Thanks for your clarification.

First of all, no department gives guarantee on personal loan taken from any bank by its employee. However, if the departmental drawing & disbursing officer of the employee has already given NOC and the EMI's are being recovered out of salary of the employee, regularly, there is no chance of the employee getting rid of the loan recovery till his retirement, even if he declares himself as a bankrupt. Except for the bank loan already being recovered out of his monthly salary, he can get relief with insolvency for his loans from private persons that too temporarily, as the private persons cannot be expected to keep mum on his insolvency. Thoy can get attachment order of the court on the salary of the employee..

So, his salary would always remain at stake for the purpose of recovery of loans. He can only take a stay order of the court on recovery of loan out of his salary.

Her gross salary is Rs. 47,976.  Out of it she is getting only Rs. 12,393/- net salary which is very meagre amount to continue her livelihood.  As per the CPC provision the creditors can only attach 2/3 of the salary.  By going the above rule, only Rs. 30,000 should be attached.  The Fulltron Finance and other private financiers are ready to recover the amounts from her.  My doubt is whether the Fulltron Finance and other private financiers be able to get attachment from the court, when already one attachment of Canara Bank (Rs.17,000) is pending and still 44 instalments are pending.  As per CPC provision even after completion of that 44 instalments the debtor should be given two years gap for attach any new debt.   

Another point is she is regularly paying Rs.5000 per month to Income Tax Department.  When the Income is Rs. 12,393 and the expenditure is more than 40,000 per month it is meaning less to pay Income Tax to the Department.  Can she avoid that Income Tax of Rs. 5000 by appointing any good C.A. or Tax consultant.  Kindly clarify. 

If you go through section 60 of the CPC that may make your concept clear on the attachment of earnings, including salary of the employee.