Insolvency and habitual indebtedness

17. Insolvency and habitual indebtedness

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

Government of India Decision

(1) Channel of submission of report to, and their disposal by Government in matters relating to habitual indebtedness taking part in politics and lending and borrowing

Rule 4 (2) (Taking part in politics), 13 (6) (lending and borrowing) and (habitual indebtedness) of the CCS (Conduct) Rules, 1955, (now Rules, 5, 16 and 17),a lay down that a Government servant shall make a report to Government of habitual indebtedness or insolvency and certain facts regarding himself or members of his family in the circumstances specified in those rules. Such report should be submitted by the Government servant to his immediate superior who should forward it through the normal channels to the authority competent to remove or dismiss him from service. Except where such authority require guidance or clarification from a higher authority it shall consider the report and pass appropriate orders on it. If any penalty is to be imposed on the Government servant, the procedure prescribed in the Central Civil Services (Classification, Control and Appeal) Rules will have to be followed. These instructions may be brought to the notice of all Government servants to whom these rules apply.

[MHA O.M. No. 25/40/55-Ests.(A), dated 22.02.1956]