Defaults in Payment
226. Any default in the payment, of interest upon a loan advanced by the Government, or in the repayment of the principal will be promptly reported by the Accountant General to the Government.
NOTEThe responsibility imposed on the Accountant General by this rule refers only to loans the detailed accounts of which are kept by him. Default of short periods up to one month need not be reported to the Government.
228. The sanctioning authority should ensure that a period is specified in the sanctioning order for the utilization of the loan. No loan shall be released without a binding stipulation that in case the loan is not properly utilised for the purpose for which it is sanctioned, the amount shall become immediately recoverable after the expiry of the period specified for its utilization. Borrowers should be required to adhere strictly to the terms settled for the loans made to them. Modifications of those terms in their favour can be made subsequently only for very special reasons and with the sanction of Government.
NOTES (1)The provisions of paragraph 369-C will apply mutatis mutandis to sanctions of loans and to the Audit of the accounts of the loanees.
(2)A certificate of utilization of the loan should be furnished to the Accountant General in every case of loan made for specific purpose, even if any Considerations are not specifically attached to the grant. The utilization certificate should be in Form no. 42-I, the words "grant-in-aid" occurring therein being substituted by the word Loan Such certificates are not, however, necessary in case where (i) Loans are sanctioned not for any specific purpose or object but take the shape of a temporary financial aid as in the cases of assistance to public bodies or private institution to tide over a temporary financial crisis; and (ii) where the loans have been sanctioned to the Public Sector under takings which are in the nature of investment in the company. Repayment of loan, however, has to be watched in the usual manner.
(Correction Slip No. 3, dated April, 1980)
[Vitta (Lekha) Anubhag 1, File no. 17/2 (1) 67]
(i) (A) In respect of loans the detailed accounts of which are maintained in the audit offices, the authorities sanctioning the loan should furnish to the Accountant-General the utilisation certificate in respect of each individual case. The utilisation certificates should be furnished by the sanctioning authority within a reasonable time after the loan is paid to the institutions. The concerned department should prescribe, in consultations, with the Finance Department target dates for the submisson of the utilisation certificate to the Accountant General (A & E-1). The target dates should, as far as possible, be not later than 18 months from the date of sanction of the loan.
(B) Before recording the certificate, the certifying officer should take steps to satisfy himself that the conditions, on which the loan was sanctioned, have been, or, are being fulfilled. For this purpose he may require the submission to him at suitable intervals of such (C) reports statement etc. Which will establish the utilisation of loan for purposes for which it was sanctioned. The loanee institutions may also be required to furnish a certificate from its auditors that the conditions attaching to the loan have been or are being fulfilled. (D) The certificate should give details of the breaches if any of those conditions. No further loans should be sanctioned unless the sanctioning authorities are satisfied about the proper utilisation of the earlier loan sanctioned to an institution etc.
(2) Where the detailed accounts of the loans are maintained by the departmental authorities, a consolidated utilisation certificate should be furnished to the Accountant General (A & E-I) by the administrative department sanctioning the loans to institutions, bodies for the total amount of loans disbursed during each year for different purposes including the loans sanctioned by their subordinate officers under the powers, if any, delegated to them. This certificate will not cover the loans to individuals for which utilisation certificates need not be funished to the Accountant-General (A & E-I).
(B) The certificate should indicate the year-wise and object wise break-up of loans disbursed and the loans for which utilisation certificates are furnished. This certificate should show the loans disbursed separately to each sub-head of account to facilitate verification by the Accountant-General (A & E-I). In respect of such loans the period of (C) 18 months should be reckoned from the expiry of the financial year in which the loans are disbursed. The consolidated utilisation certificates in respect of such loans paid each year should, therefore, be furnished not later than September of the second succeeding financial year.
The target dates should be spceified in the letter of sanction of loan. The target dates as specified should be rigidly enforced and extension should be allowed in very exceptional circumstances in consulation with the Government in the Finance Department."
(Correction Slip No. 85, dated May 11, 1986)
[Vitta (Lekha) Anubhag-1 File no, 17/2(1)-67 T. C.]