House Building Advances

244-A. With the sanction of the Government, a Head of a Department, a Secretary to Government or a District and Sessions Judge, an advance may be granted to a Government servant—

(i) to build a house (including purchase of the site); or

(ii) to purchase a house (including the cost of effecting repairs to it); or

(iii) to rebuild a, house, provided that the rebuilding involves complete demolition of existing building; or

(iv) to effect repairs to the house, provided that such repairs are not in the nature of ordinary repairs but are required to make the house habitable and involve an outlay large in comparison with the value of the house.

An advance is permissible in bonafide cases, where the house is required for the servant’s personal residence. It may either be at the place in which he is actually serving or at any place in India where he proposes to reside permanently after his retirement. Sanction of an advance will be subject to the following conditions :—

(a) The Government servant will be required to give an undertaking that he will not dispose of the house constructed or purchased with the advance without prior sanction of Government. Provisions of paragraph 244-E will also be complied with.

(b) The Government servant does not own any other residential house other than the ancesteral house.

Ordinarily no advance is permissible to a servant who is likely to retire before complete recovery can be effected.

Explanation—(1) Advances are given to enable a Government servant to build or purchase a house, subject to specified conditions, for his residence. Ordinarily an advance to build or purchase a second house will not he granted; and when approved will be subject to the condition that the first house must be sold and the sale-proceeds applied towards the second house. In such cases the advance will also not exceed the amount by which the sale proceeds falls short of the amount of house repairing advance admissible under paragraph 244-B (2).

Explanation—(2) The advance is also admissible for paying the premium to acquire lease-hold rights of a plot of land and construction of a house thereon.

244.b(1). The amount of house building advance–

1– The limit of an advance for the construction/purchase of a house shall now be fifty months basic pay or Rs. 2,50,000/– which ever is less. Its recovery with interest will be in maximum 240 monthly instalments.

2– The limit of an advance for repair/extension of a house shall be fifty months basic pay or Rs. 60,000 which ever is less. Its recovery with interest will be in maximum 120 monthly instalments.

Note:– The actual amount of advance payable shall not exceed the actual cost of construction/purchase/repair/extension of a house.

2. Capacity to repayment–

The repayment capacity of an applicant government servant shall be determined on the following basis:–

Remaining Service period

Slab of repayment capacity

(A) An employee retiring after 20 years.

35 per cent of basic pay

(B) An employees retiring after 10 years but before 20 years.

40 per cent of basic pay

(C) An employees retiring within 10 years.

50 per cent of basic pay

"Capacity to repayment" means that the monthly amount of instalment of repayment of the proposed advance shall not exceed the amount fixed in the slab above. In cases where the amount of monthly instalment of repayment is determined on the basis of advance admissible under sub-para (1) and (2) above is estimated to be more than the amount fixed in the slab above the amount to be sanctioned shall be reduced up to the limit on the basis of which monthly amount of the instalment of repayment shall not exceed the limit of the slab fixed above.

Note:– While determining the repayment capacity of a government servant in order to fix the amount of instalment for recovery of the sanctioned advance, the deductions already being made from the government servant’s pay should also be taken into consideration to ensure that it will be possible to make recovery of the instalment so fixed.

3. Maximum cost ceiling limit–

For the purchase of house building advance the cost ceiling limit will be 150 times the basic pay of the government employees applying for house building advance subject to a minimum of Rs. 2.50 lakhs and maximum of Rs. 6 lakhs.

But where the administrative Department is satisfied on the merits of any specific case they may relax the cost ceiling up to in maximum of 25 per cent of the cost ceiling mentioned above.

In cases of houses to be purchased under the self financing scheme, the limit of the cost mentioned above shall include the cost of land and its development charges.

The advance for house building/purchase/repair/extension to state cadre officer of all India services shall be sanctioned according to the provisions of "The All India Services (House Building Advances) Rules, 1978".

C. S. no. 104 Dated: 3–10–97

[Vitta (Lekha) Anubhag–1, File No. 15(2)/80]

(4) Not more than one advance shall be made for the same house ; nor shall a servant be granted a second advance while any portion of a previous advance with interest accured thereon in accordance with note 2 of the paragraph 242 is outstanding against him. An advance to repair a house which has been built or purchased with a previous advance may be made, but unless the Government permit otherwise, at least five years must elapse since the previous advance was drawn. Not more than one advance shall be made for repairing the same house.

[Existing para 244–B(3) is renumbered as para 244–B (4).vide C. S. no. 104 Dated: 3–10–97]

NOTE—A second advance may be sanctioned when the house, for which an advance was originally granted, is subsequently destroyed by storm, fire or other accidental cause, or when it ceases to be a Government servant’s property on a partition of the family estate. The advance in such case will not be treated as a second advance for the same house.

244-C. An advance shall ordinarily be drawn in instalments, the amount of each instalment being such as is likely to be required for expenditure in the next three months. Satisfactory evidence must be produced showing that the amount of an instalment has been utilized for the purpose for which it was drawn before the next instalment is paid. When, however, the amount of an advance is small and the drawing officer certificates that it is likely to be utilized within three months, it may be drawn in one sum. When an advance is granted for the purchase of a house or the purchase of hand on which to build a house, it may also be drawn in full.

Any surplus amount left out of an advance must be refunded to the Government immediately.

244-D. Advances will be recovered by deductions from the monthly pay bills of the Government servant concerned in the number of instalments as laid down in paragraph 244-B (1) and (2). The sanctioning authority may, however, permit recovery to be made in a smaller number of instalments if the servant so desires. The amount of the advance to be recovered monthly should be fixed in whole rupees except in the case of the last instalment when the remaining balance including any fraction of a rupee should be recovered. The amount of interest calculated in accordance with note 2 to paragraph 242 will be recovered in one or more instalments, each instalment being not appreciably greater than the instalments by which the principal was recovered.

Repayment of an advance taken in one lump-sum shall commence with the first issue of pay after the amount has been drawn. When an advance is drawn in instalments, repayment shall commence from the fourth issue of pay after the first instalment is drawn. Recovery of interest will commence from the month following that in which the whole of the principal has been repaid :

Provided that where an advance is taken on or after April 1, 1966 to build a house (including purchase of a site) or to re-build a house, where the re-building involves complete demolition of the existing building, repayment of it may, if the Government servant so desires, be permitted to commence from the thirteenth issue of pay, after the drawal of the advance or the first instalment thereof, if the recovery of the advance with interest in monthly instalments, as prescribed in the rule, can be completed within the period the Government servant remains in service.

244-E. To secure the Government from loss consequent on a servant dying or quitting service before complete repayment of an advance with interest accrued thereon in accordance with note 2 to paragraph 242, the house purchased, built or repaired together with the land on which it stands, shall be mortgaged to the Government in Form no. 22, 22-B or 23, as the case may be. The borrowing servant is responsible that the mortgage bond is registered within four months from the date of its execution. The bond, so registered, will be retained by the sanctioning authority.

Mortgaged property will be released on liquidation of the full amount due by a re-conveyance deed in Form 24.

If the advance to a Government servant is sanctioned for the purchase of a house under "Self Financing Scheme’’ of a Public Sector institution which has agreed to enter into a Tripartite agreement in Form No. 22-E with the State Government and the loanee, the Government servant shall have to execute the Tripartite Agreement and also to give surety in Form No, 25 E of two permanent Government servants who are equal in rank to the applicant and who are not likely to retire before the house in question is mortgaged in favour of Government.

(Correction Slip no. 28 dated 15-9-83)

[Vitta (Lekha) Anubhag-1, File no. 15 (2)-80]

If a Government servant has taken loan from L. I. C., U. P. Avas Vikash Parishad, U. P., Sahkari Avas Sangh or Govt. of India establishment Housing Development Finance Corporation Nationalised Banks and Scheduled Banks, Canara Bank sponsored, "Can Fir Homes Ltd" in first instant for purchase of plot/house construction (including loan for purchase of a Plot/house) and has mortagaged the said plot/house in favour of the concerned financial institution in the first charge, and the amount of such loan remains insufficient for purchase/ construction of the said plot/house; the Govt. servant may also be sanctioned an advance from govt. as admissible under the rules contained in the F. H. Book for completing the purchase/construction of the said plot/house on the condition that the concerned financial institution has no objection to the concerned plot/house being mortgaged in favour of Govt. as the second charge.

In such cases for mortgaging the plot/house in favour of concerned institution in the first charge and in the second charge in favour of Government add in the end of the present concerned mortgage deeds the following :–

"Not with standing anything herein before contained it is hereby declared that the property hereby mortgaged is subject to the first charge of ......... under the deed of mortgage dated ............. registered as Book ......... Vol. ........... on pages ....... to ............. at the office of the Sub-Registrar............. on the ............... day of ............ 19 ......... and the mortgagor hereby convenants the one, the mortgagor will not create any further encumberance on the said property without the written permission of the mortgagee".

In such cases in which advance for construction/purchase of house has been sanctioned to the Govt. servant by the State Govt. and the Govt. Servant desires to take additional loan from the above mentioned financial institutions for completion of construction/ Purchase of house, he shall obtain permission from the authority who has sanctioned the advance. The permission to take a loan from the said institutions be granted only when the authority sanctioning the advance has satisfied himself that the advance sanctioned to Govt. servant is insufficient to complete the construction or purchase of the plot/house. In such cases also the said plot/house may be mortgaged in the first charge in favour of the concerned institution and in the second charge in favour of the Govt. the mortgaged Bond shall be executed in prescribed form no. 22.

At the time of retirement of the Govt. Servant it will be specifically mentioned in the "No deeds certificate" that the amount of advance sanctioned by government for purchase of plot/house, construction/renovation/extension of a house and the interest thereon has been fully recovered or an amount of Rs. of advance/ interest is still due which is to be recovered.

The Mortgaged property will be released on liquidation of the full amount due by a reconceyances deed in form no. 24 A

After recovery of house building advance with interest granted in service time of government servants and on receiving "No, dues Certificate" from Accountant General, the property (Land/House) Mortgaged as garantee against advance, in case of untimely death of the employee for demortgaging the property (Land/House) in favour of legal suceesor/suceessors (husband/wife, father/mother, real brother/brothers, son/sons etc, as the case may be) newly prescribed form no. 24 A under above rule 244 E wide be utilized.

C. S. No. 103 Dated 3.10.1997

Finance (Account) Section–1 File No. 15 (2) /80

244-F. With the sanction of Government, a servant who has been granted an advance may dispose of the house, provided he is thereby enabled to clear off at once the whole amount due, or with like sanction he may transfer it to any servant of similar or higher rank on pay not less than his, when future deductions shall be made from the pay of such servant.

244-G. The last pay certificate granted to a servant holding an advance shall specify the original amount repaid and the balance outstanding together with interest accrued in accordance with note 2 to paragraph 242.

244-H. The following procedure shall regulate the grant of such advances :

(1) An application must be made through the applicant’s departmental superior, who will record his opinion as to the necessity for the advance. In the case of an advance for the purchase of land and construction of a house on the land so purchased the applicant must state separately the amount required for purchasing the land and for building the house.

(2) The applicant must state whether he has at least ten years more to serve prior to retirement and have no intention of retiring within ten years from the date of his application ; provided that in the case of an advance for repairing a house the minimum period shall be five years. The applicant’s immediate superior officer shall certify whether the statement may be accepted as correct.

(3) The applicant shall also provide satisfactory evidence of his title to the land on which the house stands or is proposed to be built. When the advances is required for the purchase of a house or land on which to construct it, the applicant shall show that he will have undisputed title to the house or land on payment of the purchase price, and that there will be no obstacle to it being mortgaged to the Government.

NOTE—This rule does not preclude the grant of an advance to a person who does not possess full proprietary rights in the land upon which he intends to build, provided the sanctioning authority is satisfied that the applicant has a lease of which the unexpired portion is of a term and value sufficient to justify the grant of the advance and that there is no danger of the lease lapsing or of the Government being unable to dispose of it, should it become necessary to foreclose the mortgage. In examining the mortgagers title care should be taken to see that the lease does not prevent any subdemise by the lessee (the mortgager). The mortgage bond in such cases will be in Form 23.

In cases in which ground rent, municipal taxes and similar dues are payable to local authorities on account of land taken no lease, the sanctioning authority may, at its discretion ask the Government servant taking the advance to produce for inspection receipts for these payments within fifteen days of their falling due. If the sanctioning authority finds that such dues have not been paid by the borrower, steps may be to recover the said dues including interest thereon, if any, from the pay of the Government servant concerned for payment to the parties concerned.

Insert the following paragraph as sub-Paragraph 4 after note below sub-paragraph (3) of this paragraph:

(4) The applicant whose land/house is in joint ownership or on joint lease with him/her and his wife/her husband; his/her real brothers; his/her father, mother, or his/her son(s) should, alongwith his/her application, submit a letter from his wife/her her husband, his/her real brother(s) his/her father, mother; his/her son(s); as the case may be, mentioning therein that he/she they are prepared to and shall mortgage as security, jointly his/her their share of the land/house in favour of Governor to ensure repayment of the advance applied for, if sanctioned to the applicant. In case of joint ownership, the land or house shall be mortgaged in Form no. 22-D and in case joint lease, in Form no. 23-A.

(Correction Slip no. 29, dated 15-9-83)

[Vitta (Lekha) Anubhag-1, File no. 15(2)-1980]

244-I. The sanctioning authority is required to satisfy himself as to the amount of the proposed advance and the applicant’s title to the property or the title which he will acquire on payment of the purchase price and, further, that there will be no legal obstacle to the property being mortgaged to the Government and that the Government will have the right of foreclosing on the condition mentioned in the mortgage bond. Where there is any doubt as to the validity of that title or otherwise, the revenue and registration authorities or, if legal advice is necessary, the Government pleader of the district concerned should be consulted through the Collector under rule 73 of the Legal Remembrancer’s Manual.

244-J [Deleted]

244-K. The order of sanction shall be issued only after necessary allotment of funds has been made by Government in the Finance Department in the year in which payment of the advance or a portion thereof will be made.

244-L. The sanctioning authority will maintain a register of applicants in the order in which the applications are received and shall sanction advances strictly in the order in which the applications are received, subject to completion of necessary formalities. Applications not met in a year will be carried forward to the next year.

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