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Sunday, December 14, 2008

Bids soon to man individual pension accounts

NEW DELHI: The regulator for the new pension scheme would soon invite bids from private sector fund managers to handle parts of its Rs 1,700-crore corpus, which theregulator expects to more than double in some time.
Insurance companies such as Tata AIG and MetLife India Insurance Co, which are partly owned by foreign investors, can also participate in the Fund management of the new pension scheme administered by the Pension Fund Regulatory Development Authority (PFRDA), an official with the regulator said.
The appointment of private fund managers comes ahead of the regulator’s plan to extend the scheme to private individuals from April 1, 2009. Now, participation in the scheme is compulsory for employees who joined government service after January 1, 2004, and voluntary for those who are in public service.
Competition among fund managers would give contributors the option to choose from different investment schemes and the opportunity to switch from one scheme to another depending on the returns. “Many foreign insurance entities have joint ventures in the country. They could sponsor pension schemes by setting up dedicated arms for that. Their eligibility criteria would be the same as that of other fund managers,” an official told ET. Entities managing Rs 10,000 crore and with five-year experience are eligible. Today, SBI, UTI Asset Management Co and LIC are managing the corpus of the scheme.
PFRDA would first invite expressions of interest, evaluate them as per technical parameters, and then invite commercial bids.
While the pension regulator will keep the total number of fund managers limited, it would appoint unlimited number of entities for soliciting and collecting contributions from individuals.
These could be banks, post offices or other entities with a large reach and ability to transfer funds electronically. “We have 1,50,000 post offices in the country, but only 10,000-15,000 have electronic connectivity with other centres. We need agents that can instantly transfer funds electronically. Otherwise contributors’ savings would remain blocked at various levels, causing them losses,” said the official.
The regulator is framing investment guidelines for the fund managers to safely deploy private individuals’ savings and to give them decent returns depending upon their risk appetite. Only 15% of government employees’ savings will go to the stock market.
Courtesy : The Economic times

National Best practice in Finance By Government Knowledge Center (DARPG)

Koshwahini: Treasury Information System

Introduction:

Treasuries are pivotal to all government operations in any country. Transparency of treasury operations also ensures accountability of government expenditures. In order to enhance citizen engagement and service delivery, it is therefore central to first computerize the treasuries so that transactions are quick, transparent and accurate. This is the essence of Koshwahini.

Koshawahini is an online financial information system designed by Directorate of Accounts and Treasuries with the help of National Informatics Centre. Data is collected from 33 District Treasuries, 292 Sub Treasuries & Pay & Accounts office and processed and converted into useful information at the level of the Directorate. The object of KOSHWAHINI is to make available up to date financial information required for various departments of the Government. The system gives detailed information for Compiled Payment Data, Compiled Receipt Data up to voucher level, chalan level respectively and also Bills in Process. It also gives reports for various payments. More over, it gives report on Budget with Expenditure for various combinations.

Koshwahini is Treasury Information System to manage the exchequer across Maharashtra. It is a powerful fact-based fiscal management tool for the entire State Government. It comprises:


  • Data warehouse of Treasury Expenditure & Receipts
  • Treasury Net: Workflow in the Treasury
  • Reconciliation with Accountant General.
  • E scroll from the Banks for payment reconciliation
  • LOC: Monitoring PWD, Forest, Irrigation Accounts
  • Budget Distribution System
  • Pension Payment System

Some of the numbers which involve the Koshwahini project are staggering and is as below:

1. Offices: One PAO in Mumbai, 33 District Treasuries, 295 sub-Treasuries.

2. 12000 Drawing & Disbursing Officers.

3. 85 lac Challans & 35 lac Vouchers every Year.

4. Number of Schemes:

-10,000 Payment Schemes

-1,100% Receipt Schemes

5. Number of State Government Pensioners : More than 4.5 lac

Koshwahini is developed using Java, JSP, DB2, Linux. It is running Live successfully for a few years across levels. Koshwahini is launched at the Data Center at Mumbai. Koshwanini has been developed on IBM middleware technologies as it is vertically & horizontally scalable with the flexibility to develop and deploy the solution on various platforms including Linux.

The Project Objectives:

1. Providing appropriate information at right time in right place

2. Building up of responsibility and accountability in the system

3. Ensuring professional approach in the Government

4. Provide efficient service management

5. Efficient delivery of services to end users

Services Offered:

1.Expeditious and transparent system of clearance of bills in a timely manner to the most socially backward classes and to the remotest tribal areas

2.Expenditure forecasts so that the required amounts are kept available in the treasuries

3.Generates bills of monthly Pension to be paid to the five lakh State pensioners and provides them facility of payment through Electronic Clearing System (ECS)

4. Payment of salary to 6 lakh State Government employees directly into their bank account






( Source : Treasury Department, Govt. of Maharshtra)

1. Electronic Pay Billing.

2. E Budget Distribution System.

3. Website for Pensioners

4. Strengthening of Koshwahini

5. Virtual Treasury

6. Central Treasury – Treasury Net



What are the benefits and why is it a good practice?

  • A tool to manage the money efficiently & effectively
  • Online custom made multi-dimension view to the data & information from various stakeholder’s perspective
  • Smart Scheme monitoring and management
  • Immediate Cheque Reconciliation
  • Monthly Bureau report is now available within a week of subsequent month, while earlier it used to take to take around 2 months
  • DAT has stopped sending printed report of around 100 pages every month to approx. 35 departments, as the information & data is available through online queries
  • Availability of data for expenditure Reconciliation
  • Optimised and reduced timelines in disbursing the Pension to around half a million Pensioners
  • A totally transparent system

The other states in India are looking at Koshwahini as a role model application and are planning to implement in their respective States. Some of the states have already visited and carrying out the Gap Analysis to kick-off their implementations. Rajasthan, Tamil Nadu, Meghayalya are among the states. Further, a high level team from Controller General of Accounts New Delhi (CGA) has visited the project; registered their acknowledgement on the success of project; and have expressed their desire to replicate similar project in their Country-wide operations.

With the implementation of treasury computerization, the system enforces daily tallying of accounts instead of tallying at the end of month and now accounts are submitted in time by the treasuries to the A.G. even before the due dates. The challans received by treasuries regarding State's dues paid are expeditiously reconciled with bank scrolls, ensuring immediate corrective actions. Finally, up to date data is available for financial decision-making. Staff can use its time more efficiently and handle greater volumes of work more professionally. Also, this has increased the motivational level in the organization and has made treasuries more accountable and transparent.

Source HERE

Saturday, December 13, 2008

Consolidated List of Hospitals & Digonstic centers empanalled with CGHS as on 10/12/2008

http://mohfw.nic.in/List%20of%20Empanelled%20Hospitals%20&%20DC.htm

ARC suggests lower age limit for civil services aspirants

Aarti Dhar
Only fewer attempts in exams should be allowed

NEW DELHI: The Second Administrative Reforms Commission (ARC) has recommended lowering of the upper age limit and reducing the number of attempts for civil services aspirants with some relaxations for reserved categories.

The Tenth report of the Commission on “Refurbishing of Personnel Administration — Scaling New Heights,” released here on Friday, suggested doing away with the present system of evaluation of performance based on annual confidential report (ACR). Instead, it came up with a concept of annual performance agreements to be signed between the Minister concerned and the Secretary or head of the department, providing physical and verifiable details of the work to be done during a financial year. The actual performance should be assessed by a third party.

Addressing a press conference, Commission chairperson M. Veerappa Moily said the panel favoured reducing the upper age limit for writing the civil services examination to between 21 and 25 for general candidates, 28 for the Other Backward Classes (OBC) and 29 for Scheduled Caste (SC) and Scheduled Tribe (ST) candidates as also those who were physically challenged.

The number of permissible attempts in the civil services examinations should be 3 years, 5 years and 6 years for the general candidates, OBC, and SC/ST and physically challenged aspirants, the panel has suggested.

At present, the upper age limit is 30 years for the general candidates with 4 attempts. But there are relaxations for the OBC and SC/ST aspirants.

According to the report, a Post-School Grooming System for civil services aspirants and a formal degree course in public policy would be of great help and also discourage the system of coaching centres which have tended to distort the formal education system.

While recommending the establishment of National Institutes of Public Administration to run degree courses in public administration, the report has said an expert committee should work out the modalities of the proposed system.

For a transparent system of appointments in the government, covering all ranks, the Commission has suggested the setting up of a Central Civil Services Authority. The panel is also in favour of introducing competition for all senior positions by opening these to services. The Authority, the panel says, should be a five-member body with the chairperson appointed by the President on the recommendations of the Prime Minister and the Leader of the Opposition to make it totally apolitical.

The Commission is of the view that in order to avoid any conflict of interest, government officials should not be allowed to go on deputation to private commercial organisations.

Periodic review

In order to increase accountability, the Commission suggested a periodic review of the performance for which it recommended a system of two intensive reviews — one on completion of 14 years of service and the other on completion of 20 years. The first review will primarily serve the purpose of intimating individual about his/her performance and the second is mainly to assess the fitness of the officer for his/her future continuation in service. The employees found unfit after 20 years should be dispensed with and a provision in this regard should be made in the proposed Civil Services Law, Mr. Moily has said.

Courtesy : The Hindu

Friday, December 12, 2008

Exchange Rate Variation (ERV)

In case of a contract involving substantial import content(s) and having a long delivery period (exceeding one year from the date of contract), an appropriate Foreign Exchange Variation clause may be formulated by the Purchase Organization in consultation with its Finance Wing, as needed, and incorporated in the Tender Enquiry Document. In that clause, the tenderers are to be asked to indicate import content(s) and the currency(ies) used for calculating the value of import content(s) in their total quoted price, which (i.e. the total quoted price) will be in Indian Rupees. The tenderers may be asked to indicate the Base Exchange Rate for each such foreign currency used for converting the FE content into Indian Rupees and the extent of foreign exchange rate variation risk they are willing to bear. To work out the variation due to changes (if any) in the exchange rate(s), the base date for this purpose will be the due date of opening of tenders/seven days prior to the due date of opening of tenders …….. (the purchase organization is to decide and adopt a particular suitable date). The variation may be allowed between the above base date and the date of remittance to the foreign principal/mid-point of manufacture of the foreign component/….. (the purchase organization is to choose the appropriate date). The applicable exchange rates as above will be according to the TT Selling Rates of Exchange as quoted by authorized Exchange Bankers approved by the Reserve Bank of India on the dates in question. No variation in price in this regard will be allowed if the variation in the rate of exchange remains within the limit of plus/minus ……. percent. (The purchase organization is to decide the figure). Any increase or decrease in the Customs Duty by reason of the variation in the rate of exchange in terms of the contract will be to the buyer’s account. In case Delivery period is refixed/ extended, ERV will not be admissible, if this is due to default of the supplier. The purchase organization may formulate an appropriate ERV clause on similar lines as above in consultation with their Finance Wing.” The following documents should be furnished by the supplier for claiming ERV:
(a) A bill of ERV claim enclosing working sheet
(b) Banker’s Certificate/debit advice detailing F.E. paid, date of remittance and exchange rate
(c) Copies of import order placed on supplier
(d) Invoice of supplier for the relevant import order

Thursday, December 11, 2008

Performance Security

To ensure due performance of the contract, Performance Security is to be obtained from the successful bidder awarded the contract. Performance Security is to be obtained from every successful bidder irrespective of its registration status etc. Performance Security should be for an amount of five to ten per cent. of the value of the contract. Performance Security may be furnished in the form of an Account payee Demand Draft, Fixed Deposit Receipt from a Commercial bank or Bank Guarantee from a Commercial bank in an acceptable form safeguarding the purchaser’s interest in all respects. Performance Security is to be furnished by a specified date (generally 21 days after notification of the award) and it should remain valid for a period of 60 days beyond the date of completion of all contractual obligations of the supplier, including warranty obligations.
Submission of Performance Security is not necessary for a contract value upto Rs.1 lakh.
Forfeiture of Performance Security
Performance security is to be forfeited and credited to the purchase organization in the event of a breach of contract by the supplier, in terms of the relevant contract.
Refund of Performance Security
Performance Security should be refunded to the supplier without any interest, whatsoever, after it duly performs and completes the contract in all respects but not later than 60 days of completion of all such obligations under the contract.
Verification of the Bank Guarantees
Bank Guarantees submitted by the tenderers / suppliers as EMD / Performance Security need to be immediately verified from the issuing Bank before acceptance.

Wednesday, December 10, 2008

India Google Zeitgeist page

Here is a look at 2008 through the collective eyes of the Indian users on the web. The Zeitgeist offers a unique perspective on the year's major events and hottest trends based on searches conducted by users in India. While developing the 2008 report, Google looked at various aspects of these searches to understand what was on Internet users minds. We retrieved the most frequently-searched terms for the period across many categories like Bollywood Celebrities, Holiday destinations etc. In addition we also looked at the top 10 fastest rising search words in India. This was done by reviewing several thousands of 2008's most popular searches and ranking them based on how much their popularity increased compared to 2007. Taken together, we believe that all these lists define the true Zeitgeist or the "spirit of the times." In addition, for the first time this year we are offering a unique insight into the mobile web, by including the top queries searched for on the mobile.

Fastest Rising

  1. youtube
  2. orkut
  3. katrina kaif
  4. cricket
  5. irctc
  6. facebook
  7. genelia d'souza
  8. beijing 2008 olympic games
  9. sixth pay commission
  10. ipl

Most Popular

  1. orkut
  2. gmail
  3. yahoo
  4. google
  5. youtube
  6. yahoomail
  7. indian railways
  8. rediff
  9. cricket
  10. katrina kaif

Top searches on Mobile

  1. orkut
  2. yahoo
  3. waptrick
  4. gmail
  5. games
  6. katrina kaif
  7. rediffmail
  8. yahoomail
  9. namitha
  10. google

Top Bollywood Celebrities

  1. katrina kaif
  2. aishwarya rai
  3. salman khan
  4. hrithik roshan
  5. kareena kapoor
  6. shahid kapur
  7. deepika padukone
  8. shahrukh khan
  9. mallika sherawat
  10. genelia d'souza

Top holiday destinations

  1. goa
  2. kerala
  3. kashmir
  4. dubai
  5. singapore
  6. australia
  7. london
  8. shimla
  9. switzerland
  10. manali

Top 'how to' searches

  1. how to reduce weight
  2. how to kiss
  3. how to earn money
  4. how to get pregnant
  5. how to learn english
  6. how to gain weight
  7. how to play guitar
  8. how to create a website
  9. how to impress a girl
  10. how to tie a tie

Laws relating to Arbitration & Conciliation (both Domestic & International)

The Arbitration and Conciliation Act, 1996 is the prime legislation relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards and also to define the law relating to conciliation and for matters connected therewith or incidental thereto. It repealed the three statutory provisions for arbitration:- (i) the Arbitration Act, 1940; (ii) the Arbitration (Protocol and Convention) Act, 1937; and (iii) the Foreign Awards (Recognition and Enforcement) Act, 1961.

Domestic Arbitration is defined as an alternative dispute resolution mechanism in which the parties get their disputes settled through the intervention of a third person and without having recourse to the court of law. It is a mode in which the dispute is referred to a nominated person who decides the issue in a quasi-judicial manner after hearing both sides. Generally, the disputing parties refer their case to an arbitral tribunal and the decision arrived at by the tribunal is known as an 'award'.

While, the term 'international commercial arbitration' means "an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in India and where at least one of the parties is:- (i) an individual who is a national of, or habitually resident in, any country other than India; or (ii) a body corporate which is incorporated in any country other than India; or (iii) a company or an association or a body of individuals whose central management and control is exercised in any country other than India; or (iv) the Government of a foreign country".

The major provisions relating to Arbitration in the Act are:-

* The parties to a present dispute may make an agreement called as the 'arbitration agreement' that instead of going to the court, they shall refer the dispute to arbitration. The parties to the agreement may refer to arbitration, a dispute:-

o Which has arisen or which may arise between them,
o In respect of a defined legal relationship, whether contractual or not.

Thus, all matters of civil nature whether they relate to present or future disputes may form the subject matter of reference. Even disputes such as infringement of intellectual property rights shall also be covered.
* Although no formal document is prescribed, an arbitration agreement/clause must be in writing. If the arbitration agreement/clause is contained in a document, the document must be signed by the concerned parties. Besides, the agreement may be established by:- (i) an exchange of letters, telex, telegram or other means of telecommunications; or (ii) an exchange of statements of claims and defence in which the agreement is alleged by one party and is not denied by the other.
* The disputes that cannot be referred to arbitration are:-
o Insolvency proceedings.
o Lunancy proceedings.
o Proceedings for appointment of a guardian to a minor.
o Question of genuineness or otherwise of a will or matter relating to issue of a probate.
o Matter of criminal nature.
o Matters concerning public charitable trusts.
o Disputes arising from and founded on an illegal contract.
* The agreement mandatorily requires the appointment of an arbitrator. An arbitrator is a person appointed, with or without mutual consent of the contending parties, for the purpose of investigation and settlement of a difference or dispute referred to him. The arbitral tribunal may be constituted by one or more arbitrators. The parties are free to fix the number of arbitrators by agreement. Accordingly, the reference may be made either to a single arbitrator or a panel of odd number (i.e. 3,5,7 etc) of arbitrators. If there is no agreement, the reference shall be made to a sole arbitrator.
* Unless otherwise agreed by the parties, an arbitrator may be of any nationality. In case of an international commercial arbitration, where the parties belong to different nationalities, the Chief Justice of india may appoint an arbitrator of a nationality other than that of the parties.
* The parties are free to agree on a procedure for appointing the arbitrator or arbitrators. If there is such an agreement, the appointment has to be made in accordance with it. The agreement may provide for the number of arbitrators, qualifications of arbitrator, procedure of appointment, procedure of challenging the appointment, termination of appointment, procedure to be followed by arbitrators, place of arbitration, language, etc.
* The duties of the Arbitral Tribunal are:- (i) to act independently and impartially and treat the parties equally; (ii) to give each party full opportunity to present his case.
* The parties may agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings. In the absence of such agreement, the arbitral tribunal may conduct the proceedings in the manner it considers appropriate and shall be empowered to determine the admissibility, relevance, materiality and weight of any evidence. The tribunal shall decide whether to hold oral hearings for presentation of evidence or for oral argument, or whether to conduct the proceedings on the basis of documents and other materials.
* An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal. The award shall state its date and place of arbitration. The arbitral award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or in case of award on a settlement between the parties. A signed copy of the award shall be delivered to each party.
* An arbitral award is itself enforceable as a decree of the court, normally after three months from the date on which it was received by the parties, provided no application for setting aside the award is made or if it is made the same has been rejected. The arbitral award shall be final and binding on the parties and persons claiming under them respectively.
* The arbitral proceedings shall be terminated when:-
o The final arbitral award is made,
o The claimant withdraws his claim, and the respondent does not object to it,
o The parties agree on the termination,
o The continuation of proceedings has for any other reason become unnecessary or impossible.

The Arbitration and Conciliation Act provides statutory recognition to conciliation as a distinct mode of dispute settlement. Conciliation is defined as the process of amicable settlement of disputes by the parties with the assistance of a conciliator. It differs from arbitration in the sense that in arbitration the award is the decision of the third party or the arbitral tribunal, while in the case of conciliation the decision is of the parties which is arrived at with the mediation of the conciliator.

The major provisions relating to Conciliation in the Act are:-

* A party initiating the conciliation shall send a written notice to the other party, briefly identifying the subject of the dispute and inviting it for conciliation. The conciliation proceedings shall commence on acceptance of invitation by the other party. If the party initiating conciliation does not receive a reply within 30 days from the date the invitation was sent or within the specified period, it may opt to treat this as a rejection and inform the same to the other party. If it rejects the invitation, there can be no conciliation proceeding.
* Unless otherwise agreed there shall be one conciliator. The parties may however, agree that there shall be two or three conciliators, who shall act jointly. The sole conciliator shall be appointed by mutual consent of the parties. In case of two conciliators, each party may appoint one conciliator. In case of three conciliators, each party may appoint one conciliator and the third conciliator may be appointed by mutual agreement of the parties who shall act as the presiding conciliator. However, the parties may agree that a conciliator shall be appointed or recommended by an institution or a person.
* Each party shall submit to the conciliator a brief written statement describing the general nature of the dispute and the points at issue. A copy of the same shall be sent to the other party. The conciliator may require of each party to send a detailed statement supported by documents and other evidence, a copy whereof shall be sent to the other party also. Any factual information concerning the dispute received by the conciliator from a party, shall be disclosed to the other party to allow it an opportunity to present any explanation, except however, when a party gives any information subject to a condition that should be kept confidential.
* The parties involved shall co-operate with the conciliator in good faith, comply with requests for submitting written materials, providing evidence and attending meetings. A party may submit to the conciliator suggestions for the settlement of the dispute.
* The functions of a Conciliator are:-
o To assist the parties in an independent and impartial manner, to reach an amicable settlement of their dispute.
o To be guided by principles of objectivity, fairness and justice.
o To give consideration to rights and obligations of the parties, trade usages, circumstances surrounding the dispute and any previous business practice between the parties.
o To conduct the conciliation proceedings in an appropriate manner, taking into account the circumstances of the case and wishes of the parties.
o To make proposals for a settlement of the dispute.
o Not to act as an arbitrator or as a representative of a party in any arbitral or judicial proceeding in respect of the same dispute, unless otherwise agreed by the parties.
o Not to act as a witness in any arbitral or judicial proceedings.
* If it appears to the conciliator that a settlement is possible, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. The conciliator shall then reformulate the possible settlement in the light of observations received from the parties. If the parties reach on a settlement, they may draw up and sign a written settlement agreement with the assistance of the conciliator. The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties. The settlement agreement shall be final and binding on the parties and shall have the same effect as of an arbitral award.
* The conciliation proceedings shall be terminated when:-
o A settlement agreement is signed by the parties,
o A written declaration is made by the conciliators after consultation with the parties, that further efforts at conciliation are no longer justified,
o A written declaration is made by the conciliator, after the deposits required in relation to costs of the proceedings are not received from the parties, that the proceedings are terminated,
o A written declaration is made by the parties to the conciliator, that the conciliation proceedings are terminated,
o A written declaration is sent by a party to the other party and the conciliator, that the conciliation proceedings are terminated.

'Foreign Award' has been defined to mean "an award on differences between persons arising out of legal relationships, whether contractual or not and considered as commercial under the law in force in India, and made in pursuance of an agreement in writing for arbitration to be governed either by the New York Convention or by the Geneva Convention, in the territory of a notified foreign State". Some of the provisions of the Act relating to foreign award are:-

* Where a commercial dispute covered by an arbitration agreement to which either of the Convention apply, arises before a judicial authority in India, it shall at the request of the party be referred to arbitration.
* The party applying for the enforcement of a foreign award shall produce the original award or a duly authenticated copy thereof, the original arbitration agreement or a certified copy thereof, and evidence to prove that the award is a foreign award.
* If the court is satisfied that the foreign award is enforceable, the award shall be deemed to be a decree of the court. An appeal shall lie against the order of the court refusing to refer the parties to arbitration or refusing to enforce a foreign award.
* Any foreign award which is enforceable under the Act, shall be binding and may be relied upon by the parties by way of defence, set off or otherwise in any legal proceedings in India.

Tuesday, December 9, 2008

Rate of Interest for GPF/CPF 2008-09

Rate of Interest on Conveyance Advance 2008-09

Liquidated Damages - Applicability and Enforceablity

Liquidated Damages - Applicability and Enforceablity

P. C. Markanda*

INTRODUCTION

In all building and engineering contracts, it is invariably provided that the subject work shall be completed within the stated time. In order to ensure that the objective is achieved, the parties agree between themselves that a certain percentage of the amount of the whole work shall be completed at different defined stages. It is also provided that default in achieving the target by the contractor at any of the defined stages would attract action by the employer in terms of the liquidated damages clause contained in the contract.

The contracts generally provide that the contractor at 1/4 th, 1/2 and 3/4th stages of the work shall achieve defined progress. If at one-fourth stage, the contractor fails to give progress as agreed, the employer can levy liquidated damages, after observing the requisite formalities, or can, alternatively, call upon the contractor to make up the progress in a period to be given in the notice, failing which a right can be reserved by the employer to levy liquidated damages. Similar action can be initiated after the expiry of half or three-fourth of the stipulated period.

The purpose of inserting liquidated damages clause is only to ensure that the contractor shall execute the work with due diligence and in a workmanlike manner and strive to complete the whole work as given in the contract within the stipulated time. It must be remembered that the stipulation with regard to liquidated damages is not at all aimed to provide revenue to the employer. It is thus, desirable that recourse to imposition of liquidated damages should be taken only in extreme cases. It must be understood that by realising the amount of liquidated damages, the employer is not only reducing the working capacity of the contractor but is also running the risk of bringing the work to a complete halt. Many legal and financial complications can and do arise consequently. There may be an injunction from the Courts restraining the employer from proceeding with the work further pending' decision of the case. In addition, the risk of additional financial burden due to efflux of time has also to be borne in mind by the employer.

In many cases the time fixed by the contract ceases to be applicable on account of some act or default of the employer or his architect or engineer. A provision is, therefore, generally inserted in order to avoid such acts or defaults destroying the right to liquidated damages, by which the architect or engineer is empowered to grant an extension of time on the happening of certain specified events, and the contractor is bound, when such an extension of time has been properly granted to complete within the extended time. This has the effect of substituting for the time fixed by the contract a new date from which the liquidated damages are to run. Such a new date can only be substituted for the original time, under such a power, where the extension is given under the circumstances and on the happening of the events expressly provided by the contract. (1)

MERE USE OF WORDS "LIQUIDATED DAMAGES" AND "PENALTY"' IN A CLAUSE NOT TO BE DECISIVE

The question that arises is as to what is meant by liquidated damages, and secondly, whether or not the stipulation in the contract is in fact for penalty or liquidated damages. Under Common Law, a genuine pre-estimate of damages by mutual agreement was regarded as a stipulation for liquidated damages, a stipulation in contract in ierrorem is a penalty and the Court refuses to enforce it, awarding to the aggrieved party only reasonable compensation

The use of the term penalty or liquidated damages by itself is not decisive, even what is described as liquidated damages could turn out to be penalty on the face of given case. The essence of penalty is a sum paid as in terroem while the essence of liquidated damages is a genuine covenanted pre-estimate of damages. A penal stipulation cannot be enforced. Liquidated damages must be the result of a genuine pre-estimate of damages and they do not include a sum fixed in terrorem. The question Is one of construction of a contract to be judged as at the tim c it was made, and mere description as penalty or liquidated damages though relevant is not binding.

The Indian Legislature has sought to cut across the web of rules and presumptions under the EngIish Common Law by enacting a uniform principle applicable to all stipulations naming amounts to be paid in case of breach, and stipulations by way of penalty. (3)

Sometimes it becomes difficult to make out whether the sum named in a clause is a penalty or liquidated damages. In such a case, the Court must take into consideration the intention of the parties, as evidenced by their language and the circumstances of the case. (4)

Mere use of the word "penalty" in a liquidated damages clause would not make the stipulation penal. If the sum named is not in terrorem it would be regarded as liquidated damages despite the fact that it had been given the name "penalty" in the contract.

Where in a contract for electric lighting installation it was provided that the work should be "completed in all respects on or before 26 November, 1898, subject to a penalty of 15 pounds per day, and the Plant by 10 December, subject to a penalty of 3 pounds per day the work remains unfinished to the satisfaction of the authorities or the Engineer, it was held that although the word penalty was used, the amounts accrued owing to the default of the contractor were, in fact, liquidated damages. (5)

On the other hand, if the sum named in the agreement is its lerrorem but has been stipulated to be liquidated damages in the contract, it will not be given effect to by the Courts since, in fact, it is in the nature of penalty.

Where the employer determined the contract on account of alleged breaches by the contractor, and clause 30 of the contract provided that in the event ofthe determination for breach, "all implements of the contractor used in the carrying out of the contract and all materials provided by him.... shall become the sole and absolute property of the employer and shall be considered as unaseertained damages for breach of contract", it was held that the clause was a penalty clause and not a liquidated damages clause.(6)

DISTINCTION BETWEEN LIQUIDATED DAMAGES AND PENALTY

Sometimes there is a very thin line dividing provisions relating to liquidated damages and penalt,.. A distinction as to whether the stipulation is one by way of liquidated damages or penalty has been summed up by the House of Lords in Dunlop Pnumatic. Tyre Co. Ltd. Vs New Garage and Molor Company Ltd. (7) as follows:

    A. The parties who use the expression `penalty' or liquidated `damages' may prima facie mean what they say, yet the expressions are not conclusive.

    B. The essence of a penalty is a payment of money in terrorem of an offending party; the essence of liquidated damages is a genuine pre-estimate of damayes.

    C. The question whether a sum is a penalty or liquidated damages is a matter of construction of the particular contract, to be judged at the time of its and not at the time of its breach.

    D. To assist in this task of construction, various tests have been suggested, which if applicable to the case under construction may prove helpful or even conclusive. Some such tests are -

      i) the sum stipulated shall be a penalty if it is extravagant and unconscionable in amount in comparison with greatest loss that could conceivably be proved to follow from breach.

      ii) it would be a penalty if breach consists only in not paying sum of money and sum stipulated is greater than sum which ought to have been paid;

      iii) presumption (but no more) that it is a penalty when single sum made payable by way of compensation, or occurrence of one or more or all of such events, which may occasion serious damage or trifling damage, on the other hand; and

      iv) no obstacle to sum stipulated being a genuine pre-estimate of damage that consequences of breach are such as to make precise pre-estimation almost impossible. On the contrary, that is the situation when probably the pre-estimated damage was true bargain between parties.

A building contract contained a proviso that in case the contract should not in all things be duly performed by the contractors they should pay 1000 pounds as liquidated damages. Held, this was a penalty and not liquidated damages. (8)

If in making a provision for breach of contract, the promisee stipulates that the promisor on the breach only, shall pay such compensation as the Court would deem reasonable in the circumstances of the case, then there is no penalty and the stipulation is not penal. But, if on the other hand, the Court, after a proper consideration of the facts of the case, come to the conclusion that the stipulation was put in not by way of reasonable compensation to the promisee but in order that by reason of its burdensome or oppressive character it may operate i . Pi terrorem over the promisor so as to drive him to fulfill the contract, then such a stipulation is by way of penalty. (9)

The parties to a contract may at the time of entering into it provide, that in case of breach the party in default is to pay to the other a sum certain provided in, or ascertainable from, the contract. This sum may be either liquidated damages, in which case it is not to be interfered with by the Court, or a penalty, which covers the loss if proved but does not assess it. If it is a sum which can be regarded as a genuine pre-estimate by the parties of the loss which they contemplated would flow from the breach, it is liquidated damages. If, on the other hand, the sum does not attempt to assess the loss, but is imposed as security for the due performance of the contract, it is a penalty. Liquidated damages, therefore, are pactional damages agreed to between the parties. Therefore, the essence of a penalty is a payment of money stipulated as in terrorem of the offending party; the essence of liquidated damages is a genuine covenanted, pre-estimate of damage. (10)

WHEN LIQUIDATED DAMAGES TREATED AS COMPENSATION FOR DELAY

In certain cases, the Courts have treated the liquidated damages as compensation for delay caused by the contractor in completing the work. By way of illustration, reference may be made to the two cases which are as under:

(A) The erectors of a silk reducing plant covenanted to pay 20 pounds a week- for every week exceeding eighteen weeks occupied in the erection of the plant. The, period was greatly exceeded, and the silk company contended that this sum was a penalty and that they were entitled to much larger sum as unliquidated damages. Held, the sum of 20 pounds a week was intended by the parties to be the agreed measure of damages as the erectors had declined to be responsible for delay and the sum was provided in place of no compensation and was not a pre-estimate of actual damages, but was an agreed amount to go towards compensation for delay.(11)

(B) Where a contractor entered into a contract with the Government for supply of materials before a specified date for the repair and construction of roads and the parties were aware that the construction work was a matter of extreme urgency and was to be completed with the help of materials to be supplied by the contractor before the specified date, otherwise the construction work would be held up and the Government would suffer loss and damages and also the parties knew before hand that if the contract would not be performed to its completion, it would not be possible for the Government to lead evidence of actual loss and accordingly they assessed such loss on the basis of certain percentage of value of contract and where there was sufficient evidence to prove inlegal injury suffered by the Government by reason of the breach of the contract and also to show that if any other contractor had been employed at that stage, the Government would have suffered certain loss and damage thereby the amount assessed and mentioned in the contract cannot be said to have been assessed by way of penalty but was a genuine pre-estimate of the loss which was to be suffered by the Government in case of failure on the part of the contractor to deliver the materials before the due date mentioned in the contract. Hence, the amount mentioned in the contract would be payable as liquidated damages. (12)

DAMAGES NOT PAYABLE WHEN LIQUIDATED DAMAGES LEVIED

The parties when entering into a contract presuppose that the employer shall not commit any breach of conditions of contract and shall under all circumstances give effect to the stipulations contained in the contract. This is probably the only reason why the contract does not provide a yardstick for measuring damages which the contractor suffers like the manner it is so provided in case of liquidated damages. Thus, the only remedy available to the contractor in case of breach of contract by the employer is to submit his claim for damages to the arbitrator if the contract provides for arbitration in case of disputes between the parties but if there be no arbitration clause, then to file a civil suit. The question whether the employer in addition to the amount stated in the liquidated damages clause, is entitled to damages has been answered in Sir Chunilal V. Mehta and Sons Ltd. Vs Century Spinning and Manufacturing Co. Lid. (13) in the following terms:

"Where the parties name in a contract reduced to writing a sum of money to be paid as liquidated damages they must be deemed to exclude the right to claim an unascertained sum of money as damages. The right to claim liquidated damages is enforceable under section 74 of the Contract Act and where such a right is found to exist no question of ascertaining damages really arises. Where the parties have deliberately specified the amount of liquidated damages there can be no presumption that they at the same time intended to allow the party who has suffered by the breach to give a go by to the sum specified and claim instead a sum of money which was not ascertainable or ascertainable at the date of the breach."

The effect of section 74 of the Indian Contract Act is that a party cannot get the full amount mentioned in the contract as a matter of absolute right or as a matter of course. But if the party proves that he has suffered damage to the extent of the full amount or that the Court considers, even without any proof that the full amount is a reasonable compensation which can be awarded under the circumstances, the Court can award the full amount. One thing is however certain, that.the party is entitled to get some amount, not exceeding the sum named, which the Court considers as reasonable compensation, whether any actual loss or damage is proved to have been suffered by him. (14)

SITUATIONS WHERE LIQUIDATED DAMAGES CANNOT BE REALISED

Realisation of liquidated damges from the contractor is not a matter of course There may be circumstances when the employer loses the right to recover the same from the contractor.

Liquidated damages cease to be payable where the employer has waived the right to insist upon them. e.g. where he has failed to deduct or retain them in cases where it is imperative on his part under the contract to do so.(15)

Where the liquidated damages are stipulated for at so much per day or per week. there must be a definite date from which they are to run. If no such date is fixed by the contract, or if by the operation of intervening circumstances the date fixed by the contract has ceased to be operative and there is no provision in the contract by which another date can be substituted, all rights to recover the sum stipulated for as liquidated damages have gone.(16)

A contractor was delayed and failed to complete the contract on time, partly because of his fault and partly because the employer was late in the delivery of certain fixtures in the building. The employer sued the contractor under a liquidated damages clause for a per diem payment of each day's work overdue. Held, the failure of the employer to deliver precluded him from relying on the penalty clause, notwithstanding that the contractor may have been overdue in any event, in the absence of evidence that the contract could have been completed in time by a special effort on the part of the contractor.(17)

When the contractor had not finished the work by the date fixed in the agreement and the State allowed him to continue and complete it and final bill was prepared without imposing any penalty in terms of contract soon after the contractor's failure to complete by fixed date or rescinding the contract or getting work completed by other contractor, the State was not entitled to compensation as it must be deemed to have waived its right to fix it and recover the same from the contractor.(18)

When a clause in the agreement provides that compensation shall be deducted from time to time as the delay would occur during the progress of the work, non-levy of the same by the Chief Engineer would amount to waiver of his right to fix the compensation and to recover the same from the contractor.(19)

There are many ways in which completion of the works within the contract time may be prevented by the act or default of the employer, as, for instance, by ordering extras.' by not providing the site at the appropriate time; by failure to supply drawings when required by the contractor, or by failing to supply materials which the employer has agreed to provide. Where the effect of extras being ordered by the employer is to cause delay to the contractor, it is clear that, in the absence of special stipulations in the contract, the date fixed for completion is made inapplicable and the contractor is relieved from his liability to pay liquidated damages for delay.(20)

Where a clause in a contract provided for imposition of penalty if work was not done with due diligence, and the delay occurred due to failure of the department in supplying the stipulated material in time which had been duly intimated from time to time, and even the request of the contractor for grant of extension of time had not been rejected by the department, it was held that imposition of penalty. for delay. cannot be justified.(21)

LIQUIDATED DAMAGES RECOVERABLE ONLY WHEN LEGAL INJURY SUFFERED

The question whether the employer can recover the amount specified in the contract by way of iquidated damages without proving that there had been "legal injury" has been answered in some decided case. In Fateh Chand Vs Balkishan Das (22), the Supreme Court of India has held that Section 74 of the Indian Contract Act undoubtedly says that the aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of "actual loss or damage". however it does not justify the award of compensation when in consequence of the breach no legal injury at all has resulted, because compensation for breach of contract can be awarded to make good loss or damage which naturally arose in the usual course of things. or which the parties knew when they made the contract, to be likely to result from the breach.

Section 74 of the Indian Contract Act, 1872 does not dispense with the basic condition of the breach resulting in any loss or damae which can be called "legal injury". The party complaining of breach of contract and claiming compensation is entitled to succeed only on proof of "legal injury" having been sustained on account of such breach. The words in Section 74 "whether or not actual damage Or loss is proved to have been caused thereby" have been employed to underscore the departure deliberately made by the Indian Legislature from the complicated principles of English Common Law and also to emphasize that reasonable compensation can be granted even in a case where extent of actual loss or damage is incapable of proof or not proved. Thus, Section 74 deliberately states that what is to be awarded is a reasonable compensation. In a case where the party complaining has not suftered legal injury in the sense of sustaining loss or damage, there is nothing to compensate him, for there is nothing to recompensate, satisfy or make amends. Therefore, he will not be entitled to compensation.(23)

Where the Chief Engineer has very categorically stated that on account of the delay on the part of the contractor in completing the work, there occasioned, in fact, no loss to the Government. compensation cannot be granted by the Courts even if a sum is named in the contract as payable in the event of breach of contract.(24)

In Michel Habib Raji Ayoub Vs Sheikh Suleman EI Taji Forouqui (25), it was observed as under:

"Agreed liquidated damages, if to be enforced must be the result of a genuine pre-estimate of damages' to use the illuminating phrase of LORD DUNREDIN. They do not include a sum fixed in terrorem covering breaches of contract of many varying degrees of importance the possible damages from which bear no relation to the fixed sum, which obviously have at no time been estimated by the contracting parties. It seems right therefore to conclude that now when the code is applied to contracts `damages' will be taken to mean actual damages, and the article will only apply to an agreement which represent a genuine pre-estimate of damages'. Where there is such an agreed sum `no more and no less' can be awarded. But if the Court applying well-known rules has to conclude that the sum agreed was a penalty, whatever it may be called in the agreement, then the penal stipulation shall not be enforced."

SECURITY DEPOSIT CANNOT BE FORFEITED WHEN LIQUIDATED DAMAGES LEVIED

The question whether security deposit of the contractor can also be forfeited when the employer has already exercised its right of recovering liquidated damages has been answered by the Courts in India. Some of the cases relating to this aspect of the matter are as under:

Where on failure of contractor to complete the work within time, the Government in accordance with conditions of contract debited the contractor with actual cost which was spent in getting unfinished work done and forfeited the security amount also, it was held that as the Government did not suffer any damage in consequence of default, it was not entitled to forfeit security deposit inasmuch as forfeiture of security deposit, would amount to imposition of penalty.(26)

The party to the contact taking a security deposit from the other party to ensure due performance of the contract is not entitled to forfeit the security deposit on the ground of default, when no loss is caused to him in consequence of such default.(27)

When in a works contract, the contractor undertook to complete the work within 3 months and on default to forgo the deposit and the building having been completed late without any loss to the department, it was held that the department could not forfeit the deposit and at best could claim reasonable compensation.(28)

A provision in the contract between the contractor and the government cast a duty on the contractor to finish the work within the specified time and if he failed to do so, the Divisional Engineer was given a discretion to cancel the contract and employee some other person to execute the remaining portion thereof The Division Engineer could also recover from the contractor any extra cost that such proceeding might entail or he might allow the contractor to complete the work chasing for each day for the work unfinished by him a penalty. The contractor not having completed the work within the stipulated time, the Government cancelled the contract. The government did not give the work to any other person nor did it allow the contractor to complete it. No notice was given to the contractor before the cancellation of the contract. The government, however, forfeited the earnest money and the security deposit which were deposited by the contractor, on the condition that the amount would be returned to the contractor upon completion of the work It was held that thought the government was entitled to cancel the contract, it had not followed the formalities laid down in the stipulations of the contract and therefore would not be entittled to forefeit the earnest moneyh and further security deposit (29).

Where in a contract between the State government and the contractor. power had been conferred upon the Executive Engineer to grant extension from time to time and for levying and recovering penalty/compensation from the contractor at specified rates for the unfinished work after expiry of the fixed date, it was held that on rescission of, such contract by Government without fixing any further period was illegal and State Government committed a breach of contract and consequently the security deposit of the contractor could not be forfeited.(30)

To justify forfeiture of advance deposit being part of price as "earnest", the terms of contract should be sufficiently explicit and made known to the party making the deposit. Thus, where the contents of the reply submitted by the receiver in the Court were not sutricient to hold that 1/4 th advance deposit of bid money was by way of earnest and as a guarantee for fulfillment of other terms of the contract so as to justify its forfeiture on the alleged breach on the part of the highest bidder, then in the absence of proof of any loss to the auctioning authority the advance deposited by the auction-purchaser could not be forfeited by the receiver as "eamest".(31)

CONCLUSION

Invocation of liquidated damages clause should be taken recourse to by the employer only in such cases where there can be no two opinions that the contractor does not have the capacity to do the work- nor he will be able to complete the work within a reasonable time after the time stated in the contract expires. Any action taken in a hurry would land the employer in problem. Some amount of restraint in proceeding against the contractor must be exercised. The contractor may have genuine problems which he could not have foreseen with reasonable diligence at the time of entering into contract. If the employer takes into consideration the fact that it does not pay the contractor to delay execution of work, then he has to investigate as to why delay is occurring. The employer must endevour to find solutions rather that saying that it is not his headache, since the aimed objective of the employer is to get the work completed rather than enter into any legal or financial complications.
Source Here

Extention of permission/ approval for reimbursement of cost of Neuro-implants



RBI FAQ On Pension

Payment of Pension to Government Pensioners

Scheme for Payment of Pension to Government Pensioners by Authorised Banks - Frequently Asked Questions (FAQs)

Reserve Bank of India monitors disbursement of pension by its agency banks in respect of all Central Government Departments (except the Department of Post) and certain State Governments. It has been receiving several queries/ complaints from pensioners in regard to fixation, calculation and payment of pension including revision of pension/ Dearness Relief from time to time, transfer of pension account from one bank branch to another, etc. We have analysed the queries/ complaints, rights and duties of pensioners and put the same in the form of answers to these Frequently Asked Questions. It is hoped that this will cover most of the queries/ doubts in the minds of pensioners.

1. Can the pensioner draw his/ her pension through a bank branch?

Yes. Even the Government employees earlier drawing their pension from a treasury or from a post office will have the option to draw their pension from the authorized bank’s branches.

2. Who is the pension sanctioning authority?

The Ministry/ Department /Office where the Government servant last served is the pension sanctioning authority. The pension fixation is made by such authority for the first time and thereafter the refixation of pay, if any, is done by the pension paying bank based on the instructions from the Central/ State Government authorities.

3. Is it necessary for the pensioner to open a separate pension account for the purpose of crediting his/ her pension in authorized bank?

The pensioner is not required to open a separate pension account. The pension can be credited to his or her existing savings/ current account maintained with the branch selected by the pensioner.

4. Can a pensioner open a Joint Account with his/ her spouse?

Yes. All Central Government Pensioners (except the pensioners of the Telecom Department) and those State Governments which have accepted such arrangement can open Joint Account with their spouses.

5. Whether Joint Account of the pensioner with spouse can be operated either by ''Former or Survivor" or " Either or Survivor".

The Joint Account of the pensioner with spouse can be operated either by ‘‘Former or Survivor" or “Either or Survivor".

6. What is the minimum balance required to be maintained in the pension account maintained with the banks?

RBI has not stipulated any minimum balance to be maintained in pension accounts by the pensioners. Individual banks have framed their own rules in this regard. However, some of the banks have also permitted zero balance in the pensioners’ accounts.

7. Who sends the Pension Payment Orders (PPOs) to the authorized bank branch?

The concerned pension paying authorities in the Ministries /Departments/ State Governments forward the PPOs to the bank branches wherefrom the pensioner desires to draw his/her pension.

8. When is the pension credited to the pensioner's account by the paying branch?

The disbursement of pension by paying branch is spread over the last four working days of the month depending on the convenience of the pension paying branch except for the month of March when the pension is credited on or after the first working day of April.

9. Can a pensioner transfer his/ her pension account from one branch to another branch of the same bank or to the branch of another bank?

(a) Pensioner can transfer his/ her pension account from one branch to another branch of the same bank within the same centre or at a different centre;

(b) He/ She can transfer his/ her account from one authorized bank to another within the same centre (such transfers to be allowed only once in a year);

(c) He/ She can also transfer his/ her account from one authorized bank to another authorized bank at different centre.

10. What is the procedure for payment of pension in the case of the transfer of PPO to another branch or bank, as the case may be?

Pension will be paid on the basis of the photocopy of the pensioner’s PPO at the transferee (new) branch from the date of the last date of payment made at the transferor (old) branch. During this time, both the branches (old and new) are required to ensure that all the required documents are received by the transferee branch within the period of three months.

11. Is it necessary for the pensioner to be present at the branch of the bank along with documents for the purpose of identification before commencement of pension?

Yes. Before the commencement of pension, a pensioner has to be present at the paying branch for the purpose of identification. The paying branch shall obtain the specimen signatures or the thumb/toe impression from the pensioner.

12. What is the procedure to be followed by the bank branch if the pensioner is handicapped /incapacitated and is not in a position to be present at the paying branch?

If the pensioner is physically handicapped/incapacitated and unable to present at the branch, the requirement of personal appearance is waived. In such cases the bank official visits the pensioner’s residence/hospital for the purpose of identification and obtaining specimen signature or thumb/toe impression.

13. Has the pensioner got right to retain half portion of the PPO for record and to get it updated from paying branch whenever there is a change in the quantum of pension due to revision in basic pension, dearness relief, etc.?

Yes. The pensioner has right to retain half portion of the PPO for record and whenever there is a revision in the basic pension/DR etc. the paying branch has to call for the pensioner's half of the PPO and record thereon the changes according to government orders/notifications and return the same to the pensioner.

14. Whether the paying branch has to maintain a detailed record of pension payments made by it in the prescribed form?

Yes. The pension paying branch is required to maintain a detailed record of pension payments made by it from time to time in the prescribed form duly authenticated by the authorized officer.

15. Can the pension paying bank recover the excess amount credited to the pensioner’s account?

Yes. The paying branch before commencement of pension obtains an undertaking from the pensioner in the prescribed form for this purpose and therefore, can recover the excess payment made to the pensioner's account due to delay in receipt of any material information or due to any bonafide error. The bank has also right to recover the excess amount of pension credited to the deceased pensioner’s account from his/ her legal heirs/nominees.

16. Is it compulsory for a pensioner to furnish a Life Certificate/Non-Employment Certificate or Employment Certificate to the bank in the month of November?

Yes. The pensioner is required to furnish a Life Certificate/Non – Employment Certificate or Employment Certificate to the bank in the month of November. However, in case a pensioner is unable to obtain a Life Certificate from an authorized bank officer on account of serious illness / incapacitation, bank official will visit his/her residence/ hospital for the purpose of recording the life certificate.

17. Can a pensioner be allowed to operate his/ her account by the holder of Power of Attorney?

The account is not allowed to be operated by a holder of Power of Attorney. However, the cheque book facility and acceptance of standing instructions for transfer of funds from the account is permissible.

18. Who is responsible for deduction of Income Tax at source from pension payment?

The pension paying bank is responsible for deduction of Income Tax from pension amount in accordance with the rates prescribed by the Income Tax authorities from time to time. While deducting such tax from the pension amount, the paying bank will also allow deductions on account of relief to the pensioner available under the Income Tax Act. The paying branch will also issue to the pensioner in April each year a certificate of tax deduction as per the prescribed form. If the pensioner is not liable to pay Income Tax, he should furnish to the pension paying branch, a declaration to that effect in the prescribed form (15 H).

19. Can old, sick physically handicapped pensioner who is unable to sign, open pension account or withdraw his/ her pension from the pension account?

A pensioner, who is old, sick or lost both his / her hands and, therefore, can not sign, can put any mark or thumb/ toe impression on the form for opening of pension account. While withdrawing the pension amount he/ she can put thumb/toe impression on the cheque/withdrawal form and it should be identified by two independent witnesses known to the bank one of whom should be a bank official.

20. Can a pensioner withdraw pension from his/ her account when he/ she is not able to sign or put thumb/toe impression or unable to be present in the bank?

In such cases, a pensioner can put any mark or impression on the cheque/ withdrawal form and may indicate to the bank as to who would withdraw pension amount from the bank on the basis of cheque / withdrawal form. Such a person should be identified by two independent witnesses. The person who is actually drawing the money from the bank should be asked to furnish his/ her specimen signature to the bank.

21. When does the family pension commence?

The family pension commences after the death of the pensioner. The family pension is payable to the person indicated in the PPO on receipt of a death certificate and application from the nominee.

22. How the payment of Dearness Relief at revised rate is to be paid to the pensioners?

Whenever any additional relief on pension/family pension is sanctioned by the Government, the same is intimated to the agency banks for issuing suitable instructions to their pension paying branches for payment of relief at the revised rates to the pensioners without any delay. The orders issued by Govt. Departments are also hosted on their websites and banks have been advised to watch the latest instructions on the website and act accordingly without waiting for any further orders from RBI in this regard.

23. Can pensioners get pension slips?

Yes. As decided by the Central Government (Civil, Defence & Railways), pension paying banks have been advised to issue pension slips to the pensioners in prescribed form when the pension is paid for the first time and thereafter whenever there is a change in quantum of pension due to revision in basic pension or revision in Dearness Relief.

24. Which authority the pensioner should approach for redressal of his/ her grievances?

A pensioner can initially approach the concerned Branch Manager and, thereafter, the Head Office of the concerned bank for redressal of his/her complaint. They can also approach the Banking Ombudsman of the concerned State in terms of Banking Ombudsman Scheme 2006 of the Reserve Bank of India (details available at the Bank’s website www.rbi.org.in) This is applicable only in respect of complaints relating to services rendered by banks. For other issues the complainant will have to approach the respective pension paying authority.

25. Where can a pensioner get information about the changes in the pension/ Dearness Relief or any pension related issue?

The pensioner can visit the Official Website of the concerned Government Department as also Reserve Bank of India Website (www.rbi.org.in) to get the information about pension related issues.