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Finance Code Chapter 11 Losses, Frauds & Embezzlements

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Summary

If the loss involves more than Rs.50,000/- Reporting to Railway Board - GM Should

Text of the circular

Finance Code Chapter 11 - Losses, Frauds, and Embezzlements
(Defalcation and Loss of Cash, Stores, or other Railway Property)
●
The Cardinal/fundamental principle applied in Losses, Frauds & Embezzlements is the
Canon of Financial Propriety -        That every Government servant should exercise the
same vigilance in respect of expenditure incurred from public money as a person of
ordinary prudence would exercise in respect of the expenditure of his own money
applied
●
Every Railway servant is personally responsible for:
1.
Any loss sustained by the Government through fraud or negligence on his /
her part; and
2.
Also for any loss arising from fraud or negligence on the part of any other
railway servant to the extent, it may be shown that he/she contributed to the
loss by his / her own action or negligence.
●
Defalcation (Misappropriation) or Loss of cash, stores & other property - On discovery -
Reported immediately to:
1.
Normal cases - Head of the Division (DRM) or Department (PHOD)
2.
Serious cases - GM
Reports are being sent simultaneously to the PFA, who will forward a copy to
PDA/DGA
●
Petty cases i.e., loss not exceeding Rs.10,000 - Need not be reported to PFA nor by him
to the PDA/DGA
●
If the loss involves more than Rs.50,000/- Reporting to Railway Board - GM Should
send a preliminary report (followed by a detailed report) within 6 weeks. Also, copy to
the PDA through PFA.
●
Detailed Report to be Send to Railway Board - Accompanied by
1.
Police Report
2.
Copy of proceedings of Departmental Enquiry Committee (loss of more than
Rs.50,000)
3.
Comments of the Railway Administration on all points brought out by the
Departmental Enquiry Committee

●
Prosecution of the offenders - In cases of losses involving a reasonable suspicion of
fraud or the criminal offence - duly seeking the advice of legal persons.
●
The amount to be recovered from railway servants - Limited to the railway servant’s
capacity to pay.
●
Pension once sanctioned cannot be reduced or withheld for misconduct
committed prior to Retirement. Hence, ensure that a Railway servant concerned in
any loss or irregularity, which is the subject of an inquiry, is not inadvertently allowed
to retire on pension while the inquiry is in progress.
●
Referred to Vigilance Officer - Cases of corruption and malpractice
●
Referred to SPE / CBI -Allegations of bribery, corruption, forgery, cheating, criminal
breach of trust, falsification of records, or other serious criminal offences or those
requiring expert police investigations such as possession of disproportionate assets or
cases in which a number of non-official witnesses are to be examined
●
Once a case is referred to SPE - Special Police Establishment (CBI - Central Bureau of
Investigation) for investigation - a parallel investigation by the Administrative authority
should be avoided.
Key Points for MCQ
1.
Reporting (of loss) immediately to DRM / PHOD, if it is a serious one, report to GM.
2.
Simultaneously copy send to PFA and by him to PDA (if the loss involves more than
Rs.10,000)
3.
If the loss involves more than Rs.50,000 - Reporting to Railway Board by the GM within
6 weeks through a preliminary report.
4.
SPE stands for Special Police Establishment
5.
CBI stands for Central Bureau of Investigation
6.
CBI is another name for SPE.
7.
CBI is established under the Delhi Special Police Establishment (DSPE) Act, of 1946
*******

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