I got appointed on compassionate grounds after the death of my father in a central government organization where my father used to work to help my family survive. My organization started a private deduction in the name of a cooperative bank, in which my father was a member, from my salary without my permission and without giving me any intimation of such deduction. When I asked my organization about this, they told me to contact the cooperative bank and said they would deduct the amount as per the bank's instruction. So, I contacted the bank, and they informed me that my father had a loan due, which I have to settle as I got the job on compassionate grounds.
After further investigation, I found that the bank has a rule stating that insurance cover and six guarantors are mandatory. When I asked the bank why there was a loan due if these rules were followed, they refused to provide any clarification. I informed my organization about the entire case, and then they referred me to a statement mentioned in the loan form, which stated that after the death of the loanee, if the loan amount is due, it should be settled from the gratuity and PF of the deceased. Further, if the amount is still due, it should be deducted from the salary of the family member appointed in the organization on compassionate grounds without giving them any intimation.
Based on this, the bank is sending deductions to my organization, and my organization is blindly processing them without checking the authenticity and details of the matter.
Is it possible for a central government organization to make such a private deduction without an employee's permission? Please suggest any solutions to the problem I am facing financial burden due to this.
From India, Kanpur
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1After further investigation, I found that the bank has a rule stating that insurance cover and six guarantors are mandatory. When I asked the bank why there was a loan due if these rules were followed, they refused to provide any clarification. I informed my organization about the entire case, and then they referred me to a statement mentioned in the loan form, which stated that after the death of the loanee, if the loan amount is due, it should be settled from the gratuity and PF of the deceased. Further, if the amount is still due, it should be deducted from the salary of the family member appointed in the organization on compassionate grounds without giving them any intimation.
Based on this, the bank is sending deductions to my organization, and my organization is blindly processing them without checking the authenticity and details of the matter.
Is it possible for a central government organization to make such a private deduction without an employee's permission? Please suggest any solutions to the problem I am facing financial burden due to this.
From India, Kanpur
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This was a condition of the loan granted by the Cooperative Bank, and hence it has some force. Your organisation is bound by the advice tendered by the Bank and has to follow it; otherwise, it will be acting against banking regulations. So going to the organization will not be of much help.
You have the option to approach the Civil Court of jurisdiction and seek a mandatory injunction against the recovery and try your chances.
From India, Mumbai
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You have the option to approach the Civil Court of jurisdiction and seek a mandatory injunction against the recovery and try your chances.
From India, Mumbai
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To my opinion, this is an absolutely illegal system. No loan can be adjusted from any employee's PF & Gratuity without any appropriate Court Order. Similarly, the loan of the father should not be deducted from the son's salary without the consent of the son or any appropriate court order.
Please seek an opinion from a good advocate and act accordingly. The agreement between the Cooperative bank and the organization, in my opinion, is not valid in law.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions
From India, New Delhi
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Please seek an opinion from a good advocate and act accordingly. The agreement between the Cooperative bank and the organization, in my opinion, is not valid in law.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions
From India, New Delhi
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Formally (in writing), is the bank aware of the death?
What was the type of loan? Credit cards, EMI, Home loan, Secured/unsecured/insured loan?
The biggest mistake is that the bank is not formally aware of the death, and they assume that the individual is defaulting on the loan.
Worry not, here is a simple solution: You should send a formal notice, with a copy to the bank manager and the appropriate authority, along with the death certificate of your father. Any decent lawyer can help you with drafting this (or you can also do it on your own - but I advise letting the advocate also earn!).
From India, Morvi
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What was the type of loan? Credit cards, EMI, Home loan, Secured/unsecured/insured loan?
The biggest mistake is that the bank is not formally aware of the death, and they assume that the individual is defaulting on the loan.
Worry not, here is a simple solution: You should send a formal notice, with a copy to the bank manager and the appropriate authority, along with the death certificate of your father. Any decent lawyer can help you with drafting this (or you can also do it on your own - but I advise letting the advocate also earn!).
From India, Morvi
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A loan taken by one person cannot be recovered from other members of his family, irrespective of whether the person is dead or alive. The only case where the family may be asked to pay is if the deceased person has assets that were inherited by the said members of the family.
The fact that you got a job on compassionate grounds is immaterial in the face of the law. No agreement made between the company and the bank/cooperative society can bind you. The actions of the company and the bank are illegal.
You need to take up the matter with both the organization and the bank with the help of a lawyer. You can also approach the Head Office (HR/IR/Compliance Officer) as well as the RBI if the concerned cooperative is a bank. Additionally, you can approach the cooperative department of the local government.
From India, Mumbai
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The fact that you got a job on compassionate grounds is immaterial in the face of the law. No agreement made between the company and the bank/cooperative society can bind you. The actions of the company and the bank are illegal.
You need to take up the matter with both the organization and the bank with the help of a lawyer. You can also approach the Head Office (HR/IR/Compliance Officer) as well as the RBI if the concerned cooperative is a bank. Additionally, you can approach the cooperative department of the local government.
From India, Mumbai
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The letter of authorization made by the bank, which my father signed, states that after the death of the loanee, the remaining loan amount can be deducted from the gratuity and funds of the loanee. Furthermore, if the amount due exceeds these funds, it should be deducted from the salary of a family member appointed on compassionate grounds.
Due to this authorization letter, the cooperative bank is sending deductions to my organization, and as a result, deductions from my salary are taking place.
Can such an agreement, without consideration of the family member, be considered valid or not?
From India, Kanpur
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Due to this authorization letter, the cooperative bank is sending deductions to my organization, and as a result, deductions from my salary are taking place.
Can such an agreement, without consideration of the family member, be considered valid or not?
From India, Kanpur
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The agreement has no validity in law because a person cannot bind someone else based on any condition to which the other party has not agreed. The only case where they can recover the loan from you is if you inherit property from him which is more than the value of the loan.
You need to approach a lawyer immediately and recover the money deducted from your salary.
From India, Mumbai
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You need to approach a lawyer immediately and recover the money deducted from your salary.
From India, Mumbai
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Is this not a repeated posting? Please see https://www.citehr.com/627451-any-pr...ml#post2462402.
In this context, I had posted the following suggestion:
"Such recoveries are improper and illegal in terms of the Central Government Account (Receipts and Payments) Rules, 1983.
Even otherwise, it is settled law that the liability of the legal heir for the debts incurred by the deceased is limited to the estate they have inherited. Appointment on compassionate grounds does not count as 'estate inherited.'
However, it could be that some colleagues/friends/relatives would have been the surety for the loan availed of. If so, non-settlement of the outstanding amount is bound to complicate the issues."
From India, Kochi
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In this context, I had posted the following suggestion:
"Such recoveries are improper and illegal in terms of the Central Government Account (Receipts and Payments) Rules, 1983.
Even otherwise, it is settled law that the liability of the legal heir for the debts incurred by the deceased is limited to the estate they have inherited. Appointment on compassionate grounds does not count as 'estate inherited.'
However, it could be that some colleagues/friends/relatives would have been the surety for the loan availed of. If so, non-settlement of the outstanding amount is bound to complicate the issues."
From India, Kochi
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