Head Office, House Building Loan Department,

Kanak Bldg., 41, Jawahar Lal Nehru Road, Kolkata 700 071.
Tel : 2288 8143 Fax : 2288 7008
HO HBL Dept.
13/05/2014

Note to the Deputy General Manager

Re: Queries from ROs regarding Second Property

After the coming into effect of the HBL Circular dtd. 14/9/12( whereby loan for another property
( Second Property ) has been allowed ), we are receiving many queries from different ROs
which are to this effect.

1. Whether an employee can be granted housing loan for another property ( Second
Property ) at all especially in view of the earlier provision set out in clause 5(a) of
Housing Loan Scheme of not granting Housing Loan to an employee if he or his
dependent family members already own a property ( house/flat/ apartment ) at the centre
where the proposed property to be purchased/construcated is situated.

2. Whether the employee can be granted another housing loan for another property ( Second
Property ) where he has foreclosed the earlier loan and retained the property.

3. Whether housing loan for another property ( second property ) can be granted where the
employee has foreclosed the earlier loan after selling the property but a period of more
than 6 months has elapsed.

4. Whether loan can be granted where the employee or his dependent family members
already own a property at the same centre where the proposed property to be
purchased/constructed is situated.

5. Whether Housing loan can be granted for another property ( second property ) where the
employee had sold off his earlier property acquired by availing Housing Loan from NIC
which has since been liquidated and he/her his dependent family members already own
in the same centre (where the proposed property to be bought is situated )
( by virtue of inheritance or acquisition through his own means ) a property( house/flat/
apartment ) at the centre where the proposed another property ( Second property ) to be
purchased/constructed is situated.


In this context, to place the things in right perspective, we would like to reproduce below the
Clause 5 (a) of Housing Loan Scheme as well as the point no. 2 of the HO HBL circular dtd.
14/09/2012 which are relevant to the matter under discussion.

Clause 5 (a) of the Housing Loan Scheme
No loan shall be granted to an employee if he/she has accommodation whether a
house/flat/apartment at the centre where the house/flat/apartment proposed to be
constructed/purchased and if the same is owned by him or dependent family members.


..2


Head Office, House Building Loan Department,
Kanak Bldg., 41, Jawahar Lal Nehru Road, Kolkata 700 071.
Tel : 2288 8143 Fax : 2288 7008

-2-

Point no. 2 of HO HBL circular dtd. 14/09/2012
Another Loan to Employees who have closed the loan availed earlier to purchase/
construct another property -
Another House Building Loan can be granted to the extent of difference between the
revised limits and the original loan availed.

According to the Clause 5 (a) of the Housing Loan Scheme, loan cannot be granted to an
employee if he has accommodation whether a house/flat/apartment at the centre where the
house/flat/apartment proposed to be constructed/purchased and if the same is owned by him or
dependent family members.

However point no. 2 of HO HBL circular dtd. 14/09/2012 unequivocally says that another House
Building Loan can be granted to the extent of difference between the revised limits and the
original loan availed.


Since the above said HO HBL circular pertains to a later date and bestows a benefit on the
employees and in view of the spirit of benevolence pervaseive in the scheme the point no. 2 of
the HBL circular will prevail over the provisions of the clause 5(a) to the extent it denies housing
loan to an employee having a property belonging to him or his dependent family members at the
centre wehre the proersed property to be purchased/constructed is situated. Further, the circular
dtd. 14/09/2012 is neither encumbered nor circumscribed by any express limitations of the kind
envisaged in clause 5 (a ) of Housing Loan Scheme and therefore it will not be proper to defeat
its purpose by importing limitations set out in an provision ( Clause 5 (a) of HL Scheme ) which
predates the circular by a long time. Thus it can be seen that although the HBL circular dtd.
14/09/2012 does not expressly abrogate the provision of clause 5 (a) of Housing Loan Scheme, it
does so the extent as mentioned above by implication.

It must be kept in mind that the provision in clause 5(a) was designed during a period when
resources were scarce and standard of living abysmally low. Moreover, the fund available with
our company for Housing loan was meager and as a consequence Housing Loans were rationed.
Since then there has been a sea change in the financial position of our company. We are living at
a time when the company is flush with funds and aspiration & needs of employees have also
have also skyrocketed.

It may further be noted that there have been many incremental beneficial changes in the Housing
Loan Scheme since its inception conferring new benefits on the employees e.g. the Scheme
originally did not contanin any provision for additional loan,however, with the passage of time ,
the provision of additional loan, second loan, purchase of adjacent tenement and transfer of loan
( whereby, subject to satisfaction of certain conditions, an employee was allowed to avail loan
for larger property after selling the original property for which loan was availed ) were
introduced. The provisions of loan for second property ( another property ) is the latest in a series
of such improvements in the scheme in employees favour.

Therefore, as the circular clearly states, an employee will be eligible for another HB Loan
for another property provided he has closed the earlier HB Loan availed by him and the
maximum quantum of loan for the second property will be the difference between the
revised limits and the original loan availed.


As a direct and necessary corollary of the abovesaid circular, as the things stand now, an
employee will be eligible for Housing Loans for two properties at the maximum during his
entire service period.

Suggestion has come from some quarters that since the circular speaks of repayment of earlier
loan as a precondition to grant of another loan for another property, loan cannot be granted for
purchase/ construction of a property in case the employee or any of his dependent members
already owns a property without availing our companys loan.

Needless to mention that such pedantic and narrow interpretation will result in uncalled for
discrimination against some of our employees and wrongfully deprive them of an benefit they
otherwise deserve.

Hence, to avoid any future complications, it is also clarified that in case an employee
already owns a property, whether inherited or acquired by himself without availing
housing loan of NIC, the employee will be eligible for a house building loan for one
property.

The Note is being placed for your kind perusal and suitable advices in the matter.



( B. B. DAS ) (N. C. CHOUHAN)
A. O. A. O.



Chief Manager :



































Head Office, House Building Loan Department,
Kanak Bldg., 41, Jawahar Lal Nehru Road, Kolkata 700 071.
Tel : 2288 8143 Fax : 2288 7008
HO HBL Dept.
02/07/2014

Note to the Deputy General Manager

Re: Clarifications/ Interpretations regarding Another Loan for Another Property


Clause 5 (a) of the Housing Loan Scheme ( flagged A ) provided that loan cannot be granted to
an employee if he has accommodation whether a house/flat/apartment at the centre where the
house/flat/apartment is proposed to be constructed/purchased and if the same is owned by him or
his dependent family members.

However, it goes without saying that after the coming into effect of the HBL circular dtd.
14/09/2012 ( flagged B ) which, interalia, laid down that another House Building Loan can be
granted to the extent of difference between the revised limits and the original loan availed, the
above said provision clause 5 (a) has been rendered irrelevant and nugatory for the following
reasons:-

1) The above said HO HBL circular pertains to a later date than the clause 5(a).
2) It bestows a new benefit on the employees and in view of the beneficial spirit underlying
the Housing Loan Scheme, the HBL circular will prevail over the archaic provisions of
the clause 5(a) to the extent it denies housing loan to an employee having a property
belonging to him or his dependent family members at the centre where the proposed
property to be purchased/constructed is situated.

3) The provision of another loan for another property in circular dtd. 14/09/2012 is neither
encumbered nor circumscribed by any express limitations of the kind envisaged in clause
5 (a ) of Housing Loan Scheme and therefore it will not be proper to defeat its purpose by
importing limitations set out in an provision ( Clause 5 (a) of HL Scheme ) which
predates the circular by a long time.

4) The Housing Loan Scheme followed by our company, of which the clause 5(a) forms a
part, was prepared by GIC. Interestingly, the Housing Loan Scheme -2012 of GIC Re
does not contain any provision identical to the provision of clause 5(a) of the old scheme.

Thus it can be seen that although the HBL circular dtd. 14/09/2012 does not expressly abrogate
the provision of clause 5 (a) of Housing Loan Scheme, it does so by implication to the extent as
mentioned above.

Therefore, according to our view, an employee will be eligible for another HB Loan for
another property regardless of location of the said property, provided he has closed the
earlier HB Loan availed by him irrespective of the fact whether he still retains the first
property or sold it off after repayment of the loan and the maximum quantum of loan for
the second property will be the difference between the revised limits and the original loan
availed.

However, a ticklish question arises as to whether HB Loan can be granted to an employee
for purchase/ construction of a property where the employee or any of his dependent family
members already owns a property ( by virtue of inheritance or acquisition through own means
) at the centre without availing our companys loan especially in view of the fact that the
circular speaks of grant of another loan for another property only after closure of earlier housing
loan.

However in our considered view, if the benefit of another/ atleast one housing loan for another
property is restricted to only those employees who have earlier availed Housing Loan, such
pedantic and narrow interpretation will result in uncalled for and irrational discrimination against
some of our employees who have not at all availed Housing Loan from our company and
wrongfully deprive them of an benefit they otherwise deserve.

Therefore, we recommend that it will in the fitness of things if the benefit of availing a housing
loan for another property (house/flat/apartment) at a centre may be logically extended to a case
where an employee already owns a property at the same centre ( whether inherited or
acquired by himself without availing housing loan of NIC ) and the quantum of the loan
can be to the extent of the cadre eligibility of the employee.

However, we recommend that the question whether housing loan can be granted for another
property ( second property ) where the employee had earlier acquired a property ( whether he
retains the property or has sold off his property ) by availing Housing Loan from NIC which has
since been closed and he or his dependent family members already own ( by virtue of inheritance
or acquisition through his own means ) a property ( house/flat/apartment ) at the centre where
the proposed another ( second ) property to be purchased/ constructed is situated should be
referred to GIPSA since there is no explicit guidelines in this respect.


The Note is being placed for your kind perusal and suitable advices in the matter.



( B. B. DAS ) (N. C. CHOUHAN)
A. O. A. O.



Chief Manager :