Pakistan Financial Regulations - Vol 1

FINANCIAL REGULATIONS
VOLUME I
1986
(ARMY AND AIR FORCE)
(i)
PREFACE
1.
The last edition of "Financial Regulations, Volume 1, for Army and Air Force was
issued in 1952. This has been revised and up-dated. All Changes' upto 31st December 1985
have been incorporated in the revised edition. The regulations contained herein supersede the
regulations contained in the 1952 edition.
2. A table of concordance has been added at the end which will help in tracing in 1986 edition
corresponding rules in the superseded edition. The table also gives references on which the
revised regulations are based.
3.
Any errors or omissions may be reported to Regulations Directorate, AG's
Branch, GHQ, Rawalpindi.
Rawalpindi
20 April 1986
ed IjIal Haider Zaidi

Secretary to the Government of Pakistan
Ministry of Defence
(iii)
TABLE OF CONTENTS
Serials
1.
2.
3.
4.
5.
Pages
Preface
Record of Amendments
Table of Contents
List of Annexes
List of Abbreviations
i
ii
iii-ix
x
xi-xv
CHAPTER 1 - GENERAL PROVISIONS
Rules Pages
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Shori Title and Commencement

Definitions
Powers of the President
Validity of joint service instructions,
Army instructions and Air Force instructions
Sanctioning of defence expenditure
Financial canons to be observed
Exercise of financial powers
Objects on which expenditure may be sanctioned
Financial powers of Services Chiefs
Expenditure Equalisation Deposit Accounts
1
2
3
4
1
1-2
2-3
3
5
6
7
8
9
10
3
3-4
4
4-5
5-6
6-7
Additional powers of the Chief of Army Staff and

the Chief of Air Staff
Financial powers of other authorities
Additional powers of RV&M Officers
11
7-8
12
13
8-11
11
(iv)
Serials
19.
Financial powers of heads of Pakistan
Ifissions Abroad
20.
Powers of officers of the MGO services
21.
Powers in respect of MES expenditure
22.
Pensions
Rules Pages
14
11
15
16
17
11-13
13
13
23.
24.
25.
Powers are personal

Sanction in instalments
Authorisation of other officer to for an officer
possessing financial powers
18
19
20
13
13
13-14
26.
Financial advisers
21
14 -17
27.
22
17
23
17
29.
Controllers of army and air force accounts

as financial advisers
Communication of sanction to controller
of accounts
Lapsing of sanction
24
17
30.
Sanctioning of expenditure not covered by rule
25
17
31.
Claims of petty nature
26
17-18
32.
Issue of store in exceptional cases
27
18
33.
Petty items of recurring expenditure
28
18
34.
Expenditure that may not be sanctioned
20
18-19
35.
Abandonment of revenue and expenditure
30
19
36.
Expenditure against allotment
31
19-21
37.
Estimate of operational expenditure
32,
21
38.
Financial powers under civil service regulations
33
21-22
39.
Whole time of a government servant
34
22
28.
(v)
Serials
40. Fees and honoraria
Rules Pages
35
22-24
41.
36
Cheques
25-28
CHAPTER 2 - LOSSES, WASTAGES AND DAMAGES TO

PUBLIC PROPERTY - PROCEDURE AND POWERS TO
WRITE OFF
42.
General rules for observance
37
29
43.
Losses of store
38
29-40
44.
Public money
39
40
45.
Loss of public money
40
40-42
46.
Exceptions
41
42-45
CHAPTER 3 - PURCHASE OF STORES, TRAINING AIDS

AND TRAINING PUBLICATIONS
47.
General rules
42
46
48.
Financial powers
43
46-51
49.
Despatch of stores
44
51
50.
Disposal of surplus, obsolete and waste stores
45
51-53
5l.
Procurement of centrally purchased stores
46
53-54
CHAPTER 4 - BUDGET ESTIMATES AND ASSIGNMENTS
52.
Budget estimates
47
55-60
53.
Assignments
48
60-62
CHAPTER 5 - CLAIMS AND RECOVERIES
54.
General rules
49
63-64
55
Adjustment
50
64
56.
Recovery of amount due
51
64.65
(vi)
Serials
Rules Pages
57.
Civil courts - attachment orders
52
65
58.
Limitation of claims
53
65-66
59.
Claims governed by civil service regulations
54
66-67
60.
Pension claims
55
67
61.
Time barred claims
56
67-68
CHAPTER 6 - VOCABULARY AND PAYMENT

ISSUE RATES
62.
Vocabulary rates
57
69
63
Payment issue rates
58
69-71
64.
Claims against carrying agencies
59
71
CHAPTER 7 - PAY AND ALLOWANCES AND

LAST PAY CERTIFICATE
65.
Pay and allowances
60
72-74
66.
Last pay certificate
61
74-77
CHAPTER 8 - AUDIT AND OBJECTIONS
67.
General rules
62
78
68.
Erroneous Payments
63
78
69.
Remission of dis-allowances
64
78-80
70.
Audit and retrenchments by audit officers
65
80
71.
MAG not be over ruled etc
66
80
72.
Powers of audit officer
67
80-82
73.
Objection statements
68
82
74.
Appeals
69
82
75.
Retrenchment from contractor's bills and appeals
70
82
(vii)
Serials
Rules Pages
CHAPTER 9 - STANDING SECURITY DEPOSITS
76.
How calculated
71
83-84
77.
Forms of standing security deposits
72
84-87
78.
Refund
73
87-88
79.
Vacation of appointment
74
88
80.
Lapsed deposits
75
88-89
81.
Bank securities
76
89
82.
Contract securities
77
89-92
83.
Custody of securities and payment of interest thereon
78
92-93
84.
General promissory notes - return and sale of
79
93
85.
Provincial and municipal debentures and port trust bonds 80 93
86.
Bank deposit receipts
81
93-94
87.
Saving bank deposits
82
94
88.
Fidelity bonds
83
94-95
89.
Security deposits- government servants
84
95-97
90.
General rules
85
98
91.
Supplies and services
86
98-99
92.
Commercial or non-government concerns
87
99
93.
AMuging of contracts
88
99-100
94.
Sanctions and modifications of contracts
89
100-101
95.
Articles of ASC supply for operations not termed
90
101
CHAPTER 10 - CONTRACTS
mobilization
(viii)
Serials
Rules Pages
96.
Legal representative of a deceased contractor
91
101-102
97.
Estimating requirements
92
102
98.
Irregular concessions to contractors
93
102
99.
Advertisements
94
102-103
100.
Tenders
95
103
101.
Opening of tenders
96
103-104
102.
Errors in tenders
97
104
103.
Non-receipt of tenders
98
104
104.
Standing security deposit
99
104
105.
Contract deeds
100
105
106.
Power of attorney
101
105
107.
Duration of contracts
102
105
108.
Transfer of contracts
103
106
109.
Supplies
104
106
110.
Advances
105
106
111.
Compensation for breach of contract
106
106-107
112.
Interpretation of Contracts
107
107
113.
Recoveries from securities in default
108
107
114.
Payment of bills
109
107-108
CHAPTER 11 - REMITTANCES AND FAMILY

ALLOTMENTS
115.
Family allotments
110
109
116.
Family remittances
111
109-111
(ix)
Serials
117.
Rules Pages
Remittance of credit balances
112
111
CHAPTER 12 - MISCELLANEOUS PROVISIONS
118.
Accounts
113
112
119.
Statistics of expenditure
114
112
120.
Cash and store transactions
115
112
121.
Responsibility for expenditure
116
112
122.
Fractions in amounts
117
112
123.
No demand certificate
118
112-113
124.
Submission of claims
119
113
125.
Arrears
120
113
126.
Contributions
121
113
127.
Broken periods
122
113
128.
Line funds
123
113-114
129.
Rates - army remount stores
124
114
130.
Rationing of animals transferred from

army remount depot.
125
114-115
131.
Financial irregularities
126
115
132.
Control and inspection of accounts
127
115
133.
Income tax
128
115
134.
Leave and pension contributions
129
115
135.
Haircutting and washing services
130
115
(x)
LIST OF ANNEXES
Serials Annex
Title
Pages
1.
Categories of cases requiring prior reference to the governments.
2.
Accounts areas
117-119
3.
Form of registers to be maintained by controlling

authority for watching expenditure against allotment.
120-124
Instruction for the guidance of officers who are required

to make purchases of stores under the provisions of rules
for the supply of articles required for the public service.
125-132
Procedure for purchase of stores by the Directorate

General of Defence Purchase and Directorate of
Procurements.
133-161
4.
5.
116
6.
Forms for the execution of different security bonds.
162-168
7.
Indemnity bond to be executed by heirs of deceased

contractors for payment of their security deposits.
169
8.
Contracts by whom sanctioned.
170-175
9.
Provision of haircutting and washing services to troops.
176-178
(xi)
LIST OF ABBREVIATIONS
Abbreviations In Full
ADEME
Assistant Director, Electrical and Mechanical Engineers
ADMF
Assistant Director Military Far
AFA
Assistant Financial Adviser
AG
Adjutant General
AHQ
Air Headquarter
ADS&T
Assistant Director Supply and Transport
AR (I)
Army Regulations (Instructions)
AR (R) Army Regulations (Rules)

Bde
Brigade
BPS
Basic Pay Scale
CAO
Chief Administrative Officer
CAAF
Controller of Accounts Air Force
CAS
Chief of the Air Staff
CASC
Commander Army Service Corps
CE
Chief Engineer
CEME
Commander, Electrical and Mechanical Engineers
CFA
Competent Financial Authority
CFM
Controller, Flour Mills
CITD
Controller of Inspection and Technical Development
CMA (DP)
Controller of Military Account (Defence Purchase)
(xii)
Abbreviations In Full
CMES
Commander Military Engineer Services
CO
Commanding Officer
COD
Central. Ordnance Depot
COAS
Chief of Army Staff
COFA
Controller of Ordnance Factory Accounts
COO
Chief Ordnance Officer
CSR
Civil Services Regulations
CVSD
Central Vehicle Supply Depot
DADMF
Deputy Assistant Director Military Farm
DADOS
Deputy Assistant Director Ordnance Services
DRV&F
Director Remounts Veterinary and Farms
DADIIN&F
Deputy Assistant Director Remount, Veterinary and Farms
DADS&T
Deputy Assistant Director Supply and Transport
DCE
Deputy Chief Engineer
DDMF
Deputy Director Military Farm
DDMI
Deputy Director of Military Intelligence
DFA
Deputy Financial Adviser
DGDP
Director General Defence Purchase
DGMS
Director General Medical Services
DGS&D
Director General Supply and Development
DITD
Director Inspection and Technical Development
DMUE
Director of Military Training and Education
DML&C
Director of Military Lands and Cantonments
(xiii)
Abbreviations
In Full
DOF
Director of Ordnance Factory
DSD
Director of Staff Duties
DOS
Director of Ordnance Services
Dy
Deputy
E-in-C
Engineer-in-Chief
EME
Electrical and Mechanical Engineer
FA
Financial Adviser
FCNA
Forces Command Northern Areas
FOR
Free on Rail
GE
Garrison Engineer
GHQ
General Headquarters
GS
General Staff
GOC
General Officer Commanding
HQ
Headquarters
ISPR
Inter Services Proof Ranges
WO
Junior Commissioned Officer
LAO
Local Audit Officer
Log
Logistics
LPC
Last Pay Certificate
MA Dept
Military Account Department
MAG
Military Accountant General
ME
Maintenance Engineer
MEO
Military Estates Officer
(xiv)
Abbreviations
In Full
MGD
Military Grain Depot
MGO
Master General of the Ordnance
MES
Military Engineer Services
MT
Mechanical Transport
MRO
Money Receipt Order
MS
Military Secretary
MVH
Military Veterinary Hospital
NCO
Non Commissioned Officer
OC
Officer Commanding
OO
Ordnance Officer
OR
Other Ranks
PAF
Pakistan Air Force
PMAD
Pakistan Military Account Department
PMA
Pakistan Military Academy
pro
Provost
PSO
Principal Staff Officer
PTF
Pakistan Territorial Force
QMG
Quarter Master General
Regs
Regulations
Supt
Superintendent
S&T
Supply and Transport
TA
Travelling Allowance
(xv)
Abbreviations
In Full
TO&E
Table of Organization and Equipment
UA
Unit Accountant
UK
United Kingdom
VCOAS
Vice Chief of Army Staff
In exercise of the powers conferred by section 176A of the Pakistan Army Act, 1952
(XXXIX of 1952), and section 203 of the Pakistan Air Force Act, 1953 (V1 of 1953), the
Fed-6ii--(government is pleased to make the following regulations, namely:FINANCIAL REGULATIONS, VOLUME 1, 1986
CHAPTER 1 - GENERAL PROVISIONS
1.
Short title and commencement

a.
These regulations shall be called the Financial Regulations, Volume 1,
1986.
b.
They shall come into force at once.
2.
Definitions. In these regulations, unless there is anything repugnant in the subject or
context:a.
"Accounts area" means the geographical limits of an area wherein military units,
formations or establishments are located and whose accounts are dealt with by
one and the same Controller of Accounts.
b.
"Audit Officer" includes an accounts and internal audit officer in whose audit
control a public servant is serving or, for the purpose of verification of his
service has served.
c.
"Brigade or Logistics Area Commander" includes Divisional Commander in

case of units and stations directly under Division Headquarters.
d.
"Compensatory allowance" means an allowance granted to meet personal

expenditure necessitated by the special circumstances wherein
duty is performed.
e.
"Competent financial authority" means the authority within whose power the
amount for issue falls.
f.
"Controller of Accounts" includes the Controller of Military Accounts, the

Controller of Military Accounts (Pensions) and the Controller of Accounts, Air
Force.
g.
"Emoluments" means pay and includes allowances, staff consolidated

pay and all other items of personal remuneration drawn by an indivi
dual other than compensatory allowance.
h.
11Fee'5 means a recurring or non-recurring payments to a Government

servant from a source other than general revenues.
"Fresh expenditure" means any expenditure not provided for in the
i.
2
budget which requires sanction of higher authorities.
j.
"Honorarium" means a recurring or non-recurring payment made to a

Government servant from general revenues as remuneration for special work of
occasional nature.
k.
"Local fund" means revenues administered by bodies controlled by the

Government with regard to proceedings generally or specific matters, manner
of sanctioning of their budgets, creating or filling up of particular posts,
enactment of leave, pension or similar rules and includes revenues of a body
notified as such by the Government.
1.
than
Local stores" ' includes articles of local produce or manufacture other

imported stores.
m.
"Ministerial appointment" means an appointment held by a person in an office or

establishment whose duties are not of an administrative or executive nature.
n.
"Office contingencies" includes charges which are incidental to the management

of an office.
o.
"Public fund" means the fund financed entirely from public money whose
unexpended balance is refundable to the Government in the event of its not
being spent on the object of its grant and includes:(1) Un-issued pay and allowances.
(2) Office allowance fund.
(3) The estates of deceased men and deserters.
3.
p.
"Public claims" means any public debt or disallowance and includes any
over-issue made through an error of fact, a deficiency, or irregular expenditure
of public money or stores of which after due investigation no explanation
satisfactory to the Government is given by the person who is responsible for the
same.
q.
"Soldier" includes a Junior Commissioned Officer, a warrant officer, a

non-commissioned officer and a sepoy other than an enrolled non-combatant.
Powers of the President

a.
In accordance with Article 243 of the Constitution of the Islamic Republic
of Pakistan, the President, in respect of the Armed Forces, shall:(1)
Raise and maintain the armed forces and the reserves thereof.
3
(2)
Grant Commission in such Forces.
(3)
b.
Appoint Chairman Joint Chiefs of Staff Committee, the Chief of the

Army Staff, the Chief of the Naval Staff and the Chief of the Air Staff
and determine their salaries and allowances.
Delegation-Of by the President. The President may delegate powers to
sanction expenditure from Federal revenues upon subjects in relation to
Defence Services subject to such condition, as he may think fit, either to any
officer subordinate to him or to a Provincial or L4)cal Government acting as his
agent. Any sanction given under this rule shall remain valid for the specified
period for which it is given. Orders of delegation passed under this rule may
contain a provision for re-delegation by the authority to which the powers are
delegated.
4.
Validity of Joint Service Instructions, Army Instructions and Air Force
Instructions. These instructions shall be assumed to have received the concurrence of the
Ministry of Finance unless Audit Officers are informed otherwise by the Ministry of Finance
(Finance Division Military).
5.
Sanctioning of Defence Expenditure. Defence expenditure may be sanctioned by
the Ministry of Defence and by the authorities subordinate to it on the following conditions,
namely:a. .
It shall pertain to defence.
b.
The exercise of delegated power shall be subject to the observance of any

general or special directions which the authority delegating power may issue at
any time, whether generally or in reference to a particular case.
6.
Financial C4nons to be observed. In incurring or sanctioning expenditure following
canons shall be observed by officers exercising financial powers. Audit officers shall also be
responsible for watching that the canons are observed: a.
Every officer should exercise the same vigilance in respect of expenditure

incurred from Government revenue as a person of ordinary prudence would
exercise in respect of the expenditure of his own money.
b.
No authority shall exercise its power of sanctioning expenditure to pass an

order which will, directly or indirectly, be to its own advantage.
c.
The amount of allowances, such as travelling allowance, granted to meet

expenditure of a particular type, shall be so regulated that it does not, on the
whole, become a source of profit to the recipient.
d.
Government revenues shall not be utilised for the benefit of a particular person
or a section of the community unless: -
(1)
4
The amount of expenditure involved is insignificant.
(2)
A claim for the amount could be enforced in court of law.
(3)
The expenditure is in pursuance of a recognised policy or custom.
7.
Exercise of Financial Powers. The financial powers, conferred on authorities
subordinate to the Federal Government, shall be exercised subject to the condition that funds
can be made available from the sanctioned budget provision, either from the provision made for
the purpose, or from the provision made for unforeseen expenditure or by re-appropriation.
8. Objects on which expenditure may be sanctioned. The following expenditure may be
sanctioned under rules 12 and 15 of these regulations for following objects, namely:a.
Monthly contingent expenditure on account of any workshop, stores- depot,

hospital, military farm or remount depot.
b.
Temporary establishments or labour in excess of fixed scales.
c.
ufacture or issue of special tools and equipment or other articles for

experimental purposes or for expediting production.
d.
Rewards for information leading to the conviction of incendiaries or for the

recovery of stray cattle.
e.
Rewards for specially prompt and meritorious action in connection with the
extinguishing of fires and the saving of life and property from damages arising
therefrom.
f.
Rewards for information leading to the conviction of personnel accused of

bribery and corruption.
g.
Rewards for information leading to the prevention of thefts from supply or

ordnance depots, etc.
h.
Expenditure on tests, trials and experiments within the annual appropriations,
placed at the disposal of the DOS and the DITI), Command ISPR or within the
monetary limit fixed for these purposes, without reference to the financial limits
prescribed in ride 12 provided that the prior concurrence of the financial
Adviser is obtained.
Notes:- 1.
Rewards under sub-rule e and f above, not exceeding .500.00 in any

individual case, will be sanctioned by the CFA concerned. Cases
involving payment of rewards exceeding Rs.500.00 but not exceeding
Rs.1,000.00 will be sanctioned by the Service Chiefs and those
involving payment of rewards exceeding Rs.1,000.00 will be
submitted for orders of Government.
2.
9.
5
Government servants shall also be eligible for the above rewards in respect
of acts other than those performed in their official capacity.
Finance Powers of Service Chiefs

a.
Within the rupee and foreign exchange allocations made to the Service
Headquarters, the Chief of Staff of the Service will hav ' e full authority to
sanction expenditure except in the following cases upto the limits prescribed:(1)
In the exceptional event of lump sum provisions made for certain

categories of expenditure which could not be finally cleared at the time
of budget discussions visualised in ride 43, these categories of
expenditure will be cleared as soon as possible after the budget
allocations are made.
(2)
Categories of cases mentioned in Annexe A to this volume. In the case

of these categories, reference will have to be made to the Government.
Re-delegation of powers by Service Chief may be done, with the
approval of the Ministry of Defence.
b.
Creation of posts under the powers of Service Chief may be made even if it
affects posts included in TO&E issued under Government sanction. Such
sanctions will remain valid for one financial year or till the date of issue of
amendment of TO&E by the Government, whichever is earlier. However, in
case the amendment in the TO&E is not issued by the Government during the
financial year of the sanction issued under the authority vested in the Service
Chief, there will he no bar to the issue of such further sanctions under the
powers of the Chief for each subsequent financial year as may be expedient.
c.
The Service Chief shall have the authority to make re-appropriation within the
budget grant of his Service in consultation with the Financial Adviser of the
Service except in the following cases which will require the approval of the
Government:(1) Re-appropriation from capital. heads to Revenue heads and vice versa.
(2) Re-appropriation from other heads to Pay and Allowances. Such reappropriation will be referred to the Ministry of Defence and the Military
Finance so that eventually these are incorporated duly in the allocation
letters which are issued by the Ministry of Defence. No re -appropriation
will be admissible between Residential Capital works and non-residential
Capital Works which are budgeted under two separate demands.
6
d.
Incurring of any expenditure on introductory action upto Rs 5,00,000/- per

item for purchase of stores and equipment for tests and evaluation purposes
from within the existing overall budget allocations subject to total expenditure in
any one year not exceeding Rs.20,00,000/-.
Incurring of any expenditure of R .2,00,000/- on contingency items, temporary
establishment, employment of labour, rewards, etc.
Incurring of any ordinary expenditure at his discretion upto
annually subject to the following conditions, namely:-
Rs.10,00,000/-
(1) That the expenditure relates to a single payment and does not cover any
recurring charge.
(2) That no payment is made to a Government servant of any remuneration or
allowance to which he is not entitled under the ordinary rules.
(3) That the expenditure does not involve an express contravention of any
existing rule or regulation and that no grant is made for Services or
individual projects in which the Government of Pakistan have previously
definitely refused to incur expenditure.
g.
The Services Chief concerned shall be responsible for ensuring that

expenditure is incurred in accordance with canons of financial propriety and
relevant rules.
7
11. Additional Powers of the Chief of the Army Staff and the Chief of tho;A*W Staff. The
Chief of the Army Staff or the Chief of the Air Staff may carry out work, on payment (eg, aerial
photography for survey and other purposes, survey of air routes, carriage of mails) for Federal
Government departments and Provincial
8
Governments, subject to the following conditions, namely:a.
The charges to be recovered from Federal Government departments and

Provincial Government on account of such work shall normally be confined to
the travelling and out-of-pocket expenses of personnel and the cost of material
used, eg, photographic gear, fuel expended, and no charge shall be made on
account of overhead charges for maintenance of aircraft and personnel, but in
the case of Provincial Governments an additional charge to cover the cost of
overhauling in gle-engined and twin-engined aircraft, as the case may be, shall
be made. This will be notified from time to time in Air Force Instructions.
b.
Ikterial will be charged for in accordance with the rules in the Memorandum of
Instructions to the Price Lists of Air Force Equipment.
c.
When the work carried out is in the nature of an experiment of a department

of the Federal Government or a Provincial Government the result of which will
also benefit the PAF, half the charges prescribed for the Federal Government
department or provincial Government shall be recovered.
12.
Financial Powers of Other Authorities. The following officers are empowered to
sanction expenditure on any of the objects enumerated in rule 8 upto the limits shown against
each: a.
AG, QMG, MGO, IGT&E and PS0s concerned

in AHQ.
b.
Corps Commander.
c.
Divisional Commander, Force Commander,

Northern Area or Independent Brigade
Commander.
Rs. 25,000.00
d.
Logistic Area Commander or Brigade

Commander.
Rs. 15,000.00
e.
Surgeon General, DS&T, DOS, DEME,

DITD & DRV&F.
Rs. 5,000.00
f.
Commandants appointment holders (Col &

above) of following establishment
Rs. 5,000.00
Rs. 40,000.00
(1) Command and Staff College.

(2) Training Institutions or Establishments.
(3) Ordnance Depots.
Rs. 50,000.00
g.
h.
(4)
9
Central and Combined Workshops.
(5)
Military Hospitals.
(6)
Military Farms and Remount Depots.
(7)
Chief Inspectors of Inspectorates.
(8)
District Remount Officers.
(9)
DADOS at PMA and OTS.
Commanding Officers appointment holders

(Lt. Col.).
Rs. 3,000.00
(1)
Training Institutions or Establishments.
(2)
Supply Depots.
(3)
Ordnance Depots.
(4)
Central, Combined, Medium/Area and Station Workshops.
(5)
Military Hospitals.
(6)
Medical Stores Depots.
(7)
(8)
(9)
ADST, Logistic Area and C0s, S&T Bns.
(10)
ADOS Corps /Division /Force Commander, Northern

Area/Logistic Area.
(11)
CEME, CO EME Bn and ADEME Logistic Area,
(12)
Officers Commanding appointment holders

(Major and below)
(1) Training Institutions/Estabbshments.
(2) Supply Depots.
(3) Ordnance Depots.
Rs. 1,500.00
10
(4)
Station/MES Equipment Workshops, Independent Workshop

Companies.
(5)
Military Hospitals.
(6)
(7)
(8)
(9)
j.
Officers Commanding, Units /Formations other Rs. 500.00 than those

mentioned at sub-rule f, g and h above.
k.
Chief Administrative Officer, GHQ:(1)
Contingent Expenditure of non- Upto Rs. 5,000.00

recurring nature.
(2)
l.
Contingent Expenditure of
recurring nature.
PAF Officers:--
Upto Rs. 500.00
(1)
Base Commanders (Air Cdre)
Rs.10,000.00
(2)
Base Commanders (Group Capt)
Rs. 5,000.00
(3)
OC Maintenance Unit
(4)
Notes:-
(a)
Group Capt
Rs. 5,000.00
(b)
Wing Commander
Rs. 3,000.00
(c)
Sqn Ldr & below
Rs. 1,500.00
OC units other than mentioned at sub

para (3) above.
1.
Rs. 500.00
Divisional, Indep Bde Commanders, Commander AACornd

and Commander FCNA are empowered to write off, under
their financial powers, expenditure in excess of the amount
of office allowance authorised under Pay and Allowances
Regs, when such excess is caused by the enhanced rate of
stationery charged by the Government Stationery Offices.
2.
District Remount Officer, Horse/Mule Breeding Area may,

11
within the limits of his financial powers, transport his office
records by other than the cheapest method when this is
necessary in the interests of the Service.
3.
Officers Commanding remount depots may sanction the

entertainment of casual workmen and farm labourers on lowest
daily rates of pay to the extent necessary to carry out duly
authorised workmen in the depots under their charge.
4.
An OC supply depot may incur contingent expenditure of an

authorised character upto Rs.1,500.00 a month. ADST may
sanction monthly contingent bills upto Its.3,000/ provided that
no single item exceeds Rs.1,200.00. Expenditure in excess of
these amount required the sanction of the authority within
above powers of sanction the amount at issue lies.
5.
In respect of the Embarkation HQs the Embarkation

Commandant, Karachi, may incur contingent expenditure of an
authorised character upto the monthly limit of Rs.15,000.00.
Expenditure in excess of this amount shall require the sanction
of the QMG.
13.
Additional Powers of RV&FC Officers. Certain special powers exercisable by

officers of the Farms Wing in respect of local purchase of stores, are laid down in the
Financial Regulations, Volume II.
14.
Financial Powers of Heads of Pakistan Mission Abroad
15.
a.
Heads of Pakistan Missions in foreign countries will exercise, in con-sultation

with their Financial Advisers (if there is any), expenditure the same powers as
are laid down in paragraphs 6 to 8 of appendix 3-A of the General Financial
Rules, Volume II, in respect of contingencies and miscellaneous expenditures
relating to the offices, etc, of the Military Attaches /Advisers and Defence
Stores Procurement Organization attached to them, provided that there are no
specific orders to the contrary and provided further that the expenditure can be
met from within the sanctioned budget allotment under the relevant head of the
Defence Services Estimates of the year in which the expenditure is proposed to
be incurred.
b.
Any modification in the financial powers laid down in General Financial Rules,
referred to in sub-rule a above, if and when notified by the Government, shall,
subject to other condition specified in the above sub-rule, apply.
Powers of Officers of the MGO Sertdces. On the condition that the financial officer
certifies that budget provisions exists to cover the expenditure involved;
12
Chief Inspector of Armaments, Chief Inspector of Vehicles and Engineering Equipment,
Chief Inspector of Electronics and Instruments, Chief Inspector of Stores and Clothing,
may sanction the employment of the following:- a.
Temporary Clerical Personnel, etc. Temporary clerical personnel public

servants in Basic Pay Scales 1 and 2, employed in shops and sheds, workmen,
including skilled, serni-skilled and unskilled personnel, supervisors, examiners,
planners, etc, in the lowest scale, to the extent necessary to carry out duly
authorised manufacture or inspection work at the minimum of the Basic Pay
Scales for the respective categories.
b.
Temporary Supervising Establishment. Temporary supervisors, examiners

and other supervisory staff, eg, estimators, planners and rate fixers who are not
covered by sub-rule a above when necessary in the interest of efficiency or
economy, for periods not exceeding six months in the case of ordnance and one
year in the case of inspection establishments. At the minimum of the prescribed
scales of pay. The Director of Inspection and Technical Development may,
when necessary, sanction the employment of such men in the senior grade and
telephone operators, gate keepers, draughtsmen, tracers, photographers,
laboratory assistants and other similar technical personnel as required by the
exigencies of the service in ordnance and inspection establish ment (including
laboratories), respectively for periods not exceeding one year in each case. At
the minimum of the prescribed scales of pay. All temporary supervising
establishments serving on the 30th June of any year will be regarded as
technically discharged on that date. Their re-engagement as necessary, having
regard to the programme of manufacture and inspection for the ensuing financial
year, shall be arranged for in accordance with these rules.
c.
Commandants, Central Ordnance Depots, Chief Ordnance Officers, Officers

Commanding Ordnance Installations, Officers Commanding Electrical and
Mechanical Engineering Workshops may sanction the employment of temporary
establishment as under:(1) Workmen, ie, skilled, semi skilled and unskilled labour properly so called
and gate keepers, firemen, leader firemen and telephone operators, etc, to
the extent necessary to carry out duly authorised manufacture, repair
orders or other work in connection with the storage, loading and unloading
of stores, etc, at the minimum of the prescribed scales of pay. The DOS
and DEME may, when necessary, sanction the employment of highly
skilled mistries and other supervisory staff--At the minimum of the
prescribed scales of pay.
(2) Men for work of a clerical nature, when necessary in the interest of
efficiency or economy. upto a period of one year in each case - At the
minimum of the prescribed scales of pay of lower
13
division clerks. All such personnel who may be serving on the 30th
June of any year will be regarded as technically discharged on that
date. Their re-engagement, as necessary, should be arranged for in
accordance with these rules.
(3) Public servants in Basic Pay Scale 1 and 2, when necessary in the interest
of efficiency or economy, upto a period of one year. At the minimum of
the prescribed scales of pay. For the purpose of determining what
authority shall be competent to sanction the employment of temporary
establishments under the provisions of this rule, no account shall be taken
of the period during which the temporary establishment technically
discharged on 30th June has already been employed, in case where it is
desired to re-employ such establishment for a further period.
16.
Powers in respect of MES Expenditure. The financial powers exercisable in respect

of MES expenditure are laid down in MES Regulations.
17.
Pensions. The powers exercisable in respect of the grant of pensions are laid down in
Pension Regulations and in separate orders issued in respect of Air Force.
18.
Powers are Personal. The powers authorized by these regulations are personal and
cannot be delegated to any subordinate officer, but see rule 20.
19.
Sanction in Instalments. The limit which has been set in each case extends to each
separate sanction. The criterion in any case is the total cost of measure and no measure,
which requires the sanction of superior authority,.shall be sanctioned by a subordinate
authority in instalments.
20.
Authorization of other officer to for an Officer possessing financial powers

a.
In every case the officer possessing financial powers shall be personally and
unreservedly responsible for any orders purporting to be issued in accordance
with the degree of relaxation permitted by this rule whether the communication
conveying the orders is signed by himself or by an officer subordinate to him.
b.
On the strict understanding that the sole responsibility rests on him, an officer
possessing financial powers may authorise a subordinate officer to sign
communications and documents of a financial character on his behalf, provided
that the name of the officer, who is authorised to sign, is communicated to the
Audit Officer concerned. In such cases it shall not be necessary for the officer
possessing financial powers himself to sanction each item personally. This
applies also in the case of special powers exercisable by competent authorities.
c.
Provided that the above conditions are observed, claims for minor allowances,
which should ordinarily be countersigned by a formation
14
commander may be countersigned "for him" by an officer authorised to sign for
him.
d.
21.
When an officer possessing financial powers is absent on leave or duty financial

responsibility will rest on the officer performing his duties, who will, for the time
being exercise the full powers of the absentee.
Financial Advisers
a.
In each Service Headquarters, there will be a Financial Advisers (FA) of

appropriate status appointed by the Ministry of Finance whose tenure shall be
three years. The Service chief shall be consulted invari ably in the matter of
appointment of persons as Service Financial Advisers. In selecting personnel for
the post of Financial Advisers due care will be taken to appoint people familiar
with the organisation where they are being seconded.
b.
The FinanicaI Adviser will be attached to the service chief but his administrative
control will vest in the Ministry of Finance. In respect of professional standards
and procedures he will facilitate functioning of the Service and make full
utilisation of the budget provisions, with due regard, for efficiency as well as
economy.
c.
The Financial Advisers to the Services shall:--
d.
e.
(1)
Advise the Service Chief on all financial matters.
(2)
Examine and tender advice on the budget estimates and reviews

prepared by the Director of Budget before their submission to the
Service Chief.
(3)
Assist in the scrutiny of all new measures.
(4)
Assist in processing all cases with Government which require

Government approval vide annex B to this volume.
Th e financial advice will be restricted to the financial propriety of the proposals.

For reasons to be recorded, the Service Chief may over rule the Financial
Adviser in cases which fall within the authority delegated to Service Chief.
Differences of opinion on whether a case falls within the authority delegated to
Service Chief shall be referred to the Ministry of Defence.
Consistent with the principles underlying the system, the following procedure
shall be adopted in obtaining financial advice and associating Finance Officers in
cases which fall within the delegated authority of the Service Chief:(1)
Committees. Full use of the Finance Officers should be made
15
by nominating them as members of policy and priority Committees, at
the discretion of the Service Chief.
(2)
Establishments. Finance Officers will be associated in the review or

reorganisation of military units and formations involving changes in
manpower or equipment.
(3)
Indents. All indents, not exceeding Rs.25 million in value, may be

finalised by Service Headquarters in accordance with the prescribed
procedure but those exceeding Rs. 25 million may continue to be
referred for financial advice.
(4)
Works. Finance Officers wil] be associated with works proposals at the

stage of scrutiny of projects and contract agreements as provided for in
the relevant orders.
(5)
Capital Works Programme

(a)
The Capital Works Programme of a Service for next financial

year shall be drawn up in consultation with the Service Financial
Adviser by the 31st May of the outgoing financial year on the
basis of the Budget Estimate for the ensuing year. The new
works may be arranged in the order of priority ie priority, I, II
and 111. Within one week of receipt of the sanction allocation
for the new financial year, adjustments may be made in it on the
basis of the actual budget allocation for this purpose and it shall
then be submitted for the approval of the Secretary General
Defence. Ministry of Defence will finalise it in consultation with
the ASMF within one week of receipt of the programme.
(b)
The Services may issue or take up for issue, administrative

sanctions for works included in the last years' approved Capital
portion there of in the normal way. Such works should be duly
accounted for in the overall approved ceiling of the new works
for the current financial year.
(c)
Foreign Training Programme. The foreign training programme of officers and personnel shall be prepared by the
Services and got cleared from the Financial Adviser of the
Service w61 in advance of the next financial year ie by the 31st
May. Immediately, on receipt of the sanctioned allocation for
the new financial year, the programme shall be tailored
according to the allocation for this purpose and submitted for
Government approval. Individual case sanctions included in the
programme so approved may be issued by the Service
Headquarters. Any change in the approved programme would
require Government approval.
(d)
16
FA's Advice Certificate. FA should tender advice on works
programme, training programme and other new measures for
their inclusion in the next years' budget without insisting on the
funds availability certificate.
(e)
Endorsement of Sanctions. To avoid audit objections at a

later stage sanctions issued by Service Headquarters, required
to be issued with the concurrence of the Service FA and on
which such concurrence has been obtained, shall be endorsed
by the Finance Officers, to the Controllers of Accounts, within
24 hours of their receipt. Sanctions which are issued by the
Service authorities in exercise of powers delegated to them
under the Regulations or Government orders, need not be
endorsed by the Service FA. Even in the case in which the
advice of the Service FA has been over-ruled in accordance
with these orders the sanction letter will be duly endorsed by
the AFA, as stated above.
(f)
References to FA's. It will be made in the following manner,

namely:(i)
All observations or queries raised by Finance Division

on a proposal should be, made once and not in
piecemeal. Thereafter the case should be deemed to be
completed.
(ii)
The observations made by Finance Division be sent to

the Service Headquarters.
(iii)
Not more than three references should be made to the

Service FA's Office. The cases should be submitted
complete in all respects at the normal AFA or DFA
level first, the second reference should be made at DFA
or FA level and the final, if still necessary, at FA level.
The advice rendered at this stage should be taken to be
the final advice of the FA. If the Service Chief considers
at this stage that the advice should be over ruled for
good and sufficient reason, action should be taken in
this behalf as provided in sub rule d above.
(iv)
Visit to Service Units or Formation. Finance Officers

will be encouraged to visit field units to familiarise
themselves with the working of the Armed Forces.
(v)
Meetings with FA Service. To clear backlog of outstanding cases, if any, periodical meetings may be
17
held between the Director Budget accompanied by the
Director concerned with the subject and the FA. The
minutes of the meeting should be forwarded to PSO
concerned at the Service Headquarters and the ASMF
inter alia. Later on, such meetings may be held with the
Deputy Financial Advisers also where feasible.
22.
Controller of Army and Air Force Accounts as Financial Adviser. Controllers of Army
and Air Force Accounts are invested with the duty of affording financial advice to
commanders and their staff. Fullest use shall be made of the assistance of the
Controllers in investigating all branches of expenditure with a view to restricting
expenditure as far as possible, consistent with efficiency.
23.
Communication of Sanction to Controller of Accounts. All sanctions by WA shall be

communicated to the controller of Accounts concerned.
24.
Lapsing of Sanction. A sanction for any fresh expenditure, not acted on for a year, shall
lapse unless it is specifically renewed, except in the case of:a.
An allowance sanctioned for an appointment or a class of officers, not drawn by

a particular incumbent of the appointment or by a particular set of officers.
b.
Additions made gradually from year to year to a permanent establishment under

a general scheme.
c.
An approved MES work. Fresh sanction is necessary if work is not

commenced within five years of the date of sanction.
25.
Sanctioning of Expenditure Not Covered by Rule. A formation Commander,

Commander Arty, the Chief of the Air Staff and OC No 1 Group may sanction, upto
the limit of powers conferred on him by rule 12, non-recurring expenditure not falling
within categories enumerated in rule 8 and not provided for in these regulations, or not
precisely or adequately covered by existing regulations, subject to the condition that the
expenditure must be a reasonable charge against Defence Services funds which, in his
opinion, is likely to receive the sanction of the Government, if referred to them.
26.
Claims of Petty Nature. Competent authorities, as defined in Passage Regulations,

1980, may sanction, in consultation with their Financial Advisers, travelling daims
including use of warrants and conveyance of stores and credit notes for amounts not
exceeding one thousand rupees in any case, which in their opinion would ordinarily be
sanctioned by the Government, except in the following cases:a.
Over-issue of travelling allowance and erroneous issue of warrants and credit

notes due to culpable negligence which fall to be dealt with under the rules in
Chapter 2.
b.
18
Travel by a class higher than that allowed by the rules.
c.
Conveyance of baggage in excess of tonnage authorised (as distinct

from conveyance of the authorised quantity of a passenger train instead of by a
goods train).
d.
Grant of daily allowance in excess of daily rates authorised.
Note: The monetary limits prescribed in this rule should not be taken as applying to the
total amount of TA Claims in question, but to such portion of the claims as
would otherwise have been submitted to the Government for sanction had
delegation of powers not been made.
27.
Issue of Store in Exceptional Cases. A Formation Commander and the Chief of the
Air Staff, may, upto Rs. 500.00 sanction the issue of stores or regularise previous issues
of stores in cases where issues are either not provided for at aft in the regulations or
where, in the opinion of the sanctioning authority, insufficient provision is made in
existing scales or rules, having regard to the special circumstances, attaching to each.
The exercise of the powers is subject only to the conditions laid down in rule 25 and to
the further conditions that:a.
b.
The case is one that is unlikely to recur frequently.

That the Financial Adviser concerned records his concurrence in
the action proposed.
Note:- Under this rule, issues made in error and over-issue from whatever
cause, may also be regularized by the above authorities subject to the
financial limits mentioned.
28.
Petty Items of Recurring Expenditure. A Formation Commander and the Chief of the
Air Staff may, in accordance with the general provisions of these rules, sanction petty
items of recurring expenditure upto an aggregate annual limit of Rs. 2,000.00 and in any
individual case upto a limit of Rs. 200.00 per annum subject to the further condition that
expenditure is sanctioned on subjects covered by these rules (see rule 29).
29.
Expenditure that may not be sanctioned

a.
No sanction may be given by an officer possessing financial powers which will

involve expenditure from the budget grant of any future year, except as
separately provided for in the Regulations for the MES and in respect of
temporary establishments or labour in excess of fixed scales, workmen and
temporary establishments or labour referred to in rule 11.
b.
Nothing in these rules shall be held to authorise as officer possessing financial

powers to sanction the employment of temporary establishments.
19
or labour in excess of fixed scale:(1)
To sanction a temporary increase to the clerical establishment of his

own office or that of any member of his staff. Such temporary increases
shall require the sanction of the next higher competent financial
authority.
(2)
To sanction temporary establishment, required for more than six months

(except as provided for in the Regulations for the MES and in ride 15).
This requires the sanction of the next higher CFA but the employment of
temporary establishment for a period of more than two years of the
creation of a temporary post, on more than the Basic Pay Scales 1 and
% requires the sane government.
Note:- The provision of sub-rule (2), clause b ibid shall not be applicable to the
sanctions issued under Rule 9 b..
c.
Further, nothing in these rules shall be held to a~t~o?n-e an officer to:- (1)
Sanction expenditure in excess of fixed annual allotments.
(2)
Sanction expenditure which is liable to establish a new ride or practice

involving further expenditure in the future, eg, admit unauthorised
persons to treatment in a military hospital, transfar an office from the
plains to hills.
(3)
Sanction a pension in excess of the amount admissible under rule.
(4)
Sanction an advance or loan not authorised by rules.
(5)
Authorise the payment to Government servants of any remuneration or

allowance to which they are not entitled under ordinary
rules.
Sanction the provision of new kinds and patterns of furniture.
(6)
30.
Abandonment of Revenue and Expenditure. No order involving abandonment of

revenue for which credit has been taken in the budget shall be issued and no
expenditure which has not been provided for in the budget or, if provided in the budget
has not been duly sanctioned, shall be authorised without the concurrence of the
Financial Adviser concerned.
31.
Expenditure Against Allotment

a.
The authorities to whom allotments are made shall watch progress of

expenditure and ensure that it does not exceed allotment. To achieve this object
the primary controlling authorities shall maintain a complete record of
disbursement & and commitments against allotments in the form prescribed in

Annex C. MAG shall render monthly statements in respect of static units only.
showing the amount compiled in accounts against allotments. When actual
disclose any tendency to excessive
20
expenditure primary controlling authorities win take steps to regulate
expenditure so as to keep it within the grant. Where it may not be possible to
restrict expenditure within allotment a report asking for supplementary allotment
will be submitted, with full reasons, to the next higher authority. The latter
authority will sanction the additional grant asked for from the reserve held by
him or from surrenders reported to him. Where no reserve or no surrenders
received he will refer the case to the central controlling authority who will take
all further action for making additional allotment and procurement of funds in
consultation with his Financial Adviser. On the other hand, if savings are
anticipated the primary controlling authority will report the fact to the next higher
authority, giving reasons for surrender and stating the amount surrendered. The
surround of excess allotments at the earliest possible date is ttant ste it will
enable the excess to be diverted to meet shortages in the grants under other
heads.
b.
Appropriate entries will be made in the budget allotments register (Annex C).
c.
The intermediate controlling authority shall keep a constant watch on the

progress of expenditure as shown in the monthly statement received from the
Accounts Office and shall:-
d.
(1)
Draw the attention of the primary controlling authority concerned to any

indication derived from his scrutiny or from his knowledge of future,
developments, of either a danger of overspending a particular allotment
or excessive allotment under any head.
(2)
Review the position of his allotments every month with the object of
deciding whether any sums can be surrendered from his reserves, and
notify all surrenders to central controlling authorities.
If on the other hand his reserve under any particular control heads is exhausted
and he has not been able to meet demands for supplement ary allotments under
that head to the extent accepted by him he may either re-appropriate funds from
his reserve under another control head or failing that, submit an application
giving full particulars and reasons for the necessary supplementary allotment. All
surrenders and supplementary allotments, whether resulting from
re-appropriation or otherwise, will be duly entered in his budget allotments
register. Re-appropriations will be reported monthly to the Service
Headquarters controlling authority conceived. The central controlling authority
shall review the position every month on the basis of actual expenditure
reported by MAG, intermediate controlling authority and such other factors as
might be known to them. Where additional allotment is asked for they will do so
either from the reserve held by them or from
21
the surrenders reported to them. If these sources are exhausted additional
allotments will be made by Service Headquarters after obtaining proper
sanction.
32.
33.
Estimates of Operational Expenditure,

a.
When operation or important special services involving the expenditure or large

sums take place, the Ministry of Defence shall at once report the fact to the
Additional Secretary, Military Finance (ASMF), together with an assessment of
the probable duration of the operations; and shall supply that authority as
promptly as possible, with a scheme giving in detail the composition and
strength of the force; the conditions of service and concessions applicable to
troops 1~ non-combatants (enrolled and civilians) to be employed and such
other particulars as may be necessary.
b.
Copies of this scheme as soon as it has received the sanction of Government

shall be furnished by the Ministry of Defence to the ASMF for communication
to all controllers of accounts and it will form the recognised basis of estimate
and audit by the Ministry of Finance and its officers. All subsequent changes
which may materially affect expenditure shall promptly be communicated to the
ASMF and the controllers and others concerned. The ASMF shall provide
ways and means and shall see that the sanctioned appropriations are not
exceeded. It is to be clearly understood, in questions of this nature, that the
primary responsibility for expenditure on field operations and similar services
rests with military and air force authorities. It is for them to see that in
the at most economy is observed in expenditure in the field, as the case
may be, at the base and in the supplies necessary for the requirements of the
forces concerned. Subject to the above considerations, the general rules in
these regulations as to the exercise of financial powers during peace shall apply
equally during war or when special operations are undertaken.
Financial Powers Under Civil Service Regulations. The officers mentioned below
shall exercise the powers or part of the powers of a Local Government under the Civil
Service Regulations to the extent specified in the table below:-TABLE
Officers
Powers
a.
Formation Commande Full
b.
Director of Personnel,
Air Force.
powers of a Local Government except

under chapter XXXVIII of the Civil Service
Regulations in respect of individuals under their
orders (excluding the personnel of the MES and
those employed at Service Headquarters, who'
are not appointed directly by the Government
22
provided that wherein the CSR powers are conferred
on Provincial Government only, such powers shall be
exercised only by the Federal Government.
c.
E-in-C.
Full powers of a Local Government except

those under Chapter XXXVIII and Article 361A of the
CSR which shall be exercised by the President only, in
respect of individuals under his orders (excluding
regular General Headquarters Staff) who are not
appointed directly by the Government, provided that
wherein the CSR, powers are conferred on Provincial
Government only, such powers shall be exercised by
the Federal Government. As no subordinate authorities
under the administrative control of E-in-C have so far
been recognised as heads of departments under the
CSR, powers under Articles 89, 147, 177, 178 (b),
253, 254, 321, 514 (a), 520 (iii) and 763, Wid, shall
not be re-delegated.
d.
CAO.
Powers under Chapters V and VI and Articles 459

of the CSR in respect of subordinates placed in basic
pay scales 1 to 16, who are employed in GHQ and Air
HQ.
e.
MAG.
Powers under Article 459 of the CSR, in respect

of subordinates placed in basic pay scales 1 to 16 and
who are employed in establishment under his control.
34.
Whole Time of a Government Servant. Unless, in any case, it is otherwise distinctly

provided, the whole time of a Government servant is at the disposal of the Government
which pays him, and he may be employed in any manner required by competent
authority without having a claim for additional remuneration, whether the services
required of him are such as would ordinarily be remunerated from general revenues or
from a local fund.
35.
Fees and Honoraria

a.
A Government servant may be permitted by the general or special order of a

competent authority, if it is satisfied that this can be done without detriment to
his official duties or responsibilities, to perform a specified service or series of
services for a private person or body or for a public body administering a local
fund eind to receive as remuneration therefore, if the service is material a
non-recurring or a recur ring fee. No Government servant shall undertake such
work without first obtaining the sanction of the competent authority who will,
23
unless the Government servant is on leave, certify that the work can be
undertaken without detriment to his official duties and responsibilities.
b.
A Government servant, may be granted an honorarium from general revenues as

remuneration for work performed which is exceptional in character and either
so laborious or of such special merit as to justify a special reward. This test of
exceptional merit shall always strictly be applied. Except when special
reasons, which should be recorded in writing, exist for a departure from this
provision, an honorarium shall not be granted unless the work has been
undertaken with the previous consent of the sanctioning authority and its amount
has been settled in advance.
c.
For both fees and honoraria, the sanctioning authorities shall record in writing
that due regard has been paid to the general principle enunciated in rule 38 and
will also record the reasons which in his opinion, justify the grant of the extra
remuneration. The amount of an honorarium or fee shall be fixed with due
regard to the value of the service in return for which it is given.
d.
Any Government servant shall be eligible to receive without special permission:(1)
The premium awarded for an essay or plan in public competition.
(2)
Any reward offered for the arrest of a criminal, or for information

or special service in connection with the administration in of
justice.
(3)
Any reward payable in accordance with the provisions of any Act

or Regulation or Rules framed thereunder.
(4)
Any reward sanctioned for services in connection with the

administration of the customs and excise laws.
(5)
Any fees payable to a Government servant for duties which he is

required to perform in his official capacity under any special or local law
or by order of Government.
e.
A Government servant whose duties involve the carrying out of scientific or

technical research shall not apply for or obtain, or cause or permit any other
person to apply for or obtain, a patent for an invention made by such
Government servant save with the permission of the Government and then only
on such conditions as he may impose.
f.
Unless the Government by special order otherwise directs, one-third of any fee
including a fee received by a Government servant for giving expert evidence
before a court of law, in excess of Rs. 50.00 or, if
24
a recurring fee of Rs.50.00 in one financial year, paid to a Government
servant for work undertaken by him for a private or public body or for a
private person shall be credited to general revenues. In other words, if any fee
exceeds Rs. 50.00 non-recurring, or Rs. 50.00 in a financial year recurring,
one-third of the total amount payable will be credited to general revenues,
provided that the amount retained by the Government servant concerned will
not, merely owing to the operation of this rule, be reduced below Rs. 50.00 if
non-recurring, or Rs. 50.00 a year, if recurring. In applying this rule
non-recurring fees shall be dealt with separately from recurring fees.
Note
1.
This rule does not apply to fees received by Government servants from
a regimental fund or from a university or other examining body in return
for their services as examiners., to fees of any kind received by medical
and veterinary officers in military employ or to payments for services of
a social nature rendered to a club or similar organization of the
Government servant's fellow employees as distinct from services
rendered on a commercial basis to a private individual or corporation.
2.
The authority competent to sanction the acceptance by a govern ment

servant of any fee whether recurring or non-recurring shall report the
matter to the Audit Officer concerned and realize the Government
share, if any.
g.
Subject to the provisions of sub rule f above, when a fee is paid for work done
by a Government servant during such time as would otherwise be spent in the
performance of official duties, the fee shall be credited to general revenues
provided that a competent authority, for special reasons which shall be
recorded, may direct that whole or any part of it may be paid to the
Government servant.
h.
The MGO shall be the competent authority for the purpose of this rule, in
respect of all civil and military personnel employed in Inspectorates of
Armaments, Vehicles and Engineering Equipment, Electronics and Instruments,
and Stores and Clothing, EME Workshops and Installations and Ordnance
Depots. The MAG is the competent authority in respect of personnel employed
in Military Accounts Department. These officers are authorised to sanction an
honorarium up to a maximum of Rs. 500.00 in each case in respect of personnel
under their orders who are not appointed directly by the Government of
Pakistan and who are not employed in the MGO Branch at General
Headquarters. The Chief of the Army Staff shall be the competent authority in
respect of all civilians except those employed in Military Accounts Department,
and army personnel employed in formations up to a maximum of Rs. 1,0001each case. All other cases shall be referred for the orders of the Government.
25
36.
Cheques.
The following general rules, affecting cheques, are prescribed, namely:--
a.
Cheques are payable at any time within three months after the month of issue
and to ensure payment after that period, a fresh cheque should be obtained by
surrender of the un-cashed cheque.
b.
Cheques drawn in favour of a Government servant must be made payable "to

order" only. Those drawn in payment of personal dues shall, as a general rule,
be crossed but an uncrossed cheque may be issued on written request at the
risk of the payee. In the case of personal claims of civilian gazetted servants the
payment shall be made by crossed cheque. Those drawn in favour of persons
not in Government employ may be made payable to "bearer" when the issue in
these terms is requested. No advice of the issue of a cheque is necessary. The
amount of all military cheques should be expressed in figures and words (in
words for the amount of rupees only).
c.
(1)
(2)
Cheques drawn in favour of Government officers and departments in

settlement of Government dues should always be
crossed 'A/C
payee only not negotiable'.
Unless it is inconvenient to the payee, all cheques should be crossed,
crossing being done by adding the words "A/C payee only" instead of
the general crossing "& W.' All cheques in favour of Government
officers will if sent by post, be registered. In the case of cheques in
favour of private individuals, they in should be delivered either in person
or through a Government officer; when it is necessary to sent such
cheques by post, they will be sent by registered post acknowledgement
due, and a
declaration should be obtained from the payee in writing
that he accepts the risks involved.
d.
In the case of units /formations, cheques for amounts due will be crossed and
marked "A/C payee only" and together with PAF (CMA) 223 sent direct to the
Bank or Treasury by the controller of accounts for credit to unit's or formation's
current accounts. At the same time, a detailed statement will be sent to the unit
or the formation concerned. For this purpose all units and the formations in
question should open a current account with the State Bank of Pakistan or
National Bank of Pakistan where such bank exists, otherwise in a local treasury.
e.
The supply of cheque books, for the purpose of operating bank account will be
made by the Bank itself but in respect of personal deposit account with civil
treasuries, cheque books should be obtained from civil Accountant General.
f.
In no case should payment be demanded from bankers, and expenses
26
incurred for the purpose of drawing cash until and intimation of the receipt of the
cheque and credit of its value to the account concerned, is received from the
Bank or Treasury except when there is sufficient credit in the particular fund
account. The intimation slip issued by the Military Accounts Department is no
authority for either drawing cash or posting and completing ledger accounts in
advance.
g.
When claims are submitted to Controllers of Accounts for cheques to be issued

which have merely to be passed on to the creditors, the memorandum
forwarding the claim should dearly indicate "Forward cheques direct to . . . . .
.... The Controller of Accounts will then forward the cheque direct to the firm or
person whose bill is to be settled and intimate to the unit or formation that this
has been done.
h.
In the case of units and formations which are located in a station where there is
no local branches of the State Bank of Pakistan or the National Bank of
Pakistan or a civil Treasury, the above rule would not apply and cheques
should, therefore, be sent to them direct.
j.
With the exception of local payments for less than Rs. 10.00 and out station
payments less than RS. 100/- in value in each case, which should be made in
cash, all payments must be made by cheque.
k.
All bills for petty works or supplies on Government Military Farms up to a limit
of Rs.25.00 may be paid in cash and not by cheques at such farms as may be
approved by the Director, Remount, Veterinary and Farms.
Note: 1.
2.
l.
In the case of military farms, payment in excess of Rs.

75.00 may be made in cash instead of by cheque for the
purchase of fodder, dairy produce or stores, cattle, etc, from
the local petty dealers or from villages situated at
considerable distances from headquarters and when it is not
possible to issue a cheque for such purchases, the assistant
Director or Deputy Director concerned being the deciding
authority as to whether payment should be made by
cheque
or cash.
In the case of the Remounts Wing of Remount, Veterinary and
Farms Corps local payments for the purchase of animals may
be made in cash at the option of the purchasing officer.
Cheque books must be kept under lock and key in the personal custody of the
drawing officer who, when relieved, will take a receipt for the number of blank
cheques made over to the relieving officer, whose specimen signatures should
be forwarded to the bank/treasury officer concerned by the relieved officer.
27
m.
The loss of a cheque book or blank cheque forms should be notified promptly
to the bank/treasury officer with whom the disbursing officer concerned has a
drawing account. Every officer should notify to the bank/treasury upon which he
draws the number of each cheque book as he brings it into use.
n.
When an officer sends a cheque or Government draft to a bank/treasury not for

cash payment, but to be credited in the bank/treasury accounts, he must
endorse it as follow:
"Place the amount to credit of Government Military receipt".
o.
Cheque drawn on the bank or any of its branches should be addressed to the
bank itself and not to any officer thereof, eg, National Bank of Pakistan,
Karachi.
p.
If a Disbursing Officer is informed that a cheque drawn by him has been lost he
will address the bank/treasury officer drawn on and forward the following
certificates for completion and return:-
"Certified that cheque No______________ dated ______________________ for

Rs-________ reported by the______________________to have been drawn by him
on this bank/treasury in favour of _____________________has not been paid, and
will not be paid if presented hereafter".
Bank/Treasury,_______________________ Bank/Treasury Officer.
The ________ 19".
Note: If the cheque has not been cashed, the bank/treasury officer will sign and return
the certificate, and the Disbursing Officer will then cancel the original cheque
and a fresh cheque may be issued.
q.
Alterations in cheques should be attested by the full signature of the Drawing

Officer and not by initials only.
r.
If a cheque is issued by Government in payment of any sum due by

Government, and that cheque is honoured on presentation to Govern merit's
bankers, payment shall be deemed to he made if:(1)
The cheque is handed over to the payee or his authorised messenger,

on the date it is so handed over.
(2)
It is posted to the payee on the date when the cover containing it is put
into the post.
Note: Cheques marked as NOT payable before a certain date should

NOT be charged to the account until the date on which they
become payable.
(3)
s.
28
The rule applies mutatis mutandis to a cheque in payment of
Government dues or in settlement of other transaction received and
accepted in accordance with provision of FR Vol. II (Army and Air
Force).
Unless otherwise specially sanctioned, an officer is entitled to one cheque only

in payment of his salary bill. This cheque will be free of premium and will be
payable on any bank/treasury in Pakistan. No change in the bank/treasury of
payment will be allowed more often than half-yearly, except in special
circumstances. Payments of all sums due to them on their personal account may
be made only to the officers themselves or at their written request or order to a
wen known banker or agent.
Exception. Cheques in payment of salary and payable on any bank/ treasury
located in a PAF Station may be issued free of premium to officers
of the PAR
t.
PAFA-35 (pay bill) need not be submitted through a banker or agent when an
officer requires his pay and allowances to be remitted to them provided he
informs the Controller of Accounts concerned, through such bankers or agent of
his wishes in the matter and endorses the pay bill each month as follows:"Pay
to
.....................
29
CHAPTER 2 - LOSSES, WASTAGE AND DAMAGE TO PUBLIC
PROPERTY - PROCEDURE AND POWERS TO WRITE OFF
37.
General Rules for Observance

a.
38.
All losses, whether of public money or of stores, shall be subjected to a

preliminary investigation by the officer in whose charge they were, to ascertain
the cause of the loss and the amount involved. For the purpose of the procedure
to be followed thereafter losses are classified as under: (1)
Losses of stores.
(2)
Losses of public money.
b.
When an investigation into a case of loss due to theft, fraud or neglect discloses
a defect of system and when irrecoverable debts of units are attributable to that
cause, a report shall be made to the Government through the usual channels and
the Controller of Accounts concerned together with a recommendation for
rectifying the defect. Petty defalcations or petty thefts need not be reported.
c.
The monetary limits of sanction specified refer to each separate case of loss and
it shall not be permissible to sub-divide a case of loss with the object of bringing
the amount within the financial powers of the authority dealing with it (see also
rule 19).
d.
In regard to courts of inquiry, see AR Instruction 334. If an Audit Officer is not

satisfied with the composition of a Court of Inquiry, the matter will be brought
to the notice of the formation Commander.
e.
The value of such losses shall be checked by the audit authorities before action
is taken for their regularization.
Losses of Stores
a.
b.
These are classified as under,: (1)
In base and station supply depots.
(2)
In all other cases.
Losses of stores in. base and Station Supply Depots.

(1)
Procedure. When stores are lost, destroyed, found to be deficient

through wastage or otherwise, or damaged by fire or otherwise, the
storekeeper concerned shall personally be responsible that an
immediate report is made to the officer commanding. The latter
30
shall investigate the cause of the loss, the amount involved; and the
circumstances of the case. He shall also report the occurrence to the
officer commanding the station. The officer commanding the station shall
himself carry out an investigation or assemble a board of officers for the
purpose if he considers it necessary. The results of this investigation
shall be communicated to the CFA through the usual channels for
further action as laid down in sub-rule (a) and (b) below:(a)
If the investigation shows that the loss is not due to theft, fraud
or neglect, it shall be written off by, the CRA in consultation
with his financial adviser.
(b)
If it is decided that the loss is due to theft, fraud or neglect, the

CRA shall in consultation with his Financial Adviser, according
to the circumstance of the case take action as under:i.
If the persons responsible are not Governments servants,
the CFA may write off the entire loss for reasons to be
recorded in writing. He may allow, but shall7Mornpel
the individual or individuals concerned to make good
the loss in whole or in part. If the loss is made good in
part, he may sanction the write off of the balance for
reasons to be Recorded in writing. He may, with the
sanction of the com petent authority, institute legal
proceedings against g, the persons responsible in a
Court of low in accordance with the procedure laid
down in respective service regulations.
ii.
If the persons responsible are civilian Government

servants, the WA may write off the entire loss for
reasons to be recorded in writing. He may allow, but
shall not compel, the individual or Individuals concerned
to make good the loss in whole or in part. If the loss is
made good in part, he may sanction the write off the
balance for reasons to be recorded in writing. He may
take departmental action against the individuals
responsible or in cases where such action requires the
orders of a higher authority, submit the case for orders
together with his recommendation. He may 'llwe
sanction of the competent authority, institute legal
proceedings against the persons responsible in court of
law in accordance with the procedure laid down in the
respective regulations.
iii
If the persons responsible are subject to military law,
31
the CFA may write off the entire loss for reasons to be
recorded in writing. He may allow, but cannot compel,
the individual or individuals concerned to make good
the loss in whole or in part. If the loss is made good in
part, he may sanction the write off the balance for
reasons to be recorded in writing. He may initiate
appropriate action to effect recovery in whole or in part
from the pay of the individual or individuals responsible,
as penal deductions under the Pakistan Army Act,
1952 (XXXIX of 1952), or, as the case may be
stoppages under the Pakistan Air Force Act, 1953 (V1
of 1953). He may take or initiate disciplinary action
against the individual or individuals responsible. Any
one or more of the above courses of action may, at the
discretion of the competent authority, be taken against
the persons responsible.
(2)
Write off Power.

The financial powers of officer In respect of
losses referred in this rule shall be as specified below:
S/No Officers
Losses Not Due
Losses Due to
to Theft, Fraud
Theft, Fraud or
Neclects
Neglects
(a)
Service Chief
Rs.500,000/Rs 100,000/(b)
(c)
(d)
(e)
(f)
QMG
Corps
Commander
Divisional
Commander/
Force Commander
Northern Area[
Independent
Brigade Commander
Brigade/Log Area
Commander
ADS&TICO S&T
Battalion
(Lt Col)
Above Rs.
25,000/up to Rs.1,00,000/(in consultation
with FA(Army)
5,000/-
Rs.25,000.00
Rs. 5,000.00
Rs. 10,000.00
Rs.2,000.00
Rs. 5,000.00
Rs. 500.00
Rs.2,000.00
Rs Nil
32
c.
(g)
OC Supply
Depots/HQ
supply coy
(Lt Col)
Rs. 2,000.00 Rs. Nil
(h)
OC Supply
Depots/Petrol
Depots/Petrol
Contract Platoon,
(Maj and below)
Rs. 250.00
Rs. Nil
Losses of Stores in All Other Cases

(1)
These losses shall be investigated by the commanding officer of the
individual immediately in charge of the stores lost. If his investigation
shows that the loss is not due to theft, fraud or neglect he shall submit
the case to the competent financial authority. If his investigation show
that the loss is due to theft, fraud or neglect he shall submit the case to
the formation commander or the Chief of the Air Staff or to the prescribed authority in the case of departments see rule 40. This authority
shall arrange for the assembly of a court of inquiry to investigate the
reported loss unless the loss involved is Rs. 5,000/- or less in which
case the holding of a court of inquiry may, at its discretion, be dispensed
with. In the case of ordnance stores damaged or rendered
unserviceable through supposed neglect on the part of a unit, the court
shall be constituted as laid down in AR(I). The case shall then be
submitted to the CFA. The CFA shall in consultation with his Financial
Adviser, take action as laid down in rule 38b.
(2)
Powers to Write Off. The Financial powers of officers in respect of

losses referred to in the preceding sub-rule shall be as specified below:S/No
Officers
Losses Not Due

to Theft, Fraud
Neclects
Rs.
(a)
Units and Formations other

than those detailed in serials
(b) to (h) below
i.
OC unit, establishment 250.00 Nil

(Maj and below/
equivalents)
Losses Due to
Theft, Fraud or
Neglects
Rs.
33
ii.
iii.
(b)
@ CO Unit
(Lt Col equivalent)
2,000.00
Station Commanders/ 5,000.00

Commandants Training
Institution Establishments
(Col and above).
Nil
500.00
iv.
Brigade Commander/ 7,000.00

PAIP Base Commander.
1,000.00
Logistic Area
Commander.
2,000.00
vi.
Divisional Commander/ 15,000.00

Force Commander
Northern Area
Independent Brigade
Commander.
3,000.00
vii.
Corps Commander
25,000.00
5,000.00
viii.
PSO concerned at
GHQ1DCACS(A)
(In consultation with
FA of the Service
concerned).
Above
25,000.00
upto
1,00,000.00
10,000.00
5,000.00
MES
i.
ii.
iii.
iv.
v.
vi.
CMES
200.00
Nil
OC Engr Stores.
200.00
Nil
Addl CE (Col/
2,000.00
500.00
equivalent).
Addl CE (Brig/ 5,000.00
1'000
equivalent) W&CE.
Corps Commander
25,000.00
5,000.00
Above
QMGIMGO/DCAS(A)/ 25,000.00 5,000.00
E-In-C*
upto
(In consultation with
1,00,000.00
FA of the Service
concerned).
34
@ For GHQ and AHQ Chief Administrative Officer and
his equivalent will exercise these powers
*In respect of MES establishment directly under his
control.
(c)
ITD Installations
ii.
iii.
iv.
(d)
Rs.
Rs.
Chief Inspector of
2,000.00
Nil
inspectorate 1C0 inspection
Depot (Lt Col).
Chief Inspectors of
5,000.00
1,000.00
Inspectorate/CO
Inspection Depots
(Col & above).
DITD at Service
15,000.00
3,000.00
Headquarters.
MGO/PSO concerned Above
at AHQ
25,000.00
5,000.00
(in consultation with
to 1,00,000.00
FA of the Service
concerned).
Ordnance Installations
i.
ii.
iii.
iv.
OC Ord Depots/PAF 500.00

Supply/Equipment
Depots (Maj & below
equivalent).
Chief Ordnance Officer 2,500.00
Ordnance Depots/PAF
Supply /Equipment
Depots (Lt Col/
equivalent).
Commandant Ord Depot 5,000.00
PAF Supply /Equipment
Depots(Col and
above /equivalent).
Nil
DOS.
3,000.00
15,000.00
Nil
1,000.00
v.
MGO/PSO concerned
at AHQ
FA of the Service
concerned).
Above
25,000.00
5,000.00
up to
1,00,000.00
(e)
(f)
35
EME installations
Rs.
Rs.
i.
OC Station/MES
500.00
Equipment Workshop
(Major and below).
Nil
ii.
OC Station/Medium
Area/Combined/
Central Workshop
(Lt Col).
2,500.00
Nil
iii.
Commandants
Combined and
Central Workshop
(Col and above).
5,000.00
1,000.00
iv
DEME.
15,000.00
3,000.00
v.
MGO
Above
(in consultation 25,000.00
5,000.00
with FA (Army).
upto
1,00.000.00
Farms and Remount

i.
OC MVH, CVSD
Remount/ Depot/
Farms, DRO
(Maj and below).
500.00
ii.
OC MVII, CVSD
2,500.00
Remount/Farms Depot,
DRO (Lt Col).
Nil
iii.
OC Remount/Farms 5,000.00
Depot (Col & above).
1,000.00
iv.
ADRV&F, Formation 2,000.00

HQ, ADJIV&F in HQ
Military Farms Group
(Lt Col).
200.00
V.
DR&VF
3,000.00
vi.
QMG
(in consultation upto
with FA (Army).
15,000.00
Above
25,000.00
1,00,000.00
Nil
5,000.00
36
(g)
ASC Units/Installations
Administered by GHQ
Rs'
Rs.
i.
OC Unit
(Maj and below).
500.00
Nil
ii.
OC Unit (Lt Col).
2,500.00
Nil
iii.
DS&T.
iv.
15,000.00
3,000.00
Above
QMG.
25,000.00
5,000.00
(in consultation upto
with FA (Army).
1,00,000.00
(h)
Units/Hospitals/Medical Installations
i.
OC Armed Forces
250.00
Medical Stores/
Inspectorates/
Laboratories (Major & below).
Nil
ii
OC Armed Forces
2000.00
Stores /Institute of
transfusion (Lt Col & Above).
Nil
iii.
CO Medical Unit/
Establishment/
Hospital.
(aa) Lt Col equivalent. 2,500.00
Nil
(bb) Col & above/

5,000.00
equivalent.
ADMS (Col & above) 5,000.00
DD1IS(Air).
1,000.00
v.
Brigade Commander/ 7,000.00

Base Commander PAR
1,000.00
vi.
Logistic Area
Commander.
10,000.00
2,000.00
vii.
Div Commander/
15,000.00
3,000.00
iv.
1,000.00
Independent
Brigade Commander.
viii.
Surgeon General.
15,000.00 3,000.00
37
ix.
x.
(j)
Rs.
Rs.
Corps Commander. 25,000.00 5,000.00
Above
PS0s concerned
25,000.00 5,000.00
GHQ and AHQ
upto
(in consultation 1,00,000.00
with FA of the service
concerned).
Service Chief.
2,50,000.00
50,000.00
d.
Losses of immovable property. Losses of, or damage to, military buildings or

other immovable property e.g. Bridges by fire or any other cause shall be dealt
with under the above rules. For this purpose the value of the loss or damage shall
be the total amount irrespective of any amount received from the insurance
company in the case of an insured building.
e.
Subsidiary Rules Relating to the. Treatment of Losses of Stores. The

following subsidiary rules shall be observed in cases where applicable in
addition to those laid down in rules 37 and 38c above :(1)
Means will be devised to ensure that every Government servant realises

fully and clearly that he will be held personally responsible for any loss
sustained by Government through fraud or negligence on his part and
that he will also be held personally responsible for any loss arising from
fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his
own action or negligence. The cardinal principle governing the
assessment of responsibility in such cases is that every public officer
should exert the same vigilance in respect of public expenditure and
public funds generally as a person of ordinary prudence would exercise
in respect of the expenditure and the custody of his own money. An
officer's honest errors of judgement involving financial loss may be
condoned, provided that he can show that he has done his best up to
the limits of his ability and experience. Any dishonesty, carelessness, or
negligence in the performance of the duties entrusted to him will be
penalised.
(2)
When stores are lost in transit the necessary investigation and action to
have the loss written off shall be taken by the consignee (consignor in
the case of ordnance stores supplied to foreign Governments). Trivial
discrepancies in quantities conditions or description, the value of which

does not exceed Rs 150.00 and w6ich are not Atributable to theft,
fraud, neglect or a fault of the carrier, c, covered on receipt of stores in
depots/units, will he adjusted without raising a discrepancy report
against the consignor. A dear receipt will be given to the consignor but
only the actual quantity received will be brought on charge. An
38
explanation of the discrepancy will be endorsed on the consignee's
receipt voucher which will be amended accordingly. When it is
considered advisable to inform the consignor of the discrepancy, e.g.,
error in designation, a discrepancy report will be prepared, enfaced
"Dealt with under Rule W' and the duplicate only sent to the consignor
with his copy of the voucher which will not be amended. The
amendment to the consignee's copy of the receipt voucher will be
vouchered for by the Groups Officer/ OC Unit concerned and the
discrepancy report will also be signed by Wm. If the value of such
losses is recoverable from the carrier company or Port Trust authorities
in Pakistan the consignees shall send to the Controller concerned a
memo giving full particulars of the loss together with a copy of the
communication in which the carrying company does or does not
acknowledge liability. Action to effect recovery shall be taken by the
Controller concerned. No claim shall be preferred against the carrier
Company or Port Trust authorities in Pakistan when the amount
involved is less than Rs 100.00. Claim in respect of insured consignments will be preferred irrespective of the amount involved.
(3)
The amount to be shown on loss statements shall be the value of the

stores lost or, in the case of stores damaged or in the case of stores
which on exan-dnation are found to differ in condition from that under
which they were held on charge, the estimated, actual where known,
cost of repairs except in cases where recovery from an individual is
involved whenrule 58 shall be followed. In the case of loss of air force
stores action shall be taken in accordance with A.P. 830 (Pakistan).
(4)
When any Government property is damaged but not actually deficient it

shall be surveyed and condemned if necessary, and the loss resulting
shall be written off by the CFA. The cost of making good any loss or
damage other than that due to reasonable wear and tear to public
property shall be assessed in accordance with the rule 58 and it shall
rest with the CFA to decide the degree of liability attaching to the
individual concerned.
(5)
In the case of a vehicle sent to an EME workshop for overhaul after an

accident, the cost of making good the damage caused by the accident
assessed (on the value of material and labour) by the workshop officer
shall be written off by the CFA independently of any liability for the loss
attaching to the unit or the individual concerned.
(6)
When, on taking stock, stores are found surplus or deficient, the

surpluses shall at once be credited to Government on a proper voucher
and the deficiencies shall be dealt with in accordance with the foregoing
rules under the orders of the CFA in cases where other specific
instructions exist.
(7)
39
In the case of stores and supply depots and medical stores depots,
where continuous stock-taking is carried out, each of the under
mentioned categories shall be treated as a separate transaction for the
purpose of determining the CFA empowered to write off losses and
shall be dealt with on separate loss statements:(a)
Loss of all individual items of dissimilar type discovered at a

stock taking except Air Force stores (see sub para 9).
(b)
(8)
Loss of all items of a similar type, as decided by the administrative officer ie except Air Force stores(see para 9).
Loss of stores discovered at stock taking, where theft, fraud or neglect
is not involved, upto a monetary limit of Rs 100.00 (Rupees one
hundred) will be written off by the Deputy Comdts/ Deputy C00s under
these rules.
(9)
In the case of Air Force units the total deficiencies will be determined in
accordance with the instructions laid down in Equipment Regulations for
the Air Force.
(10)
Loss of all items connected by the circumstances of the loss as a whole,

e.g. in cases of theft, fire, explosion, etc., shall be dealt with in a
separate loss statement.
(11)
In the case of consuming units where periodical stock taking is in force,

the total value of the loss discovered on each particular occasion of
cheek, irrespective of the time taken in checking the stores and
irrespective of the categories of stores dealt with, will be treated as one
transaction. Each transaction will be dealt with on a separate loss
statement.
(12)
Losses due to re-conditioning or re-classification of stores by inspectors

of Army stores during one examination, irrespective of the time taken
and categories of stores examined, shall be treated as one transaction,
i.e., on the same lines as for periodical stock taking.
(13)
Officers IC of Ordnance Establishments are empowered to write off

losses of fluid or semi-fluid stores, e.g., paints, oils, acids, coaltar, etc,
caused by leakage of containers which is considered as obviously due
to rough handling in transit, without further inquiry when the amount
involved does not exceed their financial powers.
(14)
A CFA is authorised to write off a loss (partly due to theft, fraud or

neglect and partly not due to theft, fraud or neglect) where the total loss
is within his financial powers in regard to losses not due to theft, fraud
or neglect, provided that the
40
portion of such loss which is due to theft, fraud or neglect is also within
his financial powers.
39.
40.
Public Money. The terms "public money" include in addition to cash proper:a.
Irrecoverable personal advances made to individuals no longer in

Government service.
b.
Overpayments; of pay and allowances made to individuals no longer in

Government service.
c.
All other irrecoverable cash claims including the value of issues on payment to
units or individuals the recovery of which would entail considerable hardship or
present special difficulty.
d.
Value of stores issued to contractors which, for any cause there has been a
failure to recover and the recovery of which would present special difficulty.
e.
Losses due to expenditure on freight in respect of stores despatched in error
f.
Losses resulting from the despatch or stores by other than the authorised
procedure.
g.
Irrecoverable debts of units disbanded in accordance with de-mobilization

orders.
h.
Losses in the imported stores occurring as a result of non-acceptance of

discrepancy reports (where the store have been brought on charge as received)
either in full or in part by the supplier (Financial Regulations (Army and Air
Force), Volume II refers).
Loss of Public Money

a.
Procedure
(1)
All losses shall be reported to the Formation Commander or Base

Commander PAF who shall arrange for the assembly of a court of
inquiry to investigate the loss.
(2)
If the court finds that the loss is not due to theft, fraud or neglect it will
be written off by the WA in consultation with his FA.
(3)
If it is decided that the loss is due to theft, fraud or neglect, the WA

shall, in consultation with his FA, take action, according to the
circumstances of the case, as laid down in rule 38 b.
b.
41
Write Off Powers. The financial powers of officer to write off losses in respect
of public money are specified as below:S/No
(1)
Officers
Losses not due,

to theft, fraud or
neglect
Losses due to
theft, fraud or
neglect
Rs
Rs
2,000/-
5001
% 2,000/@ 10,000/-
400/
2,000/-
2,500/% 2,500/
@ 12,500/5,000/% 5,000/@ 15,000/-
700/
500/
2,500/
1,250/
1,000/
3,000/-
Commandants
Training Institutions
Establishments /GHQ/ AHQ:(a)
Lt Colonel/ Colonel/
equivalent.
(b)
Brig /equivalent.
(c)
Maj General/
equivalent
and above.
(2)
Brigade/Logistic Area/ 2,500/700/

PAF Base Commander % 2,500/R&500/
(Air Commodore).
@12,500/2,5001
(3)
Divisional Commander/ 5,000/1,250/

Force Commander
@ 25,000/5,000/
Northern Area/
Independent Brigade
Commander.
(4)
Corps Commander.
25,000/-
5,000/
(5)
Surgeon General,
DS&T, DRV&F,
DOS, DEME, DITI).
5,000/-
1,250/
Remarks
42
(6)
QMG, MGO, IGT&E,

E-In-C and PS0s
concerned in AHQ
respective FA)
(7)
Service Chief &
Above
15,000/upto
50,000/-
2,00,000/-
3,000/
1,00,000/-
&
Service Chief may further delegate these powers to his subordinates.
In respect of irrecoverable advances to ranks who become casualties

and in respect of irrecoverable personal advances and over payments
of pay and allowances made to individuals no longer in Government
service.
In respect of irrecoverable debts of disbanded units.
41.
Exceptions
a.
The foregoing rules do not apply to unavoidable losses which may occur in
manufacturing or building operations iaor to losses in MES stock unless the
cause of loss is such as to necessitate inquiry. Similarly, the rules do not apply in
respect of.(1)
Airframes and aero-engines lost or damaged in flying accidents

(including equipment carried in or on such aircraft) in cues where there
is no contributory negligence or culpable default.
(2)
Airframes and aero-engines so deteriorated by wear and tear as not to

be worth the cost of repair.
(3)
Targets used for air firing practice over the sea or in the tribal territory
of the North West Frontier Province which are unavoidably destroyed
or lost in the practice.
(4)
Unavoidable breakages of glass ware in day to day work in laboratories

(excluding breakages due to careless handling).
Such equipment and stores will be struck off charge duly supported by unpriced
expense vouchers, or certificate issue vouchers in the case of the air force.
b.
Losses of the following stores incurred, under the circumstances and within the
percentage detailed in each case, will be treated as unavoidable and written off
on an expense voucher but Audit Officer should cheek and bring to notice any
tendency to treat the maximum loss up to the prescribed percentages as a
normal one. Losses in excess of the limit will be dealt with under rule 38:(1)
1 percent on crushing grains in Government stock.
(2)
(a)
(b)
(3)
43
Losses in hygroscope s ores, e.g., chalk , glue, while in
ordnance, charge due to dryage of moisture content upto a
maximum of 10 percent.
Losses due to dryage Spun Yarn Hemp imported from
overseas countries upto a maximum of 20%. No discrepancy
report will be raised against the suppliers provided there is no
shortage in length and the number of coils.
Wastage due to conversion or degrade of timber in depots and at

Military Farms upto the maximum percentages detailed below, will be
treated as unavoidable loss and written off on expense vouchers:Percentage
(a)
Conversion of log to plank
50%
(b)
Conversion of larger dimension planks

smaller dimension scantling
(c)
(d)
Conversion of sleeper to MT scantling 33-1/3%

Degree of timber while undergoing
10%
seasoning
33-1/3% to
Note: Wastage in excess of these percentages will be dealt with under

rule 38 a and b.
(4)
0.5 percent wheat on handling, cleaning and transportation to and from

seed cleaner at Military Farms.
(5)
Dryage of leather to the extent of 4% of the total quantity received from

trade provided that the number of hides is correct and that they are not
damaged in any way.
(6)
Fodder, handling and despatch. Wastage upto the maximum of 5

percent on each consignment of loose fodder despatched from one farm
to another or from depots to the bailing presses or headquarters and
vice versa. All fodder despatched by one farm or depot on any
particular day will be treated as the unit of consignment on which losses
will be calculated. The loss on each day's consignment will be
investigated on an expense voucher, to be prepared monthly for each
class of fodder and for each place, on which detail of each day's
consignment showing quantity despatched, quantity received, loss and
percentage of loss will be given and the responsibility for the loss
determined. Bailing hay (from stacks) and Bhoosa - Wastage upto 5
percent.
(7)
c.
44
Bading hay direct from crops on land-Wastage upto a maximum of 10
percent as determined by local conditions and at the discretion of the
DADRV&F, DDMF or ADRV&F, Okara. Dryage of crops (other
than fodder crops) between the date of harvesting and date of disposal.
The ADMF or DDMF, Okara, will compare the percentage loss with
the average percentage loss of the two previous years and this average
will be noted on the expense voucher together with any remarks
necessary regarding seasonal conditions. Dryage of hay during period
stacked Maximum 8 percent in each stack. Explanatory expense
vouchers will be prepared for endorsement by Assistant Director,
Remount, Veterinary and Forms or Deputy Director, HQ, Okara or
OC Supply Depot, ASC. These losses will vary according to seasonal
conditions and characteristics of crops. Dryage of green fodder and
vegetables between places of harvesting and issue maximum losses will
be laid down each month by ADMF or DDMF, Okara,
for
each station or distance and will be communicated to Local
Audit
Officers.
Milk. In handling and pasteurisation to the extent of 3 percent and in the
manufacture of evaporated milk (eg, handling, seaming and filling or
cans) to the extent of 6 percent. The percentage will be calculated on
the total milk handled during a month.
(8)
Polythene bags, losses of Polythene bags in handling, filling,

sealing and testing at Milk Powder Factory not exceeding 1.50%
of the total bags filled during a month.
(9)
Milk Bottles. Losses of milk bottles in seaming, capping and handling at

Military Farms not exceeding 0.5% of the total number of bottles filled
during the month.
(10)
Butter Tins. Losses of butter tins in seaming at Military Farms not

exceeding 1% of the total number of butter tins seamed during a month.
Losses of fodder and dairy produce in excess of the percentage mentioned

above will be valued on the following basis(1)
Fodder
(a)
Farms. At the general supply rate of the farm concerned.
(b)
ASC. At the general supply rate notified by the Farms Wing of

the Pakistan Remounts, Veterinary and Farms Corps for the
same station or at the local purchase rate at stations their entire
requirement of fodder by local contract, or in the case of
45
fodder obtained by transfer from the nearest farm at an
outstation at the general supply rate of the supplying farm plus
10 percent to cover cost of freight and handlings.
(2)
d.
Dairy Produce. At the highest sale rate in force of the farm in which the
loss occurs.
Where 'standard temperature' system of accounting is followed, gains and

losses in motor and aviation spirit, in bulk storage, which vary according to
temperature, will be adjusted against each other at the end of the month and the
net balance credited or written off, as the case may be. The same procedure
may be followed under the orders of the competent financial authority in cases
where the 'normal temperature' system of accounting is in vogue if that authority
is satisfied that the gains and losses in question are due to natural causes.
46
CHAPTER 3. - PURCHASE OF STORES, TRAINING AIDS AND TRAINING
PUBLICATIONS
42. General Rules, General rules for the purchase of stores and the supplementary
instructions are contained in Annex "D". The procedure for the purchase and disposal of
stores by the Directorate General of Defence Purchase or the Directorate of
Procurement is contained in Annex "E".
43
Finance W Powers. An officers financial powers in the matter of the purchase of

stores ordinarily extend to the limits to which he is empowered to enter into contracts.
But in the case of local purchase of stores the limits up to which power to purchase any
one article or any number of similar articles purchased at one time are as follow: a.
Local Purchase of Stores

(1)
Service Chief
(2)
* Q11G, MGO and PS0s concerned at AHQ Rs 2,50,000.00
(3)
Surgeon General, DS&T, DOS, DEME,

DITD and DRV&F
ADS&T Logistic Area/CO S&T Bn
ADR~ Division/Log Area,
ADOS, ADMS
Commandants appointment holders
(Col & Above)
(4)
(5)
(a)
Military Forms/Remount Depots
(b)
Ordnance Depots
(c)
Central and Combined Workshops
(d)
Medical Stores Depots
(e)
Chief Inspectors of Inspectorates
(f)
Training Institutions/Establishme
(6) Commanding Officers appointment Rs

holders (Lt Col)
(a) Supply Depots
(b) Military Farms/Remount Depots
Rs 10,00,000/-
Rs
75,000.00
Rs
15,000.00
Rs
25,000.00
15,000.00
(c)
47
Ordnance Depots
(d)
Central, Combined & medium/Area

Workshops
(e)
(f)
Chief Inspectors of Inspectorates
(g)
Training Institutions /Establishments
(7)
Officers Commanding (Major & below)
(8)
Rs 5,000.00
(a)
ply Depots
(b)
Military Farms/Remount Depots
(c)
Ordnance Depots
(d)
Independent Workshop Company/

Recovery Company [Workshop Section
(e)
(f)
Army Stationery Stores Depot
Chief Administrative Officer at GHQ

and his equivalents at AHQ
Rs 5,000.00
@ These powers may be further delegated in writing by the

COAS to his subordinates without consulting Military
Finance CAS may similarly delegate powers upto
Rs1,00,000.00 to their PS0s, and lesser powers to other
subordinate officers.
*QMG may also exercise powers upto Rs 50,000/- for local
purchase of MT spares required for GHQ transport company
only QMG's financial powers for local purchase of stores, other
than ASC supplies and services will remain as laid down in this
rule.
Notes : 1. The purchases sanctioned by Chief Ordnance Of i er or local
purchase officers appointed by a Chief Ordnance Officer should be
either for stores authorised in the Equipment Regulations or for those
that may be required for use in the workshop or laboratories of a

depot.
2. The financial powers of MES officers, in respect of purchase of
stores, are laid down in regulations for the MES.
3. For the financial powers of the Chief Administrative
Officer, and in respect of local purchase of stores, see rule 12.
48
4.
b.
An officer's financial powers for local purchase of ASS stores

(Supplies and Services) commonly known as local contract
supplies will extend to the limit to which he is 4inpowered to
enter into contracts.
Local Purchase
of Articles in
use (A-in-U) Stores.
(1)
Ordnance Installations:(a)
DOS
Rs 100,000.00
(b)
(2)
Commandants Rs 40,000/
Ordnance Depots/
Centre/School
(Brig/Col).
(c)
Commandants Rs 25,000/
Ordnance Depots
(Lt Col).
(d)
Commandants Rs 10,0001
Ordnance Depots
(Major).
EME Installations:
(a)
DEME.
Rs 1,00,000/
(b)
Commandant
Rs 40,000/
Central /Combined/
Aviation Workshop,
College/Centre
(Brig/Col).
(c)
Commandant
Rs 25,000/
Central /Combined/
Aviation Workshop,
Medium /Area/Sta,
Workshop (Lt Col).
(d)
OC Independent
Rs 10,000/Infantry /Armoured/
Mountain/AA Work
shop and Company,
Air conditioning
Station/MES
equipment workshop.
Note:These purchases are subject to the allotment of funds by the respective

Directorates at GHQ and observance of normal procedure as laid down in
these regulations.
49
(e)
(3)
c.
OC Workshop
Rs 10,000/section/OC Recovery
Company
(Major/Capt).
ITD Installations:(a)
DITD.
Rs.1,00,000/-
(b)
Chief
inspectors of
Inspectorates
(Brig/Col).
Rs 40,000/-
(c)
Procurement of (1)
Professional
Books, Magazines
and Periodicals (2)
for Military
Libraries or
Institutions.
Commandant
Rs 40,000/Inspection Depots
(Brig/Col).
(d)
Chief Inspectors of
Rs 25,0001
Inspectorates
Commandants
Inspection Depots
(Lt Col).
(e)
Chief Inspectors of
Rs 10,000/Inspectorates/OC
Inspection Depots
(Major).
IGT&E/PS0s concerned
Rs 75,000/at the AHQ.
per annum
Corps Commander.
(3)
(4)
(5)
Rs. 25,0001
per annum
Div Commander/
Force Commander
Northern Area/
Independent Brigade
Commander.
Logistic Area
Commander/Bde,
PAF Base Commanders.
Rs. 10,000/per annum
Commandants
Command & Staff
College Quetta.
Rs 50,000/per annum
Rs. 2,500/per annum
(6)
d.
Procurement
of Training Aids
50
Commandants Army
Colleges/Schools
of Instructions (except
Command and Staff
College) and the PAF
Staff College
(Drigh Road).
Rs 25,0001per annum
(7)
Commandants
Training Centres.
Rs 10,000/per annum
(8)
Directors of Arms and

Services at GHQ/
Directors of Edn AHQ.
Rs 5,000/per annum
(9)
Unit Commanders
(Lt Col).
Rs 1,000/per annum
(10)
Unit Commanders
(Major & Below).
Rs 350/per annum
(1)
Services Chiefs
(2)
Rs 2,50.000/per annum
(a)
Improvement and
up keep of ranges.
(b)
Preparation and
installations of
trolleys.
(c)
Purchase of
laboratory equipment,
water expenditure,
view graphs, slide
projects, epidia
scopes, models, charts, cassette
players/
tape recorders and
simulators.
(d)
Printing magazines.
IGT&E and PSO
Rs 50,000/-
concerned at AHQ.
per item
Note. Total expenditure on this account should not exceed 3,000 000/- in a financial
year. A separate head of account will be opened if it does not already exist.
51
e.
Remuneration for original

IGT&E/PSO (1)
Original writing
writing, revision,
concerned at
Rs 5,000/- per
modification of general AHQ.
book or pamphlet
staff training pamphlets
manual notes and
(2)
Revision or
instructions involving higher
writing
tactical doctrine.
Rs 2,500/-- per
book or pamphlet
(3)
Original writing
of training
instructions or
training notes
Rs 1,000/--per
training
instruction or
training note.
Note: Total expenditure on this account should not exceed Rs 1,00,000/- for
Army and Rs 15,000/- for Air Force in a financial year.
44.
45.
Despatch of Stores
a.
In case of emergency, officers responsible for despatch of stores may, within

the limits of their financial powers laid down in rule 12, incur extra expenditure
on the despatch of stores by other than the cheapest route or mode of carriage.
b.
ADOS, armament and signal stores, MT stores and general stores and clothing
at GHQ, are authorised to sanction, in cases of emergency, extra expenditure
incurred up to Rs 10,000/- which is beyond the financial power of the officer
ordered to despatch stores other than the cheapest route or mode of carriage.
Disposal of Surplus, Obsolete and Waste Stores

a.
The Director of Ordnance Services, with th 1 e concurrence of the Financial

Adviser, Military Finance, is empowered to order the disposal by dumping at
sea or by burning in ordnance factories of surplus unserviceable and obsolete
pattern arms, ammunition and explosives when their accumulation in ordnance
establishments has out-paced the normal break-up capacity.
b.
Waste store, including gunny bags and packing material, are stores which have
been utilised and have served their purpose in the Defence Services and have
been condemned under proper authority as being worn out in a sense which
connotes that they have no book value except as scrap. An example of such
waste stores is coal dust passing through a screen of 1/4 in square mesh, which
is in excess of normal issues.
52
c.
Obsolete stores are those which have become out of date in a particular service
and have to be withdrawn from equipment, aircraft or MT vehicles of that
service and which cannot be used up, issued to other arms of that service or
utilised any longer in manufactures (Ordnance, ME stores, medical stores and
air force stores).
d.
Surplus stores are stores which are current equipment of a particular service but
which cannot be utilised by that service against present or anticipated
requirements over a period to be determined on the merits of each case or
which are liable to deteriorate by the time they could be issued in the normal
course of events.
e.
Articles issued as samples will be struck off from store ledgers and returns
under the usual procedure supported by issue vouchers on PAIPZ-2096, or
certificate issue vouchers (in the case of Air Force). Expenditure incurred on
account of packing and freight, when not recoverable from the consignee, will
be borne by the establishment issuing the samples.
f.
Disposal of Surplus Stores

(1)
AG, QMG, MGO, IGT&E and PS0s

concerned at AHQ.
Rs 5,00,000/-
(2)
Surgeon General, DS&T, DOS,

DEME/Commander Logistics.
Rs 2,00,000/-
(3)
Commandants (Col & above/ equivalents):-
Rs 50,000/-
(4)
(a)
Supply Depots.
(b)
Military Farms Depots.
(c)
Ordnance Depots.
(d)
Central and Combined Workshops.
(e)
(f)
Army Stationery Store Depots.
(g)
Chief Inspector of Inspectorates/

CO Inspection Depots .
(h)
PAF Supply Equipment Depots.
Commandant (Lt Col /equivalent): -
Rs 25,000/-
(a)
Supply Depots.
(5)
(6)
46.
(b)
53
Military Farms Depots.
(c)
Ordnance Depots.
(d)
Central Combined and

Medium /Area Workshops.
(e)
Medical Store Depots.
(f)
Army Stationery Store Depots.
(g)
Chief Inspectors of
Inspectorates/CO Inspection
Depots.
(h)
PAF Supply Equipment Depots.
OC (Maj & Below /Equivalents):(a)
Supply Depots.
(b)
Military Farms Depots,
(c)
Ordnance Depots.
(d)
Central Combined and

Medium 1Area Workshops.
(e)
Medical Store Depots.
(f)
Army Stationery Store Depots,
(g)
Chief Inspector of Inspectorates/OC

Inspection Depot.
(h)
PAF Supply/ Equipment Depots.
Chief Administrative Officer,

GHQ and his equivalent at AHQ.
Rs 5,0001-
Rs 5,000/
Procurement of Centrally Purchased Stores

a.
General. All stores which are not classified as local purchase items shall be
centrally purchased.
b.
Stores-Indents and Estimates
(1)
All directors/Heads of Service concerned will prepare annually, indents

of stores, required for the Armed Forces during the
54
ensuing year, based on known and probable requirements of the year to
which they pertain. The indents will be sub-divided under vocabulary
sections or general heads, eg, in the case of ordnance stores 'Arms'
'Ammunition' Wireless Stores, etc, in the case of ASC stores under
'Provision "Materials' 'Gear' and 'Machinery', etc. The indents will be
submitted to the supplying authorities as per programme given out by
them. Urgent adhoc demand may be placed as and when necessary.
Notes: 1. For this purpose Service HQ, in consultation with their Financial Advisers,
will lay down commitment ceiling for placing indents both against foreign
exchange and rupee expenditure under different heads to ensure that budget
allocation is not exceeded.
2. For cancellation of indents and declarations of certain items as propriety the
laid down procedure will be followed.
c.
(2)
All indents not exceeding Rs 25 million in value may be finalised by

service headquarters in accordance with the laid down procedure but
those exceeding Rs 25 million may continue to be referred for financial
advice.
(3)
The indents will be as complete as possible and should show part

number, full nomenclature, specifications, drawings and other particulars
governing the supply, estimated cost of last purchase price (if known);
and the specific date or dates by which the stores are required.
Instructions regarding channel for submission of indents to the supplying
authorities will be issued by the Heads of concerned Service or
Directors in consultation with the financial authorities concerned.
Freight for Stores of Foreign Supply. A lump sum, calculated at the following
percentages on the value of the stores to be purchased from abroad, will be
added to Budget Estimates or Reports provided the same is not covered by
values at which indent have been costed:(1)
3% in the case of factory stores (other than machinery) Ordnance and

Inspection Section Stores.
(2)
6% in the case of Air Force Stores other than MT.
(3)
10% in the case of Air Force MT Stores and medical Stores and
machinery purchased for factories. This percentage applies to MES
stores also.
(4)
5% in all other cases.
55
CHAPTER 4 - BUDGET ESTEAATES AND ASSIGNMENTS
47.
Budget Estimates
a.
Well in advance of the financial year, on the dates and in the form prescribed,
the services headquarters shall submit comprehensive budget estimates to the
Ministry of Defence. These estimates will be submitted within the framework of
the long term Defence Plan so that each annual budget fits into and contributes
to objectives of long term planning. The Defence Plan will be continually kept
under review so that the framework remains realistic and up to date. The
estimates will be as detailed and supported by explanatory memoranda as may
be necessary to identity the main items of expenditure to+-enable the
Government to examine their justification. In the case of non-recurring
expenditure including purchase of stores and capital works, priorities will be
indicated in the context of the Defence Plan so that if full requirements cannot be
met, the needs are known in order of urgency and importance. In respect of
stores proposed purchases by main categories will be presented. Likewise, in
respect of capital works necessary lists including residential and non-residential
accommodation will be provided as at present. The foreign exchange
component of various items included in the budget will be indicated at the same
time. The budget estimates will be reviewed by the Government and sponsored
in the amount finally approved for presentation to the National Assembly.
b.
In the beginning of the financial year, on the basis of the budget demand voted
by the National Assembly, Ministry of Defence will
make
the
budget
allocations to the three services indicating separately the provision made for
non-effective charges, namely, pensionary liabilities, and for non-recurring
expenditure including capital works. Similarly, on the basis of the foreign budget
approved by the Government, foreign exchange allocation will be made.
Main items or categories of expenditure will be finally cleared by the
Government after examining their justification so that individual proposals do not
have to be referred to the Government during the year. It is contemplated that
throughout the year new measures including capital works, additional units or
other schemes proposed to be incorporated in the next year's budget would be
submitted to the Government for approval so that at the time of budget
discussions ab initio examination is avoided.
c.
In the case of provision of common user items by services, for the others, the
actual anticipated expenditure will be worked out by the
services
concerned and shown in its budget estimates. However, after the budget is
sanctioned necessary funds will be transferred from the user services to the
service providing common user stores for them.
56
e.
General Rules. The most careful supervision over expenditure shall be

exercised and on no account shall money be spent simply because it is available.
The following rules shall govern all estimates and military expenditure, namely:(1)
The sanctioned estimates form the limits within which authorised

expenditure may be incurred without previous reference to Government.
These limits are absolute, and apply to each subhead or minor head.
(2)
Expenditure which cannot be met from the sanctioned grant ipsofacto

requires the sanction of Government. When application is made for such
sanction, it should specifically be stated to what extent the original grant
will fall short of what is required.
(3)
Save for exceptional reasons expenditure, for which no provision has

been made in the estimates of the current year, should not be proposed.
When a proposition of this kind is made, it should clearly be stated that
no such provision has been made, and whether the expenditure can be
met from savings in the sanctioned grant. An explanation should also be
given why the expenditure is immediately necessary and why the
necessity for it was not foreseen.
(4)
Even sanctioned expenditure shall not be incurred until funds have been
provided. In the case of locally-controlled heads, and those centrally
controlled heads in respect of which allotments are distributed to lower
formations, provisional allotments will be made by the central controlling
authorities as early as possible before the commencement of the
financial year, against which all charges will be admitted in audit
provisionally pending confirmation of the provisional allotments after the
budget estimates have been finally sanctioned. If, owing to exceptional
circumstances, provisional allotments are not received before the 1st
July expenditure on account of pay and allowances may be incurred in
accordance with the sanctioned establishments and rates of pay, and in
the case of other items to the extent of the average monthly allotment of
the previous year.
(5)
f.
The unexpended portion of any existing grant shall lapse on 30th June of
each year. It is irregular to draw a sum of money for any purpose during
the currency of one financial year and expend or bring it to account in a
subsequent year. This does not apply to unspent balances in the amenity
grant which will not lapse to Government at the end of each financial
year but will be carried forward.
Preparation of Budget Estimates. No precise rules can be prescribed for
arriving at the amounts to be included in budget estimates or for
57
checking the amounts included in them, but an intelligent discretion. shall be

exercised with reference to the effect that events occurring or impending at the
time the estimates are under preparation, are likely to have on the receipts or
expenditure. The following general principles shall be observed in the
preparation of these estimates:-
g.
(1)
Only sanctioned expenditure may be included in the budget but at the

end of the estimate any fresh charge requiring sanction, that is likely to
be incurred during the year, should be noted.
(2)
All variations between provision for the ensuing financial year and that
for the current year must be explained, and when such variations are
due to the orders of Government the number and date of the order must
be quoted.
(3)
Fluctuating charges such as travelling allowances, etc, for which no

scales are laid down, will be calculated with reference to the average
normal expenditure of the previous three years and the orders affecting
such expenditure.
(4)
In respect of pay and other charges which are payable in arrears after
the close or the month to which they relate, provision should be made
for the amount due from the period Ist June to 31st May. In respect of
other charges, which are payable as soon as incurred, provision should
be made for charges likely to be incurred during the period 1st July to
30th June. Pay and allowances, which are fixed at daily rates should be
calculated for 365 days (366 days in the case of a leap year) and not on
monthly basis.
By Whom Prepared. Each controlling officer at Service Headquarters shall

prepare the annual budget estimates for the following year for each head,
sub-head or minor head for which he is responsible. The estimates will be
prepared according to the following programme:From Lower From Service
Formations to HQ to Ministry
Service HQ. of Defence
(1)
(2)
h.
Forecast.
Budget estimates.
20th August 25th September

15th October 15th December
Revised Estimates. The process of estimating does not end with the
preparation of the original budget estimates for the ensuing year but continues
through out the year. The previous estimates that are to
58
be prepared in the course of a year, in addition to the budget estimates,
are:(1)
Preliminary Revised Estimate. The preliminary revised estimate will

show the extent to which the sanctioned budget estimates for the year
are affected by circumstances known or orders promulgated either
before or after the 1st July which may necessitate modifications in those
estimates, and will be based on the actual expenditure for July and the
estimated expenditure for August to June of a current financial year.
Information required for this estimate in respect of locally controlled
heads of account will be furnished by the local authorities to the
controlling authorities at General or Air Headquarters so as to reach
them by the 20th August of each year. The controlling authorities at
Services Headquarters will furnish information required for the
preparation of this estimate to the Ministry of Defence so as to reach
them by 25th September. The Military Accountant General will also
furnish estimates in respect of his department so as to reach the Ministry
of Finance (Military) by the 25th September of each year.
(2)
The preliminary revised estimate is a forecast as accurate as possible of

what the actual results for the year are likely to be. All important
changes, tending to increase or decrease the budget estimates, as
indicated by actual figures available or by other circumstances which
have come to notice, or taken into account in the preparation of this
estimate. It will be based on the actual expenditure from July to
October and the estimated expenditure for the remaining eight months
from November to June of a current financial year. Information required
for this estimate in respect of all locally controlled heads will be
furnished by the local authorities to the controlling authorities at General
or Air Headquarters so as to reach them by the 15th October each
year. The controlling authorities at Services Headquarters will furnish
information required for the preparation of this estimate to the Ministry
of Defence so as to reach them by the 15th December. The Military
Accountant General will also furnish estimates in respect of his
department so as to reach the Ministry of Finance (Military) by the 15th
December each year.
(3)
Final Revised Estimates. The final revised estimate is the final estimate
for a current financial year and is based on the actual expenditure for the
first ten months from July to April and the estimated expenditure for the
remaining two months from May and June, taking into account any later
information or other circumstances which will affect the original grant.
The local authorities will furnish information required for this estimate in
respect of locally controlled heads to Services Headquarters by
59
the 20th November each year. The controlling authorities at Services
Headquarters will furnish information required for the preparation of this
estimate to the Ministry of Defence so as to reach them by the 1st June.
The Military Accountant General will also furnish estimates in respect of
his department so as to reach Ministry of Finance (Military) by the 1st
June each year.
j.
Classes of Voted Advances or Loans.

(1)
The detailed heads under which budget provision is made and charges
to personnel and unit of the armed forces are incurred are:(a)
"P-Deposits and Advances"Advance Repayable (Interest free).
(b)
"Q-Loans and Advances by the Government"Advances to Government Servants (bearing interest)Passage

Advances.
(2)
The QMG/AG will, by the 1st February, obtain budget estimates under
head "P-Deposits and Advances-Advances Repayable from
formations, etc, and submit a consolidated budget estimate to Ministry
of Defence through the respective Financial Adviser for acceptance and
sanction. After Government sanction has obtained, the estimates will be
forwarded to the ASMF by the 15th March for inclusion in the Cash
Requirement Estimates of the Defence Services. An estimate under
"Q-Loans and Advances by the Government to Government servants Passage advances" will be prepared by the QMG/AG and after
acceptance by the Ministry of Defence, forwarded to the ASMF by the
15th March for inclusion in the Cash Requirement Estimates of the
Defence Services.
(3)
In July of each year the ASMF will notify the amounts on account of the
various classes of advances included in the sanctioned budget estimates
for current year to the QMG/AG. The amount under the head
"P-Deposits and Advances - Advances Repayable", will be distributed
to formations, etc.
(4)
The following procedure for re-appropriations under these heads will be

observed:(a)
The sanctioned budget grant under each detailed head forms the
limit within which advances may be granted without the previous
sanction of the ASMF.
(b)
No advance will be granted unless the Audit Officer con-
60
cerned has certified that funds exist to meet it.
(5)
48.
(c)
QMG/AG will be the central authority at general Headquarters

responsible for the control of expenditure against the grant
under each detailed head.
(d)
Any re-appropriation between the allotments under heads

"P-Deposits and Advances - Advances Repayable" and
"Q-Loans etc" shall require the sanction of the legislature.
(e)
Transfer of funds under the same detailed head between the

allotments at the disposal of formations, etc, may be sanctioned
by the QMGJAG as required.
The procedure outlined above for the provision and re-appropriation of

funds under voted heads pertaining to army does not apply to advances
granted in the military accounts department in the Air Force which are
governed by separate rules.
Assignments
a.
General Rules. Within the limits of budget provision, controllers are authorised
to draw cheques on the State Bank of Pakistan and the National Bank of
Pakistan at places where the cash business of Government is conducted by that
bank or on a Government treasury or sub treasury at any other place in
Pakistan. In the case of disbursing officers who are allowed to draw funds by
cheques for their own disbursements, assignments of funds are arranged with
treasuries. By Controller of Accounts who will forward copies of such
assignments, necessary, to the State Bank of Pakistan Or the National Bank of
Pakistan, as the case may be. Ordinarily annual estimates of such
assignments)are prepared but supplementary assignments are also arranged for
by Controllers of Accounts when necessity arises. As regards the transfer of an
assignment from one disbursing officer to another, the necessary funds should
be surrendered to the Controller of Accounts by the officer desiring such a
transfer. The former will arrange for a supplementary assignment for the
requisite amount in favour of the other disbursing officer.
Note: 1. A disbursing officer, who is granted an assignment at a treasury/bank
shall, before commencing to draw upon the account forward his
specimen signature, duly attested by the senior officer of the
Headquarters to which he is attached, to the Treasury/bank. The
disbursing officer shall only commence to operate his account on
receiving intimation that his signature has been recorded.
2. When assignments on treasuries or the bank are granted
61
in respect of training grants, administered by the formation
commander every officer, who draws cheques against such
assignments will maintain a pass-book which will be sent
periodically to the treasury or the bank to be completed from
the register of cheques paid, and always immediately after the
close of the month. On the return of the book from the treasury
or the bank the formation commander will satisfy himself as to
the accuracy of the drawing during the month and of the
undrawn balance.
b.
Payments. Payments are made by treasury officers or the bank against the
assignments provided that the disbursements do not exceed the amount for
which provision has been made up to that period in the estimates.
c.
Additional Credit in Emergencies. In case of emergency, disbursing officers in

need of funds may obtain an additional credit on a civil treasury or the bank on
the authority of an Emergency Cash requisition (Defence Service) but before the
Station Commander gives an order for such extra funds, he must satisfy himself
of the propriety of the advance for which application is made. The disbursement
ordered shall at once be reported to the Controller of Accounts.
d.
Watch Over Drawings Against Assignments. Every disbursing officer must

watch his demands on his own and on the assignments of other officers
subordinate to him. Should his drawings appear likely to exceed his credits he
will apply on PAFA-213 for a supplementary assignment.
e.
D-ansfer of Assignment. A disbursing officer may arrange, in communication

with the Controller of Accounts for the transfer of his assignment, or any portion
thereof, from one treasury or the bank to another.
f.
Cash Assignments How Obtained and Drawn Against

(1)
Every disbursing officer is required to furnish the Controller of Account

by the Ist April in each year, with an estimate (PAFA213), of his cash
requirements for the ensuing year, showing the amount necessary for
each month and the treasury or the bank at which the assignments are
required. He will draw against the sum assigned to him exclusively by
cheques for which purpose separate cheque books for each treasury or
the bank to be drawn upon will be supplied by the Controller of
Accounts concerned.
(2)
In case of periodically recurring payments which have to be made at

stations other than that at which a disbursing officer is located,
arrangement for cash assignments on the treasuries or the
62
bank nearest to the stations at which the payments have to be made.
Care must be taken that assignments are obtained in all cases where this
method is suitable, ic, where the fact of regular payments having to be
made can be foreseen and provided for.
(3)
The drawings of any month added to the sums drawn in previous

months of the same financial year, must not exceed the amount for
which provision has been made up to that period in the annual or
supplementary estimate. Any balance unpaid on the last day of the
financial year will lapse except as regards cheques drawn before, but
paid after the end of the year, the amounts of which will be taken
against the balance of the assignment of the year in which the cheques
were drawn.
63
CHAPTER 5 - CLAIMS AND RECOVERIES
49.
General Rules
a.
Ordinarily all personal claims should be audited finally within twelve months
from the date of payment. Before recovery of an overpayment, detected within
this period, is effected, the individual against whom the claim is preferred will be
fully informed of its nature and of the method by which it is proposed that
recovery shall be made. If he considers that the claim is not in order and that
recovery should not be made, he may request the Controller of Accounts to
withhold recovery pending submission of an appeal to the CFA. An Audit
Officer may, if he considers the protest reasonable, postpone recovery pending
the submission of the appeal.
b.
Appeals must be submitted as expeditiously as possible. If an appeal is

submitted within two months, the question whether recovery should be delayed
until a final decision on the appeal has been arrived at, will be considered jointly
by the formation commander and the Controller of Accounts, (See rule 69).No
consideration as regards the question of the withholding of recovery will be
given to appeals not submitted within two months, and unless the delay can be
proved to have been unavoidable, the Audit Officer will recover the amount
without further question.
When there is a difference of opinion between the administrative authorities and

the Controller of Accounts over the propriety of a recovery or the rate of
recovery the matter shall, without delay, be reported to General Headquarters
through the Controller of Accounts for orders.
d.
In the case of over payments which have not been challenged within twelve
months from the date of payment the Controller of Accounts will call upon the
individual concerned, through the competent financial authority to show cause
why recovery should not be enforced. On receipt of the individual's reply the
Controller of Accounts will decide whether the amount should be written off, or
whether recovery should be effected, and will inform the Controller of Accounts
and the individual concerned accordingly. In cases where the competent
financial authority remits an overpayment, his reasons for doing so must be
recorded. When the overpayment was made partly within twelve months and
partly at a date or dates more than twelve months prior to the date of challenge,
the portions of the amount overpaid within and beyond the twelve months limit
will be dealt with separately under sub-rules a and d respectively.
Notes: 1. An intimation that an appeal has been submitted shall be sent
to the Controller of Accounts by the
64
individual concerned simultaneously with the submission of the
appeal to the administrative authority.
50.
2.
The term "over payment includes demands arising from

non-recovery of a Government dues of which it is the duty of
the Audit Officer to watch the realization, eg, house rent,
electric light charges, but does not apply to recoveries on
account of subscriptions donations or other payments due to
provident funds.
3.
Nothing in the above rules should be held to confer on

individuals any claim to the remission of sums due to
Government.
4.
The procedure laid down in this rule does not apply to overpayment of pensions which are governed by rules in pension
Regulations.
5.
The procedure laid down in sub rule a applies to overpayments*on account of travelling allowance (including
unauthorised provision of conveyance and irregular issue of
warrants and credit notes) which are detected within twelve
months from the date of payment. The cases involving
overpayments which have not been challenged within twelve
months from the date of payment will be submitted for orders of
the Government save as provided for in rule 26 .
Adjustment
a.
Retrenchments on account of excess of pay and unauthorised expenditure,

stoppages other than those awarded under the Pakistan Army Act, 1952
(XXM of 1952), or the Pakistan Air Force Act, 1953 (VI of 1953) the value of
losses and all other claims for which Government holds and officer liable, shall
be recovered in monthly instalments of one-third of emoluments. The service
chiefs and head of department in the case of civilian establishments serving
under them, may, provided they are satisfied that there are reasonable grounds
for such a course .which must be recorded in writing, relax the rule to enable
recoveries to be made in smaller instalments which, in no case, shall exceed
twelve in number.
b.
For rules regarding recovery of advances, see Pay and Allowances Regulations
for the Army and Air Force.
51.
Recovery of Amount due

a.
All emoluments payable to an individual shall be stopped to meet any public

claim or regimental debt that may be due from him or any
65
regimental claim which the Government may direct him to pay, provided that a
public claim or regimental debt shall not be recovered from the invalid or
disability pension except under the special order of Government.
---Publicclaim- shall be held to mean any public debt or disallowance, including
any over issue made through an error as to the fact, or a deficiency or irregular
expenditure of public money or stores of which after due investigation, no
explanation satisfactory to the Government is given by the person who is
responsible for the same.
b.
Claims and debts referred to in this rule other than those mentioned in rule 50
above shall be dealt with as follows:In the case of any public claim or a regimental debt which is not disputed, the
OC, of the person against whom the claim is made or from whom the debt is
due, may order the recovery of the amount by deduction from the pay and other
emoluments of the individual in such monthly instalments as the OC considers
reasonable. (For recovery from an individual who has become non-effective
and from a wound, injury or disability pension see Pension Regulations for the
Army). If in the case of a regimental debt, the person from whom it is due
disputes the correctness of the amount, or repudiates his liability such debt
becomes a "regimental claim" and, as such, can be recovered only under the
orders of the Government.
52.
53.
Civil Court -Attachment Orders

a.
When a Court order is received attaching a moiety of the pay of a Government

servant who has already received an advance from Govern merit, the
attachment order to the extent permissible will have the first claim against his
pay as falls due and the residue only will be available for the recovery of the
instalment of the advance at the rate provided for by the rules.
b.
Subscriptions to funds recognised by Government and public claims such as

retrenchments and disallowances by the Military Accounts Department, etc
cannot automatically be taken into account in ascertaining the amount of an
officer's pay which is attached by a civil court unless special Government orders
exist to the contrary in any particular case.
c.
The attachment of salary and allowances of an individual other than those who
are subject to the Pakistan Army Act, 1952 (XXXIX of 1952) or the Pakistan
Air Force Act, 1953 (VI of 1953) is governed by the provisions of the Civil
Procedure Code, 1908 (V of 1908).
Limitations of Claims
a.
All claims to pay and allowances shall be preferred as soon as they
66
arise and officers shall be personally responsible for avoidable delay. Claims
preferred within twelve months will be dealt with in the usual way and those
preferred after this period shall ordinarily be deemed to have been forfeited but
may be admitted by the format i*on commander Chief of the Air Staff and
heads of departments in consultation with Controller of Accounts when in their
opinion exceptional circumstances justify such acceptance. Doubtful cases will
be referred to the Government for orders.
b.
Claims for the counting of former service shall be preferred as soon as possible
after the refund of gratuity has been completed. Claims submitted within twelve
months after the final repayment of gratuity shall be dealt with in the usual way;
but those submitted thereafter shall be admitted in full by the Controller of
Accounts and a report of the late submission of the claim will be made by him to
the next higher authority for such action as may be deemed necessary.
Note: 1 The time limit of twelve months, for the purpose of this rule, will be
calculated from the date of issue of the Part II Orders, notifying a
casualty affecting pay and allowance and other pecuniary advantages,
irrespective of the date from which the pay and allowance, etc, become
admissible.
2. These orders do not apply to claims to pay and allowances governed
by the Civil Service Regulations.
54.
Claims Governed By Civil Service Regulations

a.
Controller of Accounts cannot investigate such claims which have been allowed
to remain in abeyance for a period exceeding three years except under orders
of the Ministry of Defence or an authority exercising the powers of a local
Government under Civil Service Regulations in respect of the claimant.
Notes: 1.The Ministry of Defence may delegate the powers, referred to above at
their discretion, to the authority which appoints the individual by whom the claim
is made.
2.
The heads of all accounts offices and DR~ have been authorised under
Note 1 to exercise the power in respect of individuals appointed by them.
3.
Deputy Military Accountant General and Joint Controllers of Military
Accounts exercise all the powers vested in Controllers of Accounts under the above
rule.
4.
The time limit of one year for the purpose of this rule,
67
will be calculated from the date of issue of Part II orders, etc, notifying
a casualty affecting pay and allowances and other pecuniary
advantages, irrespective of the date from which the pay and allowances,
etc, become admissible.
b.
All petty arrear claims and all claims for the delayed submission of which an
adequate explanation is not forthcoming shall be rejected by the local
authorities.
c.
In cases of doubt, the decision as to what constitutes a 'petty arrears claim' rests
with the authority competent to sanction such a claim.
55.
Pension Claims. For pension claims other than those arising under the Civil Service
Regulations, see Pension Regulations.
56.
Time Barred Claims

a.
Claims of contractors preferred after three years are time barred by the
limitation Act, 1908 QX of 1908). The time from which the limitation begins to
run varies but the following few examples are given for guidance. A fresh period
of limitation is computed from the time an acknowledgement accepting a
contractor's claim or a portion thereof is given. Great care should, therefore, be
exercised by all concerned in dealing with such claims and legal opinion
obtained, when necessary:
Description of claims
(1)
(2)
(3)
(4)
Period of
limitation
Hire of animals 3 years

vehicles, boats or
house hold furniture.
Balance of money
Ditto
advanced in payment
of goods to be
delivered.
Price of goods sold
Ditto
and delivered, where
no fixed period of
credit is agreed upon.
Price of goods sold
Ditto
and delivered to be
paid for after the
expiry of a fixed
period of credit.
Time from which period

begins to run
When the hire becomes

payable.
When the goods ought to
be delivered.
The date of the delivery

of the goods.
When the period of credit

expires.
68
b.
A claim preferred by a contractor or other person against Government, which is

time barred under any provision of law relating to limitation, shall not be paid
without the sanction of the Government. The onus of establishing a time barred
claim, for special treatment lies on the claiming individual, person or party
(whichever is more suitable). The authority against whom such a claim is made
shall refuse the claim until a case for special treatment is made out. Petty time
barred claims shall be rejected and only important claims shall be considered.
c.
The executive authority shall consider the question of time barred before
submitting a claim to the Controllers of Accounts for payment. The Controllers
of Accounts shall refuse payment of all claims found to be time barred until
government sanction has been obtained.
69
CHAPTER 6 - VOCABULARY AND PAYMENT ISSUE RATES
57.
Vocabulary Rates
a.
Vocabulary (or stock-book) rates for ordnance and clothing stores are
published by Government. The rate lists of the following categories stores are
published as specified below: (1)
ASC. The rates for centrally purchased stores are published by the
Ministry of Finance (Military), and for locally purchased articles are
published by Controllers of Accounts.
(2)
MT Vehicles and Stores. These are furnished by Ministry of Finance

(Military) to the controller of Accounts and are published by the
Commandant, CMT&SD, Golra, Rawalpindi.
(3)
Animals. The rates are furnished by the Ministry of Finance (Military) to

the Controller of Accounts.
(4)
Fodder. The payment issue rate (see Financial Regs Volume-II) is fixed
by Controllers of Accounts for each station of supply and is notified in
formation orders.
(5)
Dairy Produce. The sale rates are fixed by the QMG with the
concurrence of the Financial Adviser (Army).
(6)
Medical Stores. These are published by the Surgeon-General

(DMS-2), in consultation with the Ministry of Finance (Military).
The value of stores, the cost of which is met from an allowance, allotment or
grant, and the unspent balance of which lapses to Government at the close of
the financial year, shall be assessed at stock-book rates for free issues. In all
other cases the value shall be assessed at payment issue rates.
58
Payment Issue Rates

a.
Unless special rates of abatement are elsewhere prescribed the rates to 'be
charged for payment Issues will be the rates prescribed in the publications
referred to in rule 57 with the addition of any percentages or charges laid down
therein. If an article be damaged but repairable and recovery from an individual
is necessary, the loss statement will show:(1)
50 percent of the full serviceable value of the stores.
(2)
The estimated (or actual, where known) cost of repairs.
b.
The CFA, ie the authority within whose financial powers the amount
70
at 60 percent of the full serviceable value of the stores falls, will decide whether
(1) or (2) above is to be recovered from the individual.
c.
When the damage to stores is proved to be due to the neglect of an individual,

the CFA will fix the amount to be recovered as follows:(1)
The estimated (or actual, where known) cost of repairs.
(2)
A calculated amount representing the impairment of life of the stores in

question.
d.
The total of c (1) and (2) will not exceed 50 percent of the book value of the
stores.
e.
Unserviceable stores will be valued at 1110th of the stock-book rate.
Note: 1.
2.
In the case of work done in ordnance, non-military departments, MES

PA assessment of the charges to be recovered should be made at the
market rate or the cost arrived at
according to the following
formula, as circumstances may require :
Formula:
Direct labour, plus materials plus fluctuating
indirect charges, plus 5 Percent, on the sums
of these heads. Fluctuating indirect charges
would be arrived at by applying in detail to
direct labour the latest annual percentages
representing fluctuating indirect charges for the
various shops through which the work would
pass.
When the materials required for the execution of such work are
supplied by customers, the cost under the formula will be arrived at as
follows:Formula :
Direct labour plus factory materials, if any, plus

fluctuating indirect charges plus 5 percent on the sum of
direct labour plus 2 percent, on the value of the
materials supplied by the customers.
3.
Any service stores included in the vocabulary of ordnance stores, or the

priced vocabulary of clothing and necessaries which are issued direct
from the factories to MES, PAF and non-military departments, will
continue to be charged for at the vocabulary rates in accordance with
the existing orders and regulations on the subjects.
4.
Issues may be made to an army officer on payment from clothing

depots and arsenals, either through unit stores or direct, of such articles
as are stocked therein. Such indents should bear a certificate that the
stores are for his per
71
sonal use or for the use of his household. Recoveries will be made at the
rates shown and with the additions prescribed thereto, in the current
priced vocabularies of clothing and ordnance stores.
59.
5.
The rules regarding the issue of ASC supplies on payment are laid
down in AR (R) 499 to 513. These transactions are subject to scrutiny
by LA0s under instructions from Controller of Accounts.
6.
Such articles of grain as are required for bonafide consumption by

cantonment animals which are the property of cantonment authorities,
may be issued from ASC depots, recovery being made at stock-book
rates.
7.
Deficiencies in metal cases will be charged for, as ball or blank, except

when, in special cases, they have been written off to loss under ~ the
powers of the competent financial authority, but the maximum number
of cartridge cases which an officer commanding a station and an officer
commanding a unit may write off, in any one case, under this rule will be
limited to 5001- in the case of the former and 1001- in the case of the
latter.
Claims Against Carrying Agencies. When stores are lost or damaged in transit and the
carrying company is held responsible for their loss or damage, the claim for the amount
to be recovered for such loss or damage will be prepared by the consignee in
accordance with the rules laid down in the Stores Accounting Instructions and preferred
by him against the carrier concerned even though the latter maybe free to assess and
pay the claim under the rules and practices of his company for dealing with similar
claims from the public. On receipt of the letter of acceptance of the claim, which may
not be for the same amount, the consignee shall forward it to the controller of Accounts
concerned for recovery of the amount authorised therein for payment by book transfer
or otherwise.
72
CHAPTER 7 - PAY AND ALLOWANCES AND LAST PAY CERTIFICATE
60.
Pay and Allowances

a.
If Eid-ul-fitr, Eid-ul-Azha, Dusse Monday, Guru Nanak's Birthday or Chritsmas

falls within the last ten days of a month, pay, pension and allowances of that
month may, within five days of the occasion, be disbursed in advance to the
servants and the pensioners of the Federal Government belonging to the
community which observes the occasion.".
b.
Due Date. Pay and allowances are ordinarily payable in arrears on the first of
each month, but in the following cases the salary due to date may be paid
before the end of the month, namely
c.
d.
(1)
When an individual proceeds on leave (other than casual leave) lasting

beyond the end of the month.
(2)
When an individual is transferred to the payment of another Audit

Officer.
(3)
When an individual quits Government service or is transferred to foreign

service.
Note: 1.In the case of an officer proceeding ex-Pakistan, on leave

or on transfer, salary due upto and for the last day of duty
may be paid in advance within 10 days of the last day of
duty but if such an officer is detailed for duty en route to
or at the port of embarkation, the payment may be made
within 10 days of departure from his permanent station.
2. Where pay accounts are maintained on an all-Pakistan basis
by central Audit Officers, eg, the Controller Air Force
Accounts, an individual transferred during the course of
month may be paid up to the date of transfer provided his
transfer is to a station which if he was paid by a Controller
of Military Accounts, would necessitate a change in Audit
Officers.
Leave Salery Through Agents. An individual proceed on leave (including
privilege leave) within the limit of Pakistan may draw pay and allowances due to
him on his personal account through any
banker or agent.
Allowances for Leave Ex-Pakistan. Officers and other ranks, who desire to
spend their leave ex-Pakistan may, at their option, draw their leave pay in
Pakistan, or through the Pakistan Embassy or other accredited
73
representative in the country in which leave is spent on authorisation by the
Accounts Officer concerned in Pakistan. An individual, having selected the
country in which he desires to draw his leave pay, is permitted to change only
once during any one period of leave.
Note:The leave salary and leave allowances, if any, admissible under the rules
may be drawn in foreign currency upto an overall maximum limit of Rs.
3,000/- per month. The balance, if any, will be payable in rupees in
Pakistan.
e.
Officers in Civil Employ, etc.

(1)
An officer must draw his total pay and allowances from the department, in
which he is serving or from which he is absent on leave. But the pay and
allowances of an officer permanently transferred from Defence Services to civil
duty will be paid by the civil department (Federal or Provincial) from the date
on which he gives over charge of defence services duty; when transferred from
civil to defence services duty, his pay and allowances will cease to be payable in
the civil department (Federal or Provincial) from the date on which he
relinquishes charge of his civil duty. This rule is also applicable to the case of an
officer transferred from one branch of the Armed Forces to another, namely,
Army Navy and Air Force.
(2)
The transit pay and allowances both ways of an officer whose services are lent
by the Defence Services to the civil department (Federal or Provincial) and vice
versa should be charged to the borrowing department. This principle will apply
to travelling allowance even in cases where the officer lent takes leave either
before joining the borrowing department or before rejoining the lending
department.
Note: The word 'allowances' in this rule includes travelling allowance. It is to be

understood that the pay of an officer who relinquishes defence service duty for
permanent civil duty in the forenoon will he chargeable to the civil department
(Federal or Provincial) for that day; if on the other hand the officer relinquishes
defence services duty in the afternoon, his pay for that day will be chargeable to
the defence services estimates and vice versa in the case of an officer
transferred from, civil tq permanent defence services duty.
f.
Establishments
(1)
Commencement of Pay. Pay on first appointment commences from the date

of joining the service.
(2)
(3)
74
Temporary Establishments
(a)
Civilians employed under AR(R) 53 and 54 will be employed

on the Basic Scale of Pay.
(b)
Casual labour employed for less than one month are restricted
to local rates of pay.
Temporary Establishments -PAF

(a)
Civilian tradesmen including clerks may be employed locally

against authorised vacancies of airmen in PAF. Units subject to
the proviso that no civilian will be employed if airmen are
available to fill the establishment and the employment is
considered essential in the interest of service.
(b)
The civilian tradesmen may, if considered essential in the interest

of efficiency of units, be kept in employment even after the
posting of airmen to units concerned. Retention of civilians in
service under this sub rule will be allowed for a period of three
months or till such time as the airmen become conversant with
the job, whichever is earlier.
(c)
They will be entitled to pay and allowances as may be laid

down for them from time to time.
a.
General Rules. With the exception of newly appointed individuals, no person

shall draw any pay or allowances without producing the LPC from the officer
by whom he was last paid. Should, however, an Lps) not be forthcoming the
Audit Officer may, on being furnished by tfie individual concerned with a
certificate stating the date up to which he was last paid, authorise pay being
disbursed and provisionally admitted pending the receipt of the LPC or certified
copy thereof.
b.
Detailed Instructions. In addition to the printed instructions on the form

(PAFA-447) the following instructions are laid down for the guidance of all
concerned, namely:(1)
Transfer to another service, depa rtment or organisation in or out

of Pakistan.
(2)
Deputation to another establishment in or out of Pakistan.
(3)
Officers proceeding to foreign countries on courses of instruction.
(4)
Officers proceeding out of Pakistan on leave or on study leave.
75
(5)
Thrisfer of soldiers /airmen, etc, to reserve or pension.
c.
The LPC shall state (in ink) in words as well as in figures the date upto which
last paid, all Cr, or Dr balances due to or from and demands against the
departing person including the amount, if any, recoverable from him under
attachment of his salary by a court of law (Rule 52) which should be supported
by the attachment order. A separate intimation regarding Cr and Dr balances
due to or from officers shall also be sent by the controller of Accounts to the
Audit Officers concerned.
d.
If the transfer or deputation is within the same audit area, the LPC of a civilian
shall be sent to the head of the new office, or the OC the new unit or formation
and that of a civilian gazetted officer shall be handed over to him.
Countersignature on the LPC by the Controller of Accounts shall not be
necessary.
e.
If the transfer or deputation is to another audit area the following procedure

shall be observed: -
f.
(1)
Establishments to which Accountants are Attached. Last pay certificates

of civilian gazetted officers shall be prepared in duplicate by the officer
commanding and forwarded to the Controller of Accounts concerned
for countersignature and transmission of the original to the officer's new
office or officer commanding the new unit and the duplicate to the
Controller of Accounts or Audit Officer of the new area. Last Pay
Certificates of others shall be prepared by the Unit Accountant and
signed by the officer commanding the establishment and the original
forwarded to the officer commanding the new unit and duplicate to the
Controller of Accounts of the new area.
(2)
Establishment to which Accountants are not Attached. Civilian gazetted

Officer last pay certificates shall be prepared by the Controller of
Accounts. The original shall be sent to the officer or to the officer
commanding the new establishment and the duplicate to the Controller
of Accounts of the new area. Last pay certificates of all others shall be
prepared in duplicate by the officer commanding the establishment
concerned and sent to the Controller of Accounts for countersignature
and transmission of the original to the' new officer commanding and of
the duplicate to the Controller of Accounts of the new area.
In the case of a civilian discharged to pension the last pay certificate shall be
prepared by the Head of the office and shall accompany the application for
pension. Unless the applicant continues in the service after submission of his
application in which case the Controller of
76
Accounts issuing orders for payment shall direct that no payment is to be made
until the certificate is produced.
g.
In the case of a soldier airman or a non-combatant (enrolled) transferred to

pension, the LPC shall be prepared in duplicate by the FPO and the original
copy shall be forwarded to the CMP. The LPC shall show (in ink) in words as
well as in figures the date upto which effective pay has been paid and amount of
demand, if any.
h.
In the case of a soldier, airmen or a non-combatant (enrolled) drawing his pay

under Peace System of Pay Accounting when transferred to pension, the LPC
shall be prepared in duplicate by the UA and the original copy shall be
forwarded to Regt, Centre or Record Office concerned for submission to CMP
together with pension claim. The LPC shall show (in ink) in words as well as in
figures the date upto which effective pay has been paid and amount of demand,
if any.
j.
When an officer, in receipt of a wound or injury pension, is transferred to

another accounts circle, particular should be noted on the LPC.
k.
When an advance is outstanding against an officer or subordinate, the original

amount, the amount repaid, and the balance due will be noted on his LPC as
also details of any interest due on the advance.
l.
A duplicate LPC should be enfaced "duplicate". It the original be subsequently

forthcoming it should be forwarded to the Audit Officer concerned.
m.
No retrenchment should be inserted on the LPC for recovery which from its
nature should form the subject of a separate communication, but when such a
demand is noted the authority directing the recovery must be cited. When there
are no demands this should be stated.
n.
When an individual who is required to lodge a security is detailed for field

service, the amount of security lodged and the register of the executive office on
which it is borne should be noted on the LPC.
o.
The LPC for self most be signed by his successor or superior.
p.
Officers proceeding abroad will be paid by the Pakistan Embassy concerned

and payment of pay and allowances to the officer, if he so desires, will be
arranged by the Controller of Accounts through a letter of authority and no LPC
will be issued.
q.
To admit of the LPC being issued in time, OC of the individual must take action
to notify the casualty through Part II Orders and furnish a copy thereof to the
Controller of Accounts concerned, sufficiently in advance of the date of move.
77
Notes: 1.
2.
3.
4.
5.
Individuals proceeding on leave ex-Pakistan or study leave

will
continue to be paid by the Controller or Accounts. If the individual
desires the payment of his leave salary in the country of his leave,
arrangements will be made by the Controller of Accounts through a
letter of authority to the Embassy concerned.
The final LPC of an officer in temporary civil employ
whether he reverts to the Defence Services before or after
the expiry of his leave will be issued by the civil Audit
Officer who last audited the pay of the officer proceeding
on leave. The civil Audit Officer will, if he considers it
necessary, consult the Controller of Accounts from whose
payment the officer was transferred to the civil department.
The final LPC will be issued to the individual before he
leaves the station but if the individual has left Pakistan
without a final LPC the original copy of it will be
forwarded either to him or his agents (if he proceeds on
leave) or the Embassy with which he is placed on duty and
the duplicate forwarded at the earliest possible date.
In any case in which there is a probability that the final
LPC will not be issued in time to admit of pay being drawn
in continuation on due date, a temporary or provisional
LPC will be issued pending the issue of a final LPC and the
circumstances attending the case explained in a letter
forwarding the temporary LPC.
Where circumstances do not permit of a final settlement being
effected before an individual leaves Pakistan, the amount due will be
shown on the LPC for payment by the authority concerned.
78
CHAPTER 8 - AUDIT AND OBJECTIONS
62. General Rules. For the procedure in regard to personal claims, See rule 49.
63
. Erroneous Payments. When erroneous payments have been admitted in audit for a
considerable time owing either to a wrong interpretation of financial rules or through
oversight, the following procedure shall be observed for the recovery or otherwise of
the amounts overpaid: a.
When a wrong interpretation of a financial rule has been followed in an

audit-office, the new interpretation shall, in the absence of special instructions to
the contrary, be given effect to from the date of issue by the Auditor-General or
the MAG of the orders stating the correct interpretation.
b.
When erroneous payments have been left unchallenged owing to oversight the
audit-office should not, of its own motion, undertake are-audit of bills paid more
than twelve months previously but should report the facts of the case to the
competent financial authority for orders, and a re-audit should be made only if
so desired by the competent financial authority.
64. Remission of Disallowances

a.
The officers mentioned in rule 33 who exercise the full powers of a local
Government, under the Civil Service Regulations, shall have the power of
remitting over-issues of pay, and disallowances by Audit Officers subject to the
monetary limits laid down in rule 40 so far as they affect payments made to
commissioned officers and personnel below commissioned ranks as well &R
others serving under them for more than twelve months before the date when
they were challenged, provided they consider the amount to have been drawn
by the person concerned under a reasonable belief on his part that he was
entitled to it, and that he has not displayed such a degree of negligence as to
make it equitable, inspite of the lapse of time, to enforce recovery in whole or in
part.
b.
The officers mentioned in rule 33 shall exercise powers of remitting over-issues

or disallowances of payment subject to the monetary limits as laid down in Rule
40, whose erroneous issue has been challenged within twelve months from the
date of payment on the following conditions, namely:(1)
(2)
That the amount challenged was drawn by the individual concerned

under reasonable belief on his part that he was entitled to it.
That the amount challenged was not an overdrawal occasioned by delay
in notifying an individual's promotion or reversion.
79
c.
(3)
That the overdrawal does not evidence some defect in system which
should receive the notice of the Government.
(4)
That the overdrawal has not had the effect of raising an individual's
emoluments beyond Rs 12,000/- per annum or of increasing those
emoluments if they are already in excess of this limit.
The Audit Officer should bring through normal channel to the notice of the
Government cases in which he thinks the intention of the rule is being
misapplied.
Note: Remissions under this rule of over-issues challenged within twelve
months must be exceptional.
d.
If the amount over-issued or disallowed was drawn partly within twelve months
and partly at a date or dates more than twelve months prior to the date of
challenge, the part amounts involved within and beyond the twelve months limit
will be considered separately under the above order, see also rule 49.
e.
In the case of payments made in advance and subject to subsequent adjustment

on production of final bills, documents or other information, for the purpose of
audit, the twelve months limit shall date from the submission of the final bill and
not from the date of receipt of the advance.
f.
All overpayments due to incorrect interpretation of the rules, on the part of the
Military Accounts Department for which direct responsibility attaches to that
department, should be submitted to Government for orders.
Notes: 1,
In sanctioning the remission of disallowances and over.

issues the following principles will be observed, namely:a.
An individual's belief as to the allowances to which he is

entitled is not a "reasonable belief" if he has omitted
entirely to investigate the matter on his own account.
b.
Where the overdrawal has been due merely to delay in

the publication of gradation lists recovery should not be
treated as a case of hardship unless the circumstances
are very exceptional.
c.
The orders for remission should be for the gross amount

of overpayment without deduction of income tax.
80
65.
66.
2.
The powers laid down in this rule shall apply to overpayments (see rule
49).
3.
Nothing in these rules shall be held to confer on individuals any claim to

remission of sums due to Government.
4.
The powers laid down in this rule shall apply to overpayments on

account of travelling allowance (including unauthorised provision of
conveyance and irregularly issued warrants and credit notes). Save as
provided for in rule 26 such overpayments will be regularized under
orders of Government.
Audit and Retrenchments by Audit Officers

a.
Controllers of Accounts are required to retrench or object which is not duly

authorised or is unsupported by proper vouchers, but if such retrenchment
would disturb a long existing practice or where the amount is considerable, they
will take the orders of Government.
b.
The final decision of an independent Audit Officer in respect to a charge on the

ground that it is inadmissible or that the sanctioning authority was not competent
to order it, must be accepted, but an appeal against such decision may be made
through the proper channel (see rule 69 and AR (1) 737).
MAG not be Overruled, etc

a.
The MAG shall not be overruled by the Ministry of Defence on a question of

interpretation of rule or procedure in relation to Defence Services expenditure
without the concurrence of the Auditor-General and the Ministry of Finance.
b.
Service controllers shall have no discretion to authorise payments which are not
in accordance with the rules. The cases of interpretation of rules will be referred
to the MAG.
67. Powers of Audit Officer

a.
b.
An audit officer of or above the rank of Deputy Controller of Military Accounts

may waive any audit objection upto a limit of Rs 100/- in each case, and an
assistant controller or any gazetted officer of PBS 17 and above incharge of a
section of an audit.office or incharge of local audit may exercise the same power
upto a limit of Rs 50.00 only.
Similarly, a Controller of Accounts not below BPS-20, may waive any audit objection
up to a limit of Its. 200.00 in each case, brief
81
reasons being recorded of the circumstances which, in his opinion, justify the
waiver.
Note: If the irregularity is one that is likely to recur, the officer responsible
should be told that it is objectionable, even though no recovery be
made in the particular instance.
c.
Some items are placed under objection not because the whole or any portion of
the expenditure is unjustifiable in itself, but because it is not exactly covered by
rule or the authority for the expenditure is insufficient or full proof that it has
been incurred has not been provided; for example, there may be an absence of
one or more sub vouchers. In such cases, the head of an audit office, le, the
Controller (13PS 19), may waive an audit objection up to a limit of Rs 1000.00
and Rs 2000.00 in the case of a Controller (11PS 20), in each case, provided:(1)
That the expenditure is not of an intrinsically recurring nature.
(2)
Where the objection is based on insufficiency of sanction, that he is

satisfied that the authority empowered to sanction the expenditure
would accord sanction, if required.
(3)
Where the objection is on based insufficiency of proof of payment, that

he is of opinion that undue trouble would be caused if the submission of
the full proof of the expenditure having been incurred were insisted on,
and he sees no reason to doubt that the outlay has actually been made.
d.
In similar circumstances, a Deputy Controller of Accounts, not holding charge

of an accounts office, and any gazetted officer in BPS 17 of the Military
Accounts Department may waive an audit objection up to a limit of Rs 100.00
and Rs 50.00 respectively, in each case.
e.
In the case of items, which have become irrecoverable from any cause, a
Controller of Accounts (13PS 19) may write off an amount not exceeding
Rs.1,000.00 and Rs. 2,000/- in the case of a Controller (13PS 20) in each
case, including amounts outstanding under a debt head if the ultimate incidence
of the expenditure is against Defence Services estimates.
f.
A Deputy Controller of Accounts not holding charge of an accounts office and

any gazetted officers not below BPS 17 of the Military Accounts Department
may write off an amount not exceeding Rs. 100.00 and 50.00 respectively, in
each case.
g.
The provisions of this rule are not affected by any conditions or limitations
imposed in any other rule in these regulations.
82
Notes: 1.
2.
3.
4.
The powers under this rule cannot be delegated to any

subordinate officer.
The authority vested in Audit Officers under this rule is
not to be exercised in respect of items in the cheek or
audit of which they have no concern, for example, where
they merely receive bills and forward them to another
officer for final audit.
The powers of waiver under sub-rules a and c above
may also be exercised in respect of claims submitted for
pre-audit and found to be open to technical and/or unim
portant objections, in whole or in part.
The Deputy Military Accountant General (13PS 20) shall
exercise all the powers that are vested in Controllers of
Accounts under this rule.
68. Objection Statements. As a general rule disbursing and stores officers are responsible for
their receipts, payments and audit objections thereon.
69.
Apeals
a.
An appeal against the final disallowance of an Audit Officer shall be submitted
as expeditiously as possible, and in no case shall it be deferred beyond two
months from the date of issue of the intimation of final disallowance, see rule 49.
b.
Every appeal must be self-contained statement of the salient facts with the
omission of all extraneous matter and only such documents should be attached
thereto as are essential to a decision in the case. Formation Commander, in
agreement with the Controller of Accounts concerned, in his capacity as
financial adviser, is empowered to decide whether recovery of the disallowance
should be withheld until the appeal has been fully considered and orders passed
thereon, such decision being made with due regard to the protection of the
interests of Government and to the likelihood of the remission of the
disallowance or overpayment by the competent authority.
In cases where it is decided that recovery should not be withheld, the appellant
should be so informed and the Controller of Accounts shall be requested to
proceed with the recovery forthwith.
70.
Retrenchment from Contractor's Bills and Appeals. When sums are retrenched from
contractor's bills the grounds on which the amounts have been disallowed will be communicated
on PAIPA-471. If the claimant is dissatisfied with the decision given, he may within one month
from date of such decision, appeal to the Formation Commander.
83
(N.B-.For rules applicable to MES security deposits see Regulations for the
MES).
71
. How Calculated. Standing security deposits will not be taken from Government
agencies /concerns. Exception may also be made in the case of large and reliable firms,
and individual contractors on the recommendation of the Formation Commanders and
the sanction of the Q11GIMGO. Proposals for such exceptions will be supported by
reports from the income tax officer and other civil authorities, showing that the firms or
the individual contractors are financially sound and are known for their business honesty
and integrity. In other cases the amount of the security deposits will be calculated, in
tens of rupees on the value of the estimated quantity of supplies during the period if the
contract at the rates accepted as follows: a.
For a contract not exceeding Rs.10,0001- in value, 10 percent with a minimum

of Rs 25.00.
b.
For a contract between Rs 10,000.00 and Rs 30,000.00 in value, 7 percent

with a minimum of Rs 1,000.00 and maximum of Rs. 2,000.00.
c.
For a contract exceeding Rs 30,000.00 in value, 5 percent with a minimum of

Rs 2,000.00. If security deposit exceeds Rs 6,000.00 the amount may be
specially fixed by the Administrative Officer concerned who may, at his
discretion, increase or decrease the amount of the security to be furnished with
reference to the probable loss or inconvenience that would result to
Government from the failure on the part of the contractor. In case of dairy
produce contractors the amount of security may be specifically fixed by the
Administrative Officer concerned when it exceeds Rs 3,000.00. This is subject
to a further provision that for dairy produce contracts above lts 1,00,000.00
(one hundred thousand) the security deposit should not be less than 3 percent.
Notes: - 1.
When Government securities, provincial and municipal

debentures or port trust bonds are offered as security deposits,
they will be taken at their market value. Administrative officers
will satisfy themselves that the value of the security calculated on
the basis is sufficient to secure and indemnify Government
against any possible loss. In the event of such securities
appreciating or depreciating no re-adjustment of the value
thereof should be made unless the rise or fall of the
market-value is such as to render it necessary to call upon the
depositor to produce further security to the extent of at least Rs.
1001- or to enable the officer to return to the depositor security
to the same
84
extent. Even then no such adjustment should be made unless
after such adjustment, there is still a reasonable margin between
the market-value of the security tendered and the amount of the
security necessary.
2.
72.
Whenever a private person or a firm contracts with Government

to supply stores or execute a work, he or it shall unless
exempted by competent authority, he required to give security
for the due fulfilment of the contract and suitable provisions
regarding the securities shall be incorporated in the agreement.
When contracts are placed with Political Agents 'nominee'
contractors, security deposits will not ordinarily be taken. In
cases where the Political Agent concerned cannot accept the
responsibility, security will be recovered.
Forms of Standing Security Deposits

a.
The security taken from a Government officer or a contractor shall be in one of

the following forms subject to the conditions noted against each, or partly in one
and partly in another of these forms when this is specially permitted by the
authority authorised to accept the security:Forms
Conditions
(1)
Cash ...........................
Government will not pay any interest

on any deposit held in the form of cash.
(2)
Government
promissory notes,
Municipal debentures
or Port trust bonds.
These securities should be accepted at

five percent below the market-price or
at the face value whichever is less, and
should be dealt with in accordance
with the rules in Chapter IX of the
Government Securities Manual.
(3)
Post-Office Savings
Bank Pass-Books.
A pass-book for a deposit made under the

Post - Office Savings Banks Rules, may
be accepted as security, provided that the
depositor has signed and delivered to the
postmaster a letter in the prescribed
form as required by those rules.
(4)
Post-Office Cash
The certificates should be formally
Certificates, Pakistan
transferred to the authority which takes
Defence Savings
the deposit with the sanction of the Head
Certificates and Postmaster and should be accepted at
Pakistan Savings
their surrender value at the time of
Certificates.
tender.
85
(5)
Deposit receipts of
(a)
recognised banks
approved by Government for the purpose.
(b)
(c)
Ile deposit receipt should be made

out in the name of the (pledgee or,
if it is made out in the name of the
pledger, the bank should certify
on it that the deposit can be
withdrawn only on the demand
or with the sanction of the pledgee.
The depositor should agree in
writing to undertake any risks
involved in the investment.
The bank should agree that on
receiving a signed treasury challan
and a withdrawal order from the
pledgee in respect of the deposit
or any part thereof it will at once
remit the amount specified into the
nearest treasury along with the
challan and send the treasury
receipt to the pledgee.
(d)
(6)
(7)
The responsibility of the pledgee

in connection with the deposit and
the interest on it will cease when he
issues a final withdrawal order to
the depositor and sends an intima
tion to the bank that he has done
so.
Fidelity bonds from
A fidelity bond may be accepted as
tariff insurance security, from Government officer but not
companies which are from a private party.
approved by the
Government.
Other form of
Security in any such form may be
security specifically
accepted in accordance with the rules and
approved by Govern- conditions laid down in the relevant
ment for acceptance, regulations only or by special orders of
eg, mortgage on real the Government.
property, personal
security, etc.
Notes: 1
Every security deposit whether in cash, Government

securities, Provincial and Municipal debentures, Port 'lYust
Bonds, bank deposit receipts or savings bank deposits or
otherwise with a Government officer will be recorded in a

register in which transactions must be noted at the
86
time of their occurrence. Each depositor will have a separate
folio allotted to him and these deposits will be proved annually.
2.
When a subordinate who has furnished, a security deposit, is

transferred from one office to another his security should be
borne on the register of the office to which he is transferred.
3.
Security furnished in cash by Government officer or a

contractor may be converted, at the cost of the depositor, into
any of the interest bearing forms of security mentioned in notes
(2) to (5) provided:a.
That the depositor has expressly requested in writing

that this be done.
b.
That the acceptance of the new form or forms of

security is permissible under the rules and under the
terms of the agreement or bond.
4.
Subject to any rule or order made by Government in this behalf

the form of the security bond, to be executed at the time of
furnishing security, should be determined under orders of the
Head of the Department according to the kind of security
furnished. When a Government officer is specially permitted to
furnish security partly in one and partly in another or the forms
of security specified in this rule he should execute separate
bonds for the different kinds of security.
5.
Forms for the execution of different security bonds are given in

Annex F to this Volume.
b.
Post office saving bank accounts in respect of security deposits which are,'
under rule, being completed by monthly deduction from the individuals pay will
be lodged in the name of DADMF, ADMF or DDMF concerned and the
pass-books will be kept for safe Custody with the DADMF, ADI1F,. or
DDMF or the Manager of the military farm concerned. When the full amount of
security deposit has been completed the pass-book will be returned to the
depositor after being inspected as required by rule 78.
c.
When such securities are to be refunded, a No Demand Certificate

(PAFA---451) will be furnished by the DADI1F, ADMF or DDMF con
cerned after communication with the Controller of Accounts concerned who will
testify that no claims are outstanding in his office with regard to the stores held
by the individual concerned.
87
Note: For the form of deposit of cash security from Government servants
Annex F to this volume refers.
73.
Refund
a.
A security deposit should be restored to the contractor on his executing a No

Demand Certificate as soon as possible after the delivery of the supplies or the
performance of the services contracted for and with due regard to the state of
his accounts. If any delay occurs in the audit of these accounts a refund of such
portion of his security deposit may be made to him as the executive officer, after
consultation with the Audit Officer and with his concurrence, considers
expedient. At the request of the depositor a security deposit or any portion
thereof, held in respect of an expired or nearly expiring contract, may be appropriated in whole nearly expiring contract, may be appropriated in whole or in
part towards the security deposit of another contract that has just been or is
about to be entered into with the depositor.
b.
If the security deposit or any other sums due to a contractor are attached by
any court, the executive officer may, if there be no claims against the contractor,
pay the total amount into court, otherwise the lien of Government on this amount
shall take precedence on a claim by an attaching creditor; but if the contract be
a joint one, le, furnished by more than one individual joining in a contract can no
amount be attached to satisfy a demand against one of the partners alone.
Security deposits or any other sum due to the estate of a deceased subordinate
or contractor may be paid without the production of the usual legal authority;
under the orders of Chief of the Army Staff, (Surgeon General in case of
contracts of medical stores depots/army medical stores) in the capacity of local
Government on execution of an indemnity bond in the prescribed form (Annex
G) with such sureties as he may require, if he is satisfied as to the right and title
of the claimant and considers that undue delay and hardship would be caused
by insisting on the production of letters of administration. In any case of doubt
payment should be made only to the person producing legal authority. A
security deposit made by another person on behalf of a contractor will, on
fulfilment of the contract, be returned to the depositor.
c.
No security should be refunded till the particulars of the claim have been verified
with the receipt entries in the cash book or security register, the receipt
provided on the reverse of the No Demand Certificate, duly completed in all
respects, is signed by the depositor.
Notes 1.
When payment of securities is made to an official receiver
appointed by the court to manage the estate of a contractor adjudicated
insolvent, the order of the court appointing the individual as the receiver of the
contractor's estate and
88
the receipt given by the receiver on the reverse of the No Demand Certificate for
the assets made over to him would be a complete answer to any claim by the
contractor or a third person on his behalf.
2. If it appears to an Executive Officer, on receipt of an order of attachment, that
non-payment of moneys due to a contractor from Government would adversely
affect the continuance of services under contract, the executive officer will make
due representation to the court concerned with a view to obtaining a modification
of the order which will give authority to the Executive Officer to continue Payments
to the contractor as are necessary in the circumstances and, at the game time,
retain or pay into court a percentage of future sums accruing up to the limit of the
attachment.
74.
Vacation of Appointment. When a Government servant from whom a security deposit

has been taken, vacates his appointment on transfer or discharge, a final settlement
statement of his accounts shall be prepared and signed by him in proof of its
correctness. If no debt to Government is discovered, the security deposit may be
refunded to him after a no demand certificate is issued by the administrative authority
concerned which should be done as soon as possible, ie, ai.bc:Lr.-~counts have been
audited. In no case security deposits shall be refunded earlier than six months after
vacation of appointment. Debts due to Government on account of stores, etc, for which
the security deposit was lodged, shall, if discovered, he recovered from the security
deposit.
Notes: 1
2.
75.
The security bond should be retained permanently or until

it is certain that there is no further necessity for keeping it.
Without the special orders of the competent financial
authority no security deposit should be repaid or retrans
ferred to the depositor or otherwise disposed of except
in accordance with the terms of his security bond or agree
ment. An authority on returning any security to the de
positor should invariably obtain his acknowledgement
duly signed and witnessed. When an interest bearing
security is returned or retransferred, the acknowledgement
should set forth full particulars of the security.
Lapsed Deposits. The following procedure will be followed in regard to the disposal of
securities tendered as security deposit by contractors and which are not claimed by the
depositors after the termination of the latest contract in connection with which the
security was lodged:a.
Cash Security. At the close of each financial year all cash security deposits
remaining unclaimed for three years, exclusive of the year of deposits, shall be
transferred to-the credit of Government by the Audit
89
officer, who will inform the officer concerned in order that he may make the
necessary entries in his security register. Sums so credited shell not be refunded
without the sanction of the Controller of Accounts.
b.
General Promissory Notes. Deposit in general Promissory notes remaining

unclaimed for three years, exclusive of the year of deposit, shall be struck off
the books by transfer of the notes finally to the State Bank of Pakistan.
c.
Postal Saving Bank Deposits. If a depositor cannot be traced within four years
of the termination of the contract, the pass book together with a letter of
release, or, if the pass-book is not available, only the letter of release will be
sent to the Postal Audit Office concerned. In the event of a claim being
preferred later, it will be dealt with by the postal authorities.
d.
Postal Cash Certificates. If a claim is not received within three years after
maturity, or extended maturity, the cash certificate together with a letter of
release will be forwarded to the Postal Audit Office concerned for disposal.
The responsibility for dealing with claims preferred subsequently will rest with
the Postal Audit Officer.
e.
Bank Deposit Receipts. If a claim for refund is not received within a reasonable
time (say one year) of the termination of the latest contract in connection with
which the receipt was tendered, the amount will be realised on maturity and
credited to government. Subsequent claims for refund of the principal and the
interest actually realised will be disposed of under rule 73.
76.
Bank Securities. Securities furnished by banks shall be taken at their market value. In
the event of fluctuations in the market-value of security deposits lodged by private
banks or firms in respect of regimental funds lodged with them (vide relevant rules in AR
(R) the Controller of Accounts concerned shall in all cases review the position annually
or, if he or the depositor so desires, after an interval of six months from the date of
deposit, or from the date of the last review. In either case when a considerable
difference in value has taken place, the Controller of Accounts shall either call upon the
depositor to make up the difference in value or allow him a refund, as the case may be.
77.
Contract Securities. In the case of securities held by Government officers for any
purpose the following instructions shall be observed, namely: a.
In no case shall bearer bonds be held as security.
b.
When Government promissory notes are so held it is of great importance that a

Government officer shall not receive or in any way deal with such notes in his
official capacity if the title of the depositor is not absolutely clear or is in any
way defective. Before accepting such a
90
note, he must carefully scrutinise the endorsements on it. If he has reason to
think that any of the endorsements (ie, not only the last endorsement) is
irregular, or if, for any other reason, he is not satisfied as to the title of the
person presenting a note he shall refuse to accept it and shall instruct the
depositor to get it renewed by the State Bank of Pakistan. In performing this
duty the officer shall kin particular, satisfy himself that: (1)
The title of the depositor of the note is clear and indisputable, i.e, that he
is in fact the lawful owner of it.
(2)
All endorsements are on the note itself. An endorsement written on a

piece of a paper attached to the note is invalid and shall not be
recognised.
(3)
Every endorsement which consists of two parts, (a) the pay order,
containing the name of the endorse and (b) the signature of the endorser
is in order and is written clearly and legibly in one of the endorsement
cages provided on the back of the note.
(4)
No endorsement signed for any other person has been made on the
note as such as endorsement is invalid.
Note. The Government Securities Manual Chapter 5 contains full
instructions in this respect.
c.
Government promissory notes transmitted by post shall invariably be sent uncut

and insured as of the value of Rs 100.00 irrespective of their face value.
d.
Government promissory notes to be deposited with officer:(1)
For twelve months or less, irrespective of whether interest may or may

not be drawn by the depositor during the period of deposit.
(2)
For any period exceeding twelve months if the depositer does not
intend to draw interest during the period of deposit, shall be dealt with
as follows:(a)
The officer receiving the notes shall first satisfy himself that the
notes stand in the name of the depositor (see sub rule b above)
and that the contract or other document executed by the
depositor conveys authority to Government to appropriate or
cancel the notes if the contract is not fulfilled.
(b)
The officer shall then lodge the notes for safe custody at
91
State Bank of Pakistan or the nearest civil treasury.
e.
f.
(c)
The notes shall remain in the name of the depositor and shall not
be endorsed to any officer of Government or converted into
stock.
(d)
The depositor may, in exceptional circumstances, he allowed to

draw interest on the note by tendering receipts in the usual form
countersigned by the officer with whom he has deposited them.
Government promissory notes, to he deposited with officers for more than

twelve months and if the depositor wishes to draw interest during the period of
deposit, shall be dealt with as below:(1)
The officer receiving the notes shall satisfy himself that they stand in the
name of the depositor (see sub rule b above) and that all interest, due
on them at the time, has been drawn. He shall then have the notes
endorsed by the depositor in favour of the Controller of Accounts to
whom he shall forward them. The Controller of Accounts shall
re-endorse notes which are deposited for five years or more in favour
of the State Bank of Pakistan and notes deposited for less than five
years in favour of the Treasury Officer of the nearest civil treasury and
forward them for safe custody to the bank or the treasury, as the case
may be.
(2)
Exception. It shall be permissible in the case of notes deposited for five

years or more (for the notes to be retained in the custody of the
Controller of Accounts). When this option is exercised the notes shall
be converted into stock certificates and to enable this to be done the
Controller of Accounts shall, instead of endorsing them to the State
Bank of Pakistan, endorse them in favour of the President and send
them to the nearest treasury on which they have been enfaced for
payment of interest. The notes shall then be converted into stock
certificates of the loans to which they pertain unless, at the written
request of the depositor, it is desired that they should be converted (in
cases where this is premissible) into stock certificate of other loans, for
instance, Government promissory notes of any of the nonterminable
prescribed percent loans may be converted into stock certificates of the
same or of any other non-terminable prescribed percent loan. In this
event they shall be converted into stock of the desired loans subject to
the rules and conditions contained in the Government Securities Manual.
The procedure laid down in sub-rule d shall apply mutatis mutandis in the case
of treasury bills deposited with a Government officer in his official capacity. A
holder of Post Office Cash Certificates may tender
92
them as security to any department of Government for their current value. Cash
certificates so deposited shall formally be transferred to the Controller of
Accounts with the sanction of the head postmaster, irrespective of the period
for which they are pledged, and shall be forwarded to the nearest treasury for
safe custody.
78.
Custody of Securities and Payment of Interest Thereon

a.
Post Office Savings Bank Pass-Books, deposit receipt of banks, fidelity bonds
and security bonds or agreements should be kept in the safe custody of the
authority which takes security.
b.
All the Post Office Savings Bank Pass-Books should be sent to the post-office
as soon as possible after the 15th September each year for effecting necessary
entries therein on account of interest.
c.
In the case of deposit receipt of banks, the depositor should receive the interest,
when due, direct from the bank on a letter from the pledgee authorising the
bank to pay it to him.
d.
Government promissory notes, Post-Office Cash Certificates and Pakistan

Defence Savings Certificates or Pakistan Savings Certificates, Municipal
debentures and Port Trust Bonds, deposited as security, should be lodged for
safe custody with the manager of the State Bank of Pakistan at places where
there are offices of that bank and with the district treasury in other places in
accordance with the rules in Chapter 5 of the Government Securities Manual.
e.
Interest in respect of promissory notes or stock certificates shall be periodically

distributed to depositors on receipt by the Controller of Accounts from the
State Bank of Pakistan or the treasury, as the case may be, subject to the
following, namely:-(1)
Deduction of income tax and surcharge at the maximum rate unless

exemption or abatement is supported by an exemption or batement
certificate granted by an income tax officer. The deduction shall be
made by the Controller of Accounts in the case of notes deposited with
the State Bank of Pakistan and, in other cases, by the Treasury Officer.
The person deducting the income tax is required under the Income Tax
Ordinance, 1979 (XXX1 of 1979) to furnish to the person, to whom
the interest is paid, a certificate containing relevant details to enable him
to claim a refund, if necessary.
(2)
Deduction of commission at the authorised rate charged by the State

Bank of Pakistan for drawal and remittance of interest. This commission
is not charged in the case of security deposits
93
of Government servants and of banks holding regimental funds in
respect of securities lodged for such fund.
(3)
79.
In the case of security deposits of subordinates and contractors of

departments, which are allowed to make their own disbursements, the
Controller of Accounts shall issue authority to executive officers for
each depositor separately and the latter shall make the payment and
support such payments by the authority in original and the payee's
receipt.
General Promissory Notes- Return and Sale of

a.
When the return or sale of a promissory note is required application shall be

made to the State Bank of Pakistan or the treasury at which the note was
deposited for safe custody. In the case of stock certificates it shall first be
necessary to have them converted into promissory notes. The State, Bank of
Pakistan, a Treasury Officer or the Controller of Accounts shall act simply as
the agent of the officer who originally received the note and such officer is
responsible for taking action for the sale, realization or return of the securities in
accordance with the conditions of the endowment.
b.
In addition to any actual outlay in brokerage, a commission of prescribed

percent is charged by the State Bank of Pakistan for the purchase and sale of
promissory notes.
c.
When a promissory note dealt with under the exception to sub-rule d of rule 77,
is returned it will not be the identical note which was sent for custody, but
another note of the same loan or of the loan into which the original note was
transferred.
d.
An officer applying for the delivery of a note shall always specify at what
treasury or sub-treasury he wishes it to be enfaced for payment of interest.
e.
If a depositor desires that the securities, to be returned to him, should be in the

form of a stock certificate, this may be arranged for through the State Bank of
Pakistan concerned.
80.
Provincial and Municipal Debentures and Port Trust Bonds. The bonds deposited
with Government officers shall be dealt with generally under the rules laid down for
general promissory notes. All such securities shall be forwarded to the Controller of
Accounts concerned who will draw the interest and pay or authorise the amount due to
be paid to the depositor.
81.
Bank Deposit Receipts. Bank deposit receipts should be made out in the name of and
forwarded to the Controller of Accounts for custody. Interest on bank deposit receipts
should not pass through Government accounts, but depositors
94
should make their own arrangements for receiving it, when due,. direct from the bank on
a letter from the officer who received the deposit authorising the bank to pay it.
82.
Savings Bank Deposits. In the case of savings bank deposits the depositor must
himself lodge the money in the savings bank and sign the necessary security deposit
form, obtainable from the post-office. He will then deliver the pass-book to the officer
concerned who will satisfy himself by an inspection of the entries on page 1, that the
amount deposited has been correctly pledged to the Controller of Accounts or to the
Military Estates Officer in the case of contracts executed by him Such securities cannot
be withdrawn from the savings bank without the written permission PAFZ-2141 of the
officer to whom the security is pledged. Should there be any claim outstanding against
the depositor the amount of such claim, if necessary, will be withdrawn by the officer
concerned and paid into the treasury to the credit of Government. The post-office will
pay the deposit money in whole or in part to officer to whom the security was pledged
even though the depositor refuses to surrender his pass-book.
Note:- In the case of casual labour employed on military farms (eg, munshis,
chowkidars, deliverymen and other casual labourers), any security required
from them will be recovered by the manager of the farms concerned in cash by
small monthly deductions from their pay. These deductions will be deposited in
the post office savings bank in the name of the employee concerned, the savings
bank account being pledged to the manager of the farm.
83.
Fidelity Bonds
a.
The standard form prescribed for the execution of a fidelity bond is that given in
Annex F, to this Volume (with necessary changes made when the bond is
individual and not collective) to which no variation should be accepted without
adequate reason.
b.
In cases where a fidelity bond of any approved insurance company is accepted,

under proper authority, in lieu of a cash security from a Government employee
holding an appointment for which such security has been prescribed, the officer
concerned shall, before accepting such a bond, have it scrutinized by one of the
authorities specified in AR(R) 389, with a view to the deleting unnecessary
reservations, eg, the insur ance company concerned having the right to insist
upon prosecution of the said Government servant in the event of his dishonesty.
The Government servant by an insurance company is accepted , shall be
required also to execute a security bond tendering the fidelity bond as security in
lieu of cash. The standard form prescribed for the execution of a security bond
is that given in Annex F.
Note:- When a Government servant has furnished security in the form of
95
a fidelity bond the authority receiving the bond should see that the
Government servant pays the prernia necessary to keep it alive on the
due dates and continues to do so until a period of six months has
elapsed since he vacated his office. If the Government servant fails to
deliver the premium receipt to the authority in time he should be
removed from his post in accordance with the law.
84.
Security Deposits- Government Servants

a.
Security deposits in one of the forms specified in rule 72,as prescribed

hereunder, shall be furnished by Clerks /Cashier /Assistant Cashiers and
Storekeepers /Assistant Storekeepers, etc :(1) Remounts, Veterinary and Farins (Farm Section) :Rs.
(2)
(a)
Clerks holding public money. 500.00
(b)
Storekeepers (lower division). 1,200.00
(c)
Storekeepers (upper division). 1,500.00
Remounts, Veterinary and Farms (Remounts Section):(a)

(b)
(3)
1,500.00
500.00
Army Ordnance Corps:(a)

(h)
(c)
(d)
(e)
(f)
(4)
Godown overseers.
Clerks holding public money.
Storekeepers.
Assistant Storekeepers.
Store Supervisors.
Storemen.
Upper Division Clerks (Cashiers).
Lower Division Clerks (Assistant
Cashiers).
1,500.00
1,200.00
400.00
200.00
1,000.00
500.00
Electrical and Mechanical Engineering

Organisations:(a)
Storekeepers
500.00
96
(b) Cashiers
(5)
Rs.
1,000.00
Inspection and Technical Development Organizations :(a)

(b)
(c)
(d)
(e)
(6)
Clerks (Cashiers) holding public

money less than Rs 10,000.00
money exceeding Rs 10,000.00
500.00
1,000.00
Storekeepers holding public stores

200.00
covering a risk up to Rs 20,000.00
Assistant Storekeepers holding public 200.00
stores covering a risk upto lls. 20,000.00
Storemen holding public stores
200.00
covering a risk upto Rs 20,000.00,
Medical Store Depots:(a)

(b)
(c)
(d)
Notes: 1 a.
Superintendents .
Assistant Superintendents.
Upper Division Clerks.
Lower Division Clerks.
750.00
450.00
300.00
180.00
Subject to any special rule or order made by the Government in this

behalf, every cashier, storekeeper and other subordinate who is
entrusted with the custody of cash or stores shall be required to furnish
security as set out in this rule and to execute a security bond setting
forth the conditions under which the Government will hold the security
and may ultimately refund or appropriate it.
b. No subordinate official shall be permitted to handle Government cash or

stores before he has furnished adequate security. Until such security is
furnished, the Head of the office or the officer nominated by him as
drawing and disbursing officer or officer incharge of stores shall be held
personally responsible for the safe custody of cash or stores.
2.
When an individual, who has furnished security, takes regular
97
leave or is deputed to other duty the officer who is appointed to
officiate for him should be required to furnish the full amount of security
prescribed for the post, unless a competent authority has authorised a
relaxation of the rules regarding security applicable to him.
b.
Subject to any special rule or order made by the Government in this behalf
Heads of Local Administration are authorised to exercise full powers under the
provisions of rules 71 to 84, as regards security deposits of Government
servants and others employed under them.
98
Notes: 1.
These rules shall not apply to MES contracts.
2.
The term "officers of the administrative services" shall includes

Commandants, Chief ordnance officers, Chief inspectors of
armaments, vehicles and engineering equipment, electronics and
instruments, District Remount Officers of areas, OC remount
depots and OC medical stores depots.
3.
The principles and instructions enunciated in these rules shall

apply to the Air Force except where they are at variance with
the special instructions contained in "Equipment Regulations for
the Air Force (AP. 830)".
85.
General Rules. For instructions and guidance in the making of contracts and the
principles to be observed in dealing with contractors, officers shall consult the "Manual
for the guidance of officers of ASC in their relations with contractors".
86.
Supplies and Services

a.
Supplies and, Services required to carry on the public business shall be

obtained ordinarily by contract on the authorised tender forms, but may also be
obtained as follows:(1)
In an emergency, for immediate delivery-by order given on PAFZ-2123

(Informal agreement).
(2)
When the amount are small and only required from petty dealers - on
verbal offers tendered at Public auction, after due notice on
PAFZ-2137 (Call for tenders), the offer accepted being recorded on
PAFZ-2125 or PAFZ-2125A.
(3)
By purchase either by the officer, of the administrative service

concerned, or the representative detailed by him when no tenders are
received or the tenders received are, in his opinion, unacceptable.
(4)
By special contracts, by purchase or in accordance with special orders

that may be issued to meet demands for supplies and services
occasioned by the existence of field service conditions.
(5)
In the case of fodder and dairy produce supplies may be arranged by

local purchase. The system of advertising for tenders shall, whenever
possible, be avoided. Dairy cattle shall be purchased by contract or by
local purchase, whichever is most suited to the locality concerned.
99
(6)
b.
87.
88.
By purchase, from time to time, of hospital requirements of ASC supply

for which the demand is so spasmodic that neither central nor local
contracts are desirable.
No contract will be concluded without calling for tenders except with the
previous sanction of the Government, but where the Jail or Forest Department
can supply articles equal in quality and at not more than the local-market rate, it
should be invited to undertake the supply and further tenders need not be called
for. In the case of building contracts pertaining to remount wing the DR~ may,
in exceptional cases and in consultation with the FA (Army) dispense with
calling for tenders for any work up to the value of Rs 20,000.00.
Commercial or Non -Government Concerns

a.
All contracts, agreements, understandings, etc, entered into by an officer with

commercial or non-Government concerns shall be recorded in writing and a
copy thereof, signed by both contracting parties, will be carefully riled.
b.
The officers who are making contracts are responsible for the correct wording
and framing of all conditions and specifications in the contract schedule
(PAFZ-2121) or in the case of transport contracts a cyclosty led schedule
attached to PAFZ-2121-A Special Conditions).
c.
In case of any doubt or when any new items have been embodied in the
schedule which did not exist in the previous schedules and which, it is thought
necessary for the Controller of Accounts to see from an audit or financial point
of view, the officers concerned may submit these forms to the Controller of
Accounts for remarks and suggestions before tenders are invited. Every care
must be taken to avoid ambiguity or redundancy. No contract, involving an
uncertain or indefinite liability or any condition of an unusual character, should
be entered into without the previous consent of the competent financial
authority.
d.
Proposed' amendments to the printed forms PAFZ-2137-A, 2120 or 2124

must receive prior approval of the Controller of Accounts and sanction of the
Director concerned at General Headquarters or Air Headquarters, as the case
may be.
Arranging of Contracts
a.
Officers entering Into the contracts are charged with the responsibility of making
all arrangements necessary to effect a contract and will, themselves furnish
intending contractors, with all the necessary information carefully guarding
against any interference on the part of their subordinates. No Government
servant shall become a party to a
100
contract nor stand as a surety for a contractor nor assist him in the preparation
of any tender or account.
b.
Contracting officers shall maintain a register of approved contractors. The,

Controller of Accounts will notify to them, as soon as it comes to his notice,
anything that renders any contractor unfit to hold a contract. The officer will
investigate the case, and obtain the orders of his superior whether the contractor
is to be struck off the register or otherwise, notifying the decision to the
Controller of Accounts. The officers will give tender forms only to approved
contractors. A firm which, though not yet admitted to the register of approved
contractors, has submitted an application for admission thereto, may be given
tenders forms, but only on the under standing that such tenders will not be
considered unless the firm has actually been admit ted to the register before the
opening of the tenders in question.
89. Sanctions and Modifications of Contracts

a.
Sanctions:(1)
Contracts must be sanctioned by competent authority and once

sanctioned no contract rates may be increased without the sanction of
the next higher authority.
(2)
Any enhancements in contract rates sanctioned by a lower authority will

be communicated to the services headquarters.
(3)
The financial concurrence of the Controller of Accounts in his capacity

as financial adviser or the FA (Army) concerned will invariably be
obtained in all cases of enhancement of contract rates.
Note. The provisions of this rule shall not apply in cases where an
enhancement of contract rates is due to customs or excise duty
being imposed or increased, or where provision exists in a
contract for the enhancement of contract rates
under specified circumstances. Enhancement of contract rates
may be sanctioned by the contract sanctioning authority (See
Annex H to this Volume).
b.
Modifications:(1)
Modifications in the conditions of an existing contract which do not

involve an enhancement of the contract rates may be sanctioned by the
contract sanctioning authority, provided no extra expense to the State
be involved and that both parties to the contract are agreed, the
contractor's agreement being taken in writing; but the competent

authority shall consult the Controller of Accounts concerned before
101
sanctioning any modification and if there be any difference of opinion
between the competent authority and the Controller of Accounts. The
matter shall be referred, with full details, to the next higher competent
authority for decision. All amendments shall be signed by both parties to
the contract.
(2)
If at any stage, it is found that the terms of a contract are contrary to the
original intention or otherwise defective, steps should be taken forthwith
to revise it in a suitable manner
Note. - Acceptance of supplies, in excess of the quantity
ordered, will not be held to be a modification in the
conditions of a contract provided that the value of
the excess supply does not exceed five percent of
the original value. For acceptance of supplies in
excess of five percent of the original value, the
Controller of Accounts will be determined by the
value of original order plus the excess value. This
note shall apply to contracts made on an"as required"
basis.
90.
Articles of ASC Supply for Operations Not Tenned Mobilization. In the matter of
enhancement of contract rates the following is the chain of financial responsibility,
namely: Contract Sanctioning Authority Competent Authority to Sanction
Enhancement of Contract Rates
a.
Commander Log Area, Indep QMG or Corps Commander.

Bde, Div or Force Command
Northern Area
b.
QMG or Corps Commander
Ministry of Defence
Note
Intimation of enhancement of contract rates will be
made to General Headquarters. The concurrence of the Controller of
Accounts will invariably be obtained.
91.
Legal Representative of a Deceased Contractor
a.
Contract by a Minor Invalid. A contract cannot be made by or on behalf of a

minor.
b.
Contract by an Heir of a Deceased Contractor. In the event of death of a

contractor during the currency of his contract his heir, major or minor, shall not
be allowed to continue the contract. Such a contract
102
will, therefore, be deemed to have been terminated without penalty with effect
from the date of the contractor's death. Such termination will not affect the
liability already incurred by the contractor when he was alive.
Note: A minor attains his majority at the age of eighteen years unless he is under
the jurisdiction of the Court of wards, or a guardian of his property has
been appointed by any court, in which case he becomes a major on
completing 21 years.
92.
Estimating Requirements. Before advertising for tenders the officer concerned will
draw up a careful estimate of the probable amount of supplies for which he wants to
contract, with reference to past and future requirements. This estimate will be prepared
from the forms (PAFO-1361 or PAFZ-2131) in which are recorded the amounts of
supplies made by contract, purchase, or issue from stock or on the annual demands.
These records also enable the officer to watch the supplies under each contract, and to
execute a fresh one, if rates are favourable, in time to take effect as soon as the
probable requirements under the existing contract have been delivered.
93.
Irregular Concessions to Contractors. These should on no account be granted. If the

circumstances are likely to arise which must justify ex-gratia payments to contractors
steps should be taken to give such timely notice as would tend to reduce the amounts so
payable. Further, before making any such payments, the advice of the Solicitor to the
Government of Pakistan should be obtained in regard to the legal aspect of the case.
94.
Advertisements
a.
The advertisement calling for tenders for a contract should be published by any
or all of the following methods with reference to the importance of the contract
and the nature of the supplies:(1)
By advertisement in the Official Gazette and local papers,
English papers and, in the case of very important contracts, in the papers
of other Provinces.
(2)
By notice on PAFZ-2137, which should be forwarded to the
civil authorities to be . pasted in public places and circulated to likely
tenderers.
b.
Advertisements to tender and calls for tenders must be issued sufficiently

previous to the date, not exceeding weeks, the tenders will be opened as will
give prospective tenderers reasonable time to frame and submit their tenders.
Tenders should be opened on a date sufficiently previous to the date on which
the contract is to come into force as will enable the successful tenderer to make
adequate arrangements in time for carrying out the contract. The period
between the issue of the
103
advertisement or call for tenders and the date from which the contract will come
into force, may be as much as six months ahead for very important contracts
and normally, not less than three months.
c.
In the case of RV&FC (Remounts Wing) tenders for supplies and services
required by depots and areas will be notified by the circulation of notice on
PAFZ-2137 to contractors on the approved list.
95.
Tenders. Tenders for all supplies for which a special form is not prescribed shall be
submitted on I'MZ-2120. It will be issued to tenderers free in accordance with the
instructions on I'MZ-2137. Before issue to tenderers the tender and schedules will be
carefully filled in and completed, leaving only the rates and the tenderer's signature to be
added. Also see rule 87.
96.
Opening of Tenders
a.
Tenders should be deposited by tenderers, or if received by post by the officer

concerned, in a securely locked box of which he will keep the key or keys. No
tenders are to be received after the hour stated in the notice to contractors. At
the time fixed therein for opening tenders he will, in the presence of another
officer, scrutinize each tender and satisfy himself that the necessary earnest
money has been enclosed therewith and that the tender has been properly made
out in accordance with the instructions given in the tender forms and if all be
correct, initial and date the tender and allot to it a serial number. This serial
number and the rate given in the tender will then be entered by him in the
comparative statement of tenders (PAFZ-2125). He will show on the
comparative statement of tenders or on attached statements the following data
(not applicable to contracts of DITD and RV&FC):(1)
Contract rates for the current and for the preceding two years (when
available).
(2)
Average civil local price current rates for the preceding two years
(when available), showing whether those be wholesale or retail. In the
case of supplies imported from outside the local area, civil price current
rates of the area from which they are imported will also be attached.
(3)
Separately for each tenderer, the full estimated cost of the tender or
tenders recommended for acceptance and of each lower tender-The
costs will be entered at the bottom of each tenderer's column on the
comparative statement.
Note. Sub-rules (2) and (3) are not applicable to contracts relating
to medical stores depots.
b.
The officer concerned will enter his recommendations (and reasons
104
for the same) in the comparative statement of tenders and send it at once with
all necessary attached documents and the tender or tenders (if any), of which he
recommends acceptance ( and the lower tenders, if any) to the competent
sanctioning authority who may, if he considers it desirable, obtain the remarks of
the Controller of Accounts (if not already obtained) before giving his sanction.
c.
A tender for assorted supplies may be accepted in whole or in part the object
being to prevent a high rate being tendered for articles for which there is a large
demand and a low rate for those of which but small quantities are required.
Note:-In addition to the scrutiny over tenders prescribed by this rule, Audit Officers
have power to examine contracts and to bring to the notice of the Military
Accountant General, for the information of the Public Accounts Committee, any
cases where competitive tenders have not been sought, or where high tenders
have been accepted, or where other irregularities in procedure have come to
light.
97.
Errors in Tenders. Any tender which does not fulfil the conditions stated in the tender
form or notice to contractors may be rejected, but trivial omissions such as: a.
To tender the rates in words.
b.
To initial an~,lalteratio, in rates.
c.
To sign both tender and schedule (s).
may be corrected in the presence of the officer concerned and will be signed by both
parties.
98.
Non-receipt of Tenders. If no tenders are received or if those received for any article
are not acceptable, the contract will not be readvertised except in very special
circumstances, eg, when collusion between tenderers is suspected or when by the
adoption of such a course material gain is likely to accrue to the State; but purchase
may be resorted to. In the case of unimportant supplies from petty dealers auction bids
may be taken before resorting to purchase.
99.
Standing Security Deposit. It will be obtained from every contractor instead of

security deposit and earnest money. The decision regarding the amount of standing
security deposit and the amount and nature of contracts for which a contractor can be
registered shall rest with the Service Chief, who may delegate these powers to their
subordinate officers. It shall be liable to verification, forfeiture to the same extent and
under the same conditions as are applicable to security deposits and earnest money for
individual contracts.
105
100.
Contract Deeds. The tender (PAFZ- 2120) becomes a contract on acceptance which
will be communicated to the tenderer on PAFZ-2124. A special form of contract deed
is not required except in the case of specially important contracts and it should then be
drawn up by the Government Law Officer, half of the cost of the deed being payable by
the contractor. A tender cannot be made, nor can a contract be signed, by an agent
unless he holds a power-of-attorney, expressly authorising him to do so.
101.
Power-of-Attorney. One or more contractors may employ an agent, duly authorised by

power-of-attorney (PAM-2133 and 2134), to act for them.
Note: Letters of authority may be regarded as legal powers-of attorney for
purposes of this rule only if they are properly stamped as powers - ofattorney under the Stamp Act, 1899 (11 of 1899).
102.
Duration of Contracts
a.
Contracts will normally be for the twelve months of the financial year only but
may be for shorter period. In the case of ASC contracts this period may be the
financial year or the calendar year whichever is applicable to a particular area as
the QMG may prescribe from time to time. If it be considered advisable in the
interest of the State, to conclude a contract for a longer period than one year
but not exceeding three years the sanction of the next higher authority shall be
obtained. For periods exceeding three years the sanction of the QMG, the
MGO, or the Surgeon General must be obtained.
b.
Sanction of the QMG is necessary prior to the conclusion of a contract for less
than twelve months in the case of ASC contracts.
c.
If it be in the public interest to extend the period of an existing contract, the

approval of the Controller of Accounts and the sanction of the next higher
authority is necessary even where there is no intermediate authority between the
one originally sanctioning the contract and those referred to in sub rule d ibid.
Such extension may be carried out either on the original contract or in the form
of a supplementary agreement which will be signed by the competent authority
after the sanction of the next higher authority, to the period of extension and the
terms, have been obtained.
d.
Sanction of the QMG, the MGO or the Surgeon General is necessary in the
case of further extension of a contract, the original period of which plus
extension has totalled three years.
Note: In the case of contracts, including extension thereof, sanctioned by a
Director at General Headquarters, the sanction of the QMG/MGO is not
required unless the period of the contract exceeds three years or unless an
existing contract is extended beyond a period of three years.
106
103.
Transfer of Contracts. When a contractor desires to transfer a contract, the party who
is willing to take up the supply should be called upon to execute a fresh contract
(PAFZ-2120).
104.
Supplies. All orders for supplies under a contract should be given on PAFZ2135, and
the contractor's acknowledgement therefore obtained. Supplies should be made at the
places provided for in the first schedule, but if this is to units direct they must be
tendered in the presence of a representative of the department concerned. Supplies
should be passed without delay, and any objection must be raised before the contractor
is granted a receipt. Except in the case of periodical supplies at short intervals when
accounts are submitted monthly, a contractor should he paid as soon as possible after
his supplies are accepted.
Note. Supplies of ration articles, made direct by contractors to the unit should,
as far as possible, be made in the presence of a representative of the
ASC. Although delivered direct, the ASC is responsible for the quality of
the supplies.
105.
Advances. Unless specially authorised by the Government no cash advances should be

made to contractors.
106.
Compensation for Breach of Contract.

a.
Under clauses 7 and 9 of the tender form a contractor, in certain cases therein
specified, becomes liable to pay to Government compensation for loss or
inconvenience that may result from his default or from the rescission of his
contract under clause 8. Full compensation need not be insisted upon for every
default and the officers should avoid exacting it for trivial shortcomings. A clear
breach of contract should not be passed over and the loss will then be assessed
as follows:(1)
If rejected supplies have to be replaced, the amount of the loss will be

any excess over the contract rate in the price paid for the supplies
together with reasonable compensation for inconvenience caused by the
default. If the contract has to be rescinded, a new contract for the
unexpired portion of the original contact should be concluded and if the
rates of the new contract exceed those of the old, the amount of the loss
sustained will be:(a)
The total extra expense incidental to the new rates, plus.
(b)
The extra expense incurred in carrying on the service by

purchase in the interval between the two contracts.
(c)
The cost incidental to effecting a new contract.
107
Note:-Otherwise the amount of the loss will be (b) and (c) alone, or this amount
less the saving resulting from the new rates if these are lower, The loss
for inconvenience will be assessed according to the circumstances and
the nature of the contract.
b.
The following officers shall exercise discretionary powers up to the limit given
below, in the matter of waiving compensation for loss due to the failure of a
contractor:Rs.
(1) QMG/Corps Commander (with the concurrence 1,00,000/_
of the Ministry of Finance (Military).
(2)
(3)
c.
A Divisional, FCNA, Log Area, With the

50,0001Indep Bde Commander, DlIV&F,
concurrence of
Surgeon General, DOS, DITD and
Regional Controller
Chief of the Air Staff.
of Accounts
concerned.
Surgeon-General (for X-Ray
stores only).
10,0001-
The amount recoverable from the contractor, or the orders of the CFA for
waiving the recovery thereof from the contractor shall be communicated to the
Controller of Accounts.
107.
Interpretation of Contracts. Whenever an Audit Officer is in doubt as to the

interpretation of a contract he should seek advice of the Ministry of Justice and
Parliamentary Affairs (Justice Division).*
108.
Recoveries from Securities, in Default. If the compensation exceeds the security the full
security may be withheld and the balance recovered from any moneys due to the
contractor. If the amount of the actual damage suffered under the terms of a contract,
for which the contractor is liable, is more than 75 percent of the security, the whole of it
will be forfeited. If, however, the compensation payable by the contractor is 75 percent
of the security or less the balance will be refunded to him. If the defaulting contractor be
declared insolvent by a court of law the unrecoverable balance of compensation may be
written off under the orders of competent financial authority.
109.
Payment of Bills
a.
All bills must be receipted by the contractor under the words "received
payment" and be endorsed by him in favour of the bank under a separate
signature. If the bank is a collecting agency and is not included in the approved
list of scheduled banks in Pakistan and exchange banks in foreign countries, the
contractor will be required,
108
in addition, to execute a power-of-attorney in favour of the bank. If the
collecting bank is a scheduled bank, payment may be made without a
power-of-attorney. If, however, it is financing bank, the contractor will have to
execute an irrevocable power-of-attorney or deed of assignment in favour of
that bank, provided that if a deed of assignment is executed, it shall specify the
debt and be stamped under the Stamp Act, 1899 or bear a certificate of
exemption from stamp duty from a competent authority. The power-of-attorney
or deed of assignment will be subject to the approval of Government.
b.
In such cases Government will not, as a rule, make any payment to the
contractors without the knowledge of the bank. If, however, the con tractor
presents a bill for payment direct and does not endorse it in favour of the bank,
while every effort will be made to secure payment to the bank. A payment to
the contractors will constitute a full acceptance so far as Government is
concerned. The bank should be required to give a written acknowledgement of
this condition as part of the arrangement under which Government recognises
the power-of-attorney or the deed of assignment.
Notes: 1.
The above procedure shall not, in any way, affect the rights of
Government to deduct from bills (whether endorsed in favour of a bank or
not) any sums due to them from the contractors on account of penalties,
overpayments on the contract to which the bills pertain, or on any other contract with the Government.
2. Letters from contractors, forwarding powers-of-attorney or deeds of
assignment, should indicate whether the bank in whose favour such a
document has been executed will function as a financing bank or a collecting
agency.
109
CHAPTER 11 - REMITTANCES AND FAMILY ALLOTMENTS
110.
Family Allotments. The general rules regulating the payment of allotments of officers
and other ranks on field service are laid down in the Account Manual (War).
111.
Family Remittances
a.
Personnel Below Commissioned Rank. They, when ordered on field service

or service under peace conditions beyond the limits of Pakistan may make
remittances through the post-office to their families in Pakistan, free of charge
for postal commission in accordance with the arrangements detailed below:(1)
A register showing the number, rank and name of individuals making

allotments, the names and addresses of the allottees and the amount to
be paid monthly will be maintained by the Record Office concerned.
Any subsequent changes will be noted, the authority for the changes
being cited in the remarks column and filed separately.
(2)
The sum to be remitted on behalf of an individual in any month is strictly

limited to the amount of his full monthly pay and allowances. The sum to
be remitted must not contain any fraction of a rupee.
(3)
The amount of an allotment may be altered or a remittance may be

discontinued by the remitter on due intimation to the Record Office
concerned. The death of an individual, making an allotment, should be
reported as soon as possible to that office.
(4)
The Record Office concerned will send a detailed list of the payments
to be made to the respective Field Pay Office in sufficient time to enable
that office to issue payment authority by the first of the month following
that to which the allotments pertain. A separate cash-account will be
maintained for these transactions. Undisbursed amounts will be
refunded into the treasury. Amounts will be remitted by blue
money-orders with red printing.
(5)
Special care will be taken to give full names and correct addresses of
the payees in the money-order forms which will bear monthly serial
numbers and these will be sent to the post-office for issue together with
a list in triplicate (in quadruplicate if presented at a sub-post- office). All
copies of the list should be signed by the record officer concerned. No
change in the money-orders, or in the list, will be made once these have
been accepted by the post office. The money-orders and the lists will
be accompanied by a cheque for the total amount of the money-orders
plus money order commission. The original copy of list will be receipted
by
110
the post -office and returned to the Record Office in place of the usual
individual money-order receipts granted by the post office. Payees'
receipts will be watched by the Record Office and on receipt will be
securely recorded in a guard file in consecutive order.
(6)
The amounts of any money-orders which cannot be disbursed will be

refunded by the post-office in cash to the Record Office, which will be
remitted into the treasury. The receipt and disposal of such amounts will
be recorded in the appropriate columns of the family allotment register
(PAFF-1078).
Note: 1.
Cheques issued in settlement of family allotment
money-orders should, in all cases, be made payable only to
the head Postmaster within whose jurisdiction a sub-office
lies.
2. The total amount of the remittance paid in any month will be
credited in the accounts of the unit, supported by statements
in family allotment form (PAFF-1000) for the credit.
b.
Persons other than personnel below Commissioned Rank may remit, monthly to
their families by free postal money orders, sums not exceeding their monthly pay
and allowances for the month of remittance. Such money- orders will be
accepted by the post-office without payment of commission, if endorsed by the
officer under whom the individual is serving with the following certificate; CERTIFICATE
"Certified that the remitter is entitled to make this remittance which does not
exceed his pay and allowances for the month of remittance."
c.
They will submit applications on PAFF-1000 for the remittances desired to be

paid monthly on their account to the Controller of Accounts at the base who
deals with their pay accounts in the case of field service or the Controller of
Accounts of the divisional log area in Pakistan from which they proceeded in the
case of service under peace conditions beyond the limits of Pakistan and who
will arrange the remittance in communication with the officer under whom the
men were last serving in Pakistan on the general procedure indicated in a above.
A remittance may be discontinued or the amount thereof may be altered on due
intimation being given by the individual concerned through the officer under
whom he is serving to the Controller of Accounts concerned. An intimation will
be sent by those officers both to the payee and to the remitter.
111
d.
Ile death should be reported immediately by the officer under whom he is

serving to the Controller of Accounts through the Accountant General's office at
the base in the case of field service.
Note: To facilitate the payment, the service books of such persons as are
supplied with them should be carefully completed on mobilization with all
particulars required to ensure the correct preparation of money- orders.
When endorsing money- orders the officer, under whom the person is
serving, will see that the names and addresses of the remitter and payee,
as shown in the service book, are clearly entered on the money-order.
112.
Remittance of Credit Balances

a.
Meld pay offices may also make remittances to the families of personnel below
commissioned ranks from the credit balance of their accounts through the
Post-office free of charge. Such remittances can only be made at the specific
request of the person concerned and no one will be allowed to make such
remittances more than once in every three month..
b.
The amount of this special remittance will be included in the next monthly
remittance, under rule 111a, following the receipt of the request from the field
and the detailed statements will be endorsed to the effect that(1)
The amount does not exceed the credit balance at date of the men
concerned.
(2)
That no special remittance has been made on their behalf during the
preceding three months.
112
CHAPTER 12 -MISCELLANEOUS PROVISIONS
113.
Accounts. Every officer should bear in mind that his accounts form a unit of the entire
system of military accounts, and that mistakes made by him do not affect his own
accounts alone; it is, therefore, necessary that each officer should satisfy himself before
despatching his account that it is in strict accordance with the orders issued for his
guidance. Anything of the nature of a local fund, unless specially authorised, is
prohibited. All monthly account will bear the date of the last day of the month to which
they relate. All accounts and returns will be endorsed on the back with the date of
despatch.
114.
Statistics of Expenditure. The duty of preparing all statistical returns of expenditure

rests with the MA Dept but the Controller of Accounts is at liberty to call on executive
officers for any statistics or assistance he requires when the necessary information is not
available in his own office.
115.
Cash and Store Dansactions. All cash and store transactions, to which an individual in
his official capacity is a party must be brought to account and the appropriation of each
receipts to meet expenditure, except when specially authorised, is strictly prohibited.
116.
Responsibility for Expenditure. All receipts and charges should, as far as practicable,
be brought into the accounts of the financial year to which they pertain. It will be the
duty of every disbursing officer to pay all outstanding claims against Government and all
payment due in the current year and chargeable to the accounts of that year before the
end of June while every officer will at all times and specially when field operations are in
progress, ascertain what liabilities are likely to be incurred and get them settled with the
least possible delay.
117.
Ractions in Amounts. In the discharge of all claims against Government payment is to

be made down to the nearest rupee.
118.
No Demand Certificate
a.
Every person who proceeds or is about to proceed on leave pending retirement

or leaves his appointment on retirement, resignation or on being placed on half
pay or who, being in charge of cash or stores, proceeds on leave or furlough
ex-Pakistan, when, with reference to rule 61 Last Pay Certificates are not
required to be issued, must obtain a no demand certificate (PAFA--450) before
he hands over his duties. Ordinarily no person will be allowed to leave Pakistan
until the no demand certificate is produced.
b.
The officer commanding or the local Head of the Department under whom the
person concerned is serving, will immediate prepare PAFA 450, completed in
so far as regimental and public claims are concerned, and clearly endorsed as
final no demand certificate or final certificate of demand outstanding and will
submit it to the Controller of Accounts
113
responsible for the disbursement of his pay. The Controller of Accounts, after
cheek and amendment where necessary will forward it to the Pakistan embassy
concerned. AR (1) 170 also refers.
c.
The submission of a "No Demand Certificate" (PAFA-450) is not necessary

when an officer, after resignation or retirement from the service, is immediately
re-employed as a commissioned officer in an other branch of the service, any
outstanding demands against him being noted on his last pay certificate or
otherwise will be communicated to his new unit or formation, for necessary
adjustment.
Note: The issue of pay or half pay, as the case may be, beyond a period
of six months is dependent on an officer obtaining within that period the
prescribed no demand certificate.
119
Submission of Claims. Claims of officers other than monthly emoluments employed will
be submitted to the Audit Officer concerned through the officers under whom they are
serving. Claims arising from service or leave ex-Pakistan should be submitted to the
embassy concerned.
Note. Claims relating to arrears of pay which may have become due to
officers while out of Pakistan will, if preferred by them on their return to
Pakistan, be submitted to the Controller of Accounts in whose payment
they are.
120.
Arrears. All arrears against the Government should be brought forward in the month in
which they are incurred, and in the case of daily supplies in the month following that to
which they pertain. When arrears are brought forward which are over one month in
arrears, officers claiming the arrears will explain the cause of delay on the vouchers in
which such arrears are charged. The explanation should be concise and under a
separate signature.
121.
Contributions. Donations and contributions to funds will be deducted from the

pay-bills of the individuals concerned, and they are responsible for the proper payment
of such donations and contributions.
122.
Broken Periods. When salary or allowance is fixed at a weekly or monthly rate, the
broken period will be computed on the basis of the number of days in the week or in
the month in which such broken period occurs.
123.
Line Funds
a.
The rules in regard to the disposal of stable litter are contained in AR(I) 521.
b.
Litter funds accruing from the sale of litter are authorised for all units, and will be
used to meet the cost of petty improvements to unit lines, purchase of seeds
(flower, garden and vegetable ) purchase of fuel for boiling animals' feed in AT
units, purchase of cleaning material for
114
leather equipment and accoutrements, training animals, improvements to riding
schools chappars, paddocks, litter carts, military displays, prize for authorised
competitions and animals shows which would tend to improve the physique of
the men and the care of animals and equipment.
c.
Sanction of the formation commander will be obtained before any expenditure is

incurred in connection with military displays, prizes for authorized competitions
and animals shows. Expenditure relating to any form of amusement or
entertainment for the benefits or personnel will not be met from this fund.
d.
Each unit will maintain a separate litter fund account which will be administered
and audited in accordance with the rules applicable to the accounts of
regimental funds (see AR(R) 462-465).
124. Rates -Army Remount Stores
125.
a.
Rates for stores purchased by remount depots will be fixed by officers

commanding at the time of ordering purchases, and immediately entered in the
office rate book and in supply orders. A list of the rates passed will be
furnished, quarterly on the 10th of January, April, July and October to the
Director of Remounts, Veterinary and Farms. On each bill a certificate must be
furnished that the rates therein charged have been compared with those entered
in the office copy of the supply order or office rate book.
b.
The Director Remounts, Veterinary and Farms, is responsible that the rates
passed by officers commanding are not excessive. He will compile a quarterly
statement of these rates and circulate it to his executive officers as a guide to the
rates prevailing in other depots. Copies of this list will also be furnished to the
Audit Officer.
Rationing of Animals Transferred from Army Remount Depots

a.
The grain and fodder required for the journey of animals transferred from one
remount depot to another or from remount depots to railhead will be supplied,
according to 'Scales of Rations and Supplies' issued by the ASC, by the depot
from which they are transferred; from rallhead the unit concerned will make
necessary arrangements form rations of the animals for the onward road
journey. The OC remount depot concerned, when handing over forage for the
animals, may exercise his discretion as to whether a smaller or larger scale of
forage is necessary subject to the limitations imposed by 'Scales of Rations and
Supplies'. The Remount Depot concerned will give to the escorting party a
statement on PAF(RD)-8, showing the description and quantities of articles or
rations handed over to the latter and the scale at which these are to be issued
daily during the journey to each class of animal taken over, and will send a copy
direct to the OC Remount
115
Depot/unit, together with receipt and issue vouchers (PAFZ-2096) for the forage
handed over. The receipt and issue vouchers will also include the packing
material used. The animals concerned will be struck off the returns of the
remount depot on and from the date of their being handed over and will be
brought on to the receiving returns from that date. The OC Remount Depot unit
will return the receipted voucher to the OC remount depot concerned, and will
give credit for the quantities of rations received by the escorting party and strike
off the quantities issued on the journey, from his Ration and Forage Return
(PAFS1519-A).
b.
In the case of issue of animals from one Remount Depot to another the
escorting party will be supplied by the issuing depot. In the case of issue of
animals to units, the escorting party will be provided by the units concerned.
126.
Financial Irregularities. The responsibility for disciplinary action in cases of financial

irregularities rests with the administrative authorities and ultimately with Government.
These authorities will inform the Audit Officers affected of the exact nature of
disciplinary action taken by them.
127.
Control and Inspection of Accounts. Controller of Accounts will examine and control all
the offices of account, disbursement or issue in their account area, and will arrange for
the prescribed periodical inspection or local audit of the accounts of such units,
formations, etc, as they may select.
128.
Income Tax. Any leave or deputation salary drawn outside Pakistan shall be subject to
deductions of Pakistan income tax and super tax at the rates which would have been
applicable if that salary had been drawn in Pakistan. All valid deductions will be made
regularly from the pay and allowances of all officials who proceed over-seas and only
the net amount will be paid to them in the currency of the country of deputation or leave.
For detailed rules regarding income tax, see Income Tax Manual.
129.
Leave and Pension Contributions. The leave and pension contributions and their
recovery in respect of the military officers and other ranks, lent on foreign service, shall
be regulated by the Fundamental Rules.
130.
Haircutting and Washing Services. Orders regarding provision of haircutting and

washing services to troops are contained in Annex J.
116
Annex A
To Rule 9
CATEGOR IES OF CASES REQUIRING PRIOR REFERENCE TO
THE GOVERNMENT
1.
Introduction of new, or revision of existing terms and conditions of service of personnel,
scales of pay, allowances, passages and pensions, unit, or contract allowances, scales of rations
and clothings, scales and specifications of accommodation and furniture scales and rates of living
accommodation, 'TO&Es and scales of reservices.
2.
Determination of the period for which GS reserves are to be maintained.
3.
Creation of new posts of Lt Col and above and civilian officers of BPS 17 and
above.
4.
Grant of advance increments.
5.
Variation in purchase procedures laid down by Government.
6.
Proposals in respect of receipts and their utilization.
7.
Conditions governing sale or disposal of capital assets.
8.
Variation in the rules relating to payment rates and free issue rates of stores,
clothing and rations and in the rates of recovery for services rendered to
non service department.
9.
Any inter-service matter having financial implications.
10.
Negotiation relating to foreign aid, credits and barters.
11.
Relaxation of rules and regulation laid down by the Government.
12.
Accounting and financial rules.
117
Annex B
To Rule 21
ACCOUNTS AREAS
1.
2.

a.
Head of Military Account Department.
b.
Compilation of Defence Services Receipts and Expenditures.
c.
Conduct of Local Audit of Defence Services expenditure and rendition

of general statement of account reports.
d.
Consolidation and submission of Appropriation Accounts, Annual Review

of Balances, Finance & Revenue Accounts, Consolidated Balanced Account
and other Annual Accounts as heretofore.
e.
Assisting Secretary General Defence before Public Accounts Committee
f.
Preparation of Pension Budgetary figures in respect of three Services

and Civilian Pensioners of the Defence Services and submission thereof to
Ministry of Defence.
g.
Rendition of audit reports on cases referred by Ministry of Defence,

Finance and Service Headquarters.
h.
Audit interpretations.
j.
Framing, up dating and revision of Account Codes and Manuals.
k.
Monitoring of Controllers working through reports and returns and

inspections.
1.
Co-ordination of accounting and audit matters of the three services.
m.
n.
Recruitment, training, promotions and departmental examinations for all

departmental grades.
Administration of. Military Accounts element of Accounts Group.
o.
Welfare measures for PMAD.
P.
PMAD Budget.
Service Controllers (CCMA (GHQ)/CAAF (GHQ)

a.
CCMA (GHQ).
118
(1) Scrutiny of all army accounts.
(2) Checking/scrutiny of defence service regulations.
(3) Scrutiny of family pensions.
b.
CAAF(AHQ), Peshawar.
Accounts of all receipt /expenditure pertaining

to air force heads in respect of all units/
formations in Pakistan less person of civilian
paid out of defence services estimates. Pension
of PAF officers/personnel below commissioned
rank in PAF.
3.
CMA(RC), Rawalpindi.
4.
CMA (Lahore Command),Lahore.
5.
CMA (Karachi Command)Karachi.
6.
Controller of
Accounts and audit of all receipt /expenditure
Accounts (DPP&ISO), pertaining to DMISO Heads in respect of
Rawalpindi.
all units/formations and local audit of their
units/formations.
CMA (0), Rawalpindi. Pay, TA and pension accounts of all Army
Commissioned Officers/AFNS in Pakistan.
7.

to Army Heads in respect of units /formations
located in the NWFP, Northern Area, BDA,
Peshawar, Mardan, Risalpur, Nowshera, Bannu,
Kohat, D I Khan and stations from Attock to
Jhelum of Punjab Province except Pay/TA
accounts of service officers and personnel
below commissioned rank.
located in the Punjab from Kharian to Ralim
Yar Khan.Transactions with Pakistan Railways
for movement of Army are also dealt with
centrally in their command.
to Army Heads in respect of units/formations
located in the Sind3and Baluchistan Provinces.
8.
CMP, Lahore.
Pension accounts of all civilian officers/staff in

respect of' Defence Services in Pakistan and PMAD
officers/staff.
9.
CMA (FC), Lahore.
Pay, pension and TA accounts of all personnel

below commissioned ranks in respect of
Pakistan Army.
119
10.
CLA (DS), Lahore.
11.
CMA, (FWO).
12.
COFA.
Local audit of all units/formations of Army/

Air Force in Pakistan less units/formations of
DPP&ISO, FWO and Ordnance Factories.
All accounts in respect of Frontier Works Or
ganization and their local audit.
b.
c.
d.
e.
f.
g.
h.
j.
13.
CMA (DP), Rawalpindi.
a.
Audit payment and compilation of
expenditure
of labour employed in the
factory in connection with production.
Audit payment and compilation of pay,
TA and other claims of personnel borne on
estb sanctioned by
Government or DOF.
expenditure
on store and departmental
work.
Audit of store accounts.
Audit of P and M and building accounts.
Control over production programme.
Realization
and audit of rent and allied
charges.
Audit and allocation of labour material
and over head charges and
compilation
of cost of production.
Preparation
of priced store account,
manufacturing account and balance sheet
annually.
Maintenance of accounts in respect of Defence

Procurement (Army/Air)
120
Annex C
To Rule 31
FORM OF REGISTERS TO BE MAINTAINED BY CONTROLLING AUTHORITIES FOR WATCHING EXPENDITURE AGAINST ALLOTMENT
1
Main Head
Sub Head
Register to be maintained by primary controlling authority for watching expenditure against allotment
Allotment
Minor Head
Control Head
Allotment for the year

Reference
Amount of
Original
Allotment
Subsequent
Charges
+ Increase
- Decrease
g
Total
121
EXPENDITURE -PART A
(As recorded by the controlling authority)
2
ul
r
otal for the

month
rogressive
total to end
pf the month
alance
allotment
of
ug
mt
ep
mt
mt
ct
r
ov
mt
mt
ec
r
mt
an
r
mt
eb
r
mt
ar
r
pr
mt
mt
ay
r
mt
un
r
mt
122
EXPENDITURE -PART B
(As reported by DM Section of MAG through the monthly expenditure statements)
1
2
Jul
Aug
Sep
Oct
Nov Dec
Jan
Feb
Mar Apr
May
Jun
Total for
the month
Progressive
total to end
of the
month
Balance of
Allotment
INSTRUCTIONS
1.
This register will be maintained by all primary controlling authorities.
2.
Amounts should be rounded off to the nearest rupee for purposes of completing this
register.
3.
All abnormal items will be underlined in red ink so that by deducting such items, from
the progressive total, the monthly average normal expenditure can be ascertained.
Allowance must also be made for known or anticipated abnormal items likely to come
forward in the remaining months in considering the adequacy or otherwise of the
unspent balance of the allotment.
123
2.
ment received
from............
His No......... ...
Budget Allotments Register
Bedget Allotment Register

Main Head
...
Sub-Head..........
Control Head ..............
under
Dated
Subsequent
Month
Authority
to whom
Allotted
a
Month
Original
Allotment and
distri-bution
Amount
+Increase
-Decrease
Allotment
as Modified
to Date
Modifications
Month
Month
Amount
+Increase
-Decrease
Allotment
as Modified
to Date
Amount
+Increase
Decrease
g
A llotment
as
Modified
to Date
h
Amount
+Increase
-Decrease
Allotment
as Modified
to Date
Partticulars of
Additional allotment,
or surrenders of Reappropriations
124
INSTRUCTIONS
1.
This register will be maintained by all controlling authorities who distribute allotments to other controlling authorities.
2.
The initial distribution of the total original allotment and the amount retained in reserve will be entered in
columns a and b.
3.
'Me succeeding columns are provided for the purpose of recording (1) changes in this initial distribution and (2)
additions to or reductions in, the total original allotment, whether by supplementary grants from higher controlling autho
rities, surrenders or Re-appropriations.
4.
It is made clear that mere changes in the distribution of the original allotment within a control head will not
effect the aggregate amount of the allotment
(including the portion held in reserve). Additions to or reductions in the
original allotment will cause increases or decreases in the total allotment and the amounts of such increases or decreases will
be brought out in the totals of the odd numbered columns concerned.
5.
Reference will be given in column 1 to the authority for the additional allotment, surrender, or re-appropriation,
as the case may be.
125
Annex D
To Rule 42
INSTRUCTIONS FOR THE GUIDANCE OF OFFICERS WHO ARE REQUIRED
TO MAKE PURCHASES OF STORES UNDER THE PROVISIONS OF THE
RULES FOR THE SUPPLY OF ARTICLES REQUIRED FOR THE PUBLIC
SERVICE
PREAMBLE
1.
he policy of the Government is to make their purchases of stores for the public service
in such a way as to encourage the development of the industries of the country to the utmost
possible extent, consistent with economy and efficiency and the following rules which are
applicable to the purchase of stores (other than printing and stationery stores) for the
Government are prescribed in accordance with this policy.
2.
In order to give effect to the above policy preference in making purchases will be given
in the following order, namely.Firstly, to articles which are produced in Pakistan provided that the
quality is sufficiently good for the purpose.
Secondly, to articles wholly or partially manufactured in Pakistan
from imported materials provided that the quality is sufficiently good for the purpose.
Thirdly, to articles of foreign manufacture held in stock in Pakistan
provided that they are of suitable type and requisite quality;
Fourthly, to articles, manufactured abroad which need to be
specially Imported.
3.
Ministries or officers specially authorised in this behalf, may, when they are satisfied that
such measure is justified, allow a limited degree of preference in respect of price to articles
produced or manufactured in Pakistan either wholly or in part.
4.
The difference in the character of the preferences which may be given should be
carefully noted. In the case of the first two categories mentioned in Paragraph 2 above the
condition is that the quality is sufficiently good for the purposes and for the third category that
the articles are of suitable type and requisite quality. This means that articles coming under the
first two categories, should be accepted unless it is considered that the quality is definitely not up
to the standard required even though imported articles may be considered to be of better
quality.
5.
The other kind of preference referred to in the revised rules is a price preference. It is
enjoined that a limited price preference may be given to indigenous articles either wholly or in
part by officers specially authorised. It should be noted that no price preference should be given
to articles failing in the third category over those which come within the last two categories.
126
6.
A strict comparison with prices prevailing abroad is not required. But the underlying principle is
that the preference to be accorded to indigenous products or to imported stocks is to be
tempered the consideration of economy.
7.
The degree of price preference that may be allowed to indigenous products has not been
specially provided for in the rules because the Government intend to retain entirely in their own
hands, for the present, the power to grant such a preference. Ordinarily a limited degree of price
preference in favour of indigenous articles will be justified for one or other of the following
reasons, namely:a.
When the industry in question is expected to fill a vital gap in the economic life
of the country and is likely to take a firm root in the soil in the near future.
b.
Strategical Necessity.
c.
To prevent any sudden dislocation of the labour market on a large scale.
d.
To regulate and control foreign competition especially during periods
of temporary trade depression abroad.
8.
Every proposal for the grant of a price preference should be referred by the purchasing officer
concerned, through the proper channel, to the Ministry of Defence. The latter will, before
passing final orders, consult the Ministry of Industries. It will devolve on the latter to co-ordinate
the action to be taken under this head by the different departments of the Federal Government.
Rule 1. Save as provided in paragraphs 7 and 8 all articles required to be purchased
through the Ministry of Industries, shall be purchased on the condition that
delivery shall be made in Pakistan for payment in rupees in Pakistan.
9.
It should be carefully noted by all purchasing officers that under the revised rules the purchase
of all indigenous articles (with the exception of the classes of stores specified in paragraphs 7
and 8) is obligatory.
10. It should be clearly stated in all invitations to tender, issued by purchasing officers that tenders
must provide in their tenders for delivery in Pakistan and that payment for the articles will be
made in rupees in Pakistan.
11. With reference to the principles of preference enunciated in paragraph I, tenderers should be
requested to furnish information in regard to the country of manufacture and/or origin of the
material used in the manufacture of the articles.
12. Purchasing officer may exercise full discretion regarding the point or place of delivery to be
specified in their invitations to tender. They may specify CIF, or FOR, port in Pakistan, FOR,
place of despatch, in Pakistan or Free Delivery receiving
127
station in Pakistan. Where tenders are invited for plant and equipment in which the erection of
the plant at site is to be undertaken by the successful tenderer, appropriate terms in regard to
delivery at site should be included in the invitation to tender or in general specification
13.
When specifying the point or place of delivery purchasing officers should endeavour to
lay down terms which will give all tenderers equal opportunities to put forward their lowest
prices. For instance, in many cases tenderers abroad may be unable to tender for delivery FOR,
port in Pakistan or Free Delivery receiving station in Pakistan and may only be able to tender on
the basis of delivery CIF, port in Pakistan, with payment in rupees in Pakistan, against shipping
documents. Such tenders should be considered as coming within the meaning of rule 1 and
should be accepted if satisfactory in other respects.
14.
Except in special cases full payment for the stores should not be made against shipping
documents but only after delivery of stores has been taken by the receiving officer and they are
found to be satisfactory in every respect.
Rule 2. Indents for stores the value of which does not exceed Rs 500/-, will not be paid
on the purchasing authority mentioned in rule 1, except :
a.
Where rate and running contract exists.
b.
The stores cannot conveniently be obtained by the inden
tors direct.
15.
In the case of indents failing within the exceptions mentioned above the exception, under
which the particular indent falls, should specifically be mentioned on the indent and in the case of
the exception at b details of the efforts made by the indentors to secure the supply from the
market should be stated.
Rules 3.
Tenders shall be invited in Pakistan for the supply of all articles
which are purchased under rules 1 to 4 unless the values of the order to
be placed is small or sufficient reasons to be recorded exist which
indicate that it is not in the public interest to call for tenders. No tender
which fails to comply with the condition as to delivery and payment
prescribed in rule 1 shall be accepted.
16.
If the response to any invitation to tender indicates that owing to inadequate publicity or
some other reason favourable tenders have not been received, then fresh tenders should be
invited and measures taken to bring the invitation to tender to the notice of all possible tenders.
17.
It should be made clear on every tender form that the stores must be delivered in
Pakistan; that payment will be made in Pakistan in rupees and that any tender which does not
comply with these conditions will not be considered. Tenderers abroad should also be required
to specify their agents in Pakistan through
128
whom delivery will be arranged and payment received and who, when so required, will arrange
for erection at site and for the carrying out of such tests on completion, as may be specified in
the contract.
18.
No account adjustments will be made between the High Commissioner's office and the
Purchasing Department in Pakistan for the value of tender forms sent to High Commissioner and
issued on behalf of the purchasing authorities in Pakistan and the expenditure on advertisements,
postage and other charges in the High Commissioner's office.
19.
When considering the desirability of calling for tenders abroad it Itiorowbat that
purchasing officers in Pakistan should bear in mind the necessity of allowing sufficient time for
the receipt and publication of invitations to tender, the receipt of the tender forms by tenderers,
and the preparation and despatch of the tenders to Pakistan.
20.
Rule 3 does not preclude the use of limited or single tenders, not does it require that
tenders should be called for where it is clearly not in the public interests to do so. The following
procedure for obtaining tenders should be followed as far as practicable. Tenders should be
obtained:a.
By advertisement (open tender).
b.
By direct invitation to a limited number of firms (limited tender).
c.
By invitation to one firm only (Single tender or private purchase).
21.
The 'open tender' system ie, invitation to tender by public advertisements should be
used as a general rule and must be adopted subject to the exceptions noted below in all cases in
which the estimated value of the tenders to be received in Rs 50,000/-- or over.
22.
The 'limited tender' system should ordinarily be adopted in the case of all orders the
estimated value of which is less than Rs 5,000/-.
23.
For the purpose of the limited tender and single tender procedure the purchasing
officers will maintain a list of firms, both Pakistani and foreign, of known reliability who have
been able to satisfy them that they possess the necessary equipment and facilities for the supply
of stores which they offer. The list should be subjected periodically to examination and revision
and any application from a firm for inclusion in the list should be considered on its receipt.
Before the name of firm is added to the list such enquiries as may be considered necessary
should be made by the purchasing officer to ascertain the ability of the firm to execute contracts
satisfactorily. From this list the names of firms to be invited to tender should be selected.
24.
Such a list is already maintained by the DGS&D who will, on receipt of a request,
furnish purchasing officers with such information as he may possess regarding
129
the capability and standing of any firm approved by him.
25.
The 'single tender' system may be adopted in the case of small orders, or when the articles
required are of a proprietary character and competition is not considered necessary. A 'small
order' shall be interpr5ed to mean for this purpose an order the total value of which does not
exceed Rs 250/-. In all such cases the purchasing officer should consider whether it is not
feasible to enter into a rate or running contract for the articles in question or to utilize the rate or
running contracts entered into by the DGS&D.
26.
The 'limited tender' system may be adopted instead of the 'open tender' system even
when the estimated value of the tenders to be received is not less than Rs. 5,000/- in the
following cases, namely:a.
When sufficient reasons exist which indicate that it is not in the public interest to
call for tenders by advertisement. In every such case the reason must be
recorded by the purchasing officer and communicated to the Accounts Officer
and Audit Officer concerned, confidentially if necessary.
b.
When the indenting officer certifies that the demand is urgent and an additional
expenditure involved, by the elimination or open competition, must be incurred.
In all such cases the indenting officer must place on record the nature of the
urgency and why the demand could not be anticipated.
27.
When tenders are invited by public advertisement the issue of the tender forms need not
be restricted to firms whose names are on the list of approved contractors. Firms not on the list
should, on enquiry, be informed that they are at liberty on payment of the prescribed fee to
tender for advertised requirements. When a tender, which appears to be satisfactory, has been
received from an unknown firm steps should be taken before any order is placed to ascertain
whether the firm is capable of executing the work in a proper manner, if the enquiries prove
satisfactory the order or a portion of it may be placed with the firm. If the order or the portion
thereof is satisfactorily executed the name of the firm should be added to the list of approved
contractors.
Rule 4. All articles, whether manufactured in Pakistan or abroad, shall be
subject
to inspection before acceptance, and articles for which specifications
and/or
tests have been prescribed by competent authority shall be required to conform
to such specifications and/or to satisfy the prescribed test or tests which may be
carried out during manufacture or before or after despatch from the suppliers'
premises.
Rule 5. In the case of important construction works let out on contract, articles required
for the construction of such works, may be supplied by the constructing firm
provided that when specification
130
and or tests have been prescribed for such articles they shall conform to such
specifications and or shall satisfy such tests.
28.
The object of rules 4 and 5 is to emphasize the importance of ensuring that articles
purchased for the public service conform to the specifications which may be prescribed by
competent authority, and the necessity for careful inspection of all stores before acceptance.
The appropriate specification should be annexed to or quoted in the invitations to tender and it
should be stipulated in the conditions of contracts that the articles supplied will be subjected to
inspection and or test prescribed in the specifications before acceptance.
29.
When tenders for important construction works are invited the officer concerned should
also stipulate in the invitations to tender that the articles, required for the construction of such
works must comply with the specifications prescribed for such articles. The articles should be
inspected and or tested in accordance with the provisions of the specifications before
acceptance.
30.
All purchasing officers should pay special attention to these points and should takes
steps to ensure that adequate inspection arrangements are made in each case.
31.
When articles are obtained from abroad which require inspection and or test during
manufacture and before shipment, arrangements should be made by the purchasing officer
concerned for such inspection and/or tests to be carried out by the Pakistan Chief Controller,
Defence Services Stores Department, London. Any further inspection and tests considered
necessary or desirable after receipt of the articles in Pakistan should be arranged for by the
purchasing department. The services of the DGS&D can be utilised in connection with such
inspection and tests.
32.
As soon as a contract for articles which require inspection and/or test during the
manufacture or before shipment from abroad has been awarded, four complete copies of the
accepted Vender with specifications, drawings, conditions of contract, and all other relevant
documents, should be sent to the CC, DSSD London, with completed instructions for
inspection and the full address of the manufacturers. The contractors should be informed that
inspection during manufacture or before shipment will be carried out by the CC, DSSD
London, and he should be asked to instruct his representatives in the country of manufacture to
communicate direct with that officer.
33.
With regard to the inspection of articles obtained or manufactured in Pakistan all
purchasing officers can, if they so desire, utilise the services of the DGS&D for the inspection
and or test during manufacture and before despatch.
34.
In the case of orders for plant and machinery, whether purchased in Pakistan or
obtained from abroad, which include erection and test at site of work, arrangements for
inspection and test after erection at site can also be made through the DGS&D.
131
Rule 6. Nothing in these rules shall be deemed to prohibit the purchase of articles by
one Department or Railway from another.
Rule 7. Warlike stores and specialised stores peculiar to the Defence Services which
are not usually required by the civil Government indentors and which may not
be available in Pakistan may be obtained without reference to the preceding
rules by indent on the Chief Controller, Defence Services Stores Department;
Offices of the High Commissioner for Pakistan in UK. Exclusive of war like
stores and articles which not being available in Pakistan, at present, are
available in the UK are as follows:a.
b.
Battle and service dress garments and parachute clothing.

Personal equipment including web equipment, tins mess, helmets steel
and ground sheets.
c.
Engineering stores namely military craft, balley bridging, military railway

bridging and miscellaneous military bridging.
d.
Works services stores - airfield and road track.
If the Chief Controller, Defence Services Stores Department, London, obtains

these articles through the War Office or Military of Supply in the UK, payment
shall be made by the Chief Controller. If the articles are purchased by h i tn
from private trade, payment will be arranged through the High Commissioner
for Pakistan in the UK.
Rule 8. Such warlike stores and other specialised stores peculiar to the Defence
Services which are not available in Pakistan and the UK and other soft currency
areas may be purchased from dollar or hard currency areas. Indents will be
placed on the Ambassador for Pakistan in Washington in the case of purchases
in Dollar areas and the Chief Controller, Defence Services Stores Department,
Office of the High Commissioner for Pakistan, London, for purchases in hard
currency territories other than the Dollar area.
35.
Rules 7 and 8 are in the nature of exceptions to the principle enunciated in rule 1.
Before availing himself of the discretion given by these rules it will be incumbent in every
purchasing officer to take all possible steps to assure himself that the stores of the requisite
qualities cannot be obtained in Pakistan at suitable prices in accordance with the provisions of
these rules. In order to ensure that the underlying principles of the Rules are not violated, a copy
of all orders for stores placed abroad under these rules, should be forwarded to the DGS&D
for scrutiny.
36.
f orders are placed abroad under the provisions of rules 7 and 8 on the basis
132
of delivery free on board vessel at port of despatch, arrangements for the shipment of stores
should be entrusted to the Chief Controller, Defence Services Stores Department, London, or
the Ambassador for Pakistan in Washington. The indenting officer should inform the supplier of
this arrangement and should send a copy of his order to CC, DSSD London, or the
Ambassador for Pakistan in Washington, as the case may be, for information.
133
A nnex E
To Rule 42
PROCEDURE FOR PURCHASE OF STORES BY THE DIRECTORATE
GENERAL OF DEFENCE PURCHASE AND DIRECTORATE OF
PROCUREMENT
1.
2.
Organizational Structure
a.
There is a single joint service organization called Directorate General Defence

Purchase (DGDP), under the Ministry of Defence.
b.
There are three separate Directorates of Procurement one for each service. The
Directorates of Procurement Navy and Air Force will be under their respective
service Headquarters for functional control and under the Directorate-General
of Defence Purchase for administrative control.
c.
The Directorate-General of Procurement (Army) is directly under

Director-General of Defence Purchase, for all purposes including functional and
administrative control.
d.
The establishment of Director-General of Procurement (Army) is worked out

by Director-General of Defence Purchase in consultation with Financial
Adviser.
Functions. The Directorate-General of Defence Purchase is responsible for:-a.
Economic and speedy procurement of all defence stores based on priorities

assigned by service headquarters.
b.
c.
Overall procurement policy for the defence stores.

Policy directive on the following matters, namely:-
d.
(1)
Shipping, eg. shipping lines with which to deal.
(2)
Import licences, e.g., Government policy on the granting of import

licences and imposing restriction under government orders.
(3)
Insurance policy, e.g., kinds of stores which may be insured, insurance

companies to be employed and any other policy matters.
Purchase procedures.
e.
f.
Contractual forms and agreements.

General policy directives dealing with procurement.
134
3.
g.
Policy directive on registration of firms.
h.
Policy instructions on disposal of stores.
j.
Provision of full administrative cover to the three directorates of procurement.
k.
Loans, credits and barter deals with foreign Governments in respect of defence
stores in consultation with service headquarters.
Directorates of Procurement
a.
The three Directorates of Procurement will function as separate and self

contained entities as part of the Directorate -General of Defence Purchase
organization for procurement of respective service stores except for common
user items specified below
b.
Common User Items

(1)
All items which at present are being purchased, stocked and distributed
by the Army, eg; foodstuff, petrol oil and lubricant, medical stores, small
arms and ammunition, camouflage equipment, engineer stores, etc., will
continue to be purchased as at present. For these items, forecast
*requirement will be placed directly on General Headquarters, by the
other two service headquarters. Funds for Naval and Air Force
requirements of these items will be catered for in the Naval and Air
Force budget estimates and re-appropriated to the army budget in
consultation with Financial Adviser (Defence Production).
(2)
In respect of items other than those mentioned in sub paragraph (1)

above, all demands for standardised items included in the Joint Services
Vocabularies is forwarded by the Services Headquarters to their
respective Director of Procurement. It is the responsibility of Services
Headquarters to ensure that Joint Services Vocabularies number are
clearly shown on such demands. On receipt of such demands, Directors
of Procurement will cross-mandate these to the Director of
Procurement of the major user service.
4.
Overseas Procurement Cell. The overseas procurement cells continues to be joint
service organizations under Directorate General of Defence Procurement. The Service
Headquarters work out their establishments in consultation with their Financial Adviser. This is
processed at the Ministry level through the Directorate General of Defence Purchase.
5.
Processing of Indents. All indents on receipt in the administration and co-ordination
wing of Directorate of Procurement Air/Navy/Army Directorate General of Procurement are
passed on to the Deputy Director concerned after
135
keeping a record in the indent register. Thereafter one of the following methods is adopted for
procurement:a.
By Open Tender. All demands the indents which are not marked 'Secret' or
which are valued at or above Rs. one lac should if time and other factors permit,
be procured through open tender and advertised in the Directorate-General of
Defence Procurement bulletin. If it is proposed not to advertise due to urgency
or other reasons, which will be recorded the orders of the Deputy
Directors/Directors of Procurement or those of Director General of Defence
Procurement depending upon within whose financial powers the indent falls, will
be taken. Under open tender system, invitation to tender are issued to all firms
registered with Directorate-General Defence Purchase for subject stores.
Note: In view of peculiar nature of food requirements, demands for those will
not be advertised.
b.
c.
By Limited Tender. The limited tender system is adopted in case of all

demands:-(1)
Which are marked 'Secret'.
(2)
The estimated value of which is less than rupees one lac.
(3)
In case of demands of higher value, where it has been decided by the

competent purchase authority not to invite tenders by advertisement
(open tender). Where the value of an indent exceeds Rs. one lac,
invitation to tender should normally be imou to as many likely suppliers
as possible who are on the approved list. For demands, the estimated
value of which is less than Rs. one lac, invitation to tender is issued to at
least 15 firms, unless the number of registered firms for the subject
stores is less, in which case, tenders are invited from all firms on the
approved list.
Single Tender. This system is adopted only when the competent purchase
officer is satisfied that not more than one firm is in a position to quote and that
where deviations in specifications are not possible i.e., for strictly "proprietary"
articles with a sole agency, indents for such stores are normally stamped as
"proprietary".
d.
Repeat Order. Repeat order may be placed in terms of a previous order in the
case of indents of small value (Rs.25,000.00) and in cases where such a course
is considered expeditious provided the previous order is a recent one and the
competent purchase officer is satisfied that the price has not decreased since the
last order was placed.
e.
Purchase by Negotiations . Purchase by negotiations is made only in
136
exceptional cases when the stores are urgently required and the time does not
permit resort to any other mode of purchase Director's approval is essential.
Note- No contract is awarded to a firm not yet registered (Provisionally or
otherwise) except in case of Proprietary' stores where Director's orders
are obtained.
6.
Registration and Black Listing of Firms

a.
Registration of Firms is made by the Director- General in consultation with the

Directorate -General ISI/Police Authorities. Registration fee is as under which
is not refundable:(1)
(2)
(3)
(4)
(5)
(6)
Initial registration.
Rs. 500/Additional registration /indexation.
Rs. 1001 Renewal.
Rs. 100/Appeal.
Rs. 1001Tender enquiry each.
Rs. 101/From unregistered firms, whether they have applied for registration or
not until regular registration is approved.
(a)
(b)
(c)
Contracts for value upto

Rs. 25,000/
Contracts for value from
Rs. 25,000/- to Rs. 50,0001
Contracts for value above
Rs. 50,0001/-
Rs. 200/Rs. 350/Rs. 500/-
b.
The black-listing, removal or placing of firms under embargo and Lice versa is
done by the Director-General, Procurement Army, in wnroLti &lnwith DsP
(Navy) (Airforce) and approval of the DGDP.
c.
Cards of the registered Firms are maintained in Adra & Coord Wing under
broad categories of stores e.g., textile, general stores, vehicles, machinerys,
arms and ammunition, signal equipment. A separate register is kept of Firms

'black-listed' or 'removed' from the list of approved Firms or placed on
'Embargo fist' indicating the reasons of black-listing /removal /placing on
Embargo fist.
7.
Financial Powers and Procedure

a.
The financial powers of Directors and their officers are detailed in Appendix 1
to this Annex.
b.
137
Contracts exceeding RA~ million in case of DGP (Army) Rs. 3.500 million in
case of DP (Navy) & DP (Air) and up to Rs. 15.000 million will be finalized by
DGDP in consultation with FA(Pro). Contracts over Rs. 15.000 million will be
finalized by Secretary, Defence Production Division, in consultation with
Financial Adviser (DP)/ FA (Pro). In am of absence of DGDP from his
permanent duty station, his financial powers regarding finalization of contracts
may be exercised by Director, Purchase Co-ordination.
c.
In case of procurement of those items and stores for which Government has
already fixed purchase prices, contracts will be finalized by Director
Procurement concerned in consultation with FA (Pro)/DFA(P) without
restriction as to value.
d.
For those items for which prices are fixed by the Government and certain
incidental charges e.g., handling charges are in addition, the contracts should be
finalized by the respective Director of Procurement with concurrence of FA
(Procurement /DFA(P) irrespective of the value the contract provided the
incidental charges do not exceed the financial powers of the Purchase Officer
concerned. In such cases the incidental charges should be indicated separately
in the contract.
e.
In case where total value of the incidental charges is beyond the financial power
of the purchase officer, the same are referred to the next higher Competent
Purchase Officer.
f.
Cases involving difference of opinion between the Directors of Procurement and

FA (Procurement) /DFA(P) will be referred to the Secretary, DP Division
through the DGDP for decision in consultation with Additional Secretary,
Military Finance.
8.
Procedure for Drawing up Contracts. The following procedure will be fol
lowed in the procurement of stores and drawing up the contracts:a.
Price Variation Clauses

(1)
Contracts with a price variation clause (PVC) should be avoided as far

as possible.
(2)
If such a clause is unavoidable, variation in the contract price would be

admissible only in so far is rise or fall in the cost of labour and/or
material is concerned and that too subject to 15% maximum variation. It
should be specified in the contract that no variations for over head di~
other indirect charges will be allowed. Finance Division, Military will be
consulted in all such cases, except in case of 'Proprietary items or
single tender.
(3)
In the case of 'Proprietary' stores where the standard price variation

clause is not accepted by the suppliers, the Competent
138
Purchase Officer may relar, on merits with the approval of the Finance
Division Military, the above price variation terms if this is found to be
absolutely necessary and unavoidable.
Note: The provisions of paragraph 8 a 1. above will not apply to,
purchase made on Government to Government basis.
b.
Increase in Rates of Contractors. Except for calculation or typographical errors,

the rates of the contracts not having a PVC clause - win not be increased
subsequently. But when such an increase is considered desirable in the interest
of expeditious supply of stores and is necessitated by the circumstances beyond
the control of the supplier, the case will be referred to the next senior Purchase
Officer for a decision. Concurrence of Finance Division (Military) will be
essential in case the contract has been placed with their financial concurrence.
c.
Acceptance of a Higher Quotation on the Plea of the Stores Being of a Quality

Higher than Requisite Specifications. The lowest quotation on the basis of
requisite specifications should be accepted and in no case higher quotations
merely on the basis of a higher quality than the original requisite specifications
will be accepted. The criteria should be to accept the lowest offer amongst
technically acceptable quotations.
d.
'Proprietary' Items. No item will be treated as 'Proprietary stores' unless it has

been declared proprietary by the indentors in consultation with their financial
advisers and its indent has been marked as such.
e.
Increase in Quantity or Variation of Specifications After Issuance of I/T or

Orders are placed. Variation in specifications and quantity after the issuance of
invitations to tenders should not normally be made, except when such variation
are minor, unavoidable and essential. If in such cases the variations are of
substantial and serious nature resort to retender be made. After placing a
contract no variation in the specifiications affecting the rates are made. Variation
in quantity may, however, be made.
f.
Reference to the indentor in Case the Quoted Price !Exceeds the Indent Value
(1)
If the quoted price (Proposed to be accepted) in respect of indent

estimated (based on last purchase rate) to cost Rs.0.500 million and
above exceeds the indent value by more than 20%, the matter should
be referred to the indentor for his confirmation to finalise the contract on
that quoted value basis. The indentor may cancel the demand or
decrease the quantity.
(2)
In case of indents relating to items which have not been purchased

previously, (where last purchase rate does not apply), the above limits is
lowered to Rs. one lakh and 10% respectively, calculated on the basis
of estimated rate shown in the indent.
139
(3)
g.
Sub paragraph (1) above shall apply to purchase made against

contracts cancelled at risk and expense. But conclusion of contracts at
risk and expense is not delayed and confirmation/ remarks of indentor
may be obtained subsequently regarding the revised expenditure
sanction cover in the indent.
Claiming of Cash Discount. If the accepted quotation forming subject of a

contract contains any cash discount offer, for prompt payment, it should be
clearly indicated so in the contract with the stipulation that the paying authorities
should ensure payment within 15 or 21 days, as the case may be from the date
a claim complete in all respect is received. The responsibility for payment in time
will lies with the Paying Authorities.
9.
Discretion to Crossmandate and Indent. The competent purchase officer may, in his
discretion crossmandate an indent (or extracted items) at any stage before finalizing a contract
to A (DP) London or A (DP) Washington, as the case may be, if he considers that course to be
the appropriate and proper in the interest of obtaining stores expeditiously and economically.
10.
Delivery Period. The delivery period may be extended by the competent purchase
officer either before or after the expiry of the stipulated date, as under: a.
In Case Where the Contract was Finalized Without the Concurrence of the
Finance Division. The competent purchase officer may extend the delivery
date(s) with or without imposing liquidated damages, without reference to
Finance Division (Military), provided he is satisfied that the delay in the delivery
was not due to the fault of the supplier. If the competent purchase officer
proposes to grant second or subsequent extensions of delivery period without
imposing liquidated damages, the case will be referred to the next senior
competent purchase officer for his orders.
b.
In case where the Contract was Placed with the concurrence of the Finance
Division. The following procedure will be adopted:(1)
In case where, in the opinion of the competent purchase officer, the

delay is due to the fault of the supplier or if the Government has incurred
any extra expenditure and as such liquidated damages are intended to
be imposed, the delivery date with liquidated damages under the terms
of the contract may be extended by the competent purchase officer
without reference to finance division (Military).
(2)
Where, in the opinion of the competent purchase officer, the delay in the
delivery of stores is not due to the fault of the supplier and thus
liquidated damages are not proposed to be imposed, the delivery
period may be extended by the competent
140
purchase officer up to a period of two months at any one time or on a
number of occasions provided the total period of all such extensions
does not exceed two months in aggregate. For extension of delivery
period beyond two months, concurrence of the Finance Division shall
be obtained.
c.
Grace Period. Delay in the supply of stores up to 21 days will be regarded as

"grace period" available to the supplier and the delivery date will be considered
to have been automatically extended up to that limit without issuance of any
formal amendment. For delays beyond 21 days, formal amendment to the
delivery period is required.
Notes:-(1)
For purposes of imposing liquidated damages grace period will include

liquidated damages calculated from the original delivery date and not
from the expiry of the grace period.
(2)
The extension to the delivery period in respect of defence purchase

contracts which, having been placed on suppliers ex-UK, continent,
USA and Canada shall be processed by A (DP) London or A (DP)
Washington and paid for by their Accounts Officers, based on the
provisions of para 10 above, will be regulated and granted as under:(a)
(b)
In case of Contract of Firms in UK and Continent. A (DP)

London (in case of contracts signed by Directors and above)
and Deputy Attach (DP) ( in case of contracts signed by
Deputy Directors and below) will be the competent purchase
officer in respect of contracts requiring extensions up to six
months period. With the approval of their respective Financial
Economic Adviser to the Pakistan Embassy UK/USA
provided:i
The contract had been concluded with the concurrence

of the finance authorities.
ii.
The extension is, intended to be, granted without

liquidated damages for a period exceeding two months.
Cases requiring extension beyond six months period will be

referred to the Director-General, Defence Purchase for
necessary action.
In case of Contracts 4 Firms in USA and Canada. The
competent purchase officer in these cases will be A (DP),
Washington who will regulate, extension on the same lines as for
(a) above.
141
(c)
Cases requiring extension for over six months period (to be

reckoned with effect from the original stipulated delivery date)
will be referred to the Director-General, Defence Purchase and
dealt with by the competent purchase officers in Pakistan. This
six month's period will cover the maximum period up to which
the power of extension has been delegated to A (DP) Deputy
Attach (DP) or A (DP), Washington, irrespective of the
number of extensions granted by them.
11.
Sanction of the Secretary, Defence production Division, Ministry of Defence, with
concurrence of the Finance Division, will be obtained for making an exgratia payment to a
contractor, or for payment of compensation on account of cancellation of a contract if the
amount of compensation exceeds 301/0 of the value of the cancelled contract or items thereof.
The approval of Director General., Defence Purchase, with the concurrence of the Finance
Division will be required in these cases in which the compensation charges do not exceed 30%
of the value of the cancelled contract.
12.
Excess and Short Deliveries on Contacts. Competent purchase officers in
Directorate-General, Defence Purchase and its sub-offices abroad will, excepting in cases
covered by Note 1 below, accept 'Excess' JL'Short' deliveries of stores on contract for
components and spare parts, structural steel ferrous and non-ferrous metals, cables and wires
on reels, ropes, nuts /bolts/screws, washers timber (Plywood and hardboard), drugs and
medicines, food and petrol, oil lubricant items, paints and varnish without reference to the
indentors provided the following conditions are fulfilled; namely: a.
b.
The 'excess' deliveries are considered advantageous.

The price in case of 'excess' quantity is the same as that of the current contract.
c.
Value of excess or short quantity is NOT exceed either 5% of the value of the
contract or maximum of Rs.15,000.00 (or equivalent amount in foreign
exchange) per contract whichever is less subject to satisfaction of the competent
purchase officers. In ewe of food or petrol oil lubricant items, the lli~it is
restricted to either 2% of the weight per items or 2% value of the contract
whichever is less.
d.
The excess or short deliveries will be limited to 5% per item. In case of food or
petrol oil lubricant items, the limit is restricted to either 2% of the weight per
item of 2% value of the contract whichever is less.
13.
A certificate to the effect, that funds are available from within the sanctioned allotment to
meet the extra expenditure, will be recorded by the purchase officer accepting the excess
deliveries before submission of the bill to the accounts authorities.
N.B.
It is not necessary to issue a formal amendment to the contract in such

cases.
142
Notes:
1.
The above procedure will not apply to the following cases: a.
b.
2.
Air Force Stores. Covered by a special contract and those

aircraft spares which are required to carry out any repair
programme.
Naval Stores. Electronics, spare parts of W/T and radar
equipment, spares for machineries, demands against operational
requirements.
Where the cost of excess quantity is more than that mentioned in

paragraph 1.2c above, the matter will be referred to the indentor for his
approval and a formal amendment will be issued in the normal manner.
14. Waiving off liquidated damages and Writing off the risk purchase amount. Cases of
waiving of imposed liquidated damages and writing off the risk purchase amounts which are
beyond the powers delegated to Director-General Defence Purchase/D (S) P in Appendix 1
note 6, to Annex E are submitted to the Secretary (Defence Purchase) Division for approval
with the concurrence of the Finance Division.
15. Security Deposit. All contracts should normally be placed with dealers on the approved list and
as such security deposit may not be demanded. Imposing of "Security Deposit" may, therefore,
be waived by the competent purchase officer at his discretion and so recorded. This discretion
may be exercised by the competent purchase officer 'after recording the reasons for doing so at
any stage of the contract without any reference to Finance Division'.
16. Earnest Money. Normally no earnest money (in the form of treasury payment order or bank
draft, etc.) should be taken at the time of obtaining quotations, except at the discretion of
competent purchase officer in case of:a.
Important stores of urgent nature valuing Rs.0.300 million or over.
b.
Food demands.
Note:
The earnest money does not exceed 5% of the indent value.
17. Powers to Re-Instate Contracts. The competent purchase officer (the one who had approved
the contract originally) may at his discretion, reinstate a cancelled contract on its merits if he
considers that it would be in the interest of expeditious supply of stores. Concurrence of the
Finance Division will be obtained in cases where the contract had been finalized with their
approval.
18. Cash Purchases. In order to effect cash purchases on the spot for reasons of expeditious
supply of indents of smaller value, cash purchase sections has been established in Directorate
-General Procurement (Army) and Directorate Procure-
143
ment (Navy & Air). Its financial power and procurement procedure will be as per Appendix 2
to this Annex.
19.
Delegation of Purchase Powers to Indentors. To expedite procurement of stores of
small value and to reduce load work of DGDP the latter is authorised to delegate to indentors
powers to purchase locally stores valuing upto Rs.5000.00 (Rupees five thousand only),per
item of normal indents (replenishment of stock). The local purchase powers delegated to the
indentors will be exercised in accordance with the procedure approved by their Financial
Advisers. This permission will not apply to stores of the following categories; namely:a.
Those involving foreign exchange expenditure.
b.
Those covered by a Rate Running Contract of DGDR
c.
Those not likely to be available in Pakistan.

Note:
Indents valuing upto Rs.5000.00 are normally not be forwarded to the
Directorate -General Defence Purchase, except as provided for above.
20.
Disposal of Stores. The Director-General, Defence Purchase/D0 will be responsible for
the disposal of Defence Stores - surplus, serviceable and repairable (whether current, obsolete
or obsolescent etc) as per instructions and procedure detailed in Appendix 3 to this Annex.
21. Issue of Import and Export Permit
a.
DGDP may issue Import or Export permits for importing or exporting goods,
pertaining to Defence requirements for the purposes of trials and tests without
financial obligations, in Pakistan by the competent Armed Forces authorities.
b.
Issue of Import Licences. The Director-General the Directors and the Deputy
Directors and the Assistant Directors of the Directorate General, Defence
Purchase, will be permitted to seek import licences for the requisite raw
materials in respect of contracts concluded by them. For contracts concluded
by Secretary (DP) Division, DGDP, is authorised to seek Import licences on
behalf of the Secretary.
22.
Advance Payment and Letter of Credit. No advance payment (except in case of
Government to Government contracts) and letter of credit will be authorised without the
concurrence of the Finance Division, even though the contract may have been approved without
reference to the Finance Division.
23. Absence of the Directors of Procurement. The personal powers of the Directors
of Procurement may be exercised by the senior most Director, when the former is away on
leave, or on duty outside Pakistan. The powers of a Director or Dy Directorl of Defence
Purchase may be exercised by the Senior Deputy Director/ Assistant Director of that
Directorate, if the Director/Dy Director away on leave,
144
other than casual leave, or on duty outside Pakistan.
24. Procurement of Food and POL. For procurement of Food and POL, the rules and
procedures as laid down in the preceding rules equally apply except that the earnest money at
the rate of 2% to 1057o subject to a maximum ceiling of Rs.25,000.00 will accompanies the
tenders. Detailed instructions for recovery of such earnest money will be incorporated in the
Tender Inquiry Form.
25.
Delegation of Power
a.
The Secretary, Defence Purchase Division, may authorise the Director General
Defence Purchase /Directors Procurement/Assistant Defence Purchase to sign
contracts approved by him.
b.
Directors of Procurement are authorised to issue amendments to contracts

approved by the Secretary/Director General., Defence Purchase provided
financial concurrence is obtained and such amendments do not relate to:(1)
Change in specifications resulting in acceptance of stores of a lower

quality and consequent reduction in prices.
(2)
Upward increase in prices other than as a result of a price variation

clause included in the contract.
Note: The Financial advisor, procurement may require Directors of
Procurement to refer any such case for approval of Director
-General Defence Purchase /Secretary (Defence Purchase)
which he considers should be approved by the said authorities
before issue of amendment.
(3)
26.
After issue of the amendment such case is submitted for information to

Secretary/Director-General Defence Purchase, by the Director of
Procurement concerned.
Inspection
a.
The present system whereby army undertakes inspection of its own stores and
common user items and renders some further assistance in this field to the other
two services will continue.
b.
The procedure regarding payment for services rendered by one service to

another will be examined as part of the overall financial adjustments by the three
services Headquarters as envisaged in the revised system of financial
management.
27.
Financial Advisers to Directors of Procurement. The Financial Adviser
(Procurement) will look after the work of all the three directorates.
145
28.
Payment and Audit. Controller of Military Accounts (Defence Purchase), Rawalpindi,
and Deputy Controller of Military Accounts (Defence Purchase), Karachi, will be responsible
for internal audit and payment and will also be responsible to maintain upto date statistics
regarding commitments and payment and any other reports and returns which the Directors may
like to introduce.
146
Appendix 1
To Annex E
Paragraphs
7 and 14
FINANCIAL POWERS AND PROCEDURE
Method of Procurement
DGP(Army)
1.
With Financial
Concurrence
2.
After Obtaining Financial

advice which may be overuled' by the Director for
reasons to be recorded in
writing.
3.
6.000
million
Directors
of procurement
Navy & Air
Col
Officers other than

Director or Equivalent
Lt Col Major
3.5
2.000 0.600 0.200
million million million million
a.
If prescribed rules
2.5
regarding calling for
million
tender and acceptance
of lowest technically
acceptable tender are
followed.
1.5
Nil
million
Nil
Nil
b.
In case of proprie2.5
tary and standardised million
items declared to be
so with the agreement
of financial advisers of
service headquarters.
1.5
Nil
million
Nil
Nil
Without Financial
Concurrence
a.
In case of open/
limited tender subject to the condition
that the lowest tech
nically accepted
tender and the rate
accepted does not
exceed the previous
0.200
million
0.200 0.150 0.100 0.050

purchase rate by more

than 20%.
147
b.
In case of open/
limited tender when
the last purchase
rate is not known
subject to the
condition that the
lowest technically
acceptable tender
is accepted.
0.200
million
0.200 0.150
0.100
million million million
c.
In case of single
0.125
0.100 0.060
tender/repeat order/ million million million million
negotiation including
such cases where only
one offer is received
which will assume the
Character of single
tender.
Nil
0.020 Nil
Notes
1.
Contracts falling within the powers of the Dy, Director, Director or Director General
under the provisions of paragraph 2 above may be signed by an Assistant Director or a Deputy
Director as under, provided the Dy Director, Director or the Director-General, within whose
financial competency the contract falls, has given his approval of the contract in writing:a.
Assistant Director -
b.
Dy Director
Contracts upto
Rs.0.050 million
the value of
Contracts upto
Rs.0.100 million
the value of
2.
The powers vested to the Director may be exercised by any other officer duly
authorised to act in his place temporarily even if he is not of the rank of the permanent
incumbent.
3.
The civilian Deputy Naval Stores Officer in the Directorate of procurement (Navy) shall
exercise the same financial powers as laid down in the above for the rank of Major or
equivalent.
4.
Officer officiating in appointments tenable by higher ranks shall exercise the same
financial powers as laid down for the permanent incumbent of those ranks.
5.
The rejection of a quotation on the basis of it being not technically acceptable must
always be supported by the appropriate technical officer's report. If the purchase officer feels
that the rejection of a particular offer by the technical officer, on technical grounds is prima facie
not correct, he should, before finalizing the case, refer the matter to the Financial Adviser
through the Director for the
148
acceptance of the technical report or otherwise. In case of stationery items, a board of officers
composed, as under, will be technical authority:a.
President:
Deputy Director (Armament & General Stores)/

Director Defence Purchase (Navy)/ Director Defence
Purchase (Air)
b.
Members:
(1) Representative of Indentor

(2) Representative of Financial Adviser (Provost)
(3) Assistant Director concerned.
6.
a.
Waiving of
liquidated
damages imposed
and writing off
risk purchase
amounts, without
reference to Finance Division.
Directorate
General
Defence
Purchase
Rs.20,000/-
Director
General
Purchase
(Army)
Rs.10,000/-
Director of
Procurement
(Navy) & (Air)
Rs.8,000/-
b.
The authority for waiving liquidated damages and writing off risk purchase
amount will be the next senior purchase officer, ie, not the one who had
imposed these damages or cancelled the contract in the first instance.
c.
In cases where liquidated damages have been imposed or the contract

cancelled by the Director-General, Defence Purchase, should be referred to the
Secretary, Defence Purchase Division, for orders.
149
Appendix 2
To Annex E
Paragraph 18
CASH PURCHASE SECTION
PURCHASE AND PAYMENT PROCEDURE
Limits of Cash Purchase
1.
Cash purchase section will deal with:

a.
All indents the value of which does not exceed Rs. 20,000/- in case of
Director-General, Purchase (Army), and Rs. 18,000/- in case of Director
Purchase (Navy) & (Air Force). The limit will apply to indent values as given by
the indentor.
b.
Item/items for which not technically acceptable or economical, offer has been
received in response to open/hinited ITs, provided the value of the item/items so
extracted does not exceed Rs.20,0001- - in case of Director-General,
Purchase (Army), and Rs. 18,000/- in case of Defence Purchase (Navy) and
Air Force.
2.
These provisions are further subject to the conditions that only those indents/ items are
passed on to the cash purchase section:a.
Which are likely to be available in the market.
b.
Which do not require import.
c.
For which a repeat order cannot be placed.
d.
Which cannot be bulked with other items /indents in hand.
3.
Indents/Items of higher value will not split up to bring them within the purview of the
cash purchase section except as provided for above.
Purchase Procedure
4.
The normal system of the calling for tenders will be dispensed with. The Assistant
Director Defence Purchase, incharge of cash purchase section (Cash Purchase Officer), and/or
his representative, may visit the market and the dealers to locate the required ores. On stores
having been located, purchase action will be taken as follows:-
a.
Nine copies of purchase order on the proforma as per Appnd Annex E will be
prepared and sanction of the competent F "g Officer obtained (see para 5 below).
Indents/items pertaining to different
150
Services /Branches of Services will not be mixed in one purchase order.
b.
On the authority of the above referred sanction, a cheque for the requisite
amount will be issued by the permanent advance holder (see para 6 below).
One cheque will be issued for each purchase order. The permanent advance
holder will endorse copy No. 3 of the purchase order with the no and date of
cheque issued. Copy No. 2 of the purchase order is retained by him as an
advance requisition until copy No. 3 bearing receipt of the cheque by the
supplier dealer is received back.
c.
The cheque will be handed over to the supplier/dealer concerned and his receipt
obtained on copy No. 3 of the purchase order bearing the no and date of the
cheque issued.
d.
The stores will be collected and handed over by the cash purchase section to
the local depots (to be called, as 'Transit Depots') of the services/branch
concerned, which will be responsible for packing and onward despatch to the
consignee as indicated in the purchase order. Central Ordnance Depot, Drigh
Road, Station Supply Depot/petrol control platoon, Armed Forces Medical
Service, NSI)/VSD(PN), 101 MU(PAF) and OFLS (POL) will act as 'Transit
Depot' for their respective services. For stores meant for CAO, AO (K) will
issue the military credit notes, but the suppliers will despatch them direct to
CAO Rawalpindi.
e.
DD (CPS) in case of Army and Director Purchase (Navy) in case of A, Navy

and Air HQ (Detts) and SPS Shara-i-Faisal, in case of Pakistan ir Force will
decide whether the stores are to be despatched by cash purchase section
through the transit depot or direct to the consignee depots under their own
arrangements.
f.
Copy No 6 will be sent to the indentor. Copies No. 7,8 and 9 will be handed
over to the 'Transit Depot' along with the stores. The Depot will despatch copy
no 7 along with the stores to the consignee, retain copy no 8 for own record
and return copy no 9 to Director-General, Defence Purchase's representative as
receipted copy.
5.
The cash purchase officer will. always endeavour to reduce the prices by negotiation
whenever he considers the prices quoted by the dealers to be unreasonable. If, after negotiation,
a reasonable price based on the current trend in the market cannot be obtained it is for the
competent purchase officer to decide whether or not the stores be purchased under the cash
purchase system. In case he decides not to make the cash purchase of the stores, he will return
the indent to the basic purchase section for normal procurement action with the certificate that
the stores in question are not available at reasonable prices.
151
6.
The Deputy Controller of Military accounts, Defence Purchase, Karachl, will place permanent
advance of Rs. 1,00,000.00 at the disposal of Director General, procurement (Army), Rs.
50,000.00 each at Director, Procurement (Navy) and Director Procurement (Airforce)
respectively. The Director-General, Purchase (Army), Director Purchase (Navy) and Director
Purchase (Airforce) with designate an officer not below the rank of Major or equivalent as
permanent advance holder for operating the said account. All payments from the permanent
advance will be made by cheques only and accounts are maintained in accordance withthe
existing rules and regulations. The advance will be recouped as and when necessary through a
contingent bill, duly supported by copy No. 3 of the purchase orders, for which disbursements
have been made. Copies No. 4 and 5 will accompany copy No. 3 of the purchase order. On
receipt of copies No. 3,4 and 5 the advance holder compares these copies with copy No. 2
and forward them to the Controller of Military Account, along with the contingent bill. The
Controller of Military Accounts keeps copy no 3 for audit purposes and forward copy No. 4 to
the Local Audit Officer of consignee concerned and copy No. 5 to the audit team attached with
the Director-General, Defence Purchase. The Deputy Controller of Military Account, Karachi,
will be responsible for post-auditing the accounts of the permanent advance holder.
Maintenance of Documents
7.
Cash purchase section will maintain indent control register in which all indents on receipts will be
controlled and progressed. This register will show all the details of the purchases and delivery of
stores to the 'Transit Depots'. The transit depots will maintain a register on this proforma given
in Appendix 5 in which they will enter the receipt and despatch details of the stores to the
ultimate consignee.
Financial Powers
8.
The following officers will exercise financial powers for cash purchase as given against
each:-a.
b.
c.
d.
Director-General, Purchase(Army)
-Rs. 20,000.00 Per purchase order
Directors Procurement (Navy) -Rs. 18,000.00 -do
and (Air Force)
Deputy Director Procurement
-Rs. 10,000.00 -do
Assistant Director Procurement -Rs. 4,000.00 -do-
These powers are personal and will not be delegated to subordinate officers.
Inspection
9.
The cash purchase officer will as far as possible see that the stores purchased by him
are in accordance with the specifications given by the indentor and he will
152
certify to that effect on the purchase order. The stores will not be subject to any further
inspection. However, in case of complicated items, cash purchase officer may, before purchase
ask the CID Karachi/CINS Karachi1O.C. No. 1 Q.C. Flight PAF for inspection of such stores
which will be final. He may consult the Inspector/indentor/stores depot concerned in doubtful
cases and obtain samples for guidance in procurement. "Stores in Lieu" may be purchased by
cash purchase officer provided he is satisfied that the stores so procured will serve the purpose
and are as much according to the specification possible. If the indentor does not require stores
to be purchased in lieu it would be dearly stated on the Indent no in lieu will be accepted.
Discrepancies
10.
No discrepancy on account of stores being sub-standard/of wrong specifications will be
raised by the consignees /Transit Depot unless the stores are found to be completely different to
those entered in purchase orders. Stores supplied 'In Lieu' will be accepted by all concerned.
11.
Discrepancies on account of deficiencies, breakages or change of condition of stores
while in transit between the transit depots and consignees will be settled amongst themselves
and Director- General, Defence Purchase, will not be addressed on the subject at any stage.
Subsidiary Instructions
12.
The Director-General, Defence Purchase, may also issue any subsidiary instructions
considered necessary regarding the cash purchase system with the concurrence of the Finance
Division.
153
Appendix 3
To Annex E
Paragraph 20
POWERS OF DIRECTOR-GENERAL, DEFENCE PURCHASE AND I-US
OFFICERS FOR THE DISPOSAL OF SURPLUS DEFENCE SERVICE STORES
AND THE ALLIED MATTERS
1.
The Director-General, Defence Purchase and his officer will be competent to dispose of
the surplus serviceable /repairable stores (whether current redundant obsolete, or obsolescent,
etc), of defence services other than POFs, in accordance with the procedure and rules laid
down in the succeeding paragraphs except as provided for below:-a.
Surplus serviceable /repairable stores (whether current, redundant, obsolete or

obsolescent) the book-value of which does not exceeds Rs. 30,000.00 per
item, which will be disposed of under stock holder's arrangements.
b.
Cast iron and re-rollable iron will, when surplus, be reported to the
Director-General, Instrument Purchase, for disposal only if not accepted by
Pakistan Ordnance Factory Wah to whom it will be offered in the first instance.
c.
Serviceable repairable packing material stores of the Station supply depots,

which cannot be utilized according to the instructions contained in Anx A to
Rule 83 of Army Service Corps Regulations,1986, upto the value of Rs. 0.100
million supply depots.
d.
Disposal of refraction produced from wheat grains and dalls in CFM and
MGDs will be arranged by the Director, Defence Purchase-III, by means of
regular contracts and NOT by auction. His financial power in this respect will
be limited to Rs 0.1 million without reference to Finance Division. Cases
beyond that limit will be referred to Finance Division for their concurrence. In
the absence of a regular contract, the monthly accumulation of 'refraction may
be disposed of by auction under arrangements of officer commanding military
grain depots/ controlled flour Mills up to a maximum value of Rs.30,000.00.
Notes:
1.
2.
3.
The above limits refer to the book-value of the stores under disposal.
The provisions of rule 45 of Financial Regulations, Volume I, will be treated as modified
to the above extent.
The above delegation of authority shall not apply to the disposal of arms, ammunition
and explosives which will continue to be offered to Directorate General, Defence
Purchase for disposal when public disposal is decided upon.
154
(A)
The financial limit concerning the disposal or refraction will be determined on the
basis of quotations received from the purchasers.
2.
In case where the disposal of particular stores to the public has been placed under certain
restrictions by the competent controlling authorities, the disposal of such stores will be governed
by the provisions of such control measures. Any relaxation there of will not be permissible
without the approval of the competent controlling authority.
3.
Wherever consultation with the Finance Division (Military) is prescribed under these orders,
powers delegated to the Director-General and his officers shall be exercised with the
concurrence of the Finance Division.
4.
Surplus serviceable repairable stores will ordinarily be disposed of either:-a.
By transfer to the other defence services or priority Government indentors i.e.

departments of Federal /Provincial Government.
b.
By sale through one or other of the normally accepted methods such as

advertised tenders, limited tenders, private treaty, negotiations or public auction.
5.
Powers of the disposal officers of the Directorate-General Defence Purchase
will, for each item reported for disposal, be as follows:a.
Director General
Full powers.
b.
Director
Upto Rs. 0.600 million.
c.
Dy Director
d.
Assistant Director
Note: The powers will subject to the provisions of paragraphs 5, 6 and 7 of Annex E
and refer to the book-value of surplus stores under disposal.
6.
Finance Division will be consulted in all cases of disposal with regard to the method of
disposal to be adopted (except when the disposal is public auction) and for fixing the reserve
price, where applicable, Le, in respect of surplus vehicles (A, B and C types), plants, aircraft,
shiglaunches, bridging equipment, machineries etc, reported as serviceable /repairable (whether
current, redundant, obsolete or obsolescent, etc) by the stock holders.
7.
When the concurrence of Finance Division has been obtained as to the fixed (where
applicable ) in method of disposal and the reserve price has been r consultation with that
division, their concurrence will not be required for subsequent stages of disposal except under
the following circumstances :
155
a.
When the case is one of sale to the public by either limited tender, private treaty
or negotiation method in which cue the Finance Division will be associated at all
stages of negotiation.
b.
If it is proposed to accept a bid other than the highest bid in the disposal by
advertised tender method.
c.
If the highest bid in a public auction is less than the reserve price fixed to the
extent of 25% and it is proposed to accept that offer rather than re-auction.
8.
Reserve Price. The stock holders will indicate, the book-value (where known) or
estimated disposal price (EDP) of important stores such as vehicles (A,B and C) plants, aircraft,
ships, launches, bridging equipment, machineries etc. DirectorateGeneral Defence Procurement
will fix the reserve price for these stores, in consultation with Financial Adviser (Pro)
irrespective of its method of disposal. For other stores, NO RESERVE price is fixed, but
approximated disposal price may be decided by the competent disposal officer as per financial
powers mentioned in para 5 above, irrespective of the fact whether or not the book value/
estimated disposal price has been indicated by the stock holder.
9.
10.
Collection of Earnest Money for Accepted Bids

a.
The earnest money which is equivalent to 25% of the total sale price of the
stores is collected by the auctioneer from the purchaser at the spot and
deposited into the government treasury/state bank/National Bank of Pakistan on
the next working day against the military receivable orders (Form No
PAFA-507) to be issued by the auction supervising officer or the stock holder
his representative. However, the above procedure does not apply to the
contracts concluded for disposal of refraction /wheat and bran by means of
regular contracts under para 1 d above. Earnest money in such cases is
obtained at the rate 2 to 10% of the offered rate.
Collection of Earnest Money for Disposal of Stores Through Methods

Other Than Public Auctions. Offers for purchase /disposal of stores through
methods other than public auctions, shall not be considered unless accompanied
by earnest money to the extent of 25% of the offer in the form of a Bank
Draft or a cheque duly certified and marked by the Bank concerned "Good for
payment" in the name of the Director-General, Procurement (Army).
Collection of Balance Money and Extension of the Date of Final Payment

a.
The normal period to be allowed for collection by the auctioneer of the balance
money of the bids having been accepted at the spot will be
6 days from the
date of auction. The auctioneer will deposit the balance money into the
Government Treasury/State Bank of Pakistan/
156
National Bank of Pakistan on the next working day against the military
receivable order (Form PAFA-507).
b.
The period allowed for collection of the balance money in respect of bids which
are subject to approval will be 6 days from the date of receipt by the bidder, or
the intimation regarding acceptance of the bids. The balance money will be
deposited into Government Treasury / State Bank of Pakistan / National Bank
of Pakistan by the auctioneer on the next working day.
c.
Under special and peculiar circumstances, the Director-General and his disposal
officer may, on receipt of an application from the successful bidder, grant at
their discretion, extension of date of final payment of the balance of the sale
money as under:(1)
Director-General -
Upto 30 days beyond the normal period

of 6 days permissible without finance
Division's concurrence. If extension beyond
this period is proposed to be
granted, the concurrence of finance
Division is obtained.
(2)
Director
(3)
Deputy Director -

Division's concurrence.

Division's concurrence
Note: The date fixed for final payment of the balance money win always be less than the
period allowed for removal of stores under the provisions of para 11 below to
ensure that the full payment has been made before stores are removed.
11.
Period for Removal of Stores. The normal period allowed for the removal of stores by
the purchaser at his expense will be 11 working days from the date of sale (in cases of spot
approval), or from the date of receipt of intimation of final acceptance (in cases of stores the
sale of which was subject to approval) this period may be. extended by another 15 days by the
auction supervising officer at the time of sale auction and the exact removal period permitted will
be recorded in the auction catalogue. Circumstances may, however, arise where for certain
genuine and valid reasons the purchaser may not be in a position to remove the stores within the
stipulated period. In such cases the removal period may be further. extended as under:a.
Director-General -
Upto 60 days (excluding the original period laid

down) without finance Division's concurrence;
but extension beyond this period requires the
157
b.
Director

down ) without finance Division's concurrence.
a.
While granting extension of removal period, it will be clearly stipulated whether

or not such extension is subject to the payment of ground rent.
b.
The above powers are subject to the condition that the stores will not be
permitted to be removed before the payment of the balance sale money has
been deposited at least on pro ra ta basis.
c.
The stores will be removed ex site and the Government will not be responsible
for expenses incurred for this purpose. In the case of heavy lift stores which can
not be removed without the help of a crane, stock holder provides cranage
facilities upto the depot gate.
d.
The stores not removed within the stipulated or extended removal period will be
liable to be forfeited in favour of Government.
Notes:-
12.
Ground Rent. The rate of ground rent if and when levied, will be 1/2 per diem on the
original sale price of the stores and this amount will be paid before the stores are permitted to
be removed. It will be the duty of the stock holders to ensure that the ground rent charges, as
levied and payable, are deposited into the Govt Treasury/State Bank of Pakistan /National
Bank of Pakistan against MRO before permitting removal of stores.
13.
However, under certain circumstances, to be recorded, the amount of ground rent so
levied may be waived off by the following officers:a.
Director-General -
Upto Rs. 50,0001- without finance

Division's concurrence, and beyond this
with finance Division's concurrence.
b.
Director
Upto Rs.10,000 /- without finance

158
Appendix 4
To Annex E
Paragraph 4(a) of Appendix 2
PURCHASE ORDER
Control No._____________
DP No. 36
Date __________________
Copy No_________
________________________________________________________________________
INDENTOR
INDENT NO & DATE
ACCOUNT HEAD/ CONSIGNEE

SUB-HEAD
________________________________________________________________________
PART-I
The following stores against the above mentioned indent is/are available with and will be
supplied by M/s________________________________________________________
supply to be completed by__________________________________________________
Indent
S.No. Item No
Total Cost
Item
A/U
Qty
Rate
Rs
Total (In Figs) Rs___________________

Total (In Words) Rupees_______________
___________________________________
Signature____________________________
Designation: Cash Purchase Offrs
Dated:_____________
NAME (
)
_______________________________________________________________________
PART-II
Proposed purchase is approved at the rates quoted and cheque for the amount may be
issued.
Signature_______________
Designation_____________
(COMPETENT PURCHASE AUTHORITY)
Dated: __________
NAME (
_______________________________________________________________________
159
PART-III
Cheque No______________ dated _________ for the sum of__________________
Rs_____________
(Rs.________________________________) Issued.
DIRECTOR-GENERAL DEFENCE PURCHASE,
PERMANENT ADVANCE HOLDER
Dated:____________
NAME (
)
_____________________________________________________________________
PART-IV
Received payment of (in figs) Rs_____________________
(in words)__________
_____________________________through DGDP Cheque No________________

Date______________on account of stores supplied as part I above.
SUPPLIER'S SIGNATURE
__________________
ADDRESS________________________________
Dated:_____________
TELE NO_________ (if any)
_______________________________________________________________________
PART - V
The stores duly inspected are acceptable and are taken over.
SIGNATURE__________________________
DESIGNATION: CASH PURCHASE OFFICER
Dated:________________
NAME (
)
________________________________________________________________________
160
PART -VI
Despatch details are as under: S. No.
Delivered to (Transit Dept)
Ultimate
Consignee
with full Address
As per
Part-I
SIGNATURE____________________
OR REP. AUTHORISED BY
THE OFFICER TO DELIVER THE STORES.
Dated:_____________
NAME (
(ALL ENTRIES IN BLOCK LETTERS)

______________________________________________________________________
The Director-General, Defence Purchase,
(Cash Purchase Section),
8 Napier Barracks,
Ministry of Defence,
Karachi-4.
Stores listed in part 1 above have been received in good condition vide details at part I and VI above.
Place_______
Date__________
Signature____________________
Designation__________________
Name_______________________
Unit________________________
Tele No._____________________
161
Appendix 5
To Annex E
Paragraph 7 of Appendix 2
Receipt
Cash Purchase Order
No
Date
Designation
Issues
Quantity
Consignee
Quantity
RR/RWB
No of Packages No
Date
Date Receipted
copy received
162
Annex F
To Rules 72 and 83
FORMS FOR THE EXECUTION OF DIFFERENT SECURITY BONDS
A. CASH SECURITY BOND
KNOW all men by these presents that 1, A.B ..............................................
of..................
am held and firmly bond unto the President of Pakistan in the sum of
Rupees..................... (Rupees ...................................................... ) to be paid to the
President for which payment, will and truly to be made I bind myself, my heirs, executors,
administrators, and legal representatives by these presents.
2.
WHEREAS the above bounden A.B. was on the day of 19................appointed
to and now holds the office of..............................
in the office of ............and whereas
the said A.B......................................................................by virtue such office is bound to
collect........................................................................nature of the cashier's /storekeeper's/
(here describe the sub-storekeepers/ subordinate's duties) and to keep and render true and
faithful accounts of his dealings with all property and money which may come into his hands or
possession or under his control, such accounts to be kept in the form and manner that may,
from time to time be prescribed duly constituted authority and also to prepare and submit such
returns, accounts and other doeuments as may from time to time be required of him.
3.
AND WHEREAS the said A.B ............................... has, in pursuance of Note 1
under rule 80 of Financial Regulations, Volume I, delivered to and deposited with
the above mentioned sum of Rupees..................................(Rupees..................................)
in cash as security for the due and faithful performance by the said A.B. of the duties of his said
office and of any other office requiring security to which he may be appointed at any time and of
other duties which may be required of him while holding any such office as aforesaid and for the
purposes of securing and indemin fying the President against all loss, injury, damage, costs or
expenses which the President may; in any way, suffer, sustain or pay by reason of the
misconduct, neglect, oversight or any other act or omission of the said A.B. or of any person or
persons acting under him or for whom he may be responsible.
4.
Now, the conditions of the above written bond is such that if the said A.B has, whilst he
has held the said office of as aforesaid, always duly performed and fulfilled the duties of his said
office and if he shall, whilst he shall hold the said office or any other office requiring security to
which he may be appointed, or in which he may act, always duly perform and fulfil, all and each
of the duties there of respectively and other duties which may, from time to time, be required of
him while holding any such office as aforesaid and shall duly pay into the Government Treasury
at..................all such money as are payable to President and shall come into his possession or
control by reason of the said office and shall duly account for and deliver up all moneys, papers
and other property which shall come into his possession or control by reason of the said office
and if the said A.B, his heirs,
163
executors of adminstrators shall pay or cause to be paid unto the President the amount of any
loss or defalcation in the accounts of the accounts of the said ..... within twenty four hours after
the amount of such..........
loss or defalcation shall have been demanded from the said
A.B. by the............... such demand to be in writing and left at the office or last known place of
residence of the said A.B. and shall also at all times indemnify and save harmless the President
from an and every loss injury, damage,costs expenses which has been or shall or may at any
time or times hereafter during the service or employment of the said A.B. in such office as
aforesaid, or any such offices aforesaid, be sustained, incurred, suffered, or paid by the
President by reason of any act, embezzlement defalcation, mis management, neglect, failure,
misconduct, default, dishbedience, omission or in solvency of the said A.B. or of any person or
persons acting under him or for whom he may be responsible, then this obligation shall be void
and of no effect, otherwise the same shall be and remain in full force. Provided always and it is
hereby
declared
and
agreed
that
the
said
sum
of
Rs............(Rupees...........................................),
so delivered and deposited as afroesaid, shall be and shall remain with the President for the time
being, as such security as aforesaid with full power to the President for the time being as
occasion shall require, to apply the said sum of Rs ...........
(Rupees...........) or any part
thereof, in and towards the indemnity of the President or otherwise as aforesaid.
5.
AND it is hereby further agreed that in the event of the death of the said A.B. or n the
final termination of the service of the said A.B. whether as such as aforesaid or otherwise or in
the event of the said A.B. ceasing to hold any office requiring security the said sum of Rs..........
(Rupees................................ )for or so much thereof as shall then
.........................remain in deposit and shall not have been applied or appropriated as aforesaid
shall be returned to the said A.B. of his legal representative as the case may be without interest
and this bond shall remain with the President for six calender months thereafter for recovering
any loss, injury, damage, costs or expenses, that may have been sustained, incurred or paid by
the President owing to the act, neglect or default of the said
A.B. or any such other person or persons as aforesaid and which may not have been
discoveted until after his death or the termination of his said service, or ceasing to hold any
office for which the security was required. Provided always that the return at any time of the
said security shall not be deemed to affect or prejudice the right of the President to take
proceedings upon or under this bond against the said A.B. or against his heirs, executors,
administrator or legal representatives after his death in case any breach of conditions of this
bond shall be discovered after the return of the said.security and the responsibility of the said
A.B. or his estate; as the case may be, shall at all times continue and the President shall be fully
indemnified against all such loss or damage as aforesaid at any time.
6.
PROVIDED FURTHER that nothing herein contained nor the security hereby given
shall be deemed to limit the liability of the said A.B. in respect of matters aforesaid to the
forfeiture of the said sum of Rs ........................(Rupees.................................) or any part or
parts thereof and that should the said sum be insufficient to indemnify the resident in full for any
loss and damage sustained by them in respect of matters foresaid the said A.B. shall pay
President on demand as such further sum as shall be deemed by the ...........
164
to be necessary, in addition, to the said sum of Rs...................(Rupees...............)
to cover such loss or damage as aforesaid and that the President shall be entitled
to cover such further sum payable as aforesaid in any manner open to him.
IN WITNESS whereas the said A.B. has here unto set his hand this day of ...........
19 .........
Signed and delivered by the above named A.B. in the presence of .........
Signature
B. PERSONAL SECURITY BOND
KNOW all men by these presents that I..................... of.......................................
am held and firmly bound unto the President of Pakistan hereinafter referred to as "the
President" which expression shall include his successors-in-office and assigns where the control
so admits in the sum of Rs................. (Rupees................................. ) to be paid to the
President for which payment, well and truly to be made, 1 bind myself, my heirs, excutors,
adminis trators and legal representatives by these presents.
WHEREAS the above bounden..........................was on the.....................................
day of....................................
19 ................. appointed to and now holds the office
of............................... in the office of...................... and whereas the said .........................
by virtue of such office is bound to collect (here describe the nature of the cashier's
storekeeper's sub-storekeeper's subordinate's duties) and to keep and render true and faithful
accounts of his dealing with all property and money which may come into his hands or
from time to time be prescribed by duly constituted authority and also to prepare and submit
such returns, accounts and other documents as may, from time to time, be required of him.
AND WHEREAS the said.......................... has, in pursuance of note I under rule
80 of Financial Regulations Volume-I been called upon to execute a bond with two sureties in
favour
of
the
President
in
the
above
mentioned
sum
of
Rs.
...................................(Rupees..................................................) for the due and faithful
performance by the said..................of the duties of his office, and of any other office to which
he may be appointed at any time and of other duties which may be required of him and for the
purpose of securing and indemnifying the President against all loss, injury,
damage, costs or expenses which the President may, in any way, suffer, sustain or Pay, by
reason of the misconduct, neglect, oversight or any other act of the
said..............or of any
person or persons acting under him or for whom he may be
responsible.
165
Now, the condition of the above written bond is such that if the said ...................
has, whilst he has held the said office ..................
as aforesaid always duly performed,
and fulfilled the duties of his said office and if he shall, whilst he shall hold the said office or any
other office to which he may be appointed, or in which he may act, always duly perform and
fulfil all and each of the duties thereof respectively and other duties which may, from time to
time, be required of him and shall duly pay into the Government Treasury at. . . . . . . . . . all such
money as are payable to the President and shall come into his possession or control by reason
of the said office and shall duly account for and deliver up all moneys, papers and other
property which shall come into his possession or control by reasons of the said office and if the
said............. by the ...................... such demand to be in writing to be paid unto the
President the amount of any loss or defalcation in the accounts of the said......................
within twenty-four hours after the amount of such loss or defalcation shall have been
demanded from the said .......... by the
.........................such demand to be in writing and left at the officer or last known place of
residence of the Mid and shall also at all times indemnify and save harmless the President
from all and every loss,injury, damage, costs or expenses which has been or shall or may at any
time or times hereafter during the service or employment of the said.....................
in such
office as aforesaid or any such other offices as aforesaid, be sustained, incurred, suffered, or
paid by the President by reason of any act, embezzlement, defalcation, mis-management,
neglect, failure, misconduct, default, disobedience, omission or insolvency of the said ..........or
of any person or persons acting under him or for whom he may be responsible, then this
obligation shall be void and of no effect; otherwise the same shall be and remain in full force and
virtue.
AND it is hereby further agreed that in the event of the death of the
said ...................
or on the final termination of the service of the said .............
whether as such ......... as aforesaid or otherwise, this bond shall remain with the President for
calendar months thereafter for...............recovering any loss, injury, damage, costs or
expenses that may have been sustainedincured or paid by the President owing to the act, neglect
or default of the said ...or any such other person or persons as aforesaid and which may not
have beendiscovered until after his death or the termination of his said service.
Provided always that without prejudice to any other rights or remedies for recovering the
loss or damage as aforesaid it shall be open to the President to recover the amount payable
under this bond as an arrear of land revenue.
In witness whereof the said..............................
has hereinto set his hand this
day of .......................................19................................................................................
Signed and delivered by the above named in the presence of ............
Signature
166
We (a) ..........................................
and (b) ...........................................................
residents of........................................ hereby declare ourselves as sureties for the above
said.................................that he shall do and perform all that he has above undertaken
to do and perform, and in cue of his making default therein, we hereby bind overselves, jointly
and severally to pay to the president of Pakistan the sum of ...........
in which the above
said...................................................................
has bound myself, or such
other sum as shall be deemed to be sufficient by the .....................to cover any loss or damage
which the President may sustatn by reason of such default.
And we also agree that neither or us shall be at liberty to terminate his suretyship except upon
giving to the ......................... six calendar month's notice in writing of his intention so to do
and our joint and several liability under this bond shall continue in respect of all acts,
embezzlements, mismanagement, neglects, failures, misconducts, defaults, disobedience,
omissions and insolvencies on the part of the said........................ until the expiration of the said
period of six months. Date this
the...............................................day of...........................
19 ...............................
Signature of sureties in respect of ..............................................................
1
2.
In the presence of
(Signature)
1.
2.
(Signature)
C. FIDELITY BOND DEPOSITED AS SECURITY
1.
KNOW all men by these presents that I..............................of................................
am held and firmly bound unto the President of Pakistan (hereinafter referred to as 'President')
which exprgssion shall include his successors-in-office and assigns where the context so admits
in the sum of Rs.......................
(Rupees........................) to be paid to the President
for which payment, well and truly to be made, I bind myself, my heirs, executors,
administrators, and legal representative, by these presents.
2.
WHEREAS the above bounden was on the day of ...............................................
19.........
appointed to and now holds the office of...................................................
in the office...............................................
and whereas the said ........by virtue of........
such office is bound to collect.............................................
(here describe the nature of
the cuhier'slstorekeeper's/Sub-storekeeper'slsubordinate's duties) . . . . . . . . .....................
and to keep and render true and faithful accounts of his dealings with all property and money
which may come into his hands or possession or under his control,
167
such accounts to be kept in the form and manner that may, from time to time, be prescribed by
duly consitituted authority, and also to prepare and submit such returns and other documents as
may from time to time, be required of him.
3.
AND WHEREAS the said .......................... has, in pursuance of note I under rule
80 of Financial Regulations Volume-I, delivered to and deposited with ...........................
a fidelity bond issued by .................. company for the sum of Rs..............(Rupees..........) as
security for the due and faithful performance by the said
.............................................
of the duties of his said................................. office and any other office requiring security
to which he may be appointed at any time and of other duties which may be required of him
while holding any such office as aforesaid and for the purpose of securing the indemnifying the
President against all loss, injury, damage, costs or expenses which the President may in any
way, suffer, sustain, or pay, by reason of the misconduct, neglect, oversight, or any other act
or-omission of the said ...... or of any person or persons acting under him or for whom he may
he responsible.
AND WHEREAS the said
has entered into the above bond in the sum
of
conditioned
for the due performance by him of the duties of the said office of
and of
other duties appertaining thereto or which may lawfully be required of him and to indemnify the
President (his successors and assigns and the servants of the President) against loss from or by
reason of the acts or defaults of the said
and of all and every
person or persons aforesaid.
4.
Now the condition of the above written bond is such that if the said ....... has whilst he
has held the said office of.................................
always duly performed and fulfilled the
duties of his said office and if he shall, while he shall hold the said office or any other office
requiring security to which he may be appointed or in which he may act, always duly
perforwand fulfil all and each of the duties there of respectively and other duties which may,
from time to time be required of him while holding any such office as aforesaid, and shall duly
pay into the Government Treasury at . . . . . . . . . all such money as are payable to the President
and shall come into his possession of control by reasons of the said office and shall duly account
for and deliver up all moneys, papers and other property which shall come into his possession
or control by reason of the said office and the said . . . . . . . his heirs, executors or
administrators shall pay or cease to be paid unto the President the amount of any loss or
defalcation in the accounts of the
said within twenty four hours after the amount of
such loss or defalcation,shall have beW demanded from the said by the such demand to be in
writing and left at the office or last known place of residence
of the said
and shall also at all thne or times hereafter indemnify and save harmless the
President from all and every loss, injury, damage, costs, expenses which has been or shall or
may at any time or times hereafter during the service or employment or the said . . . . . . . in
such office as aforesaid, or any such offices as aforesaid, be 'sustained, incurred, suffered, or
paid by the President by reasons of any act, embezzlement, defalcation, mismanagement,
neglect, failure, misconduct, default, disobedience, omission or...............
168
insolvency of the said ..................... or of any person or persons acting under him or for
whom he may be responsible, then this obligation shall be void and of no effect, other wise the
same shall be and remain in full force and virtue.
5.
PROVIDED ALWAYS and it is hereby declared and agreed by the between the
parties hereto that the said fidelity bond No......
delivered and deposited as aforesaid,
shall be and remain at the disposal of the as additional security (over and above this bond) to
the President (his successors and assigns) for the indemnity and other purposes aforesaid with
full power to the President (his successors or assigns or the servants of the President duly
authorised in that behalf) to obtain and receive payment of the sum or sums of money
recoverable or to be received upon or by virtue or the said fidelity bond or a sufficient portion
thereof and all v, benefits and advantages thereof and to apply the same in and towards the
indemnity as aforesaid of the President (his successors, and assigns and the servants of the
President as the case may require).
6.
AND it is hereby further agreed and declared by and between the parties hereto that
the amount of the premia which becomes due, from time to time, on
the said fidelity bond
shall be deducted from the salary of the said ............. and paid to the said company to keep
the fidelity bond in full force. In case the amount of premia is large enough to cause
inconvenience to the cashiers, the amount may be paid out of the permanent advance of the
imprest to pay in lump sum to the insurance company which may be recouped by monthly cash
recoveries from the cashiers in suitable instalments, which should not normally exceed the
amount of special pay of the cashiers concerned.
PROVIDED ALWAYS that the cancellation or lapse at any time of the said fidelity bond
shall not be deemed to affect the right of the President to take proceedings upon or under this
said bond against the said
in case any breach of the condition of this bond shall be
discovered after the cancellation or lapse of the said fidelity bond but the responsibility of the
said ..................shall at all times continue and the President shall be fully indemnified against all
such loss or damage as aforesaid at all times.
IN WITNESS whereof the said has hereinto set his hands this day of
19..................................
Signed and delivered by the above named in the presence of
1.
2.
Signature
169
Annex G
To Rule 73(b)
INDEMNITY BOND TO BE EXECUTED BY HEIRS OF DECEASED
CONTRACTORS FOR PAYMENT OF THEIR SECURITY DEPOSITS
KNOW ALL MEN by these presents that we .........................................
and.....................................................................
of ....................................
are held and firmly bound unto the President of Pakistan in the sum of rupees of lawful money
of Pakistan to be paid to the President, his certain attorney, successors or assigns, for which
payment well and truly to be made we bind ourselves our heirs, executors and administrators
jointly and binds himself, his heirs, executors and administrators severally and firmly by these
presents.
WHEREAS ........................................................................................................
son of
was before his death on a (
)at............................................... and as
such lodged with Government Rs
as a security deposit AND WHEREAS the said claim
(s) to be the heir (s) of the said ......................................... and as such entitled to his estate and
having represented that there would be undue delay and hardship if Government insisted on
legal representation being taken out before sanctioning payment of the said deposit Government
have agreed to pay the said sum of Rs to the said
on the execution of this bond.
NOW THE CONDITION of the above written bond is such that if the above
bounden ......................................... and........................... their executors, administrators
or legal representatives do and shall from time to time and at all times hereafter well and
sufficiently save, defend and keep harmless and indemnified the said President his successors
and assigns for the time being and other officers and servants of the Government and each and
every of them from and against all and all manner of action or actions suit or suits and other legal
proceedings, costs, charges, damages and expenses whatever which shall or may, at any time or
times hereafter, be brought, commenced or used by any person or body corporate against or
happen or to be occasioned to the said President his successors, assigns or the for the time
being or any or other or the officers or
servants of the Government for or on account or in respect or by reason of the said payment as
aforesaid the above written bond shall be void and of no effect otherwise the same shall be and
remain in full force and virtue.
As WITNESS our hand the
day of
19
Signed by the said in the presence of ........................

170
Annex H
To Ruk 89
CONTRACTS - BY WHOM SANCTIONED
A - SUPPLY SERVICES
1.
Contracts for the supply of articles are arranged as follows: a.
'Central purchase' articles - Contracts for these articles are made for QMG
by DGM
Note. In case of emergency, such articles may be purchased locally, in accordance with
standing orders but all such purchases which should be made only to the extent
necessary, to meet immediate requirements together with rates and full reasons
should be reported to the DS&T monthly.
b.
The ADS&T/CO S&T battalion acting under the orders of/formation

commander will consider, as necessary, the various local purchase supplies for
which it is desirable to make contracts and decide which of these, having due
regard to the advantage of the State, should be for individual stations or for
groups of stations. For individual articles or for suitable groups of articles such
as any particular class of contractors would be willing to tender for.
c.
'Local purchase' article - Contracts for these articles are made, where
necessary, by the ASC officers concerned as under, subject to the rules in these
regulations:Controlling
Authority
Sanctioned by
Period
Value Limit
ADS&T/
COAS.
3 years
Full powers
CO S&T Bn'
QMG.
3 years
Rs. 3,000,000/
Corps Commander. 1 year
Rs. 3,000,000/
Divisional/Force
1 year
Rs. 1,000,000/
Commander Northern
Area/Log Area
Independent
Brigade Commander.
Note: These powers will be subject to observance of all formalities in respect of
tendering procedure and bids evaluation as laid down in the relevant
rules.
2.
In the case of contracts for articles of 'Local Purchase' the QMG or the formation
commander will exercise supervision by calling up for that purpose, before
171
completion, such proportion of contracts as they may direct.
3.
Government sanction will he necessary in respect of contracts of the following types,
namely:-
4.
a.
Contracts involving an uncertain or indefinite liability or any condition of an

unusual character.
b.
Any proposal to create an'ageney'type of supply.
c.
Taking under control or on lease a private firm.
d.
Grant of bonus or subsidy to a firm.
The classification of articles authorised for supply is contained in ASC Regulations.

B - TRANSPORT SERVICES
5.
The adoption of any particular mode of conveyance for military personnel and stores
over any road, or any alteration in the existing mode of conveyance, shall require the sanction of
the formation commander.
6.
Renewals or extensions or AT contract, the period of which exceeds one year,will be
sanctioned by the next higher authority to that sanctioning the original contract, subject to the
limitations imposed by rule 98. No new AT and AT cum-MT contracts will be entered into by
commanders for periods longer than one year without sanction of General Headquarters.
7.
Officers Commanding Air Force units may, in similar circumstances, and with the prior
sanction of the Chief of the Air Staff hire private transport for the performance of Air Force
duties. Such hiring shall be arranged in consultation with the ADS&TICO S&T Bn of the
formation in which the units are situated.
8.
The MES authorities may, in consultation with the CASCIOC S&T Bn/DADS &T;
Division /Log Area, make their own arrangements for the transportation of machinery and
articles which require special stacking.
9.
The powers for sanctioning the contracts will be same are as at A above.
C
10.
- SANCTIONING AUTHORITIES - CONTRACT FOR THE

SERVICES UNDER THE MGO
The following contracts may be executed by the authorities specified below:a.
Contracts for washing of textile and
Ministry of Defence, The
repairs to garments and tentage.
MGO, Divisional Log Area,
172
b.
c.
d.
e.
11.
Contracts for the repair of

screen, cooling and chicks
(coarse and fine).
scientific instruments and all
other types of service equipment, ie,
repair of vehicles or their
components, electrical motors etc.
All other contracts, deeds and
instruments, other than leases of houses,
land and other immovable property
for the DITD.
All instruments connected with
the re conveyance of property
given as security.
Local contract powers a.

of EME officers for
b.
repair through trade.
c.
d.
e.
f.
Bde and Station Comds, or

offr of the ordnance other
than departmental offrs, of
the EME or the DITI).
DEME.
Comdt Central/
Combined/Aviation Base
Workshop (Brig/Col).
Comdt Central /Combined/
Aviation Base Workshop
(Lt Col).
CO EME Bn/CEME/
GC Medium /Station
Workshop (Lt Col).
OC Independent
Armed/Infantry/
Mountain/AA Workshop
Company/ Station/Air
conditioning MES Equipment
Workshop(maj),
OC MES Equipment/
Workshop Section
(Capt and below).
Rs. 35,000/25,000/-
Rs 10,0001
Rs
10,000/
Rs
7,0001
Rs 5,0001
D - SANCTIONING AUTHORITIES -CONTRACTS FOR THE

FARMS WING OF THE RV&F. CORPS
12.
a.
Leases of land, purchases or leases of harvesting or cutting rights and

renewal of such leases, where the period of each lease or each separate
renewal does not exceed :
173
(1) Five years
(2) Twelve months
b.
Value-limit
QMG
Rs. 30,00, 000
DRV&F
Rs.10,00,000
13.
By the DRV&F/DDRV
By Assistant Directors of Military Farms.
Contracts for supplies and services to, and purchases for the Farm Wing of
RV&FC.
Officers
Note:
Periods Upto Whichemarks

Contract May be
Executed
3 years
These powers will be subject
to
observance of all formal year
lities in respect of tendering procedure
and bids evaluation as laid down
in the relevant rules.
The financial powers of the DRV for according administrative

approval to farms works are laid down in the Financial Regulations
Volume-II
E - SANCTIONING AUTHORITIES - CONTRACTS FOR THE
REMOUNT WING OF THE RV & FC
Contract for the above may be executed by the following authorities:a.
Agreements with shippers for landing horses at the

remount and veterinary installation, Karachi.
b.
Sale by public auction of Government animals By Officers

rejected from RV&FC (Remounts).
Commanding
Remount Depots,
or District Re
mount Offrs of
breeding areas.
Contracts for forage or stores.
By the DRV&F
Offrs CommandContracts for Petty works at remount
ing Remount
depots and breeding areas.
Depots, or Dis
trict Remount
Offrs of breeding
areas.
c.
d.
By the QMG.
e.
All instruments connected with the

reconveyance of property given as security.
BY Offrs
Commanding,
174
Remount Depots,
or District Remount Offrs of
breeding areas.
f.
g.
h.
j.
Leases of land, harvesting or cutting

rights, and renewal of such leases in
remount depots.
Appointment of contractors for petty stores
contracts in remount depots.
Appointment of local contractors for
supplying grain to horse/donkey stallions
and testing ponies in Sahiwal breeding
area.
By the OC
Remount Depots.
By the DRV&F
By the District
Remount Offrs,
Sahiwal
breeding area
Salilwal
Leases of land for breeding purposes a

subsequent renewal thereof:
(1)
To individual breeders under Ghoripal - By District
System.
Remount Officers
(2)
To stud grantees.
By the QMG.
F - SANCTIONING AUTHORITIES - CONTRACTS FOR THE PAF

14.
Contracts for the above may he executed by the following authorities:Contracts for the recovery of exploded practice bombs By the OC PAF
or expended bullets from the PAF bombing ranges.
Station/unit.
G - SANCTIONING AUTHORITIES - GENERAL INSTRUMENTS AND

CONTRACTS
15.
General instruments and contracts may be executed by the following

a.
Contracts for the supply of hot weather

establishment and other temporary labour.
b.
c.
Contracts for petty supplies to hospitals.

Contracts for the supply of dairy produce
(where military farms do not function)
Cinema contracts
d.
authorities:-
By OC a unit, OC
a sanatorium, or
OC a hospital,
By OC a hospital
By formation
commander.
By sta comd or
OC a unit.
175
e.
Contracts for the operation of canteen services for the troops by

contractors; after approval of the contract by the QMG in all cases:(1)
Station contracts.
(2)
(3)
Units Contracts.
Garrison Institute
(Hill Station or Depot) contracts
By Station
Commander or
Administrative
Commandant.
By OC Unit.
By OC Hill
Station or Depot
176
Annex J
To Rule 130
PROVISION OF HAIRCUTTING AND WASHING SERVICES TO TROOPS
1.
Following procedure will be adopted for the fixation of:a.
Monthly rates of pay for civilian barbers and dhobies employed by units and
formations in lieu of authorised combatants.
b.
Per capita rates of haircutting and washing allowance for payment to entitled
troops.
c.
Contract rates for the provision of these two services.
2.
A board of officers, composed as under, will be held in January and July each year
(Except Northern Areas and places not falling within the jurisdiction of a Station Headquarters
for which see para 9 and 10 below) under the orders of the local OC station to fix the above
monthly rates. The board while fixing the contract rates of haircutting allowance will notify the
rates for two elements of haircutting and shaving separately:President : A field officer other than the Station Commander.
Members :A commissioned officer.
The local Audit Officer or his representative.
Note: The bill for haircutting allces will be preferred in the name of barber contractor
and will be paid to him. The amount of shaving charges will be claimed by the
unit separately and paid to the JC0s1OR concerned under the unit arrangement.
3.
The board's recommendations will be based on the rates of pay of civilian barbers and
dhobles employed in local civil departments, rates of stores and equipment in local market and
similar other local factors which nay influence the availability of these services. The board will,
however, make every effort to fix the rates at the most economical basis to the state consistent
with the requirement of efficient and smooth provision of these services.
4.
The proceedings will then be forwarded to the station commander for approval of the
rates recommended and their publication in station orders. The station commander if he is below
the rank of a Lt Col will not approve the proceeding if their is a note of dissent from the LAO
but forward them to the Formation Commander, as the case may be, for adjudication whose
decision shall be final.
5.
The rates published in the station orders will be the authority for admitting
unit bill by the CMAs.
177
6.
The term 'pay' used in paragraphs 1 and 2 above will exclude other allowances
admissible, such as dearness allowance sanctioned by the Government from time to time.
Notes: 1
A contract for provision of haircutting and washing services
can only be entered into for the provision of each or both of
these services as a whole. In other words a unit cannot enter into
a contract when it has on its posted strength a part of authorised
establishment of dhobles or barbers employed either as combatant
or civilians in lieu of combatants. Contract will be
resorted to only if there is no dhobi or barber employed/
working as combatant, or civilian lieu of combatants. Each
contract will be reviewed and renewed on the 1st March and the
1st September each year on the basis of revised rates, fixed
half yearly.
2.
The term 'troops does not include officer.

3. Each contract will be submitted to the OC station through the LAO, for
approval before completion, endorsed with the certificate, signed by the
OC, as follows:-
Certified that.a.
b.
c.
This unit being deficient of the full authorised strength of combatant (in case of static units) dhobies and/or barbers, is unable
to employ them as temporary civilians on authorised rates of pay.
A contract for haircutting/washing services is, therefore, ines
capable.
Contract rates, prescribed herein, are in accordance with station Order
No......... dated ......................
Free materials will not be demanded from the Government.
7.
Although the board will be held in the months of January and July each year (except in
the case of units, located in the Northern Area (for which see para 9 below) but the rates
approved as a result of its recommendations will have effect from the 1st March and the 1st
September respectively, of the same year and will remain effective for six months in each case.
8.
Small units or a few individuals posted out of station on temporary duty away from their
parent units, or on leave, in whose case it is not administratively possible to attach them to other
units, will be paid in cash the haircutting and washing allowance at the rates fixed for the station
of their duty.
9.
In the case of units located in the Northern Area the boards will be held in
the month of April and October each year. The rates approved as a result of the
178
board's recommendations will have effect from the 1st June and the 1st December respectively
of the same year.
10.
For units located at places not falling within the jurisdiction of a Station Headquarters,
the powers and functions of OC station under these rules will be exercised by the local
Formation Headquarter under whose command units concerned are serving.
11.
The need for economy consistent with administrative requirements of these services in
fixation of these rates cannot be over emphasized. The station and formation commanders will
exercise a very careful scrutiny of the rates recommended by the Station Boards and will ensure
that only the minimum possible rates at which these services of a satisfactory standard can be
made available are approved.
179
Annex 'K' To
Rule 60 c
LIST OF SCHEDULED BANKS IN PAKISTAN
S. No
1.
2.
3.
4.
5.
6.
7,
8.
9.
10.
11.
12.
15.
16.
17.
18.
19.
20.
21.,
22.
23.
24.
25.
26.
NAME OF THE BANK

Agriculture Development Bank of Pakistan.
Algemene Bank Nederland.
Allied Bank of Pakistan Limited.
American Express Bank Limited.
Bank of America N. T. & S. A.
Banque Indosuez.
Bank of Oman Limited.
Bank of Tokyo Limited.
Chase Manhattan Bank N. A.
Citibank N. A.
Deutsche Bank (A~ G.)
Dhoa Bank Limited.
13.
ANZ Grindlays Bank P. I. C.
14.
ilabib Bank Limited.
Hong Kong & Shanghai Banking Corporation.
Industrial Development Bank of Pakistan.
International Finance Investment Commerce Bank Ltd.
Middle East Bank Limited.
Massaraf Faysal Al Islami of Bahrain.
Muslim Commercial Bank Limited.
Natonal Bank of Pakistan.
Rupali Bank Limited.
Standard Chartered Bank.
Emirates Bank International Limited.
United Bank Limited,
Habib Bank A. G. - Zurich.
180
TABLE OF CONCORDANCE
1.
The Financial Regulations Vol 1, 1986 is a completely revised edition. It is based on.
Financial Regulations Part-I 1952 (Reprinted in 19n) and other government or6rs, letters and
instructions, issued upto 31 December 1985.
2.
The table of concordance given below shows column-wise the rules in the new
regulations, the comparative Financial Regulations Part I (Army and Air Force) - 1972 and
other references supporting modifications.
FR Vol 1
(1995)
2
3
4
5
6
7
8
9
0
F R Part I 1986
4
Other References
81 /1)-21 (B get)-2
Dec 81.
12
9n 96 and 1 Govt ltr no F-1 70176 /D-1 5 (C-1) of 27 Feb
80 (Reproduced in SPAO 11180).
13
27
14
21
15
16
17
1" 177
18
"a2
19
20
34 z- JP
Para 17 to 21 of Govt ltr F-11335[
22
81 /1)-21 (Budget) 2 of 26 Dec 8 1 1.
23
~37 z
24
38
5
25
-40
26
AI -4
27
z,
28
29
48
30
4,,9
31
181
FR Vol 1
FR Part I 1986
Other References
32
*2
33
W
34
88
35
-89
36
134-136
37
70
38
71- -75 and-7 9
Govtltr~%F-17 /,7,6/D-15~C-1) of
~u~
27 Feb 8
u d in SPAO 11180).
39
76 _~1n
40
-do
41
42
43
.92
-do
44
W
45
--W
46
PO-474
Yga 21 (111) of Govt ltr noF-11335/811
D-2f(Budget) 2 of 26 Dec 81.
47
99
Para 2 to 5 of Govt ltr no F-1 13351811
109
D-21 (Budget) 2 of 26 Dec 81 and Anx H
of Pay and Allces Vol II.
48
49
-120
50
J21,
51
1.22
52
123- 124
53
125
54
126
55
127
56
128
57
130
58
131
59
13,2
60
144-,142--'144,150 & 152A and Treasury Rules of the Fed
Govt, 1972, note 4 of Rule 217
61
155-4w
FRPart-11,1952 Rule 57.-62
160
63
161
64
162
65
163
66
164
67
---165 Para 26c of Govt ltr no F-11335181/D-21
(Budget) 2 of 26 Dec 81.
68
11,96
69
1,67
70'
1"
71
182
FR Part 1
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
FR Part I 1986
(Reprinted 1972)
Other References
113
114
115
116
117
183
FR Vol 1
FR Part 1986
Other References
118
2a4
119
26b
120
260
121
267-122
268.
123
27.2
124
273
125
274
126
2,77
127
278.
128
279
129
281
130
U4
Annex A
Annex B
Annex C
Annex D
Annex E
Annex F
Annex G
Annex H
Annex J
Anx A to Govt Itr no F-11335/81/D-21

(Budget) of 26 Dec 81.
(xv) and annex B of Govt ltr -do
Appx 11
Appx VI
Govt ltr no 1557/40/DGDP/PC-1/11/4174/
2/P40 of 29 Nov 82.
Appx VII
Appx V
Appx IV
Govt ltr no 18017 /Budget-2 3316 /D-1
(B) of 06 Aug 69.
Appx IX
Rules of Financial Regulations Part 1- 1952 (Reprinted in 1972) omitted due to reasons stated
against each:-1.
Being blank. 4, 6-S, 10-44, 16, 22- 24, 39, 44-47, 50---61,55, 61, 65-66, 68- 69,
80, ^ 86---87,91--93,95-98,105-108,116-119, 129, 133,139, 141, 145,
147---149,158-159, 169, 175-189, 225-229, 237---249,253-~-2,56, 2707-271 and 275.
2.
Rules replaced by government of Pakistan letters:a.
Rule merged under heading definition (page ix - xi)
b.
Rule 2, 18-19, 35, 52---53,54 a and 56---60replaced with the provision of

GHQ letter no F-1/335181/1)-21 (Budget) 2 dated 26 Dec 81.
3.
Being Superfluous redundant. 63, 64, 78, 90, 94, 102-103,137-138, 146,
151- 152, 153, 220, 224, 2d2-263, 269, 276, 280, Rule 20 item (3dii), 34 (e), 54
para 1 and sub para (a), 89 (e), (1), 124 last two paras Rule 75 (XIV), Rule 217
para 3, 4, 5, Rule 261 note 1 to 7, Rule 264 para 3 note 2 and Rule 268 note 1 to 3.
81
reasons being recorded of the circumstances which, in his opinion, justify the
waiver.
Note: If the irregularity is one that is likely to recur, the officer responsible
should be told that it is objectionable, even though no recovery be
made in the particular instance.
c.
Some items are placed under objection not because the whole or any portion of
the expenditure is unjustifiable in itself, but because it is not exactly covered by
rule or the authority for the expenditure is insufficient or full proof that it has
been incurred has not been provided; for example, there may be an absence of
one or more sub vouchers. In such cases, the head of an audit office, ie, the
Controller (13PS 19), may waive an audit objection up to a limit of Rs 1000.00
and Rs 2000.00 in the case of a Controller (11PS 20), in each case, provided:(1)
That the expenditure is not of an intrinsically recurring nature.
(2)
Where the objection is based on insufficiency of sanction, that he is

satisfied that the authority empowered to sanction the expenditure
would accord sanction, if required.
(3)
Where the objection is on based insufficiency of proof of payment, that

he is of opinion that undue trouble would be caused if the submission of
the full proof of the expenditure having been incurred were insisted on,
and he sees no reason to doubt that the outlay has actually been made.
d.
In similar circumstances, a Deputy Controller of Accounts, not holding charge

of an accounts office, and any gazetted officer in BPS 17 of the Military
Accounts Department may waive an audit objection up to a limit of Rs 100.00
and Rs 50.00 respectively, in each case.
e.
In the case of items, which have become irrecoverable from any cause, a
Controller of Accounts (13PS 19) may write off an amount not exceeding
Rs.1,000.00 and Rs. 2,000/- in the case of a Controller (13PS 20) in each
case, including amounts outstanding under a debt head if the ultimate incidence
of the expenditure is against Defence Services estimates.
f.
A Deputy Controller of Accounts not holding charge of an accounts office and

any gazetted officers not below BPS 17 of the Military Accounts Department
may write off an amount not exceeding Rs. 100.00 and 50.00 respectively, in
each case.
g.
The provisions of this rule are not affected by any conditions or limitations
imposed in any other rule in these regulations.
82
Notes: 1.
2.
3.
4.
The powers under this rule cannot be delegated to any

subordinate officer.
The authority vested in Audit Officers under this rule is
not to be exercised in respect of items in the cheek or
audit of which they have no concern, for example, where
they merely receive bills and forward them to another
officer for final audit.
The powers of waiver under sub-rules a and c above
may also be exercised in respect of claims submitted for
pre-audit and found to be open to technical and/or unimportant
objections, in whole or in part.
The Deputy Military Accountant General (13PS 20) shall
exercise all the powers that are vested in Controllers of
Accounts under this rule.
68. Objection Statements. As a general rule disbursing and stores officers are responsible for
their receipts, payments and audit objections thereon.
69.
Apeals
a.
An appeal against the final disallowance of an Audit Officer shall be submitted
as expeditiously as possible, and in no case shall it be deferred beyond two
months from the date of issue of the intimation of final disallowance, see rule 49.
b.
Every appeal must be self-contained statement of the salient facts with the
omission of all extraneous matter and only such documents should be attached
thereto as are essential to a decision in the case. Formation Commander, in
agreement with the Controller of Accounts concerned, in his capacity as
financial adviser, is empowered to decide whether recovery of the disallowance
should be withheld until the appeal has been fully considered and orders passed
thereon, such decision being made with due regard to the protection of the
interests of Government and to the likelihood of the remission of the
disallowance or overpayment by the competent authority.
In cases where it is decided that recovery should not be withheld, the appellant
should be so informed and the Controller of Accounts shall be requested to
proceed with the recovery forthwith.
70.
Retrenchment from Contractor's Bills and Appeals. When sums are retrenched from
contractor's bills the grounds on which the amounts have been disallowed will be communicated
on PAIPA-471. If the claimant is dissatisfied with the decision given, he may within one month
from date of such decision, appeal to the Formation Commander.
83
(N.B-.For rules applicable to MES security deposits see Regulations for the
MES).
71. How Calculated. Standing security deposits will not be taken from Government agencies
/concerns. Exception may also be made in the case of large and reliable firms, and individual
contractors on the recommendation of the Formation Commanders and the sanction of the
Q11GIMGO. Proposals for such exceptions will be supported by reports from the income tax
officer and other civil authorities, showing that the firms or the individual contractors are
financially sound and are known for their business honesty and integrity. In other cases the
amount of the security deposits will be calculated, in tens of rupees on the value of the estimated
quantity of supplies during the period if the contract at the rates accepted as follows: a.
For a contract not exceeding Rs.10,0001- in value, 10 percent with a minimum

of Rs 25.00.
b.
For a contract between Rs 10,000.00 and Rs 30,000.00 in value, 7 percent

with a minimum of Rs 1,000.00 and maximum of Rs. 2,000.00.
c.
For a contract exceeding Rs 30,000.00 in value, 5 percent with a minimum of

Rs 2,000.00. If security deposit exceeds Rs 6,000.00 the amount may be
specially fixed by the Administrative Officer concerned who may, at his
discretion, increase or decrease the amount of the security to be furnished with
reference to the probable loss or inconvenience that would result to
Government from the failure on the part of the contractor. In case of dairy
produce contractors the amount of security may be specifically fixed by the
Administrative Officer concerned when it exceeds Rs 3,000.00. This is subject
to a further provision that for dairy produce contracts above lts 1,00,000.00
(one hundred thousand) the security deposit should not be less than 3 percent.
Notes: - 1.
When Government securities, provincial and municipal

debentures or port trust bonds are offered as security deposits,
they will be taken at their market value. Administrative officers
will satisfy themselves that the value of the security calculated on
the basis is sufficient to secure and indemnify Government
against any possible loss. In the event of such securities
appreciating or depreciating no re-adjustment of the value
thereof should be made unless the rise or fall of the
market-value is such as to render it necessary to call upon the
depositor to produce further security to the extent of at least Rs.
1001- or to enable the officer to return to the depositor security
to the same
84
extent. Even then no such adjustment should be made unless
after such adjustment, there is still a reasonable margin between
the market-value of the security tendered and the amount of the
security necessary.
2.
72.
Whenever a private person or a firm contracts with Government

to supply stores or execute a work, he or it shall unless
exempted by competent authority, he required to give security
for the due fulfilment of the contract and suitable provisions
regarding the securities shall be incorporated in the agreement.
When contracts are placed with Political Agents 'nominee'
contractors, security deposits will not ordinarily be taken. In
cases where the Political Agent concerned cannot accept the
responsibility, security will be recovered.
Forms of Standing Security Deposits

a.
The security taken from a Government officer or a contractor shall be in one of

the following forms subject to the conditions noted against each, or partly in one
and partly in another of these forms when this is specially permitted by the
authority authorised to accept the security:Forms
Conditions
(1)
Cash ...........................
Government will not pay any interest

on any deposit held in the form of cash.
(2)
Government
promissory notes,
Municipal debentures
or Port trust bonds.
These securities should be accepted at

five percent below the market-price or
at the face value whichever is less, and
should be dealt with in accordance
with the rules in Chapter IX of the
Government Securities Manual.
(3)
Post-Office Savings
Bank Pass-Books.
(4)
Post-Office Cash
The certificates should be formally
Certificates, Pakistan
transferred to the authority which takes
Defence Savings
the deposit with the sanction of the Head
Certificates and Postmaster and should be accepted at
Pakistan Savings
their surrender value at the time of
A pass-book for a deposit made under the

Post - Office Savings Banks Rules, may
be accepted as security, provided that the
depositor has signed and delivered to the
postmaster a letter in the prescribed
form as required by those rules.
Certificates.
tender.
85
(5)
Deposit receipts of
(a)
recognised banks
approved by Government for the purpose.
(b)
(c)
The deposit receipt should be made

out in the name of the (pledgee or,
if it is made out in the name of the
pledger, the bank should certify
on it that the deposit can be
withdrawn only on the demand
or with the sanction of the pledgee.
The depositor should agree in
writing to undertake any risks
involved in the investment.
The bank should agree that on
receiving a signed treasury challan
and a withdrawal order from the
pledgee in respect of the deposit
or any part thereof it will at once
remit the amount specified into the
nearest treasury alongwith the
challan and send the treasury
receipt to the pledgee.
(d)
(6)
(7)
The responsibility of the pledgee

in connection with the deposit and
the interest on it will cease when he
issues a final withdrawal order to
the depositor and sends an intima
tion to the bank that he has done
so.
Fidelity bonds from
A fidelity bond may be accepted as
tarrif insurance security, from Government officer but not
companies which are from a private party.
approved by the
Government.
Other form of
Security in any such form may be
security specifically
accepted in accordance with the rules and
approved by Govern- conditions laid down in the relevant
ment for acceptance, regulations only or by special orders of
eg, mortgage on real the Government.
property, personal
security, etc.
Notes: 1
Every security deposit whether in cash, Government

securities, Provincial and Municipal debentures, Port 'lYust
Bonds, bank deposit receipts or savings bank deposits or
otherwise with a Government officer will be recorded in a

register in which transactions must be noted at the
86
time of their occurrence. Each depositor will have a separate
folio allotted to him and these deposits will be proved annually.
2.
When a subordinate who has furnished, a security deposit, is

transferred from one office to another his security should be
borne on the register of the office to which he is transferred.
3.
Security furnished in cash by Government officer or a

contractor may be converted, at the cost of the depositor, into
any of the interest bearing forms of security mentioned in notes
(2) to (5) provided:a.
That the depositor has expressly requested in writing

that this be done.
b.
That the acceptance of the new form or forms of

security is permissible under the rules and under the
terms of the agreement or bond.
4.
Subject to any rule or order made by Government in this behalf

the form of the security bond, to be executed at the time of
furnishing security, should be determined under orders of the
Head of the Department according to the kind of security
furnished. When a Government officer is specially permitted to
furnish security partly in one and partly in another or the forms
of security specified in this rule he should execute separate
bonds for the different kinds of security.
5.
Forms for the execution of different security bonds are given in

Annex F to this Volume.
b.
Post office saving bank accounts in respect of security deposits which are,'
under rule, being completed by monthly deduction from the individuals pay will
be lodged in the name of DADMF, ADMF or DDMF concerned and the
pass-books will be kept for safe Custody with the DADMF, ADI1F,. or
DDMF or the Manager of the military farm concerned. When the full amount of
security deposit has been completed the pass-book will be returned to the
depositor after being inspected as required by rule 78.
c.
When such securities are to be refunded, a No Demand Certificate

(PAFA---451) will be furnished by the DADI1F, ADMF or DDMF con
cerned after communication with the Controller of Accounts concerned who will
testify that no claims are outstanding in his office with regard to the stores held
by the individual concerned.
87
Note: For the form of deposit of cash security from Government servants
Annex F to this volume refers.
73.
Refund
a.
A security deposit should be restored to the contractor on his executing a No

Demand Certificate as soon as possible after the delivery of the supplies or the
performance of the services contracted for and with due regard to the state of
his accounts. If any delay occurs in the audit of these accounts a refund of such
portion of his security deposit may be made to him as the executive officer, after
consultation with the Audit Officer and with his concurrence, considers
expedient. At the request of the depositor a security deposit or any portion
thereof, held in respect of an expired or nearly expiring contract, may be appropriated in whole nearly expiring contract, may be appropriated in whole or in
part towards the security deposit of another contract that has just been or is
about to be entered into with the depositor.
b.
If the security deposit or any other sums due to a contractor are attached by
any court, the executive officer may, if there be no claims against the contractor,
pay the total amount into court, otherwise the lien of Government on this amount
shall take precedence on a claim by an attaching creditor; but if the contract be
a joint one, le, furnished by more than one individual joining in a contract can no
amount be attached to satisfy a demand against one of the partners alone.
Security deposits or any other sum due to the estate of a deceased subordinate
or contractor may be paid without the production of the usual legal authority;
under the orders of Chief of the Army Staff, (Surgeon General in case of
contracts of medical stores depots/army medical stores) in the capacity of local
Government on execution of an indemnity bond in the prescribed form (Annex
G) with such sureties as he may require, if he is satisfied as to the right and title
of the claimant and considers that undue delay and hardship would be caused
by insisting on the production of letters of administration. In any case of doubt
payment should be made only to the person producing legal authority. A
security deposit made by another person on behalf of a contractor will, on
fulfilment of the contract, be returned to the depositor.
c.
No security should be refunded till the particulars of the claim have been verified
with the receipt entries in the cash book or security register, the receipt
provided on the reverse of the No Demand Certificate, duly completed in all
respects, is signed by the depositor.
Notes 1.
When payment of securities is made to an official receiver
appointed by the court to manage the estate of a contractor adjudicated
insolvent, the order of the court appointing the individual as the receiver of the
contractor's estate and
88
the receipt given by the receiver on the reverse of the No Demand Certificate for
the assets made over to him would be a complete answer to any claim by the
contractor or a third person on his behalf.
2. If it appears to an Executive Officer, on receipt of an order of attachment, that
non-payment of moneys due to a contractor from Government would adversely
affect the continuance of services under contract, the executive officer will make
due representation to the court concerned with a view to obtaining a modification
of the order which will give authority to the Executive Officer to continue Payments
to the contractor as are necessary in the circumstances and, at the game time,
retain or pay into court a percentage of future sums accruing up to the limit of the
attachment.
74.
Vacation of Appointment. When a Government servant from whom a security deposit
has been taken, vacates his appointment on transfer or discharge, a final settlement statement of
his accounts shall be prepared and signed by him in proof of its correctness. If no debt to
Government is discovered, the security deposit may be refunded to him after a no demand
certificate is issued by the administrative authority concerned which should be done as soon as
possible, ie, ai.bc:Lr.-~counts have been audited. In no case security deposits shall be refunded
earlier than six months after vacation of appointment. Debts due to Government on account of
stores, etc, for which the security deposit was lodged, shall, if discovered, he recovered from
the security deposit.
Notes: 1
2.
The security bond should be retained permanently or until

it is certain that there is no further necessity for keeping it.
Without the special orders of the competent financial
authority no security deposit should be repaid or retrans
ferred to the depositor or otherwise disposed of except
in accordance with the terms of his security bond or agree
ment. An authority on returning any security to the de
positor should invariably obtain his acknowledgement
duly signed and witnessed. When an interest bearing
security is returned oi retransferred, the acknowledgement
should set forth full particulars of the security.
75.
Lapsed Deposits. The following procedure will be followed in regard to the disposal of
securities tendered as security deposit by contractors and which are not claimed by the
depositors after the termination of the latest contract in connection with which the security was
lodged:a.
Cash Security. At the close of each financial year all cash security deposits
remaining unclaimed for three years, exclusive of the year of deposits, shall be
transferred to-the credit of Government by the Audit
89
officer, who will inform the officer concerned in order that he may make the
necessary entries in his security register. Sums so credited shell not be refunded
without the sanction of the Controller of Accounts.
b.
General Promissory Notes. Deposit in general Promissory notes remaining

unclaimed for three years, exclusive of the year of deposit, shall be struck off
the books by transfer of the notes finally to the State Bank of Pakistan.
c.
Postal Saving Bank Deposits. If a depositor cannot be traced within four years
of the termination of the contract, the pass book together with a letter of
release, or, if the pass-book is not available, only the letter of release will be
sent to the Postal Audit Office concerned. In the event of a claim being
preferred later, it will be dealt with by the postal authorities.
d.
Postal Cash Certificates. If a claim is not received within three years after
maturity, or extended maturity, the cash certificate together with a letter of
release will be forwarded to the Postal Audit Office concerned for disposal.
The responsibility for dealing with claims preferred subsequently will rest with
the Postal Audit Officer.
e.
Bank Deposit Receipts. If a claim for refund is not received within a reasonable
time (say one year) of the termination of the latest contract in connection with
which the receipt was tendered, the amount will be realised on maturity and
credited to government. Subsequent claims for refund of the principal and the
interest actually realised will be disposed of under rule 73.
76.
Bank Securities. Securities furnished by banks shall be taken at their market value. In
the event of fluctuations in the market-value of security deposits lodged by private banks or
firms in respect of regimental funds lodged with them (vide relevant rules in AR (R) the
Controller of Accounts concerned shall in all cases review the position annually or, if he or the
depositor so desires, after an interval of six months from the date of deposit, or from the date of
the last review. In either case when a considerable difference in value has taken place, the
Controller of Accounts shall either call upon the depositor to make up the difference in value or
allow him a refund, as the case may be.
77.
Contract Securities. In the case of securities held by Government officers for any
purpose the following instructions shall be observed, namely: a.
In no case shall bearer bonds be held as security.
b.
When Government promissory notes are so held it is of great importance that a

Government officer shall not receive or in any way deal with such notes in his
official capacity if the title of the depositor is not absolutely clear or is in any
way defective. Before accepting such a
90
note, he must carefully scrutinize the endorsements on it. If he has reason to
think that any of the endorsements (ie, not only the last endorsement) is
irregular, or if, for any other reason, he is not satisfied as to the title of the
person presenting a note he shall refuse to accept it and shall instruct the
depositor to get it renewed by the State Bank of Pakistan. In performing this
duty the officer shalkin particular, satisfy himself that: (1)
The title of the depositor of the note is clear and indisputable, i.e, that he
is in fact the lawful owner of it.
(2)
All endorsements are on the note itself. An endorsement written on a

piece of a paper attached to the note is invalid and shall not be
recognised.
(3)
Every endorsement which consists of two parts, (a) the pay order,
containing the name of the endorse and (b) the signature of the endorser
is in order and is written clearly and legibly in one of the endorsement
cages provided on the back of the note.
(4)
No endorsement signed for any other person has been made on the
note as such as endorsement is invalid.
Note. The Government Securities Manual Chapter 5 contains full
instructions in this respect.
c.
Government promissory notes transmitted by post shall invariably be sent uncut

and insured as of the value of Rs 100.00 irrespective of their face value.
d.
Government promissory notes to be deposited with officer:(1)
For twelve months or less, irrespective of whether interest may or may

not be drawn by the depositor during the period of deposit.
(2)
For any period exceeding twelve months if the depositer does not
intend to draw interest during the period of deposit, shall be dealt with
as follows:(a)
The officer receiving the notes shall first satisfy himesif that the
notes stand in the name of the depositor (see sub rule b above)
and that the contract or other document executed by the
depositor conveys authority to Government to appropriate or
cancel the notes if the contract is not fulfilled.
(b)
The officer shall then lodge the notes for safe custody at
91
State Bank of Pakistan or the nearest civil treasury.
e.
f.
(c)
The notes shall remain in the name of the depositor and shall not
be endorsed to any officer of Government or converted into
stock.
(d)
The depositor may, in exceptional circumstances, he allowed to

draw interest on the note by tendering receipts in the usual form
countersigned by the officer with whom he has deposited them.
Government promissory notes, to he deposited with officers for more than

twelve months and if the depositor wishes to draw interest during the period of
deposit, shall be dealt with as below:(1)
The officer receiving the notes shall satisfy himself that they stand in the
name of the depositor (see sub rule b above) and that all interest,due on
them at the time, has been drawn. He shall then have the notes
endorsed by the depositor in favour of the Controller of Accounts to
whom he shall forward them.The Controller of Accounts shall
re-endorse notes which are deposited for five years or more in favour
of the State Bank of Pakistan and notes deposited for less than five
years in favour of the Treasury Officer of the nearest civil treasury and
forward them for safe custody to the bank or the treasury, as the case
may be.
(2)
Exception. It shall be permissible in the case of notes deposited for five

years or more (for the notes to be retained in the custody of the
Controller of Accounts). When this option is exercised the notes shall
be converted into stock certificates and to enable this to be done the
Controller of Accounts shall, instead of endorsing them to the State
Bank of Pakistan, endorse them in favour of the President and send
them to the nearest treasury on which they have been enfaced for
payment of interest. The notes shall then be converted into stock
certificates of the loans to which they pertain unless, at the written
request of the depositor, it is desired that they should be converted (in
cases where this is premissible) into stock certificate of other loans, for
instance, Government promissory notes of any of the nonterminable
prescribed percent loans may be converted into stock certificates of the
same or of any other non-terminable prescribed percent loan. In this
event they shall be converted into stock of the desired loans subject to
the rules and conditions contained in the Government Securities Manual.
The procedure laid down in sub-rule d shall apply mutatis mutandis in the case
of treasury bills deposited with a Government officer in his official capacity. A
holder of Post Office Cash Certificates may tender
92
them as security to any department of Government for their current value. Cash
certificates so deposited shall formally be transferred to the Controller of
Accounts with the sanction of the head postmaster, irrespective of the period
for which they are pledged, and shall be forwarded to the nearest treasury for
safe custody.
78.
Custody of Securities and Payment of Interest Thereon

a.
Post Office Savings Bank Pass-Books, deposit receipt of banks, fidelity bonds
and security bonds or agreements should be kept in the safe custody of the
authority which takes security.
b.
All the Post Office Savings Bank Pass-Books should be sent to the post-office
as soon as possible after the 15th September each year for effecting necessary
entries therein on account of interest.
c.
In the case of deposit receipt of banks, the depositor should receive the interest,
when due, direct from the bank on a letter from the pledgee authorising the
bank to pay it to him.
d.
Government promissory notes, Post-Office Cash Certificates and Pakistan

Defence Savings Certificates or Pakistan Savings Certificates, Municipal
debentures and Port Trust Bonds, deposited as security, should be lodged for
safe custody with the manager of the State Bank of Pakistan at places where
there are offices of that bank and with the district treasury in other places in
accordance with the rules in Chapter 5 of the Government Securities Manual.
e.
Interest in respect of promissory notes or stock certificates shall be periodically

distributed to depositors on receipt by the Controller of Accounts from the
State Bank of Pakistan or the treasury, as the case may be, subject to the
following, namely:-(1)
Deduction of income tax and surcharge at the maximum rate unless

exemption or abatement is supported by an exemption or batement
certificate granted by an income tax officer. The deduction shall be
made by the Controller of Accounts in the case of notes deposited with
thd State Bank of Pakistan and, in other cases, by the Treasury Officer.
The person deducting the income tax is required under the Income Tax
Ordinance, 1979 (XXX1 of 1979) to furnish to the person, to whom
the interest is paid, a certificate containing relevant details to enable him
to claim a refund, if necessary.
(2)
Deduction of commission at the authorised rate charged by the State

Bank of Pakistan for drawal and remittance of interest. This commission
is not charged in the case of security deposits
93
of Government servants and of banks holding regimental funds in
respect of securities lodged for such fund.
(3)
79.
In the case of security deposits of subordinates and contractors of

departments, which are allowed to make their own disbursements, the
Controller of Accounts shall issue authority to executive officers for
each depositor separately and the latter shall make the payment and
support such payments by the authority in original and the payee's
receipt.
General Promissory Notes- Return and Sale of

a.
When the return or sale of a promissory note is required application shall be

made to the State Bank of Pakistan or the treasury at which the note was
deposited for safe custody. In the case of stock certificates it shall first be
necessary to have them converted into promissory notes. The State,Bank of
Pakistan, a Treasury Officer or the Controller of Accounts shall act simply as
the agent of the officer who originally received the note and such officer is
responsible for taking action for the sale, realization or return of the securities in
accordance with the conditions of the endowment.
b.
In addition to any actual outlay in brokerage, a commission of prescribed

percent is charged by the State Bank of Pakistan for the purchase and sale of
promissory notes.
c.
When a promissory note dealt with under the exception to sub-rule d of rule 77,
is returned it will not be the identical note which was sent for custody, bx;t
another note of the same loan or of the loan into which the original note was
transferred.
d.
An officer applying for the delivery of a note shall always specify at what
treasury or sub-treasury he wishes it to be enfaced for payment of interest.
e.
If a depositor desires that the securities, to be returned to him, should be in the

form of a stock certificate, this may be arranged for through the State Bank of
Pakistan concerned.
80.
Provincial and lklunicipal Debentures and Port Trust Bonds. The bonds deposited
with Government officers shall be dealt with generally under the rules laid down for
general promissory notes. All such securities shall be forwarded to the Controller of
Accounts concerned who will draw the interest and pay or authorise the amount due to
be paid to the depositor.
81.
Bank Deposit Receipts. Bank deposit receipts should be made out in the name of and
forwarded to the Controller of Accounts for custody. Interest on bank deposit receipts
should not pass through Government accounts, but depositors
94
should make their own arrangements for receiving it, when due,. direct from the bank on
a letter from the officer who received the deposit authorising the bank to pay it.
82.
Savings Bank Deposits. In the case of savings bank deposits the depositor must
himself lodge the money in the savings bank and sign the necessary security deposit
form, obtainable from the post-office. He will then deliver the pass-book to the officer
concerned who will satisfy himself by an inspection of the entries on page 1, that the
amount deposited has been correctly pledged to the Controller of Accounts or to the
Military Estates Officer in the case of contracts executed by him Such securities cannot
be withdrawn from the savings bank without the written permission PAFZ-2141 of the
officer to whom the security is pledged. Should there be any claim outstanding against
the depositor the amount of such claim, if necessary, will be withdrawn by the officer
concerned and paid into the treasury to the credit of Government. The post-office will
pay the deposit money in whole or in part to officer to whom the security was pledged
even though the depositor refuses to surrender his pass-bobk.
Note:- In the case of casual labour employed on military farms (eg, munshis,
chowkidars, deliverymen and other casual labourers), any security required
from them will be recovered by the manager of the farms concerned in cash by
small monthly deductions from their pay. These deductions will be deposited in
the post office savings bank in the name of the employee concerned, the savings
bank account being pledged to the manager of the farm.
83.
Fidelity Bonds
a.
The standard form prescribed for the execution of a fidelity bond is that given in
Annex F, to this Volume (with necessary changes made when the bond is
individual and not collective) to which no variation should be accepted without
adequate reason.
b.
In cases where a fidelity bond of any approved insurance company is accepted,

under proper authority, in lieu of a cash security from a Government employee
holding an appointment for which such security has been prescribed, the officer
concerned shall, before accepting such a bond, have it scrutinized by one of the
authorities specified in AR(R) 389, with a view to the deleting unnecessary
reservations, eg, the insur ance company concerned having the right to insist
upon prosecution of the said Government servant in the event of his dishonesty.
The Government servant by an insurance copmpany is accepted , shall be
required also to execute a security bond tendering the fidelity bond as security in
lieu of cash. The standard form prescribed for the execution of a security bond
is that given in Annex F.
Note:- When a Government servant has furnished security in the form of
95
a fidelity bond the authority receiving the bond should see that the
Government servant pays the prernia necessary to keep it alive on the
due dates and continues to do so until a period of six months has
elapsed since he vacated his office. If the Government servant fails to
deliver the premium receipt to the authority in time he should be
removed from his post in accordance with the law.
84.
Security Deposits- Government Servants

a.
Security deposits in one of the forms specified in rule 72,as prescribed

hereunder, shall be furnished by Clerks /Cashier /Assistant Cashiers and
Storekeepers /Assistant Storekeepers, etc :(1) Remounts, Veterinary and Farins (Farm Section) :Rs.
(2)
(a)
Clerks holding public money. 500.00
(b)
Storekeepers (lower division). 1,200.00
(c)
Storekeepers (upper division). 1,500.00
Remounts, Veterinary and Farms (Remounts Section):(a)

(b)
(3)
1,500.00
500.00
Army Ordnance Corps:(a)

(h)
(c)
(d)
(e)
(f)
(4)
Godown overseers.
Clerks holding public money.
Storekeepers.
Assistant Storekeepers.
Store Supervisors.
Storemen.
Upper Division Clerks (Cashiers).
Lower Division Clerks (Assistant
Cashiers).
1,500.00
1,200.00
400.00
200.00
1,000.00
500.00
Electrical and Mechanical Engineering

Organisations:(a)
Storekeepers
500.00
96
(b) Cashiers
(5)
Rs.
1,000.00
Inspection and Technical Development Organizations :(a)

(b)
(c)
(d)
(e)
(6)

money less than Rs 10,000.00
money exceeding Rs 10,000.00
500.00
1,000.00
Storekeepers holding public stores

200.00
covering a risk up to Rs 20,000.00
Assistant Storekeepers holding public 200.00
stores covering a risk upto lls. 20,000.00
Storemen holding public stores
200.00
covering a risk upto Rs 20,000.00,
Medical Store Depots:(a)

(b)
(c)
(d)
Notes: 1 a.
Superintendents .
Assistant Superintendents.
Upper Division Clerks.
Lower Division Clerks.
750.00
450.00
300.00
180.00
Subject to any special rule or order made by the Government in this

behalf, every cashier, storekeeper and other subordinate who is
entrusted with the custody of cash or stores shall be required to furnish
security as set out in this rule and to execute a security bond setting
forth the conditions under which the Government will hold the security
and may ultimately refund or appropriate it.
b. No subordinate official shall be permitted to handle Government cash or

stores before he has furnished adequate security. Until such security is
furnished, the Head of the office or the officer nominated by him as
drawing and disbursing officer or officer incharge of stores shall be held
personally responsible for the safe custody of cash or stores.
2.
When an individual, who has furnished security, takes regular
97
leave or is deputed to other duty the officer who is appointed to
officiate for him should be required to furnish the full amount of security
prescribed for the post, unless a competent authority has authorised a
relaxation of the rules regarding security applicable to him.
b.
Subject to any special rule or order made by the Government in this behalf
Heads of Local Administration are authorised to exercise full powers under the
provisions of rules 71 to 84, as regards security deposits of Government
servants and others employed under them.
98
Notes: 1.
These rules shall not apply to MES contracts.
2.
The term "officers of the administrative services" shall includes

Commandants, Chief ordnance officers, Chief inspectors of
armaments, vehicles and engineering equipment, electronics and
instruments, District Remount Officers of areas, OC remount
depots and OC medical stores depots.
3.
The principles and instructions enunciated in these rules shall

apply to the Air Force except where they are at variance with
the special instructions contained in "Equipment Regulations for
the Air Force (AP. 830)".
85.
General Rules. For instructions and guidance in the making of contracts and the
principles to be observed in dealing with contractors, officers shall consult the "Manual for the
guidance of officers of ASC in their relations with contractors".
86.
Supplies and Services

a.
Supplies and, Services required to carry on the public business shall be

obtained ordinarily by contract on the authorised tender forms, but may also be
obtained as follows:(1)
In an emergency, for immediate delivery-by order given on PAFZ-2123

(Informal agreement).
(2)
When the amount are small and only required from petty dealers - on
verbal offers tendered at Public auction, after due notice on
PAFZ-2137 (Call for tenders), the offer accepted being recorded on
PAFZ-2125 or PAFZ-2125A.
(3)
By purchase either by the officer, of the administrative service

concerned, or the representative detailed by him when no tenders are
received or the tenders received are, in his opinion, unacceptable.
(4)
By special contracts, by purchase or in accordance with specia! orders

that may be issued to meet demands for supplies and services
occasioned by the existence of field service conditions.
(5)
In the case of fodder and dairy produce supplies may be arranged by

local purchase. The system of advertising for tenders shall, whenever
possible, be avoided. Dairy cattle shall be purchased by contract or by
local purchase, whichever is most suited to the locality concerned.
99
(6)
b.
87.
88.
By purchase, from time to time, of hospital requirements of ASC supply

for which the demand is so spasmodic that neither central nor local
contracts are desirable.
No contract will be concluded without calling for tenders except with the
previous sanction of the Government, but where the Jail or Forest Department
can supply articles equal in quality and at not more than the local-market rate, it
should be invited to undertake the supply and further tenders need not be called
for. In the case of building contracts pertaining to remount wing the DR~ may,
in exceptional cases and in consultation with the FA (Army) dispense with
calling for tenders for any work up to the value of Rs 20,000.00.
Commercial or Non -Government Concerns

a.
All contracts, agreements, understandings, etc, entered into by an officer with

commercial or non-Government concerns shall be recorded in writing and a
copy thereof, signed by both contracting parties, will be carefully riled.
b.
The officers who are making contracts are responsible for the correct wording
and framing of all conditions and specifications in the contract schedule
(PAFZ-2121) or in the case of transport contracts a cyclosty led schedule
attached to PAFZ-2121-A Special Conditions).
c.
In case of any doubt or when any new items have been embodied in the
schedule which did not exist in the previous schedules and which, it is thought
necessary for the Controller of Accounts to see from an audit or financial point
of view, the officers concerned may submit these forms to the Controller of
Accounts for remarks and sugges tions before tenders are invited. Every care
must be taken to avoid ambiguity or redundancy. No contract, involving an
uncertain or indefinite liability or any condition of an unusual character, should
be entered into without the previous consent of the competent financial
authority.
d.
Proposed' amendments to the printed forms PAFZ-2137-A, 2120 or 2124

must receive prior approval of the Controller of Accounts and sanction of the
Director concerned at General Headquarters or Air Headquarters, as the case
may be.
Arrangingof Contracts
a.
Officers entering Into the contracts are charged with the responsibility of making
all arrangements necessary to effect a contract and will, themselves furnish
intending contractors, with all the necessary information carefully guarding
against any interference on the part of their subordinates. No Government
servant shall become a party to a
100
contract nor stand as a surety for a contractor nor assist him in the preparation
of any tender or account.
b.
Contracting officers shall maintain a register of approved contractors. The ,

Controller of Accounts will notify to them, as soon as it comes to his notice,
anything that renders any contractor unfit to hold a contract. The officer will
investigate the case, and obtain the orders of his superior whether the contractor
is to be struck off the register or otherwise, notifying the decision to the
Controller of Accounts. The officers will give tender forms only to approved
contractors. A firm which, though not yet admitted to the register of approved
contractors, has submitted an application for admission thereto, may be given
tenders forms, but only on the under standing that such tenders will not be
considered unless the firm has actually been admit ted to the register before the
opening of the tenders in question.
89. Sanctions and Modifications of Contracts

a.
Sanctions:(1)
Contracts must be sanctioned by competent authority and once

sanctioned no contract rates may be increased without the sanction of
the next higher authority.
(2)
Any enhancements in contract rates sanctioned by a lower authority will

be communicated to the services headquarters.
(3)
The financial concurrence of the Controller of Accounts in his capacity

as financial adviser or the FA (Army) concered will invariably be
obtained in all cases of enhancement of contract rates.
Note.
b.
The provisions of this rule shall not apply in cases where an

enhancement of contract rates is due to customs or excise duty
being imposed or increased, or where provision exists in a
contract for the enhancement of contract rates
under specified circumstances. Enhancement of contract rates
may be sanctioned by the contract sanctioning authority (See
Annex H to this Volume).
Modifications:(1)
Modifications in the conditions of an existing contract which do not

involve an enhancement of the contract rates may be sanctioned by the
cqntract sanctioning authority, provided no extra expense to the State
be involved and that both parties to the contract are agreed, the
contractor's agreement being taken in
101
writing; but the competent authority shall consult the Controller of Accounts
concerned before sanctioning any modification and if there be any
difference of opinion between the competent authority and the
Controller of Accounts. The matter shall be referred, with full details, to
the next higher competent authority for decision. All amendments shall
be signed by both parties to the contract.
(2)
If at any stage, it is found that the terms of a contract are contrary to the
original intention or otherwise defective, steps should be taken forthwith
to revise it in a suitable manner
Note. - Acceptance of supplies, in excess of the quantity
ordered,will not be held to be a modification in the
conditions of a contract provided that the value of
the excess supply does not exceed five percent of
the original value. For acceptance of supplies in
excess of five percent of the original value, the
Controller of Accounts will be determined by the
value of original order plus the excess value. This
note shall apply to contracts made on an"as required"
basis.
90.
Articles of ASC Supply for Operations Not Tenned Mobilization. In the matter of
enhancement of contract rates the following is the chain of financial responsibility,
namely: Contract Sanctioning Authority Competent Authority to Sanction
Enhancement of Contract Rates
a.
Commander Log Area, Indep QMG or Corps Commander.

Bde, Div or Force Command
Northern Area
b.
QMG or Corps Commander
Ministry of Defence
Note
Intimation of enhancement of contract rates will be
made to General Headquarters. The concurrence of the Controller of
Accounts will invariably be obtained.
91.
Legal Representative of a Deceased Contractor

a.
Contract by a Minor Invalid. A contract cannot be made by or on behalf of a

minor.
b.
Contract by an Heir of a Deceased Contractor. In the event of death of a

contractor during the currency of his contract his heir, major or minor,shall not
be
allowed
to
continue
the
contract.
Such
contract
102
will, therefore, be deemed to have been terminated without penalty with effect
from the date of the contractor's death. Such termination will not affect the
liability already incurred by the contractor when he was alive.
Note: A minor attains his majority at the age of eighteen years unless he is under
the jurisdiction of the Court of wards, or a guardian of his property has
been appointed by any court, in which case he becomes a major on
completing 21 years.
92.
Estimating Requirements. Before advertising for tenders the officer concerned will
draw up a careful estimate of the probable amount of supplies for which he wants to contract,
with reference to past and future requirements. This estimate will be prepared from the forms
(PAFO-1361 or PAFZ-2131) in which are recorded the amounts of supplies made by
contract, purchase, or issue from stock or on the annual demands. These records also enable
the officer to watch the supplies under each contract, and to execute a fresh one, if rates are
favourable, in time to take effect as soon as the probable requirements under the existing
contract have been delivered.
93.
Irregular Concessions to Contractors. These should on no account be granted. If the
circumstances are likely to arise which must justify ex-gratia payments to contractors steps
should be taken to give such timely notice as would tend to reduce the amounts so payable.
Further, before making any such payments, the advice of the Solicitor to the Government of
Pakistan should be obtained in regard to the legal aspect of the case.
94.
Advertisements
a.
The advertisement calling for tenders for a contract should be published by any
or all of the following methods with reference to the importance of the contract
and the nature of the supplies:(1)
By advertisement in the Official Gazette and local papers,
English papers and, in the case of very important contracts, in the papers
of other Provinces.
(2)
By notice on PAFZ-2137, which should be forwarded to the
civil authorities to be . pasted in public places and circulated to likely
tenderers.
b.
Advertisements to tender and calls for tenders must be issued sufficiently

previous to the date, not exceeding weeks, the tenders wiR be opened as will
give prospective tenderers reasonable time to frame and submit their tenders.
Tenders should be opened on a date sufficiently previous to the date on which
the contract is to come into force as will enable the successful tenderer to make
adequate arrangements in time for carrying out the contract. The period
between the issue of the
103
advertisement or call for tenders and the date.from which the contract will come
into force, may be as much as six months ahead for very important contracts
and normally, not less than three months.
c.
In the case of RV&FC (Remounts Wing) tenders for supplies and services
required by depots and areas will be notified by the circulation of notice on
PAFZ-2137 to contractors on the approved list.
95.
Tenders. Tenders for all supplies for which a special form is not prescribed shall be
submitted on I'MZ-2120. It will be issued to tenderers free inlaccordance with the instructions
on I'MZ-2137. Before issue to tenderers the tender and~ schedules will be carefully filled in and
completed, leaving only the rates and the tenderer's signature to be added. Also see rule 87.
96.
Opening of Tenders
a.
Tenders should be deposited by tenderers, or if received by post by the officer

concerned, in a securely locked box of which he will keep the key or keys. No
tenders are to be received after the hour stated in the notice to contractors. At
the time fixed therein for opening tenders he will, in the presence of another
officer, scrutinize each tender and satisfy himself that the necessary earnest
money has been enclosed therewith and that the tender has been properly made
out in accordance with the instructions given in the tender forms and if all be
correct, initial and date the tender and allot to it a serial number. This serial
number and the rate given in the tender will then be entered by him in the
comparative statement of tenders (PAFZ-2125). He will show on the
comparative statement of tenders or on attached state ments the following data
(not applicable to contracts of DITD and RV&FC):(1)
Contract rates for the current and for the preceding two years (when
available).
(2)
Average civil local price current rates for the preceding two years
(when available), showing whether those be wholesale or retail. In the
case of supplies imported from outside the local area, civil price current
rates of the area from which they are imported will also be attached.
(3)
Separately for each tenderer, the full estimated cost of the tender or
tenders recommended for acceptance and of each lower tender-The
costs will be entered at the bottom of each tenderer's column on the
comparative statement.
Note. Sub-rules (2) and (3) are not applicable to contracts relating
to medical stores depots.
b.
The officer concerned will enter his recommendations (and reasons
104
for the same) in the comparative statement of tenders and send it at once with
all necessary attached documents and the tender or tenders (if any), of which he
recommends acceptance ( and the lower tenders, if any) to the competent
sanctioning authority who may, if he conf siders it desireable, obtain the remarks
of the Controller of Accounts (if not already obtained) before giving his
sanction.
c.
A tender for assorted supplies may be accepted in whole or in part the object
being to prevent a high rate being tendered for articles for which there is a large
demand and a low rate for those of which but small quantities are required.
Note:-In addition to the scrutiny over tenders prescribed by this rule, Audit Officers
have power to examine contracts and to bring to the notice of the Military
Accountant General, for the information of the Public Accounts Committee, any
cases where competitive tenders have not been sought, or where high tenders
have been accepted, or where other irregularities in procedure have come to
light.
97.
Errors in Tenders. Any tender which does not fulfil the conditions stated in the tender
form or notice to contractors may be rejected, but trivial omissions such as: a.
To tenderthe rates in words.
b.
To initial an~,lalteratio, in rates.
c.
To sign both tender and schedule (s).
may be corrected in the presence of the officer concerned and will be signed by both parties.
98.
Non-receipt of Tenders. If no tenders are received or if those received for any article
are not acceptable, the contract will not be readvertised except in very special circumstances,
eg, when collusion between tenderers is suspected or when by the adoption of such a course
material gain is likely to accrue to the State; but purchase may be resorted to. In the case of
unimportant supplies from petty dealers auction bids may be taken before resorting to purchase.
99.
Standing Security Deposit. It will be obtained from every contractor instead of
security deposit and earnest money. The decision regarding the amount of standing security
deposit and the amount and nature of contracts for which a contractor can be registered shall
rest with the Service Chief, who may delegate these powers to their subordinate officers. It shall
be liable to verification, forfeiture to the same extent and under the same conditions as are
applicable to security deposits and earnest money for individual contracts.
105
100.
Contract Deeds. The tender (PAFZ- 2120) becomes a contract on acceptance which
will be communicated to the tenderer on PAFZ-2124. A special form of contract deed
is not required except in the case of specially important contracts and it should then be
drawn up by the Government Law Officer, half of the cost of the deed being payable by
the contractor. A tender cannot be made,nor can a contract be signed, by an agent
unless he holds a power-of-attorney, expressly authorising him to do so.
101.
Power-of-Attorney. One or more contractors may employ an agent, duly authorised by

power-of-attorney (PAM-2133 and 2134), to act for them.
Note: Letters of authority may be regarded as legal powers-of attorney for
purposes of this rule only if they are properly stamped as powers - ofattorney under the Stamp Act, 1899 (11 of 1899).
102.
Duration of Contracts
a.
Contracts will normally be for the twelve months of the financial year only but
may be for shorter period. In the case of ASC contracts this period may be the
financial year or the calendar year whichever is applicable to a particular area as
the QMG may prescribe from time to time. If it be considered advisable in the
interest of the State, to conclude a contract for a longer period than one year
but not exceeding three years the sanction of the next higher authority shall be
obtained. For periods exceeding three years the sanction of the QMG,
theMGO, or the Surgeon General must be obtained.
b.
Sanction of the QMG is necessary prior to the conclusion of a contract for less
than twelve months in the case of ASC contracts.
c.
If it be in the public interest to extend the period of an existing contract, the

approval of the Controller of Accounts and the sanction of the next higher
authority is necessary even where there is no intermediate authority between the
one originally sanctioning the contract and those referred to in sub rule d ibid.
Such extension may be carried out either on the original contract or in the form
of a supplementary agreement which will be signed by the competent authority
after the sanction of the next higher authority, to the period of extension and the
terms, have been obtained.
d.
Sanction of the QMG, the MGO or the Surgeon General is necessary in the
case of further extension of a contract, the original period of which plus
extension has totalled three years.
Note:In the case of contracts, including extension thereof, sanctioned by a
Director at General Headquarters, the sanction of the QMG/MGO is not
required unless the period of the contract exceeds three years or unless an
existing contract is extended beyond a period of three years.
106
103.
Transfer of Contracts. When a contractor desires to transfer a contract, the party who
is willing to take up the supply should be called upon to execute a fresh contract
(PAFZ-2120).
104.
Supplies. All orders for supplies under a contract should be given on PAFZ2135, and
the contractor's acknowledgement therefore obtained. Supplies should be made at the
places provided for in the first schedule, but if this is to units direct they must be
tendered in the presence of a representative of the department concerned. Supplies
should be passed without delay, and any objection must be raised before the contractor
is granted a receipt. Except in the case of periodical supplies at short intervals when
accounts are submitted monthly, a contractor should he paid as soon as possible after
his supplies are accepted.
Note. Supplies of ration articles, made direct by contractors to the unit should,
as far as possible, be made in the presence of a representative of the
ASC. Although delivered direct, the ASC is responsible for the quality of
the supplies.
105.
Advances. Unless specially authorised by the Government no cash advances should be

made to contractors.
106.
Compensation for Breach of Contract.

a.
Under clauses 7 and 9 of the tender form a contractor, in certain cases therein
specified, becomes liable to pay to Government compensation for loss or
inconvenience that may result from his default or from the rescission of his
contract under clause 8. Full compensation need not be insisted upon for every
default and the officers should avoid exacting it for trivial shortcomings. A clear
breach of contract should not be passed over and the loss will then be assessed
as follows:(1)
If rejected supplies have to be replaced, the amount of the loss will be

any excess over the contract rate in the price paid for the supplies
together with reasonable compensation for inconvenience caused by the
default. If the contract has to be rescinded, a new contract for the
unexpired portion of the original contact should be concluded and if the
rates of the new contract exceed those of the old, the amount of the loss
sustained will be:(a)
The total extra expense incidental to the new rates, plus.
(b)
The extra expense incurred in carrying on the service by

purchase in the interval between the two contracts.
(c)
The cost incidental to effecting a new contract.
107
Note:-Otherwise the amount of the loss will be (b) and (c) alone, or this amount
less the saving resulting from the new rates if these are lower, The loss
for inconvenience will be assessed according to the circumstances and
the nature of the contract.
b.
The following officers shall exercise discretionary powers up to the limit given
below, in the matter of waiving compensation for loss due to the failure of a
contractor:Rs.
(1) QMG/Corps Commander (with the concurrence 1,00,000/_
of the Ministry of Finance (Military).
(2)
(3)
c.
A Divisional, FCNA, Log Area, With the

50,0001Indep Bde Commander, DlIV&F,
concurrence of
Surgeon General, DOS, DITD and
Regional Controller
Chief of the Air Staff.
of Accounts
concerned.
Surgeon-General (for X-Ray
stores only).
10,0001-
The amount recoverable from the contractor, or the orders of the CFA for
waiving the recovery thereof from the contractor shall be communicated to the
Controller of Accounts.
107. Interpretation of Contracts. Whenever an Audit Officer is in doubt as to the

interpretation of a contract he should seek advice of the Ministry of Justice and Parliamentary
Affairs (Justice Division).*
108. Recoveries from Securities, in Default. If the compensation exceeds the security the full
security may be withheld and the balance recovered from any moneys due to the contractor. If
the amount of the actual damage suffered under the terms of a contract, for which the contractor
is liable, is more than 75 percent of the security, the whole of it will be forfeited. If, however, the
compensation payable by the contractor is 75 percent of the security or less the balance will be
refunded to him. If the defaulting contractor be declared insolvent by a court of law the
unrecoverable balance of compensation may be written off under the orders of competent
financial authority.
109.
Payment of Bills
a.
All bills must be receipted by the contractor under the words "received
payment" and be endorsed by him in favour of the bank under a separate
signature. If the bank is a collecting agency and is not included in the approved
list of scheduled banks in Pakistan and exchange banks in foreign countries, the
contractor will be required,
108
in addition, to execute a power-of-attorney in favour of the bank. If the
collecting bank is a scheduled bank, payment may be made without a
power-of-attorney. If, however, it is financing bank, the contractor will have to
execute an irrevocable power-of-attorney or deed of assignment in favour of
that bank, provided that if a deed of assignment is executed, it shall specify the
debt and be stamped under the Stamp Act, 1899 or bear a certificate of
exemption from stamp duty from a competent authority. The power-of-attorney
or deed of assignment will be subject to the approval of Government.
b.
In such cases Government will not, as a rule, make any payment to the
contractors without the knowledge of the bank. If, however, the con tractor
presents a bill for payment direct and does not endorse it in favour of the bank,
while every effort will be made to secure payment to the bank.A payment to the
contractors will constitute a full acquit tance so far as Government is concerned.
The bank should be required to give a written acknowledgement of this
condition as part of the arrangement under which Government recognises the
power-of-attorney or the deed of assignment.
Notes: 1.
The above procedure shall not, in any way, affect the rights of
Government to deduct from bills (whether endorsed in favour of a bank or
not) any sums due to them from the contractors on account of penalties,
overpayments on the contract to which the bills pertain, or on any other contract with the Government.
2. Letters from contractors, forwarding powers-of-attorney or deeds of
assignment, should indicate whether the bank in whose favour such a
document has been executed will function as a financing bank or a collecting
agency.
109
CHAPTER 11 - REMITTANCES AND FAMILY ALLOTMENTS
110.
Family Allotments. The general rules regulating the payment of allotments of officers
and other ranks on field service are laid down in the Account~ Manual (War).
111.
Family Remittances
a.
Personnel Below Commissioned Rank. They, when ordered on field service

or service under peace conditions beyond the limits of Pakistan may make
remittances through the post-office to their families in Pakistan, free of charge
for postal commission in accordance with the arrangements detailed below:(1)
A register showing the number, rank and name of individuals making

allotments, the names and addresses of the allottees and the amount to
be paid monthly will be maintained by the Record Office concerned.
Any subsequent changes will be noted, the authority for the changes
being cited in the remarks column and filed separately.
(2)
The sum to be remitted on behalf of an individual in any month is strictly

limited to the amount of his full monthly pay and allowances. The sum to
be remitted must not contain any fraction of a rupee.
(3)
The amount of an allotment may be altered or a remittance may be

discontinued by the remitter on due intimation to the Record Office
concerned. The death of an individual, making an allotment, should be
reported as soon as possible to that office.
(4)
The Record Office concerned will send a detailed list of the payments
to be made to the respective Field Pay Office in sufficient time to enable
that office to issue payment authority by the first of the month following
that to which the allotments pertain. A separate cash-account will be
maintained for these transactions. Undisbursed amounts will be
refunded into the treasury. Amounts will be remitted by blue
money-orders with red printing.
(5)
Special care will be taken to give full names and correct addresses of
the payees in the money-order forms which will bear monthly serial
numbers and these will be sent to the post-office for issue together with
a list in triplicate (in quadruplicate if presented at a sub-post- office). All
copies of the list should be signed by the record officer concerned. No
change in the money-orders, or in the list, will be made once these have
been accepted by the post office. The money-orders and the lists will
be accompanied by a cheque for the total amount of the money-orders
plus money order commission. The original copy of list will be receipted
by
110
the post -office and returned to the Record Office in place of the usual
individual money-order receipts granted by the post office. Payees'
receipts will be watched by the Record Office and on receipt will be
securely recorded in a guard file in consecutive order.
(6)
The amounts of any money-orders which cannot be disbursed will be

refunded by the post-office in cash to the Record Office, which will be
remitted into the treasury. The receipt and disposal of such amounts will
be recorded in the appropriate columns of the family allotment register
(PAFF-1078).
Note: 1.
Cheques issued in settlement of family allotment
money-orders should, in all cases, be made payable only to
the head Postmaster within whose jurisdiction a sub-office
lies.
2. The total amount of the remittance paid in any month will be
credited in the accounts of the unit, supported by statements
in family allotment form (PAFF-1000) for the credit.
b.
Persons other than personnel below Commissioned Rank may remit, monthly to
their families by free postal money orders, sums not exceeding their monthly pay
and allowances for the month of remittance. Such money- orders will be
accepted by the post-office without payment of commission, if endorsed by the
officer under whom the individual is serving with the following certificate; -
CERTIFICATE
"Certified that the remitter is entitled to make this remittance which does not
exceed his pay and allowances for the month of remittance."
c.
They will submit applications on PAFF-1000 for the remittances desired to be

paid monthly on their account to the Controller of Accounts at the base who
deals with their pay accounts in the case of field service or the Controller of
Accounts of the division log area in Pakistan from which they proceeded in the
case of service under peace conditions beyond the limits of Pakistan and who
will arrange the remittance in communication with the officer under whom the
men were last serving in Pakistan on the general procedure indicated in a above.
A remittance may be discontinued or the amount thereof may be altered on due
intimation being given by the individual concerned through the officer under
whom he is serving to the Controller of Accounts concerned. An intimation will
be sent by those officers both to the payee and to the remitter.
111
d.
The death should be reported immediately by the officer under whom he is

serving to the Controller of Accounts through the Accountant General's office at
the base in the case of field service.
Note: To facilitate the payment, the service books of such persons as are
supplied with them should be carefully completed on mobilization with all
particulars required to ensure the correct preparation of money- orders.
When endorsing money- orders the officer, under whom the person is
serving, will see that the names and addresses of the remitter and payee,
as shown in the service book, are clearly entered on the money-order.
112.
Remittance of Credit Balances

a.
Meld pay offices may also make remittances to the families of personnel below
commissioned ranks from the credit balance of their accounts through the
Post-office free of charge. Such remittances can only be made at the specific
request of the person concerned and no one will be allowed to make such
remittances more than once in every three month..
b.
The amount of this special remittance will be included in the next monthly
remittance, under rule 111a, following the receipt of the request from the field
and the detailed statements will be endorsed to the effect that(1)
The amount does not exceed the credit balance at date of the men
concerned.
(2)
That no special remittance has been made on their behalf during the
preceding three months.
112
CHAPTER 12 -MISCELLANEOUS PROVISIONS
113. Accounts. Every officer should bear in mind that his accounts form a unit of the entire
system of military accounts, and that mistakes made by him do not affect his own accounts
alone; it is, therefore, necessary that each officer should satisfy himself before despatching his
account that it is in strict accordance with the orders issued for his guidance. Anything of the
nature of a local fund, unless specially authorised, is prohibited. All monthly account will bear
the date of the last day of the month to which they relate. All accounts and returns will be endorsed on the back with the date of despatch.
114. Statistics of Expenditure. The duty of preparing all statistical returns of expenditure
rests with the MA Dept but the Controller of Accounts is at liberty to call on executive officers
for any statistics or assistance he requires when the necessary information is not available in his
own office.
115. Cash and Store Dansactions. All cash and store transactions, to which an individual in
his official capacity is a party must be brought to account and the appropriation of each receipts
to meet expenditure, except when specially authorised, is strictly prohibited.
116. Responsibility for Expenditure. All receipts and charges should, as far as practicable,
be brought into the accounts of the financial year to which they pertain. It will be the duty of
every disbursing officer to pay all outstanding claims against Government and all payment due in
the current year and chargeable to the accounts of that year before the end of June while every
officer will at all times and specially when field operations are in progress, ascertain what
liabilities are likely to be incurred and get them settled with the least possible delay.
117. Ractions in Amounts. In the discharge of all claims against Government payment is to
be made down to the nearest rupee.
118.
No Demand Certificate
a.
Every person who proceeds or is about to proceed on leave pending retirement

or leaves his appointment on retirement, resignation or on being placed on half
pay or who, being in charge of cash or stores, proceeds on leave or furlough
ex-Pakistan, when, with reference to rule 61 Last Pay Certificates are not
required to be issued, must obtain a no demand certificate (PAFA--450) before
he hands over his duties. Ordinarily no person will be allowed to leave Pakistan
until the no demand certificate is produced.
b.
The officer commanding or the local Head of the Department under whom the
person concerned is serving, will immediate prepare PAFA 450, completed in
so far as regimental and public claims are concerned, and clearly endorsed as
final no demand certificate or final certificate of demand outstanding and will
submit it to the Controller of Accounts
113
responsible for the disbursement of his pay. The Controller of Accounts, after
cheek and amendment where necessary will forward it to the Pakistan embassy
concerned. AR (1) 170 also refers.
c.
The submission of a "No Demand Certificate" (PAFA-450) is not necessary

when an officer, after resignation or retirement from the service, is immediately
re-employed as a commissioned officer in an other branch of the service, any
outstanding demands against him being noted on his last pay certificate or
otherwise will be communicated to his new unit or formation, for necessary
adjustment.
Note: The issue of pay or half pay, as the case may be, beyond a period
of six months is dependent on an officer obtaining within that period the
prescribed no demand certificate.
119
Submission of Claims. Claims of officers other than monthly emoluments employed will
be submitted to the Audit Officer concerned through the officers under whom they are
serving. Claims arising from service or leave ex-Pakistan should be submitted to the
embassy concerned.
Note. Claims relating to arrears of pay which may have become due to
officers while out of Pakistan will, if preferred by them on their return to
Pakistan, be submitted to the Controller of Accounts in whose payment
they are.
120.
Arrears. All arrears against the Government should be brought forward in the month in
which they are incurred, and in the case of daily supplies in the month following that to
which they pertain. When arrears are brought forward which are over one month in
arrears, officers claiming the arrears will explain the cause of delay on the vouchers in
which such arrears are charged. The explanation should be concise and under a
separate signature.
121.
Contributions. Donations and contributions to funds will be deducted from the

pay-bills of the individuals concerned, and they are responsible for the proper payment
of such donations and contributions.
122.
Broken Periods. When salary or allowance is fixed at a weekly or monthly rate, the
broken period will be computed on the basis of the number of days in the week or in
the month in which such broken period occurs.
123.
Line Funds
a.
The rules in regard to the disposal of stable litter are contained in AR(I) 521.
b.
Litter funds accruing from the sale of litter are authorised for all units, and will be
used to meet the cost of petty improvements to unit lines, purchase of seeds
(flower, garden and vegetable ) purchase of fuel for boiling animals' feed in AT
units, purchase of cleaning material for
114
leather equipment and accoutrements, training animals, improvements to riding
schools chappars, paddocks, litter carts, military displays, prize for authorised
competitions and animals shows which would tend to improve the physique of
the men and the care of animals and equipment.
c.
Sanction of the formation commander will be obtained before any expenditure is

incurred in connection with military displays, prizes for authorized competitions
and animals shows. Expenditure relating to any form of amusement or
entertainment for the benefits or personnel will not be met from this fund.
d.
Each unit will maintain a separate litter fund account which will be administered
and audited in accordance with the rules applicable to the accounts of
regimental funds (see AR(R) 462-465).
124. Rates -Army Remount Stores
125.
a.
Rates for stores purchased by remount depots will be fixed by officers

commanding at the time of ordering purchases, and immediately entered in the
office rate book and in supply orders. A list of the rates passed will be
furnished, quarterly on the 10th of January, April, July and October to the
Director of Remounts, Veterinary and Farms. On each bill a certificate must be
furnished that the rates therein charged have been compared with those entered
in the office copy of the supply order or office rate book.
b.
The Director Remounts, Veterinary and Farms, is responsible that the rates
passed by officers commanding are not excessive. He will compile a quarterly
statement of these rates and circulate it to his executive officers as a guide to the
rates prevailing in other depots. Copies of this list will also be furnished to the
Audit Officer.
Rationing of Animals Transferred from Army Remount Depots

a.
The grain and fodder required for the journey of animals transferred from one
remount depot to another or from remount depots to railhead will be supplied,
according to 'Scales of Rations and Supplies' issued by the ASC, by the depot
from which they are transferred; from rallhead the unit concerned will make
necessary arrangements for rations of the animals for the onward road journey.
The OC remount depot concerned, when handing over forage for the animals,
may exercise his discretion as to whether a smaller or larger scale of forage is
necessary subject to the limitations imposed by 'Scales of Rations and Supplies'.
The Remount Depot concerned will give to the escorting party a statement on
PAF(RD)-8, showing the description and quantities of articles or rations handed
over to the latter and the scale at which these are to be issued daily during the
journey to each class of animal taken over, and will send a copy direct to the
OC Remount
115
Depot/unit, together with receipt and issue vouchers (PAFZ-2096) for the forage
handed over. The receipt and issue vouchers will also include the packing
material used. The animals concerned will be struck off the returns of the
remount depot on and from the date of their being handed over and will be
brought on to the receiving returns from that date. The OC Remount Depot unit
will return the receipted voucher to the OC remount depot concerned, and will
give credit for the quantities of rations received by the escorting party and strike
off the quantities issued on the journey, from his Ration and Forage Return
(PAFS1519-A).
b.
In the case of issue of animals from one Remount Depot to another the
escorting party will be supplied by the issuing depot. In the case of issue of
animals to units, the escorting party will be provided by the units concerned.
126.
Financial Irregularities. The responsibility for disciplinary action in cases of financial

irregularities rests with the administrative authorities and ultimately with Government.
These authorities will inform the Audit Officers affected of the exact nature of
disciplinary action taken by them.
127.
Control and Inspection of Accounts. Controller of Accounts will examine and control all
the offices of account, disbursement or issue in their account area, and will arrange for
the prescribed periodical inspection or local audit of the accounts of such units,
formations, etc, as they may select.
128.
Income Tax. Any leave or deputation salary drawn outside Pakistan shall be subject to
deductions of Pakistan income tax and super tax at the rates which would have been
applicable if that salary had been drawn in Pakistan. All valid deductions will be made
regularly from the pay and allowances of all officials who proceed over-seas and only
the net amount will be paid to them in the currency of the country of deputation or leave.
For detailed rules regarding income tax, see Income Tax Manual.
129.
Leave and Pension Contributions. The leave and pension contributions and their
recovery in respect of the military officers and other ranks, lent on foreign service, shall
be regulated by the Fundamental Rules.
130.
Haircutting and Washing Services. Orders regarding provision of haircutting and

washing services to troops are contained in Annex J.
116
Annex A
To Rule 9
CATEGOR IES OF CASES REQUIRING PRIOR REFERENCE TO
THE GOVERNMENT
1.
Introduction of new, or revision of existing terms and conditions of service of personnel,
scales of pay, allowances, passages and pensions, unit, or contract allowances, scales of rations
and clothings, scales and specifications of accommodation and furniture scales and rates of
living accommodation, 'TO&Es and scales of reserves.
2.
Determination of the period for which GS reserves are to be maintained.
3.
Creation of new posts of Lt Col and above and civilian officers of BPS 17 and
above.
4.
Grant of advance increments.
5.
Variation in purchase procedures laid down by Government.
6.
Proposals in respect of receipts and their utilization.
7.
Conditions governing sale or disposal of capital assets.
8.
Variation in the rules relating to payment rates and free issue rates of stores,
clothing and rations and in the rates of recovery for services rendered to
non service department.
9.
Any inter-service matter having financial implications.
10.
Negotiation relating to foreign aid, credits and barters.
11.
Relaxation of rules and regulation laid down by the Government.
12.
Accounting and financial rules.
117
Annex B
To Rule 21
ACCOUNTS AREAS
1.
2.

a.
Head of Military Account Department.
b.
Compilation of Defence Services Receipts and Expenditures.
c.
Conduct of Local Audit of Defence Services expenditure and rendition

of general statement of account reports.
d.
Consolidation and submission of Appropriation Accounts, Annual Review

of Balances, Finance & Revenue Accounts, Consolidated Balanced Account
and other Annual Accounts as heretofore.
e.
Assisting Secretary General Defence before Public Accounts Committee
f.
Preparation of Pension Budgetary figures in respect of three Services

and Civilian Pensioners of the Defence Services and submission thereof to
Ministry of Defence.
g.
Rendition of audit reports on cases referred by Ministry of Defence,

Finance and Service Headquarters.
h.
Audit interpretations.
j.
Framing, up dating and revision of Account Codes and Manuals.
k.
Monitoring of Controllers working through reports and returns and

inspections.
1.
Co-ordination of accounting and audit matters of the three services.
m.
n.
Recruitment, training, promotions and departmental examinations for all

departmental grades.
Administration of. Military Accounts element of Accounts Group.
o.
Welfare measures for PMAD.
P.
PMAD Budget.
Service Controllers (CCMA (GHQ)/CAAF (GHQ)

a.
CCMA (GHQ).
118
(1) Scrutiny of all army accounts.
(2) Checking/scrutiny of defence service regulations.
(3) Scrutiny of family pensions.
b.
CAAF(AHQ), Peshawar.

to air force heads in respect of all units/
formations in Pakistan less person of civilian
paid out of defence services estimates. Pension
of PAF officers/personnel below commissioned
rank in PAF.
3.
CMA(RC), Rawalpindi.
4.
CMA (Lahore Command),Lahore.
5.
CMA (Karachi Command)Karachi.
6.
Controller of
Accounts and audit of all receipt /expenditure
Accounts (DPP&ISO), pertaining to DMISO Heads in respect of
Rawalpindi.
all units/formations and local audit of their
units/formations.
CMA (0), Rawalpindi. Pay, TA and pension accounts of all Army
Commissioned Officers/AFNS in Pakistan.
7.

located in the NWFP, Northern Area, BDA,
Peshawar, Mardan, Risalpur, Nowshera, Bannu,
Kohat, D I Khan and stations from Attock to
Jhelum of Punjab Province except Pay/TA
accounts of service officers and personnel
below commissioned rank.
located in the Punjab from Kharian to Ralim
Yar Khan.Transactions with Pakistan Railways
for movement of Army are also dealt with
centrally in their command.
to Army Heads in respect of units/formations
located in the Sind3and Baluchistan Provinces.
8.
CMP, Lahore.
Pension accounts of all civilian ofricers/staff in

respect of'Defence Services in Pakistan and PMAD
officers/staff.
9.
CMA (FC), Lahore.
Pay, pension and TA accounts of all personnel
below commissioned ranks in respect of

Pakistan Army.
119
10.
CLA (DS), Lahore.
11.
CMA, (FWO).
12.
COFA.
Local audit of all units/formations of Army/

Air Force in Pakistan less units/fonnations of
DPP&ISO, FWO and Ordnance Factories.
All accounts in respect of Frontier Works Organization and their local audit.
b.
c.
d.
e.
f.
g.
h.
j.
13.
CMA (DP), Rawalpindi.
a.
expenditure
of labour employed in the
factory in connection with production.
Audit payment and compilation of pay,
TA and other claims of personnel borne on
estb sanctioned by
Government or DOF.
expenditure
on store and departmental
work.
Audit of store accounts.
Audit of P and M and building accounts.
Control over production programme.
Realization and audit of rent and allied
charges.
Audit and allocation of labour material
and over head charges and
compilation
of cost of production.
Preparation
of priced store account,
manufacturing account and balance sheet
annually.
Maintenance of accounts in respect of Defence

Procurement (Army/Air)
120
Annex C
To Rule 31
FORM OF REGISTERS TO BE MAINTAINED BY CONTROLLING AUTHORITIES FOR WATCHING EXPENDITURE AGAINST ALLOTMENT
1
Main Head
Sub Head
Register to be maintained by primary controlling authority for watching expenditure against allotment
Allotment
Minor Head
Control Head
Allotment for the year

Reference
Amount of
Original
Allotment
Subsequent
Charges
+ Increase
- Decrease
g
Total
121
EXPENDITURE -PART A
(As recorded by the controlling authority)
2
ul
r
otal for the

month
rogressive
total to end
pf the month
alance
allotment
of
ug
mt
ep
mt
mt
ct
r
ov
mt
mt
ec
r
mt
an
r
mt
eb
r
mt
ar
r
pr
mt
mt
ay
r
mt
un
r
mt
122
EXPENDITURE -PART B
(As reported by DM Section of MAG through the monthly expenditure statements)
1
2
Jul
Aug
Sep
Oct
Nov Dec
Jan
Feb
Mar Apr
May
Jun
Total for
the month
Progressive
total to end
of the
month
Balance of
Allotment
INSTRUCTIONS
1.
This register will be maintained by all primary controlling authorities.
2.
Amounts should be rounded off to the nearest rupee for purposes of completing this
register.
3.
All abnormal items will be underlined in red ink so that by deducting such items, from
the progressive total, the monthly average normal expenditure can be ascertained.
Allowance must also be made for known or anticipated abnormal items likely to come
forward in the remaining months in considering the adequacy or otherwise of the
unspent balance of the allotment.
123
2.
ment received
from............
His No......... ...
Budget Allotments Register
Bedget Allotment Register

Main Head
...
Sub-Head..........
Control Head ..............
under
Dated
Subsequent
Month
Authority
to whom
Allotted
a
Month
Original
Allotment and
distri-bution
Amount
+Increase
-Decrease
Allotment
as Modified
to Date
Modifications
Month
Month
Amount
+Increase
-Decrease
Allotment
as Modified
to Date
Amount
+Increase
Decrease
g
A llotment
as
Modified
to Date
h
Amount
+Increase
-Decrease
Allotment
as Modified
to Date
Partticulars of
Additional allotment,
or surrenders of Reappropriations
124
INSTRUCTIONS
1.
This register will be maintained by all controlling authorities who distribute allotments to other controlling authorities.
2.
The initial distribution of the total original allotment and the amount retained in reserve will be entered in
columns a and b.
3.
'Me succeeding columns are provided for the purpose of recording (1) changes in this initial distribution and (2)
additions to or reductions in, the total original allotment, whether by supplementary grants from higher controlling autho
rities, surrenders or Re-appropriations.
4.
It is made clear that mere changes in the distribution of the original allotment within a control head will not effect the aggregate amount of the allotment
(including the portion held in reserve). Additions to or reductions in the original allotment will cause increases or decreases in the total allotment and the
amounts of such increases or decreases will be brought out in the totals of the odd numbered columns concerned.
5.
Reference will be given in column 1 to the authority for the additional allotment, surrender, or re-appropriation, as the case may be.
125
Annex D
To Rule 42
INSTRUCTIONS FOR THE GUIDANCE OF OFFICERS WHO ARE REQUIRED
TO MAKE PURCHASES OF STORES UNDER THE PROVISIONS OF THE
RULES FOR THE SUPPLY OF ARTICLES REQUIRED FOR THE PUBLIC
SERVICE
PREAMBLE
1.
The policy of the Government is to make their purchases of stores for the public service
in such a way as to encourage the development of the industries of the country to the utmost
possible extent, consistent with economy and efficiency and the following rules which are
applicable to the purchase of stores (other than printing and stationery stores) for the
Government are prescribed in accordance with this policy.
2.
In order to give effect to the above policy preference in making purchases will be given
in the following order, namely.Firstly, to articles which are produced in Pakistan provided that the
quality is sufficiently good for the purpose.
Secondly, to articles wholly or partially manufactured in Pakistan
from imported materials provided that the quality is sufficiently good for the purpose.
Thirdly, to articles of foreign manufacture held in stock in Pakistan
provided that they are of suitable type and requisite quality;
Fourthly, to articles, manufactured abroad which need to be
specially Imported.
3.
Ministries or officers specially authorised in this behalf, may, when they are satisfied that
such measure is justified, allow a limited degree of preference in respect of price to articles
produced or manufactured in Pakistan either wholly or in part.
4.
The difference in the character of the preferences which may be given should be
carefully noted. In the case of the first two categories mentioned in Paragraph 2 above the
condition is that the quality is sufficiently good for the purposes and for the third category that
the articles are of suitable type and requisite quality. This means that articles coming under the
first two categories, should be accepted unless it is considered that the quality is definitely not up
to the standard required even though imported articles may be considered to be of better
quality.
5.
The other kind of preference referred to in the revised rules is a price preference. It is
enjoined that a limited price preference may be given to indigenous articles either wholly or in
part by officers specially authorised. It should be noted that no price preference should be given
to articles failing in the third category over those which come within the last two categories.
126
6.
A strict comparison with prices prevailing abroad is not required. But the underlying principle is
that the preference to be accorded to indigenous products or to imported stocks is to be
tempered the consideration of economy.
7.
The degree of price preference that may be allowed to indigenous products has not been
specially provided for in the rules because the Government intend to retain entirely in their own
hands, for the present, the power to grant such a preference. Ordinarily a limited degree of price
preference in favour of indigenous articles will be justified for one or other of the following
reasons, namely:a.
When the industry in question is expected to fill a vital gap in the economic life
of the country and is likely to take a firm root in the soil in the near future.
b.
Strategical Necessity.
c.
To prevent any sudden dislocation of the labour market on a large scale.
d.
To regulate and control foreign competition especially during periods
of temporary trade depression abroad.
8.
Every proposal for the grant of a price preference should be referred by the purchasing officer
concerned, through the proper channel, to the Ministry of Defence. The latter will, before
passing final orders, consult the Ministry of Industries. It will devolve on the latter to co-ordinate
the action to be taken under this head by the different departments of the Federal Government.
Rule 1. Save as provided in paragraphs 7 and 8 all articles required to be purchased
through the Ministry of Industries, shall be purchased on the condition that
delivery shall be made in Pakistan for payment in rupees in Pakistan.
9.
It should be carefully noted by all purchasing officers that under the revised rules the purchase
of all indigenous articles (with the exception of the classes of stores specified in paragraphs 7
and 8) is obligatory.
10. It should be clearly stated in all invitations to tender, issued by purchasing officers that tenders
must provide in their tenders for delivery in Pakistan and that payment for the articles will be
made in rupees in Pakistan.
11. With reference to the principles of preference enunciated in paragraph I, tenderers should be
requested to furnish information in regard to the country of manufacture and/or origin of the
material used in the manufacture of the articles.
12. Purchasing officer may exercise full discretion regarding the point or place of delivery to be
specified in their invitations to tender. They may specify CIF, or FOR, port in Pakistan, FOR,
place of despatch, in Pakistan or Free Delivery receiving
127
station in Pakistan. Where tenders are invited for plant and equipment in which the
erection of the plant at site is to be undertaken by the successful tenderer, appropriate
terms in regard to delivery at site should be included in the invitation to tender or in
general specification
13.
When specifying the point or place of delivery purchasing officers should endeavour to
lay down terms which will give all tenderers equal opportunities to put forward their
lowest prices. For instance, in many cases tenderers abroad may be unable to tender
for delivery FOR, port in Pakistan or Free Delivery receiving station in Pakistan and
may only be able to tender on the basis of delivery CIF, port in Pakistan, with payment
in rupees in Pakistan, against shipping documents. Such tenders should be considered
as coming within the meaning of rule 1 and should be accepted if satisfactory in other
respects.
14.
Except in special cases full payment for the stores should not be made against shipping
documents but only after delivery of stores has been taken by the receiving officer and
they are found to be satisfactory in every respect.
Rule 2. Indents for stores the value of which does not exeed Rs 500/-, will not be paid
on the purchasing authority mentioned in rule 1, except:
a.
Where rate and running contract exists.
b.
The stores cannot conveniently be obtained by the indentors
direct.
15.
In the case of indents failing within the exceptions mentioned above the exception, under
which the particular indent falls, should specifically be mentioned on the indent and in the
case of the exception at b details of the efforts made by the indentors to secure the
supply from the market should be stated.
Rules 3.
Tenders shall be invited in Pakistan for the supply of all articles
which are purchased under rules 1 to 4 unless the values of the order to
be placed is small or sufficient reasons to be recorded exist which
indicate that it is not in the public interest to call for tenders. No tender
which fails to comply with the condition as to delivery and payment
prescribed in rule 1 shall be accepted.
16.
If the response to any invitation to tender indicates that owing to inadequate publicity or
some other reason favourable tenders have not been received, then fresh tenders should
be invited and measures taken to bring the invitation to tender to the notice of all
possible tenders.
17.
It should be made clear on every tender form that the stores must be Delivered in
Pakistan; that payment will be made in Pakistan in rupees and that any tender which
does not comply with these conditions will not be considered. Tenderers abroad should
also be required to specify their agents in Pakistan through
128
whom delivery will be arranged and payment received and who, when so required, will
arrange for erection at site and for the carrying out of such tests on completion, as may
be specified in the contract.
18.
No account adjustments will be made between the High Commissioner's office and the
Purchasing Department in Pakistan for the value of tender forms sent to High
Commissioner and issued on behalf of the purchasing authorities in Pakistan and the
expenditure on advertisements, postage and other charges in the High Commissioner's
office.
19.
When considering the desirability of calling for tenders abroad it Itioro what that
purchasing officers in Pakistan should bear in mind the necessity of allowing sufficient
time for the receipt and publication of invitations to tender, the receipt of the tender
forms by tenderers, and the preparation and despatch of the tenders to Pakistan.
20.
Rule 3 does not preclude the use of limited or single tenders, not does it require that
tenders should be called for where it is clearly not in the public interests to do so. The
following procedure for obtaining tenders should be followed as far as practicable.
Tenders should be obtained:a.
By advertisement (open tender).
b.
By direct invitation to a limited number of firms (limited tender).
c.
By invitation to one firm only (Single tender or private purchase).
21.
The 'open tender' system ie, invitation to tender by public advertisements should be
used as a general rule and must be adopted subject to the exceptions noted below in all
cases in which the estimated value of the tenders to be received in Rs 50,000/-- or
over.
22.
The 'limited tender' system should ordinarily be adopted in the case of all orders the
estimated value of which is less than Rs 5,000/-.
23.
For the purpose of the limited tender and single tender procedure the purchasing
officers will maintain a list of firms, both Pakistani and foreign, of known reliability who
have been able to satisfy them that they possess the necessary equipment and facilities
for the supply of stores which they offer. The list should be subjected periodically to
examination and revision and any application from a firm for inclusion in the list should
be considered on its receipt. Before the name of firm is added to the list such enquiries
as may be considered necessary should be made by the purchasing officer to ascertain
the ability of the firm to execute contracts satisfactorily. From this list the names of firms
to be invited to tender should be selected.
24.
Such a list is already maintained by the DGS&D who will, on receipt of a request,
furnish purchasing officers with such information as he may possess regarding
129
the capability and standing of any firm approved by him.
25.
The 'single tender' system may be adopted in the case of small orders, or when the articles
required are of a proprietary character and competition is not considered necessary. A 'small
order' shall be interpr5ed to mean for this purpose an order the total value of which does not
exceed Rs 250/-. In all such cases the purchasing officer should consider whether it is not
feasible to enter into a rate or running contract for the articles in question or to utilize the rate or
running contracts entered into by the DGS&D.
26.
The 'limited tender' system may be adopted instead of the 'open tender' system even
when the estimated value of the tenders to be received is not less than Rs. 5,000/- in the
following cases, namely:a.
When sufficient reasons exist which indicate that it is not in the public interest to
call for tenders by advertisement. In every such case the reason must be
recorded by the purchasing officer and communicated to the Accounts Officer
and Audit Officer concerned, confidentially if necessary.
b.
When the indenting officer certifies that the demand is urgent and an additional
expenditure involved, by the elimination or open competition, must be incurred.
In all such cases the indenting officer must place on record the nature of the
urgency and why the demand could not be anticipated.
27.
When tenders are invited by public advertisement the issue of the tender forms need not
be restricted to firms whose names are on the list of approved contractors. Firms not on the list
should, on enquiry, be informed that they are at liberty on payment of the prescribed fee to
tender for advertised requirements. When a tender, which appears to be satisfactory, has been
received from an unknown firm steps should be taken before any order is placed to ascertain
whether the firm is capable of executing the work in a proper manner, if the enquiries prove
satisfactory the order or a portion of it may be placed with the firm. If the order or the portion
thereof is satisfactorily executed the name of the firm should be added to the list of approved
contractors.
Rule 4. All articles, whether manufactured in Pakistan or abroad, shall be
subject
to inspection before acceptance, and articles for which specifications
and/or
tests have been prescribed by competent authority shall be required to conform
to sudh specifications and/or to satisfy the prescribed test or tests which may be
carried out during manufacture or before or after despatch from the suppliers'
premises.
Rule 5. In the case of important construction works let out on contract, articles required
for the construction of such works, may be supplied by the constructing firm
provided that when specifi.
130
cation andlor tests have been prescribed for such articles they shall conform to
such specifications andlor shall satisfy such tests.
28.
The object of rules 4 and 5 is to emphasize the importance of ensuring that articles
purchased for the public service conform to the specifications which may be prescribed
by competent authority, and the necessity for careful inspection of all stores before
acceptance. The appropriate specification should be annexed to or quoted in the
invitations to tender and it should be stipulated in the conditions of contracts that the
articles supplied will be subjected to inspection and or test prescribed in the
specifications before acceptance.
29.
When tenders for important construction works are invited the officer concerned should
also stipulate in the invitations to tender that the articles, required for the construction of
such works must comply with the specifications prescribed for such articles. The articles
should be inspected and or tested in accordance with the provisions of the specifications
before acceptance.
30.
All purchasing officers should pay special attention to these points and should takes
steps to ensure that adequate inspection arrangements are made in each case.
31.
When articles are obtained from abroad which require inspection and or test during
manufacture and before shipment, arrangements should be made by the purchasing
officer concerned for such inspection and/or tests to be carried out by the Pakistan
Chief Controller, Defence Services Stores Department, London. Any further inspection
and tests considered necessary or desirable after receipt of the articles in Pakistan
should be arranged for by the purchasing department. The services of the DGS&D can
be utilised in connection with such inspection and tests.
32.
As soon as a contract for articles which require inspection and/or test during the
manufacture or before shipment from abroad has been awarded, four complete copies
of the accepted Vender with specifications, drawings, conditions of contract, and all
other relevant documents, should be sent to the CC, DSSD London, with completed
instructions for inspection and the full address of the manufacturers. The contractors
should be informed that inspection during manufacture or before shipment will be
carried out by the CC, DSSD London, and he should be asked to instruct his
representatives in the country of manufacture to communicate direct with that officer.
33.
With regard to the inspection of articles obtained or manufactured in Pakistan all

purchasing officers can, if they so desire, utilise the services of the DGS&D for the
inspection and or test during manufacture and before despatch.
34.
In the case of orders for plant and machinery, whether purchased in Pakistan or
obtained from abroad, which include erection and test at site of work, arrangements for
inspection and test after erection at site can also be made through the DGS&D.
131
Rule 6. Nothing in these rules shall be deemed to prohibit the purchase of
by one Department or Railway from another.
articles
Rule 7. War like stores and specialised stores peculiar to the Defence Services which
are not usually required by the civil Government indentors and which may not
be available in Pakistan may be obtained without reference to the preceding
rules by indent on the Chief Controller, Defence Services Stores Department;
Offices of the High Commissioner for Pakistan in UK. Exclusive of war like
stores and articles which not being available in Pakistan, at present, are
available in the UK are as follows:a.
b.
Battle and service dress garments and parachute clothing.

Personal equipment including web equipment, tins mess, helmets steel
and ground sheets.
c.
Engineering stores namely military craft, balley bridging, military railway

bridging and miscellaneous military bridging.
d.
Works services stores - airfield and road track.
If the Chief Controller, Defence Services Stores Department, London, obtains

these articles through the War Office or Military of Supply in the UK, payment
shall be made by the Chief Controller. If the articles are purchased by h i tn
from private trade, payment will be arranged through the High Commissioner
for Pakistan in the UK.
Rule 8. Such warlike stores and other specialised stores peculiar to the Defence
Services which are not available in Pakistan and the UK and other soft currency
areas may be purchased from dollar or hard currency areas. Indents will be
placed on the Ambassador for Pakistan in Washington in the case of purchases
in Dollar areas and the Chief Controller, Defence Services Stores Department,
Office of the High Commissioner for Pakistan, London, for purchases in hard
currency territories other than the Dollar area.
35.
Rules 7 and 8 are in the nature of exceptions to the principle enunciated in rule 1.
Before availing himself of the discretion given by these rules it will be incumbent in every
purchasing officer to take all possible steps to assure himself that the stores of the
requisite qualities cannot be obtained in Pakistan at suitable prices in accordance with
the provisions of these rules. In order to ensure that the underlying principles of the
Rules are not violated, a copy of all orders for stores placed abroad under these rules,
should be forwarded to the DGS&D for scrutiny.
36.
f orders are placed abroad under the provisions of rules 7 and 8 on the basis
132
of delivery free on board vessel at port of despatch, arrangements for the shipment of
stores should be entrusted to the Chief Controller, Defence Services Stores
Department, London, or the Ambassador for Pakistan in Washington. The indenting
officer should inform the supplier of this arrangement and should send a copy of his
order to CC, DSSD London, or the Ambassador for Pakistan in Washington, as the
case may be, for information.
133
A nnex E
To Rule 42
PROCEDURE FOR PURCHASE OF STORES BY THE DIRECTORATE
GENERAL OF DEFENCE PURCHASE AND DIRECTORATE OF
PROCUREMENT
1.
2.
Organizational Structure
a.
There is a single joint service organization called Directorate General Defence

Purchase (DGDP), under the Ministry of Defence.
b.
There are three separate Directorates of Procurement one for each service. The
Directorates of Procurement Navy and Air Force will be under their respective
service Headquarters for functional control and under the Directorate-General
of Defence Purchase for administrativecontrol.
c.
The Directorate-General of Procurement (Army) is directly under

Director-General of Defence Purchase, for all purposes including functional and
administrative control.
d.
The establishment of Director-General of Procurement (Army) is worked out

by Director-General of Defence Purchase in consultation with Financial
Adviser.
Functions. The Directorate-General of Defence Purchase is responsible for:-a.
Economic and speedy procurement of all defence stores based on priorities

assigned by service headquarters.
b.
c.
Overall procurement policy for the defence stores.

Policy directive on the following matters, namely:(1)
Shipping, eg. shipping lines with which to deal.
(2)
Import licences, e.g., Government policy on the granting of import

licences and imposing restriction under government orders.
(3)
d.
e.
f.
Insurance policy, e.g., kinds of stores which may be insured, insurance

companies to be employed and any other policy matters.
Purchase procedures.
Contractual forms and agreements.
General policy directives dealing with procurement.
134
3.
g.
Policy directive on registration of firms.
h.
Policy instructions on disposal of stores.
j.
Provision of full administrative cover to the three directorates of procurement.
k.
Loans, credits and barter deals with foreign Governments in respect of defence
stores in consultation with service headquarters.
Directorates of Procurement
a.
The three Directorates of Procurement will function as separate and self

contained entities as part of the Directorate -General of Defence Purchase
organization for procurement of respective service stores except for common
user items specified below
b.
Co mmon User Items

(1)
All items which at present are being purchased, stocked and distributed
by the Army, eg; foodstuff, petrol oil and lubricant, medical stores, small
arms and ammunition, camouflage equipment, engineer stores, etc., will
continue to be purchased as at present. For these items, forecast
*requirement will be placed directly on General Headquarters, by the
other two service headquarters. Funds for Naval and Air Force
requirements of these items will be catered for in the Naval and Air
Force budget estimates and re-appropriated to the army budget in
consultation with Financial Adviser (Defence Production).
(2)
In respect of items other than those mentioned in sub paragraph (1)

above, all demands for standardised items included in the Joint Services
Vocabularies is forwarded by the Services Headquarters to their
respective Director of Procurement. It is the responsibility of Services
Headquarters to ensure that Joint Services Vocabularies number are
clearly shown on such demands. On receipt of such demands, Directors
of Procurement will cross-mandate these to the Director of

Procurement of the major user service.
4.
Overseas Procurement Cell. The overseas procurement cells continues to be joint

service organizations under Directorate General of Defence Procurement. The Service
Headquarters work out their establishments in consultation with their Financial Adviser.
This is processed at the Ministry level through the Directorate General of Defence
Purchase.
5.
Processing of Indents. All indents on receipt in the administration and co-ordination

wing of Directorate of Procurement Air/Navy/Army DirectorateGeneral of Procurement
are passed on to the Deputy Director concerned after
135
keeping a record in the indent register. Thereafter one of the following methods is
adopted for procurement:a.
By Open Tender. All demands the indents which are not marked 'Secret' or
which are valued at or above Rs. one lac should if time and other factors permit,
be procured through open tender and adver tised in the Directorate-General of
Defence Procurement bulletin. If it is proposed not to advertise due to urgency
or other reasons, which will be recorded the orders of the Deputy
Directors/Directors of Procurement or those of Director ~General of Defence
Procurement depending upon within whose financial powers the indent falls, will
be taken. Under open tender system, invitation to tender are issued to all firms
registered with Directorate-General Defence Purchase for subject stores.
Note: In view of peculiar nature of food requirements, demands for those will
not be advertised.
b.
By Limited Tender. The limited tender system is adopted in case of all

demands:-(1)
Which are marked 'Secret'.
(2)
The estimated value of which is less than rupees one lac.
(3)
In case of demands of higher value, where it has been decided by the

competent purchase authority not to invite tenders by advertisement
(open tender). Where the value of an indent exceeds Rs. one lac,
invitation to tender should normally be imou to as many likely suppliers
as possible who are on the approved list. For demands, the estimated
value of which is less than Rs. one lac, invitation to tender is issued to at
least 15 firms, unless the number of registered firms for the subject
stores is less, in which case, tenders are invited from all firms on the
approved list.
c.
Single Tender. This system is adopted only when the competent purchase
officer is satisfied that not more than one firm is in a position to quote and that
where deviations in specifications are not possible i.e., for strictly "proprietary"
articles with a sole agency, indents for such stores are normally stamped as
"proprietary".
d.
Repeat Order. Repeat order may be placed in terms of a previous order in the
case of indents of small value (Rs.25,000.00) and in cases where such a course
is considered expeditious provided the previous order is a recent one and the
competent purchase officer is satisfied that the price has not decreased since the
last order was placed.
e.
Purchase by Negotiations . Purchase by negotiations is made only in
136
exceptional cases when the stores are urgently required and the time does not
permit resort to any other mode of purchase Director's approval is essential.
Note- No contract is awarded to a firm not yet registered (Provisionally or
otherwise) except in case of Troprietary' stores where Director's orders
are obtained.
6.
Registration and Black Listing of Firms

a.
Registration of Firms is made by the Director- General in consultation with the

Directorate -General ISI/Police Authorities. Registration fee is as under which
is not refundable:(1)
(2)
(3)
(4)
(5)
(6)
Initial registration.
Rs. 500/Additional registration /indexation.
Rs. 1001 Renewal.
Rs. 100/Appeal.
Rs. 1001Tender enquiry each.
Rs. 101/From unregistered firms, whether they have applied for registration or
not until regular registration is approved.
(a)
(b)
(c)
b.
Contracts for value upto

Rs. 25,000/
Contracts for value from
Rs. 25,000/- to Rs. 50,0001
Contracts for value above
Rs. 50,0001/-
Rs. 200/Rs. 350/Rs. 500/-
The black-listing, removal or placing of firms under embargo and Lice versa is
done by the Director-General, Procurement Army, in wnroLti&lnwith DsP
(Navy) (Airforee) and approval of the DGDP.
c.
7.
Cards of the registered Firms are maintained in Adra & Coord Wing under
broad categories of stores e.g., textile, general stores, vehicles, machineries,
arms and ammunition, signal equipment. A separate register is kept of Firms
'black-listed' or 'removed' from the list of approved Firms or placed on
'Embargo fist' indicating the reasons of black-listing /removal /placing on
Embargo fist.
FinancW Powers and Procedure

a.
The financial powers of Directors and their officers are detailed in Appendix 1
to this Annex.
b.
137
Contracts exceeding RA~ million in case of DGP (Army) Rs. 3.500 million in
case of DP (Navy) & DP (Air) and upto Rs. 15.000 million will be finalized by
DGDP in consultation with FA(Pro). Contracts over Rs. 15.000 million will be
finalized by Secretary, Defence Production Division, in consultation with
Financial Adviser (DP)/ FA (Pro). In am of absence of DGDP from his
permanent duty station, his financial powers regarding finalization of contracts
may be exercised by Director, Purchase Co-ordination.
c.
In case of procurement of those items and stores for which Government has
already fixed purchase prices, contracts will be finalized by Director
Procurement concerned in consultation with FA (Pro)/DFA(P) without
restriction as to value.
d.
For those items for which prices are fixed by the Government and certain
incidental charges e.g., handling charges are in addition, the contracts should be
finalized by the respective Director of Procurement with concurrence of FA
(Procurement /DFA(P) irrespective of the value the contract provided the
incidental charges do not exceed the financial powers of the Purchase Officer
concerned. In such cases the incidental charges should be indicated separately
in the contract.
e.
In case where total value of the incidental charges is beyond the financial power
of the purchase officer, the same are referred to the next higher Competent
Purchase Officer.
f.
Cases involving difference of opinion between the Directors of Procurement and

FA (Procurement) /DFA(P) will be referred to the Secretary, DP Division
through the DGDP for decision in consultation with Additional Secretary,
Military Finance.
8.
Procedure for Drawing up Contracts. The following procedure will be fol
lowed in the procurement of stores and drawing up the contracts:a.
Price Variation Clauses

(1)
Contracts with a price variation clause (PVC) should be avoided as far

as possible.
(2)
If such a clause is unavoidable, variation in the contract price would be

admissible only in so far is rise or fall in the cost of labour and/or
material is concerned and that too subject to 15% maximum variation. It
should be specified in the contract that no variations for over head di~
other indirect charges will be allowed. Finance Division, Military will be
consulted in all such cases, except in case of 'Proprietory'ltems or single
tender.
(3)
In the case of 'Proprietary' stores where the standard price variation

clause is not accepted by the suppliers, the Competent
138
Purchase Officer may relar, on merits with the approval of the Finance
Division Military, the above price variation terms if this is found to be
absolutely necessary and unavoidable.
Note: The provisions of paragraph 8 a 1. above will not apply to,
purchase made on Government to Government basis.
b.
Increase in Rates of Contractors. Except for calculation or typographical errors,

the rates of the contracts not having a PVC clause - win not be increased
subsequently. But when such an increase is considered desirable in the interest
of expeditious supply of stores and is necessita ted by the circumstances
beyond the control of the supplier, the case will be referred to the next senior
Purchase Officer for a decision. Concurrence of Finance Division (Military) will
be essential in case the contract has been placed with their financial
concurrence.
c.
Acceptance of a Higher Quotation on the Plea of the Stores Being of a Quality

Higher than Requisite Specifications. The lowest quotation on the basis of
requisite specifications should be accepted and in no case higher quotations
merely on the basis of a higher quality than the original requisite specifications
will be accepted. The criteria should be to accept the lowest offer amongst
technically acceptable quotations.
d.
'Proprietary' Items. No item will be treated as 'Proprietory stores' unless it has

been declared proprietary by the indentors in consultation with their financial
advisers and its indent has been marked as such.
e.
Increase in Quantity or Variation of Specifications After Issuance of I/T or

Orders are placed. Variation in specifications and quantity after the issuance of
invitations to tenders should not normally be made, except when such variation
are minor, unavoidable and essential. If in such cases the variations are of
substantial and serious nature resort to retender be made. After placing a
contract no variation in the spedrications affecting the rates are made. Variation
in quantity may, however, be made.
f.
Reference to the indentor in Case the Quoted Price !Exceeds the Indent Value
(1)
If the quoted price (Proposed to be accepted) in respect of indent

estimated (based on last purchase rate) to cost Rs.0.500 million and
above exceeds the indent value by more than 20%, the matter should
be referred to the indentor for his confirmation to finalise the contract on
that quoted value basis. The indentor may cancel the demand or
decrease the quantity.
(2)
In case of indents relating to items which have not been purchased

previously, (where last purchase rate does not apply), the above limits is
lowered to Rs. one lakh and 10% respectively, calculated on the basis
of estimated rate shown in the indent.
139
(3)
g.
Sub paragraph (1) above shall apply to purchase made against

contracts cancelled at risk and expense. But conclusion of contracts at
risk and expense is not delayed and confirmation/ remarks of indentor
may be obtained subsequently regarding the revised expenditure
sanction cover in the indent.
Claiming of Cash Discount. If the accepted quotation forming subject of a

contract contains any cash discount offer, for prompt payment, it should be
clearly indicated so in the contract with the stipulation that the paying authorities
should ensure payment within 15 or 21 days, as the case may be from the date
a claim complete in all respect is received. The responsibility for payment in time
will lies with the Paying Authorities.
9.
Discretion to Cross mandate and Indent. The competent purchase officer may, in his
discretion cross mandate an indent (or extracted items) at any stage before finalizing a contract
to A (DP) London or A (DP) Washington, as the case may be, if he considers that course to be
the appropriate and proper in the interest of obtaining stores expeditiously and economically.
10.
Delivery Period. The delivery period may be extended by the competent purchase
officer either before or after the expiry of the stipulated date, as under: a.
In Case Where the Contract was Finalized Without the Concurrence of the
Finance Division. The competent purchase officer may extend the delivery
date(s) with or without imposing liquidated damages, without reference to
Finance Division (Military), provided he is satisfied that the delay in the delivery
was not due to the fault of the supplier. If the competent purchase officer
proposes to grant second or subsequent extensions of delivery period without
imposing liquidated damages, the case will be referred to the next senior
competent purchase officer for his orders.
b.
In case where the Contract was Placed with the concurrence of the Finance
Division. The following procedure will be adopted:(1)
In case where, in the opinion of the competent purchase officer, the

delay is due to the fault of the supplier or if the Government has incurred
any extra expenditure and as such liquidated damages are intended to
be imposed, the delivery date with liquidated damages under the terms
of the contract may be extended by the competent purchase officer
without reference to finance division (Military).
(2)
Where, in the opinion of the competent purchase officer, the delay in the
delivery of stores is not due to the fault of the supplier and thus
liquidated damages are not proposed to be imposed, the delivery

period may be extended by the competent
140
purchase officer upto a period of two months at any one time or on a
number of occasions provided the total period of all such extensions
does not exceed two months in aggregate. For extension of delivery
period beyond two months, concurrence of the Finance Division shall
be obtained.
c.
Grace Period. Delay in the supply of stores upto 21 days will be regarded as
"grace period" available to the supplier and the delivery date will be considered
to have been automatically extended upto that limit without issuance of any
formal amendment. For delays beyond 21 days, formal amendment to the
delivery period is required.
Notes:-(1)
For purposes of imposing liquidated damages grace period will includ

liquidated damages calculated from the original delivery date and not
from the expiry of the grace period.
(2)
The extension to the delivery period in respect of defence purchase

contracts which, having been placed on suppliers ex-UK, continent,
USA and Canada shall be processed by A (DP) London or A (DP)
Washington and paid for by their Accounts Officers, based on the
provisions of para 10 above, will be regulated and granted as u~der:(a)
(b)
In case of Contract of Firms in UK and Continent. A (DP)

London (in case of contracts signed by Directors and above)
and Deputy Attache (DP) ( in case of contracts signed by
Deputy Directors and below) will be the competent purchase
officer in respect of contracts requiring extensions upto six
months period. With the approval of their respective Financial
Economic Adviser to the Pakistan Embassy UK/USA
provided:i
The contract had been concluded with the concurrence

of the finance authorities.
ii.
The extension is, intended to be, granted without

liquidated damages for a period exceeding two months.
Cases requiring extension beyond six months period will be

referred to the Director-General, Defence Purchase for
necessary action.
In case of Contracts 4 Firms in USA and Canada. The
competent purchase officer in these cases will be A (DP),
Washington who will regulate, extension on the same lines as for
(a) above.
141
(c)
Cases requiring extension for over six months period (to be

reckoned with effect from the original stipulated delivery date)
will be referred to the Director-General, Defence Purchase and
dealt with by the competent purchase officers in Pakistan. This
six month's period will cover the maximum period upto which
the power of extension has been delegated to A (DP) Deputy
Attach (DP) or A (DP), Washington, irrespective of the
number of extensions granted by them.
11.
Sanction of the Secretary, Defence production Division, Ministry of Defence, with

concurrence of the Finance Division, will be obtained for making an exgratia payment to
a contractor, or for payment of compensation on account of cancellation of a contract if
the amount of compensation exceeds 301/0 of the value of the cancelled contract or
items thereof. The approval of Director General., Defence Purchase, with the
concurrence of the Finance Division will be required in these cases in which the
compensation charges do not exceed 30% of the value of the cancelled contract.
12.
Excess and Short Deliveries on Contracts. Competent purchase officers in

Directorate-General, Defence Purchase and its sub-offices abroad will, excepting in
cases covered by Note 1 below, accept 'Excess' JL'Short' deliveries of stores on
contract for components and spare parts, structural steel ferrous and non-ferrous
metals, cables and wires on reels, ropes, nuts /bolts/screws, washers timber (Plywood
and hardboard), drugs and medicines, food and petrol, oil lubricant items, paints and
varnish without reference to the indentors provided the following conditions are fulfilled;
namely: -
13.
a.
b.
The 'excess' deliveries are considered advantageous.

The price in case of 'excess' quantity is the same as that of the current contract.
c.
Value of excess or short quantity is NOT exceed either 5% of the value of the
contract or maximum of Rs.15,000.00 (or equivalent amount in foreign
exchange) per contract whichever is less subject to satisfaction of the competent
purchase officers. In ewe of food or petrol oil lubricant items, the lli~it is
restricted to either 2% of the weight per items or 2% value of the contract
whichever is less.
d.
The excess or short deliveries will be limited to 5% per item. In case of food or
petrol oil lubricant items, the limit is restricted to either 2% of the weight per
item of 2% value of the contract whichever is less.
A certificate to the effect, that funds are available from within the sanctioned allotment to
meet the extra expenditure, will be recorded by the purchase officer accepting the
excess deliveries before submission of the bill to the accounts authorities.
N.B.
It is not necessary to issue a formal amendment to the.contract in such

cases.
142
Notes:
1.
The above procedure will not apply to the following cases: a.
b.
2.
Air Force Stores. Covered by a special contract and those

aircraft spares which are required to carry out any repair
programme.
Naval Stores. Electronics, spare parts of W/T and radar
equipment, spares for machineries, demands against operational
requirements.
Where the cost of excess quantity is more than that mentioned in

paragraph 1.2c above, the matter will be referred to the indentor for his
approval and a formal amendment will be issued in the normal manner.
14. Waiving off liquidated damages and Writing off the risk purchase amount. Cases of
waiving of imposed liquidated damages and writing off the risk purchase amounts which are
beyond the powers delegated to Director-General Defence Purchase/D (S) P in Appendix 1
note 6, to Annex E are submitted to the Secretary (Defence Purchase) Division for approval
with the concurrence of the Finance Division.
15. Security Deposit. All contracts should normally be placed with dealers on the approved list and
as such security deposit may not be demanded. Imposing of "Security Deposit" may, therefore,
be waived by the competent purchase officer at his discretion and so recorded. This discretion
may be exercised by the competent purchase officer 'after recording the reasons for doing so at
any stage of the contract without any reference to Finance Division'.
16. on the spot for reasons of expeditious supply of indents of smaller value, cash purchase Earnest
Money. Normally no earnest money (in the form of treasury payment order or bank draft, etc.)
should be taken at the time of obtaining quotations, except at the discretion of competent
purchase officer in case of:a.
Important stores of urgent nature valuing Rs.0.300 million or over.
b.
Food demands.
Note:
The earnest money does not exceed 5% of the indent value.
17. Powers to Re-Instate Contracts. The competent purchase officer (the one who had approved
the contract originally) may at his discretion, reminstate a cancelled contract on its merits if he
considers that it would be in the interest of expeditious supply of stores. Concurrence of the
Finance Division will be obtained in cases where the contract had been finalized with their
approval.
18. Cash Purchases. In order to effect cash purchases sections has been established in Directorate
-General Procurement (Army) and Directorate Procure-
143
ment (Navy & Air). Its financial power and procurement procedure will be as per Appendix 2
to this Annex.
19.
Delegation of Purchase Powers to Indentors. To expedite procurement of stores of
small value and to reduce load work of DGDP the latter is authorised to delegate to indentors
powers to purchase locally stores valuing upto Rs.5000.00 (Rupees five thousand only),per
item of normal indents (replenishment of stock). The local purchase powers delegated to the
indentors will be exercised in accordance with the procedure approved by their Financial
Advisers. This permission will not apply to stores of the following categories; namely:a.
Those involving foreign exchange expenditure.
b.
Those covered by a Rate Running Contract of DGDR
c.
Those not likely to be available in Pakistan.

Note:
Indents valuing upto Rs.5000.00 are normally not be forwarded to the
Directorate -General Defence Purchase, except as provided for above.
20.
Disposal of Stores. The Director-General, Defence Purchase/D0 will be responsible for
the disposal of Defence Stores - surplus, serviceable and repairable (whether current, obsolete
or obsolescent etc) as per instructions and procedure detailed in Appendix 3 to this Annex.
21. Issue of Import and Export Permit
a.
DGDP may issue Import or Export permits for importing or exporting goods,
pertaining to Defence requirements for the purposes of trials and tests without
financial obligations, in Pakistan by the competent Armed Forces authorities.
b.
Issue of Import Licences. The Director-General the Directors and the Deputy
Directors and the Assistant Directors of the Directorate General, Defence
Purchase, will be permitted to seek import licences for the requisite raw
materials in respect of contracts concluded by them. For contracts concluded
by Secretary (DP) Division, DGDP, is authorised to seek Import licences on
behalf of the Secretary.
22.
Advance Payment and Letter of Credit. No advance payment (except in case of
Government to Government contracts) and letter of credit will be authorised without the
concurrence of the Finance Division, even though the contract may have been approved without
reference to the Finance Division.
23. Absence of the Directors of Procurement. The personal powers of the Directors
of Procurement may be exercised by the senior most Director, when the former is away on
leave, or on duty outside Pakistan. The powers of a Director or Dy Director of Defence
Purchase may be exercised by the Senior Deputy Director/ Assistant Director of that
Directorate, if the Director/Dy Director away on leave,
144
other than casual leave, or on duty outside Pakistan.
24. Procurement of Food and POL. For procurement of Food and POL, the rules and
procedures as laid down in the preceding rules equally apply except that the earnest money at
the rate of 2% to 1057o subject to a maximum ceiling of Rs.25,000.00 will accompanies the
tenders. Detailed instructions for recovery of such earnest money will be incorporated in the
Tender Inquiry Form.
25.
Delegation of Power
a.
The Secretary, Defence Purchase Division, may authorise the Director General
Defence Purchase /Directors Procurement/Assistant Defence Purchase to sign
contracts approved by him.
b.
Directors of Procurement are authorised to issue amendments to contracts

approved by the Secretary/Director General., Defence Purchase provided
financial concurrence is obtained and such amendments do not relate to:(1)
Change in specifications resulting in acceptance of stores of a lower

quality and consequent reduction in prices.
(2)
Upward increase in prices other than as a result of a price variation

clause included in the contract.
Note: The Financial advisor, procurement may require Directors of
Procurement to refer any such case for approval of Director
-General Defence Purchase /Secretary (Defence Purchase)
which he considers should be approved by the said authorities
before issue of amendment.
(3)
26.
After issue of the amendment such case is submitted for information to

Secretary/Director-General Defence Purchase, by the Director of
Procurement concerned.
Inspection
a.
The present system whereby army undertakes inspection of its own stores and
common user items and renders some further assistance in this field to the other
two services will continue.
b.
The procedure regarding payment for services rendered by one service to

another will be examined as part of the overall financial adjustments by the three
services Headquarters as envisaged in the revised system of financial

management.
27.
Financial Advisers to Directors of Procurement. The Financial Adviser
(Procurement) will look after the work of all the three directorates.
28.
145
Payment and Audit. Controller of Military Accounts (Defence Purchase), Rawalpindi,
and Deputy Controller of Military Accounts (Defence Purchase), Karachi, will be
responsible for internal audit and payment and will also be responsible to maintain upto
date statistics regarding commitments and payment and any other reports and returns
which the Directors may like to introduce.
146
Appendix 1
To Annex E
Paragraphs
7 and 14
FINANCIAL POWERS AND PROCEDURE
Method of Procurement
DGP(Army)
1.
With Financial
Concurrence
2.
After Obtaining Financial

advice which may be overuled' by the Director for
reasons to be recorded in
writing.
3.
6.000
million
Directors
of procurement
Navy & Air
Col
Officers other than

Director or Equivalent
Lt Col Major
3.5
2.000 0.600 0.200
a.
If prescribed rules
2.5
regarding calling for
million
tender and acceptance
of lowest technically
acceptable tender are
followed.
1.5
Nil
million
Nil
Nil
b.
In case of proprie2.5
tary and standardised million
items declared to be
so with the agreement
of financial advisers of
service headquarters.
1.5
Nil
million
Nil
Nil
Without Financial
Concurrence
a.
In case of open/
limited tender subject to the condition
that the lowest tech
nically accepted
tender and the rate
accepted does not
exceed the previous
0.200
million
0.200 0.150 0.100 0.050

purchase rate by more

than 20%.
147
b.
In case of open/
limited tender when
the last purchase
rate is not known
subject to the
condition that the
lowest technically
acceptable tender
is accepted.
0.200
million
0.200 0.150
0.100
million million million
c.
In case of single
0.125
0.100 0.060
tender/repeat order/ million million million million
negotiation including
such cases where only
one offer is received
which will assume the
Character of single
tender.
Nil
0.020 Nil
Notes
1.
Contracts falling within the powers of the Dy, Director, Director or Director General
under the provisions of paragraph 2 above may be signed by an Assistant Director or a
Deputy Director as under, provided the Dy Director, Director or the Director-General,
within whose financial competency the contract falls, has given his approval of the
contract in writing:a.
Assistant Director -
b.
Dy Director
Contracts upto
Rs.0.050 million
the value of
Contracts upto
Rs.0.100 million
the value of
2.
The powers vested to the Director may be exercised by any other officer duly
authorised to act in his place temporarily even if he is not of the rank of the permanent
incumbent.
3.
The civilian Deputy Naval Stores Officer in the Directorate of procurement (Navy) shall
exercise the same financial powers as laid down in the above for the rank of Major or
equivalent.
4.
Officer officiating in appointments tenable by higher ranks shall exercise the same
financial powers as laid down for the permanent incumbent of those ranks.
5.
The rejection of a quotation on the basis of it being not technically acceptable must
always be supported by the appropriate technical officer's report. If the purchase officer
feels that the rejection of a particular offer by the technical officer, on technical grounds
is prima facie not correct, he should, before finalizing the case, refer the matter to the
Financial Adviser through the Director for the
148
acceptance of the technical report or otherwise. In case of stationery items, a board of officers
composed, as under, will be technical authority:a.
President:
Deputy Director (Armament & General Stores)/

Director Defence Purchase (Navy)/ Director Defence
Purchase (Air)
b.
Members:
(1) Representative of Indentor

(2) Representative of Financial Adviser (Provost)
(3) Assistant Director concerned.
6.
a.
Waiving of
liquidated
damages imposed
and writing off
risk purchase
amounts, without
reference to Finance Division.
Directorate
General
Defence
Purchase
Rs.20,000/-
Director
General
Purchase
(Army)
Rs.10,000/-
Director of
Procurement
(Navy) & (Air)
Rs.8,000/-
b.
The authority for waiving liquidated damages and writing off risk purchase
amount will be the next senior purchase officer, ie, not the one who had
imposed these damages or cancelled the contract in the first instance.
c.
In cases where liquidated damages have been imposed or the contract

cancelled by the Director-General, Defence Purchase, should be referred to the
Secretary, Defence Purchase Division, for orders.
149
Appendix 2
To Annex E
Paragraph 18
CASH PURCHASE SECTION
PURCHASE AND PAYMENT PROCEDURE
Limits of Cash Purchase
1.
Cash purchase section will deal with:

a.
All indents the value of which does not exceed Rs. 20,000/- in case of
Director-General, Purchase (Army), and Rs. 18,000/- in case of Director
Purchase (Navy) & (Air Force). The limit will apply to indent valus.. as given by
the indenior.
b.
Item/items for which not technically acceptable or economical, offer has been
received in response to open/hinited ITs, provided the value of the item/items so
extracted does not exceed Rs.20,0001- - in case of Director-General,
Purchase (Army), and Rs. 18,000/- in case of Defence Purchase (Navy) and
Air Force.
2.
These provisions are further subject to the conditions that only those indents/ items are
passed on to the cash purchase section:a.
Which are likely to be available in the market.
b.
Which do not require import.
c.
For which a repeat order cannot be placed.
d.
Which cannot be bulked with other items /indents in hand.
3.
Indents/Items of higher value will not split up to bring them within the purview of the
cash purchase section except as provided for above.
Purchase Procedure
4.
The normal system of the calling for tenders will be dispensed with. The Assistant
Director Defence Purchase, incharge of cash purchase section (Cash Purchase Officer), and/or
his representative, may visit the market and the dealers to locate the required ores. On stores
having been located, purchase action will be taken as follows:-
a.
Nine copies of purchase order on the proforma as per Ap nd Annex E will be

prepared and sanction of the competent F "g Officer obtained (see para 5 below).
Indents/items pertaining to different
150
Services /Branches of Services will not be mixed in one purchase order.
b.
On the authority of the above referred sanction, a cheque for the requisite
amount will be issued by the permanent advance holder (see para 6 below).
One cheque will be issued for each purchase order. The permanent advance
holder will endorse copy No. 3 of the purchase order with the no and date of
cheque issued. Copy No. 2 of the purchase order is retained by him as an
advance requisition until copy No. 3 bearing receipt of the cheque by the
supplier dealer is received back.
c.
The cheque will be handed over to the supplier/dealer concerned and his receipt
obtained on copy No. 3 of the purchase order bearing the no and date of the
cheque issued.
d.
The stores will be collected and handed over by the cash purchase section to
the local depots (to be called, as 'Transit Depots') of the services/branch
concerned, which will be responsible for packing and onward despatch to the
consignee as indicated in the purchase order. Central Ordnance Depot, Drigh
Road, Station Supply Depot/petrol control platoon, Armed Forces Medical
Service, NSI)/VSD(PN), 101 MU(PAF) and OFLS (POL) will act as 'Transit
Depot' for their respective services. For stores meant for CAO, AO (K) will
issue the military credit notes, but the suppliers will despatch them direct to
CAO Rawalpindi.
e.
DD (CPS) in case of Army and Director Purchase (Navy) in case of A, Navy

and Air HQ (Detts) and SPS Shara-i-Faisal, in case of Pakistan ir Force will
decide whether the stores are to be despatched by cash purchase section
through the transit depot or direct to the consignee depots under their own
arrangements.
f.
Copy No 6 will be sent to the indentor. Copies No. 7,8 and 9 will be handed
over to the 'Transit Depot' along with the stores. The Depot will despatch copy
no 7 alongwith the stores to the consignee, retain copy no 8 for own record and
return copy no 9 to Director-General, Defence Purchase's representative as
receipted copy.
5.
The cash purchase officer will. always endeavour to reduce the prices by negotiation
whenever he considers the prices quoted by the dealers to be unreasonable. If, after negotiation,
a reasonable price based on the current trend in the market cannot be obtained it is for the
competent purchase officer to decide whether or not the stores be purchased under the cash
purchase system. In case he decides not to make the cash purchase of the stores, he will return
the indent to the basic purchase section for normal procurement action with the certificate that
the stores in question are not available at reasonable prices.
151
6.
The Deputy Controller of Military accounts, Defence Purchase, Karachi, will place permanent
advance of Rs. 1,00,000.00 at the disposal of Director General, procurement (Army), Rs.
50,000.00 each at Director, Procurement (Navy) and Director Procurement (Airforce)
respectively. The Director-General, Purchase (Army), Director Purchase (Navy) and Director
Purchase (Airforce) with designate an officer not below the rank of Major or equivalent as
permanent advance holder for operating the said account. All payments from the permanent
advance will be made by cheques only and accounts are maintained in accordance with the
existing rules and regulations. The advance will be recouped as and when necessary through a
contingent bill, duly supported by copy No. 3 of the purchase orders, for which disbursements
have been made. Copies No. 4 and 5 will accompany copy No. 3 of the purchase order. On
receipt of copies No. 3,4 and 5 the advance holder compares these copies with copy No. 2
and forward them to the Controller of Military Account, alongwith the contingent bill. The
Controller of Military Accounts keeps copy no 3 for audit purposes and forward copy No. 4 to
the Local Audit Officer of consignee concerned and copy No. 5 to the audit team attached with
the Director-General, Defence Purchase. The Deputy Controller of Military Account, Karachi,
will be responsible for post-auditing the accounts of the permanent advance holder.
Maintenance of Documents
7.
Cash purchase section will maintain indent control register in which all indents on receipts will be
controlled and progressed. This register will show all the details of the purchases and delivery of
stores to the 'Transit Depots'. The transit depots will maintain a register on this proforma given
in Appendix 5 in which they will enter the receipt and despatch details of the stores to the
ultimate consignee.
Financial Powers
8.
The following officers will exercise financial powers for cash purchase as given against
each:-a.
b.
c.
d.
Director-General, Purchase(Army)
-Rs. 20,000.00 Per purchase order
Directors Procurement (Navy) -Rs. 18,000.00 -do
and (Air Force)
Deputy Director Procurement
-Rs. 10,000.00 -do
Assistant Director Procurement -Rs. 4,000.00 -do-
These powers are personal and will not be delegated to subordinate officers.
Inspection
9.
The cash purchase officer will as far as possible see that the stores purchased by him
are in accordance with the specifications given by the indentor and he will
152
certify to that effect on the purchase order. The stores will not be subject to any further
inspection. However, in case of complicated items, cash purchase officer may, before purchase
ask the CID Karachi/CINS Karachi1O.C. No. 1 Q.C. Flight PAF for inspection of such stores
which will be final. He may consult the Inspector/indentor/stores depot concerned in doubtful
cases and obtain samples for guidance in procurement. "Stores in Lieu" may be purchased by
cash purchase officer provided he is satisfied that the stores so procured will serve the purpose
and are as much according to the specification possible. If the indentor does not require stores
to be purchased in lieu it would be dearly stated on the Indent no in lieu will be accepted.
Discrepancies
10.
No discrepancy on account of stores being sub-standard/of wrong specifications will be

raised by the consignees /Transit Depot unless the stores are found to be completely
different to those entered in purchase orders. Stores supplied 'In Lieu' will be accepted
by all concerned.
11.
Discrepancies on account of deficiencies, breakages or change of condition of stores

while in transit between the transit depots and consignees will be settled amongst
themselves and Director- General, Defence Purchase, will not be addressed on the
subject at any stage.
Subsidiary Instructions
12.
The Director-General, Defence Purchase, may also issue any subsidiary instructions
considered necessary regarding the cash purchase system with the concurrence of the
Finance Division.
153
Appendix 3
To Annex E
Paragraph 20
POWERS OF DIRECTOR-GENERAL, DEFENCE PURCHASE AND I-US
OFFICERS FOR THE DISPOSAL OF SURPLUS DEFENCE SERVICE STORES
AND THE ALLIED MATTERS
1.
The Director-General, Defence Purchase and his officer will be competent to dispose of
the surplus serviceable /repairable stores (whether current redundant obsolete, or
obsolescent, etc), of defence services other than POFs, in accordance with the
procedure and rules laid down in the succeeding paragraphs except as provided for
below:-a.
Surplus serviceable /repairable stores (whether current, redundant, obsolete or

obsolescent) the book-value of which does not exceeds Rs. 30,000.00 per
item, which will be disposed of under stock holder's arrangements.
b.
Cast iron and re-rollable iron will, when surplus, be reported to the
Director-General, Instrument Purchase, for disposal only if not accepted by
Pakistan Ordnance Factory Wah to whom it will be offered in the first instance.
c.
Serviceable repairable packing material stores of the Station supply depots,

which cannot be utilized according to the instructions contained in Anx A to
Rule 83 of Army Service Corps Regulations,1986, upto the value of Rs. 0.100
million supply depots.
d.
Disposal of refraction produced from wheat grains and dalls in CFM and
MGDs will be arranged by the Director, Defence Purchase-III, by means of
regular contracts and NOT by auction. His financial power in this respect will
be limited to Rs 0.1 million without reference to Finance Division. Cases
beyond that limit will be referred to Finance Division for their concurrence. In
the absence of a regular contract, the monthly accumulation of' refraction may
be disposed of by auction under arrangements of officer commanding military
grain depots/ controlled flour Mills upto a maximum value of Rs.30,000.00.
Notes:
1.
2.
3.
The above limits refer to the book-value of the stores under disposal.
The provisions of rule 45 of Financial Regulations, Volume I, will be treated as modified
to the above extent.
The above delegation of authority shall not apply to the disposal of arms, ammunition
and explosives which will continue to be offered to Directorate General, Defence
Purchase for disposal when public disposal is decided upon.
154
(A)
The financial limit concerning the disposal or refraction will be determined on the
basis of quotations received from the purchasers.
2.
In case where the disposal of particular stores to the public has been placed under certain
restrictions by the competent controlling authorities, the disposal of such stores will be governed
by the provisions of such control measures. Any relaxation there of will not be permissible
without the approval of the competent controlling authority.
3.
Wherever consultation with the Finance Division (Military) is prescribed under these orders,
powers delegated to the Director-General and his officers shall be exercised with the
4.
Surplus serviceable repairable stores will ordinarily be disposed of either:-a.
By transfer to the other defence services or priority Government indentors i.e.

departments of Federal /Provincial Government.
b.
By sale through one or other of the normally accepted methods such as

advertised tenders, limited tenders, private treaty, negotiations or public auction.
5.
Powers of the disposal officers of the Directorate-General Defence Purchase
will, for each item reported for disposal, be as follows:a.
Director General
Full powers.
b.
Director
c.
Dy Director
d.
Assistant Director
Note: The powers will subject to the provisions of paragraphs 5, 6 and 7 of Annex E
and refer to the book-value of surplus stores under disposal.
6.
Finance Division will be consulted in all cases of disposal with regard to the method of
disposal to be adopted (except when the disposal is public auction) and for fixing the reserve
price, where applicable, Le, in respect of surplus vehicles (A, B and C types), plants, aicraft,
shiglaunches, bridging equipment, machineries etc, reported as serviceable /repairable (whether
current, redundant, obsolete or obsolescent, etc) by the stock holders.
7.
When the concurrence of Finance Division has been obtained as to the fixed (where
applicable ) in method of disposal and the reserve price has been r consultation with that
division, their concurrence will not be required for subsequent stages of disposal except under
the following circumstances :
155
a.
When the case is one of sale to the public by either limited tender, private treaty
or negotiation method in which cue the Finance Division will be associated at all
stages of negotiation.
b.
If it is proposed to accept a bid other than the highest bid in the disposal by
advertised tender method.
c.
If the highest bid in a public auction is less than the reserve price fixed to the
extent of 25% and it is proposed to accept that offer rather than re-auction.
8.
Reserve Price. The stock holders will indicate, the book-value (where known) or
estimated disposal price (EDP) of important stores such as vehicles (A,B and C) plants, aircraft,
ships, launches, bridging equipment, machineries etc. Directorate General Defence Procurement
will fix the reserve price for these stores, in consultation with Financial Adviser (Pro)
irrespective of its method of disposal. For other stores, NO RESERVE price is fixed, but
approximated disposal price may be decided by the competent disposal officer as per financial
powers mentioned in para 5 above, irrespective of the fact whether or not the book value/
estimated disposal price has been indicated by the stock holder.
9.
10.
Collection of Earnest Money for Accepted Bids

a.
The earnest money which is equivalent to 25% of the total sale price of the
stores is collected by the auctioneer from the purchaser at the spot and
deposited into the government treasury/state bank/National Bank of Pakistan on
the next working day against the military receivable orders (Form No
PAFA-507) to be issued by the auction supervising officer or the stock holder
his representative. However, the above procedure does not apply to the
contracts concluded for disposal of refraction /wheat and bran by means of
regular contracts under para 1 d above. Earnest money in such cases is
obtained at the rate 2 to 10% of the offered rate.
Collection of Earnest Money for Disposal of Stores Through Methods

Other Than Public Auctions. Offers for purchase /disposal of stores through
methods other than public auctions, shall not be considered unless accompanied
by earnest money to the extent of 25% of the offer in the form of a Bank
Draft or a cheque duly certified and marked by the Bank concerned "Good for
payment" in the name of the Director-General, Procurement (Army).
Collection of Balance Money and Extension of the Date of Final Payment

a.
The normal period to be allowed for collection by the auctioneer of the balance
money of the bids having been accepted at the spot will be
6 days from the
date of auction. The auctioneer will deposit the balance money into the
Government Treasury/State Bank of Pakistan/
156
National Bank of Pakistan on the next working day against the military
receivable order (Form PAFA-507).
b.
The period allowed for collection of the balance money in respect of bids which
are subject to approval will be 6 days from the date of receipt by the bidder, or
the intimation regarding acceptance of the bids. The balance money will be
deposited into Government Treasury / State Bank of Pakistan / National Bank
of Pakistan by the auctioneer on the next working day.
c.
Under special and peculiar circumstances, the Director-General and his disposal
officer may, on receipt of an application from the successful bidder, grant at
their discretion, extension of date of final payment of the balance of the sale
money as under:(1)
Director-General -

Division's concurrence. If extension be
yond this period is proposed to be
granted, the concurrence of finance
Division is obtained.
(2)
Director
(3)
Deputy Director -


Division's concurrence
Note: The date fixed for final payment of the balance money win always be less than the
period allowed for removal of stores under the provisions of para 11 below to
ensure that the full payment has been made before stores are removed.
11.
Period for Removal of Stores. The normal period allowed for the removal of stores by
the purchaser at his expense will be 11 working days from the date of sale (in cases of spot
approval), or from the date of receipt of intimation of final acceptance (in cases of stores the
sale of which was subject to approval) this period may be. extended by another 15 days by the
auction supervising officer at the time of sale auction and the exact removal period permitted will
be recorded in the auction catalogue. Circumstances may, however, arise where for certain
genuine and valid reasons the purchaser may not be in a position to remove the stores within the
stipulated period. In such cases the removal period may be further. extended as under:a.
Director-General -

down) without finance Division's concurrence;
but extension beyond this period requires the
157
b.
Director

down ) without finance Division's concurrence.
a.
While granting extension of removal period, it will be clearly stipulated whether

or not such extension is subject to the payment of ground rent.
b.
The above powers are subject to the condition that the stores will not be
permitted to be removed before the payment of the balance sale money has
been deposited at least on pro ra ta basis.
c.
The stores will be removed ex site and the Government will not be responsible
for expenses incurred for this purpose. In the case of heavy lift stores which can
not be removed without the help of a crane, stock holder provides cranage
facilities up to the depot gate.
d.
The stores not removed within the stipulated or extended removal period will be
liable to be forfeited in favour of Government.
Notes:-
12.
Ground Rent. The rate of ground rent if and when levied, will be 1/2 per diem on the
original sale price of the stores and this amount will be paid before the stores are
permitted to be removed. It will be the duty of the stock holders to ensure that the
ground rent charges, as levied and payable, are deposited into the Govt Treasury/State
Bank of Pakistan /National Bank of Pakistan against MRO before permitting removal of
stores.
13.
However, under certain circumstances, to be recorded, the amount of ground rent so

levied may be waived off by the following officers:a.
Director-General -
Upto Rs. 50,0001- without finance

Division's concurrence, and beyond this
with finance Division's concurrence.
b.
Director
Upto Rs.10,000 /- without finance

158
Appendix 4
To Annex E
Paragraph 4(a) of Appendix 2
PURCHASE ORDER
Control No._____________
DP No. 36
Date __________________
Copy No_________
________________________________________________________________________
INDENTOR
INDENT NO & DATE
ACCOUNT HEAD/ CONSIGNEE

SUB-HEAD
________________________________________________________________________
PART-I
The following stores against the above mentioned indent is/are available with and will be
supplied by M/s________________________________________________________
supply to be completed by__________________________________________________
Indent
S.No. Item No
Total Cost
Item
A/U
Qty
Rate
Rs
Total (In Figs) Rs___________________

Total (In Words) Rupees_______________
___________________________________
Signature____________________________
Designation: Cash Purchase Offrs
Dated:_____________
NAME (
)
_______________________________________________________________________
PART-II
Proposed purchase is approved at the rates quoted and cheque for the amount may be
issued.
Signature_______________
Designation_____________
(COMPETENT PURCHASE AUTHORITY)
Dated: __________
NAME (
_______________________________________________________________________
159
PART-III
Cheque No______________ dated _________ for the sum of__________________
Rs_____________
(Rs.________________________________) Issued.
DIRECTOR-GENERAL DEFENCE PURCHASE,
PERMANENT ADVANCE HOLDER
Dated:____________
NAME (
)
_____________________________________________________________________
PART-IV
Received payment of (in figs) Rs_____________________
(in words)__________
_____________________________through DGDP Cheque No________________

Date______________on account of stores supplied as part I above.
SUPPLIER'S SIGNATURE
__________________
ADDRESS________________________________
Dated:_____________
TELE NO_________ (if any)
_______________________________________________________________________
PART - V
The stores duly inspected are acceptable and are taken over.
SIGNATURE__________________________
Dated:________________
NAME (
)
________________________________________________________________________
160
PART -VI
Despatch details are as under: S. No.
Delivered to (Transit Dept)
Ultimate
Consignee
with full Address
As per
Part-I
SIGNATURE____________________
OR REP. AUTHORISED BY
THE OFFICER TO DELIVER THE STORES.
Dated:_____________
NAME (
(ALL ENTRIES IN BLOCK LETTERS)

______________________________________________________________________
The Director-General, Defence Purchase,
(Cash Purchase Section),
8 Napier Barracks,
Ministry of Defence,
Karachi-4.
Stores listed in part 1 above have been received in good condition vide details at part I and VI above.
Place_______
Date__________
Signature____________________
Designation__________________
Name_______________________
Unit________________________
Tele No._____________________
161
Appendix 5
To Annex E
Paragraph 7 of Appendix 2
Receipt
Cash Purchase Order
No
Date
Designation
Issues
Quantity
Consignee
Quantity
RR/RWB
No of Packages No
Date
Date Receipted
copy received
162
Annex F
To Rules 72 and 83
FORMS FOR THE EXECUTION OF DIFFERENT SECURITY BONDS
A. CASH SECURITY BOND
KNOW all men by these presents that 1, A.B ..............................................
of.................. am held and firmly bond unto the President of Pakistan in the sum of
Rupees..................... (Rupees ...................................................... ) to be paid to the
President for which payment, will and truly to be made I bind myself, my heirs, executors,
administrators, and legal representatives by these presents.
2.
WHEREAS the above bounden A.B. was on the day of 19................appointed
to and now holds the office of..............................
in the office of ............and whereas
the said A.B......................................................................by virtue such office is bound to
collect........................................................................nature of the cashier's /storekeeper's/
(here describe the sub-storekeepers/ subordinate's duties) and to keep and render true and
faithful accounts of his dealings with all property and money which may come into his hands or
from time to time be prescribed duly constituted authority and also to prepare and submit such
returns, accounts and other documents as may from time to time be required of him.
3.
AND WHEREAS the said A.B ............................... has, in pursuance of Note 1
under rule 80 of Financial Regulations, Volume I, delivered to and deposited with
the above mentioned sum of Rupees..................................(Rupees..................................)
in cash as security for the due and faithful performance by the said A.B. of the duties of his said
office and of any other office requiring security to which he may be appointed at any time and of
other duties which may be required of him while holding any such office as aforesaid and for the
purposes of securing and identifying the President against all loss, injury, damage, costs or
expenses which the President may; in any way, suffer, sustain or pay by reason of the
misconduct, neglect, oversight or any other act or omission of the said A.B. or of any person or
persons acting under him or for whom he may be responsible.
4.
Now, the conditions of the above written bond is such that if the said A.B has, whilst he
has held the said office of as aforesaid, always duly performed and fulfilled the duties of his said
office and if he shall, whilst he shall hold the said office or any other office requiring security to
which he may be appointed, or in which he may act, always duly perform and fulfil, all and each
of the duties there of respectively and other duties which may, from time to time, be required of
him while holding any such office as aforesaid and shall duly pay into the Government Treasury
at..................all such money as are payable to President and shall come into his possession or
control by reason of the said office and shall duly account for and deliver up all moneys, papers
and other property which shall come into his possession or control by reason of the said office
and if the said A.B, his heirs,
163
executors of administrators shall pay or cause to be paid unto the President the amount
of any loss or defalcation in the accounts of the accounts of the said ..... within twenty
four hours after the amount of such..........
loss or defalcation shall have been
demanded from the said A.B. by the............... such demand to be in writing and left at
the office or last known place of residence of the said A.B. and shall also at all times
indemnify and save harmless the President from an and every loss injury, damage, costs
expenses which has been or shall or may at any time or times hereafter during the
service or employment of the said A.B. in such office as aforesaid, or any such offices
aforesaid, be sustained, incurred, suffered, or paid by the President by reason of any
act, embezzlement defalcation, mis management, neglect, failure, misconduct, default,
disobedience, omission or in solvency of the said A.B. or of any person or persons
acting under him or for whom he may be responsible, then this obligation shall be void
and of no effect, otherwise the same shall be and remain in full force. Provided always
and it is hereby declared and agreed that the said sum of
Rs............(Rupees...........................................),
so delivered and deposited as aforesaid, shall be and shall remain with the President for
the time being, as such security as aforesaid with full power to the President for the time
being as occasion shall require, to apply the said sum of Rs ...........
(Rupees...........) or any part thereof, in and towards the indemnity of the
President or otherwise as aforesaid.
5.
AND it is hereby further agreed that in the event of the death of the said A.B. or n the
final termination of the service of the said A.B. whether as such as aforesaid or
otherwise or in the event of the said A.B. ceasing to hold any office requiring security
the said sum of Rs..........
(Rupees................................ )for or so much thereof
as shall then .........................remain in deposit and shall not have been applied or
appropriated as aforesaid shall be returned to the said A.B. of his legal representative as
the case may be without interest and this bond shall remain with the President for six
calender months thereafter for recovering any loss, injury, damage, costs or expenses,
that may have been sustained, incurred or paid by the President owing to the act,
neglect or default of the said
A.B. or any such other person or persons as aforesaid and which may not have been
discovered until after his death or the termination of his said service, or ceasing to hold
any office for which the security was required. Provided always that the return at any
time of the said security shall not be deemed to affect or prejudice the right of the
President to take proceedings upon or under this bond against the said A.B. or against
his heirs, executors, administrator or legal representatives after his death in case any
breach of conditions of this bond shall be discovered after the return of the said security
and the responsibility of the said A.B. or his estate; as the case may be, shall at all times
continue and the President shall be fully indemnified against all such loss or damage as
aforesaid at any time.
6.
PROVIDED FURTHER that nothing herein contained nor the security hereby given
shall be deemed to limit the liability of the said A.B. in respect of matters aforesaid to
the forfeiture of the said sum of Rs ........................(Rupees.................................) or
any part or parts thereof and that should the said sum be insufficient to indemnify the
resident in full for any loss and damage sustained by them in respect of matters foresaid
the said A.B. shall pay President on demand as such further sum as shall be deemed by
the ...........
164
to be necessary, in addition, to the said sum of Rs...................(Rupees...............)
to cover such loss or damage as aforesaid and that the President shall be entitled
to cover such further sum payable as aforesaid in any manner open to him.
IN WITNESS whereas the said A.B. has here unto set his hand this day of ...........
19 .........
Signed and delivered by the above named A.B. in the presence of .........
Signature
B. PERSONAL SECURITY BOND
KNOW all men by these presents that I..................... of.......................................
am held and firmly bound unto the President of Pakistan hereinafter referred to as "the
President" which expression shall include his successors-in-office and assigns where the control
so admits in the sum of Rs................. (Rupees................................. ) to be paid to the
President for which payment, well and truly to be made, 1 bind myself, my heirs, executors,
administrators and legal representatives by these presents.
WHEREAS the above bounden..........................was on the.....................................
day of.................................... 19 ................. appointed to and now holds the office
of............................... in the office of...................... and whereas the said .........................
by virtue of such office is bound to collect (here describe the nature of the cashier's
storekeeper's sub-storekeeper's subordinate's duties) and to keep and render true and faithful
accounts of his dealing with all property and money which may come into his hands or
from time to time be prescribed by duly constituted authority and also to prepare and submit
such returns, accounts and other documents as may, from time to time, be required of him.
AND WHEREAS the said.......................... has, in pursuance of note I under rule
80 of Financial Regulations Volume-I been called upon to execute a bond with two sureties in
favour
of
the
President
in
the
above
mentioned
sum
of
Rs.
...................................(Rupees..................................................) for the due and faithful
performance by the said..................of the duties of his office, and of any other office to which
he may be appointed at any time and of other duties which may be required of him and for the
purpose of securing and indemnifying the President against all loss, injury,
damage, costs or expenses which the President may, in any way, suffer, sustain or Pay, by
reason of the misconduct, neglect, oversight or any other act of the
said..............or of any
person or persons acting under him or for whom he may be
responsible.
165
Now, the condition of the above written bond is such that if the said ...................
has, whilst he has held the said office ..................
as aforesaid always duly performed,
and fulfilled the duties of his said office and if he shall, whilst he shall hold the said office or any
other office to which he may be appointed, or in which he may act, always duly perform and
fulfil all and each of the duties thereof respectively and other duties which may, from time to
time, be required of him and shall duly pay into the Government Treasury at. . . . . . . . . . all such
money as are payable to the President and shall come into his possession or control by reason
of the said office and shall duly account for and deliver up all moneys, papers and other
property which shall come into his possession or control by reasons of the said office and if the
said............. by the ...................... such demand to be in writing to be paid unto the
President the amount of any loss or defalcation in the accounts of the said......................
within twenty-four hours after the amount of such loss or defalcation shall have been
demanded from the said .......... by the
.........................such demand to be in writing and left at the officer or last known place of
residence of the Mid and shall also at all times indemnify and save harmless the President
from all and every loss, injury, damage, costs or expenses which has been or shall or may at any
time or times hereafter during the service or employment of the said.....................
in such
office as aforesaid or any such other offices as aforesaid, be sustained, incurred, suffered, or
paid by the President by reason of any act, embezzlement, defalcation, mis-management,
neglect, failure, misconduct, default, disobedience, omission or insolvency of the said ..........or
of any person or persons acting under him or for whom he may be responsible, then this
obligation shall be void and of no effect; otherwise the same shall be and remain in full force and
virtue.
AND it is hereby further agreed that in the event of the death of the
said ...................
or on the final termination of the service of the said .............
whether as such ......... as aforesaid or otherwise, this bond shall remain with the President for
calendar months thereafter for...............recovering any loss, injury, damage, costs or
expenses that may have been sustained incurred or paid by the President owing to the act,
neglect or default of the said ...or any such other person or persons as aforesaid and which may
not have been discovered until after his death or the termination of his said service.
Provided always that without prejudice to any other rights or remedies for recovering the
loss or damage as aforesaid it shall be open to the President to recover the amount payable
under this bond as an arrears of land revenue.
In witness whereof the said..............................
has here-into set his hand this
day of .......................................19................................................................................
Signed and delivered by the above named in the presence of ............
Signature
166
We (a) ..........................................
and (b) ...........................................................
residents of........................................ hereby declare ourselves as sureties for the above
said.................................that he shall do and perform all that he has above undertaken
to do and perform, and in cue of his making default therein, we hereby bind overselves, jointly
and severally to pay to the president of Pakistan the sum of ...........
in which the above
said...................................................................
has bound myself, or such
other sum as shall be deemed to be sufficient by the .....................to cover any loss or damage
which the President may sustain by reason of such default.
And we also agree that neither or us shall be at liberty to terminate his surety ship except upon
giving to the ......................... six calendar month's notice in writing of his intention so to do
and our joint and several liability under this bond shall continue in respect of all acts,
embezzlements, mismanagement, neglects, failures, mis-conducts, defaults, disobedience,
omissions and insolvencys on the part of the said........................ until the expiration of the said
period of six months. Date this
the...............................................day of...........................
19 ...............................
Signature of sureties in respect of ..............................................................
1
2.
In the presence of
(Signature)
1.
2.
(Signature)
C. FIDELITY BOND DEPOSITED AS SECURITY
1.
KNOW all men by these presents that I..............................of................................
am held and firmly bound unto the President of Pakistan (hereinafter referred to as 'President')
which expression shall include his successors-in-office and assigns where the context so admits
in the sum of Rs.......................
(Rupees........................) to be paid to the President
for which payment, well and truly to be made, I bind myself, my heirs, executors,
administrators, and legal representative, by these presents.
2.
WHEREAS the above bounden was on the day of ...............................................
19.........
appointed to and now holds the office of...................................................
in the office...............................................
and whereas the said ........by virtue of........
such office is bound to collect.............................................
(here describe the nature of
the cahier's storekeeper's/Sub-storekeeper's subordinate's duties) . . . . . . . . .....................
and to keep and render true and faithful accounts of his dealings with all property and money
which may come into his hands or possession or under his control,
167
such accounts to be kept in the form and manner that may, from time to time, be prescribed by
duly constituted authority, and also to prepare and submit such returns and other documents as
may from time to time, be required of him.
3.
AND WHEREAS the said .......................... has, in pursuance of note I under rule
80 of Financial Regulations Volume-I, delivered to and deposited with ...........................
a fidelity bond issued by .................. company for the sum of Rs..............(Rupees..........) as
security for the due and faithful performance by the said
.............................................
of the duties of his said................................. office and any other office requiring security
to which he may be appointed at any time and of other duties which may be required of him
while holding any such office as aforesaid and for the purpose of securing the indemnifying the
President against all loss, injury, damage, costs or expenses which the President may in any
way, suffer, sustain, or pay, by reason of the misconduct, neglect, oversight, or any other act
or-omission of the said ...... or of any person or persons acting under him or for whom he may
he responsible.
AND WHEREAS the said
has entered into the above bond in the sum
of
conditioned
for the due performance by him of the duties of the said office of
and of
other duties appertaining thereto or which may lawfully be required of him and to indemnify the
President (his successors and assigns and the servants of the President) against loss from or by
reason of the acts or defaults of the said
and of all and every
person or persons aforesaid.
4.
Now the condition of the above written bond is such that if the said ....... has whilst he
has held the said office of.................................
always duly performed and fulfilled the
duties of his said office and if he shall, while he shall hold the said office or any other office
requiring security to which he may be appointed or in which he may act, always duly
perforwand fulfil all and each of the duties there of respectively and other duties which may,
from time to time be required of him while holding any such office as aforesaid, and shall duly
pay into the Government Treasury at . . . . . . . . . all such money as are payable to the President
and shall come into his possession of control by reasons of the said office and shall duly account
for and deliver up all moneys, papers and other property which shall come into his possession
or control by reason of the said office and the said . . . . . . . his heirs, executors or
administrators shall pay or cease to be paid unto the President the amount of any loss or
defalcation in the accounts of the
said within twenty four hours after the amount of
such loss or defalcation, shall have been demanded from the said by the such demand to be in
writing and left at the office or last known place of residence
of the said and shall also at all then or times hereafter indemnify and save harmless the President
from all and every loss, injury, damage, costs, expenses which has been or shall or may at any
time or times hereafter during the service or
employment or the said . . . . . . . in such office
as
aforesaid, or any such offices as aforesaid, be 'sustained, incurred, suffered, or paid by
the President by reasons of any act, embezzlement, defalcation, mismanagement, neglect, failure,
misconduct, default, disobedience, omission or...............
168
insolvency of the said ..................... or of any person or persons acting under him or for
whom he may be responsible, then this obligation shall be void and of no effect, other wise the
same shall be and remain in full force and virtue.
5.
PROVIDED ALWAYS and it is hereby declared and agreed by the between the
parties hereto that the said fidelity bond No......
delivered and deposited as
aforesaid, shall be and remain at the disposal of the as additional security (over and
above this bond) to the President (his successors and assigns) for the indemnity and
other purposes aforesaid with full power to the President (his successors or assigns or
the servants of the President duly authorised in that behalf) to obtain and receive
payment of the sum or sums of money recoverable or to be received upon or by virtue
or the said fidelity bond or a sufficient portion thereof and all v,
benefits
and
advantages thereof and to apply the same in and towards the indemnity as aforesaid of
d out of the permanent advance of the imprest to pay in lumpsum to the insurance
company which may be recouped by monthly cash recoveries from the cashiers in
suitable instalments, which should not normally exceed the amount of special pay of the
cashiers concerned.
PROVIDED ALWAYS that the cancellation or lapse at any time of the said fidelity bond
shall not be deemed to affect the right of the President to take proceedings upon or under this
said bond against the said
in case any breach of the condition of this bond shall be
discovered after the cancellation or lapse of the said fidelity bond but the responsibility of the
said ..................shall at all times continue and the President shall be fully indemnified against all
such loss or damage as aforesaid at all times.
IN WITNESS whereof the said has here-into set his hands this day of
19..................................
Signed and delivered by the above named in the presence of
1.
2.
Signature
169
Annex G
To Rule 73(b)
INDEMNITY BOND TO BE EXECUTED BY HEIRS OF DECEASED
CONTRACTORS FOR PAYMENT OF THEIR SECURITY DEPOSITS
KNOW ALL MEN by these presents that we .........................................
and.....................................................................
of ....................................
are held and firmly bound unto the President of Pakistan in the sum of rupees of lawful money
of Pakistan to be paid to the President, his certain attorney, successors or assigns, for which
payment well and truly to be made we bind ourselves our heirs, executors and administrators
jointly and binds himself, his heirs, executors and administrators severally and firmly by these
presents.
WHEREAS ........................................................................................................
son of
was before his death on a (
)at............................................... and as
such lodged with Government Rs
as a security deposit AND WHEREAS the said claim
(s) to be the heir (s) of the said ......................................... and as such entitled to his estate and
having represented that there would be undue delay and hardship if Government insisted on
legal representation being taken out before sanctioning payment of the said deposit Government
have agreed to pay the said sum of Rs to the said
on the execution of this bond.
NOW THE CONDITION of the above written bond is such that if the above
bounden ......................................... and........................... their executors, administrators
or legal representatives do and shall from time to time and at all times hereafter well and
sufficiently save, defend and keep harmless and indemnified the said President his successors
and assigns for the time being and other officers and servants of the Government and each and
every of them from and against all and all manner of action or actions suit or suits and other legal
proceedings, costs, charges, damages and expenses whatever which shall or may, at any time or
times hereafter, be brought, commenced or used by any person or body corporate against or
happen or to be occasioned to the said President his successors, assigns or the for the time
being or any or other or the officers or
servants of the Government for or on account or in respect or by reason of the said payment as
aforesaid the above written bond shall be void and of no effect otherwise the same shall be and
remain in full force and virtue.
As WITNESS our hand the
day of
19

170
Annex H
To Ruk 89
CONTRACTS - BY WHOM SANCTIONED
A - SUPPLY SERVICES
1.
Contracts for the supply of articles are arranged as follows: a.
'Central purchase' articles - Contracts for these articles are made for QMG
by DGM
Note. In case of emergency, such articles may be purchased locally, in accordance with
standing orders but all such purchases which should be made only to the extent
necessary, to meet immediate requirements together with rates and full reasons
should be reported to the DS&T monthly.
b.
The ADS&T/CO S&T battalion acting under the orders of/formation

commander will consider, as necessary, the various local purchase supplies for
which it is desirable to make contracts and decide which of these, having due
regard to the advantage of the State, should be for individual stations or for
groups of stations. For individual articles or for suitable groups of articles such
as any particular class of contractors would be willing to tender for.
c.
'Local purchase' article - Contracts for these articles are made, where
necessary, by the ASC officers concerned as under, subject to the rules in these
regulations:Controlling
Authority
Sanctioned by
Period
Value Limit
ADS&T/
COAS.
3 years
Full powers
CO S&T Bn'
QMG.
3 years
Rs. 3,000,000/
Corps Commander. 1 year
Rs. 3,000,000/
Divisional/Force
1 year
Rs. 1,000,000/
Commander Northern
Area/Log Area
Independent
Brigade Commander.
Note: These powers will be subject to observance of all formalities in respect of
tendering procedure and bids evaluation as laid down in the relevant
rules.
2.
In the case of contracts for articles of 'Local Purchase' the QMG or the for mation
commander will exercise supervision by calling up for that purpose, before
171
completion, such proportion of contracts as they may direct.
3.
Government sanction will he necessary in respect of contracts of the following types,
namely:-
4.
a.
Contracts involving an uncertain or indefinite liability or any condition of an

unusual character.
b.
Any proposal to create an `agency' type of supply.
c.
Taking under control or on lease a private firm.
d.
Grant of bonus or subsidy to a firm.
The classification of articles authorised for supply is contained in ASC Regulations.

B - TRANSPORT SERVICES
5.
The adoption of any particular mode of conveyance for military personnel and stores
over any road, or any alteration in the existing mode of conveyance, shall require the sanction of
the formation commander.
6.
Renewals or extensions or AT contract, the period of which exceeds one year,will be
sanctioned by the next higher authority to that sanctioning the original contract, subject to the
limitations imposed by rule 98. No new AT and AT cum-MT contracts will be entered into by
commanders for periods longer than one year without sanction of General Headquarters.
7.
Officers Commanding Air Force units may, in similar circumstances, and with the prior
sanction of the Chief of the Air Staff hire private transport for the performance of Air Force
duties. Such hiring shall be arranged in consultation with the ADS&TICO S&T Bn of the
formation in which the units are situated.
8.
The MES authorities may, in consultation with the CASCIOC S&T Bn/DADS &T;
Division /Log Area, make their own arrangements for the transportation of machinery and
articles which require special stacking.
9.
The powers for sanctioning the contracts will be same are as at A above.
C - SANCTIONING AUTHORITIES - CONTRACT FOR THE

SERVICES UNDER THE MGO
10.
The following contracts may be executed by the authorities specified below:a.
Contracts for washing of textile and
Afinistry of Defence, The
repairs to garments and tentage.
MGO, Divisional Log Area,
172
b.
c.
d.
e.
11.

screen, cooling and chicks
(coarse and fine).
scientific instruments and all
other types of service equipment, ie,
repair of vehicles or their
components, electrical motors etc.
All other contracts, deeds and
instruments, other than leases of houses,
land and other immovable property
for the DITD.
All instruments connected with
the reconveyance of property
given as security.
Local contract powers a.

of EME officers for
b.
repair through trade.
c.
d.
e.
f.
Bde and Station Comds, or

offr of the ordnance other
than departmental offrs, of
the EME or the DITI).
DEME.
Comdt Central/
Combined/Aviation Base
Workshop (Brig/Col).
Comdt Central /Combined/
Aviation Base Workshop
(Lt Col).
CO EME Bn/CEME/
GC Medium /Station
Workshop (Lt Col).
OC Independent
Armed/Infantry/
Mountain/AA Workshop
Company/ Station/Air
conditioning MES Equipment
Workshop(maj),
OC MES Equipment/
Workshop Section
(Capt and below).
Rs. 35,000/25,000/-
Rs 10,0001
Rs
10,000/
Rs
7,0001
Rs 5,0001
D - SANCTIONING AUTHORITIES -CONTRACTS FOR THE

FARMS WING OF THE RV&F. CORPS
12.
a.
Leases of land, purchases or leases of harvesting or cutting rights and

renewal of such leases, where the period of each lease or each separate
renewal does not exceed :
173
(1) Five years
(2) Twelve months
b.
Value-limit
QMG
Rs. 30,00, 000
DRV&F
Rs.10,00,000
13.
By the DRV&F/DDRV
By Assistant Directors of Military Farms.
Contracts for supplies and services to, and purchases for the Farm Wing of
RV&FC.
Officers
Note:
Periods Upto Which

Remarks
Contract May be
Executed
3 years
These powers will be subject
to
observance of all formal year
lities in respect of tendering procedure
and bids evaluation as laid down
in the relevant rules.
The financial powers of the DRV for according administrative

approval to farms works are laid down in the Financial Regulations
Volume-II
E - SANCTIONING AUTHORITIES - CONTRACTS FOR THE
REMOUNT WING OF THE RV & FC
Contract for the above may be executed by the following authorities:a.
Agreements with shippers for landing horses at the

remount and veterinary installation, Karachi.
b.
Sale by public auction of Government animals By Officers

rejected from RV&FC (Remounts).
Commanding
Remount Depots,
or District Re
mount Offrs of
breeding areas.
Contracts for forage or stores.
By the DRV&F
Offrs CommandContracts for Petty works at remount
ing Remount
depots and breeding areas.
Depots, or Dis
trict Remount
Offrs of breeding
areas.
c.
d.
By the QMG.
e.
All instruments connected with the

reconveyance of property given as security.
BY Offrs
Commanding,
174
Remount Depots,
or District Remount Offrs of
breeding areas.
f.
g.
h.
j.
Leases of land, harvesting or cutting

rights, and renewal of such leases in
remount depots.
Appointment of contractors for petty stores
contracts in remount depots.
Appointment of local contractors for
supplying grain to horse/donkey stallions
and testing ponies in Sahiwal breeding
area.
By the OC
Remount Depots.
By the DRV&F
By the District
Remount Offrs,
Sahiwal
breeding area
Salilwal
Leases of land for breeding purposes a

subsequent renewal thereof:
(1)
To individual breeders under Ghoripal - By District
System.
Remount Officers
(2)
To stud grantees.
By the QMG.
F - SANCTIONING AUTHORITIES - CONTRACTS FOR THE PAF

14.
Contracts for the above may he executed by the following authorities:Contracts for the recovery of exploded practice bombs By the OC PAF
or expended bullets from the PAF bombing ranges.
Station/unit.
G - SANCTIONING AUTHORITIES - GENERAL INSTRUMENTS AND

CONTRACTS
15.
General instruments and contracts may be executed by the following

a.
Contracts for the supply of hot weather

establishment and other temporary labour.
b.
c.
Contracts for petty supplies to hospitals.

Contracts for the supply of dairy produce
(where military farms do not function)
Cinema contracts
d.
authorities:-
By OC a unit, OC
a sanatorium, or
OC a hosptial,
By OC a hospital
By formation
commander.
By sta comd or
OC a unit.
175
e.
Contracts for the operation of canteen services for the troops by

contractors; after approval of the contract by the QMG in all cases:(1)
Station contracts.
(2)
(3)
Units Contracts.
Garrison Institute
(Hill Station or Depot) contracts
By Station
Commander or
Administrative
Commandant.
By OC Unit.
By OC Hill
Station or Depot
176
Annex J
To Rule 130
PROVISION OF HAIRCUTTING AND WASHING SERVICES TO TROOPS
1.
2.
Following procedure will be adopted for the fixation of:a.
Monthly rates of pay for civilian barbers and dhobies employed by units and
formations in lieu of authorised combatants.
b.
Per capita rates of haircutting and washing allowance for payment to entitled
troops.
c.
Contract rates for the provision of these two services.
A board of officers, composed as under, will be held in January and July each year
(Except Northern Areas and places not falling within the jurisdiction of a Station
Headquarters for which see para 9 and 10 below) under the orders of the local OC
station to fix the above monthly rates. The board while fixing the contract rates of
haircutting allowance will notify the rates for two elements of haircutting and shaving
separately:President : A field officer other than the Station Commander.
Members :A commissioned officer.
The local Audit Officer or his representative.
Note: The bill for haircutting allces will be preferred in the name of barber contractor
and will be paid to him. The amount of shaving charges will be claimed by the
unit separately and paid to the JC0s1OR concerned under the unit arrangement.
3.
The board's recommendations will be based on the rates of pay of civilian barbers and
dhobles employed in local civil departments, rates of stores and equipment in local
market and similar other local factors which nay influence the availability of these
services. The board will, however, make every effort to fix the rates at the most
economical basis to the state consistent with the requirement of efficient and smooth
provision of these services.
4.
The proceedings will then be forwarded to the station commander for approval of the
rates recommended and their publication in station orders. The station commander if he
is below the rank of a Lt Col will not approve the proceeding if their is a note of dissent
from the LAO but forward them to the Formation Commander, as the case may be, for
adjudication whose decision shall be final.
5.
The rates published in the station orders will be the authority for admitting
unit bill by the CMAs.
177
6.
The term 'pay' used in paragraphs 1 and 2 above will exclude other allowances
admissible, such as dearness allowance sanctioned by the Government from time to
time.
Notes: 1
A contract for provision of haircutting and washing services
can
only be entered into for the provision of each or both of these services as a
whole. In other words a unit cannot enter into a contract when it has on its
posted strength a part of authorised establishment of dhobles or barbers
employed either as combatant or civilians in lieu of combatants. Contract will be
resorted to only if there is no dhobi or barber employed/ working as combatant,
or civilian lieu of combatants. Each contract will be reviewed and renewed on
the 1st March and the 1st September each year on the basis of revised rates,
fixed half yearly.
2.
The term 'troops does not include officer.

3. Each contract will be submitted to the OC station through the LAO, for
approval before completion, endorsed with the certificate, signed by the
OC, as follows:-
Certified that.a.
b.
c.
This unit being deficient of the full authorised strength of combatant (in case of
static units) dhobies and/or barbers, is unable to employ them as temporary
civilians on authorised rates of pay.

A contract for haircutting/washing services is, therefore, ines
capable.
Contract rates, prescribed herein, are in accordance with station Order
No......... dated ......................
Free materials will not be demanded from the Government.
7.
Although the board will be held in the months of January and July each year (except in
the case of units, located in the Northern Area (for which see para 9 below) but the
rates approved as a result of its recommendations will have effect from the 1st March
and the 1st September respectively, of the same year and will remain effective for six
months in each case.
8.
Small units or a few individuals posted out of station on temporary duty away from their
parent units, or on leave, in whose case it is not administratively possible to attach them
to other units, will be paid in cash the haircutting and washing allowance at the rates
fixed for the station of their duty.
9.
In the case of units located in the Northern Area the boards will be held in the month of
April and October each year. The rates approved as a result of the
178
board's recommendations will have effect from the 1st June and the 1st December respectively
of the same year.
10.
For units located at places not falling within the jurisdiction of a Station Headquarters,
the powers and functions of OC station under these rules will be exercised by the local
Formation Headquarter under whose command units concerned are serving.
11.
The need for economy consistent with administrative requirements of these services in
fixation of these rates cannot be over emphasized. The station and formation commanders will
exercise a very careful scrutiny of the rates recommended by the Station Boards and will ensure
that only the minimum possible rates at which these services of a satisfactory standard can be
made available are approved.
179
Annex 'K' To
Rule 60 c
LIST OF SCHEDULED BANKS IN PAKISTAN
S. No
1.
2.
3.
4.
5.
6.
7,
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.,
22.
23.
24.
25.
26.
NAME OF THE BANK

Agriculture Development Bank of Pakistan.
Algemene Bank Nederland.
Allied Bank of Pakistan Limited.
American Express Bank Limited.
Bank of America N. T. & S. A.
Banque Indosuez.
Bank of Oman Limited.
Bank of Tokyo Limited.
Chase Manhattan Bank N. A.
Citibank N. A.
Deutsche Bank (A~ G.)
Dhoa Bank Limited.
ANZ Grindlays Bank P. I. C.
Habib Bank Limited.
Hong Kong & Shanghai Banking Corporation.
Industrial Development Bank of Pakist,an.
International Finance Investment Commerce Bank Ltd.
Middle East Bank Limited.
Massaraf Faysal Al Islami of Bahrain.
Muslim Commercial Bank Limited.
Natonal Bank of Pakistan.
Rupali Bank Limited.
Standard Chartered Bank.
Emirates Bank International Limited.
United Bank Limited,
Habib Bank A. G. - Zurich.
180
TABLE OF CONCORDANCE
1.
The Financial Regulations Vol 1, 1986 is a completely revised edition. It is based on.
Financial Regulations Part-I 1952 (Reprinted in 19n) and other government or6rs,
letters and instructions, issued upto 31 December 1985.
2.
The table of concordance given below shows column-wise the rules in the new
regulations, the comparative Financial Regulations Part I (Army and Air Force) - 1972
and other references supporting modifications.
FR Vol 1
(1995)
2
3
4
5
6
7
8
9
0
F R Part I 1986
4
Other References
81 /1)-21 (B get)-2
Dec 81.
12
9n 96 and 1 Govt ltr no F-1 70176 /D-1 5 (C-1) of 27 Feb
80 (Reproduced in SPAO 11180).
13
27
14
21
15
16
17
1" 177
18
"a2
19
20
34 z- JP
Para 17 to 21 of Govt ltr F-11335[
22
81 /1)-21 (Budget) 2 of 26 Dec 8 1 1.
23
~37 z
24
38
5
25
-40
26
AI -4
27
z,
28
29
48
30
4,,9
31
181
FR Vol 1
FR Part I 1986
Other References
32
*2
33
W
34
88
35
-89
36
134-136
37
70
38
71- -75 and-7 9
Govtltr~%F-17 /,7,6/D-15~C-1) of
~u~
27 Feb 8
u d in SPAO 11180).
39
76 _~1n
40
-do
41
42
43
.92
-do
44
W
45
--W
46
PO-474
Yga 21 (111) of Govt ltr noF-11335/811
D-2f(Budget) 2 of 26 Dec 81.
47
99
Para 2 to 5 of Govt ltr no F-1 13351811
109
D-21 (Budget) 2 of 26 Dec 81 and Anx H
of Pay and Allees Vol II.
48
49
-120
50
J21,
51
1.22
52
123- 124
53
125
54
126
55
127
56
128
57
130
58
131
59
13,2
60
144-,142--'144,150 & 152A and Treasury Rules of the Fed
Govt, 1972, note 4 of Rule 217
61
155-4w
FRPart-11,1952 Rule 57.-62
160
63
161
64
162
65
163
66
164
67
---165 Para 26c of Govt ltr no F-11335181/D-21
(Budget) 2 of 26 Dec 81.
68
11,96
69
1,67
70'
1"
71
182
FR Part 1
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
FR Part I 1986
(Reprinted 1972)
Other References
113
114
115
116
117
183
FR Vol 1
FR Part 1986
Other References
118
2a4
119
26b
120
260
121
267-122
268.
123
27.2
124
273
125
274
126
2,77
127
278.
128
279
129
281
130
U4
Annex A
Annex B
Annex C
Annex D
Annex E
Annex F
Annex G
Annex H
Annex J
Anx A to Govt Itr no F-11335/81/D-21

(Budget) of 26 Dec 81.
(xv) and annex B of Govt ltr -do
Appx 11
Appx VI
Govt ltr no 1557/40/DGDP/PC-1/11/4174/
2/P40 of 29 Nov 82.
Appx VII
Appx V
Appx IV
Govt ltr no 18017 /Budget-2 3316 /D-1
(B) of 06 Aug 69.
Appx IX
Rules of Financial Regulations Part 1- 1952 (Reprinted in 1972) omitted due to reasons stated
against each:-1.
Being blank. 4, 6-S, 10-44, 16, 22- 24, 39, 44-47, 50---61,55, 61, 65-66, 68- 69,
80,
^
86---87,91--93,95-98,105-108,116-119,
129,
133,139,
141,
145,
147---149,158-159, 169, 175-189, 225-229, 237---249,253-~-2,56, 2707-271 and 275.
2.
Rules replaced by government of Pakistan letters:a.
Rule merged under heading definition (page ix - xi)
b.
Rule 2, 18-19, 35, 52---53,54 a and 56---60replaced with the provision of

GHQ letter no F-1/335181/1)-21 (Budget) 2 dated 26 Dec 81.
3.
Being Superfluous redundant. 63, 64, 78, 90, 94, 102-103,137-138, 146,
151- 152, 153, 220, 224, 2d2-263, 269, 276, 280, Rule 20 item (3dii), 34 (e), 54
para 1 and sub para (a), 89 (e), (1), 124 last two paras Rule 75 (XIV), Rule 217
para 3, 4, 5, Rule 261 note 1 to 7, Rule 264 para 3 note 2 and Rule 268 note 1 to 3.
184
ERRATA
To Financial Regulations, Volume 1, 1986
(Army and Air Force)
Page
26
29
30
40
63
140
Rule/para
Sub para 1
Sub para d
Sub para (b) i
Rule 40a (1)
Rule 49 b
Sub para (a)
Last line
Last line
10th line
last Line
'Ist Line
2nd lino
Line
Corrections
Correct relieved as relieved

Correct formation as Formation
Correct law as law
Correct or as of
Insert'.' after possible instead of
Insert before in
184
ERRATA
To Financial Regulations, Volume 1, 1986
(Army and Air Force)
Page
26
29
30
40
63
Rule/para
Sub para 1
Last line
Sub para d
Last line
Sub para (b) i 10th line
Rule 40a (1) last Line
Rule 49 b
'Ist Line
140
Sub para (a) 2nd lino
Line
Corrections
Correct relieved as relieved

Correct formation as Formation
Correct law as law
Correct or as of
Insert'.' after possible instead of
Insert before in

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FINANCIAL REGULATIONS

ed IjIal Haider Zaidi

CHAPTER 1 - GENERAL PROVISIONS

Shori Title and Commencement

Additional powers of the Chief of Army Staff and

Powers are personal

Controllers of army and air force accounts

Sanctioning of expenditure not covered by rule

Claims of petty nature

Issue of store in exceptional cases

Petty items of recurring expenditure

Expenditure that may not be sanctioned

Abandonment of revenue and expenditure

Expenditure against allotment

Estimate of operational expenditure

Financial powers under civil service regulations

Whole time of a government servant

CHAPTER 2 - LOSSES, WASTAGES AND DAMAGES TO

General rules for observance

Loss of public money

CHAPTER 3 - PURCHASE OF STORES, TRAINING AIDS

Disposal of surplus, obsolete and waste stores

Procurement of centrally purchased stores

CHAPTER 4 - BUDGET ESTIMATES AND ASSIGNMENTS

CHAPTER 5 - CLAIMS AND RECOVERIES

Recovery of amount due

Civil courts - attachment orders

Claims governed by civil service regulations

Time barred claims

CHAPTER 6 - VOCABULARY AND PAYMENT

Payment issue rates

Claims against carrying agencies

CHAPTER 7 - PAY AND ALLOWANCES AND

Pay and allowances

Last pay certificate

CHAPTER 8 - AUDIT AND OBJECTIONS

Audit and retrenchments by audit officers

MAG not be over ruled etc

Powers of audit officer

Retrenchment from contractor's bills and appeals

Forms of standing security deposits

Custody of securities and payment of interest thereon

General promissory notes - return and sale of

Provincial and municipal debentures and port trust bonds 80 93

Bank deposit receipts

Saving bank deposits

Security deposits- government servants

Supplies and services

Commercial or non-government concerns

Sanctions and modifications of contracts

Articles of ASC supply for operations not termed

Legal representative of a deceased contractor

Irregular concessions to contractors

Standing security deposit

Compensation for breach of contract

Recoveries from securities in default

CHAPTER 11 - REMITTANCES AND FAMILY

CHAPTER 12 - MISCELLANEOUS PROVISIONS

Cash and store transactions

Responsibility for expenditure

Rates - army remount stores

Rationing of animals transferred from