Novation Agreement

 

Novation Agreement

What is 

• Consensual replacement of a contract's party or obligation with a new one.

• Transfers the contractual obligations of one party to a third party in a contract. 

• All parties involved in this type of contract must consent to the changes.

• When a third party enters the agreement, it takes the place of the departing party.

 

Three parties are involved

• The transferee

• The transferor

• The counterparty

General Examples:

1.  Lease - When one tenant signs a lease over to another person, this new tenant is responsible for paying lease charges and is liable for property damage. But with the consent of the Lessor. 

2. Construction industry - A contractor transfers a job to another contractor. But with the consent of the client. 

Difference between Novation and Assignment

Novation	Assignment
Involves 3 parties	Involves Two parties only
Consent of all parties are compulsory	Doesn’t necessarily require the consent of the third party
Transfer obligations as well as rights	Transfers rights only. Therefore the original party can actually held responsible if the assignee doesn’t fulfill the contractual performance

Advantages: 

1.  Protect the sellers from future liabilities. 

2. Learning curve

 

Disadvantages: 

1. Tedious process. 

2. Requires consent of a third party. 

3. Conflict of interest. 

Examples in Indian Railways

• EBR -IF funded works through IRFC 

• Standard novation agreement issued by the Railways with the consent of Ministry of Law and Justice. 

• Tender documents are suitably modified to incorporate the provisions of standard Novation agreement.

 

+++++++++++

 

 

Group B Selections - Reforms in All 7 Depts except Accounts

 Click for Railway Board letter dated 30.09.2020 on Group B Selections (Except Accounts) 

Quotations - Dispensing with calling of Tenders

 

Quotations - Dispensing with calling of Tenders

·      for works which are urgent in nature and to accept offers received in response to quotations.

Delegation of Powers as per MSOP - Item 5 (f) of Works Matters Part A 

	Powers lying with	Without concurrence	With Concurrence
Safe running of Trains (works should be of urgent nature)	JAG/SG & SS(Independent charge)	Up to Rs.2 Lakhs (Annual Limit Rs.10 Lakhs)	Up to Rs.5 Lakhs (Annual limit: Rs.60 Lakhs)
Other works (incl: Safe running of train)	SAG		Up to Rs.10 Lakhs (Annual Limit Rs.120 Lakhs)

Authority: Railway Board Letter dated 05.03.2009 & 06.10.2010. 

Other Important Points as per MSOP

 

1.    Finance concurrence is necessary except for work is of urgent nature and directly related to safe running of trains.

2.    Exercised by the officers with their own administrative approval and no separate administrative approval is necessary.

3.    The powers should be exercised sparingly.

4.    The circumstances under which quotations have to be called should be spelt out.

5.   Provision in Sanctioned estimate.

6.    The work should not be split up for the purpose of bringing it within the ambit of this dispensation

7.   Should not be for fancy items (expensive, but of low utility)

8.    For works which are urgent in nature.

9.   At least 3 well experienced contacters/agencies.  They need not necessarily borne in the Approved list.

10.                      A Register showing the full particulars of works authorized through quotations shall be maintained by the officer and shall be sent to associate finance while seeking their concurrence.

11.                      Cross utilization of powers of equivalent officers in a division/single administrative unit shall not be allowed.

12.                      Notice period of at least 7 days from the date of NIQ (Notice inviting Quotation)

13.                     In case of emergency, the period can be reduced with approval of the authority accepting quotation.

***

Reforms in Group B selections in Indian Railways - PPT

Group b exam reforms ppt 28.9.20 from Nageswara Rao M

Index - Browse the articles category wise

RESULTS

Question Papers - LDCE

Question papers - Appendix2 exam

 Question papers - Appendix3 exam 

 Books & Budget   Expenditure 

  Stores   Workshop Accounts 

Establishment     Traffic  Book keeping 

Appendix 3 Exam  70% Exam (AFA post)

LDCE(AFA post)   Differences between  

Allocations

Railway PSUs  Miscellaneous 

Official Language for LDCE & 70% Exam 

Management Accounting for LDCE

Group D to Group C Exam

Objective type/Multiple choice questions 

PPTs on different Railway Subjects

Service Contracts and GeM

 

Service Contracts  and GeM – Government E Marketplace

·        If Services available on GeM portal, Procurement has to be done through GeM only.

 

·        Exception to the above rules is with Specific reasons with justification and Personal approval of GM/DRM is required.

 

 

        Delegation of Powers to invite and accepting Service Tenders

 

PHOD/HOD	DRM	All other Officers
Full powers	Rs. 100 Crores (long term contracts)	As per delegation of Service contracts

 

 

·        Enter Service Contract in place of termination of existing Service Contract: 

§  DRMs have full powers .

§  For a period of 3 months only.

§  By calling quotations from approved list of vendors.

§  Finance concurrence required

 

·        Source: Sl.No.44 of Works Matters of MSOP

 

()()()()()

Reforms in Appendix3 Examination - Likely

 

Reforms in Appendix3 Examination

My suggestions on Appendix3 Exam - Click here

 

Hi friends,

ü  you are likely to hear good news about Appendix3 exam in a few days.

 

ü  There may be a possibility of changing exam pattern (both McQ and descriptive), one common exam for all the three groups.(i.e., SO/A, TIA & ISA)

 

ü   Exam is proposed to be held in February or March 2021.

 

ü  McQ exam may be held online.

 

ü  Please be patient. Don't make enquiries to Railway Board and disturb their valuable time.

 

ü   Dust off your study material and start preparations. All the best.

 

Get Started Now

                                                                                                                

 

 

 

 

MCQ 1001 Objective type Questions by IRIFM

 

Click for MCQ by IRIFM

70% Selection Question Papers - 2020 year - Accounts Dept

 

SWR Question paper 70% Selection 2020 year

ECR Question Paper 70% Selection 2020 Year

Did you know ?

Previous	Now
Railway Branch	Railway Board
Public Works Dept	Railway Dept
Secretary, Railway Branch	Chairman & CEO, Railway Board
Dy.Secretary – Accounts	Member (Finance) - MF
Dy. Secretary – Traffic	Member (O&BD - Operations & Business Development) - M/O&BD
Dy. Secretary – Construction	Surrendered now.  (Previously it was Member - Engineering)
Circle	Zonal Railway
Consulting Engineer	General Manager
Govt Examiner of Accounts	PFA – Principal Financial Advisor

·         Initially (i.e., Before 1905) regulation and control of Government Railways was exercised by the Railway Branch of the Public Works Department (PWD) of Government of India. 

·         Till 1905 (the year Railway Board was established), the Railway Branch was headed by The Secretary and 3 Deputy Secretaries (Traffic, Accounts & Construction) – like The Chairman, FC & Members as in current Railway Board set up.

·         The entire Railway system was divided into seven circles  (like present Zonal Railways )

·         One Consulting Engineer and one Government Examiner of Accounts were posted to each of these seven circles. (like General Manager and PFA-Principal Financial Adviser)

·         The accounting and auditing functions of the Railway Branch were combined and looked after  by The Accountant  General, Public Works Department.

&&&

Did you Know ? - Busiest Railway Station in India

 

                                                         Did you know ?

 

Busiest Railway Station in India is Howrah Railway Station

·        Train frequency  - Nearly 1000 trains per day

 

·         Oldest Railway Station – 1854

 

·        Largest Railway Junction

 

·        23 Platforms

 

·          Handling nearly 10 lakh passengers a day

 

Did you know - Highest Priority trains in India

 

Did you know

 

Highest Priority trains in India - Rank wise

 

1. Rajdhani Express

2. Shatabdi Express

3. Duronto Express

4. Tejas Express

5. Garib Rath Express

6. Double Decker Express

7. Jan Shatabdi Express

8. Superfast Express

9. Express/Mails Trains

10. Suburban Trains