Rule 224 of The General Financial Rules 2017 Contract Authority and Execution
Original Rule Text
Visual Summary
All contracts require empowerment by or under President’s orders (Article 299(1)).
Contracts must be executed “for and on behalf of the President of India”.
Specific authorities and procedures for contracts are detailed in other rules and notifications.
Executive Summary
Rule 224 of The General Financial Rules, 2017, establishes the foundational legal framework for all contracts and property assurances made by the Union Government. It mandates that all such agreements must be made by an authority empowered by or under the President’s orders, specifically referencing Article 299 (1) of the Constitution of India. Furthermore, it dictates that these contracts must explicitly state they are executed “for and on behalf of the President of India.” The rule also points to supplementary notifications from the Ministry of Law and the Delegation of Financial Powers Rules for detailed procedures and delegated authorities, ensuring legal validity and proper execution of government contracts.
In-Depth Analysis of the Rule
Introduction: Rule 224 is a cornerstone of contract management within the Indian government, ensuring that all financial commitments and property transactions adhere to constitutional provisions and established legal protocols. It underscores the principle that the executive power of the Union, when entering into contracts, acts through the President.
Breakdown of the Rule:
- Rule 224 (1) – Authority to Make Contracts: This sub-rule unequivocally states that any contract entered into by the government must be made by an authority that is specifically empowered to do so. This empowerment stems directly from the President’s orders or powers delegated under them, in line with Article 299 (1) of the Constitution. This ensures that all government contracts have the necessary legal backing and are not ultra vires.
- Rule 224 (2) – Execution on Behalf of the President: This section specifies the mandatory wording for the execution of contracts and property assurances. Every such document must include the phrase “for and on behalf of the President of India” immediately following the designation of the signing officer. This formal requirement reinforces the legal fiction that the Union Government acts through its head, the President, in contractual matters.
- Notes 1 & 2 – Delegation and Procedure: The accompanying notes clarify that the detailed classes of contracts, the authorities empowered to execute them, and the specific conditions and procedures are further elaborated in notifications issued by the Ministry of Law and the Delegation of Financial Powers Rules. This indicates a tiered system of authority and a comprehensive regulatory framework governing government contracts.
Practical Example: Imagine the Ministry of Defence needs to procure new fighter jets. According to Rule 224 (1), the contract for these jets cannot be signed by just any official; it must be signed by an officer specifically empowered by the President or under delegated authority. Furthermore, as per Rule 224 (2), the contract document itself must explicitly state that it is being executed “for and on behalf of the President of India,” followed by the signing officer’s designation. Failure to adhere to these fundamental requirements could render the contract legally invalid, highlighting the critical importance of this rule in government procurement.
Related Provisions
Understanding Rule 224 is enhanced by examining these related provisions:
- Rule 225 of The General Financial Rules 2017 General Principles for Contract: This rule outlines the overarching principles that must be observed when entering into contracts, such as precision, definiteness, and the use of standard forms.
- Rule 226 of The General Financial Rules 2017 Management of Contracts: This provision details the procedures for monitoring contract implementation, ensuring compliance, and managing financial instruments like Bank Guarantees.
Learning Aids
Mnemonics
- CAPE: Contract Authority Provides Execution.
Process Flowchart
Multiple Choice Questions
1. According to Rule 224 of The General Financial Rules, 2017, who must empower an authority to make contracts on behalf of the Union Government?
- A) The Ministry of Finance
- B) The Parliament
- C) The President of India
- D) The Comptroller and Auditor General
Show Answer
Correct Answer: C) The President of India
2. What specific phrase, as per Rule 224 (2) of The General Financial Rules, 2017, must follow the designation of the officer executing a contract?
- A) “By order of the Government of India”
- B) “For and on behalf of the President of India”
- C) “Under the authority of the Union”
- D) “With the consent of the Ministry of Finance”
Show Answer
Correct Answer: B) “For and on behalf of the President of India”
3. Rule 224 (1) of The General Financial Rules, 2017, refers to which Article of the Constitution of India regarding contract authority?
- A) Article 266 (1)
- B) Article 112 (1)
- C) Article 299 (1)
- D) Article 283 (1)
Show Answer
Correct Answer: C) Article 299 (1)
4. Where are the detailed procedures for various classes of contracts and assurances of property specified, as per Note 1 of Rule 224 of The General Financial Rules, 2017?
- A) In the Annual Financial Statement
- B) In the Treasury Rules
- C) In Notifications issued by the Ministry of Law
- D) In the Public Accounts Committee reports
Show Answer
Correct Answer: C) In Notifications issued by the Ministry of Law
5. What is the primary purpose of Rule 224 of The General Financial Rules, 2017?
- A) To define recurring and non-recurring expenditure
- B) To establish the legal framework for government contracts and property assurances
- C) To outline procedures for budget formulation
- D) To specify rules for inventory management
Show Answer
Correct Answer: B) To establish the legal framework for government contracts and property assurances
Frequently Asked Questions
What is the significance of Article 299 (1) of the Constitution in Rule 224 of The General Financial Rules, 2017?
Article 299 (1) of the Constitution of India is crucial as it provides the constitutional basis for all contracts and assurances of property made in the exercise of the executive power of the Union. Rule 224 explicitly links government contracts to this article, ensuring their legal validity and proper authorization by or under the President’s orders.
Why must contracts be executed “for and on behalf of the President of India” as per Rule 224 (2)?
This specific wording is a legal formality that signifies that the contract is being entered into by the Union Government, acting through its constitutional head, the President. It ensures that the contract is binding on the Government of India as a whole, rather than on the individual officer signing it, providing legal continuity and accountability.
Are there specific rules detailing the powers of authorities to execute contracts under Rule 224 of The General Financial Rules, 2017?
Yes, Rule 224 notes that the various classes of contracts, the authorities empowered to execute them, and the general procedures are specified in Notifications issued by the Ministry of Law from time to time, and also in the Delegation of Financial Powers Rules. These documents provide the granular details for implementing the broad principles laid down in Rule 224.
Key Takeaways
- All government contracts must be made by an authority empowered by or under the President’s orders, as per Article 299 (1) of the Constitution.
- Contracts must explicitly state they are executed “for and on behalf of the President of India” to ensure legal validity and accountability.
- Detailed procedures and delegated powers for contract execution are found in Ministry of Law notifications and the Delegation of Financial Powers Rules.
- Adherence to these legal formalities is crucial to prevent contracts from being legally invalid or unenforceable.
Conclusion
Rule 224 of The General Financial Rules, 2017, serves as the fundamental legal bedrock for all contractual engagements of the Union Government. By meticulously defining the necessary authority and execution protocols, it safeguards public funds and property, ensuring that every government contract is not only financially sound but also constitutionally compliant and legally enforceable. Its provisions are vital for maintaining transparency, accountability, and the rule of law in government transactions.