Rule 125 of The General Financial Rules 2017 Period for Preferment of Claims
Original Rule Text
Visual Summary
Claims should ideally be preferred within the current financial year.
Absolute deadline for claims is three years from transaction date.
The three-year limitation can be waived through mutual departmental agreement.
Executive Summary
Rule 125 of The General Financial Rules, 2017, establishes the timeframe for inter-departmental claims within the Central Government. It mandates that such claims, whether commercial or non-commercial, should ideally be preferred within the same financial year. An absolute upper limit of three years from the date of the transaction is set, beyond which claims are generally not entertained. However, this three-year limitation can be waived in specific instances if there is a mutual agreement between the departments involved.
In-Depth Analysis of the Rule
Introduction: Rule 125 provides crucial guidance on the timely processing of financial claims between different departments of the Central Government. This rule is vital for maintaining financial discipline, ensuring prompt reconciliation of accounts, and preventing the accumulation of old, unresolved liabilities. It applies broadly to all types of inter-departmental claims, encompassing both commercial and non-commercial transactions.
Breakdown of the Rule:
- Ordinary Preference within the Same Financial Year: The rule’s primary directive is that all inter-departmental claims should ordinarily be preferred within the financial year in which the transaction occurred. This promotes efficient financial management and reduces the complexity associated with cross-year adjustments.
- Absolute Three-Year Limitation: A strict outer limit is imposed, stating that claims shall not be preferred beyond three years from the date of the transaction. This acts as a statute of limitations, preventing indefinite delays in raising and settling claims.
- Waiver by Mutual Agreement: An important exception to the three-year limit is provided. In specific cases, if the departments concerned reach a mutual agreement, this limitation can be waived. This flexibility allows for resolution of legitimate claims that might otherwise be time-barred due to unforeseen circumstances or complex issues requiring extended deliberation.
Practical Example: Consider the Ministry of Health and Family Welfare providing medical supplies to the Ministry of Defence. If the transaction for these supplies occurred in June 2023, the Ministry of Health should ideally raise the claim for payment against the Ministry of Defence within the same financial year (i.e., by March 31, 2024). Even if there’s a delay, the claim must be preferred by June 2026 (three years from the transaction date). However, if due to a prolonged dispute over the quality of supplies, the claim cannot be settled within this period, both ministries can mutually agree to waive the three-year limitation to resolve the outstanding payment, provided there are valid reasons for such an extension.
Related Provisions
Rule 125 is part of a broader framework governing inter-departmental financial interactions. Other relevant provisions include:
- Rule 123 of The General Financial Rules, 2017 Inter-Departmental Adjustments: Lays down the general principles for inter-departmental adjustments.
- Rule 124 of The General Financial Rules, 2017 Principles for Division of Departments for Inter-Departmental Payments: Details how departments are categorized for inter-departmental payments.
- Rule 126 of The General Financial Rules, 2017 Procedure for Settlement of Inter-Departmental Adjustments: Outlines the specific procedures for settling inter-departmental adjustments.
Learning Aids
Mnemonics
- SYTM MW: Same Year, Three Years Max, Mutual Waiver.
Process Flowchart
Multiple Choice Questions (MCQs)
1. According to Rule 125 of The General Financial Rules, 2017, inter-departmental claims should ordinarily be preferred within what timeframe?
- A) Six months from the date of transaction
- B) The same financial year as the transaction
- C) Two years from the date of transaction
- D) Five years from the date of transaction
Show Answer
Correct Answer: B) The same financial year as the transaction
2. What is the maximum period beyond which inter-departmental claims, as per Rule 125 of The General Financial Rules, 2017, shall generally not be preferred?
- A) One year
- B) Two years
- C) Three years
- D) Four years
Show Answer
Correct Answer: C) Three years
3. Under Rule 125 of The General Financial Rules, 2017, the three-year limitation for preferring claims can be waived under which condition?
- A) With the approval of the Ministry of Finance only
- B) By a unilateral decision of the claiming department
- C) By mutual agreement between the departments concerned
- D) If the claim amount exceeds Rupees one lakh
Show Answer
Correct Answer: C) By mutual agreement between the departments concerned
4. Rule 125 of The General Financial Rules, 2017, applies to which types of Central Government departments?
- A) Only commercial departments
- B) Only non-commercial departments
- C) Both commercial and non-commercial departments
- D) Only departments dealing with foreign transactions
Show Answer
Correct Answer: C) Both commercial and non-commercial departments
5. If a claim is preferred beyond three years from the date of transaction without mutual agreement, as per Rule 125 of The General Financial Rules, 2017, what is the likely outcome?
- A) It will be automatically approved with a penalty.
- B) It will generally not be preferred.
- C) It will be referred to an arbitration committee.
- D) The claiming department will be fined.
Show Answer
Correct Answer: B) It will generally not be preferred.
Frequently Asked Questions
What is the primary timeframe for inter-departmental claims under Rule 125 of The General Financial Rules, 2017?
Inter-departmental claims should ordinarily be preferred within the same financial year as the transaction occurred.
Can the three-year limitation for claims be extended under Rule 125 of The General Financial Rules, 2017?
Yes, the three-year limitation can be waived in specific cases by mutual agreement between the departments concerned.
Does Rule 125 of The General Financial Rules, 2017, apply to all types of inter-departmental claims?
Yes, it applies to all claims preferred between departments, both commercial and non-commercial, of the Central Government.
Key Takeaways
- Inter-departmental claims should ideally be made within the same financial year.
- An absolute limit of three years from the transaction date applies to all claims.
- This three-year limitation can be waived only through mutual agreement between the involved departments.
- The rule promotes financial discipline and timely reconciliation of accounts across all Central Government departments.
Conclusion
Rule 125 of The General Financial Rules, 2017, serves as a cornerstone for maintaining order and efficiency in financial transactions between Central Government departments. By establishing clear timeframes for preferring claims and outlining conditions for exceptions, it ensures accountability and prevents the accumulation of stale financial liabilities, thereby contributing to sound financial governance.