Rule 111 - Petty Claims | KartavyaDesk
Original Rule Text
Union Territories) and the State Governments have agreed under reciprocal arrangements not to prefer petty and isolated claims for an amount not exceeding Rupees ten thousand against one another Rule 112 Criteria in determining whether a particular claim is covered by the reciprocal arrangement. The significant criterion in determining whether a particular claim is covered by the reciprocal arrangement mentioned above, will be that the claim shall be both petty and of an occasional character and shall cover services rendered and not supplies made unless the latter forms part of service. The term “service rendered” will be taken to mean an individual act of service, like providing police escort to a high dignitary and will not apply to supply of stores etc. Claims relating to Commercial undertakings under the Government of India or the State Governments such as those of the Railways, the Department of Post, the Electrical undertakings, etc., shall fall outside the purview of the proposed reciprocal arrangements and shall continue to be settled as hitherto. If a doubt arises as to whether a particular claim would fall within or outside the purview of the proposed arrangement, it shall be decided by mutual consultation. The above arrangements will remain in force without any time limit in respect of all State Governments. Rule 113 Projects jointly executed by several State Governments. In the case of Projects, jointly executed by several Governments, where the expenditure is to be shared by the participating Governments in agreed proportions, but the expenditure is ab-initio incurred by one Government and shares of other participating Governments recovered subsequently; such recoveries from other Governments shall be exhibited as abatement of charges under the relevant expenditure Head of Account in the books of the Governments incurring the expenditure initially Rule 114 Claims of State Governments on account of the extra cost of agency functions. Claims of State Governments, on account of the extra cost of agency functions entrusted to them under Article 258 of the Constitution shall be dealt with and settled in accordance with such directions as may be issued by the President in this regard from time to time Rule 115 The following principles shall be generally observed in dealing with claims preferred
What This Means
Rule 111 of the General Financial Rules (GFR) 2017 deals with a reciprocal agreement between the Union Territories and State Governments regarding petty claims. Essentially, it says that these entities have agreed not to pursue small, one-off claims against each other if the amount is less than ₹10,000. This is designed to save time and resources by avoiding the administrative burden of processing very small claims. The rule applies to services rendered, not typically to supplies made, unless the supply is directly part of the service.
Think of it as a 'no big deal' agreement for minor, infrequent transactions. However, this rule doesn't apply to commercial undertakings like Railways or the Postal Department. If there's any confusion about whether a claim falls under this agreement, the involved parties should consult each other to decide. This arrangement is intended to be a long-term agreement, simplifying financial interactions between states and union territories.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •Applies to petty and isolated claims not exceeding ₹10,000 between Union Territories and State Governments.
- •Covers 'services rendered,' not typically 'supplies made' (unless the supply is integral to the service).
- •Excludes claims from commercial undertakings like Railways, Postal Department, and Electricity Boards.
- •Disputes are resolved through mutual consultation.
- •The agreement is intended to be a long-term arrangement.
Practical Example
The Haryana Police provided a security escort to a visiting dignitary from the Government of Rajasthan. The cost of the escort, including fuel and overtime for the officers, amounted to ₹8,500. According to Rule 111, Haryana will not raise a claim against Rajasthan for this amount. However, if Rajasthan had requested Haryana to supply 100 police batons (supplies) and the cost was ₹8,500, then Rule 111 would not apply, and Haryana would raise a claim. Similarly, if the Rajasthan State Electricity Board owed the Haryana Power Generation Corporation Limited ₹8,500, Rule 111 would not apply because both are commercial undertakings.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What does 'petty and isolated' mean in the context of Rule 111?▼
Does Rule 111 apply to all types of claims between states?▼
If a service includes both labor and supply of materials, does Rule 111 apply?▼
What happens if two states disagree on whether a claim falls under Rule 111?▼
Is there a time limit for this reciprocal arrangement?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Test Your Knowledge
Question 1 of 3
According to Rule 111 of the General Financial Rules, 2017, what is the maximum amount for petty and isolated claims that Union Territories and State Governments have agreed not to prefer against one another under reciprocal arrangements?
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