Para 6.19 — MSO (A&E)
Original Rule Text
6.19 Advances for Law suits should be debited to the functional expenditure head concerned under Rule 69(4) of Government Accounting Rules, 1990 Refunds of amounts remaining unspent out of these advances should be dealt with as cash recoveries.
What This Means
When a government department needs money for a lawsuit, the advance is not classified under a loan head but is debited to the functional (departmental) expenditure head as per Rule 69(4) of Government Accounting Rules, 1990. If any portion of the advance remains unspent after the lawsuit concludes, the refund is treated as a cash recovery — meaning it reduces the expenditure under the same head rather than being credited to a receipt head.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Litigation advances are debited to the departmental expenditure head, not a loan head
- 2Classification follows Rule 69(4) of Government Accounting Rules, 1990
- 3Unspent balances are refunded as cash recoveries (reduction of expenditure)
- 4This is different from regular advances which are classified under loan and advance heads
Practical Example
The Irrigation Department draws Rs. 5 lakh as an advance for a land acquisition lawsuit. The amount is debited to the Irrigation Department's expenditure head under 'Other Charges — Legal Expenses'. The case is settled for Rs. 3.5 lakh. The unspent Rs. 1.5 lakh is refunded and shown as a cash recovery (deducted from the department's expenditure), not as a revenue receipt.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why are lawsuit advances treated as expenditure rather than advances?▼
What is a 'cash recovery' in government accounting?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.