This special appeal was filed under Chapter VIII Rule 5 of the Allahabad High Court Rules, 1952, to challenge an interim order dated 17.06.2026 passed in a writ petition, which stayed a recovery of Rs. 4,38,104.00 subject to the condition that the appellant deposit Rs. 2 lacs within 15 days. The appellant contended that under Rule 257 of the U.P. Panchayat Raj Rules, 1947, surcharge cannot be imposed after three years of demitting office. The Division Bench dismissed the special appeal, holding that subordinate rules cannot override or conflict with substantive statutory provisions. The Court clarified that the substantive provision under Section 27 of the U.P. Panchayat Raj Act, 1947, sets the limitation period as five years from the date the person ceases to hold office, or ten years from the occurrence of loss, whichever is later.
- Conflict Between Act and Rules: The Court examined the limitation period for imposing a surcharge on a Gram Pradhan for financial loss, waste, or misapplication. While the 3rd proviso to Rule 257(2) of the U.P. Panchayat Raj Rules, 1947, prescribes a three-year limitation period from the date of ceasing to hold office, Section 27 of the parent Act sets it at five years.
- Supremacy of Substantive Legislation: The Court reaffirmed the settled legal principle that subordinate legislation (Rules) cannot supplant, supersede, or remain in conflict with the substantive provisions of the Act under which they are framed.
- Statutory Timeline Under Section 27: Under the proviso to Section 27 of the U.P. Panchayat Raj Act, 1947, liability for a surcharge ceases only after the expiration of ten years from the occurrence of the loss or five years from the date on which the person ceases to hold office, whichever is later.
Action Directed for Harmonization: The Court dismissed the appeal challenging the interim deposit condition and directed the State authorities to communicate the judgment to the Principal Secretary of the Panchayati Raj Department to address and rectify the conflict between the rules and the substantive provisions of the Act.
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Harikesh Verma v. State Of U.P. Thru. Prin. Secy. Panchayati Raj Deptt. Lko. And 5 Others (D.O.J. July 6, 2026)
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