NOTE: Official UPSC answer key has considered both B and C as correct.

Both B and C are valid responses, and they can be seen as complementary approaches in handling this situation:

B. Refuse your friend the extra amount and strictly follow the rules. This ensures that you uphold the law and demonstrate that no one is above the regulations, regardless of personal relationships. It sends a clear message that rules must be followed, ensuring fairness and preventing any misuse of power.

C. Show your friend the copy of the Government instructions and then persuade him to accept the lower amount as prescribed in the rules. This approach allows you to explain the situation politely, showing transparency and reasoning with your friend. By presenting the official instructions, you maintain the integrity of your position while keeping the conversation respectful and making it easier for your friend to understand the limitations.