Director to surcharge illegal payment or loss caused by gross negligence or misconduct

(1) The Director may disallow every item of expenditure incurred contrary to law and surcharge the same on the person

incurring or authorising the incurring of such expenditure, and may charge

against any person responsible therefor the amount of any deficiency, loss or unprofitable outlay occasioned by the negligence or misconduct of that person or of any sum which ought to have been accounted, but is not brought into account by that person and shall, in every such case, certify the amount due from such person.

Explanation: It shall not be open to any person whose negligence or misconduct has caused or contributed to any such deficiency or loss, to contend that notwithstanding his negligence of misconduct the deficiency or loss would not have occurred, but for the negligence or misconduct of some other person.

1. (2) The Director shall state in writing the reasons for his decision in respect of every disallowance, surcharge or charge and a copy of such decision shall be served on the person against whom it is made in the manner laid down for the service of summons in the Code of Civil Procedure, 1908 (Central Act V of 1908).
2. (3) Any person aggrieved by any disallowance, surcharge or charge may, within sixty days after the date of service on him of the decision of the Director either—
   • (a) make an application to the concerned principal civil court of

original jurisdiction to set aside such disallowance, surcharge or

charge and the Court, after taking such evidence as is necessary may confirm, modify or remit such disallowance, surcharge or charge with such orders as to costs as it may think proper in the circumstances; or

1. (b) in lieu of such application, may appeal to the Government who shall pass such orders as they think fit.

1. (4) Where an application is made to the court under clause (a) of sub- section (3), the Director shall be the sole respondent thereto, and the applicant shall not make either the Government or any other person a party to the proceedings.
2. (5) From the decision of the court under clause (a) of sub-section (3), an appeal shall lie to the High Court.
3. (6) Every sum certified by the Director to be due from a person under this Act shall be paid by such person to the local authority or the other authority as the case may be, within sixty days after the date of service on him of the decision of the Director unless within that time such person has made an application to the court or an appeal to the Government against the decision, and such sum, if not so paid, or such sum as the Court or the