Penalty and Compensation for mala fide action.

(1) The Designated Authority or the Union Territory Appellate Authority may impose a lump sum penalty against a designated officer responsible for rendering of service to which the applicant is entitled, or against a Grievance Redressal Officer, for acting in a mala fide manner or for having failed to discharge his duties without any sufficient and reasonable cause, which shall not be less than Rs. 1,000 and may extend up to Rs. 10,000, which shall be recovered from the salary of the official against whom penalty has been imposed: Provided that the concerned officer shall be given a reasonable opportunity of being heard before any penalty is imposed on him under this section. (2) On imposition of the penalty under sub-section (1), the Union Territory Appellate Authority or the Designated Authority, as the case may be, may, by order, direct that such portion of the penalty imposed under sub-section (1) shall be awarded to the appellant, as compensation, as it may deem fit: Provided that the amount of such compensation awarded shall not exceed the amount of penalty imposed under this section. (3) If any public servant is found guilty under sub-section (1), the disciplinary authority shall initiate the disciplinary proceedings against such officer of the public authority, who, if proved to be guilty of a mala fide action in respect of any provision of this Act, shall be liable to such punishment as the disciplinary authority may decide.