Liability for loss, waste or mis-application of property :~ (1) Every

Chairperson, Vice-Chairperson, '[* * *] Councillor, officer or servant of a municipality, including a Government servant whose services are lent to the municipality, shall be liable for the loss, waste or mis-application of any money or other property owned by or vested in the municipality if such loss, waste or mis-application is a direct consequence of any illegal act, omission, neglect or misconduct on his part; and a suit for compensation may be instituted against him in any Court of competent jurisdiction by the Municipality with the previous sanction of the State Government or by the State Government.

1. (2) Every such suit shall be instituted within three years after the date on which cause of action arose.