(1) Every member, officer of the municipality shall be liable for the loss, waste or misappropriation of any money or other property belonging to a municipality, if such loss, waste is reported by the Comptroller and Auditor General of India or other audit authority empowered by the Government in this behalf to be a direct consequence of his neglect or misconduct in the performance of his duty while a member, officer or official of the municipality, and he may after being given an opportunity, by notice served in the manner provided for the service of summons in [the Code of Civil Procedure, 1908 (5 of 1908)] to show cause by written or oral representation why he should not be required to make good the loss, be surcharged with the value of such property or the amount of such money by the Director and if the amount is not paid within fourteen days from the expiry of the period of appeal prescribed by sub-section (2) the Collector at the request of the Director, shall proceed forthwith to recover the amount as if it were an arrear of land revenue and have it credited to the municipal fund.
(2) The person against whom an order under sub-section (1) is made, may within thirty days of such order, appeal to the Government who shall appoint an officer to hear the appeal and the appellate authority shall have the power of confirming, modifying or disallowing the surcharge :
Provided that no person shall under this section be called upon to show cause after the expiry of a period of four years from the occurrence of such loss, waste or misappropriation or after the expiry of one year from the time of his ceasing to be a member :
Provided further that nothing in this section shall be deemed to debar the aggrieved party from seeking remedy in civil court against an order made under sub-section (1).