(1) If, in the opinion of the State Government, a Gram Mandal,-
(a) is not competent to perform or persistently makes default in performing the duties assigned to it by this Act, or
(b) exceeds or abuses the powers assigned to it under this Act, or
(c) is not functioning in a manner consistent with the provisions of this Act or the rules framed thereunder,
the State Government may, by notification in the Official Gazette, stating the reasons for its order, declare that Gram Mandal to be incompetent or in default or to have exceeded or abused its powers or to have not been functioning in a manner consistent with the provisions of this Act or the rules framed thereunder, as the case may be, and supersede it for such period not exceeding one year at a time as may be specified in the notification :
Provided that, before any such notification issued, the Gram Mandal concerned shall be given a reasonable opportunity of showing cause why the proposed declaration should not be made.
(2) On the supersession of a Gram Mandal under sub-section (1),-
(a) the President [the Vice-President] and members of all committees constituted by the Gram Mandal shall from the date specified in the notification vacate their office ;
(b) all the powers and duties of the Gram Mandal or any committee thereof, shall, during the period of supersession, be exercised and performed by such person or persons as the State Government may from time to time appoint in this behalf ;
(c) all properties vested in the Gram Mandal and any balance of the Gram Nidhi, shall be vested in and such of its liabilities as may have been incurred in the discharge of its legitimate functions or which have been incurred in the course of normal duties performed by the Gram Mandal concerned, shall be transferred to, the State Government which shall make such arrangements, as may be deemed necessary, until the expiration of the period of supersession.
(3) Before the expiration of the period of supersession specified in the notification, the State Government may, if in its opinion it is so necessary, extend the period of supersession for such further term, as it may consider necessary, but not exceeding one year at a time, and on the expiration of the period of supersession either as originally specified or extended, the Gram Mandal shall resume its functions and elect its President [and Vice-President] and constitute the committees:
Provided that, the State Government may at any time before the expiration of the period of supersession, withdraw any notification issued under sub-section (1).
(4) The income derived from the Gramdan village during the period of supersession, shall first be utilised towards the cost of management during the period of supersession and liquidation of liabilities of the Gram Mandal and the balance shall be credited to the Gram Nidhi.