(1) Non-compliance of requisition issued under sub-rule (1) of rule 7, within the specified time or time extended under sub-rule (6) of rule 7, by the Principal Officer of the local authority or any other officer authorised by him in this behalf, shall be deemed to be indifference towards the requirement of audit requisition. In such cases, the facts shall be reported by the auditor to the Assistant Director of the region through the District Audit Officer or Assistant Director/Deputy Director concerned in the case of concurrent audit.
(2) On receipt of information under sub-rule (1), the Assistant Director or the Deputy Director and in the event of requisition having been issued by him, he shall issue a show-cause notice in Form L.F.A.
116 to the Principal Officer of the Local Authority by registered post or through a special messenger calling for his explanation as to why action should not be taken against him under sub-section (1) of the section 7 of the Act for non-compliance of the requisition.
(3) In case no reply of the notice issued under sub-rule (2) is received from the PrincipalOfficer or the officer authorised by him in this behalf, within one month from the date of issue ofthe notice, it will be deemed that he has nothing to say in this regard and proceedings will beinitiated under section 7 of the Act.
(4) The reply to the show-cause notice issued under sub-rule (2) shall be reviewed by the Deputy Director or the Assistant Director concerned and it will be decided whether action under sub-section (1) of section 7 of the Act is to be taken or not against the person responsible for wilful negligence or refusing compliance of the requisition. Approval of the Director shall be obtained on the decision taken by the Deputy Director or the Assistant Director concerned. After receiving the written sanction of the Director a suit under sub-section (4) of section 7 of the Act shall be instituted by the officer, under whose signature the audit report is issued.