( 1 ) THE petitioners were the Councillors of the Town Municipal Council, tarikere. By the order made under sub-sec. (2) of S. 308 of the Mysore municipalities Act, 1964, they were called upon to pay to the Municipal council a total amount of Rs. 2,529-99 to make good the loss sustained by the Council. In this petition under Arts. 226 and 227, they challenge the validity of the said order. ( 2 ) THE matter arises in this way: Four sites belonging to the Muni- pal Council have been in occupation of T. J. Ramachandrappa, M. R. Krishnoji Rao, M. P. Parashuram Rao and Lakshmanachar. The occupants offered to purchase the sites at upset price. The Municipal Council accepted the proposal of the occupants and sought approval of the Divisional commissioner for the disposal of sites Before the approval was accorded, the Council resolved that the sites should be sold by public auction. Accordingly the sale was notified to be held on 26-7-1965, but the sale did not take place on that day. It was postponed to 29-7-1965 without a fresh proclamation. On 29-7-1965 the sale was held by accepting the bid of the said occupants and on 16-8-1965, it was confirmed by the Council. The price fetched in the auction sale was less than the upset price offered by the occupants. On coming to know of all these facts, the Divisional commissioner directed the Deputy Commissioner to take surcharge proceedings against the petitioners under S. 308 (2) of the Act. The Deputy commiissioner called upon the petitioners to show cause why they should not be asked to make good the loss sustained by the Municipal Council. In reply, the petitioners said that they were not responsible for any loss occasioned by the auction sale, conducted by the authorities. The deputy Commissioner, however, held that the petitioners should have taken enough care while confirming the sale. He was of the view, that the sale ought not to have been confirmed by the Council. In conclusion he observed thus :". . . . . . the Councillors have failed to observe the formalities prescribed for disposal of sites and also the sale was not held on the date fixed in the sale notification. Thus, the Municipality has sustained a loss to the tune of Rs. 2,529-99 due to illegal disposal of municipal property. In conclusion he observed thus :". . . . . . the Councillors have failed to observe the formalities prescribed for disposal of sites and also the sale was not held on the date fixed in the sale notification. Thus, the Municipality has sustained a loss to the tune of Rs. 2,529-99 due to illegal disposal of municipal property. Hence it is ordered that the former President and Councillors who voted to the resolution dt. 16-8-1965 so far as the confirmation of sale held on 29-7-1965 and helped in securing of sites by Sriyuths t. J. Ramachandrappa, M. R. Krishnoji Rao, M. B. Parashuram rao and Lakshmanachar be and are held responsible for the loss of rs. 2,529-99 (Rupees two thousand five hundred and twenty nine and paise ninety nine only) and that they are liable to make good the loss sustained. " ( 3 ) AGGRIEVED by the above order, the petitioner appealed before the government under sub-sec. (3) of S. 308. The Government, while dismissing the append, have stated that the action taken by the Councillors in confirming the sale was illegal and should not be encouraged. ( 4 ) THE question is whether the impugned order could be supported under S. 308 (2) of the Act. The said section reads :" 308. Liability of Councillors for loss, waste or misapplication.- (1) * * * * (2) If, after giving the Councillor or Councilors concerned sufficient opportunity for showing cause to the contrary the Deputy commissioner is satisfied that the loss, waste or misapplication of any money or other property of the Municipal Council is a direct consequence of misconduct or gross neglect on his or their part, the Deputy commissioner shall by order in writing direct such Councillor or councillors to pay to the Municipal Council before a fixed date, the amount required to reimburse it for such loss, waste or misapplication. " ( 5 ) THIS is a penal provision. It calls for an enquiry with a reasonable opportunity to the parties. There should be clear evidence for the proof of misconduct or gross neglect on the part of the Cquncillors in the discharge of their duties as Councillors. That by itself is not sufficient. The loss occasioned to the Council should have been the direct consequence of their misconduct or gross neglect and not due to the action of any intervening person. That by itself is not sufficient. The loss occasioned to the Council should have been the direct consequence of their misconduct or gross neglect and not due to the action of any intervening person. Unless these two requirements are satisfied, the Deputy Consioner has no jurisdiction to surcharge the Councillors. ( 6 ) I have already set out the relevant portion of the order of the deputy Commissioner. I have again perused his entire order. Nowhere can I get his finding that the petitioners were guilty of misconduct or gross neeglect in the discharge of their duties and the loss sustained by the council was the direct result of such acts. The Government have also not reached that conclusion. In the asbence of such a finding, the impugned orders cannot be supported. ( 7 ) IN the result, the petition is allowed and the impugned orders are quashed. No costs. --- *** --- .