Employees' State Insurance (Central) Rules, 1950
45. Disallowance of expenditure incurred and surcharge for loss or deficiency
(1) The Standing Committee or any authority authorized by it in this behalf may, after giving the person concerned an opportunity to submit an explanation, and after considering any such explanation, disallow any item of account contrary to the provisions of the Act or of the rules or regulations made thereunder , and surcharge the same on the person making or authorizing the making of payment of such account and shall charge against any person accounting, the amount of any deficiency or loss incurred by the negligence or misconduct of that person, or of any sum which ought to have been but is not brought into account by that person, and shall in every such case certify the amount due from such person:
PROVIDED that no certificate made by the authority authorized by the Standing Committee shall have effect unless it is approved by the Standing Committee.
(2) The Standing Committee shall state in writing its reasons for every disallowance, surcharge or charge made or approved by it and shall serve a certificate of the amount due and a copy of the reasons for its decision on the person against whom the certificate is made and shall also furnish copies thereof to the Central Government.
(3) Any person aggrieved by a certificate made under this rule may, within one month from the date of the service of certificate on him under sub-rule (2), file an application to the Central Government for setting aside or modifying the disallowance, surcharge or charge in respect of which the certificate was made.
(4) On receipt of application under sub-rule (3) or on its own motion, the Central Government may, after making such inquiry as may be necessary, pass such order as it thinks fit either confirming, modifying or setting aside the disallowance, surcharge or charge in respect of which the certificate was made and the Standing Committee shall thereupon take action in accordance with such order within such time as may be specified by the Central Government.
(5) The Central Government may by order direct that all further action under the certificate made under this rule shall be stayed until the disposal of the matter pending before it under sub-rule (4).