Former executive officer of Bassi Pathana municipal council (MC) had allegedly withdrawn Rs 10 lakh from the development funds against his gratuity on March 31 on his retirement day.
It has been alleged that former EO Ajit Singh, after taking senior vice-president of MC Mohan Lal Sappal into confidence, had withdrawn funds after getting the latter's signature.
When contacted, Sappal said he had signed the cheque in good faith and that there was no wrong intention behind it.
Local SAD member of legislative assembly (MLA) Nirmal Singh, talking to the Hindustan Times, said the EO had no power to sign the cheque in his favour to withdraw funds from the development grant on account of his retirement benefits.
He added that after the matter was brought to his consideration, the issue was raised with Ashok Gupta, secretary, local bodies.
"A probe has been ordered and the officials concerned have directed not to release his retirement benefits until the inquiry is on,"he said.
Meanwhile, Congress councillor Ramesh Gupta said, "No MC meeting has been held after the council chief polls were organised on March 12. It has come to the fore that some councilors had also kept MC members in dark while signing the check in EO's favour."
Manoj Banda, president, Hindu Organisation, urged the government to take strict action against the defaulters. He said that no development activity had been carried out in the town after the formation of a new council.