Public servants are prohibited from engaging in trade or having pecuniary interests in contracts made with the public authority they serve, as it violates the Berar Municipal Law and the Indian Penal Code.

H J Stanyon, Esquir—This case raises a somewhat difficult question of law and it is therefore expedient to make a short statement of the facts material thereto. The applicant, A.B., became a member of the Municipal Committee of the town of Amraoti, in Berar, on the 1st April 1908. On the 2nd June 1908 he became Vice-Chairman of that Committee, a position of great trust and responsibility. As Vice-Chairman he was the working member of the Committee in its dealings with contractors who carried on Municipal work. He made the contracts, passed contractors, bills and issued Municipal Cheques in payment thereof. Incidentally, he was also subject to the Berar Municipal Law, section 146 (1), whereof runs as follows:--

If any member officer, or servant of a Committee is otherwise than with the permission in writing of the Commissioner, directly or indirectly interested in any contract made with the Committee, he shall be deemed to have committed an offence under section 168 of the Indian Penal Code.

2. By profession the applicant is a pleader, practising as such at the Amraoti Bar, and he also has, and himself carries on, a money-lending business.

3. On the 16th November 1908, two contracts were given by the Municipal Committee, acting through the applicant, to one Lahanu for the construction of certain drains, the amount payable for the completed drains being Rs. 352 in one case and Rs. 456 in the other. The contractor is said to have been in want of capital to carry out these works, and it is an admitted fact that the applicant advanced him Rs. 150 on the first contract, and Rs. 200 on the second. These advances were not made by applicant in his official capacity from Municipal Funds, but constituted on the faces of them, private loans from applicant's money-lending business, According to Lahanu (W.P. 4) the money was lent without any agreement for the payment of interest. In due course Lahanu presented two bills for payment on account of the above contracts, and these bills having been passed by the applicant as Vice Chairman, he issued Municipal Cheques signed by himself in payment thereof on two different dates. The cheques were however not given to Lahanu but kept under control of the applicant, as below The first cheque was endorsed to one Pandharinath, clerk to Mr. Kale a pleader who is a trustee of the estate of A.B.'s father-in-law Jog. Pandharinath cashed the cheque and brought the money to A.B., who first deducted his own claim, and passed on the balance to the contractor Lahanu. The second cheque was endorsed to A.B.'s office peon, Naru, who as was done in the Other case, cashed it and carried and delivered the money to A.B. who then paid Lahanu a balance after deducting his own claim.

4. Upon these facts applicant was convicted by the Sub-Divisional Magistrate of Amraoti of two offences punishable under section 168 of the Indian Penal Code as applied to Berar, (namely that, being a public servant he had unlawfully engaged in trade), and sentenced to pay a fine of Rs. 51 or undergo simple imprisonment for one month in respect of each of the two offences, The applicant appealed against these convictions and sentences to the Court of Session for East Berar, but the appeal was dismissed. He has therefore applied for revision to this Court.

5. On behalf of the applicant it was urged that his election as member and Vice-Chairman of the Amraoti Municipality did not disentitle him to carry on his business as a banker and moneylender. Lahanu was introduced to him by one Pimple, another pleader and the money was recovered, with the contractor's consent, in ordinary course of applicant's business as a banker and money-lender. Except the recovery of money lent, A.B. had no interest whatever. Under section 146 (1), Berar Municipal Law, the word ''interest'' meant 'pecuniary interest' in the contract. If Lahanu's contracts had gone to the wall, A.B. would still have been entitled to recover his advances. In other words, the argument