The main legal point established is that municipal members, when acting in good faith and with due care and attention based on legal advice, are not liable for incurred losses.

Sen, J—This is an appeal by Nemichand under Section 14(3), Central Provinces Local Fund Audit Act, 1933, to set aside the order dated 28th August 1941 passed by the District Judge, Wardha, in Miscellaneous Judicial case No. 4 of 1944 upholding the order of the Commissioner, dated 22nd December 1943.

2. The relevant facts which led to the present appeal are briefly these. Govind Suryabhan Wankhede was a Water Works Overseer employed by the Municipal Committee, Arvi and was drawing Rs. 90 P.M. as his salary. He was removed from service by the resolution of the Municipal Committee passed on 30th August 1937. This order was set aside on appeal by the Deputy Commissioner, Wardha, on 2nd May 1938. The Municipal Committee filed an appeal before the Commissioner, Nagpur Division which was dismissed on 29th October 1938 on the ground that the appeal was not competent. The Municipal Committee consulted Mr. Thengdi, an advocate, whether a revision application should be filed before the Provincial Government against the order of the Commissioner. Mr. Thengdi was of the opinion that the order of the Commissioner was wrong and advised the Municipal Committee to file a revision application. Accordingly a resolution was passed by the Municipal Committee on 7th December 1938 sanctioning the filing of a revision application. At that meeting eight municipal members were present and Nemichand the appellant was one of them.

3. On 19th January 1940 another resolution was passed by the Municipal Committee sanctioning the expenditure of Rs. 60-2-0 for the expenses of the revision application made to the Provincial Government. The revision application made to the Provincial Government was dismissed on the ground that no revision application was maintainable as Wankhede was drawing a salary less than Rs. 200 p.m., A copy of the minutes of 19th January 1940 has not been' filed and it is not clear whether the appellant was one of the persons who were present at the meeting of the 19th and voted for the resolution, sanctioning the expenditure of Rs. 60-2-0. The Examiner of Local Fund Accounts submitted a report under Section 8, C.P. Local Fund Audit Act objecting to the expenditure of Rs. 60-2-0. The Commissioner, Nagpur Division by the order dated 22nd December 1943 held that the members voting for resolution No. 598, dated 7th December 1938, acted in a grossly negligent manner thus causing unnecessary expenditure of Rs. 60-2-0 which must be considered to be a loss to the municipal fund and charged that sum against the eight municipal members who voted for the resolution in equal proportions, i.e., each one of them was made liable to pay Rs. 7-8-3.

4. The appellant was thus made liable for the payment of Rs. 7-8-8 under the order of the Commissioner. The members who were made liable for the payment of Rs. 7-8-3 filed applications to set aside the order of the Commissioner. All these cases were consolidated by the order of the District Judge, Wardha, who upheld on 28th August 1944 the order of the Commissioner. It is against the order of the District Judge that the present appeal has been filed.

5. It may be noted at the outset that the members who voted for the filing if an appeal before the Commissioner against the order of the Deputy Commissioner, Wardha, dated 2nd May 1938, were not made liable for the filing of an appeal be for the Commissioner or for voting for the expenditure on account of the appeal; nor does it appear that any objection was taken at the time an appeal had been filed previously before the Commissioner Nagpur Division against the order of the Deputy Commissioner, dated 23rd September 1936.

6. The defence of the appellant was that the municipal members acted with due care and attention and in good faith in order to protect the interest of the Municipal Committee, Arvi. Nemichand has supported his case by his evidence. Mr. Thengdi was examined as witness 2 for the applicant, and he fully supported the evidence of Nemichand. Mr. Th