I.---Supplement and Exceptional Provisions.State · Punjab

Section 62 of The Punjab District Boards Act, 1883

(1)If any member, officer or servant of a district or local board or joint committee appointed under this Act is, otherwise than with the permission in writing of the Commissioner, directly or indirectly interested in any contract made with that board or joint committee, he shall be deemed to have committed an offence under the Indian Penal Code, section 168.
(2)A person shall not, by reason of being a shareholder in, or a member of, any incorporated or registered company, be held to be interested, in any contract entered into between the company and a board or committee; but he shall not take part in any proceedings of the board or committee relating to any such contract.

Summary

Members and workers are forbidden from having a personal interest in board contracts.
They can only have an interest if they get written permission from the Commissioner.
Violating this rule is considered a crime under the Indian Penal Code.
Being a shareholder in a company that deals with the board is generally allowed.
Shareholders are still banned from participating in any board business regarding their company's contract.

Practical examples

1Ms. Fatima is a member of the local board and also owns a construction company. The board needs a new bridge. To bid on the job, Fatima must get a letter from the Commissioner allowing her to be interested in the deal.

2Mr. Khan works as a clerk for the district board. He also owns ten percent of the shares in a local paper mill. The board is buying paper from that mill. Mr. Khan doesn't need special permission to keep his shares, but he cannot be part of the meeting where the paper purchase is decided.

FAQ

1. What happens if a board member has a secret interest in a contract under the Punjab District Boards Act, 1883?

Under Section 62 of the Punjab District Boards Act, 1883, they are treated as having committed a crime under Section 168 of the Indian Penal Code.

2. Who gives permission for a member to be part of a contract under the Punjab District Boards Act, 1883?

The Commissioner must provide permission in writing under Section 62 of the Punjab District Boards Act, 1883.

3. Can a company shareholder vote on their company's contract under the Punjab District Boards Act, 1883?

No, Section 62 of the Punjab District Boards Act, 1883 says they must not take part in any proceedings relating to that contract.

Test yourself

Q1.Under Section 62 of the Punjab District Boards Act, 1883, who must give written permission for a member to be interested in a contract?

Q2.Which section of the Indian Penal Code is used for penalties in Section 62 of the Punjab District Boards Act, 1883?

Q3.According to Section 62 of the Punjab District Boards Act, 1883, what is a shareholder prohibited from doing?

Q4.To whom does the penalty in Section 62 of the Punjab District Boards Act, 1883 apply?

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