Judgment.- This appeal raises a question of general importance as to the jurisdiction of an Auditor to disallow and surcharge items of expenditure made by a local authority, whose accounts he is under a statutory duty to audit. The appellant herein has been a Chairman of the Cuddalore Municipality. The Examiner of Local Fund Accounts surcharged the appellant and the other members of the Cuddalore Municipal Council to a sum of Rs. 6,496-o6 nP. on the ground that the municipality incurred a loss to that extent on account of the negligence of the said Councillors. Originally, the Cuddalore Municipality passed a resolution to illuminate all important centres of the Cuddalore Town with mercury vapour lamps for the benefit of the public, and for that purpose invited sealed tenders for the supply of 36 mercury vapour lamps together with the fittings. A notification calling for tenders was also published in the newspapers, the Hindu and the Swadesamitran on 13th September, 1956. In response to the notification calling for tenders, tenders were received from the following firms: (1) Neo Hindustan Electricals, Madras, (2) The Modern Electricals, Cuddalore, (3) Radio Lamp Works, Madras and (4) Electric Power Devices Co., Bangalore. The two tenders; received from the third and the fourth firms respectively were not placed before the Council by the Commissioner, as they did not make the tenders in proper form and also because the said two firms did not quote the rates for all the items required. Therefore, the Council, considered only the tenders received from the Neo Hindustan Electricals, Madras and the Modern Electricals, Cuddalore at its meeting held on 22nd April, 1957. The Council, while considering the two tenders, thought it desirable to call for quotations also from individual firms. Accordingly, the Commissioner of the Cuddalore Municipality called for quotations. The General Electric Company, Madras, The Radio Lamp Works, Madras and the Modern Electricals, Cuddalore, gave their quotations. When the matter came up again before the Council at its meeting held on 10th June, 1957, the Council took into consideration the tenders only and ultimately accepted the tender of the Modern Electricals, Cuddalore. In pursuance of the acceptance of the tender, the Cuddalore firm supplied 36 lamps and the Municipality paid the amount. In the course of audit, the Examiner of Local Fund Accounts took objection to the procedure adopted by the Municipality. In pursuance of the acceptance of the tender, the Cuddalore firm supplied 36 lamps and the Municipality paid the amount. In the course of audit, the Examiner of Local Fund Accounts took objection to the procedure adopted by the Municipality. In his opinion the decision of the Council to call for quotations when the tenders were placed before the meeting amounted to a rejection of the tenders although it had not been specifically recorded, and that when quotations were received, the Council was not justified in accepting the tender of Modern Electricals, Cuddalore. He concluded that the appellant and the other members of the Council were thoroughly negligent in discharging their duties and had acted in a manner detrimental to the Municipality. In the view of the Examiner, the Council wanted to favour one individual in Cuddalore. In the end, he issued a surcharge certificate under Rule 60 of Schedule IV of the Madras District Municipalities Act, that a sum of Rs. 6,496-06 NP. representing the loss caused to the Cuddalore Municipal Council fund was surchargeable and due jointly and severally from the appellant and the other members of the Council. The appellant herein questioned the propriety and correctness of the certificate and filed O.P. No. 143 of 1959, out of which this appeal arises, before the Sub-Court, Cuddalore. The learned Subordinate Judge dismissed the petition with the finding that the appellant and the other Councillors really acted in a manner detrimental to the financial interests of the Municipal Council of Cuddalore. It is against this order that the Chairman of the Council has preferred this appeal. The only ground of complaint of the Auditor against the Municipality seems to be that they accepted tender which was not the lowest, when there was a quotation which they themselves called for was the cheapest. It is true that originally the Municipality called for tenders; when the tenders came up for consideration at the meeting on 22nd April, 1957, the Municipality passed a resolution to the effect, “Resolved to call for quotations for the supply of materials and lights, etc.” After quotations were received the Council at its meeting held on 10th June, 1957 considered once again both the tenders and quotations, and finally passed resolution; to the effect, "The Lowest tender of Modern Electricals at Rs. 600..........is accepted......” The explanation that was offered by the Chairman and the other Councillors was that they never intended to reject the tenders, and when the tenders came up for consideration, they wanted to call for quotations also, and in the final meeting they took into account all facts and circumstances and decided to accept the lowest tender of the Modern Electricals, Cuddalore. They gave the reason that the Modern Electricals, Cuddalore, being a local firm would be under their control, and on account of urgency, they would insist upon him to supply all the 36 mercury vapour lamps, to be installed in Cuddalore Town. They never rejected the tenders, when they called for quotations. It was contended by Mr. Rajah Iyer, learned Counsel for the appellant that the Examiner committeed a mistake in coming to the conclusion that, when the Municipality called for quotations, it should be deemed that the tenders had been rejected. According to the learned Counsel, it was the intention of the Council, when the tenders came up for consideration, to call for quotations also from some more firms before deciding the matter, and that only by inviting quotations they could get some more information about the market position of the goods. But the Council never intended to reject the tenders. They were aware of the procedure laid down in Rule 4 of the Tender Rules that if they wanted to reject the tenders, they should get the sanction of the Government for dispensing with tenders and accepting the quotations. Now, the relevant provision which authorises the Auditor to issue the certificate is Rule 60 (1) in Schedule IV to the Madras District Municipalities Act, 1920. It is as follows:- “The Auditors may disallow every item contrary to law and surcharge the same on the person making, or authorising the making of, the illegal payment; and may charge against any person responsible therefore the amount of any deficiency, loss or unprofitable outlay 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.” Now, the rule has to be interpreted for deciding this appeal. This rule is quite analogous to section 247, sub-section (7) of the Public Health Act, 1875, which is in the following terms: “Any Auditor acting in pursuance of this section shall disallow every item of account contrary to law, and surcharge the same on the person making or authorising the making of the illegal payment, 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, and on application by any party aggrieved shall state in writing the reasons for his decision in respect of such disallowance or surcharge, and also of any allowance which he may have made.” The scope of the section was considered on a number of occasions in the Court of Appeal. The leading case, and perhaps the earliest case on this subject, is that of King v. Carson Roberts1. In that case, in the course of audit, the Auditor surcharged jointly and severally upon certain members of the highway committee of the Council several sums representing losses incurred by the Council in respect of contracts for horse forage, fine crushed ballast, carbolic acid, and boots respectively, by reason, as the Auditor alleged, of the negligence or misconduct of such members in the selection of tenders for the articles in question. Farwell, L.J., in the course of the arguments, observed: “Any body acquainted with business must know that it is frequently a most injudicious thing to accept the lowest tender..........” Lord Justice Fletcher Moulton observed: “It is so obvious that the acceptance of the lowest tender is only a matter of discretion, and that of ten it is wiser to accept a tender that is not the lowest.......... Another Noble Lord observed in the same case: "In my opinion, it is plain that this is a matter of administration, not of policy......“ Therefore the mere acceptance of the lowest tender would not be enough for an Auditor to issue a certificate. But he must go further and prove that there was negligence or misconduct on the part of the Councillors concerned, when they accepted the lowest tender in preference to the lowest quotation. But he must go further and prove that there was negligence or misconduct on the part of the Councillors concerned, when they accepted the lowest tender in preference to the lowest quotation. Therefore, we have to see whether there was any negligence or misconduct on the part of the Councillors, when they accepted the lowest tender in spite of the fact that they had before them the lowest quotation. The appellant has stated that the Council never rejected the tenders. He also gave reasons why the Council accepted the tender in preference to the quotation. No fraud, or corruption has been suggested by the Auditor except a vague insinuation, namely, that, in order to prefer a local man, the Councillors accepted the lowest tender. The members of the Council were admittedly honest in their recommendation, and to find them guilty of negligence, merely because they accepted the lowest tender in preference to the lowest quotation, is not proper or justifiable. It is useful to refer to a passage of Lord Farwell at page 435: ”The Auditor found that the highest instead of lower tenders had been accepted, and asked the reason and was told that the committee thought it best, and they declined to answer further. No one, of course, would say that the lowest tender must or ought necessarily to be accepted, but Sir R. Finlay pushed his contention to the extent that if one tender for the same material was five times greater than any other the Auditor must bow to their decision without more. In my opinion, it is plain that this is a matter of administration, not of policy........" A further question arises for consideration, whether the words "surcharge the same on the person making or authorising the making of illegal payment; and may charge against any person responsible therefor......" refer to all the members of the Municipal Council or the person who made the payment is responsible for the loss. In the instant case the Auditor surcharged all the Councillors of the Municipality in spite of the fact that several Councillors filed statements to the effect that they were not well acquainted with the procedure, some of them stating that they were not advised, warned or guided at the time of passing the resolution and one of the Councillors alleged that the Commissioner himself recommended the local tender. On the face of these allegations, can the Auditor surcharge all the Councillors when the rule says that "surcharge the same on the person making or authorising the making of illegal payment"?. The answer is provided by the dissenting judgment of L.J. Fletcher Moulton in King v. Carson Roberts1. "It is clear that persons answering to either of these descriptions making or authorising the making of payment must necessarily be persons who are before the Auditor in his capacity as such, and must be persons who either have had money of the Corporation for which they must properly account, or have had control of funds of the Corporation which they had authority to pay away, and for the proper expenditure of which they have therefore to account..... But to my mind it is impossible to call an individual corporator as such a ‘person accounting". He brings in no accounts, and no money of the Corporation passes through his hands. The Corporation is the person accounting, and any person or persons to whom are delegated duties which include the receipt and disbursement of moneys for specific purposes will become thereby ‘persons accounting’, because they personally have to bring in accounts which must be put into right form by the Auditor. I do not pretend that these categories exhaust the possible ways in which an individual corporator may become a person accounting, but to my mind he does not become in his personal capacity subject to the jurisdiction of the Auditor, and liable to be directly charged by him, merely because he is a corporator. He may well become liable in respect of deficiencies due to the surcharges or disallowances made by the Auditor in the accounts brought in by the Corporation, but if so his liability must be established (as between himself and the Corporation that has been surcharged) by the ordinary processes of law. The auditor has neither the power nor the jurisdiction to hold an enquiry as to which of the individual corporators are to be visited with the consequences of what he deems to be an act of negligence on the part of the Corporation. " Their Lordships finally refused to surcharge the members for the loss suffered by the Council. The auditor has neither the power nor the jurisdiction to hold an enquiry as to which of the individual corporators are to be visited with the consequences of what he deems to be an act of negligence on the part of the Corporation. " Their Lordships finally refused to surcharge the members for the loss suffered by the Council. In the case of King Kennedy v. Browne2, certain members of a rural council employed solicitors and directed them to prepare bonds (which included agreements and warrants) for the contractors for the building of cottages and the fencing of plots. When the solicitors furnished bill of costs, in which a charge of £ 2.2s. was made for the preparation and execution of these documents, the same was allowed. When the accounts of the Council subsequently came to be audited, the Auditor disallowed certain amounts and surcharged the Councillors who authorised the employment of the solicitors with these sums. Lord O’Brien, L.C.J., posing a question, "was the particular payment that was made an illegal payment ?" observed thus: "‘I think not. I see no illegality whatever in the contract between the Council and Mr. Gullinan. There was no suggestion of fraud or collusion. All want of bona fides was more than once emphatically disclaimed. The contract between Mr. Gullinan and the Council was a valid contract, infected with no illegality, no corruption, no fraud, no collusion, no mala fides." In the instant case also, I cannot say that the mere acceptance of the local tender is not a valid contract and nor can I say that the same is infected with illegality, corruption, fraud, collusion or mala fides. Gullinan and the Council was a valid contract, infected with no illegality, no corruption, no fraud, no collusion, no mala fides." In the instant case also, I cannot say that the mere acceptance of the local tender is not a valid contract and nor can I say that the same is infected with illegality, corruption, fraud, collusion or mala fides. In the same judgment, the following passage from the case of In re Faure Electric Accumulator Company3, is quoted: "Mere imprudence is not enough; want of judgment is not enough; grave error of judgment is not enough." Similarly in the case of Rex v. Roberts4, while considering a surcharge certificate issued by an Auditor upon the Councillors on the ground that they made overpayments to their employees, Scrutton, L.J., observed at page 719: "But in determining what is reasonable and what is excessive, I think the Auditor must give full effect to the consideration that he is dealing with a representative body entrusted by Parliament with wide powers............A wide margin should be allowed for error of judgment, not amounting to misconduct, or for deliberate policy, not being illegal, with which the Auditor cannot interfere." What is negligence or misconduct was explained in a case decided on similar facts Pentecost v. London District Auditor1. In that case, a District Auditor refused to surcharge a local authority or their officers concerned in respect of payments in full to contractors which the officers had authorised though the work to which the payments related was defective. It was said on behalf of the objectors that the District Auditor applied the wrong test, when he directed himself to find gross negligence. In this connection, Lynskey, J., observed: "Negligence is well known and well defined. A man is either guilty of negligence or he is not guilty of negligence. Gross negligence is not known to the English Common Law so far as civil proceedings are concerned, and one has only to consider the phrase in criminal cases, particularly in cases of motor manslaughter. In the ordinary case in civil proceedings, either a man is guilty of negligence or he is not." In the same case, Delvin, J., observed as follows: "Clearly, ‘negligence’ is intended to be an alternative to ‘misconduct’, and if one adds to negligence the element of moral culpability, it is difficult to see any distinction between negligence with moral culpability, and misconduct. I therefore think that the right construction of the word ‘negligence’ is its ordinary meaning...... It does not follow that every mistake or every want of judgment or every error of judgment on the part of any local authority or official will lead to a surcharge. The test will be that of negligence in its ordinary sense which is commonly applied in these Courts." On a review of the case law on this question whether the Auditor was right in issuing the surcharge certificate, I come to the conclusion that merely because the Councillors accepted the lowest tender when there was a cheapest quotation their action would not amount to negligence or misconduct. It may be mere imprudence or want of judgment or grave error of judgment; but it is certainly not negligence or misconduct. After all, these people came to the municipality, "to give their service to the community in this way. The task is at best unremunerative and often, thankless; but if those who accept it are to be liable to have their conduct pronounced upon and their character and property injured by decisions, not of any of the Courts of law of the country, to which they are of course amenable, but of a special tribunal consisting of an official chosen by a government department without any powers or qualifications for holding a judicial inquiry, and discharging these functions without any of the securities which protect the individual before our Courts, and if the jurisdiction of that individual is not to be limited to requiring an account of municipal money for which the accused has made himself responsible, but extends to calling him to account for the reasons and motives of all his actions, no self-respecting man will take part in municipal affairs." King v. Corson Roberts”. In the result, this appeal is allowed ; but in the circumstances of the case, there will be no order as to costs. V.K. ----- Appeal allowed.