(1) The Nagar Panchayat or the Council, as the case may be, may enter into any contract necessary for the purposes of this Act.
     (2) Every contract made by or on behalf of the Nagar Panchayat or the Council, as the case may be, in respect of any sum exceeding ten thousand rupees shall be sanctioned by the Nagar Panchayat or the Council, as the case may be, at a meeting and shall be in writing and shall be signed by at least two Councillors one of whom shall be the Chairperson or the Vice-Chairperson and in absence of both the Executive Officer. Every such contract shall be sealed with common seal of the Nagar Panchayat or the Council, as the case may be.
     (3) Any contract made in contravention of sub-section (2) shall not be binding on the Nagar Panchayat or the Council, as the case may be.