The locals broke the office´s windows, doors and furniture, apart from vandalizing a taxi with registration number Ba 1 Jha 4433.
The locals also took out a rally demanding that the municipality´s chief be sacked and action be taken against other officers.
Ilam´s fire engine that broke down three months ago has still not been repaired.
A fire on Monday night in Ilam gutted 10 houses, damaging property worth Rs 100 million.
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