To get this quest, enter the Arcana Archives at 11 in Saradush and speak to Lazarus Librarus. He would love to sell spells to you but his spellbook has been stolen! He suspects Hectan but he had an alibi for the time of the crime. The only clue is small footprints outside Lazarus' window.
Leave the Arcana Archives and go north. At 12 you will find two boys. Speak to the one called Squip.
Squip demands 1,000 GP to tell you what he knows. You can be a complete fool and pay him that, you can haggle him down to 5 GP, or you can threaten to beat the information out of him. Either way he tells you that Hectan paid him to steal the book.
Now go to the Tankard Tree. Hectan is at 6. Confront him with the evidence.
Hectan admits but also tells you he hasn't got the spellbook on him. He will give it back if you can get him a teleportation scroll from Lazarus so he can escape Saradush.
Go back to the Arcana Archives and speak to Lazarus Librarus. Lazarus gladly gives you a teleportation scroll but also warns you that Yaga-Shura's mages have raised a magical barrier around the city. If Hectan tries to use the scroll, he will be killed.
Go back to the Tankard Tree and give the scroll to Hectan. If you don't warn him, he uses the scroll and gets blown up, and the party loses a reputation point.
Bring the book back to Lazarus Librarus. Each party member gains 5,000 XP, and the Arcana Archives shop is now open.
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"*My OBSERVATIONS are done through JUSTICE'S EYE. I OBSERVE, then I ACT. You would do well to REMEMBER this, if all else is forgotten to you.*" -Vhailor, Planescape: Torment