State of Rajasthan v. Ashok Khetoliya

(c) election of Chairpersons of a Municipality in the manner specified in the State law;

(d) constitution of Committees at ward level or other level or levels within the territorial area of a Municipality as may be provided in the State law; (e) reservation of seats in every Municipality-

(i) for Scheduled Castes and Scheduled Tribes in proportion to their population of which not less than one-third shall be for women;

(ii) for women which shall not less than one-third of the total number of seats;

(iii) in favour of backward class of citizens if so provided by the

Legislature of the State; (iv) for Scheduled Castes, Scheduled Tribes and women in the office of Chairpersons as may be specified in the State law; (f) fixed tenure of 5 years for the Municipality and re-election within six months of end of tenure. If a Municipality is dissolved before expiration of its duration, elections to be held within a period of six months of its dissolution; (g) devolution by the State Legislature of powers and responsibilities upon the Municipalities with respect to preparation of plans for economic development and social justice, and for the implementation of development schemes as may be required to enable them to function as institutions of self-government; (h) levy of taxes and duties by Municipalities, assigning of such taxes and duties to Municipalities by State Governments and for making grants-in-aid by the State to the Municipalities as may be provided in the State law;

(i) xx xx xx”

3. Article 243ZF of the Constitution mandated that any provision of any law relating to Municipalities in force in a State immediately before the commencement of the Constitution (Seventy-fourth Amendment) Act, 1992, which is inconsistent with the provisions of Part IXA shall continue to be in force until amended or repealed by a competent Legislature or any other competent authority or until the expiration of one year from such commencement whichever is earlier. Article 243ZF reads thus: “243-ZF. Continuance of existing laws and Municpalities. - Notwithstanding anything in this Part, any provision of any law relating to Municipalities in force in a State immediately before the commencement of the Constitution (Seventy-fourth Amendment) Act, 1992, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is earlier: Provided that all the Municipalities existing immediately before such commencement shall continue till the expiration of their duration, unless sooner dissolved by a resolution passed to that effect by the Legislative Assembly of that State or, in the case of a State having a Legislative Council, by each House of the Legislature of that State.”

4. Therefore, Article 243ZF of the Constitution is in the context of mandating the State Legislature to amend the State laws to be in conformity with Part IXA of the Constitution. The objects and reasons of introducing Part IXA in the Constitution were that local bodies had become weak and ineffective on account of variety of reasons such as failure to hold regular elections, prolonged supersessions and inadequate devolution of powers and functions. The Urban Local Bodies were also not able to perform effectively as vibrant democratic units of self-government. Therefore, when Part IXA was introduced, Parliament was aware that the competent legislature to legislate on the subject of the Urban Local Bodies was the State legislature but Part IXA of the Constitution had given constitutional status to the Municipalities. The States were put under constitutional obligation to adopt Municipalities as per systems enshrined in the Constitution.

5. Entry 5 of the Seventh Schedule List II reads thus:

6. In view of such mandate and its legislative authority, the State of Rajasthan had enacted the Rajasthan Municipalities Act, 2009[1]. Section 2 Clauses (xxxix) and (lxv) of the Municipalities Act read as under: “(xxxix) “municipal area” means the territorial area of a Municipality as notified by the State Government from time to time; xx xx xx

1 For short, the “Municipalities Act” (lxv) “a transitional area”, “a smaller urban area” or “a larger urban area” means an area specified under Article 243Q of the Constitution of India;”

7. Article 243Q of the Constitution and Section 5 of the Municipalities Act are reproduced hereunder: Constitution of India Rajasthan Municipalities Act, 243Q. Constitution of Municipalities. —(1) There shall be constituted in every State,— (a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area; (b) a Municipal Council for a smaller urban area; and

(c) a Municipal Corporation for a larger urban area, in accordance with the provisions of this Part: Provided that a Municipality under this clause may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by public notification, specify to be an in- Section 5 of the Municipalities Act

5. Establishment and incorporation of Municipality. – (1) In every transitional area, there shall be established a Municipal Board and every such Municipal Board shall be a body corporate by the name of the Municipal Board of the place by reference to which the Municipality is known and shall have perpetual succession and a common seal and may sue or be sued in its corporate name. (2) In every smaller urban area, there shall be established a Municipal Council and every such Municipal Council shall be a body corporate by the name of the Municipal Council of the city by reference to which the Municipality is known and shall have perpetual succession and a common seal and may sue and be sued in its corporate name. (3) In every larger urban area, there dustrial township. (2) In this article, “a transitional area”, “a smaller urban area” or “a larger urban area” means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in non-agricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part. shall be established a Municipal Corporation and every such Municipal Corporation shall be a body corporate by the name of the Municipal Corporation of the city by reference to which the Municipality is known and shall have perpetual succession and a common seal and may sue and be sued in its corporate name: Provided that a Municipality under this Section may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by notification, specify to be an industrial township: Provided further that having regard to the cultural, historic, tourist or other like importance of an urban area, the State Government may, by notification in the Official Gazette, exclude such area from the Municipality and constitute, or without excluding such area from the Municipality constitute in addition to the Municipality, a development authority to exercise such powers and discharge such functions in the said area as may be prescribed and notwithstanding anything elsewhere in this Act, may, in relation to such area, delegate, by notification in the Official Gazette, such municipal powers, functions and duties to the said authority as it may think appropriate for the proper, rapid and planned development of such area.

8. We find that the High Court has misread the scope of Part IXA of the Constitution and Article 243Q of the Constitution contemplating that the transitional area has to be notified under such provision. The scheme of the Constitutional Amendment is not to take away legislative competence of the State Legislatures to legislate on the subject of local Government but it is more to ensure that the three tiers of governance are strengthened as part of democratic set up.

9. Dr. Manish Singhvi, learned senior counsel for the State has referred to the judgments of this Court reported as Tulsipur Sugar Co. Ltd. v. The Notified Area Committee, Tulsipur[2] and Sundarjas Kanyalal Bhatija & Ors. v. Collector, Thane, Maharashtra & Ors.[3] to contend that the power to declare Municipal Board or a Municipality is a legislative function which is discharged by the State by issuing a notification on behalf of the Hon’ble Governor. The notification issued by the Hon’ble Governor is in fact a notification issued by the State

Government. The provisions of Section 5 of the Municipalities Act are not inconsistent in any manner with Article 243Q of the Constitution and thus, Section 5 of the Municipalities Act is a legal and valid provision and the notification has been issued in exercise of the powers conferred by the statute. The High Court has thus erred in law to quash the notification issued.

10. On the other hand, Ms. Yadav, learned counsel for the respondents, did not dispute that the notification issued under Section 5 of the Municipalities Act is a legislative function but she contended that firstly there has to be a notification under Article 243Q of the Constitution and only thereafter the Government can issue a notification constituting a Municipal Board under Section 5 of the Municipalities Act. She relies upon judgments of this Court reported as Pune Municipal Corporation & Anr. v. Promoters and Builders Association & Anr.[4] and MGR Industries Association & Anr. v. State of Uttar Pradesh & Ors.5. Reliance is also placed upon judgment of this Court reported as Champa Lal v. State of Rajasthan & Ors.6.

11. This Court in Tulsipur Sugar Co. Ltd. held as under:

9. We are, therefore, of the view that the maxim “audi alteram partem” does not become applicable to the case by necessary implication. xx xx xx

17. We are, therefore, of the view that a notification issued under Section 3 of the Act which has the effect of making the Act applicable to a geographical area is in the nature of a conditional legislation and that it cannot be characterised as a piece of subordinate legislation. In view of the foregoing, we hold that the contention of the plaintiff that the declaration made by the State Government under Section 3 of the Act declaring the area in which the sugar factory of the plaintiff is situated as a part of the Tulsipur town area is invalid is not tenable.”

12. In Sundarjas Kanyalal Bhatija, a draft notification proposed the formation of a “Kalyan Corporation” by merging municipal areas of Kalyan, Ambarnath, Dombivali and Ulhasnagar. The State Government issued a notification excluding Ulhasnagar from the proposed corporation. The High Court found that the decision to exclude Ulhasnagar was taken by the Government abruptly and in an irrational manner. This Court held as under:

13. In Champa Lal, this Court had struck down a notification issued by the Governor of the State of Rajasthan holding that in the absence of notification which meets the requirement of Article 243Q(2), the entire exercise undertaken by the State of Rajasthan in upgrading the Napasar Village Gram Panchayat to be a Nagarpalika is inconsistent with the requirements provided thereof under the Constitution.

14. We find that such judgment is not in tune with the scheme of the Constitution and is contrary to a three-Judge Bench judgment of this Court reported as Parmar Samantsinh Umedsinh v. State of Gujarat & Ors.[7] wherein the vires of the Gujarat Provincial Municipal Corporation Act, 1949 were subject matter of challenge on the ground that the State law has provided more than one representative from a single Ward and, thus, this provision is inconsistent with the provisions of Article 243R and Article 243S of the Constitution. This Court held as under:

50. Thus, the Legislature of a State may by law has to provide all matters relating to or in connection with election to the Municipalities, which includes filling of the seats in the Municipality by person chosen by direct election. Articles 243R and 243ZA does not give any indication as to whether from territorial constituency, i.e., the Wards, whether only one member has to be elected in the Municipality or it can be multiple member constituency. The constitutional provisions of Article 243R, which provides for composition of Municipalities and that of Article 243ZA does not give any indication to the above. The provisions of Article 243ZG, which deals with bar to interference by courts in electoral matters throws some light…

59. We have analysed the provisions of Article 243R, 243S and have come to the definite conclusion that no limitation in Article 243S can be found of which contains any prohibition of having more than one member for a Ward.

63. We, in the present case, after analysing the relevant provisions of Part IXA of the Constitution has come to the conclusion that there is no prohibition or limitation in Part IXA of the Constitution prohibiting the State Legislature from making a law providing for election of more than one member from one territorial constituency, i.e., Ward.”

15. In State of U.P. & Ors. v. Pradhan Sangh Kshettra Samiti & Ors.8, this Court was considering the Constitution (Seventy-third Amendment) Act, 1992. Article 243C in Part IX of the Constitution is similar to Article 243Q in Part IX-A of the Constitution. The High Court had struck down the definition of Village, Gram Sabha and Panchayat Area under the U.P. Panchayat Raj Act, 1947 as ultra vires the respective definitions given in Part IX of the Constitution. This Court held as under:

16. Since the local Government falls in entry 5 of List II of the Seventh Schedule, therefore, it is the State Legislature alone which is competent to legislate in respect of the municipalities with only one limitation that the provisions of the State Act cannot be inconsistent with the mandate of the Scheme of Part IXA of the Constitution. The scheme of Part IXA of the Municipalities Act does not contemplate a separate notification under Article 243Q of the Constitution and thereafter under Section 5 of the Municipalities Act. As Section 5 of the Municipalities Act is not inconsistent with any provisions of Article 243Q of the Constitution, therefore, two notifications are not contemplated or warranted under the Scheme of Part IXA or the Municipalities Act as reproduced in the table above.

17. The State Government is competent to divide the Municipalities in the State into classes according to their income or other factors like population or importance of the local area and other circumstances as provided under Section 329 of the Municipalities Act. In terms of Section 329, a notification was issued on 30.4.2012 determining the category of the Municipal Corporation/Municipal Council/Municipal Board. The said notification reads as under: “No. P.[8] (Ga) ( ) Rule/Category/LSG/12/3825 Dated 30/4/12:- Notification:- In connection with the partition of the category of municipalities and superseding all the notifications issued earlier in relation to the categorization of Municipal Councils by exercising the powers rendered in Section 329 read with Section 337 of Rajasthan Municipal Act, 2009 (Act No. 18 of year 2009), the State Government hem by determines the category of all the Municipal Corporation/Councils/Board which follows as under:- (1) Greater Urbanized area (Municipal Corporation) - Urbanized area of population of 5 lacs (2) Small urbanized area - All urbanized area and all (Municipal Council) district headquarters (except Municipal Corporation) having population of more than 1 lac and less than 5 lacs. (3) Transitional area (Municipality Board) - Urbanized area of 1 lac population But State Government would have right to convert any municipal council into any category keeping in view its historical/religious/archaeological importance or in any special circumstances. As per order of Governor Sd. Deputy Government Secretary”

18. Thereafter, the impugned notification dated 12.8.2014 was issued in exercise of the powers conferred on the State Government under Section 3 read with Section 329 of the Municipalities Act. The said notification reads thus: “No.F.10(ka)Est./Category( )/DLB/14/2591 Dated 12/8/14:- Notification:- State Government by exercising its power U/S 3 read with Section 329 of Rajasthan Municipal Act 2009 (Act No.18 year

2009) and Notification No.P.8(.G)()Rule/Category/LSG/12/3825- 4090 dated 30/4/12 hereby declares all the following Gram Panchayat areas into fourth class Municipal Councils with immediate effect.

Gram Panchayat Newly constituted forth class Municipal Councils 1 Bharatpur Roopbas Municipal Board Roopbas Existing Boundaries of the said Gram Panchyat (Barbar -in the north, Gram Samahad in the south, Bhidyani and Rudh Roopwas in the east and Dorda in the west) would remain the local boundaries of newly constituted Municipal Board. As per order of Governor Sd. Government Deputy Secretary”

19. The above notifications would show that the State Government had exercised powers to establish Municipality in terms of Section 5 of the Municipalities Act. Such notifications cannot be said to be illegal or arbitrary in any manner and were rightly issued in exercise of the statutory powers conferred on the State by the Legislature.

20. The argument of Ms. Yadav is that the notification is arbitrary and unreasonable, therefore, the High Court has rightly struck down the notification. Reliance is placed on the judgment reported as Pune Municipal Corporation to support such contention. In the said case, the notification amending the Development Control Rules sanctioned by the State Government under Section 37 of the Maharashtra Regional and Town Planning Act, 1966 was the subject matter of challenge. The High Court had struck down the notification amending the Development Control Rules. It was held that the Development Control Rules were legislative function, therefore, Section 36 has to be viewed as repository of legislative powers for effecting amendments to Development Control Rules. It was observed that such Rules can be challenged on the ground of it being arbitrary or unreasonable. We do not find that the said judgment in any way support the arguments raised by the learned counsel.

21. In MGR Industries Association, the appellant was claiming to be part of the industrial township so as to be exempt from the jurisdiction of Zila Panchayat. This Court examined that there has to be a notification under Section 12-A of the U.P. Industrial Area Development Act, 1976 before it is excluded from Panchayat area. Therefore, two notifications were required, one to constitute an industrial township under Section 12-A of the 1976 Act and then exclusion of Panchayat area under the Uttar Pradesh Kshettra Panchayats and Zila Panchayats Adhiniyam, 1961. The said judgment is again not helpful for the arguments raised.

22. In fact, the High Court has struck down the notification only for the reason that the notification under Article 243Q(2) was not published. Such reasoning is not tenable.

23. Thus, the order of the High Court is clearly erroneous and unsustainable in law. The same is set aside and the writ petition is dismissed. Consequently, the appeal is allowed .............................................. J. (HEMANT GUPTA) ............................................. J. (V. RAMASUBRAMANIAN) NEW DELHI; MARCH 10, 2022.