STATE OF RAJASTHAN versus ASHOK KHETOLIYA & ANR on 10 March 2022

STATE OF RAJASTHAN

v.

ASHOK KHETOLIYA & ANR

(Civil Appeal No. 1814 of 2022)

MARCH 10, 2022

[HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ]

Constitution of India: Arts.243Q(2), 243ZF, Constitution(Seventy Fourth Amendment) Act, 1992 – Part IXA – LegislativeCompetence with respect to Urban Local Bodies – Appellant-Stateissued a notification declaring Gram Panchayat Roopbas, DistrictBharatpur as Municipal Board – The said notification waschallenged on the ground that the same was ultra-vires as nonotification was made public as contemplated under Art.243Q(2) –High Court accepted the challenge and held that declaration bythe State was beyond its legislative competence – Held: Art.243ZFof the Constitution mandates the State legislature to amend the StateLaws to make them in conformity with Part IXA – When Part IXAwas introduced, the Parliament was aware that the competentlegislature to legislate on the subject of the Urban Local Bodieswas the State Legislature but Part IXA gave constitutional status tothe Municipalities and therefore the State were put underconstitutional obligation to adopt Municipalities – Local Governmentfalls in Entry 5 List II of Seventh Schedule therefore state legislaturealone is competent to legislate in respect of municipalities providedthe same is not inconsistent with Part IXA – The scheme of Part IXAdoes not contemplate separate notification under Art.243 Q and ifthe notification is issued as per the Municipality Act enacted by theState which is not inconsistent with Art.243Q, then it fulfills theconstitutional requirement and the same cannot be held to be ultra-vires solely on the basis that the notification was not published underArt.243Q(2) – Rajasthan Municipalities Act, 2009.

Constitution (Seventy Fourth Amendment) Act, 1992: Part IXA– Object of introducing Part IXA in the Constitution – Held: Objectsand reasons of introducing Part IXA were that local bodies hadbecome weak and ineffective on account of variety of reasons suchas failure to hold regular elections, prolonged supersessions and

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Ainadequate devolution of powers and functions – The Urban LocalBodies were also not able to perform effectively as vibrant democraticunits of self-government – Therefore, when Part IXA was introduced,Parliament was aware that the competent legislature to legislate onthe subject of the Urban Local Bodies was the State legislature butPart IXA of the Constitution had given constitutional status to theBMunicipalities – The States were put under constitutional obligationto adopt Municipalities as per systems enshrined in the Constitution– Constitution of India.

Allowing the appeal, the Court

Allowing the appeal, the Court

CHELD: 1. Article 243ZF of the Constitution mandated thatany provision of any law relating to Municipalities in force in aState immediately before the commencement of the Constitution(Seventy-fourth Amendment) Act, 1992, which is inconsistent withthe provisions of Part IXA shall continue to be in force untilamended or repealed by a competent Legislature or any otherDcompetent authority or until the expiration of one year from suchcommencement whichever is earlier. Therefore, Article 243ZFof the Constitution is in the context of mandating the StateLegislature to amend the State laws to be in conformity with PartIXA of the Constitution. The objects and reasons of introducingEPart IXA in the Constitution were that local bodies had becomeweak and ineffective on account of variety of reasons such asfailure to hold regular elections, prolonged supersessions andinadequate devolution of powers and functions. The Urban LocalBodies were also not able to perform effectively as vibrantdemocratic units of self-government. Therefore, when Part IXAFwas introduced, Parliament was aware that the competentlegislature to legislate on the subject of the Urban Local Bodieswas the State legislature but Part IXA of the Constitution hadgiven constitutional status to the Municipalities. The States wereput under constitutional obligation to adopt Municipalities as perGsystems enshrined in the Constitution. [Paras 3, 4][783-D-E; 784-A-C]

2. The High Court has misread the scope of Part IXA ofthe Constitution and Article 243Q of the Constitutioncontemplating that the transitional area has to be notified under H

such provision. The scheme of the Constitutional Amendment isnot to take away legislative competence of the State Legislaturesto legislate on the subject of local Government but it is more toensure that the three tiers of governance are strengthened aspart of democratic set up. [Para 8][786-A-B]

Tulsipur Sugar Co. Ltd. v. The Notified Area Committee,Tulsipur (1980) 2 SCC 295 : [1980] 2 SCR 1111;Sundarjas Kanyalal Bhatija & Ors. v. Collector, Thane,Maharashtra & Ors. (1989) 3 SCC 396 : [1989] 3 SCR405; Parmar Samantsinh Umedsinh v. State of Gujarat& Ors. 2021 SCC OnLine SC 138; State of U.P. &Ors. v. Pradhan Sangh Kshettra Samiti & Ors. 1995Supp (2) SCC 305 : [1995] 2 SCR 1015 – relied on.

3. Since the local Government falls in entry 5 of List II ofthe Seventh Schedule, therefore, it is the State Legislature alonewhich is competent to legislate in respect of the municipalitieswith only one limitation that the provisions of the State Act cannotbe inconsistent with the mandate of the Scheme of Part IXA ofthe Constitution. The scheme of Part IXA of the MunicipalitiesAct does not contemplate a separate notification under Article243Q of the Constitution and thereafter under Section 5 of theMunicipalities Act. As Section 5 of the Municipalities Act is notinconsistent with any provisions of Article 243Q of theConstitution, therefore, two notifications are not contemplatedor warranted under the Scheme of Part IXA or the MunicipalitiesAct. The State Government is competent to divide theMunicipalities in the State into classes according to their incomeor other factors like population or importance of the local areaand other circumstances as provided under Section 329 of theMunicipalities Act. In terms of Section 329, a notification wasissued on 30.4.2012 determining the category of the MunicipalCorporation/Municipal Council/Municipal Board. Thereafter, theimpugned notification dated 12.8.2014 was issued in exercise ofthe powers conferred on the State Government under Section 3read with Section 329 of the Municipalities Act. The notificationswould show that the State Government had exercised powers to A

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Aestablish Municipality in terms of Section 5 of the MunicipalitiesAct. Such notifications cannot be said to be illegal or arbitrary inany manner and were rightly issued in exercise of the statutorypowers conferred on the State by the Legislature. In fact, theHigh Court has struck down the notification only for the reasonthat the notification under Article 243Q(2) was not published.BSuch reasoning is not tenable. Thus, the order of the High Courtis clearly erroneous and unsustainable in law. [Paras 16-19, 22-23][792-B-E; 793-D; 794-A-B, F-G]

Pune Municipal Corporation & Anr. v. Promoters andBuilders Association & Anr. (2004) 10 SCC 796 : [2004]C2 Suppl. SCR 207; MGR Industries Association & Anr.v. State of Uttar Pradesh & Ors. (2017) 3 SCC 494 :[2017] 1 SCR 604 – referred to.

Champa Lal v. State of Rajasthan & Ors. (2018) 16SCC 356 : 2018 (5) SCR 628 – not good law.

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Case Law Reference

FCIVIL APPELLATE JURISDICTION: Civil Appeal No. 1814of 2022.

From the Judgment and Order dated 28.04.2015 of the High Courtof Judicature for Rajasthan at Jaipur Bench, Jaipur in D.B. Civil WritPetition No.13620 of 2014.

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Dr. Manish Singhvi, Sr. Adv., Arpit Parkash, Milind Kumar, Advs.for the Appellant.

Ms. Radhika Yadav, Amit Agrawal, Naman, Advs. for theRespondents.

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The Judgment of the Court was delivered by HEMANT GUPTA, J.

1. The present appeal is directed against an order passed by theHigh Court of Judicature of Rajasthan dated 28.4.2015 whereby anotification dated 12.8.2014 declaring Gram Panchayat Roopbas, DistrictBharatpur as Municipal Board was set aside. The High Court found thatno public notification as contemplated under Article 243Q(2) of theConstitution of India has been produced specifying Gram PanchayatRoopbas as a “transitional area” and thus, it cannot be declared as aMunicipal Board.

2. The Constitution (Seventy-Fourth Amendment) Act, 1992introduced Part IXA in the Constitution which came into force on20.4.1993. The Statement of Objects and Reasons as waspublished inthe Gazette on 16.09.1991 when the Bill was introduced is as under:

“In many States local bodies have become weak and ineffectiveon account of a variety of reasons, including the failure to holdregular elections, prolonged supersessions and inadequatedevolution of powers and functions. As a result, Urban Local Bodiesare not able to perform effectively as vibrant democratic units ofself-government.

2. Having regard to these inadequacies, it is considered necessarythat provisions relating to Urban Local Bodies are incorporated inthe Constitution particularly for-

(i) putting on a firmer footing the relationship between the StateGovernment and the Urban Local Bodies with respect to- (a) the functions and taxation powers; and (b) arrangements for revenue sharing;

(ii) Ensuring regular conduct of elections;

(iii) ensuring timely elections in the case of supersession; and

(iv) providing adequate representation for the weaker sectionslike Scheduled Castes, Scheduled Tribes and women.

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3. Accordingly, it is proposed to add a new part relating to theUrban Local Bodies in the Constitution to provide for- A

(a) constitution of three types of Municipalities:

(i) Nagar Panchayats for areas in transition from a rural area tourban area; B

(ii) Municipal Councils for smaller urban areas;

(iii) Municipal Corporations for larger urban areas. The broadcriteria for specifying the said areas is being provided in theproposed article 243-0; C

(b) composition of Municipalities, which will be decided by theLegislature of a State, having the following features:

(i) persons to be chosen by direct election;

(ii) representation of Chairpersons of Committees, if any, at wardDor other levels in the Municipalities;

(iii) representation of persons having special knowledge orexperience of Municipal Administration in Municipalities (withoutvoting rights); E(c) election of Chairpersons of a Municipality in the mannerspecified in the State law;

(d) constitution of Committees at ward level or other level or levelswithin the territorial area of a Municipality as may be provided inthe State law; F

(e) reservation of seats in every Municipality-

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

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

(iii) in favour of backward class of citizens if so provided by theLegislature of the State; (iv) for Scheduled Castes, ScheduledTribes and women in the office of Chairpersons as may be specifiedin the State law; H

(f) fixed tenure of 5 years for the Municipality and re-electionwithin six months of end of tenure. If a Municipality is dissolvedbefore expiration of its duration, elections to be held within a periodof six months of its dissolution; (g) devolution by the State Legislature of powers andresponsibilities upon the Municipalities with respect to preparationof plans for economic development and social justice, and for theimplementation of development schemes as may be required toenable them to function as institutions of self-government; (h) levy of taxes and duties by Municipalities, assigning of suchtaxes and duties to Municipalities by State Governments and formaking grants-in-aid by the State to the Municipalities as may beprovided in the State law;

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3. Article 243ZF of the Constitution mandated that any provisionof any law relating to Municipalities in force in a State immediatelybefore the commencement of the Constitution (Seventy-fourthAmendment) Act, 1992, which is inconsistent with the provisionsof Part IXA shall continue to be in force until amended or repealedby a competent Legislature or any other competent authority oruntil the expiration of one year from such commencementwhichever is earlier. Article 243ZF reads thus:

“243-ZF. Continuance of existing laws and Municpalities. -Notwithstanding anything in this Part, any provision of any lawrelating to Municipalities in force in a State immediately beforethe commencement of the Constitution (Seventy-fourthAmendment) Act, 1992, which is inconsistent with the provisionsof this Part, shall continue to be in force until amended or repealedby a competent Legislature or other competent authority or untilthe expiration of one year from such commencement, whicheveris earlier:

Provided that all the Municipalities existing immediatelybefore such commencement shall continue till the expiration oftheir duration, unless sooner dissolved by a resolution passed tothat effect by the Legislative Assembly of that State or, in thecase of a State having a Legislative Council, by each House ofthe Legislature of that State.”

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A4. Therefore, Article 243ZF of the Constitution is in the context ofmandating the State Legislature to amend the State laws to be inconformity with Part IXA of the Constitution. The objects and reasonsof introducing Part IXA in the Constitution were that local bodies hadbecome weak and ineffective on account of variety of reasons such asfailure to hold regular elections, prolonged supersessions and inadequateBdevolution of powers and functions. The Urban Local Bodies were alsonot able to perform effectively as vibrant democratic units of self-government. Therefore, when Part IXA was introduced, Parliament wasaware that the competent legislature to legislate on the subject of theUrban Local Bodies was the State legislature but Part IXA of theCConstitution had given constitutional status to the Municipalities. TheStates were put under constitutional obligation to adopt Municipalities asper systems enshrined in the Constitution.

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

D“5. Local government, that is to say, the constitution and powersof municipal corporations, improvement trusts, district boards,mining settlement authorities and other local authorities for thepurpose of local self-government or village administration.”

6. In view of such mandate and its legislative authority, the StateEof Rajasthan had enacted the Rajasthan Municipalities Act, 2009[1].Section 2 Clauses (xxxix) and (lxv) of the Municipalities Act read asunder:

“(xxxix) “municipal area” means the territorial area of aMunicipality as notified by the State Government from time toFtime; xx xxxx

(lxv) “a transitional area”, “a smaller urban area” or “a largerurban area” means an area specified under Article 243Q of theConstitution of India;”G

7. Article 243Q of the Constitution and Section 5 of theMunicipalities Act are reproduced hereunder:

H1 For short, the “Municipalities Act”

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A8. We find that the High Court has misread the scope of Part IXAof the Constitution and Article 243Q of the Constitution contemplatingthat the transitional area has to be notified under such provision. Thescheme of the Constitutional Amendment is not to take away legislativecompetence of the State Legislatures to legislate on the subject of localGovernment but it is more to ensure that the three tiers of governanceBare strengthened as part of democratic set up.

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9. Dr. Manish Singhvi, learned senior counsel for the State hasreferred to the judgments of this Court reported as Tulsipur Sugar Co.Ltd. v. The Notified Area Committee, Tulsipur[2] and SundarjasKanyalal Bhatija & Ors. v. Collector, Thane, Maharashtra & Ors.[3]Cto contend that the power to declare Municipal Board or a Municipalityis a legislative function which is discharged by the State by issuing anotification on behalf of the Hon’ble Governor. The notification issuedby the Hon’ble Governor is in fact a notification issued by the StateGovernment. The provisions of Section 5 of the Municipalities Act arenot inconsistent in any manner with Article 243Q of the Constitution andDthus, Section 5 of the Municipalities Act is a legal and valid provision andthe notification has been issued in exercise of the powers conferred bythe statute. The High Court has thus erred in law to quash the notificationissued.

10. On the other hand, Ms. Yadav, learned counsel for therespondents, did not dispute that the notification issued under Section 5Eof the Municipalities Act is a legislative function but she contended thatfirstly there has to be a notification under Article 243Q of the Constitutionand only thereafter the Government can issue a notification constitutinga Municipal Board under Section 5 of the Municipalities Act. She reliesupon judgments of this Court reported as Pune Municipal CorporationF& Anr. v. Promoters and Builders Association & Anr.[4] and MGRIndustries Association & Anr. v. State of Uttar Pradesh & Ors.[5].Reliance is also placed upon judgment of this Court reported as ChampaLal v. State of Rajasthan & Ors.[6].

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

“7. We are concerned in the present case with the power of theGState Government to make a declaration constituting a geographicalarea into a town area under Section 3 of the Act which does not 2 (1980) 2 SCC 295

3 (1989) 3 SCC 396

4 (2004) 10 SCC 7965 (2017) 3 SCC 494H6 (2018) 16 SCC 356

require the State Government to make such declaration after givingnotice of its intention so to do to the members of the public andinviting their representations regarding such action. The power ofthe State Government to make a declaration under Section 3 ofthe Act is legislative in character because the application of therest of the provisions of the Act to the geographical area which isdeclared as a town area is dependent upon such declaration. Section3 of the Act is in the nature of a conditional legislation. Dealingwith the nature of functions of a non-judicial authority, Prof. S.A.De Smith in Judicial Review of Administrative Action (3rd Edn.)observes at p. 163:

“However, the analytical classification of a function may be aconclusive factor in excluding the operation of the audi alterampartem rule. It is generally assumed that in English law the makingof a subordinate legislative instrument need not be preceded bynotice or hearing unless the parent Act so provides.”

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9. We are, therefore, of the view that the maxim “audi alterampartem” does not become applicable to the case by necessaryimplication.

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17. We are, therefore, of the view that a notification issued underSection 3 of the Act which has the effect of making the Actapplicable to a geographical area is in the nature of a conditionallegislation and that it cannot be characterised as a piece ofsubordinate legislation. In view of the foregoing, we hold that thecontention of the plaintiff that the declaration made by the StateGovernment under Section 3 of the Act declaring the area in whichthe sugar factory of the plaintiff is situated as a part of the Tulsipurtown area is invalid is not tenable.”

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

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A“27. Reverting to the case, we find that the conclusion of theHigh Court as to the need to reconsider the proposal to form theCorporation has neither the attraction of logic nor the support oflaw. It must be noted that the function of the Government inestablishing a Corporation under the Act is neither executive noradministrative. Counsel for the appellants was right in hisBsubmission that it is legislative process indeed. No judicial duty islaid on the Government in discharge of the statutory duties. Theonly question to be examined is whether the statutory provisionshave been complied with. If they are complied with, then, thecourt could say no more. In the present case the Government didCpublish the proposal by a draft notification and also consideredthe representations received. It was only thereafter, a decisionwas taken to exclude Ulhasnagar for the time being. That decisionbecame final when it was notified under Section 3(2). The courtcannot sit in judgment over such decision. It cannot lay downnorms for the exercise of that power. It cannot substitute evenD“its juster will for theirs”.”

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

14. We find that such judgment is not in tune with the scheme ofthe Constitution and is contrary to a three-Judge Bench judgment of thisCourt reported as Parmar Samantsinh Umedsinh v. State of GujaratF& Ors.[7] wherein the vires of the Gujarat Provincial Municipal CorporationAct, 1949 were subject matter of challenge on the ground that the Statelaw has provided more than one representative from a single Ward and,thus, this provision is inconsistent with the provisions of Article 243Rand Article 243S of the Constitution. This Court held as under:G“19. The power of competent Legislature, i.e., State Legislaturein the light of enabling provisions provided in the Constitution withregard to framing of laws concerning Legislature cannot be whittleddown by way of restrictive interpretation as contended by theappellants. The State Legislature in federal set up specially in the H7 2021 SCC OnLine SC 138

matter of local Government are to enable enough seats to adoptthe reservation based on local body.

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35. The ratio which can be culled out from the above judgment isthat power of the State to legislate within its legislative competenceis plenary and the same cannot be curtailed in the absence of anexpress limitation placed on such power in the Constitution itself.

36. Article 243ZF provides that any law relating to municipalitiesin force in a State immediately before the commencement of theConstitution (Seventy-fourth Amendment) Act, 1992, which isinconsistent with the provisions of Part IXA, shall not continuebeyond expiration of one year from commencement of theconstitutional amendment. Thus, Part IXA of the Constitutioncategorically contemplated that any law made by State Legislature,which is inconsistent with the provisions of Part IXA shall ceaseto operate on the expiration of one year or till amended or repealedby a competent Legislature, whichever is earlier. The Constitutionprovisions, thus, mandates that any law of the State, which isinconsistent, cannot continue. Thus, this limitation shall also governany law made after enforcement of Constitution (SeventyfourthAmendment) Act. Thus, a law, which is inconsistent with PartIXA cannot be framed by the State Legislature.

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38. One of the meanings of expression “inconsistent” as approvedby this Court is mutually repugnant or contradictory. Article 254of the Constitution contains a heading “inconsistency betweenlaws made by the Parliament and the laws made by the Legislatureof the State” whereas under Article 254(1) and Article 254(2) thewords used are repugnant. The Constitution itself, thus, has usedthe words inconsistency and repugnancy interchangeably. To findout as to whether a law made by State Legislature is inconsistentwith provisions of Part IXA of the Constitution, the principles whichhave been laid down by this Court to determine the repugnancybetween the law made by the Legislature of a State and lawmade by Parliament can be profitably relied on. We, thus, need tonotice the principles on which the repugnancy of law made byState and law made by the Parliament is found out.

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[2022] 2 S.C.R.

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50. Thus, the Legislature of a State may by law has to provide allmatters relating to or in connection with election to theMunicipalities, which includes filling of the seats in the Municipalityby person chosen by direct election. Articles 243R and 243ZABdoes not give any indication as to whether from territorialconstituency, i.e., the Wards, whether only one member has to beelected in the Municipality or it can be multiple memberconstituency. The constitutional provisions of Article 243R, whichprovides for composition of Municipalities and that of Article243ZA does not give any indication to the above. The provisionsCof Article 243ZG, which deals with bar to interference by courtsin electoral matters throws some light…

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59. We have analysed the provisions of Article 243R, 243S andhave come to the definite conclusion that no limitation in ArticleD243S can be found of which contains any prohibition of havingmore than one member for a Ward.

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

15. In State of U.P. & Ors. v. Pradhan Sangh Kshettra SamitiF& Ors.[8], this Court was considering the Constitution (Seventy-thirdAmendment) Act, 1992. Article 243C in Part IX of the Constitution issimilar to Article 243Q in Part IX-A of the Constitution. The High Courthad struck down the definition of Village, Gram Sabha and PanchayatArea 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:G

“3. On coming into force of the said Constitutional Amendment,the States were required by the Centre to take steps to organisevillage panchayats on the lines of the provisions of the said Constitutional Amendment by making law or amending the existinglaw suitably. ………….

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11. The panchayats are to be constituted at the village, intermediateand district levels and the “panchayat area” as defined by Article243(e) means the territorial area of the panchayat whether at thevillage, intermediate or district levels. What is necessary toremember further is that while as per Article 243(c) “intermediatelevel” is a level between the village and district levels, as specifiedby the Governor, the ‘district’ as per Article 243(a) means a districtin a State the boundaries of which may be changed by the StateGovernment. The district is not required to be specified by theGovernor whereas village and intermediate levels have to bespecified by him for the purposes of the said Part of theConstitution.

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36. As regards the objection of the High Court that whereas Article243(g) requires the Governor to specify the village, the Act givesthis power to the State Government to do so, the High Court hasfailed to notice the provisions of the Constitution which equatethe Governor with the State Government in exercise of hisfunctions except where he is by or under the Constitution requiredto exercise the functions in his discretion…………..

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44. It is for the Government to decide in what manner the panchayatareas and the constituencies in each panchayat area will bedelimited. It is not for the court to dictate the manner in which thesame would be done. So long as the panchayat areas and theconstituencies are delimited in conformity with the constitutionalprovisions or without committing a breach thereof, the courtscannot interfere with the same. We may, in this connection, referto a decision of this Court in Hingir-Rampur Coal Co.Ltd. v. State of Orissa [(1961) 2 SCR 537 : AIR 1961 SC 459] .In this case, the petitioner-mineowners, had among others,challenged the method prescribed by the legislature for recoveringthe cess under the Orissa Mining Areas Development Fund Act,1952 on the ground that it was unconstitutional. The majority of A

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the Bench held that the method is a matter of convenience and,though relevant, has to be tested in the light of other relevantcircumstances. It is not permissible to challenge the vires of astatute solely on the ground that the method adopted for therecovery of the impost can and generally is adopted in levying aduty of excise.”

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16. Since the local Government falls in entry 5 of List II of theSeventh Schedule, therefore, it is the State Legislature alone which iscompetent to legislate in respect of the municipalities with only onelimitation that the provisions of the State Act cannot be inconsistent withthe mandate of the Scheme of Part IXA of the Constitution. The schemeCof Part IXA of the Municipalities Act does not contemplate a separatenotification under Article 243Q of the Constitution and thereafter underSection 5 of the Municipalities Act. As Section 5 of the MunicipalitiesAct is not inconsistent with any provisions of Article 243Q of theConstitution, therefore, two notifications are not contemplated orDwarranted under the Scheme of Part IXA or the Municipalities Act asreproduced in the table above.

17. The State Government is competent to divide the Municipalitiesin the State into classes according to their income or other factors likepopulation or importance of the local area and other circumstances asEprovided under Section 329 of the Municipalities Act. In terms of Section329, a notification was issued on 30.4.2012 determining the category ofthe Municipal Corporation/Municipal Council/Municipal Board. The saidnotification reads as under:

“No. P .8 (Ga) ( ) Rule/Category/LSG/12/3825Dated 30/4/12

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:- Notification:-

In connection with the partition of the category of municipalitiesand superseding all the notifications issued earlier in relation tothe categorization of Municipal Councils by exercising the powersrendered in Section 329 read with Section 337 of RajasthanMunicipal Act, 2009 (Act No. 18 of year 2009), the StateGovernment hem by determines the category of all the MunicipalCorporation/Councils/Board which follows as under:- G

STATE OF RAJASTHAN v. ASHOK KHETOLIYA & ANR[HEMANT GUPTA, J.]

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But State Government would have right to convert any municipalcouncil into any category keeping in view its historical/religious/archaeological importance or in any special circumstances.

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As per order of Governor

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Deputy Government Secretary”

18. Thereafter, the impugned notification dated 12.8.2014 wasissued in exercise of the powers conferred on the State GovernmentDunder Section 3 read with Section 329 of the Municipalities Act. Thesaid notification reads thus:

“No.F.10(ka)Est./Category( )/DLB/14/2591Dated 12/8/14

:- Notification:-

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State Government by exercising its power U/S 3 read with Section329 of Rajasthan Municipal Act 2009 (Act No.18 year 2009) andNotification No.P.8(.G)()Rule/Category/LSG/12/3825-4090 dated30/4/12 hereby declares all the following Gram Panchayat areasinto fourth class Municipal Councils with immediate effect.

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Existing Boundaries of the said Gram Panchyat (Barbar -in thenorth, Gram Samahad in the south, Bhidyani and Rudh Roopwas in theeast and Dorda in the west) would remain the local boundaries of newlyconstituted Municipal Board.

As per order of Governor

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Government Deputy Secretary”

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

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B20. The argument of Ms. Yadav is that the notification is arbitraryand unreasonable, therefore, the High Court has rightly struck down thenotification. Reliance is placed on the judgment reported as PuneMunicipal Corporation to support such contention. In the said case,the notification amending the Development Control Rules sanctioned bythe State Government under Section 37 of the Maharashtra RegionalCand Town Planning Act, 1966 was the subject matter of challenge. TheHigh Court had struck down the notification amending the DevelopmentControl Rules. It was held that the Development Control Rules werelegislative function, therefore, Section 36 has to be viewed as repositoryof legislative powers for effecting amendments to Development ControlDRules. It was observed that such Rules can be challenged on the groundof it being arbitrary or unreasonable. We do not find that the said judgmentin any way support the arguments raised by the learned counsel.

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

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

G23. Thus, the order of the High Court is clearly erroneous andunsustainable in law. The same is set aside and the writ petition isdismissed. Consequently, the appeal is allowed.

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Devika Gujral