Case: Khambalia Municilpality &amp; Anr Vs. State Of Gujarat

1. This appeal arises out of a writ application challenging a notification issued on June 14, 1965, declaring the area of Khambalia municipality in Jamnagar district to be a nagar under S. 9 (1) of the Gujarat Panchayats Act, 1961 (Gujarat Act No. VI of 1962). The Jamnagar district was formerly a part of the ; State of Saurashtra which merged in the State of Bombay in 1956. Before the merger, the State of Saurashtra adopted the Bombay District Municipalities Act, 1901 under which the town of Khambalia was constituted into a municipality. On the bifurcation of the State of Bombay , the district of Jamnagar became a part of the State of Gujarat. The Gujarat Panchayat Act, 1961 was passed on February 24, 1962. The population of Khambalia municipality according to the census of 1961 was 12,249. By a notification, dated August 17, 1962, issued under S. 9 of the Gujarat Panchayats Act, 1961, the local area within the limits of the Khambalia municipality was declared to be a nagar and the municipality ceased to exist. On February 5, 1963, upon the publication of the Gujarat Panchayats (Suspension of Provisions and reconversion of certain local areas into municipal districts) Act, 1962, the Khambalia municipality and other municipalities converted into Nagar Panchayats by notifications under S. 9 (1) of the Nagar Panchayats Act, 1961, stood revived. On February 7, 1963, the Gujarat Panchayat Laws (Amendment) Ordinance 1963 repealed S. 3 of the Gujarat Panchayats (suspension of provisions and reconversion of certain local areas into municipal districts) Act. 1962 and all the provisions of the Gnjarat Panchayats Act, 1961 became again operative. In April 1962, the State Government converted some of the revived municipalities into nagar or gram panchayats, but the Khambalia municipality was not then so converted. Meanwhile, the State Government started proceedings for the supersession of the Khambalia municipality under S. 179 of the Bombay District Municipal Act, 1901 and in this connection there was litigation between the Government and the municipality. On December 23, 1964, the Gujarat Municipalities Act, 1963 (Act No. XXXIV of 1964) was passed, and the Khambalia municipality became a municipality constituted under this Act for the Khambalia municipal borough. On June 14, 1965, the Development Commissioner, Gujarat State, issued a notification under S. 9 (1) of the Gujarat Panchayats Act, l961, declaring "the whole area of the existing limits of the Khambalia municipality in Jamnagar district" to be a nagar with effect from the date of the issue of the notification. This notification was issued by the Development Commissioner after making the prescribed enquiry under S. 9 (1). The effect of the notification was that the entire local area included within the limits of the municipal borough for which the Khambalia municipality was constituted became a nagar. On June 22, 1965, the appellants filed a writ petition in the High Court of Gujarat, praying for an order quashing the notification, dated June 14, 1965 and declaring S. 9 of the Gujarat Panchayats Act, 1961 as ultra vires and unconstitutional, and for other reliefs. The High Court dismissed this application. The appellants now appeal to this Court under a certificate granted by the High Court

Reasoning:
There is no force in this contention.The power to make the declaration necessarily carries with it the power to make the inquiry preliminary to the declaration. There can be no declaration without any inquiry. The relevant notification sufficiently authorized the development commissioner to issue the declaration after making the prescribed inquiryWe cannot accept this contention.Section 307 of the Act shows that a local areae with or included within the limits of a municipal district or a municipal borough may be declared to be a gram or nagar under S. 9 and on such a declaration, the municipality functioning within the local area or part thereof ceases to exist. On a combined reading of Ss. 9 and 307, it would appear that a municipal borough is an administrative unit within the meaning of Section 9 (1) and a local areae with or included in a municipal borough may be declared to be a gram or nagarBefore the notification was issued, there was some correspondence in course of which the State Government on the representation of Shri Haribhai Nakum, M. L. A., inquired of the Khambalia municipality whether it was willing to include the surrounding vadi areas within its limits. It was after the municipality indicated its unwillingness to include the vadi areas within its limits that the Development Commissioner issued a notification under S. 9 (1). The suggestion is that the State Government having failed to impose its opinion regarding the inclusion of the vadi areas upon the municipality, adopted the device of the declaration under S. 9 (1) for imposing its opinion at the instance of Shri Nakum as the ruling Congress party was hostile to the majority group in control of the municipality. The High Court rightly rejected this suggestion. Under S. 4 (1) (b) of the Gujarat Municipalities Act, 1963, the State Government had the power to alter the limits of the municipal borough after consulting the municipality. The State Government had duly consulted the municipality. If the Government wanted to exercise its powers under the aforesaid S. 4 (1) (b), it could do so without the consent of the municipality. For the purpose of imposing its opinion, it was not necessary for the Government to take recourse to the device of a declaration under S. 9 (1) of the Gujarat Panchayats Act, 1961. Nor was the surrounding vadi area included in the Khambalia nagar declared by the notification under S. 9 (1). It is not shown how Shri Nakum or the ruling party would stand to gain by this notification. The allegation of mala fides was categorically denied in the affidavit filed on behalf of the State GovernmentWe think that this contention has no merit. The legislature cannot delegate its essential legislative functions to an administrative agency, see In re, Delhi Laws Act, 1951 SCR 747  : (AIR 1951 SC 332  ) and Raj Narain Singh v. Chairman, Patna Administrative Committee, (1955) 1 SCR 290  : (AIR 1954 SC 569  ).An essential legislative function consits in the determination of a legislative policy and its formulation as a binding rule of conduct. Having laid down the legislative policy, the legislature may confer discretion on an administrative agency as to the execution of the policy and leave it to the agency to work out the details within thek of the policy. Judged by this test, we think that S. 9 (1) does not suffer from the vice of excessive delegationHaving regard to this policy S. 9 (1) cannot be said to suffer from the vice of excessive delegation of legislative power to the State Government. Pursuant to this policy the Gujarat Government has established panchayats in all villages within the State. The table at p. 4 of the "Panchayat Raj at a glance as on March 31, 1966" published by the Ministry of Food Agriculture, Community Development andn (Department of Community Development) Government of India, New Delhi, shows that in the State of Gujarat there are 11,785 panchayats, covering 18,247 villages and that 100 per cent of the villages and all the rural population are now included in the panchayats9. Section 9 (1) read with S. 307 shows that a local areae with or included within the limits of a municipal borough or a municipal district with a population not exceeding 30,000 may be declared to be a gram or nagar. The democratic decentratization committee set up under the Government resolution, dated July 15, 1960 recommended in Paras. 4.6 of its report that the life of towns with populations over 30,000 is different from that of villages. They are better served by municipalities. For this reason they are excluded from the purview of S. 9 (1)We are not impressed with this argument. Under S. 9 (1) read with S. 307, the Government has no power to declare a municipal borough with a population exceeding 30,000 as a gram or nagar. It will be an abuse of the power under S. 9 (1) if by declaring small fragments of such a municipal borough into separate grams or nagars, the Government seeks to achieve indirectly what it cannot do directly. If the Government abuses the power vested in it by S. 9 (1), its action will be struck down. But S. 8 (1) cannot be held unconstitutional because of the possibility that it may be unfaithfully administered by those who are charged with its executionNow the classification of municipalities on the basis of population between 10,000 and 20,000; 20,000 and 25,000 and 25,000 and 30,000 is not justified by S. 9 (1) which places all local areas with population between 10,000 and 30,000 on the same footing. Counsel for the respondent was unable to justify the classification. The policy decision in so far as it makes this classification is not lawful and is liable to be struck down. From the statement filed by counsel for the State of Gujarat before us it appears that the State Government has so far not converted into grams or nagars eight Municipalities in Saurashtra and thirteen municipalities in Gujarat, having populations between 20,000 and 30,000. If and in so far thisn is based solely on the policy decision, it cannot be justified and it will be the duty of the State Government to establish panchayats in those municipalities as soon as possible. The appellant particularly complained in the writ petition that the State had not converted the municipalities of Bagasra and Wadhawan into nagar panchayats.Counsel for the State conceded that theirn could not be supported on the ground that their population was between 20,000 and 30,000. It appears, however, that on July 12, 1965, during the pendency of the writ petition, the Bagasra area was declared to be a nagar. With regard to Wadhawan municipality, counsel for the State stated that the question of its amalgamation with Surendranagar municipality was under consideration by the State Government and that is the reason why the Wadhawan municipality was not so far converted into a nagar panchayat.We have no reason to doubt that appropriate steps will be taken by the State Government with regard to the Wadhawan area. But then of any of these municipalities into nagar panchayats does not vitiate the notification of June 14, 1965. This notification is lawful and is justified by S. 9 (1). Khambalia has a population of 12,249 and was rightly declared to be a nagar. Having regard to the policy of the Act, it was the duty of the State Government to declare it to be a nagar, and the Government has carried out its dutyWe are unable to accept this contention. For the purpose of reorganizing the local areas, it may be necessary to include within or exclude from any nagar or gram any local area or otherwise alter the limits of any nagar or gram or to declare that any local area shall cease to be a nagar or gram, and this is provided by S. 9 (2) of the Act. Action under S. 9 (2) can be taken only after consultation with the taluka panchayat, the district panchayat and the nagar or gram panchayat concerned (if already constituted). The Act makes incidental provisions for the establishment and reconstitution of the panchayats consequential upon the alteration of the area of a gram or nagar (Ss. 298, 299), for amalgamtion or division of grams consequential upon an area ceasing be a gram (Ss. 309, 310), and for special cases where an area excluded from or gram or nagar ceasing to be a gram or nagar is not merged in an area having localt (Ss. 300, 301).Having regard to the policy of the Act, it is plain that the discretionary power under S. 9 (2) is vested in the State Government for the purpose of reorganizing the local areas into new units of Local. For such purposes, it may be necessary to establish new panchayats, reconstitute old panchayats, amalgamate or divide existing grams and pending such reorganization it may sometimes be even necessary that an area should cease to be a gram or nagar. It is impossible to visualise all the contingencies when action under S. 9 (2) should be taken and the necessary discretion was properly left to the State Government. We are satisfied that S. 9 (2) cannot be held unconstitutional on the ground of excessive delegation. We may add that no action has been taken against the appellant under S. 9 (2).