Industrial township notification upheld under statutory fiction and fair consultation, with no separate municipal procedure or individual hearing required.

An industrial area declared under the Gujarat Industrial Development Act could validly be treated by notification as a notified area and excluded from the Gram Panchayat, because Section 16 created a statutory fiction allowing the municipal notified-area regime to apply without following the separate procedure under the Gujarat Municipalities Act. The constitutional challenge under Parts IX and IX-A failed, as the industrial development statute could continue to operate for an industrial township under Article 243-Q. The notifications were also upheld against objections based on consultation and natural justice, because substantial consultation with the affected Panchayats had taken place and no separate individual hearing was required.

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Issues: (i) Whether the notification issued under Section 16 of the Gujarat Industrial Development Act, 1962, treating the industrial area as a notified area and excluding it from the Gram Panchayat, was invalid for inconsistency with Parts IX and IX-A of the Constitution; (ii) Whether, before issuing such notification, the State Government was bound to follow the procedure applicable to creation of a notified area under the Gujarat Municipalities Act, 1963 and to give a hearing to the affected residents.

Analysis: Section 16 of the Gujarat Industrial Development Act, 1962 creates a statutory fiction by which an industrial area declared under that Act may be brought within the regime of a notified area under the Gujarat Municipalities Act, 1963 by notification, without following the separate procedural requirements for creating a notified area under the Municipalities Act. The industrial development law and the local self-government enactments operate in distinct fields, and an industrial area already developed for industrial purposes may validly be treated as an industrial township for the purposes of local administration under Article 243-Q. The constitutional amendments introducing Parts IX and IX-A did not prohibit the continued operation of an industrial development statute in this manner, nor did the later amendments to the municipal law undermine the statutory mechanism under Section 16. The Court also found that the proviso to Article 243-Q is not confined so narrowly as to exclude transitional areas from its operation where the area is otherwise fit to be treated as an industrial township.

Conclusion: The notification under Section 16 was constitutionally valid and not repugnant to Parts IX or IX-A of the Constitution.

Issue (ii): Whether the impugned notifications were invalid for want of compliance with the procedure under the Gujarat Municipalities Act, 1963, want of consultation under the Gujarat Panchayats Act, 1961, or breach of natural justice.

Analysis: The statutory scheme of Section 16 permits the State Government to extend the notified area provisions to an industrial area by notification, so the separate procedure for constituting a notified area under the Municipalities Act was not a precondition. The record showed substantial consultation with the affected Panchayats before issuance of the notifications, and the Government also adopted a revenue-sharing arrangement to mitigate prejudice to them. In the circumstances, the long-drawn consultation process satisfied the requirements of fairness, and no separate individual hearing was necessary before issuing the notification. The Court therefore rejected the objection founded on civil consequences and natural justice.

Conclusion: The notifications were not vitiated by procedural defect, inadequate consultation, or breach of natural justice.

Final Conclusion: The industrial area could validly be brought within the notified-area regime and excluded from the Gram Panchayat, and the challenge to the notifications failed in its entirety.

Ratio Decidendi: An industrial area notified under an Industrial Development Act may, by statutory fiction, be treated as a notified area or industrial township under municipal law and constitutional provisions dealing with municipalities, without resort to the ordinary procedure for constituting a notified area, provided the statute authorises such extension and the decision is reached after fair consultation in the circumstances.

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