1967 (2) TMI 111 - SC - Indian Laws

Court Upholds Municipality Area Declaration Validity Under Gujarat Panchayats Act

KHAMBALIA MUNICILPALITY & ANR. Versus STATE OF GUJARAT

KHAMBALIA MUNICILPALITY & ANR. Versus STATE OF GUJARAT - 1967 AIR 1048, 1967 SCR 631 Issues Involved:1. Applicability of Section 9 of the Gujarat Panchayats Act, 1961 to a municipal district.2. Validity of the notification due to the inquiry process.3. Delegation of inquiry power to the Development Commissioner.4. Allegation of mala fide exercise of power.5. Constitutionality of Section 9 of the Gujarat Panchayats Act, 1961 due to excessive delegation of legislative power.Issue-wise Detailed Analysis:1. Applicability of Section 9 of the Gujarat Panchayats Act, 1961 to a municipal district:The appellants contended that the local area of a municipal borough is not 'any local area, comprising a revenue village, or a group of revenue villages or hamlets forming part of a revenue village, or such other administrative unit or part thereof' within the meaning of Section 9 of the Gujarat Panchayats Act, 1961. The court rejected this contention, stating that Section 307 of the Act shows that a local area co-extensive with or included within the limits of a municipal district or a municipal borough may be declared to be a gram or nagar under Section 9, and on such a declaration, the municipality functioning within the local area or part thereof ceases to exist.2. Validity of the notification due to the inquiry process:The appellants argued that the notification was invalid as no inquiry as prescribed by Rule 2 of the Gujarat Panchayats (Declaration of nagar or gram) Inquiry Rules, 1962 was in fact made. The court found no merit in this contention, stating that the Development Commissioner had made the prescribed inquiry under Section 9(1) before issuing the notification.3. Delegation of inquiry power to the Development Commissioner:The appellants contended that the power to make the inquiry under Section 9(1) was not delegated by the State government to the Development Commissioner. The court held that the power to make the declaration necessarily carries with it the power to make the inquiry preliminary to the declaration. The relevant notification sufficiently authorized the Development Commissioner to issue the declaration after making the prescribed inquiry.4. Allegation of mala fide exercise of power:The appellants suggested that the notification under Section 9(1) was issued mala fide, alleging 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 Section 9(1) for imposing its opinion at the instance of a ruling party MLA. The court rejected this suggestion, stating that the State government had the power to alter the limits of the municipal borough under Section 4(1)(b) of the Gujarat Municipalities Act, 1963, and it was not necessary for the government to resort to the device of a declaration under Section 9(1) of the Gujarat Panchayats Act, 1961.5. Constitutionality of Section 9 of the Gujarat Panchayats Act, 1961 due to excessive delegation of legislative power:The appellants argued that Section 9(1) of the Gujarat Panchayats Act, 1961 is ultra vires and unconstitutional on the ground of excessive delegation of legislative power to the State government. The court held that the legislature cannot delegate its essential legislative functions to an administrative agency. However, 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 the framework of the policy. Judged by this test, the court found that Section 9(1) does not suffer from the vice of excessive delegation.Separate Judgment by Shelat, J.:Shelat, J. concurred with the conclusions on contentions 1 to 4 but dissented on the fifth contention regarding the validity of Section 9. He argued that Section 9 delegates to the government an uncontrolled power under sub-sections (1) and (2) both as regards declaration and alteration of local areas without laying down any criterion which should govern and guide the government in the exercise of its power. He concluded that Section 9 suffers from excessive delegation and is invalid, and the impugned notification issued thereunder must fall along with it.Conclusion:The majority opinion dismissed the appeal without costs, holding that the notification dated June 14, 1965, declaring the area of Khambalia municipality to be a nagar was lawful and justified under Section 9(1) of the Gujarat Panchayats Act, 1961.