State of Haryana Vs. Mohan Lal &
Ors  INSC 320 (30 October 1969)
30/10/1969 SIKRI, S.M.
REDDY, P. JAGANMOHAN
CITATION: 1970 AIR 1848 1970 SCR (3) 202 1969
SCC (3) 484
Punjab Town Improvement Act (Punj. 4 of
1922), ss. 1(3) 3, 4, 4A and 103(1) and Punjab Municipal Act, 1911, s. 238Supersession
of Municipality-Power of Government to set up Improvement Trust under
1922.Act-Power of Government to reconstitute dissolved Trust after
reconstitution of Municipal Committee.
The Rohtak Municipal Committee was superseded
in August 1954, and an Administrator was appointed under s. 238 of the Punjab
Municipal Act, 1911. In June 1958 the provisions of the Punjab Town Improvement
Act, 1922, were extended to the Municipality and the Rohtak Improvement Trust
was set up under the Act. In August 1961, the Government issued a notification
under s. 103 (1) of the 1922 Act dissolving the Trust. The Municipal Committee
was reconstituted in January 1962 and in October 1962 the Government decided to
reconstitute the Trust. The Municipal Committee thereupon passed a resolution
opposing the reconstitution of the Trust. In January 1963, however, the
Government reconstituted the Trust and the Municipal Committee was asked to
name its representatives to be appointed as trustees.
The rate-payers filed a writ petition
challenging the reconstitution of the trust and the High Court allowed the
In appeal to this Court,
HELD : (1) The attention of the High Court
was not drawn to s. 4A of the 1922 Act and therefore it erred in holding that
the Trust could not be set up in 1958 because, under s. 1(3) of the 1922 Act a
Trust cannot be created in a Municipal area unless the committee was
functioning. Under s. 4A, where the Municipal Committee was superseded the
State ,Government could appoint the trustees, and there was no anomaly in the
-Government nominating the trustees, because, the Administrator who had all the
powers and duties of the Committee under s. 238 of the 1911 Act was competent
to say to the Government that the 1922 Act should not be applied to the
Municipality. [205 C-D 206 B] (2) Once the 1922 Act had come into operation
1(3), it ,continues to apply and it was not
necessary to apply it again when the Municipal Committee was reconstituted in
1962. [206 D] (3) Under ss. 3 and 4 of the 1922 Act and the General Clauses
(Punjab) Act, 1898, Government has the power to create a new trust or
-reconstitute a Trust which was dissolved. [206 H]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1121 of 1966.
Appeal by special leave from the judgment and
order dated August 17, 1965 of the Punjab High Court, in Letters Patent Appeal
No. I 10 of 1965.
203 Janardan Sharma -and R. N. Sachthey, for
The respondent did not appear.
The Judgment of the Court was delivered by
Sikri, J.-This appeal by special leave is directed against the judgment of the
High Court of Punjab accepting the petition filed by the rate-payers of
Municipal Committee, Rohtak, respondents before us, and ordering that the State
Government shall not proceed with the constitution of the Rohtak Improvement
Trust under the notification of August 30, 1961. The High Court allowed the
petition because it held (1) that sub-s. (3) of s. I of the Punjab Town
Improvement Act (Punjab Act IV of 1922)-here in after referred to as the
Act-only envisages the creation 'of a Trust in a Municipal area where -a
Committee is functioning and so is in a position to hold a special meeting to
decide whether or not it considers the creation of a trust desirable, and (2)
that once a trust ceases to exist under s. 103(l) of the Act in order to
recreate the trust, the Act has to be applied again, and as the Municipal
Committee had at a special meeting held on November 9, 1962, decided
unanimously that the Act should not be applied the Government was bound to give
effect to that decision.
The learned counsel for the appellant, Mr.
Sachthey, contends that the High Court has placed a wrong interpretation on the
two provisions mentioned above and somehow s. 4-A of the Act was not noticed by
the High Court.
Before we deal with the interpretation of the
provisions mentioned above it is necessary to state a few facts. The Rohtak
Municipal Committee was superseded on August 2, 1954.
The Government purported to extend the
provisions of the Act to the whole of the area of the Municipality on May 21,
1958. The notification to this effect reads "In pursuance of the
provisions of sub-section of Section I of the Punjab Town Improvement Act 1922
(Punjab Act No. IV of 1922), the Governor of Punjab proposes to apply the
provisions of the said Act to the whole of the area of the municipalities
specified below with effect from 9th June, 1958 1.......
3. Rohtak,......" Sub-section (3) of s.
1 of the Act reads as follows "1. (3) This section and section 66 shall
come into force at once. The State Government may by notification propose to
apply the rest of the Act to the whole or any part of any municipality and to
any locality adjacent 204 thereto, on such date as may be specified in such
notification; and the Act shall come into operation after the, lapse of three
months unless within that period the municipal committee concerned at meeting
convened for the purpose of considering the application of the Act resolve by a
majority of two-thirds that the Act should not be so applied." In
pursuance of this notification a trust was set up. But on August 30, 1961, the
Government issued a notification in exercise of its powers under sub-s. (1) of
s. 103 of the Act and declared that the Rohtak Improvement Trust shall be
dissolved with effect from August 30, 1961 from which the Chairman and the
trustees of the aforesaid Trust ceased to function.
Section 103(1) of the Act reads as follows :
"103. (1) When all schemes sanctioned
under this Act have been executed or have been so far executed as to render the
continued existence of the trust, in the opinion of the State Government,
unnecessary, or when in the opinion of the State Government it is expedient
that the trust shall cease to exist, the State Government may by notification
declare that the trust shall be dissolved from such date as may be specified in
this behalf in such notification; and the trust shall be deemed to be dissolved
accordingly." It appears that on the supersession of the Municipality of
Rohtak in 1954 an Administration was appointed under S. 238 of the Punjab
Municipal Act, 191 1. This section, inter alia, provides:
"238. (1) ....
(2) When a committee is so super seeded. the
following consequences shall ensue (a)....
(b) all powers and duties of the committee
may, until the committee is reconstituted, be exercised and performed by such
persons as the State Government may appoint in that behalf;" Fresh
elections of the Municipal Committee, Rohtak, were held in July 1961, and the
Municipal Committee reconstituted on January 10, 1962. On October 23, 1962, the
Government informed the Deputy Commissioner, Rohtak, that it had decided to
reconstitute Rohtak Improvement Trust immediately and asked the Deputy
Commissioner to recommend a panel of six names of suitable persons for
appointment as trustees and the Government also asked him to call upon the
Municipal Committee, Rohtak, to elect its representatives as trustees.
205 This was not to the liking of the
Municipal Committee and the Municipal Committee unanimously passed a resolution
on November 9, 1962, strongly opposing the reconstitution of the Improvement
The Government by notification dated January
10, 1963, in exercise of powers conferred 'by sub-s. (2) of s. 4 of the Act
appointed one Major S. K.Mehta -as Chairman, Rohtak Improvement Trust. The
Municipal Committee was again requested to send two names of three members of
the Municipal Committee to be appointed as trustees as required by cl. (b) of
sub-s. ( 1) of s. 4 of the Act. Thereupon 32 rate-payers filed the petition
under Art. 226 of the Constitution challenging the reconstitution of the Rohtak
Coming to the first point decided by the High
Court, it seems to us that s. 4-A to the Act was-not brought to its notice and
if it had been brought to its notice the High Court may well have come to the
Section 4-A which, was inserted by Punjab Act
VIII of 1936 reads :
"4-A. During the period of supersession
of a Municipal Committee under section 238 of the Punjab Municipal Act, 191 1,
the three seats allotted to the Municipal Committee on the trust under clause
(b) of sub-section (1) of section 4 shall be filled by the State Government by
appointing any three persons by notification in the Official Gazette. The term
of office of every trustee so appointed shall be three years or until the Trust
is dissolved, whichever period is less, provided that if the Municipal
Committee is reconstituted three members of the Municipal Committee shall be
elected or appointed in accordance with the provisions of section 4, and on
their election or appointment the three trustees appointed by the State
Government under this section shall cease to be members of the Trust."
Reading s. 1(3) and s. 4A of the Act, and s. 238 of the Punjab Municipal Act,
191 1, together, it seems to us that the true meaning of the latter portion of
sub-section (3) of s. 1 is that when the Government -applies the section and
the Municipal Committee has been superseded before that date, it is the
Administrator who would exercise the powers given under the latter part of that
sub-section; in other words, the Administrator would be competent to say to the
Government that the Act shall not come into operation. The words of s. 238 of
the Punjab Municipal Act are very wide and it is difficult to limit the
expression "all powers -and duties of the committee" in any manner.
The Municipality exercised powers by resolution passed by majority and the fact
that this particular resolution had to be by two-third majority does not lead
206 to the conclusion that the power to oppose the application of the Act
vesting in the Municipal Committee cannot be exercised by the Administrator under
s. 238, Punjab Municipal Act.
Section 4A of the Act clearly proceeds on the
basis that while the Municipal Committee stands superseded the appointment of
trustees which was originally to be made by the Municipal Committee would be
made 'by the State Government. As the High Court did not have s. 4-A before it
had relied on the anomaly that where a Municipal Committee was suspended the
Government could nominate some members of the suspended Committee as members of
the Trust or otherwise fill these vacancies, and the High Court felt that it
could not believe that it was the intention of the Legislature.
Coming to the second point. made by the High
Court, it seems that the High Court has wrongly,, held that once the Act has
been applied it is necessary that it should be applied again when the Municipal
Committee is reconstituted. There is nothing in the words of sub-s. (3) of s. I
to 'warrant this conclusion. Once the Act has come into operation in accordance
with the provisions of sub-s. (3) of s. 1 there is no provision by which the
Act can cease to apply.
The only point that remains is,: when a trust
has been dissolved under s. 103 of the Act, can it be reconstituted under the
Act ? The only provisions under which a trust can be reconstituted under the Act
are sections 3 and 4. Section 3 reads :
"3. The duty of carrying out the
provisions of this' Act in any local area shall, subject to the conditions and
limitations hereinafter contained, be vested in a board to be called "The
(name of town) Improvement Trust" hereinafter referred to as the 'The
Trust"; and every such board shall be -a body corporate and have perpetual
succession and common seal, and shall by the said name sue and be sued."
Section 4 reads;
"4. (1) The trust shall consist of seven
trustees, namely The other sub-sections of s. 4 provide how the trustees are to
It seems to us that if the trust could
originally be created under ss. 3 and 4, reading ss. 3 and 4 and s. 12 of the
General Clauses Act, the Government has the power to create a view trust or
reconstitute a new trust. We may mention that s. 12 of the General Clauses
(Punjab.) Act, 1898, provides that "where by any Punjab Act any power is
conferred then that power may be exercised from time to time as occasion requires."
In the result the judgment of the High Court is set aside, the appeal allowed
and the writ petition dismissed. There, will be no order as to costs
Y.P. Appeal allowed.