Khambalia Municilpality & ANR Vs.
State of Gujarat [1967] INSC 34 (16 February 1967)
16/02/1967 BACHAWAT, R.S.
BACHAWAT, R.S.
WANCHOO, K.N.
SHELAT, J.M.
CITATION: 1967 AIR 1048 1967 SCR (2) 631
ACT:
Gujarat Panchayats Act, 1961 (Guj. Act No. 6
of 1962), s. 9(1) and (2)-inquiry, if delegated-Applicability to municipal
district-section 9 if suffers from excessive delegation.
HEADNOTE:
The respondent-State authorised its
Development Commissioner to exercise powers exercisable by the Government under
s. 9(1) of the Gujarat Panchayats Act 1961.
After making the prescribed inquiry under s.
9(1) of the Act the Development Commissioner issued a notiftation under s. 9(1)
of the Act decal the whole area of the existing limits of the appellant
cipality to be a nagar. The appellants field a writ petition forquashing the
notification and declaring s. 9 of the Act as ultra vires and unconstitutional,
which the High Court dismissed. In appeal to this Court, the appellants
contended that (i) the power to make enquiry under s. 9(1) was not delegated to
the Development Commission; (ii) s. 9 of the Act did not apply to a municipal
district as it was not a local area or such other administrative unit or part
thereof; (iii) the notification was issued 'in mala fide exercise of power as
it was imbued after the municipality indicated its unwillingness to accept the
of the Government to include within its limits certain vadi areas; and (iv) s.
9 of the Act was ultra vires by reasons of excessive delegation of legis native
power in favour of the State Government.
HELD:(per Full Court) (i) 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 an inquiry.
The Development Commissioner was sufficiently authorised to issue the
declaration after making the prescribed inquiry.[635 G-H] (ii)Section 307 of
the Act shows that a local area coextensive 'with or included within the limits
of a municipal district or a municipal borough ma 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 of s. 9(1) and a local area co-extensive with or included in a
municipal borough may be declared to be a gram or nagar. [636 B-C] (iii)
Therewas no mala fide in the issuance of the notification. Under s. 4(1)(b) of
the Gujarat Municipalities Act, 1963, the State Govern has the power to alter
the funits of the municipal borough after consulting the municipality. The
State Government had duty 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 Pandora Act, 1961. Nor was the
surrounding vadi area included in the nagar declared by the notification under
s. 9(1). [636 F, G] 6 32 (iv)(Per Wanchoo and Bachawat, JJ.) Section 9(1) does
not suffer from the vice of excessive delegation. An essential legislative
function consists 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 the frame work of the policy. [637 B-C] It is the policy of the Act that
panchayats should be established within a reasonable time in all local areas
with population not exceeding 30,000 and not included in a notified area or a
cantonment. This policy guides and controls the discretionary power of the
State Government under S. 9(1). 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 reorganising the local areas into new units of
local selfGovernment. [638 C-D] It is not correct to say that even a municipal
borough with a population of over 30,000 is at the mercy of the State
Government under s. 9(1). 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 municipal borough into separate grams or nagars, the
government seeks to achieve indirectly what it cannot do directly. But S. 9(1)
at be held unconstitutional because of the possibility that it may be
unfaithfully administered by those who are charged with its execution. [,638
H-639 B] In re Delhi Laws Act [1951] S.C.R. 747 and Rai Narain Singh v. The
Chairman, Patna Administration Committee, [1955] 1 S.C.R. 290, referred to.
(Per Shelat, J. dissenting) : Section 9
suffers from the vice of excessive delegation.
Even if a policy is declared by a statute it
may be couched in such vague terms that it may not set down a definite standard
or criterion for the guidance of the delegate. [644 D-E] In spite of the avowed
policy of the Art to set up Panchayat Raj throughout the State the Government,
by virtue of the power to declare being discretionary under S. 9(1), may or may
not declare a local area to be nagar or a gram. The only fetter is that where
it desires to make a declaration in respect of any particular local area it can
do so after making an inquiry as prescribed. But neither s. 9 nor any other
proviSion in the Act lays down that even if the inquiry ends in a particular
conclusion the Government must make the declaration.. What the requisite result
of such an inquiry for a declaration should be is also not prescribed ,in the
Act and the Government is left to decide its course of action after such an
inquiry. [645 D-F] Sub-section 2 confers a discretionary power on the
Government to alter by inclusion or exclusion any area or areas from a nagar or
a grain panchayat and convert one into the other, the only restriction on such
power being the necessity to consult the district, the taluka, and the nagar or
the gram panchayat as the case may be. The restriction is consultation but not
the consent of the concerned panchayats. Sub-section 2 does not require even an
inquiry as sub-s. 1 does at the time of the declaration. Nor does it lay down
any principle or criterion as to when and in what circumstances the Government
can launch upon such alteration of the local limits. Thus the Government can
modify at any time the structure and the nature of a panchayat from a nagar to
a gram pancbayat and vice versa by simply altering its area after a mere
consultation and even if the panchayats concerned are against such alteration.
Under this power the Government can also transfer a portion or portions of a
nagar or gram panchayat after formally going through the process of
consultation and join it-or them with another panchayat even if the people
concemed were to be, unwilling to such a transfer. [645 F-646 B] Rai Narain
Singh v. Chairman, Patna Administration Committee, [1955],1 S.C.R. 290, In re
Delhi Laws Act [195]1 S.C.R. 747, V Maganbhal v. State of Bombay, [1961] 1
S.C.R.
341 and Mamdard Dawakhands case, [1960] 2
S.C.R.-671, referred to.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
1340 of 1966.
Appeal from the judgment and order dated
April 5 and 6. 1966 of the Gujarat High Court in Special Civil Application No. 657
of 1965.
Purshottam Trikamdas, and Ravinder Narain,
for the appellants.
N.S. Bindra, K. L. Hathi, S. P. Nayyar and R.
H.
Dhebar, for the respondents.
The Judgment of WANCHOO and BACHAWAT, JJ. was
delivered by BACHAWAT, J. SHELAT, J. delivered a dissenting Opinion Bachawat,
J. This appeal arises out of a writ application challenging a notification
issued on June 14, 1965, declaring the area of Khaimbalia 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 Panchayats 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 Aug 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
Khambaha 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, 634 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 Gujarat 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, 1961, 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 wires 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.
To appreciate the contentions raised by
learned counsel for the appellants, it is necessary to read s. 9 of the Gujarat
Panchayats Act, 1961. That section is in these terms:"9. (1) After making
such inquiries as may be prescribed, the State Government may, by notification
in the Official Gazette, declare any local area, comprising a revenuevillage,
or a group of revenue villages or hamlets formingpart of a revenue village, or
such other administrative unit or part thereof,(a) to be a nagar, if the
population of such local area "exceeds 10,000 but does not exceed 30,000,
and (b) to be a gram, if the population of such local area does not exceed
10,000.
(2) After consultation with. the taluka
panchayat, the district panchayat and the nagar or gram panchayat concerned (if
already constituted) the State Government may, by like notification, at any
time(a)include within, or exclude from any nagar or gram, any local area or
otherwise alter the limits of any nagar or gram; or (b)declare that any local
area shall cease to be a nagar or gram;
and thereupon the local area shall be so
included or excluded, or the limits of the nagar or gram so altered or, as the
case may be, the local area shall cease to be a nagar or gram." Rule 2 of
the Gujarat Panchayats (Declaration of nagar or gram) Inquiry Rules, 1962,
prescribes the inquiry to be made by the State Government under s. 9 (1) it
reads:
"2. Inquiry by' State Government.-(1)
Before declaring any local area to be a nagar or gram under subsection (1) of
section 9 of the Act, the State Government shall make inquiries as to:(1)the
population and the ordinary land revenue of the revenue village or each of the
revenue villages or hamlets,, or as the case may be, any other administrative
unit or part thereof, comprised in the local area, (2)whether the revenue
villages or ham lets or other administrative units or parts thereof can be
conveniently grouped so as to form a gram or nagar, as the case may be, (3)for
the purpose of sub-rule (1), the District Development Officer or where there is
no such officer the Collector when so required by the state Government, shall
submit to the State Government a statement in the form appended hereto".
Sec. 321 of the Gujarat Panchayats Act
empowers the State Government to authorise by notification in the official
gazette any officer of the government to exercise any of the powers exercisable
by the government under the Act. By a notification dated June 13 1963, as
amended by a notification dated May 5, 1964, the State: government authorised
the development commissioner, Gujarat State, to exercise the powers exercisable
by the government under s.
9(1) "declaring a local area to be a
gram or nagar".
Counsel contends that the power to make the
inquiry under s. 9(1) was not. delegated by the. State government to the
development commissioner. There is no force in this contention. The power to
make the 636 -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 authorised the development
commissioner to issue the declaration after making the prescribed inquiry.
The next contention is 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 s. 9
of the Gujarat Panchayats Act 1961, and that consequently the local area of the
municipal borough for which the Khambalia municipality was constituted could
not be declared to be a nagar. We cannot accept this contention. 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 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 s. 9(1) and a local area co-extensive with or included in
a municipal borough may be declared to be a gram or nagar.
The next contention is that the notification
under s. 9(1) dated June 14, 1965, was made mala fide. Before the notification
was issued, there was some correspondence in course of which the State
Government on the representation of Shri Haribhai Nakum MLA, 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 total 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 637 allegation of mala
fides was categorically denied in the affidavit filed on behalf of the State
government.
The next contention is that s. 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. It is
said that the legislature has not sufficiently indicated the policy which is to
guide the State government in declaring a local area to be a gram or nagar or
in the matter of making an inquiry preliminary to the declaration and the
framing of the rules for the inquiry and has given a naked and arbitrary
discretion to the State government to declare or not to declare a local area to
be a gram or nagar or alter the limits of any nagar or gram or declare that any
local area shall cease to be a nagar or a gram. We 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(1) and Raj
Narain Singh v. The Chairman, Patna Administration Committee(2). An essential
legislative function consists 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 the frame work of the policy. Judged by this test, we think that s. 9(1)
does not suffer from the vice of excessive delegation.
The preamble to the Gujarat Panchayats Act,
1961 shows that it is an Act to consolidate and amend the law relating to
village panchayats and district local authorities in the State of Gujarat with
a view to reorganize the administration pertaining to local government in
furtherance of the object of the democratic decentralisation of powers in
favour of different classes of panchayats. The Act extends to the whole of the
State of Gujarat (S. 1(2).) It makes special provision for the district of Dang
having regard to the sparsity of its population and other peculiar features
(ss. 311 to 314). In other districts the Act seeks to introduce a three tier
panchayat organization in the State for the purpose of securing a greater
measure of participation by the people of the State in local and governmental
functions (ss. 3, 8 and 287). At the summit of the panchayat organization is
the district panchayat. Below the district panchayat and subordinate to it is
the taluka panchyat. For each district as constituted from time to time under
the Land Revenue Code, there is a district panchayat, and for each taluka or a
mahal as constituted from time to time under the Land Revenue Code, there is a
taluka panchayat (ss. 3 and 10). A district panchayat and subject to the
authority of the district panchayat, a taluka panchayat has authority over the
area for which it is constituted except that portion of the area which for the
time (1) [1951] S.C.R. 747.
(2) [1955] 1 S.C.R. 290.
638 being is within the limits of a city
municipal borough, municipal district, notified area or cantonment constituted
under any law for the time being in force. Below the taluka panchayat and the
district panchayat and subordinate to them are the gram and nagar panchayats.
For each gram, there is a gram panchayat and for each nagar there is a nagar
panchayat. Sec. 9(1) provides for the constitution of grams and nagars. The
State government may declare a local area comprising a group of revenue
villages or a revenue village or part of it or such other administrative unit
or part of it to be a gram if the population does not exceed 10,000 or a nagar
if the population exceeds 10,000 but does not exceed 30,000. Before making the
declaration it is necessary to find out whether the local area can be
conveniently constituted into a gram or nagar. The necessary inquiries to be
made are prescribed by the Gujarat Panchayats (declaration of nagar or gram)
Inquiry Rules, 1962. Obviously the State legislature cannot make the necessary
inquiry as to whether a village or a part of it or two or more villages grouped
together or an administrative unit or part of it is a viable unit fit to be
constituted as a separate gram or nagar: The inquiry and the framing of proper
rules with regard to the inquiry are subordinate or ancillary matters which
were properly left to an administrative agency. It is the policy of the Act
that panchayats should be establish within a reasonable time in all local areas
with populations not exceeding 30,000 and not included in a notified area or a
cantonment. This policy guides and controls the discretionary power of the
State government under s. 9(1). Having 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 and Cooperation (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 panchayats.
Section 9 (1) read with s. 307 shows that a
local area co extensive 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 a gram or nagar. The democratic decentra lisation committe set up
under the government resolution dated July 15, 1960 recommended in paragraph 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).
On behalf of the appellant, it is contended
that even a municipal borough with a population over 30,000 is at the mercy of
the State 639.
government under s. 9(1). It is said that out
of such a municipal borough, small fragments with populations less than 30,000
may be carved out and may be separately declared to be grams and nagars and by
adopting this method, the government may convert the entire municipal borough
into several grams and nagars. 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. 9(1) cannot be held unconstitutional
bemuse of the possibility that it may be unfaithfully administered by those who
are charged with its execution.
envisages that gram and nagar panchayats
should be 'The Act envisages that gram and nagar panchayats should be
established in all local areas having population not exceeding 30,000. But it
appears that on February 12, 1963, the Gujarat government arrived at the
following policy decision:
"(a) The Municipalities whose population
does not exceed 10,000 may be converted into Gram Panchaytas.
(b)Those with a population exceeding 10,000
but not exceeding 20,000 may be converted into Nagar Panchayat.
(c)Municipalities having a population
exceeding 20,000 but not exceeding 25,000 may be given option to be converted
into Nagar Panchayats.
(d)There are certain Muncipalities in respect
of which disciplinary and such other actions are either pending or is proposed
to be initiated. To enable such actions to' proceed legally uninterrupted,
under the relevant Municipal Act it is decided that such Municipalities should
not be converted either into Gram or Nagar Panchayats, irrespective of their
population. The question of converting such Muncipalities may be considered
only after the of such disciplinary 'or other proceedings under the Municipal
Act." Now 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 640 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 this non-conversion 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 their non-conversion
could not be supported on the ground that their population was between 20000
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 Surendra nagar 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 the nonconversion 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 duty.
Counsel for the appellant contended that s.
9(2) also suffers from the vice of excessive delegation. We 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 amalgamation or division of grams
consequential upon an area ceasing to be a gram (ss. 309, 310), and for special
cases where an area excluded from a gram or nagar ceasing to be a gram or nagar
is not merged in an area having local self-government (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 selfgovernment. For such purposes, it may
be necessary 641 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).
In the result the appeal is dismissed without
cost.
Shelat, J. The appellant municipality of
Khambalia is in Jamnagar District which prior to 1956 formed part of the then
State of Saurashtra. The State had adopted the Bombay District Municipal Act,
1901 and had thereunder constituted the appellant municipality. On the merger
of Saurashtra with the State of Bombay in 1956, Jamnagar District became part
of the then Bombay State. But on bifurcation of the Bombay State the District
of Jamnagar became part of the new State of Gujarat.
The Gujarat Panchayats Act,1961 was enacted
on November 24 1962. At that time the population of Khambaliam municipality
according to the census report of 1961 stood at 12,249. By a notification dated
August 17, 1962 issued under section 9 of the Panchayats Act the Government of
Gujarat declared the local area comprised in Khambalia municipality as a nagar.
Consequently the appellant municipality ceased to exist and a Nagar Panchayat
was set up in its stead. On account of emergency declared by the President the
State Legislature passed the Gujarat Panchayats (Suspension of Provisions and
Reconversion of certain local areas into municipal districts) Act, 1962, which
was published on February 5, 1963. The effect of this Act was that the
appellant municipality and certain other municipalities which were converted
into nagar Panchayats stood revived. This result was however short lived
because on. February 7, 1963 the State Government promulgated the Gujarat
Panchayat Laws (Amendment) Ordinance, 1963 repealing s. 3 of the Suspension
Act. In April 1963 the Government once again converted some of 'the
municipalities into nagar or gram panchayats. Not so the appellant,
municipality as the Government, it is said, desired to supersede it under
section 179 of the Bombay District Municipal Act, 1901. As soon as the
Government took action under that Act the appellant municipality filed a suit
challenging that action.
On December 23, 1964 the Gujarat Municipalities
Act, 1963 (Act XXXIV of 1964) was enacted and under its provisions the
appellant municipality was deemed to be a municipality constituted thereunder.
On June 14, 1965 the Development Commissioner 642 -under powers delegated to
him under sec. 321 of the Panchayats Act issued the impugned notification under
sec.
9(1) thereof declaring the area comprised in
the appellant municipality to be a nagar. Counsel for the Municipality
challenged the legality of this notification under five heads, viz., (1)that
sec. 9 of the Panchayats Act did not apply to a municipal district as it is not
a local area or such other administrative unit or part thereof,:
(2)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 :
(3)that the inquiry, if any, could be held by
the State Government and not by the Development Commissioner because though the
Government's power under sec. 9 was delegated the obligation to hold such an
inquiry was not and could not be delegated;
(4) that the notification was issued in mala
fide exercise of power; and (5) that sec. 9 of the Act is ultra vires by reason
of excessive delegation of legislative power in favour of the State Government.
I have had the advantage of perusing the
judgment prepared by my brother Bachawat J. and while I am prepared to go along
with him so far as his conclusions on contentions 1 to 4 are concerned, I
regret I cannot concur with his conclusion as regards the fifth contention
which challenges the validity of sec. 9 and the notification.
To appreciate the challenge to sec. 9 it is
necessary to recite that section. The section reads as follows:"(9) (1)
After making such inquiries as may be prescribed, the State Government may by
notification in the Official Gazette, declare 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,(a) to be a
nagar, if the population of such local area-exceeds10,000 but does not exceed
30,000 and (b) to be a gram, if the population of such local area does not
exceed 10,000.
(2)After consultation with the taluka
panchayat, the district panchayat and the nagar or gram panchayat ,concerned
(if already constituted) the State Government may, by like notification, at any
time643 (a)include within, or exclude from, any nagar or gram, any local area
or otherwise alter the limits of any nagar or gram; or (b)declare that any
local area shall cease to be a nagar or gram;
and thereupon the local area shall be so
included or excluded or the limits of the nagar or gram so altered or as the
case may be, the local area shall cease to be a nagar or gram." The
inquiries to be made under the section are dealt with by Rule 2 of the Inquiry
Rules, 1962. Rule 2 is as follows:"2. Inquiry by State Government.-(1)
Before declaring any local area to be a nagar or gram under sub-sec. (1) of
sec. 9 of the Act, the State Government shall make inquiries as to(1)the
population and the ordinary land revenue of the revenue village or each of the
revenue villages or hamlets, or as the case may be, any other administrative
unit or part thereof, comprised in the local area.
(2)whether the revenue villages or hamlets or
other administrative units or parts thereof can be conveniently grouped so as
to form a gram or nagar, as the case may be." Thus the inquiry involves
consideration of two factors only;
(1) population and the ordinary land revenue
and (2) whether the revenue villages or hamlets or other units or parts thereof
can be conveniently grouped together to form a gram or a nagar.
Now it is clear from the preamble of the Act
that the object of the Act is to. set up a Panchayat Raj throughout the State
of Gujarat with a three-tiered' Organisation ranging from the 'Village to the
district level. To achieve this Act provides for a gram or a nagar panchayat, a
taluk a panchayat and a district panchayat in each of the districts.
It is also clear from several provisions of
the Act that though the policy was to set up such a Panchayat Raj it was
considered that a panchayat would not be suitable for local areas with
populations exceeding 30,000 and that such areas would be best served by municialities.
Therefore the Act leaves out certain urban areas and their municipalities
untouched. Indeed it was because the legislature knew that such urban areas,
should be left out from the scope of the Act that it passed a comprehensive
statute, the Gujarat Municipalities Act, 1963, which governs all municipalities
including the existing ones constituted either under the Bombay District
Municipal Act 1901 or the Bombay M2Sup. C. 1/67-12 644 Municipal Boroughs Act,
1925. Though the policy was that it is only local areas with, populations
exceeding 30,000 which should be left out from the purview of the Act and all
the areas with populations below 30,000 should be brought under the panchayat
system, the Gujarat Municipalities Act, 1963 curiously enough does not lay down
any minimum limit as to population for a municipality to be set up. Prima facie
the State Government under that Act can constitute or permit an existing
municipality to continue even if its population is less than 30,000. The effect
of this gap in the implementation of the avowed legislative policy in the
Panchayats Act will be easily perceived hereafter.
A declaration under sec. 9(1) that a local
area shall be a nagar or a gram is a legislative function. As stated on several
occasions by this Court an essential legislative function consists in the
determination of the legislative policy and its formulation as a binding rule
of conduct.
(Cf. Raj Narain Singh v. Chairman, Patna
Administration Committee(1) and Delhi Laws Act case.(2)). Such a function
cannot be surrendered or delegated in favour of another authority or agency for
the Constitution entrusts the legislative function to the legislatures. In view
however of the diverse activities of a modern state it is recognised that a
legislature cannot be expected to work out all the details of a complex statute
such as the instant Act. It is therefore competent for a legislature to
delegate in suitable cases some of its ancillary legislative powers to the
executive or any other authority to work out such details. But there is an
inherent danger in such delegation. As observed in Vasantlal Maganbhai v. State
of Bombay(3)" although the power of delegation is a constituent element of
the legislative power, it is well settled that the legislature cannot delegate
its essential legislative functions in any case and before it can delegate any
subsidiary or ancillary power, to a delegate of its choice, it must lay down
the legislative policy and principles so as to afford the delegate proper
guidance in implementing the same." If, therefore, a statute is challenged
on the ground of excessive delegation it has to be established that the
legislature has delegated its essential legislative power or function and that
it has not laid down its policy or principle for the guidance of its delegate.
Even if a policy is declared it may, however, be couched in such vague terms
that it may not set down a definite standard or criterion for the guidance of
the delegate. The consequence would be to confer an arbitrary or uncanalised
power to change or modify the declared policy without reserving to itself any
control over the subordinate legislation. Such an effacement or abdication of
power in favour (1) [1955] 1 S.C.R. 290.
(2) [1951] S.C.R. 747.
(3) [1961] 1 S.C.R. 341 at 346 645 of another
agency either in whole or in part is beyond the permissible limits of
delegation. In Hamdard Dawakhana's case,(1) clause (d) of sec. 3 of the Drugs
and Magic Remedies (Objectionable Advertisements) Act, 1954 which gave power to
the Central Government to add to the diseases falling within the mischief of
sec. 3 was struck down on the ground of its conferring such uncanalised power
to include any disease it thought fit.
Let me now examine the provisions of sec. 9
in the background of these principles. As aforesaid, the object of the Act is
to set up the Panchayat system throughout the State except of course in those
local areas 'where the population exceeds 30,000. It is to implement this
object that the Act provides a three-tier Organisation consisting of a gram or
nagar panchayat, a taluka panchayat and a district panchayat in each district.
What section 9(1) does is to delegate to the government the power to declare,
after making such inquiries as may be prescribed, a local area or a part
there-of to be a nagar, if its population is between 10,000 to 30,000 or a
gram, if its population is less than 10,000. Sub-section 2 authorises the
government after consultation with the taluka, the district and the nagar or
gram panchayat concerned to alter the limits of any nagar or gram by including
or excluding any area or declare that any local area shall cease to be a nagar
or a gram and thereupon the local area shall be so included or excluded etc.
The Government thus is empowered (1) to declare a local area to be a nagar or a
gram depending upon its population; (2) after such a nagar or gram has been
constituted to alter its area either by including other area or areas or
excluding an area or areas there from; (3) by doing so to convert a gram into a
nagar and vice versa and (4) or to declare any such local area as having ceased
to be a nagar or a gram. It will at once be noticed that the word
"or" between clauses (a) and (b) in sub-sec. 2 indicates that the
power to declare that a local area has ceased to be a nagar or a gram can be
exercised either after such inclusion or exclusion or even without such
inclusion or exclusion. It follows therefore that even where a nagar or a gram
panchayat is constituted, the government can declare at any time that it shall
cease to be a nagar or a gram either as a result of the alteration of its local
area or without such alteration.
It will also be noticed that sub-section (1)
by the use of the word 'may' therein confers an absolute discretion to make the
declaration thereunder or not. Indeed, Counsel for the State insisted that the
word 'may' there does not mean 'shall' and therefore that provision is not
mandatory. It follows therefore that in spite of the avowed policy of the Act
to set up Panchayat Raj throughout the State the Government by virtue of the
power to declare being discretionary under sub-section (1), may or may not
declare a local area to be a nagar or a gram.
(1) [1960]2 S.C.R. 671.
646 The only fetter is that where it desires
to make a declaration in respect of any particular local area it can do so
after making an inquiry as prescribed. But neither sec. 9 nor any other
provision in the Act lays down that even if the inquiry ends in a particular
conclusion the Government must make the declaration. What the requisite result
of such an inquiry for a declaration should be is also not prescribed in the
Act and the government is left to decide its course of action after such an
inquiry.
Similarly sub-sec. 2 confers a discretionary
power on the government to alter by inclusion or exclusion any area or areas
from a nagar or a gram panchayat and convert one from the other. The only
restriction on such power is the necessity to consult the district, the taluka,
and the nagar or the gram panchayats as the case may be. The restriction is
consultation but not the consent of the concerned panchayats. Sub-sec. 2 does
not require even an inquiry as sub-section I does at the time of the
declaration. Nor does it lay down any principle or criterion as to when and in,
what circumstances the Government can launch upon such alteration of the local
limits. Thus the Government can modify at any time the structure and the nature
of a panchayat from a nagar to a gram panchayat and vice versa by simply
altering its area after a mere consultation and even if the panchayats
concerned are against such alteration.
Under this power the Government can also
transfer a portion or portions of a nagar or gram panchayat after formally
going through the process of consultation and join it or them with another
panchayat even if the people concerned were to be unwilling to such a transfer.
It is true that sec. 9(1) contains one
criterion, viz., of population, that is, if the population is between 10,000 to
30,000 the local area would be a nagar and if it is less than 10,000 it would
be a gram. Even so, by reason of the absolute discretion left with the
government it is not as if it is incumbent on the government to make the
declaration under section 9(1) even if the local area has the necessary
population and revenue to make it a viable unit. The government, even in such a
case, may decline to make a declaration in the absence of any provision
requiring it to do so or under sub-section 2 divide, the area and join such
divided portions with other panchayats.
The inquiry under sub-section I is not
regulated under the Act but under Rules made by the government. Neither the Act
nor the Rules provide that the government has to act under sec. 9(1) if the
inquiry ends in a particular result. In other words there is no provision that
the government has to act in a particular way after such an inquiry.
Consequently, it is not necessary for the
government to make a declaration even if it is satisfied as regards the
population or the land revenue of the local area.
Furthermore, the section does not lay down
any principles to guide the Government 647 as to when a single revenue village
should be constituted a gram panchayat or when it should be grouped with other
such villages to constitute a gram or a nagar panchayat. Neither section 9 nor
'Rule 2 provides as to what should follow after an inquiry is held. Thus
neither sec. 9 nor the Rules provide any principle or criterion on the basis of
which the power of declaration and alteration under sub-section I or
sub-section 2 of sec. 9 is to be exercised and it is left entirely to the sweet
will of the government whether a particular area is to be declared a gram or a
nagar or not and to alter its area by adding or subtracting therefrom part or
parts so that it may be reduced to a gram or augmented into a nagar regardless
of the willingness either of the people or the panchayat concerned.
Another result ensuing from the government's
power to alter the limits which can be easily visualised is that even where a
local area has a population exceeding 30,000 and has a duly constituted
municipality, if the government for one reason or the other desires to do away
with such a municipality it has simply to reduce its limits which it can do
since a municipal area is a local area within the meaning of sec. 9(1) and
convert it into a gram or a nagar depending upon how much of its area is carved
out. Since under subsec. 2 such a power can be exercised even without an
inquiry or consent of the municipality concerned every municipality would be
entirely at the mercy of the government for its continuance. The consequences
flowing from such a power are far more far reaching than even those from
exercise of power of supersession of a municipality under the Gujarat
Municipalities Act. If the government supersedes a municipality it does not
become extinct. Only the existing body of the members would be superseded but a
fresh election has to take place and a new body of members would constitute the
municipality. Where government acts under this Act and so alters the local area
constituting the municipality as to reduce its population below 30,000 the
government can on such 'alteration bring about the extinction of the'
municipality and convert it into a nagar or even a gram panchayat. It is easy
to perceive in the provisions of Sec.
9 an uncanalised power to do all these things
any principle or criterion laid down therein to govern or control the actions
of the government.
The, fact that sub-section (1), is not
mandatory and confers dicretionary power has also other significance. Inspite
of the ,provision in it that where the 'population of a local area is between
10,000 to 30,000 it should be a nagar panchayat the State Government made a
policy decision 'on Feb. 12, 1963. That decision was:"(a) The
Municipalities whose population does not exceed 10,000 may be converted into gram
panchayats.
648 (b)Those with a population exceeding
10,000 but not exceeding 20,000 may be converted into Nagar Panchayats.
(c)Municipalities having a population
exceeding 20,000 but not exceeding-25,000 may be given option to be converted
into Nagar Panchayats.
The effect of the decision is that
municipalities having a population between 20,000 to 30,000 are left out from
the purview of sec. 9(1). Municipalities with populations between 20,000 to
25,000 are given an option whether to convert themselves into nagar panchayats;
municipalities with populations between 25,000 to 30,000 are not to be
converted into nagar panchayats. It is obvious that the policy decision is
defective of the object of the Act. It is also obvious that the government could
make such a policy decision only because sec. 9 confers an absolute discretion
where under 'it leaves it to the government to declare or not to declare local
areas as grams or nagars as the case may be.
The fact that such a policy decision could be
made demonstrates that the legislature did not reserve to itself any power to
control the implementation by the government of its objective. It is therefore
clear that sec. 9 delegates to the Government an uncontrolled power under
sub-sec. (1) and sub-sec. 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. Such a power leaves every panchayat
whether it be a nagar or a gram panchayat or a local area where there is a
municipality duly constituted at the mercy of the government for its
continuance as such panchayat or municipality.
The complaint of the appellant-municipality
is that it is because of such an arbitrary power that the government has been
able to declare the appellant municipality to be nagar while allow'ing at least
two municipalities of Bagasra and Wadhawan though similarly situated to
continue as municipalities. It was only after the appellantmunicipality filed
its writ petition in the High Court that the government declared Bagasra a
nagar. Wadhawan Municipality however is still allowed to continue. During the
course of the hearing of this appeal, we asked Counsel for the State if the
government was agreeable to convert Wadhawan into a nagar. He asked for time to
obtain instructions and subsequently filed a statement. The only reason given
in the statement is that there is a proposal before the government to
amalgamate Wadhawan with the nearby Surendera nagar and to have one municipality
for both. It is strange that even after nearly four years since the passing of
the Act the government has yet not been able to make up its mind and 649 the
alleged proposal for amalgamation is still said to be under its consideration.
But these are not the only two municipalities to which the government did not
apply the Act. In answer to the said statement the appellant municipality has
drawn our attention to the fact that the Act has not been applied to eight
municipalities in Saurashtra and thirteen municipalities in Gujarat having
populations between 20,000 and 30,000 presumably acting, under the said policy
decision. The above figures are not disputable as they are taken from a
government publication.
No doubt the appellant municipality has a population
of 12,000 and odd and is therefore liable to be converted into a nagar. But so
also the aforesaid twenty one municipalities, under the very same provisions of
the Act.
The only reason why these other
municipalities have not been converted into nagars is the decision of the
government based perhaps on a consideration that areas with populations between
twenty and thirty thousand are urban, areas which would be better served by
municipalities. That can be the only explanation for the said policy decision.
But the decision is contrary to the legislative decision contained in s. 9(1)
that such areas are fit to be converted into nagar panchayats. Such a decision
became possible because the legislature left an uncontrolled power in the
government enabling it to modify and even defeat the legislative policy without
reserving to itself any control over the implementation of the Act by its
delegate. Such a delegation amounts to an effacement and is not within the
permissible limits of delegation.
Realising this difficulty, Counsel for the
State conceded that the policy decision was illegal. But such a concession by
Counsel cannot be of any assistance, for the simple reason that as Sec. 9 1)
stands the power delegated to the government is discretionary and the
government can therefore decide whether a particular local area or a class of
local areas should be declared as. nagars or grams or not and it is in exercise
of that power. that the policy decision was made and implemented, contrary
though it is to the aim and object of the Act to set up panchayats in all local
areas except those having populations over 30,000.
Section 9 in my view suffers from excessive
delegation and therefore is invalid. The impugned notification issued
there-under must fall along with it.
I would, therefore, allow the appeal with
costs.
ORDER In accordance with the opinion of the
majority the appeal is dismissed without costs.
Y.P.
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