Holding

The State's notification is valid; no separate notification under Article 243Q(2) is required, and the State Legislature retains full competence to create municipalities under the Rajasthan Municipalities Act, 2009.

Summary

The State of Rajasthan issued a notification on 12 August 2014 converting Gram Panchayat Roopbas into a Municipal Board under the Rajasthan Municipalities Act, 2009. The Rajasthan High Court set aside the notification, holding that it was ultra vires because no separate public notification under Article 243Q(2) of the Constitution had been made. On appeal, the Supreme Court examined the scope of Part IXA and Article 243ZF, concluding that the Constitution merely obliges the State Legislature to bring its municipal laws into conformity with Part IXA and does not require a distinct notification under Article 243Q(2). The Court held that the State’s notification, issued pursuant to Sections 3 and 329 of the Municipalities Act, was a valid exercise of legislative power and not arbitrary or unreasonable. Consequently, the High Court’s order was set aside and the writ petition dismissed. The appeal was allowed, affirming the State’s competence to create municipalities without a separate Article 243Q(2) notification.

Issues considered

The validity of the State's notification declaring a Gram Panchayat as a Municipal Board without a separate publication under Article 243Q(2).
Whether Part IXA and Article 243ZF limit the State Legislature's power to create municipalities.
Whether the Rajasthan Municipalities Act, 2009, and its provisions (Sections 3, 5, 329) are consistent with the constitutional scheme for urban local bodies.

Legislation cited

Constitution (Seventy‑fourth) Amendment Act, 1992s. Art. 243Q, s. Art. 243R, s. Art. 243S, s. Art. 243ZF, s. Art. 254, s. Part IXA
Rajasthan Municipalities Act, 2009s. Section 3, s. Section 329, s. Section 337, s. Section 5

Subjects

MunicipalitiesPart IXAArticle 243QArticle 243ZFState legislative competenceUrban Local BodiesNotificationRajasthan Municipalities ActConstitutional amendmentUltra vires

Judgment

[2022] 2 S.C.R. 777 777

STATE OF RAJASTHAN A
v.
ASHOK KHETOLIYA & ANR
(Civil Appeal No. 1814 of 2022)
MARCH 10, 2022 B
[HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ]
Constitution of India: Arts.243Q(2), 243ZF, Constitution
(Seventy Fourth Amendment) Act, 1992 – Part IXA – Legislative
Competence with respect to Urban Local Bodies – Appellant-State
C
issued a notification declaring Gram Panchayat Roopbas, District
Bharatpur as Municipal Board – The said notification was
challenged on the ground that the same was ultra-vires as no
notification was made public as contemplated under Art.243Q(2) –
High Court accepted the challenge and held that declaration by
the State was beyond its legislative competence – Held: Art.243ZF D
of the Constitution mandates the State legislature to amend the State
Laws to make them in conformity with Part IXA – When Part IXA
was introduced, the Parliament was aware that the competent
legislature to legislate on the subject of the Urban Local Bodies
was the State Legislature but Part IXA gave constitutional status to
E
the Municipalities and therefore the State were put under
constitutional obligation to adopt Municipalities – Local Government
falls in Entry 5 List II of Seventh Schedule therefore state legislature
alone is competent to legislate in respect of municipalities provided
the same is not inconsistent with Part IXA – The scheme of Part IXA
does not contemplate separate notification under Art.243 Q and if F
the notification is issued as per the Municipality Act enacted by the
State which is not inconsistent with Art.243Q, then it fulfills the
constitutional requirement and the same cannot be held to be ultra-
vires solely on the basis that the notification was not published under
Art.243Q(2) – Rajasthan Municipalities Act, 2009.
G
Constitution (Seventy Fourth Amendment) Act, 1992: Part IXA
– Object of introducing Part IXA in the Constitution – Held: Objects
and reasons of introducing Part IXA were that local bodies had
become weak and ineffective on account of variety of reasons such
as failure to hold regular elections, prolonged supersessions and
H
777
778 SUPREME COURT REPORTS [2022] 2 S.C.R.

A inadequate devolution of powers and functions – The Urban Local
Bodies were also not able to perform effectively as vibrant democratic
units of self-government – Therefore, when Part IXA was introduced,
Parliament was aware that the competent legislature to legislate on
the subject of the Urban Local Bodies was the State legislature but
Part IXA of the Constitution had given constitutional status to the
B
Municipalities – The States were put under constitutional obligation
to adopt Municipalities as per systems enshrined in the Constitution
– Constitution of India.
Allowing the appeal, the Court
C HELD: 1. Article 243ZF of the Constitution mandated that
any provision of any law relating to Municipalities in force in a
State immediately before the commencement of the Constitution
(Seventy-fourth Amendment) Act, 1992, which is inconsistent with
the provisions of Part IXA shall continue to be in force until
amended or repealed by a competent Legislature or any other
D competent authority or until the expiration of one year from such
commencement whichever is earlier. Therefore, Article 243ZF
of the Constitution is in the context of mandating the State
Legislature to amend the State laws to be in conformity with Part
IXA of the Constitution. The objects and reasons of introducing
E Part IXA in the Constitution were that local bodies had become
weak and ineffective on account of variety of reasons such as
failure to hold regular elections, prolonged supersessions and
inadequate devolution of powers and functions. The Urban Local
Bodies were also not able to perform effectively as vibrant
democratic units of self-government. Therefore, when Part IXA
F was introduced, Parliament was aware that the competent
legislature to legislate on the subject of the Urban Local Bodies
was the State legislature but Part IXA of the Constitution had
given constitutional status to the Municipalities. The States were
put under constitutional obligation to adopt Municipalities as per
G systems enshrined in the Constitution. [Paras 3, 4][783-D-E; 784-
A-C]
2. The High Court has misread the scope of Part IXA of
the Constitution and Article 243Q of the Constitution
contemplating that the transitional area has to be notified under
H
STATE OF RAJASTHAN v. ASHOK KHETOLIYA & ANR 779

such provision. The scheme of the Constitutional Amendment is A
not to take away legislative competence of the State Legislatures
to legislate on the subject of local Government but it is more to
ensure that the three tiers of governance are strengthened as
part of democratic set up. [Para 8][786-A-B]
Tulsipur Sugar Co. Ltd. v. The Notified Area Committee, B
Tulsipur (1980) 2 SCC 295 : [1980] 2 SCR 1111;
Sundarjas Kanyalal Bhatija & Ors. v. Collector, Thane,
Maharashtra & Ors. (1989) 3 SCC 396 : [1989] 3 SCR
405; Parmar Samantsinh Umedsinh v. State of Gujarat
& Ors. 2021 SCC OnLine SC 138; State of U.P. &
Ors. v. Pradhan Sangh Kshettra Samiti & Ors. 1995 C
Supp (2) SCC 305 : [1995] 2 SCR 1015 – relied on.
3. Since the local Government falls in entry 5 of List II of
the Seventh Schedule, therefore, it is the State Legislature alone
which is competent to legislate in respect of the municipalities
with only one limitation that the provisions of the State Act cannot D
be inconsistent with the mandate of the Scheme of Part IXA of
the Constitution. The scheme of Part IXA of the Municipalities
Act does not contemplate a separate notification under Article
243Q of the Constitution and thereafter under Section 5 of the
Municipalities Act. As Section 5 of the Municipalities Act is not E
inconsistent w ith any provisions of Article 243Q of the
Constitution, therefore, two notifications are not contemplated
or warranted under the Scheme of Part IXA or the Municipalities
Act. The State Government is competent to divide the
Municipalities in the State into classes according to their income
or other factors like population or importance of the local area F
and other circumstances as provided under Section 329 of the
Municipalities Act. In terms of Section 329, a notification was
issued on 30.4.2012 determining the category of the Municipal
Corporation/Municipal Council/Municipal Board. Thereafter, the
impugned notification dated 12.8.2014 was issued in exercise of G
the powers conferred on the State Government under Section 3
read with Section 329 of the Municipalities Act. The notifications
would show that the State Government had exercised powers to

H
780 SUPREME COURT REPORTS [2022] 2 S.C.R.

A establish Municipality in terms of Section 5 of the Municipalities
Act. Such notifications cannot be said to be illegal or arbitrary in
any manner and were rightly issued in exercise of the statutory
powers conferred on the State by the Legislature. In fact, the
High Court has struck down the notification only for the reason
that the notification under Article 243Q(2) was not published.
B
Such reasoning is not tenable. Thus, the order of the High Court
is clearly erroneous and unsustainable in law. [Paras 16-19, 22-
23][792-B-E; 793-D; 794-A-B, F-G]
Pune Municipal Corporation & Anr. v. Promoters and
Builders Association & Anr. (2004) 10 SCC 796 : [2004]
C 2 Suppl. SCR 207; MGR Industries Association & Anr.
v. State of Uttar Pradesh & Ors. (2017) 3 SCC 494 :
[2017] 1 SCR 604 – referred to.
Champa Lal v. State of Rajasthan & Ors. (2018) 16
SCC 356 : 2018 (5) SCR 628 – not good law.
D
Case Law Reference
[1980] 2 SCR 1111 relied on Para 9
[1989] 3 SCR 405 relied on Para 9
[2004] 2 Suppl. SCR 207 referred to Para 10
E
[2017] 1 SCR 604 referred to Para 10
[2018] 5 SCR 628 not good law Para 13
[1995] 2 SCR 1015 relied on Para 15
F CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1814
of 2022.
From the Judgment and Order dated 28.04.2015 of the High Court
of Judicature for Rajasthan at Jaipur Bench, Jaipur in D.B. Civil Writ
Petition No.13620 of 2014.
G Dr. Manish Singhvi, Sr. Adv., Arpit Parkash, Milind Kumar, Advs.
for the Appellant.
Ms. Radhika Yadav, Amit Agrawal, Naman, Advs. for the
Respondents.

H
STATE OF RAJASTHAN v. ASHOK KHETOLIYA & ANR 781

The Judgment of the Court was delivered by A
HEMANT GUPTA, J.
1. The present appeal is directed against an order passed by the
High Court of Judicature of Rajasthan dated 28.4.2015 whereby a
notification dated 12.8.2014 declaring Gram Panchayat Roopbas, District B
Bharatpur as Municipal Board was set aside. The High Court found that
no public notification as contemplated under Article 243Q(2) of the
Constitution of India has been produced specifying Gram Panchayat
Roopbas as a “transitional area” and thus, it cannot be declared as a
Municipal Board.
C
2. The Constitution (Seventy-Fourth Amendment) Act, 1992
introduced Part IXA in the Constitution which came into force on
20.4.1993. The Statement of Objects and Reasons as waspublished in
the Gazette on 16.09.1991 when the Bill was introduced is as under:
“In many States local bodies have become weak and ineffective D
on account of a variety of reasons, including the failure to hold
regular elections, prolonged supersessions and inadequate
devolution of powers and functions. As a result, Urban Local Bodies
are not able to perform effectively as vibrant democratic units of
self-government. E
2. Having regard to these inadequacies, it is considered necessary
that provisions relating to Urban Local Bodies are incorporated in
the Constitution particularly for-
(i) putting on a firmer footing the relationship between the State F
Government and the Urban Local Bodies with respect to-
(a) the functions and taxation powers; and
(b) arrangements for revenue sharing;
(ii) Ensuring regular conduct of elections; G

(iii) ensuring timely elections in the case of supersession; and
(iv) providing adequate representation for the weaker sections
like Scheduled Castes, Scheduled Tribes and women.
H
782 SUPREME COURT REPORTS [2022] 2 S.C.R.

A 3. Accordingly, it is proposed to add a new part relating to the
Urban Local Bodies in the Constitution to provide for-
(a) constitution of three types of Municipalities:
(i) Nagar Panchayats for areas in transition from a rural area to
B urban area;
(ii) Municipal Councils for smaller urban areas;
(iii) Municipal Corporations for larger urban areas. The broad
criteria for specifying the said areas is being provided in the
proposed article 243-0;
C
(b) composition of Municipalities, which will be decided by the
Legislature of a State, having the following features:
(i) persons to be chosen by direct election;
(ii) representation of Chairpersons of Committees, if any, at ward
D or other levels in the Municipalities;
(iii) representation of persons having special knowledge or
experience of Municipal Administration in Municipalities (without
voting rights);
E (c) election of Chairpersons of a Municipality in the manner
specified in the State law;
(d) constitution of Committees at ward level or other level or levels
within the territorial area of a Municipality as may be provided in
the State law;
F
(e) reservation of seats in every Municipality-
(i) for Scheduled Castes and Scheduled Tribes in proportion to
their population of which not less than one-third shall be for women;
(ii) for women which shall not less than one-third of the total
G number of seats;
(iii) in favour of backward class of citizens if so provided by the
Legislature of the State; (iv) for Scheduled Castes, Scheduled
Tribes and women in the office of Chairpersons as may be specified
in the State law;
H
STATE OF RAJASTHAN v. ASHOK KHETOLIYA & ANR 783
[HEMANT GUPTA, J.]

(f) fixed tenure of 5 years for the Municipality and re-election A
within six months of end of tenure. If a Municipality is dissolved
before expiration of its duration, elections to be held within a period
of six months of its dissolution;
(g) devolution by the State Legislature of powers and
responsibilities upon the Municipalities with respect to preparation B
of plans for economic development and social justice, and for the
implementation of development schemes as may be required to
enable them to function as institutions of self-government;
(h) levy of taxes and duties by Municipalities, assigning of such
taxes and duties to Municipalities by State Governments and for C
making grants-in-aid by the State to the Municipalities as may be
provided in the State law;
(i) xx xx xx”
3. Article 243ZF of the Constitution mandated that any provision
of any law relating to Municipalities in force in a State immediately D
before the commencement of the Constitution (Seventy-fourth
Amendment) Act, 1992, which is inconsistent with the provisions
of Part IXA shall continue to be in force until amended or repealed
by a competent Legislature or any other competent authority or
until the expiration of one year from such commencement E
whichever is earlier. Article 243ZF reads thus:
“243-ZF. Continuance of existing laws and Municpalities. -
Notwithstanding anything in this Part, any provision of any law
relating to Municipalities in force in a State immediately before
the commencement of the Constitution (Seventy-fourth F
Amendment) Act, 1992, which is inconsistent with the provisions
of this Part, shall continue to be in force until amended or repealed
by a competent Legislature or other competent authority or until
the expiration of one year from such commencement, whichever
is earlier:
G
Provided that all the Municipalities existing immediately
before such commencement shall continue till the expiration of
their duration, unless sooner dissolved by a resolution passed to
that effect by the Legislative Assembly of that State or, in the
case of a State having a Legislative Council, by each House of
the Legislature of that State.” H
784 SUPREME COURT REPORTS [2022] 2 S.C.R.

A 4. Therefore, Article 243ZF of the Constitution is in the context of
mandating the State Legislature to amend the State laws to be in
conformity with Part IXA of the Constitution. The objects and reasons
of introducing Part IXA in the Constitution were that local bodies had
become weak and ineffective on account of variety of reasons such as
failure to hold regular elections, prolonged supersessions and inadequate
B
devolution of powers and functions. The Urban Local Bodies were also
not able to perform effectively as vibrant democratic units of self-
government. Therefore, when Part IXA was introduced, Parliament was
aware that the competent legislature to legislate on the subject of the
Urban Local Bodies was the State legislature but Part IXA of the
C Constitution had given constitutional status to the Municipalities. The
States were put under constitutional obligation to adopt Municipalities as
per systems enshrined in the Constitution.
5. Entry 5 of the Seventh Schedule List II reads thus:

D “5. Local government, that is to say, the constitution and powers
of municipal corporations, improvement trusts, district boards,
mining settlement authorities and other local authorities for the
purpose of local self-government or village administration.”
6. In view of such mandate and its legislative authority, the State
E of Rajasthan had enacted the Rajasthan Municipalities Act, 20091.
Section 2 Clauses (xxxix) and (lxv) of the Municipalities Act read as
under:
“(xxxix) “municipal area” means the territorial area of a
Municipality as notified by the State Government from time to
F time;
xx xx xx
(lxv) “a transitional area”, “a smaller urban area” or “a larger
urban area” means an area specified under Article 243Q of the
G Constitution of India;”
7. Article 243Q of the Constitution and Section 5 of the
Municipalities Act are reproduced hereunder:

1
H For short, the “Municipalities Act”
STATE OF RAJASTHAN v. ASHOK KHETOLIYA & ANR 785
[HEMANT GUPTA, J.]

A

B

C

D

E

F

G

H
786 SUPREME COURT REPORTS [2022] 2 S.C.R.

A 8. We find that the High Court has misread the scope of Part IXA
of the Constitution and Article 243Q of the Constitution contemplating
that the transitional area has to be notified under such provision. The
scheme of the Constitutional Amendment is not to take away legislative
competence of the State Legislatures to legislate on the subject of local
Government but it is more to ensure that the three tiers of governance
B are strengthened as part of democratic set up.
9. Dr. Manish Singhvi, learned senior counsel for the State has
referred to the judgments of this Court reported as Tulsipur Sugar Co.
Ltd. v. The Notified Area Committee, Tulsipur 2 and Sundarjas
Kanyalal Bhatija & Ors. v. Collector, Thane, Maharashtra & Ors.3
C to contend that the power to declare Municipal Board or a Municipality
is a legislative function which is discharged by the State by issuing a
notification on behalf of the Hon’ble Governor. The notification issued
by the Hon’ble Governor is in fact a notification issued by the State
Government. The provisions of Section 5 of the Municipalities Act are
not inconsistent in any manner with Article 243Q of the Constitution and
D thus, Section 5 of the Municipalities Act is a legal and valid provision and
the notification has been issued in exercise of the powers conferred by
the statute. The High Court has thus erred in law to quash the notification
issued.
10. On the other hand, Ms. Yadav, learned counsel for the
respondents, did not dispute that the notification issued under Section 5
E
of the Municipalities Act is a legislative function but she contended that
firstly there has to be a notification under Article 243Q of the Constitution
and only thereafter the Government can issue a notification constituting
a Municipal Board under Section 5 of the Municipalities Act. She relies
upon judgments of this Court reported as Pune Municipal Corporation
F & Anr. v. Promoters and Builders Association & Anr.4 and MGR
Industries Association & Anr. v. State of Uttar Pradesh & Ors.5.
Reliance is also placed upon judgment of this Court reported as Champa
Lal v. State of Rajasthan & Ors.6.
11. This Court in Tulsipur Sugar Co. Ltd. held as under:
“7. We are concerned in the present case with the power of the
G
State Government to make a declaration constituting a geographical
area into a town area under Section 3 of the Act which does not
2
(1980) 2 SCC 295
3
(1989) 3 SCC 396
4
(2004) 10 SCC 796
5
(2017) 3 SCC 494
H 6
(2018) 16 SCC 356
STATE OF RAJASTHAN v. ASHOK KHETOLIYA & ANR 787
[HEMANT GUPTA, J.]

require the State Government to make such declaration after giving A
notice of its intention so to do to the members of the public and
inviting their representations regarding such action. The power of
the State Government to make a declaration under Section 3 of
the Act is legislative in character because the application of the
rest of the provisions of the Act to the geographical area which is
B
declared as a town area is dependent upon such declaration. Section
3 of the Act is in the nature of a conditional legislation. Dealing
with the nature of functions of a non-judicial authority, Prof. S.A.
De Smith in Judicial Review of Administrative Action (3rd Edn.)
observes at p. 163:
“However, the analytical classification of a function may be a C
conclusive factor in excluding the operation of the audi alteram
partem rule. It is generally assumed that in English law the making
of a subordinate legislative instrument need not be preceded by
notice or hearing unless the parent Act so provides.”
xx xx xx D
9. We are, therefore, of the view that the maxim “audi alteram
partem” does not become applicable to the case by necessary
implication.
xx xx xx
E
17. We are, therefore, of the view that a notification issued under
Section 3 of the Act which has the effect of making the Act
applicable to a geographical area is in the nature of a conditional
legislation and that it cannot be characterised as a piece of
subordinate legislation. In view of the foregoing, we hold that the
contention of the plaintiff that the declaration made by the State F
Government under Section 3 of the Act declaring the area in which
the sugar factory of the plaintiff is situated as a part of the Tulsipur
town area is invalid is not tenable.”
12. In Sundarjas Kanyalal Bhatija, a draft notification proposed
the formation of a “Kalyan Corporation” by merging municipal areas of G
Kalyan, Ambarnath, Dombivali and Ulhasnagar. The State Government
issued a notification excluding Ulhasnagar from the proposed corporation.
The High Court found that the decision to exclude Ulhasnagar was taken
by the Government abruptly and in an irrational manner. This Court held
as under:
H
788 SUPREME COURT REPORTS [2022] 2 S.C.R.

A “27. Reverting to the case, we find that the conclusion of the
High Court as to the need to reconsider the proposal to form the
Corporation has neither the attraction of logic nor the support of
law. It must be noted that the function of the Government in
establishing a Corporation under the Act is neither executive nor
administrative. Counsel for the appellants was right in his
B
submission that it is legislative process indeed. No judicial duty is
laid on the Government in discharge of the statutory duties. The
only question to be examined is whether the statutory provisions
have been complied with. If they are complied with, then, the
court could say no more. In the present case the Government did
C publish the proposal by a draft notification and also considered
the representations received. It was only thereafter, a decision
was taken to exclude Ulhasnagar for the time being. That decision
became final when it was notified under Section 3(2). The court
cannot sit in judgment over such decision. It cannot lay down
norms for the exercise of that power. It cannot substitute even
D
“its juster will for theirs”.”
13. In Champa Lal, this Court had struck down a notification
issued by the Governor of the State of Rajasthan holding that in the
absence of notification which meets the requirement of Article 243Q(2),
the entire exercise undertaken by the State of Rajasthan in upgrading
E the Napasar Village Gram Panchayat to be a Nagarpalika is inconsistent
with the requirements provided thereof under the Constitution.
14. We find that such judgment is not in tune with the scheme of
the Constitution and is contrary to a three-Judge Bench judgment of this
Court reported as Parmar Samantsinh Umedsinh v. State of Gujarat
F & Ors.7 wherein the vires of the Gujarat Provincial Municipal Corporation
Act, 1949 were subject matter of challenge on the ground that the State
law has provided more than one representative from a single Ward and,
thus, this provision is inconsistent with the provisions of Article 243R
and Article 243S of the Constitution. This Court held as under:
G “19. The power of competent Legislature, i.e., State Legislature
in the light of enabling provisions provided in the Constitution with
regard to framing of laws concerning Legislature cannot be whittled
down by way of restrictive interpretation as contended by the
appellants. The State Legislature in federal set up specially in the
7
H 2021 SCC OnLine SC 138
STATE OF RAJASTHAN v. ASHOK KHETOLIYA & ANR 789
[HEMANT GUPTA, J.]

matter of local Government are to enable enough seats to adopt A
the reservation based on local body.
xxx xxx xxx
35. The ratio which can be culled out from the above judgment is
that power of the State to legislate within its legislative competence
is plenary and the same cannot be curtailed in the absence of an B
express limitation placed on such power in the Constitution itself.
36. Article 243ZF provides that any law relating to municipalities
in force in a State immediately before the commencement of the
Constitution (Seventy-fourth Amendment) Act, 1992, which is
inconsistent with the provisions of Part IXA, shall not continue C
beyond expiration of one year from commencement of the
constitutional amendment. Thus, Part IXA of the Constitution
categorically contemplated that any law made by State Legislature,
which is inconsistent with the provisions of Part IXA shall cease
to operate on the expiration of one year or till amended or repealed
D
by a competent Legislature, whichever is earlier. The Constitution
provisions, thus, mandates that any law of the State, which is
inconsistent, cannot continue. Thus, this limitation shall also govern
any law made after enforcement of Constitution (Seventyfourth
Amendment) Act. Thus, a law, which is inconsistent with Part
IXA cannot be framed by the State Legislature. E
xxx xxx xxx
38.One of the meanings of expression “inconsistent” as approved
by this Court is mutually repugnant or contradictory. Article 254
of the Constitution contains a heading “inconsistency between
laws made by the Parliament and the laws made by the Legislature F
of the State” whereas under Article 254(1) and Article 254(2) the
words used are repugnant. The Constitution itself, thus, has used
the words inconsistency and repugnancy interchangeably. To find
out as to whether a law made by State Legislature is inconsistent
with provisions of Part IXA of the Constitution, the principles which
G
have been laid down by this Court to determine the repugnancy
between the law made by the Legislature of a State and law
made by Parliament can be profitably relied on. We, thus, need to
notice the principles on which the repugnancy of law made by
State and law made by the Parliament is found out.
H
790 SUPREME COURT REPORTS [2022] 2 S.C.R.

A xxx xxx xxx
50. Thus, the Legislature of a State may by law has to provide all
matters relating to or in connection with election to the
Municipalities, which includes filling of the seats in the Municipality
by person chosen by direct election. Articles 243R and 243ZA
B does not give any indication as to whether from territorial
constituency, i.e., the Wards, whether only one member has to be
elected in the Municipality or it can be multiple member
constituency. The constitutional provisions of Article 243R, which
provides for composition of Municipalities and that of Article
243ZA does not give any indication to the above. The provisions
C of Article 243ZG, which deals with bar to interference by courts
in electoral matters throws some light…
xxx xxx xxx
59. We have analysed the provisions of Article 243R, 243S and
have come to the definite conclusion that no limitation in Article
D 243S can be found of which contains any prohibition of having
more than one member for a Ward.
xxx xxx xxx
63. We, in the present case, after analysing the relevant provisions
of Part IXA of the Constitution has come to the conclusion that
E there is no prohibition or limitation in Part IXA of the Constitution
prohibiting the State Legislature from making a law providing for
election of more than one member from one territorial constituency,
i.e., Ward.”
15. In State of U.P. & Ors. v. Pradhan Sangh Kshettra Samiti
F & Ors.8, this Court was considering the Constitution (Seventy-third
Amendment) Act, 1992. Article 243C in Part IX of the Constitution is
similar to Article 243Q in Part IX-A of the Constitution. The High Court
had struck down the definition of Village, Gram Sabha and Panchayat
Area under the U.P. Panchayat Raj Act, 1947 as ultra vires the respective
G definitions given in Part IX of the Constitution. This Court held as under:
“3. On coming into force of the said Constitutional Amendment,
the States were required by the Centre to take steps to organise
village panchayats on the lines of the provisions of the said

H 8
1995 Supp (2) SCC 305
STATE OF RAJASTHAN v. ASHOK KHETOLIYA & ANR 791
[HEMANT GUPTA, J.]

Constitutional Amendment by making law or amending the existing A
law suitably. ………….
xxx xxx xxx
11. The panchayats are to be constituted at the village, intermediate
and district levels and the “panchayat area” as defined by Article
243(e) means the territorial area of the panchayat whether at the B
village, intermediate or district levels. What is necessary to
remember further is that while as per Article 243(c) “intermediate
level” is a level between the village and district levels, as specified
by the Governor, the ‘district’ as per Article 243(a) means a district
in a State the boundaries of which may be changed by the State C
Government. The district is not required to be specified by the
Governor whereas village and intermediate levels have to be
specified by him for the purposes of the said Part of the
Constitution.
xxx xxx xxx
D
36. As regards the objection of the High Court that whereas Article
243(g) requires the Governor to specify the village, the Act gives
this power to the State Government to do so, the High Court has
failed to notice the provisions of the Constitution which equate
the Governor with the State Government in exercise of his
functions except where he is by or under the Constitution required E
to exercise the functions in his discretion…………..
xxx xxx xxx
44. It is for the Government to decide in what manner the panchayat
areas and the constituencies in each panchayat area will be
F
delimited. It is not for the court to dictate the manner in which the
same would be done. So long as the panchayat areas and the
constituencies are delimited in conformity with the constitutional
provisions or without committing a breach thereof, the courts
cannot interfere with the same. We may, in this connection, refer
to a decision of this Court in Hingir-Rampur Coal Co. G
Ltd. v. State of Orissa [(1961) 2 SCR 537 : AIR 1961 SC 459] .
In this case, the petitioner-mineowners, had among others,
challenged the method prescribed by the legislature for recovering
the cess under the Orissa Mining Areas Development Fund Act,
1952 on the ground that it was unconstitutional. The majority of
H
792 SUPREME COURT REPORTS [2022] 2 S.C.R.

A the Bench held that the method is a matter of convenience and,
though relevant, has to be tested in the light of other relevant
circumstances. It is not permissible to challenge the vires of a
statute solely on the ground that the method adopted for the
recovery of the impost can and generally is adopted in levying a
duty of excise.”
B
16. Since the local Government falls in entry 5 of List II of the
Seventh Schedule, therefore, it is the State Legislature alone which is
competent to legislate in respect of the municipalities with only one
limitation that the provisions of the State Act cannot be inconsistent with
the mandate of the Scheme of Part IXA of the Constitution. The scheme
C of Part IXA of the Municipalities Act does not contemplate a separate
notification under Article 243Q of the Constitution and thereafter under
Section 5 of the Municipalities Act. As Section 5 of the Municipalities
Act is not inconsistent with any provisions of Article 243Q of the
Constitution, therefore, two notifications are not contemplated or
D warranted under the Scheme of Part IXA or the Municipalities Act as
reproduced in the table above.
17. The State Government is competent to divide the Municipalities
in the State into classes according to their income or other factors like
population or importance of the local area and other circumstances as
E provided under Section 329 of the Municipalities Act. In terms of Section
329, a notification was issued on 30.4.2012 determining the category of
the Municipal Corporation/Municipal Council/Municipal Board. The said
notification reads as under:
“No. P .8 (Ga) ( ) Rule/Category/LSG/12/3825 Dated 30/4/12
F :- Notification:-
In connection with the partition of the category of municipalities
and superseding all the notifications issued earlier in relation to
the categorization of Municipal Councils by exercising the powers
rendered in Section 329 read with Section 337 of Rajasthan
G Municipal Act, 2009 (Act No. 18 of year 2009), the State
Government hem by determines the category of all the Municipal
Corporation/Councils/Board which follows as under:-

H
STATE OF RAJASTHAN v. ASHOK KHETOLIYA & ANR 793
[HEMANT GUPTA, J.]

A

B

But State Government would have right to convert any municipal
council into any category keeping in view its historical/religious/
archaeological importance or in any special circumstances.
As per order of Governor C
Sd.
Deputy Government Secretary”
18. Thereafter, the impugned notification dated 12.8.2014 was
issued in exercise of the powers conferred on the State Government
D
under Section 3 read with Section 329 of the Municipalities Act. The
said notification reads thus:
“No.F.10(ka)Est./Category( )/DLB/14/2591 Dated 12/8/14
:- Notification:-
State Government by exercising its power U/S 3 read with Section E
329 of Rajasthan Municipal Act 2009 (Act No.18 year 2009) and
Notification No.P.8(.G)()Rule/Category/LSG/12/3825-4090 dated
30/4/12 hereby declares all the following Gram Panchayat areas
into fourth class Municipal Councils with immediate effect.
F

Existing Boundaries of the said Gram Panchyat (Barbar -in the
north, Gram Samahad in the south, Bhidyani and Rudh Roopwas in the
G
east and Dorda in the west) would remain the local boundaries of newly
constituted Municipal Board.
As per order of Governor
Sd.
Government Deputy Secretary” H
794 SUPREME COURT REPORTS [2022] 2 S.C.R.

A 19. The above notifications would show that the State Government
had exercised powers to establish Municipality in terms of Section 5 of
the Municipalities Act. Such notifications cannot be said to be illegal or
arbitrary in any manner and were rightly issued in exercise of the
statutory powers conferred on the State by the Legislature.
B 20. The argument of Ms. Yadav is that the notification is arbitrary
and unreasonable, therefore, the High Court has rightly struck down the
notification. Reliance is placed on the judgment reported as Pune
Municipal Corporation to support such contention. In the said case,
the notification amending the Development Control Rules sanctioned by
the State Government under Section 37 of the Maharashtra Regional
C and Town Planning Act, 1966 was the subject matter of challenge. The
High Court had struck down the notification amending the Development
Control Rules. It was held that the Development Control Rules were
legislative function, therefore, Section 36 has to be viewed as repository
of legislative powers for effecting amendments to Development Control
D Rules. It was observed that such Rules can be challenged on the ground
of it being arbitrary or unreasonable. We do not find that the said judgment
in any way support the arguments raised by the learned counsel.
21. In MGR Industries Association, the appellant was claiming
to be part of the industrial township so as to be exempt from the jurisdiction
E of Zila Panchayat. This Court examined that there has to be a notification
under Section 12-A of the U.P. Industrial Area Development Act, 1976
before it is excluded from Panchayat area. Therefore, two notifications
were required, one to constitute an industrial township under Section 12-
A of the 1976 Act and then exclusion of Panchayat area under the Uttar
Pradesh Kshettra Panchayats and Zila Panchayats Adhiniyam, 1961.
F The said judgment is again not helpful for the arguments raised.
22. In fact, the High Court has struck down the notification only
for the reason that the notification under Article 243Q(2) was not
published. Such reasoning is not tenable.

G 23. Thus, the order of the High Court is clearly erroneous and
unsustainable in law. The same is set aside and the writ petition is
dismissed. Consequently, the appeal is allowed.

Devika Gujral Appeal allowed.

H