G H CHAMPA LAL versus STATE OF RAJASTHAN AND ORS.

Leave granted.

p. 631, margin E

These two appeals are inter connected tossing up an important question of law regarding the interpretation of Article 243 Q of the Constitution of India.

p. 631, margin F

It is not necessary for us to give the complete factual details and history of the case for the purpose of this order except the bare minimum. The litigation revolves around the upgradation by a notification dated 6.10.2008 of Gram Panchayat of Napasar Village as Nagar Palika (Municipality) Class IV category by the State of Rajasthan purportedly in exercise of power conferred under Section 3(1)(A) of the Rajasthan Municipalities Ordinance 2008 . Legality of the said notification was challenged before the Rajasthan High Court in a writ petition. It was dismissed by a learned Single Judge. Aggrieved by the dismissal, the matter was carried in a writ appeal. During the pendency of the writ appeal, the impugned notification dated 6.10.2008 was withdrawn by another State of Rajasthan by a notification dated 18.9.2009. The writ appeal was therefore, rendered infructuous.

pp. 631–632, margin F

Challenging the notification dated 18.9.2009, another writ petition came to be filed. The said writ petition was allowed by a Division Bench by its judgment dated 13.5.2015 quashing the notification and directing the State to take consequential steps. Aggrieved by the same, SLP(C)No.11091/2017 came to be filed. Pursuant to the direction of the High Court, a fresh notification dated 2.6.2016 came to be issued once again for establishing a Nagarpalika for the Napasar village. Challenging the said notification, another writ petition came to be filed before the Rajasthan High Court. It was dismissed by a judgment dated 3.8.2016. On appeal, the same was confirmed by the Division Bench by its judgment dated 12.9.2016. Aggrieved by the same, SLP(C)No.38618 of 2016 is filed.

p. 632, margin B

The correctness of the two judgments of the High Court impugned in these two appeals, is questioned on various grounds. In our opinion, it is not necessary to examine the various submissions made before us. The impugned actions of the respondent State which culminated in the two impugned judgments of the High Court suffers from a fundamental infirmity which goes to the root of the matter.

p. 632, margin D

The establishment of municipalities and their organisations is governed by Part IX A (consisting of Articles 243P to 243ZG) of the Constitution of India inserted in the Constitution by the Constitution 74th (Amendment) Act, 1992 with effect from 1.6.1993. Article 243P (e) defines the expression “Municipality” to mean an institution of selfgovernment constituted under Article 243 Q. Article 243 Q of the Constitution of India declares as follows: “243Q. Constitution of Municipalities:- (1)There shall be constituted in every State- (a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area; (b) a Municipal Council for smaller urban area; and (c) a Municipal Corporation for a larger urban area, in accordance with provisions of this Part: Provided that a Municipality under this clause may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit by public notification, specify to be an industrial township. (2) In this article, “a transitional area”, “a smaller urban area” or “ a larger urban area” means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in non-agricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part.”

pp. 632–633, margin E

Article 243Q contemplates the constitution of three different categories of bodies known as (i) Nagar Panchayat for a transitional area, (ii) Municipal Council for a smaller urban areas and (iii) Municipal Corporation for a larger urban area.

p. 633, margin E

It is declared under Article 243Q(2) that the expressions “a transitional area”, “a smaller urban area” and “a larger urban area” (hereinafter collectively referred to as “AREAS”) would mean such areas as may be specified by the Governor by a public notification for the purpose of Part IX A of the Constitution of India. Article 243Q(2) further obligates the Governor to have due regard to the various factors mentioned therein before specifying the AREAS i.e. population of the area, the density of the population, the revenue generated in the area for local administration, percentage of employment in non-agricultural activities, the economic importance or such other factors as he may deem fit.

p. 633, margin F

It, therefore, appears from the scheme of Article 243Q(2) that the Governor is not free to notify ‘AREAS’ in his absolute discretion but is required to fix the parameters necessary to determine whether a particular AREA is a transitional area or a smaller urban area or a larger urban area with due regard to the factors mentioned above. It is implicit that such parameters must be uniform for the entire State. It is only after the determination of the parameters, various municipal bodies contemplated under Article 243Q(1) could be constituted.

p. 634, margin A

In response to a specific query whether any notification contemplated under Article 243(Q)(2) had been issued by the State of Rajasthan, Mr. Guru Krishnakumar learned senior counsel appearing for the State of Rajasthan, produced two notifications dated 4.7.1995 and 30.4.2012. On a plain reading of both the notifications, it appears that these notifications had been issued in exercise of the statutory powers conferred on the State Government by two different enactments known as “The Rajasthan Municipality Act, 1959 (since repealed) and the Rajasthan Municipalities Act, 2009. Apart from the declaration regarding the source of power for the issuance of these notifications to be authority conferred by the various provisions of the above mentioned two enactments, it appears from the tenor and scheme of the notifications that these notifications purport to classify municipalities only on the basis of population. The various other parameters to which regard is required to be had under Article 243Q(2) were not taken into consideration for the purpose of classification made under the above mentioned two notifications. Therefore, in our opinion, these two notifications cannot be treated as notifications contemplated under Article 243(Q)(2).

p. 634, margin B

In the absence of any notification which meets the requirements of Article 243Q(2), the entire exercise undertaken by the State of Rajasthan in upgrading the Napasar village Gram Panchayat to be a Nagarpalika – [that is equivalent to Nagar Panchayat as mentioned in Article 243Q(1)(a)] is unconstitutional as it is inconsistent with the requirements of the Constitution under Article 243Q of the Constitution of India. Therefore, the initial notification dated 6.10.2008 itself is unsustainable. Unfortunately, this aspect has not been noticed by the High Court obviously because it was not brought to the notice of the High Court. The fact that a litigant before the court does not point out the relevant principles and provisions of law does not prevent the court from examining the issues involved in the lis, more particularly, when the process which is the subject matter of litigation before the court is inconsistent with the mandate of the Constitution. It is a settled principle of law that courts are bound to take note of the constitution and the laws.

pp. 634–635, margin E

We, therefore, have no choice but to hold that the initial notification dated 6.10.2008 is unconstitutional. Therefore, the legality of various actions which followed that notification and the judgments of the High Court which examined the legality of those actions, in our view, need not be examined. All such subsequent action of the State which led to litigation suffer from a fundamental constitutional flaw. The impugned judgments of the High Court rendered without examining the true scope and scheme of Part IXA of the Constitution and more particularly Article 243Q(2) are per incuriam.

p. 636, margin A

Mr. A. Subba Rao, learned counsel appearing for the non- State respondents in SLP(C)No.11091/2017 submitted that in view of the findings recorded by the High court that in the interregnum, lot of development (such as the establishment of industries, educational institutions and hospitals etc.) took place in the geographical area in question, and therefore, this Court may not interfere with the notification upgrading the area in question to a Nagarpalika as such interference would have the effect of reducing the Nagarpalika into a Gram Panchayat once again. Confronted with the question as to what would be the prejudice the non-State respondents would suffer by such consequence, Mr. Rao submitted that there is a possibility of the industries being shifted away from the area in question. It is only an apprehension. We find no basis in the pleading for such apprehensions nor do we see any reason which might lead to such a possibility. Therefore, the submission is rejected.

p. 636, margin B

The appeals are disposed of accordingly.

p. 636, margin E