Telangana High Court

Smt. Kolan Roja Rani vs The State Of Telangana on 11 June, 2024

       THE HON'BLE THE CHIEF JUSTICE
      SRI THOTTATHIL B. RADHAKRISHNAN
                     AND
 THE HON'BLE SRI JUSTICE A.RAJASHEKER REDDY

WP Nos.14010, 15247, 15321, 16794, 19027, 20313,
20905, 21169, 22239, 22599, 22615, 23339, 24102,
24233, 24669, 24701, 24702, 24770, 25086, 25126,
25194, 25217, 25226, 25365, 25464, 25526, 25558,
25758, 25760, 25797, 25800, 25842, 25919, 25981,
25995, 26003, 26006, 26178, 26184, 26285, 26291,
26295, 26373, 26465, 26551, 26559, 26581, 26627,
26679, 26772, 26776, 26782, 26834, 26867, 27010,
27022, 27073, 27536, 27541, 27571, 27709, 27866,
27965, 27975 28075, 28548, 28681, 28685, 28932,
28944, 29012, 29050, 29301, 29736, 29795, 30257,
30929,     32712, 32789, 32794, 32811, 32851, 32956,
33267, 33293, 33323, 33367, 33956 34030, 34341,
34508, 34516, 34832, 34873, 34918, 34960, 34962,
34988, 34989, 35004, 35043, 35531, 35552, 35553,
35730, 35759, 36009, 36090, 36094, 36233, 36648,
36995, 37115, 37369, 38740, 39798, 42519, 46608,
46779, 47134, 47288, 47916 and 48159 of 2018 and W.P.
Nos.251, 959, 1013, 1293 of 2019

COMMON ORDER :

( per the Hon'ble Sri Justice A. Rajasheker Reddy )

In all these connected writ petitions, the issue

which has been raised is identical, hence these

petitions are being heard and decided together.

02. In one set of petitions, lead case being WP

No.14010 of 2018 and batch, the petitioners assail the

State amendment contained in Act No.4 of 2018, for

short, "Act 4 of 2018" brought in to Section 3 of the

Telangana Municipal Corporation Act, 1994, for short,

"Act 1994" by way of Section 3A. In another set of

petitions, lead case being WP No.26465 of 2018 and

batch, the petitioners assail the State amendment

contained in Act No.4 of 2018 brought in to Sections 2

and 3 of the Telangana Municipalities Act, 1965, for

short, "Act 1965" by way of Clause 42-aa in Section 2

and sub-Section 1(B) in Section 3, respectively of the

Act 1965. It is worthwhile to extract the impugned

amendments called in question in these petitions.

03. Section 3A of the Act 1994, reads thus:-

"3A. Notwithstanding anything contained in sub Sections (2) and (3), the areas mentioned in Column No.3 of Schedule-I of this Act shall stand included and form part of the area governed by the Municipal Corporations shown in

the corresponding entry of Column No.4 of the said schedule;

(a) where an elected body of the Gram Panchayat constituted for such area prior to the commencement of the Telangana Panchayat Raj Act 2018, is in existence, on the date of expiry of the term of such elected body;

(b) where no elected body of the Gram Panchayat constituted for such area prior to the commencement of the Telangana Panchayat Raj Act, 2018 is in existence, on the date of such commencement."

04. Schedule-I appended to Section 3A of the Act

1994 provides the details as to the name of the

district, areas to be included, name of the Municipal

Corporation into which the areas are included, ward

no. of the Municipal Corporation into which such

areas are merged.

05. Clause 42-aa of Section 2 of the Act 1965, reads

thus:-

"(42-aa) Notwithstanding anything contained in clause (42-a), the areas mentioned in Column No.3 of Schedule-X of this Act shall be deemed to have been constituted as the smaller urban areas as specified in the corresponding entry of Column no.4 of the said schedule:

(a) where an elected body of the Gram Panchayat constituted for such area prior to the commencement of the

Telangana Panchayat Raj Act 2018, is in existence, on the date of expiry of the term of such elected body;

(b) where no elected body of the Gram Panchayat constituted for such area prior to the commencement of the Telangana Panchayat Raj Act, 2018 is in existence, on the date of such commencement."

06. Sub-Section (1-B) of Section 3 of the Act 1965,

reads thus:-

"(1-B) Notwithstanding anything contained in sub- Section 1-A, the areas mentioned in Column No.3 of Schedule-XI of this Act shall stand included and form part of the area governed by the municipality shown in the corresponding entry of column no.4 of the said schedule:

(a) where an elected body of the Gram Panchayat constituted for such area prior to the commencement of the Telangana Panchayat Raj Act 2018, is in existence, on the date of expiry of the term of such elected body;

(b) where no elected body of the Gram Panchayat constituted for such area prior to the commencement of the Telangana Panchayat Raj Act, 2018 is in existence, on the date of such commencement."

07. The case of the petitioners in WP No.14010 of

2018 who are villagers and Sarpanches of different

Gram Panchayats of Karimnagar district is that the

impugned Act 4 of 2018 has made a complete

departure from the texture of the parent Act 1994 and

by introduction of Section 3A of the Act 1994, the

villages which are named in Schedule-I are merged

with Karimnagar Municipal Corporation without there

being a notification by the Governor under Section 3

(2) of the Act 1994 muchless they are de-notified

under Section 3 (f) of the Panchayat Raj Act, 1994.

The villages are beyond 3 kms distance from the limits

of Karimnagar Municipal Corporation which cannot be

merged. The scheme of the Act 1994 is to make a

publication of a larger urban area and has to pass

through the test with reference 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 and such other

factors as may be prescribed. That most of the villages

are mostly agricultural dominated villages and there

are no non-agricultural activities. That they are still

continuing as part and parcel of the respective

Grampanchayats. By operation of the impugned

amendment, they are just thrusting into the territorial

area of Karimnagar Municipal Corporation. As per the

Act 1994 there is nothing like enlargement of

territorial area of a Municipal Corporation. That the

impugned Act 4 of 2018 has done away with the doing

of exercise of analyzing the scientific data to be

collected as stipulated in the parent Act 1994, and

therefore it is unconstitutional. An amendment to an

existing statute must lay down the legislative policy

and avoid specific enumeration of the named villages.

Unless and until the villagers/areas have got the

profile of a larger urban area, the question of inclusion

of that area into the existing Corporation, does not

arise. Since, no guidelines or parameters are laid down

in the impugned amendment, it is liable to be struck

down on both grounds of lack of legislative competence

and violation of Article 14 of the Constitution.

08. Likewise, the case of the petitioners in WP

No.26465 of 2018 is that by virtue of the impugned

amendment Gandimasaanipeta village is merged in

Yellareddy Municipality without conducting any

detailed study and without hearing the Gram

Panchayat members who have filed their objections

opposing the inclusion of the village into Municipality.

That the villagers who are mainly dependent on

agriculture and got benefits under the schemes of the

State and the Union Governments will lose the benefits

if the merger takes place. That employment guarantee

scheme is a welfare scheme which guarantees

employment to agricultural labourers in the village and

such a scheme is not available in the Municipality.

That by virtue of the impugned amendment, the

substantive provisions i.e. Section 2 (42a) and Section

3(1-A) have become redundant as while Section 2 (42a)

requires certain criteria to be followed for notifying a

transitional area or smaller urban area, Section 3 (1-A)

deals with the principles and procedure for

inclusion/exclusion into the Municipality, local or part

thereof in the vicinity of such Municipality. That under

the guise of impugned amendment, the Government

has virtually replaced the substantive provisions. That

the respondents have given a go-by to the Telangana

Municipalities (Inclusion or Exclusion of Areas

into/from the limits of Municipalities/Nagara

Panchayats) Rules, 2006, for short, "the Rules" which

regulates inclusion or exclusion of areas into/from

Municipalities/Nagara Panchayats, as the case may

be. That the Rules provide for sufficient safeguards

and lay down a detailed procedure for taking into

consideration the views of the Gram Panchayat and

also recommendation of the concerned authorities like

Municipal Commissioner, District Collector,

Commissioner of Municipal Administration and such a

procedure is by-passed when the Rules are very much

in force and since the impugned amending Act 4 of

2018 does not lay down any new Rules, the Rules

continue to hold the field. That the decision making

process is vitiated not only for non-application of mind

but also because of mala-fide exercise of power

inasmuch as detailed study was not conducted and

there being no criteria for inclusion of

Gandimasaanipeta village into Yellareddy Municipality,

the inclusion of the said village is violative of Article 14

of the Constitution and the impugned amendment is

liable to be struck down.

09. Counter affidavit is filed in WP No.14010 of 2018

by the 2nd respondent wherein it is stated that the

instant Gram Panchayats were merged into the limits

of the existing Karimnagar Municipal Corporation,

which was already declared as larger urban area in the

year 2005 itself, after collecting data as required under

Section 2 (d) of the Act 1994. It is stated that there is

no rule specifying that before merger of a Gram

Panchayats into existing Municipal Corporation, such

Gram Panchayats shall be declared as larger urban

area and then merge them into the limits of the

Municipal Corporation. That the Government vide GO

Ms.No.300, MA & UD (Election-II) Department, dated

07-04-2005 have issued notification specifying the

areas covered under erstwhile Karimnagar

Municipality as larger urban area under Section 2 (d)

of the Act 1994, the Karimnagar Municipal

Corporation is deemed to have been constituted under

Section 3 (1) of the Act 1994 as Municipal Corporation.

Counter affidavit is filed on similar lines in WP

No.26465 of 2018, which is a lead case in another

batch of cases wherein it is stated that by constituting

smaller urban areas i.e. Municipalities or up-gradation

of Gram Panchayat/s into Municipalities pursuant to

the impugned legislation, there is no violation of the

right to self governing, on the other hand better civic

amenities and services are made available to the

citizens and there are numerous self employment

schemes and poverty alleviation programmes under

the Municipal laws.

10. Heard Sri Vedula Venkataramana, Sri S. Satyam

Reddy, learned senior counsels, Sri T. Venkat Raju

Goud, Sri K. Pavan Kumar, Sri B. Vijayasen Reddy,

learned counsel for Sri V. Venkata Mayur, Sri K. Buchi

Babu, Sri Poodathu Amarender and Sri K. Upender

Reddy, learned counsel appearing for the petitioners

and the learned Addl. Advocate General for the

respondent-State.

11. The combined argument of the learned senior

counsel and other learned counsel for the petitioners

in these cases is that the amending Act 4 of 2018

cannot run counter to the basic structure of the

parent Acts 1994 & Act 1965 and the amendment

brought in is violative of 73rd & 74th Amendment to

Constitution of India, especially Article 243Q (2) of the

Constitution and lacks legislative competence. That

no procedure, as envisaged in Act 1994 or Act 1965 or

Rules made thereunder is followed much less the

publication of the villages sought to be merged with

the Municipal Corporation with specific ward

numbers. That no notice was given either to the

elected representatives of the respective village or the

villagers since act of inclusion/exclusion of the villages

into the Municipal Corporation, Municipality or

creation/up-gradation into Municipality, as the case

may be, affected the rights of the elected

representatives of the villages as well as rights of the

villagers who are members of the Gram Panchayats.

That the villages merged into Municipal Corporations

and Municipalities are mostly agriculturally dominated

and there are no non-agricultural activities in these

villages and they are still continuing as Gram

Panchayats. That the members of the villages are

deprived of rural employment and the benefits of

various schemes provided to the villagers who are

members of the Gram Panchayats under the State and

Union governments and they will lose these benefits if

the merger takes place which is arbitrary and violative

of Article 14 of the Constitution of India. Though the

Telangana Municipalities (Inclusion or Exclusion of

Areas into/from the limits of Municipalities/Nagara

Panchayats) Rules, 2006, for short "the Rules" are

framed in that behalf for inclusion or exclusion of the

villages issued vide GO Ms.No.63, Municipal

Administration & Urban Development (Elections-II)

Department, dated 18-02-2006, scientific data was not

collected, except calling for proposals from the District

Collectors. Decisions in PROF. BK CHANDRASHEKAR

vs. STATE OF KARNATAKA1, RAVEENDRAN vs.

STATE OF KERALA2, STATE OF TAMIL NADU vs. K.

SHYAM SUNDER3 & CHAMPA LAL vs. STATE OF

RAJASTHAN4 are relied on.

12. Learned Addl. Advocate General appearing for the

State, on the other hand, contended that consequent

upon passing of the Bill in the Legislature on 29-03-

2018, it received the assent of the Governor on 30-03-

2018 for merger of certain Gram Panchayats into

Municipal Corporation and Municipalities and,

therefore, there is no conflict of provisions of Section 2

(d) of the Act 1994 or the Rules, as the case may be,

and that of Article 243-Q(2) of the Constitution, and in

this case there is over compliance with the provisions

AIR 1999 KARNATAKA 461

2006 (1) KLT 427

(2011) 8 SCC 737

2018 SCC OnLine SC 536

of the Constitution. As far it relates to collecting data,

it is stated that the Government vide Memo

No.860/Plg.II/2018, dated 19-01-2018 have informed

all the District Collectors in the State that the

Government desired all major Gram Panchayats with

population of more than 15,000 and Gram Panchayats

adjoining the existing urban local bodies (within 1 to 5

kms) shall be considered for either constitution of new

urban local body or merging with the existing urban

local body respectively and accordingly, all the District

Collectors were asked to submit proposals of potential

Gram Panchayats having urban characteristics and

suitable for either constitution as new urban local

body or merging them with the nearest urban local

body. It is stated that proposals were submitted by

the District Collectors and accordingly the

Commissioner and Director of Municipal

Administration vide letter Roc.No.21755/2018-H2,

dated 22-03-2018, in turn submitted the same to

Government along with draft amendments to the Act

1994 to include the Gram Panchayats in question into

the limits of Karimnagar Municipal Corporation. The

contention of the petitioners that unless and until the

villages have got the profile of the larger urban area or

transitional area, as the case may be, they cannot be

merged with the Municipal Corporation or Municipality

is refuted, as nowhere in the Act 1994 such a

procedure is contemplated. It is also stated that

issuance of public notification by the Governor is only

dispensed with by way of a non-abstante clause in

Clause 42(aa) to Section 2 of the Act 1965, however

the constitutional mandate of 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 etc.,

were scrupulously followed while the impugned

legislation was brought in. In support of his

contention learned Addl. Advocate General relied on

the decision in STATE OF UP vs. PRADHAN SANGH

KSHETTRA SAMITI,5 STATE OF PUNJAB vs. TEHAL

SINGH6 & SUNDARAJAS KANYALAL BATIJA vs.

COLLECTOR, THANE MAHARASHTRA.7

13. Having heard the learned senior counsels as

also the learned counsels for the petitioners, learned

Addl. Advocate General and on a perusal of the

material brought on record, the following points

emerge for consideration.

i) Whether the impugned amending Act 4 of 2018 violates Articles 14, 73rd and 74th Amendment to the Constitution of India & 243Q(2) of the Constitution;

ii) Whether the respondent-State has legislative competence to bring in the impugned amending Act 4 of 2018;

iii) Whether the impugned amending Act 4 of 2018 is against the texture of the parent Acts i.e. the

1995 Suppliment (2) SCC 305

2002 (2) SCC 7

1989 (3) SCC 396

Municipal Corporation Act and the Municipalities Act; and

iv) Whether notice is mandatory under the Rules to the elected representatives of the villages and the villagers.

POINT (i) ::

{Whether the impugned amending Act 4 of 2018 violates Articles 14, 73rd and 74th Amendment to the Constitution of India & 243Q(2) of the Constitution}

14. Article 243P of the Constitution deals with

definitions and unless the context otherwise requires,

(a) xxxxxx

(b) xxxxxx

(c) xxxxxx (omitted)

(d) Municipal area means the territorial area of a Municipality as is notified by the Governor;

(e) Municipality means an institution of self government constituted under Article 243Q;

(f) Panchayat means a Panchayat constituted under Article 243B;

15. Article 243Q contemplates constitution of three

different categories of bodies viz., (i) a Nagar

Panchayat, for a transitional area, (ii) a Municipal

Council, for a smaller urban areas; and (iii) a

Municipal Corporation, for a larger urban area.

16. Article 243Q(2) of the Constitution reads thus:-

"(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"

17. In Article 234Q(2), the expression "a transitional

area", "a smaller urban area" or "a larger urban area"

would mean such areas as may be specified by the

Governor by a public notification. This Article further

requires that due regard be had to various factors as

mentioned therein before specifying the areas, as the

case may be, having regard to population of the area,

the density of the population therein, the revenue

generated in the area for local administration,

percentage of employment in non-agricultural

activities, the economic importance or such other

factors as deemed fit and necessary.

18. Article 243Q is an enabling provision enabling

the Governor to specify by way of public notification, a

transitional area, a smaller urban area and a larger

urban area, as the case may be, having regard to the

criteria mentioned therein. Analogous provisions are

provided in the Act 1994 and the Act 1965. Section 2

(d) of the Act 1994 defines the expression "larger urban

area" which 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 may be

prescribed, specify by notification.

19. Section 2 (42-a) of Act 1965, "transitional area" or

"smaller urban area" is defined thus:-

"transitional area" or "a smaller 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 Act, subject to such rules as may be made in this behalf."

20. When once a notification is issued under Section

3 (1) of the Act 1994 by the Governor specifying an

area as a "larger urban area" under Section 2 (d) of the

Act 1994, a Municipal Corporation shall be deemed to

have been constituted for such larger urban area.

Under Section 3 (2) of the Act 1994, the Governor may,

from time to time, after consultation with the

Municipal Corporation, by notification in the gazette,

alter the limits of a larger urban area specified in the

notification so as to include therein or to exclude

therefrom, the areas specified in the notification.

21. It is to be seen that the areas which have the

potential of being declared as larger urban areas are

already constituted under Section 2 (d) of the Act 1994

and a notification by way of G.O.Ms. No 300, dated

07-04-2015, was issued under Section 2 (d) of the Act

and a Corporation is deemed to have been constituted

under Section 3 (1) of the Act which is not disputed

nor challenged by the petitioners.

22. It is to be seen that what is contemplated under

Article 243Q (2) is only for constitution of a

transitional area, a smaller urban area or a larger

urban area and it does not deal with alteration of

those areas i.e. inclusion/exclusion of the villages

therefrom or thereto, as the case may be, and at the

same time and does not prohibit the

inclusion/exclusion. But the parent Acts 1994 and

1965 provide for the same, which is not challenged. As

per the counter affidavit filed in the matter, the

exercise carried out by the State i.e. calling for

proposals from the District Collectors of the respective

Districts and appointment of Special Officer in a way

complies the criteria as appearing in Article 243Q (2)

as also in Section 3 (2) & (3) of the Act 1994 and

Section 3 (1-A), Section 2 (42-a) of the Act, 1965 for

that matter the procedure contemplated under Rules

made thereunder in that regard and after considering

the proposals, the legislature chose to pass the

impugned legislation. In other words, the State, before

passing the impugned legislation has undertaken the

exercise what is prescribed under the provisions noted

above, instead by the Governor, but by itself.

Therefore, the criteria laid under Article 234Q(2) for

formation of larger urban area or small urban area, as

the case may be, is followed. Power of the legislature

to make legislation or to bring an amendment to a

statute is always on a higher pedestal than the power

conferred on the Governor or State Government under

the legislation, more so in the instant case, the

impugned legislation has received the assent of the

Governor.

23. The Supreme Court in PRADHAN SANGH

KSHETTRA SAMITI's case (5 supra) relied on by

learned Addl. Advocate General dealing with a similar

fact situation case at para 40 of the judgment held:-

"We also find no merit in the contention that the first part of section 2(f) which defines village to mean any local area recorded as a village in the revenue records of the district in which it is situated, goes counter to the provisions of article 243 (g) in that it forecloses the authority of the Governor to specify the village for the purposes of establishing a gram panchayat as envisaged by part IX of the Constitution. The argument ignores that whereas the Constitution permits the Governor to specify village by a notification, it does not prevent the State from enacting a law for the purpose. As pointed out earlier, the notification issued by the Governor is in fact a notification issued by the state government. An enactment of the legislature is certainly a higher form of legal instrument that a notification. What is further, the act has received the assent of the Governor on 22-04-1994. Hence, there is not only no conflict between the provisions of Section 2 (f) of the Act and those of Article 243 (g) but there is an over compliance with the provisions of the Constitution".

(emphasis supplied)

24. In RAVEENDRAN's case (2 supra) one of us,

Thottathil B. Radhakrishnan (J) as Judge of the Kerala

High Court had an occasion to analyze Part IXA of the

Constitution, which exclusively concerns itself with

Municipalities. While considering the question whether

an area notified as urban area by the Governor, can

again be re-notified as rural area, and as Panchayat by

the Government, it was observed that such an exercise

cannot be done under Part IXA of the Constitution for

the reason when once the Municipality in relation to a

transitional area or a smaller urban area, or a larger

urban area, on its coming into existence, becomes a

constitutional institution and cannot be abolished by

an act of the Legislature without specific authorization

in that regard in the Constitution. The situation

appearing in the present cases is otherwise as in the

instant case there is no restructuring of larger urban

area into rural area. In this case the argument is that

the procedure envisaged for merging of rural areas into

larger urban areas, smaller urban areas, and

constitution of smaller urban area is not followed and

by way of impugned legislation given a go-bye, but it is

not their case that either merging of areas or

constitution or upgrading is not permissible. In

PROF. BK CHANDRASHEKAR's case (1 supra), the

Division Bench of Karnataka High Court considered

the scope of Article 243E. Sub-Article (1) thereof

provides that every Panchayat, unless sooner dissolved

under any law for the time being in force, shall

continue for five years from the date appointed for its

first meeting and no longer. Sub-Article (2) thereof

provides that no amendment of any law for the time

being in force shall have the effect of causing

dissolution of a Panchayat at any level, which is

functioning immediately before such amendment, till

the expiration of its duration specified in Clause (1).

In the above case, the challenge was to the State

legislation in bringing amendments to existing

Karnataka Panchayat Raj Act which in effect violated

the mandate contained in Article 243 (E) (1), and also

postponed elections by the impugned notification

therein nullifying the constitutional mandate under

Sub-Article (2) of Article 243E of the Constitution, in

those circumstances, it was held to be impermissible

and violative of Article 243E of the Constitution. The

facts in the present case are distinguishable. Here it is

a case of merger of Gram Panchayats and up-

gradation thereof into Municipalities by the impugned

legislation which, in our view, do not violate any

provision of Constitution much less Article 243(Q), as

such, or the Constitutional Amendments 73rd and 74th

and the decision in PROF. BK CHANDRASHEKAR's

case (1 supra) has no application to the facts of this

case.

25. The argument of learned counsel for the

petitioners that the impugned legislation is arbitrary

and violative of Article 14 of the Constitution is

concerned, no factual foundation of facts is laid with

regard to the same in the writ affidavit. It is to be seen

that the impugned legislation is only relates to merging

of gram panchayats into smaller urban area or into

larger urban area or upgradation of smaller urban

area (Municipality) into larger urban area (Municipal

Corporation), as the case may, and this was preceded

by calling for reports from the concerned Collectors

and after satisfying itself as to the necessity or

otherwise amendment was brought in, and in view of

the same, this Court finds no arbitrariness on the part

of the State legislature in enacting the impugned

legislation, which sub-serves larger public purpose.

The criterion laid down under Article 234Q(2) of the

Constitution and the provisions of the Parent Acts

1994 and 1965 is fulfilled before enacting the

legislation as such it does not violate the mandate of

Article 14 of the Constitution. The argument that the

impugned legislation is politically motivated lacks force

as the constitutionality of an enactment is not always

a question of power of the legislature to enact that

statue. Motive of the legislature while enacting a

statue is inconsequential. There is presumption in

favour of constitutionality of a statue. Article 14

strikes at arbitrariness because an action that is

arbitrary, must necessarily involve negation of

equality. Whenever therefore, there is arbitrariness in

State action, whether it be of the legislature or of the

executive, Article 14 immediately springs into action

and strikes down such State action. Law cannot be

declared ultra vires on the ground of hardship but can

be done so on the ground of total unreasonableness.

The legislation can be questioned as arbitrary and

ultra vires under Article 14, however, to declare an Act

ultra vires under Article 14, the Court must be

satisfied in respect of substantive unreasonableness in

the statue itself. (see State of Tamil Nadu vs. K.Shyam

Sunder, (2011) 8 SCC 737, Ajay Hasia vs. Khalid Mujib

Sehravardi (1981) 1 SCC 722, Bidhannagar (Salt Lake)

Welfare Assn. vs. Central Valuation Board (2007) 6 SCC

668).

26. A law which violates the fundamental right of a

person is void. In such cases of violation, the Court

has to examine as to what factors the Court should

weigh while determining the constitutionality of a

statute. First and the foremost, as already noticed, is

the competence of the legislature to make the law. The

wisdom or motive of the legislature in making is not a

relative consideration. The Court should examine the

provisions of the statute in light of the provisions of

the Constitution (Part-III), regardless of how it is

actually administered or is capable of being

administered. In this regard, the Court may consider

the following factors, as noticed in D.D. Basu, Shorter

Constitution of India (14th Edn., 2009):

(a) The possibility of abuse of a statute does not impart to it any element of invalidity.

(b) Conversely, a statute which violates the Constitution cannot be pronounced valid merely because it is being administered in a manner which might not conflict with the constitutional requirements.

27. The Courts would accept an interpretation which

would be in favour of the constitutionality, than an

approach which would render the law

unconstitutional. Declaring the law unconstitutional is

one of the last resorts taken by the Courts. The Courts

would preferably put into service the principle of

"reading down" or "reading into" the provision to make

it effective, workable and ensure the attainment of the

object of the Act. These are the principles which clearly

emerge from the consistent view taken by this Court in

its various pronouncements.

28. CHMPA LAL vs. STATE OF RAJESTHAN8, was a

case where in exercise of the statutory powers

2018 SCC OnLine SC 536

conferred on the State Government, two notifications

were issued to upgrade a gram panchayat to be a

Nagar panchayat and under those circumstances the

Supreme Court held that the notifications purport to

classify the Municipalities only on the basis of

population, and other parameters to which regard is

required to be had under Article 243Q(2) were not

taken into account, the same were held to be

unsustainable. The facts in the case on hand are

discernable and no such situations arise in this case.

29. As far as 73rd and 74th Constitutional

Amendments are concerned, 73rd Constitutional

Amendment PART IX, mandates the State

Government to endow the Panchayats with such

powers and authority as may be necessary to enable

them to function as institutions of self government.

74th Constitutional amendment by way of PART IXA

has given constitutional status to the Municipalities

and brought them under the justifiable part of the

Constitution. States were put under constitutional

obligation to adopt municipalities as per system

enshrined in the Constitution. Nowhere in the said

provisions is there any clause prohibiting inclusion or

exclusion of the areas, or for that matter merger of

Gram Panchayats into a smaller urban area or a larger

urban area or up-gradation of a smaller urban area

into a larger urban area, as the case may be.

30. In STATE OF BIHAR vs. BIHAR DISTILLERY

LIMITED9, Supreme Court after referring to the ratio

laid down in the rulings on the subject, laid down

certain principles on how to judge the constitutionality

of an enactment, at para 17 held thus:-

"17. Now coming to the reasoning in the impugned judgment, we must say with all respect that we have not been able to appreciate it. The approach of the Court, while examining the

(1997) 2 SCC 453

challenge to the constitutionality of an enactment, is to start with the presumption of constitutionality. The Court should try to sustain its validity to the extent possible. It should strike down the enactment only when it is not possible to sustain it. The Court should not approach the enactment with a view to pick holes or to search for defects of drafting, much less inexactitude of language employed.

Indeed, any such defects of drafting should be ironed out as part of the attempt to sustain the validity/constitutionality of the enactment. After all, an Act made by the legislature represents the will of the people and that cannot be lightly interfered with. The unconstitutionality must be plainly and clearly established before an enactment is declared as void. The same approach holds good while ascertaining the intent and purpose of an enactment or its scope and application...."

31. Supreme Court in DHARAM DUTT vs. UNION OF

INDIA,10 considered the decision in K.C. Gajapati Narayan

Deo v. State of Orissa [AIR 1953 SC 375], observed at

para16 thus;

"16. Though the petition alleges the impugned Act (with the

history of preceding ordinances) to be the outcome of political malice,

no particulars thereof have been given by the writ petitioner.

However, that aspect need not be deliberated upon any further in

view of two Constitution Bench decisions of this Court. It has been

held in K.C. Gajapati Narayan Deo v. State of Orissa [AIR 1953 SC

375 : 1954 SCR 1] and in Board of Trustees, Ayurvedic and Unani

(2004) 1 SCC 712

Tibia College v. State of Delhi (now Delhi Admn.) [AIR 1962 SC 458 :

1962 Supp (1) SCR 156] that the doctrine of colourable legislation

does not involve any question of bona fides or mala fides on the part

of the legislature. The whole doctrine resolves itself into the question

of the competency of a particular legislature to enact a particular

law. If the legislature is competent to pass a particular law, the

motives which impelled it to act are really irrelevant. On the other

hand, if the legislature lacks competency, the question of motive does

not arise at all. We will, therefore, concentrate on the legislative

competence of Parliament to enact the impugned legislation. If

Parliament has the requisite competence to enact the impugned Act,

the enquiry into the motive which persuaded Parliament into passing

the Act would be of no use at all."

32. On the above analysis, the impugned amending

Act 4 of 2018 cannot be held to be violative of Articles

14 and 73rd and 74th Amendments especially, 243Q (2)

of the Constitution of India.

POINT No.(ii) ::

{Whether the respondent-State has legislative competence to bring in the impugned amending Act 4 of 2018}

33. To refer to the issue of legislative competence of

the legislature in bringing the impugned Act 4 of 2018,

except making oral submissions and raising plea on

this issue, no factual foundation is laid in the

pleadings. Nonetheless, the issue is considered

adverting to the arguments of the learned counsels for

the parties. Part XI, Chapter I, Article 245 of the

Constitution deals with distribution of legislative

powers wherein the legislature of a State is empowered

to make laws for the whole or any part of the State

subject to the provisions of the Constitution. Under

clause (3) of Article 246 of the Constitution, subject to

clauses (1) and (2) therein, empowers the legislature of

the State to make laws for the whole of any part of the

State with respect to any of the matters enumerated in

List-II in the VII Schedule. Entry 5 of List-II of

Schedule VII of the Constitution of India is as follows:-

"5. Local government, that is to say, the constitution and powers of municipal corporations, improvement trusts, district boards, mining settlements authorities and other local authorities for the purpose of local self government or village administration."

34. In this case, parent Acts 1994, 1965 and the

impugned legislation by way of Act 4 of 2018 is made

in respect of State of Telangana and the power is

traceable to Entry 5 of List-II of Schedule VII of the

Constitution of India and is in accordance with the

provisions of the Constitution as held in Point (i). It is

not the case of the learned counsel for the petitioners

that the subject matter of legislation does not fall

under Entry 5 of List-II of Schedule VII of the

Constitution of India.

35. In ELEL HOTELS & INVESTMENTS LTD. vs.

UNION OF INDIA11 at para 14 held thus:-

"14........The cardinal rule of interpretation is that the entries in the legislative lists are not to be read in a narrow or restricted sense and that each general word

(1989) 3 SCC 698

should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. The widest possible construction, according to the ordinary meaning of the words in entry, must be put upon them. Reference to legislative practice may be admissible in reconciling two conflicting provisions in rival legislative lists. In construing the words in a constitutional document conferring legislative power the most liberal construction should be put upon the words so that the same may have effect in their widest amplitude".

36. In view of the above, we are of the opinion that

the impugned legislation by way of Act 4 of 2018 is

within the legislative competence of the State and,

therefore, the impugned amendment brought in

cannot be invalidated on the ground lack of legislative

competence.

POINT No. (iii) ::

{Whether the impugned amending Act 4 of 2018 is against the texture of the parent Acts i.e. the Municipal Corporation Act and the Municipalities Act}

37. Coming to the question as to whether the

impugned amending Act 4 of 2018 is in conflict with

the parent Acts 1994 and 1965, in this case some of

the rural areas in Gram Panchayat, on being

identified by the functionaries of the State, taking into

various factors as envisaged in Article 243Q(2) of the

Constitution of India and relevant provisions of both

the Acts 1994 and 1965 in that regard as mentioned

supra, are merged with Municipal Corporation, and

some with Municipalities and some upgraded as

Municipalities. Hence, there is no conflict between the

amending Act 4 of 2018 and the parent Acts.

Mitigating factors pleaded opposing the merger or

creation of larger urban or smaller urban area on the

ground they deprived the benefits under employment

guarantee scheme extended by the State and the

Union Government cannot override the power of State

legislature from enacting or amending an enactment.

Such actions on the part of the State to merge the

rural areas or upgrade some of them into

Municipalities, is a policy decision of the State. Even

otherwise, the rules framed under Act or the 1965

Act, is a subordinate legislation and the amending Act

4 of 2018 in Section 3-A of Act 1994 and Clause 42-aa

of Section 2 and sub-Section 1B of Section 3 of the

1965 Act, starts with a non-obstante clause, giving

overriding effect over the other provisions of the Act,

1994, as such, the impugned amending Act 4 of 2018

cannot be invalidated on the ground of not following

the procedure provided under parent Acts or the rules

framed thereunder. The amending Act is preceded by

collection of data and also identifying the villages

which have potential to be merged into Municipal

Corporation or Municipality or creation of a

Municipality, as the case may be, cannot be said to be

in conflict with the provisions of parent Act. It is

settled proposition of law as laid down by the Supreme

Court in a plethora of decisions that the constitutional

validity of an enactment made by the State legislature

or by the Parliament can only be challenged on the

ground i.e. it is violative of any provisions of the

Constitution or on the ground of excessive delegation

and not on any other ground as such impugned

legislation amending the parent Act cannot be

challenged on the ground that it is offending or

destructive of parent Acts when it is within the

province of the State legislature as held in Point (ii)

while dealing with the issue of legislative competence

of State legislature.

POINT (iv) ::

{Whether notice is mandatory under the Rules to the elected representatives of the villages and the villagers}

38. The effect of amending Act 4 of 2018 resulted in

merger of certain villages into Municipal Corporation

or Municipalities and up-gradation as Municipality

and the State legislature in its wisdom though it fit not

to provide for inclusion of principles of natural justice

before the inclusion of the areas and up-gradation as

the case may be, in the impugned legislation. The

impugned legislation is general in nature not intended

against any particular individual and no specific right

of the individual is affected or demonstrably infringed

as such, the impugned legislation cannot be struck

down on the ground of violation of principles of natural

justice. The Supreme Court while dealing with a

similar fact situations observed that when the

provisions of a particular Act do not provide for

observance any opportunity of hearing to the residents

before any area falling under a particular Gram Sabha

is excluded and included in another Gram Sabha, the

residents of that area which has been excluded or

included in a different Gram Sabha cannot make a

complaint regarding denial of opportunity of hearing

before taking action for such a purpose, (see State of

Punjab vs. Tehal Singh12). In STATE OF PUNJAB

(2002) SCC 7

vs. TEHAL SINGH,13 the Supreme Court at para 9 &

10 held thus:-

"9. Once it is found that the power exercisable under Sections 3 and 4 of the Act respectively is legislative in character, the question that arises is whether the State Government, while exercising that power, the rule of natural justice is required to be observed. It is almost settled law that an act legislative in character -- primary or subordinate, is not subjected to rule of natural justice. In case of legislative act of legislature, no question of application of rule of natural justice arises. However, in case of subordinate legislation, the legislature may provide for observance of principles of natural justice or provide for hearing to the residents of the area before making any declaration in regard to the territorial area of a Gram Sabha and also before establishing a Gram Sabha for that area. We have come across many enactments where an opportunity of hearing has been provided for before any area is excluded from one Gram Sabha and included in different Gram Sabhas or a local authority. However, it depends upon the legislative wisdom and the provisions of an enactment. Where the legislature has provided for giving an opportunity of hearing before excluding an area from a Gram Sabha and including it in another local authority or body, an opportunity of hearing is sine qua non and failure to give such an opportunity of hearing to the residents would render the declaration invalid. But where the legislature in its wisdom has not chosen to provide for any opportunity of hearing or observance of principles of natural justice before issue of a declaration either under Section 3 or Section 4 of the Act, the residents of the area cannot insist for giving an opportunity of hearing before the area where they are residing is included in another Gram Sabha or local authority. In Rameshchandra Kachardas Porwal v. State of Maharashtra [(1981) 2 SCC 722] this Court held as thus: (SCC p. 741, para

17)

"In one of the Bihar cases it was further submitted that when a market yard was disestablished at one place and established at another place, it was the duty of the authority concerned to invite and hear objections. Failure to do so was a violation of the principles of natural justice and the notification disestablishing the market yard at one place and establishing it elsewhere was therefore, bad. It was said that even as there was express provision for inviting and hearing objections before a 'market area' was declared under the Act, so should objections be invited and heard before a 'market yard' was established at any particular place. The principles of natural justice demanded it. We are unable to agree. We are here not concerned with the exercise of a judicial or quasi-judicial function where the very nature of the function involves the application of the rules of natural justice, or of an administrative function affecting the rights of persons, wherefore, a duty to act fairly. We are concerned with legislative activity; we are concerned with the making of a legislative instrument, the declaration by notification of the Government that a certain place shall be a principal market yard for a market area, upon which declaration certain statutory provisions at once spring into action and certain consequences prescribed by statute follow forthwith. The making of the declaration, in the context, is certainly an act legislative in character and does not oblige the observance of the rules of natural justice.

10. In the present case, the provisions of the Act do not provide for any opportunity of hearing to the residents before any area falling under a particular Gram Sabha is excluded and included in another Gram Sabha. In the absence of such a provision, the residents of that area which has been excluded and included in a different Gram Sabha cannot make a complaint regarding denial of opportunity of hearing before issue of declarations under Sections 3 and 4 of the Act respectively. However, the position would be different where a house of a particular resident of an area is sought to be excluded from the existing Gram Sabha and included in another Gram Sabha. There the action of the Government being directed against an individual, the Government is required to observe principles of natural justice. For the aforesaid reasons, we are of the view that no opportunity of

hearing was required to be given before making declarations either under Section 3 or Section 4 of the Act by the Government."

39. In SUNDARJAS KANYALAL BHATIJA vs.

COLLECTOR, THANE14 the Supreme Court while dealing

with the question of principles of natural justice in

legislative action and its applicability at paras 27 and

28 observed thus:-

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 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 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 "its juster will for theirs".

28. Equally, the rule issued by the High Court to hear the parties is untenable. The Government in the exercise of its powers under Section 3 is not subject to the rules of natural justice any more than is legislature itself.

The rules of natural justice are not applicable to legislative action plenary or subordinate. The procedural requirement of hearing is not implied in the

(1989) 3 SCC 396

exercise of legislative powers unless hearing was expressly prescribed. The High Court, therefore, was in error in directing the Government to hear the parties who are not entitled to be heard under law."

40. As far as the contention regarding de-notification of

the Gram Panchayat as envisaged under Section 3 (f) of

the Panchayat Raj Act, 1994, before merging with

Municipality or Municipal Corporation is concerned,

power is conferred on Government i.e. State Government.

Section 3 (2) (f) of the Panchayat Raj Act, 1994,

specifically empowers the government to withdraw any

notification issued under Section 3 of the Act. In the case

on hand, it is merger of certain Gram Panchayats into

smaller urban area or larger urban area and also

constitution of a smaller urban area by merging the Gram

Panchayats by an Act of legislature itself by way of