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PETITIONER: SUB DIVISIONAL OFFICER & ORS. ETC.

       Vs.

RESPONDENT: DR. MEHAR SINGH AND ORS. ETC.

DATE OF JUDGMENT17/08/1988

BENCH: RANGNATHAN, S. BENCH: RANGNATHAN, S. NATRAJAN, S. (J)

CITATION:  1989 AIR  206            1988 SCR  Supl. (2) 467  1988 SCC  (4) 200        JT 1988 (3)   470  1988 SCALE  (2)391

ACT:     Punjab  Municipal Act 1939: Section 244-Challenging  the Constitutional    validity   of    section    244-Guidelines discernible  in  section 241 to be read  into  section  241- Whether provisions of section 244 are ultra vires Article 14 of the  Constitution.

HEADNOTE:     Certain  areas  in  Punjab  State  were  constituted  as notified  areas.  An ares was declared a ’notified  area  by notification  under  s.  241  of  the  Act.  The  Government nominated    members,   issued   the   necessary    enabling notifications  under  s. 242 and appointed a  notified  area committee   consisting  of  certain  persons.   Later,   the Government  issued a notification under s.  244,  cancelling the earlier notification under s. 241.     Writ  Petitions  were  filed in the High  Court  by  the office-bearers  of the notified area committees  challenging the  constitutional  validity of s. 244. The  challenge  was sustained by the High Court; heading to the appeals in  this Court.     Before the High Court, bare proposition of law was urged that  s.  244 violated Art. 14 of the Constitution  for  the reason  that it gave an arbitrary and unduided power to  the State  Government to cancel a notification issued  under  s. 241  without  specifying/indicating  the  godliness  or  the principles on the basis of which such cancellation could  be effected.     Allowing the appeals, the Court,     HELD: The preliminary objection raised by the appellants to  the  locus standi of the members of  the  notified  area committees to pursue the matter was not tenable. As a result of  the  notification, the rights of the members  under  the statute had been taken away, and they were  entitled to come to  the  Court impugning the  notifications  which  affected them.  Merely because they had ceased to be members  of  the notified  area committees, their locus standi  to  ventilate their grievance was not affected. [473D, G]                                                   PG NO 467                                                   PG NO 468     Section 244, by itself, does not in express words  spell

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out  the circumstances in which a notification issued  under s.  241  or  an  order under s.  242  may  be  cancelled  or modified,  but  s. 244 should not be read  or  construed  in isolation  from  the rest of the Chapter dealing  with  this subject-matter.  The whole purpose of notifying areas  under Chapter  XIII  of  the  Act is to grant  a  degree  of  self autonomy to an area which is comprised in a village.  [477H; 478A]     As  and when the economy of a particular area  develops, the  State Government should see to it that arrangement  for its  administration  also  improve  and  provide  for   more efficient local administration. [478G-H]     The  provisions  that notified area will  exercise  only such  powers as are entrusted to it by the State  Government under s. 242 and that only such provisions of the Act as the State  Government  considers  fit can  be  applicable  to  a notified area, show that the principal consideration was the economic and administrative viability of the particular unit to  look after its own local affairs. If the  area  develops further  and proves viable and self-sufficient  economically and   efficient  administratively,  it  may  be   eventually converted  into  a  municipal  area.  If  the  area  is  not financially solvent or is administratively weak, the  status quo ante may have to be restored. [479B-C]     Section  244  is  intended  as  a  power  enabling   the Government to go forward or backward in the process of  this evolution depending upon the circumstances of each case.  It may  turn  out that a particular area  is  not  economically viable  and the notification issued under s. 241 has  to  be cancelled. [279D]     The situations, in which a cancellation or  modification of  a notification under s. 241 may be called for,  will  be numerous  and  impossible  to be spelt out  in  a  statutory provision. The power of cancellation or modification is  not an  arbitrary  and unduided one but is one  intended  to  be exercised  in  the  light  of  the  implementation  of   the notification in a particular local area having regard to the main principle and purpose behind s. 241. [279E-G]     There are sufficient guidelines or indications available in  the Statute as to the circumstances in which  the  power can  be  invoked.  It could not be said to be  a  naked  and arbitrary power. Section 244 contains sufficient  guidelines to act thereunder and it was not possible to accept the plea that  s. 244 itself was ultra vires and should  be  declared void.The  provisions of s. 244 are valid. They could not  be                                                   PG NO 469 said  to  be  bad  being violative  of  Article  14  of  the Constitution. [481F-G]     Gram  Sabha Begowal v. State of Punjab and another,  AIR 1981 P and  H 101, approved.     State  of Punjab v. Dewan Chand, AIR 1979 P & H  46  and Ayodhya Prasad Vajpai v. State of U. P. and others, AIR 1968 SC 1344, referred to.

JUDGMENT:     CIVIL  APPELLATE JUTRISDlCTION: Civil Appeal  Nos.  1888 and 1888-A of 1982.     From  the  Judgment  and Order dated  16.9.1987  of  the Punjab  and  Haryana High Court in Civil Writ Nos.  3880  of 1980 and 1839 of 1981,     C.M. Nayyar for the Appellants.     E.C. Agarwala and Ms. Purnima Bhatt for the Respondents.

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   The Judgment of the Court was delivered by     S. RANGANATHAN, J . These appeals raise a common  point. They  arise  out of two out of a batch  of  writ  petitions, disposed  of  by  the Punjab &  Haryana  High  Court,  which challenged  the  validity  of  Section  244  of  the  Punjab Municipal  Act.  The  High Court  concluded  that,  both  on principle  and  precedent, the provisions should  be  struck down   as   they   plainly  suffer   from   the   taint   of unconstitutionality.  ’The  State of  Punjab  has  preferred these appeals.     The Punjab Municipal Act (hereinafter referred to as the ’Act’)  was  an  Act  to  make  better  provisions  for  the administration  of municipalities in Punjab.  The  procedure for constituting any local area as a municipality is set out in Sections 4 to 10 (Chapter II) of the Act. Under section 4 the State Government is empowered by notification to propose any   local  area  (other  than  any  part  of  a   military cantonment)  to  be  a  municipality  under  the  Act.   Any inhabitant,  who desires to object to such a  proposal,  can put  forward  his objections in writing  within  a  specific period.  The  State  Government  is  obliged  to  take  such objections   into   consideration.  It  may   then,   by   a notification,  declare  the local area to be a  municipality of  the  first, second or third class as the  case  may  be. Section  5  enables the Government to alter the areas  of  a                                                   PG NO 470 municipality by including within the municipality any  other local  area.  In  such a case also the  inhabitants  of  the municipality or the local area proposed to be included,  are entitled  to file objections which the State  Government  is obliged to take into account before notifying the  inclusion of  the local area in the municipality. Section  6  provides for  a  notification of the intention of the  Government  to exclude  from  a  municipality  any  local  area   comprised therein.  Here again, any in habitat of the municipality  or local  area is entitled to put forward his objections and  a final  notification of exclusion of the local area from  the municipality  will be issued by the State  Government  after taking such objections into consideration. Section 9 confers a  power on the State Government to except any  municipality or part thereof from the operation of such of the provisions of  the Act as are unsuited thereto. Section 10 of  the  Act (as  originally enacted) gave power to the State  Government to  withdraw from the operation of the Act the area  of  any municipality constituted thereunder with the result that the Act  would not apply within the limits of that  area.  These are the sets of provisions relating to the constitution of a local  area as a municipal area to be fully governed by  the provisions  of the municipal Act.  These municipalities  are managed by committees constituted as provided in Section  12 and they have powers of raising money by taxation. The  fund of the municipality, called the municipal fund, consists  of all  sums raised by or on behalf of the Committee under  the Act  or  otherwise.  The funds are to  be  defrayed  by  the committee on various types of civil needs set out in  detail in Section 52 of the Act.     The  Act also contemplates the constitution  of  certain local  areas into what may be described as ’notified  areas. These  notified  areas  do not  function  as  municipalities proper  but  they  are  given  a  certain  amount  of  local autonomy. The State Government appoints a committee and  the committee manages the affairs of the local area. they are in charge  of all aspects of local administration like a  full- edged municipality. They are given powers to impose  certain taxes as are permitted by the State Government and only such

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provisions  of  the  Act are applicable to them  as  may  be extended by the State Government. The creation of a notified area  is the recognition by the Government of the  necessity for granting powers of local administration to a  particular area  in  a  smaller  measure  than  is  the  case  with   a municipality. The provisions governing the constitution of a notified  area  are set out in Section 241  to  Section  245 (Chapter XIII!) of the Act. It is however, sufficient to set out the provisions of Section 241 to section 244 here for  a proper  appreciation  of  the issue  that  arises  in  these appeals:                                                   PG NO 471     Section 241:     Constitution of Notified Area     (1)  The State Government may, by notification,  declare that with respect to some or all of the matters upon which a municipal  fund may be expended under section  52,  improved arrangement  are  required within a  specified  area,  which nevertheless,  it  is  not  expedient  to  constitute  as  a municipality.     (2)  An area in regard to which a notification has  been issued  under  sub-section  (1)  is  hereinafter  called   a notified area.     (3)  No  area shall be made a notified  area  unless  it contains a town or a bazar and is not a purely  agricultural village.     (4)  The decision of the State Government that  a  local area  is not an agricultural village within the  meaning  of sub-section  (2) (sic) shall be final, and a publication  in the Official Gazette of a notification declaring an area  to be notified area shall be conclusive proof of such decision. Section 242:     Power of State Government to impose taxation and regular expenditure  of proceeds thereof- (1) The  State  Government may-     (a)  impose in any notified area any tax which could  be imposed  there  by  the committee under  the  provisions  of section 6 if the notified area were a municipality:     Provided  that  any tax imposed on buildings  and  lands shall not be subject to the maximum limits prescribed by sub clause (a) of clause ( f) of section 6:     Provided  also  that a tax payable by the owner  may  be made payable by the occupier:     (b)  apply  or  adapt  to  the  notified  area  for  the assessment and recovery of any tax imposed under clause (a), any  of the provisions of this Act, or of any rules for  the                                                   PG NO 472 time  being  in force, with respect to  the  assessment  and recovery of any tax imposed under this Act:     (C) arrange for the due  expenditure of the proceeds  of taxes  imposed  under- clause  (a) and for  preparation  and maintenance of proper accounts.     (d)  appoint a committee of one or more persons for  the purposes of clauses (b) and (c) :     (e)   appoint a president of such committee and fix  the term of office of member or president of the committee.     (f)   extend  to  any notified area  provisions  of  any section  of  this  Act  subject  to  such  restrictions  and modifications, if any, as the Government may think fit.     (2) The proceeds of any tax levied in any notified  area under  this  section shall be expended only  in  some  (sic) manner  in  which the municipal fund of such  notified  area might be expended if the notified area were a municipality. Section 243: Application of Act to notified area--

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   For the purposes of any section of this Act which may be extended to a notified area the committee appointed for such area  under  section 243 shall be deemed to be  a  municipal committee under this Act and the area to be a municipality. Section 244 Discontinuance of notified area-     The  State Government may at any time cancel  or  modify any  notification  under  section 241  or  any  order  under section 242.     In  Punjab,  certain  areas  in  the  State-it  is   not necessary  to  set out these in detail-were  constituted  as notified  areas. To give the relevant details in  regard  to                                                   PG NO 473 one of  them,  it  was declared  a  ’notified  area’  by  a notification  under  section 241 of the Act  dated  19.  10. 1978. It took sometime for the State Government to  nominate members and issue the necessary enabling notifications under section  242.  These were issued only on 11.2.  1980  and  a notified  area committee consisting of certain  persons  was appointed.  The committee functioned for a few months.  Soon thereafter,   on   7.10.1980,  the   Government   issued   a notification  under  Section  244  cancelling  the   earlier notification  made  under  section  241.  A  batch  of  writ petitions was filed in the High Court by the office  bearers of   the   notified   area   committees   challenging    the constitutional  validity of section 244 and  this  challenge has  been  sustained by the division bench  leading  to  the present appeal.     At  the outset, the counsel for the appellant  raised  a preliminary  contention. He stated that the members  of  the various  notified area committees were appointed only for  a period  of  three  years. Even if  the  notifications  under section  241  had continued to be in force,  their  term  of office  would  have  expired  quite  some  time  back.   He. therefore,  submitted that the writ petitioners have  ceased to  have any locus standi to pursue the matter  further.  In our  opinion, this objection is neither tenable nor  can  it entitle  the appellant to any relief automatically.  At  the time  the writ petitions were filed, these persons were  the members  of the notified area committees and as a result  of the  notification, their rights under the statute  had  been taken  away. They were, therefore, entitled to come  to  the Court  impugning the notifications which affected them.  The High  Court  has sustained their challenge  and,  since  the conclusion  of  the High Court affects  the  appellant.  the appeal has to he heard on the merits and cannot be  disposed of   as  infructuous.  That  apart,  the  petitioners   were concerned  with  the matter not only in  their  capacity  as members  of the notified area committees but also  in  their capacity  as  inhabitants of the concerned  notified  areas. They  had. and continue to have. an interest in seeing  that the  uplift in status conferred on their local area  by  the notifications under section 241 continues to be in operation and  is  not  with-drawn or cancelled  to  their  determent. Merely  because  some  or all of them  have  ceased  to,  be members of the notified area committees, their locus  standi to ventilate this grievance is not affected.     Coming  to the principal question, the short  ground  on which   the  High  Court  has  accepted  the  plea  of   the petitioners  is  that  section  244  does  not  contain  any guidelines  or  indications as to the  considerations  which should  be  taken note of by the Government in  deciding  to cancel  a  notification already issued  under  section  241.                                                   PG NO 474 Referring to the earlier decision of the same High Court  in

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Gram  Sabha  v. State, AIR 1981 P & H 101 which  repelled  a like challenge to the constitutionality of section 241,  the Bench  observed that the criteria spelt out by  the  statute for the creation of a notified area committee under  section 241 could have little or no relevance to the  pre-conditions which   might  be  necessary  for  its  denotification   and dissolution. Reliance was placed on a decision of the Punjab High Court in State of Punjab v. Dewan Chand, AIR 1979 P & H 46 by which section 10 of the Municipal Act was declared  to be  unconstitutional. The Court was of the opinion that  the ratio of Dewan Chand case covered the issue before them.  It added  that even de hors the same, on principle and  on  the existing statutory provisions, the same conclusion  appeared to  be  inevitable.  The learned  judges  distinguished  the decision  in  Ayodhaya Prasad Vajpai v. State  of  U.P.  and others,  AIR  1968  SC 1344 on which the  State  relied  and repelled an argument of desperation, that section 244 should be treated as merely a statutory declaration of the inherent power  of  cancellation of any order that is vested  in  any authority  under the General Clauses Act. Referring  to  the well  established constitutional proposition that a  statute has to be held to be discriminatory irrespective of the  way in  which  it is applied, "if the statute  itself  does  not disclose   a  definite  policy  or  objective  and   confers authority on another to make selection at its pleasure", the Court declared section 244 to be unconstitutional.     It may be mentioned at the outset that, before the  High Court,the writ petitioners had also taken certain objections on  the merits and also attributed mala fides to  the  State Government in issuing the notifications of cancellation  but these    allegations.,of   mala   fides    and    extraneous considerations   having  vitiated  the  notifications   were expressly given up. Only a bare proposition of law was urged that section 244 violates article 14 of the Constitution for the  sole and simple reason that it gives an  arbitrary  and unduided   power  to  the  State  Government  to  cancel   a notification   issued   under  section  241   without   also specifying,   or  atleast  indicating,  the  guidelines   or principles on the basis of which such cancellation could  be effected.     It  will be appropriate first to notice the  Full  Bench decision  of  Punjab High Court in Gram  Sabha  Begowal)  v. Stare of Punjab and another, AIR 1981 P & H 101 repelling  a similar challenge to the provisions of section 241 and  242. Two  objections were raised to the validity of sections  241 and  242.  It  was said first that  these  sections  do  not provide  enough  guidelines regarding the  circumstances  in which  an area can be constituted into a notified  area  and                                                   PG NO 475 empowered   to   administer   its   own   fund   for   local administration. Secondly, it was submitted that there was no provision  to provide persons affected by such  notification with  an opportunity of hearing and that this was  violative of  article  14. In that case, an area comprised in  a  gram sabha was included under section 241 and the gram sabha came to the court urging that it could not be so notified without hearing its objections.  These contentions were overruled by the  Full  Bench [to which one of the members of  the  Bench which  heard  the present batch of cases was a  party).  The principle  of the decision is contained in the head note  of the report of the said case :     "Section  241 of the Act gives sufficient guidelines  to the  State  Government  as  to which  area  deserves  to  be declared  as  notified area. Whenever the  State  Government finds  that  the  proposed  area is not  big  enough  to  be

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constituted  as  a municipality, but  nevertheless  requires improved  arrangements  with respect to some or all  of  the matters enumerated in s. 52 for which municipal funds may be expended,it  can  constitute a notified area.  Further,  the State Government has been prohibited from declaring a purely agricultural  village  to be a notified area but if  such  a village contains a town or a Bazar, then it can be  declared to  be a notified area. Before a decision is taken under  s. 241,  the  State Government has to apply its mind  fully  to consider  the  pros  and  cons  whether  the  area  can   be constituted as a municipality but if it finds that it is not possible to do so because it is not such a large area so  as to  be able to sustain the expense of a municipality but  at the  same time the State Government considers that  some  of the  improved arrangements as detailed in section 52 of  the Act  deserve  to  be  made in  that  area,  then  the  State Government has been given the power to constitute that  area into a notified area subject to the restrictions imposed  in sub-s.  (3)  of section 241 of the Act.  Similarly,  once  a notified  area is constituted, s. 242 merely authorises  the State Government to impose tax under s. 61 and to apply  any of the provisions of the Act to the notified area subject to such  restrictions  and limitations, if any,  as  the  State Government  may think proper besides doing other  beneficial acts  for  the  notified area as detailed  in  the  section. Section  242 is merely consequential authorising  the  State Government  to  levy  tax and to  frame  the  procedure  for                                                   PG NO 476 recovery  etc. and to apply the  Act insorfar as it  may  be beneficial for the proper working of the notified area.     Although  in  Ss.  4 to 7 a  provision  for  hearing  of objections has been made, but no similar provision has  been made in section 241. Section 241 is however, not ultra vires article  14 of the Constitution merely because there  is  no provision   therein  for  inviting-  objections   from   the inhabitants of the area before declaring a notified area. No provision  of  law can be struck down as ulta  vires  merely because  it  does not contain a provision  for  affording  a hearing  to  the  persons concerned.  No  violation  of  the principles  of  natural  justice arises  in  construing  the statutory provisions."     The Full Bench, with which we are in agreement,  clearly laid down that the provisions of section 241 are not  liable to  challenge  on  grounds similar to those  raised  in  the present petition.     Basing itself on this Full Bench decision, it was argued for the State that the same principle would be applicable in the  case of section 244 as well. The f-High Court  repelled this  contention  by saying that the criteria spelt  out  in section  241  could have no relevance to  the  preconditions which  might be necessary for its denotification. The  Court observed:     "For  instance,  one  -of  the  pre-requisites  for  the creation  of  a Notified Area Committee laid  down  in  sub- section  (3) is the existence of a town or a bazar  therein. Some modicum of urbanization or semi-urbanization is thus  a pre-requisite for the creation of a Notified Area Committee. Now  it  is  manifest that this  cannot  have  the  remotest relevance   when   subsequently   the   question   of    the denotification  or the dissolution of an  existing  Notified Area   Committee  arises.  Clearly  the  statute   was   not visualising an earthquake which would raze the town or hazar to  shambles  and consequently obliterate one  of  the  pre- requisites for the creation.  An urban area in the shape  of a  town or bazar having already come into existence,  it  is

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too  remote  a possibility that the same would  vanish  into thin  air and in this manner provide a guideline  or  policy for de-notifying the Committee under Section 244 of the Act.     Again  the  other  criterion  negatively  put  for   the creation  of  a  Notified Area Committee is  that  the  area                                                   PG NO 477 comprised therefor is not a purely agricultural village. Now once  this  is satisfied that the  area loses  its  pristine rural  or agricultural nature so as to warrant the  creation of a Notified Area Committee. It seems rather inconceivable, if  not  impossible, that the same would revert again  to  a purely  agricultural  village  so as to  necessitate  a  de- notification.  Indeed,  it appears to me  that  the  learned counsel  for  the petitioner is on a sound footing  that  at least for the limited purpose of the statute before usz  the guidelines  for the constitution and creation of a  Notified Area Committee would be totally alien to the  considerations which might later require its de-notification. The Bench concluded that:     Once  it  is held as above, it appears to be  plain  and beyond  cavil that in the language of Section 244, there  is not the least hint of any legislative policy or any  inkling of  a  guideline  for the de-notification  of  a  Committee. lndeed,the  language excels in its absoluteness and  confers powers  on  the State Government to cancel ar any  time  any notification  under  ,section 241 of the Act  without  more. There  is  no manner of doubt that a  de-notification  of  a corporate  urban  area is fraught with  grave  and  material Legal  and civil consequences not merely to  the  individual members of the Committee, but to the corporate existence  of all  the citizens composed there of.  Nevertheless,  section 244 is wholly silent, both as to policy and as to  guideline for the exercise of a totally arbitrary power vested in  the Government  to de-notify an existing Committee. It seems  to be  now  well  settled  that where  such  an  unlimited  and uncanalised power is vested without even remotely indicating a  legislative  policy or the rational  criteria,  the  same would be hit by Article 14 of the Constitution, even  though the  repository  of the power is the State  or  the  Central Government itself."     With  respect  to the learned judges, we are  unable  to concur in this conclusion. It is true that ,section 244,  by itself,   does   not  in  express  words   spell   out   the circumstances  in which a notification issued under  section 241  or  an  order under section 242  may  be  cancelled  or modified. But in our opinion, section 244 should not be read or  construed  in  isolation from the rest  of  the  chapter                                                   PG NO 478 dealing  with  this  subject matter. The  whole  purpose  of notifying areas under Chapter XIII of the act is to grant  a degree  of self autonomy to an area which is comprised in  a village. The circumstances in which such a notification  can be  issued  are  set  out in  section  241  with  sufficient particularity.   The  section  postulates  that  the   State Government is to be satisfied in regard to a particular area that   it  may  be  allowed  to  carry  on  its  own   local administration, that such administration should be run by  a committee  appointed by the Government, that  the  committee should  be empowered to collect taxes and finally, that  the committee  should  be  empowered to take  over  the  onerous responsibility  of  providing  for various  types  of  civic amenities  and facilities as may be entrusted to it. But  at the  same time the Government should be of the opinion  that either   because  of  its  location,  population,  lack   of affluence,  backwardness or other considerations, it is  not

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possible to constitute the area into a regular  municipality fully  governed by the provisions of the Municipal Act.  The Government, therefore, should consider that it is sufficient if  the area is carved out as a notified area, to  be  given such powers as may be considered fit and proper in regard to its  administration. The State Government is also  empowered to  gradually  notify, if necessary, from time to  time  the various  provisions of the Act which would be applicable  in respect of such notified area. In our opinion, the provision makes  clear  the  guidelines for declaring  an  area  as  a notified area.     Sub-section   (3)  of  section  241  contains   specific provisions  against  a  purely  agricultural  village  being converted  into  a  notified area and,  again,  against  the declaration  of an area as a notified area, if it  does  not contain  any town or bazar. The learned judges of  the  High Court have referred to the provisions of sub-section (3) and have pointed out that once these requirements are  satisfied then it is practically impossible to conceive of a situation when these requirements would cease to exist warranting  the cancellation  of  the  notification  already  issued   under section  241.  There  is substance in this  comment  of  the learned judges. But, in our opinion, the crux of section 241 lies  in sub-section (1) to which we have a˜ready  referred. The  whole  scheme  of sections 241 to 244 is  to  be  taken together.  The  idea is that as and when the  economy  of  a particular area develops, the State Government should see to it that arrangements for its administration also improve and provide  for  more  efficient  local  administration.   Thus section 241(1) envisages the criteria of the development  of a  purely rural area into a township or  commercial  centre, with increased trade and commerce, with increased population and  with  increased  economic  activities  justifying   its                                                   PG NO 479 evolution into a notified area to which a certain amount  of local autonomy could be granted. The whole process, however, is  one of gradual evolution. The Act does  not  contemplate the  sudden conferment of all types of local  administrative powers  to  a  notified area committee.  The  provisions  of sections  24l  to 244 of the Act make it clear  that  it  is really  an  evolutionary  process.  The  provisions  that  a notified  area  will  exercise  only  such  powers  as   are entrusted  to it by the State Government  under section  242 and  that  only  such provisions of the  Act  as  the  State Government  considers  fit can be applicable to  a  notified area  show that the principal consideration is the  economic and administrative viability of the particular unit to  look after  its own local affairs. If the area  develops  further and   further   and  proves  viable  and   self   sufficient economically  and  efficient  administratively  it  may   be eventually converted into a municipal area. If on the  other hand,  the  area  does not come up to  expectations  is  not financially solvent or is administratively weak, the  status quo ante may have to be restored. If section 244 is read  in this  context and background, it will be very clear that  it is intended as a power enabling the Government to go forward or backward in the process of this evolution depending  upon the  circumstances  of  each case. It may turn  out  that  a particular  area  is not economically viable and  hence  the notification  issued under section 241 has to be  cancelled. It  may  be  that too much powers are  found  to  have  been entrusted  to a particular notified area committee and  some of  the  powers need to be withdrawn. It may again  be  that this  type  of administration does not property  work  in  a particular  situation and that the experiment undertaken  in

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that particular area is somewhat pre-mature. The situations, in  which a cancellation or modification of  a  notification under  section 241 may be called for, will be  numerous  and impossible to be spelt out in a statutory provision. But all the  same if one considers that sections 241 to 244  form  a compact  group  of  sections of the Act which  deal  with  a particular  topic and if one bears in mind the  contents  of sections  241  to 244, it will be clear that  the  power  of cancellation  or  modification  is  not  an  arbitrary   and unguided  one  but is one intended to be  exercised  in  the light  of  the  implementation  of  the  notification  in  a particular  local area having regard to the  main  principle and purpose behind section 241. It is, therefore,  difficult to  agree with the High Court  that section 244 contains  no guidelines  whatever  or  that  the  guidelines   admittedly discernible  in section 241 cannot be read into section  244 also.     It  is necessary to make a reference to the decision  in Dewan  Chand’s  case.  That  decision  was  rendered  in   a different  context  of provisions to which we  have  earlier referred. From the scheme of Chapter II of the Act, it could                                                   PG NO 480 be  seen  that a specific procedure was prescribed  for  the constitution of a municipality as well as for the  exclusion therefrom,  or inclusion therein, of other areas. Section  5 to 9 are elaborate provisions under which, before any one of these exercises was undertaken, the inhabitants of the  area were   entitled  to  participate  therein  and   the   State Governments  were  to  issue  the  notification  only  after considering   such  objections.  In particular,  if  it  was decided that a particular local area should be excluded from a  municipality,  the prescribed procedure had  to  be  gone through.  It  was in this context that section  10  and  the purpose  thereof  became unintelligible One could  not  even conceive  in what respects this would be different from  the power  to exclude an area from a municipality for  which  an elaborate   procedure  was  laid  down.  It  was  in   these circumstances  that  the  High Court held  that  Section  10 contained  a  drastic  power with no  limits  or  guidelines regarding  the  circumstances in which the  power  could  be invoked.  We may mention that, subsequent to this  decision, section 10 of the Act has been amended.     We  have pointed out that the scheme of sections 241  to 244  is  totally  different  and should  be  treated  as  an integral whole. Section 244 has to be understood, as section 10 was viewed, in the context of the preceding sections and, doing  so,  we  are of opinion  that  there  are  sufficient guidelines or indications available in the statute as to the circumstances  in which the power can be invoked. It  cannot be  said to be a naked and arbitrary power. In  the  present case, the appellants have attempt of to explain the  reasons why  the  order  of cancellation of  the  notifications  was issued.  After pointing out that 31 areas were  cancellation as notified areas in the State, the counter affidavit of the State  Government filed before the High Court  proceeded  to say that:     ". . . . . .. .. the working of all the 31 Notified Area Committees  ill  the  State  was  considered  and   examined thoroughly  because it was felt that these  Committees  art: not  functioning  properly  and in  other  words  failed  to provide  civic  amenities to the residents of the area  with their  lean resources. In the case of some of  the  Notified Area  Committees  the income was not sufficient  to  justify their  existence  because major portion of  the  income  was spent  on the establishment and the development of the  area

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remained  altogether neglected, Area very purpose for  which the  Notified  Area Committees were  created  for  providing better   civil  amenities  to  the  area  stands  forfeited. Moreover,  the  Notified Area  Committee  lacked  democratic                                                   PG NO 481 character  because  it consists of nominated  members  which were not liked by the inhabitants of the area concerned. The State Government also received many representations from the inhabitants  of the entire area for the dissolution  of  the Notified  Area  Committee,   Nadala,  Bholath,  Begowal  and Dhilwan for the dissolution of the Notified Area  Committees in  these areas. The State Govt. after having through  probe and  proper application of mind came to the conclusion  that the  Notified Area Committee, Nadala has failed  to  achieve the  very purpose for which  it was created and  its  income could not justify its existence and as such the State  Govt. exercised  its  legal  right  to  cancel  the   notification constituting  the Notified  Area Committees u/s 244  of  the Act,  having less than annual income of Rs.5 lakhs. As  such the State Government exercised its legal right to cancel the notification constituting Notified Area Committee u/s 241 of the  Act. The action taken by the State Govt.  is  perfectly legal  and  in accordance with the provisions  of  law.  The provisions  of Section 344 of the Act as already  stated  in para 5 of the written statement provide sufficient guideline to the State Government and are not arbitrary in nature."     It is not necessary for us to go into the correctness or otherwise  of  these averments because as  we  have  already mentioned. what was argued before us was a pure question  of law  that  section 244 does not contain any  indications  or gaudiness  for  the  action  to  be  taken  there-under.  No questions  of fact are at all involved in the contention  as urged  before:  the  High Court and before us.  We  are  not called  upon  to express any opinion as to whether,  in  the case  of  any  particular notification   involved  in  these cases,  the cancellation was, justified or not in the  light of  the  foregoing discussion and in the light of  what  has been  stated in the counter-affidavit. It is sufficient  for that  present  purposes  to say that  Section  244  contains sufficient  guidelines  to  act thereunder  and  it  is  not possible to accept the plea that section 244 itself is ultra vires  and should be declared void.     For  the  reasons  discussed above,  we  hold  that  the provisions of section 244 of the Act are valid. They  cannot be  said  to  be had being violative of article  14  of  the Constitution. The appeals are allowed. There  will,  however, be no order as to costs. S.L.                                     Appeals allowed.