74th Constitutional Amendment Does Not Take Away States' Power To Legislate In The Matter Of 'Local Bodies': Supreme Court

The Supreme Court observed that the Constitution (Seventy-Fourth Amendment) Act, 1992, does not take away legislative competence of the State Legislatures to legislate on the subject of local Government.

It is the State Legislature alone which is competent to legislate in respect of the municipalities with only one limitation that the provisions of the State Act cannot be inconsistent with the mandate of the Scheme of Part IXA of the Constitution, the bench comprising Justices Hemant Gupta and V. Ramasubramanian said.

In this case, the Rajasthan High Court set aside a notification declaring Gram Panchayat Roopbas, District Bharatpur as Municipal Board issued by the State on the ground that no public notification as contemplated under Article 243Q(2) of the Constitution of India has been produced specifying Gram Panchayat Roopbas as a "transitional area" and thus, it cannot be declared as a Municipal Board.

In appeal filed by the State, the Apex court bench observed that the High Court has misread the scope of Part IXA of the Constitution and Article 243Q of the Constitution contemplating that the transitional area has to be notified under such provision. It observed:

The scheme of the Constitutional Amendment is not to take away legislative competence of the State Legislatures to legislate on the subject of local Government but it is more to ensure that the three tiers of governance are strengthened as part of democratic set up....Since the local Government falls in entry 5 of List II of the Seventh Schedule, therefore, it is the State Legislature alone which is competent to legislate in respect of the municipalities with only one limitation that the provisions of the State Act cannot be inconsistent  with the mandate of the Scheme of Part IXA of the Constitution.

The court noted that the scheme of Part IXA of the Municipalities Act does not contemplate a separate notification under Article 243Q of the Constitution and thereafter under Section 5 of the Municipalities Act. The bench said:

As Section 5 of the Municipalities Act is not inconsistent with any provisions of Article 243Q of the Constitution, therefore, two notifications are not contemplated or warranted under the Scheme of Part IXA or the Municipalities Act...The State Government is competent to divide the Municipalities in the State into classes according to their income or other factors like population or importance of the local area and other circumstances as provided under Section 329 of the Municipalities Act.

The court noticed that the State Government had exercised powers to establish Municipality in terms of Section 5 of the Municipalities Act. Such notifications cannot be said to be illegal or arbitrary in any manner and were rightly issued in exercise of the statutory powers conferred on the State by the Legislature, the bench observed while allowing the appeal.

Headnotes

Constitution of India, 1950 ; Part IXA ; Entry 5 of List II of the Seventh Schedule - It is the State Legislature alone which is competent to legislate in respect of the municipalities with only one limitation that the provisions of the State Act cannot be inconsistent with the mandate of the Scheme of Part IXA of the Constitution.

Constitution (Seventy-Fourth Amendment) Act, 1992 - The scheme of the Constitutional Amendment is not to take away legislative competence of the State Legislatures to legislate on the subject of local Government but it is more to ensure that the three tiers of governance are strengthened as part of democratic set up. (Para

Constitution of India, 1950 ; Part IXA - Rajasthan Municipalities Act, 2009 ; Section 5, 329 - The scheme of Part IXA does not contemplate a separate notification under Article 243Q of the Constitution and thereafter under Section 5 of the Municipalities Act. As Section 5 of the Municipalities Act is not inconsistent with any provisions of Article 243Q of the Constitution, therefore, two notifications are not contemplated or warranted under the Scheme of Part IXA or the Municipalities Act - The State Government is competent to divide the Municipalities in the State into classes according to their income or other factors like population or importance of the local area and other circumstances as provided under Section 329 of the Municipalities Act. (Para 16-17)

Summary: Appeal against Rajasthan High Court set aside a notification declaring Gram Panchayat Roopbas, District Bharatpur as Municipal Board on the ground that no public notification as contemplated under Article 243Q(2) of the Constitution of India has been produced specifying Gram Panchayat Roopbas as a "transitional area" and thus, it cannot be declared as a Municipal Board - Allowed - State Government had exercised powers to establish Municipality in terms of Section 5 of the Municipalities Act. 

Case details

State of Rajasthan vs Ashok Khetoliya | CA 1814 OF 2022 | 10 March 2022

Citation: 2022 LiveLaw (SC) 263

Coram: Justices Hemant Gupta and V. Ramasubramanian