"Hurdle In Achievement Of Self Governance": Patna HC Holds Certain Provisions Of 'Bihar Municipal Amendment Act 2021' As Unconstitutional

In a significant order, the Patna High Court today declared certain provisions of the Bihar Municipal (Amendment) Act, 2021 which amended the State's 2007 Act, as unconstitutional while holding that certain amendments carried out in the 2007 Act are contrary to the 74th Constitutional Amendment as they placed hurdles in the achievement of self-governance.

For context, by virtue of the amendments made to the Bihar Municipal Act, 2007, inter alia, all the powers of appointment, selection, posting, and transfer of employees of Grade-C & D were taken over by the State Government. 

The issue in question

For further clarity, it may be noted that as per the original act of 2007, in respect of category 'A' and 'B' employees, appointments are to be made by the State Government in consultation with the Empowered Standing Committee and with respect to the latter two, i.e. category 'C' and 'D', the Chief Municipal Officer with the prior approval of the Empowered Standing Committee would make such appointment.

However, in the Amendment Act of 2021, the executive of the State Government had been given the power to undertake this task with the respect to the employees of Grade-C & D too.

It may be noted that the Empowered Standing Committee, which is the executive of the Municipal Authority, has administrative control of employees, however, the Amendment Act sought to take away such controlling rights, which, the petitioners in the instant matter argued, resulted in a concentration of power with the State Government which is against the spirit of devolution of powers.

It was their primary argument that the Empowered Standing Committee, which is an elected body and is answerable to the people is now (with the coming of the amendment act) at the mercy of the Directorate of Municipal Administration (controlled by the state government). In essence, they argued that the power of a body consisting of elected members had been taken away and vested in a centralized executive authority, i.e. the Directorate of Municipal Administration.

#BREAKING | The #PatnaHighCourt today declared the Bihar Municipal (Amendment) Act 2021 as UNCONSTITUTIONAL to the effect of amending Sections 36, 37, 38, 41 of the #BiharMunicipalAct 2007.

2007 Act has been restored in its entirety as prior to such amendment. pic.twitter.com/lcPtObvctD

— Live Law (@LiveLawIndia) October 21, 2022

Bihar Government's stand

Justifying its stand to bring in the Amendment Act, the Bihar Government argued before the Court that the amendment was brought in with a view to deal with a practical issue that was being faced in the free and fair appointment on the posts of Group 'C' as these positions were being used to "remain working in a particular municipal office for a long time", which lead to corruption.

The Government further argued that Post amendment, transfers of Group 'C' employees became possible, resulting in better management of the Municipalities with "efficient and experienced employees".

Court's observations

Having examined the amended provisions of the Act, the bench of Chief Justice Sanjay Karol and Justice S. Kumar noted that in total 4 Sections of the Amendment Act (which amended Sections 36, 37, 38, and 41 of the 2007 Act) had given complete authority to the State Government to prescribe method appointment, control, conduct, etc of Grade-C & D employees.

The Court also stressed that while the State Legislature does possess the ability to legislate on matters concerning municipal bodies, however, the degree of involvement of the State Government in the functioning of such municipal bodies has to be minimal

"...the impugned amendments to the extent of Section 2, amending Section 36; Section 3, amending Section 37; Section 4, amending Section 38; Section 5, amending Section 41 of the Municipal Act, by virtue of Bihar Municipal (Amendment) Act, 2021 (Bihar Act 06, 2021), are contrary to the Seventy Fourth Constitutional Amendment as both the major effects, i.e. the recentralization of power and institution of self-government being weakened as being dependent on the State Government for regulation of its employees, are incompatible with the idea, intent and design of the constitutional amendment and are manifestly arbitrary," the Court remarked as it stressed that there is a need to strike a balance in the devolution/self-government of municipal bodies and the control exercised thereon by the State, the Court opined.

Regarding the argument of the Bihar Government that corruption had prompted it to bring in the amendment act, the Court noted that the record put forth by the Government did not show that any inquiry was conducted into corruption in municipal bodies generally or with respect to an appointment in Group-C or D. The Court further noted that no example been put forth to establish the misuse of the power to recall an officer by municipalities and the consequent problems in administration arising therefrom.

Significantly, the Court further stressed that the State Government is already empowered to take action against municipalities vide the parent Act in case corrupt practices are prevailing, as claimed by the State Government.

In view of this, underlining that amending a provision of law is entirely permissible so long as such amendment does not fundamentally alter the overall scheme of the Act, the Court further remarked thus:

"In the face of existing provisions giving wide and far-ranging supervisory powers to the State, the path chosen is one that hampers/damages a hallmark of the third level of Government i.e. devolution of powers. It would have been entirely within the purview of the State to have initiated an investigation into the purported corrupt practices prevailing in municipal bodies compelled the taking of rectifying action and in the absence of such action being taken, itself enforced the order and in exceptional cases, after due opportunity of being heard, even dissolved the municipality."

"So far as the appointment of Group-C and D Employees is concerned and the irregularity/illegality plaguing this exercise, the constitutionally permissible answer would be to exercise powers already existing under the Statute, supervisory in nature and not to bring in an amendment which goes against the very spirit of joint/collective responsibility and the core reasons for which this amendment was brought to the Constitution."

Further, referring to Sections 27-B, 37 (1) to (3) and the wide range of functions and responsibilities under Sections 45 and 47 of the Municipal Act, the Court observed that the Municipalities have their own sphere of authority and function, however, now, with the coming of the Amendment Act, disproportionate power and authority now vests with the State Government, creating a situation that tilts completely in favor of the unilateral exercise of power by the latter.

"The impugned amendments place hurdles in the achievement of self-governance and therefore are liable to be removed...," the Court further added as it held that Sections 2, 3, 4, and 5 of the Bihar Municipal (Amendment) Act, 2021 are in contravention of the Bihar Municipal Act, 2007.

Case title - Dr. Ashish Kumar Sinha and others v. The Union of India and others along with connected matters

Case Citation: 2022 LiveLaw (Pat) 37

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