Gram Panchayat Nasrali vs State of Punjab and others

S.S. Kang, J.

Whether with the inclusion of a part of the Sabha area within a municipality under subsection (3) of Section 5 of the Punjab Municipal Act, 1911 the Shamlat Deh which vested in the Gram Panchayat of the Sabha and which now falls within the extended municipal limits, comes to vest in the municipality, is the spinal question which falls for determination in this writ petition.

The factual matrix juxta posed with the relevant statutory provisions will illumine the contours of the controversy, village Nasrali is situate on the out skirts of Mandi Gobindgarh, a flourishing and expanding town. The Gram Panchayat of this village owned 87 Bighas and 19 Biswas of land situated within the revenue estate of this village. The income from this land is the main financial source of the Panchayat which has out of this income constructed the building of the Primary School; paved the village streets; built a Veterinary Hospital; provided street lights and is maintaining the above amenities and has engaged 4 sweepers for keeping the village streets clean and tidy.

By a notification dated August 20, 1976 (Copy Annexure P.2), the State Government in exercise of the powers conferred on it under subsection (3) of Section 5 of the Punjab Municipal Act extended the limits of Gobindgarh Municipality with the result that vast areas of land of the surrounding villages were included within the limits of the Municipal Committee, Gobindgarh. A part of the Sabha area including the Shamlat land owned by the Gram Panchayat Nasrali was also included within the municipal limits. Thereafter, the officials of the Municipal Committee started claiming that the abovementioned Gram Panchayat land had come to vest in the Municipal Committee. A letter was written on its behalf to the NaibTehsildar requesting that the mutation of the Shamlat land vesting in the Gram Panchayat Nasrali be mutated in the name of the Municipal Committee, Gobindgarh. Aggrieved, by this conduct of the officials of the Municipal Committee, the Gram Panchayat Nasrali has filed this writ petition.

The respondents appeared and filed two separate written statements broadly controverting the pleas raised in the writ petition. The Municipal Committee asserted that the land had been transferred by the Government to the Municipal Committee in 1973. It was contended that with the inclusion of a part of the Gram Sabha Area and some Shamilat land within the municipality the Shamilat land came to vest in the Municipality.

Village Nasrali was declared by the Punjab Government a Sabha area under section 4 of the Punjab Gram Panchayat Act. Thereafter Gram Panchayat Nasrali was constituted under subsection (2) of section 6 of the said Act. A Gram Panchayat constituted under this section is a body corporate having perpetual succession and a common seal, and subject to any restriction prescribed by law, has power to acquire, hold, administer and transfer movable property and immovable property. By virtue of the provisions of section 4 of the Punjab Village Common Lands (Regulation) Act, 1961, Shamilat deh of village Nasrali came to vest in the Gram Panchayat, Nasrali. The respondents have not produced any orders passed by the Punjab Government transferring the shamilat land belonging to the petitioner to the Municipality. The notification under section 5(3) of the Punjab Municipal Act only extended the territorial jurisdiction of the Municipal Committee, Gobindgarh by including local areas lying around it, within its limits. There is no mention in this notification that the land in dispute had been transferred from the ownership of the petitioner and vested in the Municipal Committee, Gobindgarh. The language of the notification is clear and unambiguous. There is no scope for any inference that the land in dispute had been transferred by this notification to the Municipal Committee.

There is no provision in the Punjab Municipal Act divesting the Gram Panchayat of its property by the inclusion of a part of Sabha area within the municipal limits. Similarly there is no provision in this Act for vesting such land in the Municipal Committee. The provisions of section 5 rather exclude any such interpretation. It will be appropriate at this stage to set down the relevant provisions of section 5 of the Punjab Municipal Act. They are reproduced below :

"5. Notification of intention to alter limits of municipality. (1) The State Government, may, by notification published in the official gazette and in such other manner as it may determine, declare its intention to include within a municipality any local area in the vicinity of the same and defined in the notification, whether such local area is Municipality or notified area under this Act or not.

(2) Any inhabitant of a municipality or local area in respect of which a notification has been published under subsection (1), may, should he object to the alteration proposed, submit his objection in writing through the Deputy Commissioner to the State Government within six weeks from the publication of the notification in the Official Gazette and the State Government shall take such objection into consideration.

(3) When six weeks from the publication of the notification have expired, and the State Government has considered the objections (if any) which have been submitted under subsection (2), the State Government may, by notification, include the local area in the municipality.

(4) When any local area has been included in a Municipality under subsection (3) of this section of this Act, and except as the State Government may otherwise by notification direct, all rules, notification, byelaws, order, directions and powers made, issued or conferred under this Act and in force throughout the whole municipality at the time, shall apply to such area.

(5) When any local area included in a municipality under subsection(3) is a Sabha area or a part thereof under the Punjab Gram Panchayat Act, 1952, representation to the inhabitants of the local area so included, on the committee of the municipality, in which local area is included, shall be given in the prescribed manner.

(6) When any local area included in a municipality under subsection (3) is a municipality or a notified area under this Act,

(a) on and from the date of issue of the notification under subsection (3), except for the purpose of electing members for giving representation to the inhabitants of the local area so included, the members of the municipal committee or notified area committee, as the case may be, of the local area shall cease to hold office;

(b) the State Government shall in the notification issued under subsection (3) determine the number of members to be elected by the members of the municipal committee or notified area committee for giving representation, on the committee of the municipality in which the local area is included hereinafter referred to as the successor Municipal Committee) to the inhabitants of the local area included in that municipality;

(c) the members of the Municipal Committee or the notified area committee, as the case may be, of the local area included in the municipality shall, within a period of one month of the date of issue of the notification under sub section (3), elect from amongst themselves in the prescribed manner the number of members determined under clause (b),and if the requisite number of members is not elected within that period the State Government shall nominate such number of members, as has not been elected, from amongst the members of the municipal committee or notified area committee as the case may be;....

(e) on and from the date of issue of the notification under subsection (3),

(i) all rules, notifications, byelaws, orders, directions and powers made, issued or conferred and all taxes imposed under this Act and in force in such local area shall cease to be in force therein;

(ii) in respect of any tax, fee or any other amount due from any person to the municipal committee or notified area committee, as the case may be, of such local area, the successor municipal committee shall be deemed to have become the perpetual successor of such municipal committee or notified area committee and it may be recovered in the same manner as if the tax, fee or amount were due to the successor municipal committee;

(iii) all properties, movable and immovable together with all interests of whatsoever nature and kind therein vested in the municipal committee or notified area committee, as the case may be of such local area, immediately before the aforesaid date, shall vest in the successor Municipal committee;

(iv) any right, privilege, obligation or liability acquired, accrued or injured by the Municipal Committee or notified area committee, as the case may be, of such local area, shall be deemed to have become the right, privilege, obligation or liability of the successor Municipal Committee."

Subsection (3) empowers the Government to extend the territorial limits of a municipality by including the local area within such a municipality. Subsection(4) lays down that when any local area has been included in a municipality then the rules, notification, byelaws, orders, directions and powers made, issued or conferred under the Act shall apply to such included areas. Provision is made under subsection (5) for providing representation to the inhabitants of the included local area on committee of the municipality in the prescribed manner. Sub section (6) deals with the situation arising out of the inclusion in a municipality of another municipality or notified area. In such an exigency, among other things, the representation shall be given to the inhabitants of the freshly included area on the Committee of the Municipality and all rules, notification, byelaws, orders, directions etc.issued and all taxes imposed under this Act by the previous committee shall cease to be in force and under clause (iii) of this subrule all the movable and immovable properties vesting in the Municipal Committee or the notified area Committee, as the case may be, shall vest in the successor municipal committee. It is pertinent to notice that subsection (6) of section 5 takes care of only those cases in which the whole area of a municipality or the notified area as the case may be has been included within the limits of another municipal committee. In such situation the municipal committee or the notified area committee shall on their own inclusion in the successor Municipality cease to exist. Naturally provision had to be made to deal with the assets and liabilities of the included municipal committee or notified area committee. Section 5 does not provide as to what will happen when a part of a Gram Sabha or Shamlat land belonging to the Gram Panchayat is included within a municipality. It is completely silent regarding those situations. The only other provision which can have some bearing on this matter is section 56 of the Punjab Municipal Act. The relevant provisions thereof are reproduced below :

"S. 56 Property vested in committee (1) Subject to any special reservation made or to special conditions imposed by the State Government, all property of the nature hereinafter in this section specified and situated within the municipality, shall vest in and be under the control of the committee, and with all other property which has already vested, or may hereafter vest in the committee, shall be held and applied by it for the purposes of this Act, that is to say: (a) to (e)....

(f) all land or other property transferred to the committee by the Government or acquired by gift, purchase or otherwise for local public purposes;....."

The Municipal Committee has not produced any document by which the State Government may have transferred the land in dispute to the Municipal Committee. Admittedly, the municipal committee has not acquired this land by gift or purchase. As has been seen earlier the Gram Panchayat like any other individual has been specially empowered to own, acquire or possess immovable property. It cannot be divested of this property even by the State Government except under some valid legislative enactment. Even the Government by an executive fiat cannot divest a Gram Panchayat of its property and transfer the same to a Municipal Committee. By the mere inclusion of local areas within the Municipal Committee the lands possessed by the private individuals or other juridical persons do not come to vest in the Municipal Committee. All that happens is that the newly included areas come under the municipal administration. The inhabitants of the area get a right to be represented on the committee of the municipality. Subject to the direction of the State Government, all rules, notifications, byelaws, orders, directions etc. made, issued or conferred under the Punjab Municipal Act and in force in municipality are made applicable to such area but this does mean that even the property owned by or vested in a Gram Panchayat which may come to be included within the municipal limits shall cease to be its property and shall vest in the municipal committee.

It was then argued by Sh. A.N. Mittal, learned counsel for the Municipal Committee that section 4 of the Punjab Gram Panchayat Act and Rule 3 of the Punjab Gram Panchayat Rules, 1965 (for short the `Rules'') divests the Gram Panchayat of the ownership of its land which came to be included within the Municipal limits. It will be apposite at this stage to reproduce the relevant statutory provisions :

Punjab Gram Panchayat Act, 1952 : "S.4(3) If whole of the Sabha area is included in an urban estate to which the provisions of the Punjab Municipal Act, 1911, are applicable or in a City, municipality, cantonment or notified area under any law for the time being in force, the Sabha and the Gram Panchayat for that area shall cease to exist and the assets and liabilities of the Gram Panchayat shall be disposed of in the prescribed manner."

Punjab Gram Panchayat Rules, 1956: Rule 3. Disposal of assets and liabilities of Gram Sabha If the whole of the Sabha area is included in a municipality, cantonment or notified area all rights, obligations, property, assets and liabilities, if any, whether arising out of any contract or otherwise shall vest in the Municipal Committee, Cantonment Board or Notified Area Committee, as the case may be".

Subsection(3) of Section 4 provides that when the whole of the Sabha Area is included in a municipality, the Sabha and the Gram Panchayat of that area cease to exist. Their juristic personality come to an end. In that case, the assets and liabilities of the Gram Panchayat have to be disposed of. For the purpose a provision was made in rule 3 that when the whole of the Sabha area is included in a municipality then all the rights, obligations, property, assets and liabilities, if any, shall vest in the Municipal Committee. Previously there was a proviso to this rule that land which vested in the Panchayat under the Punjab Village Common Lands (Regulation) Act, 1961 or the lands, the management and control of which vested in the Panchayat under the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1949 shall revert to the cosharers adn the owners thereof. This proviso, however, was deleted in January, 1976. The effect was that after January, 1976 when a Gram Sabha or Gram Panchayat ceased to exist, under Section 4(3) the immovable property including the shamilat Deh and the other lands under the management and control of the Gram Panchayat shall vest in the Municipal Committee. The condition precedent, however, for the application of sub section (3) of Section 4 ibid and Rule 3 of the Rules is the inclusion of the whole of the Sabha Area within the municipal limits. It is only then that the Gram Sabha and the Gram Panchayat cease to exist. By partial inclusion of the Sabha area, the Gram Sabha or the Gram Panchayat remain very much alive. Their existence does not come to an end. They do not cease to be juristic persons. Whatever properties are owned by the Gram Panchayat, they remain within its ownership. The areas which are included in the municipal limits cease to be amenable to the provisions of the Punjab Gram Panchayat Act. The Gram Panchayat loses its jurisdiction over that area. They come to be administered by the Municipal Committee in accordance with the Punjab Municipal Act but that does not affect the title of the Gram Panchayat or the other private individuals and juristic persons. The lands remain the property of the Gram Panchayat. Similar controversy arose before the Mysore High Court. It was observed by a Division Bench of that Court in Smt. Manorama v. Jayabore Gowda and another, A.I.R. 1969 Mysore 263 as under :

"Ownership of certain land which had already vested in the Government under the provisions of Land Acquisition Act, held, could not get divested by inclusion thereof within the municipal limits of the Corporation under Ss 3(9) and 3B of the City of Bangalore Municipal Corporation Act. The Government''s power to transfer the land to another did not cease on such inclusion. By inclusion of an area under the said provisions, the only power which could vest in the Corporation was the power of Municipal administration and to apply to the said area all notifications, rules, byelaws, orders, directions and the like made under the Act and to levy and collect imposts created under the Corporation Act. Such inclusion did not make the Corporation its owner."

It is apparent from the above observation of the Division Bench of that Court that by inclusion of property within the limits of a municipality, the owner is not divested of its ownerships the property shall remain the property of the owner and only the power of municipal administration comes to vest in the municipality and it can apply to all the notifications, byelaws, rules etc to the land included.

On the other hand Shri A.N. Mittal, learned counsel for the Municipal Committee placed reliance on a recent decision of this Court in Gram Panchayat Moranwali v. State of Punjab and others, 1978 P.L.J. 390 : 1985 R.R.R. 474. Lodna My pointed attention was drawn to the following passage from that judgment :

"It is clear that under subsection (2), the Government is competent to include any area in or exclude any area from the Sabha area. It is further clear that neither the whole nor any part of a Municipality can be included in a Sabha area and further under the circumstances explained in the proviso to subsection (1), if it is so done, the assets and liabilities of the Municipal Committee shall vest in the Gram Panchayat of that Gram Sabha. Subsection (3) further clarifies that if whole of the Sabha area is included within the municipal limits, then the Sabha and the Gram Panchayat for that area shall cease to exist and the assets and liabilities of the Gram Panchayat shall be disposed of in the prescribed manner. In the instant case, a part of the land which vested in Gram Panchayat, Moranwali, has been included within the municipal limits of Sunam. The petitioner would stand divested of that area and it shall vest in Municipal Committee, Sunam. The disputed area vest in Gram Panchayat, Moranwali, by virtue of law and similarly it stands divested of it. The Gram Panchayat, Moranwali, did not pay any compensation when the area in dispute was vested in it and for the same reasons the question of payment of compensation to it for being divested of such area does not arise."

It is evident that the issue raised in that case was entirely different. It will be useful to refer to para 5 of the judgment to understand the above observation. It reads as under:

"The only point argued by the learned counsel for the petitioner is that once the Gram Panchayat, Moranwali, had been vested with certain property it could not be divested of it without payment of compensation". The observations have been made in the context of the argument of the learned counsel for the petitioner. In that case the Gram Panchayat had not been paid any compensation for the land in dispute. It was not disputed in that case that the land of the Gram Panchayat had come to vest in the Municipal Committee. In the present case, the sole contention of the learned counsel for the petitioner is that the land of the Gram Panchayat did not come to vest in the Municipal Committee. Reference was also made by Mr. Mittal to a Division Bench judgment of this Court in State of Haryana and others v. Gram Panchayat Fateh Singh and others. 1978 P.L.J. 263 : 1985 R.R.R. 472. The facts and the points of law decided in that case were entirely different. The point settled therein was that while readjusting the boundaries of Sabha area of the two Gram Sabhas the State Government was competent under subsection(2) of section 4 to take away the land owned by one Panchayat and to give it to another Panchayat. In the present case, the dispute is not between the two Panchayats; it is between Gram Panchayat and the Municipal Committee governed by two different sets of law. Moreover the Government has not transferred the land in dispute to the Municipality. So, the ratio of this case is not applicable to the facts of the case in hand.

Lastly, it was contended by Mr. Mittal that the term "vest" is of a limited connotation and its meanings are dependent on the context in which it is used. The Gram Panchayat was not the owner of the land in dispute, even if it be held that the land had come to vest in the Gram Panchayat. It is apparent from the perusal of the provisions more particularly section 5A of the Punjab Village Common Lands (Regulation) Act that the Gram Panchayat becomes the owner of the land vested in it under that Act. The Gram Panchayat has been authorised to gift the Shamilat land vested in it. The Panchayat has further been authorised to transfer the shamilat land by way of exchange. It can lease out such lands and can use the same for the purposes enumerated in rule 3 of the Rules framed under that Act which include amongst others, using this land for constructing hospitals, parks, Jhanjghar etc. It is clear from these facts that the Gram Panchayat was the owner of the land in dispute. Further the Municipal Committee can claim this land in dispute only if it were the property of the Gram Panchayat. If it did not belong to the Gram Panchayat, then the Municipal Committee cannot lay any claim thereto.

For the foregoing reasons I find that on the inclusion of a part of the Sabha area within the municipality, the shamilat land which vested in the Gram Panchayat of the Sabha and which now falls within the extended municipal limits, does not come to vest in the municipality.

The writ petition is consequently allowed and it is held that the dispute does not vest in the Gobindgarh Municipality and continues to be the property of Gram Panchayat Nasrali. No costs.