LexKHAMBALIA MUNICIPALITY & ANR. versus STATE OF GUJARAT
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A B c D E F G H KHAMBALIA MUNICIPALITY & ANR. v. STATE OF GUJARAT February 16, 1967 [K. N. WANCHOO, R. S. BACHAWAT AND J.M. SHE!.AT, JJ.) Gujarat Panc/wyats Act, 1961 (G11j. Act No. 6 of 1962), s. 9(1) and (2j-lnquiry, if delegated-Applicability ro m1111icipa/ di.urict-Sectio11 9 if suffers from excessive delegation. The respondent-State authorised its Development Commissioner to exercise powers exercisable by the Government under s. 9( I) of the Gujarat Panchayats Act, 1961. After making the prescribed inquiry under s. 9(1) of the Act the Development Commissioner i8'ued a notifica- tion under s. 9(1) of the Act declaring the whole area of the existin1 limits of the appellant-municipalitr, to be a nagar. The appellants field a writ petition for quashing the notdlcation and declariag s. 9 of the Act as ultra vires and unconstitutional which the High Court dismissed. In ap~ peal to this Court. the appellants contended that (i) the power to make enquiry under s. 9(1) was not delegated to the Development Commi.- sioner; (ii) s. 9 of the Act did not apply to a municipal district as it was not a local area or such other administrative unit or part thereof; (iii) the notification was issued in mala fide exercise of power as it was issued after the mµnicipatity indicated its unwillingness to accept the opinion of tfle Gove·mment to include within its limits certain vadi areas; and (iv) s. 9 of the Act was ultra vires by reasons of excessive delegation of legis- lative power in favour of the State Government. HELD : (per Full Court) (i) The power to make the declaration necessarily carries with it the power to make the inquiry prelimina~y to the declaration. There can be no declaration without an inquiry. The Development Commissioner was sufficiently authorised to issue the decla- ration after making the prescribed inquirv. [635 G-Hl (ii) Section 307 Of the Act shows that a local area co-extensive with or included within ·the limits of a municipal district or a municipal borough may be declared to be a gram or nagar under s. 9 and on such a declara~ tion, the Municipality functioning within the local area or part thereof ceases to exist. On a combined reading of ss. 9 and 307, it would appear that a municipal borough is an administrative unit within the meaning of s. 9( 1) and a local area co-extensive with o·r included in a municipal borough may be declared to be a gram or nagar. [636 B·CJ (iii) Tb.ere was no mala fide in the issuance of the notification. Under s. 4(1 )(b) of the Gujarat Municipalities Act, 1963, the State Gov~rn ment has the power to alter the limits of the municipal borough after consulting the municipality. The State Government had duly consulted the .municipality. If the Government wanted to exercise its powers under the aforesaid s. 4(l)(b), it could do so without the consent of the muni- cipality. For the purpose of imposing its opinion, it wa~ not necessary for the gove·rnment to take recourse to the device of a declaration under s. 9( I) of the Gujarat Panchayats Act., 1961. Nor was the surroundinc vadi area included in the nagar declared by the notification under s. 9( 1). [636 F'. GJ 632 SUPRl!MI! CO~T Rl!PORTS [1967] 2 S.C.R. (iv) (PN Wanchoo and Bachawat, JJ.) Section 9(l) does not suffer from the vice of cxccs~ive delegation. An cssentiul legislative function consists in the determination of a legislative policy and its formulation as <t binding rule of conduct. Having laid down the legislative policy, the legislature nL1y confer discretion on an administrative agency as to the 1..·xccution of 1hc policy Jnd leave it lo the agency to \1,.·ork out the details within the frame work of the policy. [637 B-C] It i• the policy of the Act that panchayats •hould be established within a reasonable time in all local areas "''ith population not exceeding 3(},000 ;ind not included in a noiificd area or a cantonment. This policy guides and controls tbc di~crctionary power of the Slate Government under s. 9( 1). Having re~ard to the policy of the Act, it is plain that the dis- crelionary power under s. 9(2) is vested in the State Government for the purpo~e of rcor~ani.;ing. the local ;ircas into new units 0f local sclf- Government. [6J8 C.D] It i1 not correct to say that even a municipal borough '"°'ith a popula- tion of over 30,000 i• at the mercy of the State Government under s. 9(1). Under s. 9( 1) read wit
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