The JAMMU AND KASHMIR FINANCE COMMISSION FOR PANCHAYATS AND MUNICIPALITIES ACT, 2011

FINANCE COMMISSION
FOR PANCHAYATS AND
MUNICIPALITIES ACT, 2011
(Act No. XVI of 2011)
THE JAMMU AND KASHMIR FINANCE COMMISSION
FOR PANCHAYATS AND MUNICIPALITIES ACT, 2011
(Act No. XVI of 2011)
CONTENTS
Section.
CHAPTER I
Preliminary
1. Short title and commencement.
2. Definitions.
CHAPTER II
Constitution
3. Constitution of the Finance Commission for Panchayats and Municipalities.
4. Term of office of Chairperson and Members.
5. Member to act as Chairperson or to discharge his functions in certain
circumstances.
6. Removal of Chairperson and Members.
7. Vacancies etc. not to invalidate the proceedings of the Commission.
8. Procedures to be regulated by the Commission.
9. Office and other staff of the Commission.
CHAPTER III
Power and Functions of the Commission
10. Functions of the Commission.
Section.
11. Power to call for information and documents.
12. Report of the Commission.
CHAPTER IV
Finance, Accounts and Audit
13. Grants by the Government.
14. Accounts and audit of the Commission.
CHAPTER V
Miscellaneous
15. Members and officers to be public servants.
16. Protection of action taken in good faith.
17. Powers of the Government to make rules.
18. Power to remove difficulties.
–––––––
FINANCE COMMISSION FOR PANCHAYA TS & MUNICIPALITIES 121
THE JAMMU AND KASHMIR STATE FINANCE
COMMISSION FOR PANCHAYATS AND
MUNICIPALITIES ACT, 2011
(Act No. XVI of 2011)
[Received the assent of the Governor on 23rd April, 2011 and published
in the Government Gazette dated 25th April, 2011.]
An Act to provide for constitution of a State Finance Commission to
review the financial position of the Panchayats, Municipalities and suggesting
measures thereof and matters connected therewith or incidental thereto.
Be it enacted by the Jammu and Kashmir State Legislature in the Sixty-
second Year of the Republic of India as follows:––
CHAPTER I
Preliminary
1. Short title and commencement.––(1) This Act may be called the Jammu
and Kashmir 1[x x x] Finance Commission for Panchayats and Municipalities
Act, 2011.
2[(2) It shall come into force from such date as the Government may, by
notification in the *[Government Gazette], appoint].
2. Definitions.–– In this Act, unless the context otherwise requires, ––
(a) “Act” means the Jammu and Kashmir 1[x x x] Finance Commission
for Panchayats and Municipalities Act, 2011 ;
(b) “Commission” means the 1[x x x] Finance Commission for Panchayats
and Municipalities constituted under section 3 of the Act ;
(c) “Chairperson” means the Chairperson of the Commission ;
1. Word “State” omitted by S.O. 1229 (E) dated 31.03.2020.
2. Enforced vide SRO-195 dated 24-06-2011 w.e.f. 24th June, 2011.
* Now “Official Gazette”.
3. Substituted by S.O. 1229 (E) dated 31.03.2020 for “Government”.
122 FINANCE COMMISSION FOR PANCHAYA TS & MUNICIPALITIES
(d) “Government” means the 3[Government of Union territory of Jammu
and Kashmir] ;
(e) “Member” means a Member of the Commission and includes the
Chairperson ;
(f) “Municipality” means the Municipal Corporation, Municipal
Committee or a Municipal Council constituted under the Jammu
and Kashmir Municipal Corporation Act, 2000 or the Jammu and
Kashmir Municipal Act, 2000, as the case may be ;
(g) “Notification” means a notification published in the *[Government
Gazette] ;
(h) “Panchayats” means Panchayati Raj Institutions constituted under
the Jammu and Kashmir Panchayati Raj Act, 1989 ;
(i) “Panchayati Raj Institution” means an institution by whatever name
called, constituted under the Jammu and Kashmir Panchayati Raj
Act, 1989 ;
(j) “Prescribed” means prescribed by rules made under the Act.
CHAPTER II
Constitution
3. Constitution of the Finance Commission for Panchayats and
Municipalities.––(1) The Government shall, as soon as may be from the
commencement of the Act, and thereafter at the expiration of every fifth year,
constitute a “1[x x x] Finance Commission for Panchayats and Municipalities”
to review the financial position of Panchayats and Municipalities and to exercise
the powers conferred upon and to perform the functions assigned to it, under
the Act.
(2) The Commission shall consist of,––
(a) a Chairperson who shall be an eminent economist with expertise in
State finance, planning, rural development, panchayats and local
bodies ; and
1. Word “State” omitted by S.O. 1229 (E) dated 31.03.2020.
* Now “Official Gazette”.
FINANCE COMMISSION FOR PANCHAYA TS & MUNICIPALITIES 123
(b) such other members, not exceeding two, as the Government may
appoint from amongst persons of repute having excelled in
administration, planning, panchayats, municipalities, legal or
academic fields.
(3) The Chairperson and the Members shall be appointed by the
Government by notification.
(4) There shall be a Secretary to the Commission who shall be the Chief
Executive Officer of the Commission to be appointed by the Government.
(5) The Secretary shall exercise such powers and discharge such functions
of the Commission as it may delegate to him.
(6) The headquarters of the Commission shall be at such place as the
Government may determine.
4. Term of office of Chairperson and Members. ––(1) The Chairperson
and Members shall hold office as such for a term of one year from the date on
which they enter upon their office or until they submit the report to the
Government or attain the age of sixty-five years, whichever is earlier :
Provided that the Government may for reasons to be recorded in writing,
extend the term of the Commission for a period not exceeding six months :
Provided further that any member may, by writing under his hand,
addressed to the Government, resign from the office.
(2) The salary, allowances and other conditions of service of Chairperson
and a Member shall be such as may be prescribed from time to time :
Provided that if the Chairperson or a Member is at the time of his
appointment eligible for, or in respect of, a pension in respect of any previous
service, his salary in respect of service of Chairperson or a Member shall be
reduced, ––
(a) by the amount of that pension ; and
(b) if he has, before such appointment, received, in lieu of a portion of
the pension due to him in respect of such previous service, the
commuted value thereof, by the amount of that portion of the
pension.
124 FINANCE COMMISSION FOR PANCHAYA TS & MUNICIPALITIES
5. Member to act as Chairperson or to discharge his functions in certain
circumstances.––(1) In the event of occurrence of any vacancy in the office of
the Chairperson by reason of his death, resignation or otherwise, the
Government may, by notification, authorize one of the Members, to act as the
Chairperson until the appointment of a new Chairperson to fill such vacancy
for the remainder of the period.
(2) When the Chairperson is unable to discharge his functions owing to
absence on leave or otherwise, such one of the Members, as the Government
may, by notification, authorize in this behalf, shall discharge the functions of
the Chairperson until the date the Chairperson resumes his duties.
6. Removal of Chairperson and Members.–– The Chairperson or any
Member may be removed from the office on the ground of proved misbehaviour
or incapacity by the Government in the prescribed manner.
7. Vacancies etc. not to invalidate the proceedings of the Commission. ––
No act or proceedings of the Commission shall be questioned, or shall be
invalidated, merely on the ground of existence of any vacancy or defect in the
constitution of the Commission.
8. Procedures to be regulated by the Commission.––(1) The Commission
shall meet at such time and place as the Chairperson may deem fit.
(2) The Commission shall regulate its own procedure.
(3) The recommendations of the Commission shall be authenticated by
the Secretary of the Commission.
9. Office and other staff of the Commission.––(1) The Government shall
make available to the Commission an officer not below the rank of Additional
Secretary to Government having cumulative experience of working in
Panchayats, local bodies or any other such institution, as may be prescribed
by the Government, who shall be the Secretary of the Commission.
(2) The Government shall provide such other administrative or technical
staff to the Commission, as it may consider necessary.
(3) The salaries, allowances and conditions of service of the officers and
other staff of the Commission shall be such as may be prescribed.
FINANCE COMMISSION FOR PANCHAYA TS & MUNICIPALITIES 125
(4) Officers and staff of the Commission shall be under the administrative
control of the Chairperson and shall not be transferred from the Commission
without consulting the Commission.
CHAPTER III
Power and Functions of the Commission
10. Functions of the Commission.––The Commission shall perform all or
any of the following functions and shall make recommendations to the
Government as to:––
(i) the distribution between the 1[Union territory of Jammu and
Kashmir] and the Panchayats of the net proceeds of the taxes,
duties, tolls and fees leviable by the 1[Union territory of Jammu and
Kashmir], which may be divided between them and the allocation
between the Panchayats at all levels of their respective shares of
such proceeds ;
(ii) the determination of taxes, duties, tolls and fees which may be
assigned to, or appropriated by, the Panchayats ;
(iii) the grants-in-aid to the Panchayats from the Consolidated Fund of
the 1[Union territory of Jammu and Kashmir] ;
(iv) the measures needed to improve the financial position of the
Panchayats ;
(v) the distribution between the 1[Union territory of Jammu and
Kashmir] and the Municipalities of the net proceeds of the taxes,
duties, tolls and fees leviable by the 1[Union territory of Jammu and
Kashmir], which may be divided between them and the allocation
between the Municipalities at all levels of their respective shares
of such proceeds ;
(vi) the determination of the taxes, duties, tolls and fees which may be
assigned to, or appropriated by, the Municipalities ;
1. Substituted for “State” by S.O. 1229 (E) dated 31.03.2020.
126 FINANCE COMMISSION FOR PANCHAYA TS & MUNICIPALITIES
(vii) the grants-in-aid to the Municipalities from the Consolidated Fund
of the 1[Union territory of Jammu and Kashmir] ;
(viii) the measures needed to improve the financial position of the
Municipalities ;
(ix) any other matter referred to the Finance Commission by the
Government in the interests of sound finance of Panchayats or
Municipalities ;
(x) any other matter as may be referred to the Commission by the
Government from time to time ;
(xi) any other matter as may be ancillary or incidental to any of the
aforesaid functions.
11. Power to call for information and documents.––(1) The Commission
may require any public servant or any other person who, in its opinion is able
to furnish information or produce documents, relevant to the functions of the
Commission, to furnish any such information or produce any such documents.
(2) Notwithstanding anything contained in the foregoing sub-section,
no person shall be required or authorized by virtue of the Act to furnish any
such information or answer any such question or produce so much of any
document as might, ––
(a) prejudice the security of the 1[Union territory of Jammu and
Kashmir] ; or
(b) involve the disclosure of proceedings of the Cabinet of the
2[Government of the Union territory of Jammu and Kashmir] or any
Committee of the Cabinet :
Provided that the privilege to this effect is claimed by the concerned
person or functionary in accordance with the law.
12. Report of the Commission.–– The Commission shall submit its report
to the Government within the time prescribed.
CHAPTER IV
1. Substituted for “State” by S.O. 1229 (E) dated 31.03.2020.
2. Substituted ibid for “Government”.
3. Substituted ibid for “Legislature”.
FINANCE COMMISSION FOR PANCHAYA TS & MUNICIPALITIES 127
Finance, Accounts and Audit
13. Grants by the Government.––(1) The 2[Government of Union territory
of Jammu and Kashmir] shall after due appropriation made by 3[Legislative
Assembly] by law in this behalf pay to the Commission by way of grants such
sums of money as the 1[Government of Union territory of Jammu and Kashmir]
may think fit for being utilized for the purposes of the Act.
(2) The Commission may spend such sums as it thinks fit for performing
its functions under the Act, and such sums shall be treated as expenditure
payable out of the grants referred to in sub-section (1).
14. Accounts and audit of the Commission.––(1) The Commission shall
maintain proper accounts and other relevant records and prepare statement of
accounts in such form as may be prescribed.
(2) The accounts of the Commission shall be audited in the prescribed
manner.
CHAPTER V
Miscellaneous
15. Members and officers to be public servants.–– Every member of the
Commission, and every officer appointed or authorized by the Commission to
exercise functions under the Act, shall be deemed to be public servant within
the meaning of 2[section 21 of the Indian Penal Code (45 of 1860)].
16. Protection of action taken in good faith.–– No suit or legal proceeding
shall lie against the Government, Commission or any Member thereof or any
person acting under the direction of the Commission in respect of anything
which is in good faith done or intended to be done in pursuance of the Act, or
of any rules or any order made thereunder.
17. Powers of the Government to make rules. ––(1) The Government may,
by notification, make rules for the purpose of carrying into effect the provisions
of the Act.
(2) In particular and without prejudice to the generality of the foregoing
power, such rules may provide for all or any of the following matters, namely: ––
1. Substituted for “Government” by S.O. 1229 (E) dated 31.03.2020.
2. Substituted ibid for “section 21 of the Ranbir Penal Code”.
128 FINANCE COMMISSION FOR PANCHAYA TS & MUNICIPALITIES
(i) the other terms and conditions of service of the Members under
sub-section (2) of section 4;
(ii) the procedure for removal of Chairperson and Members under
section 6;
(iii) the form in which the statement of accounts is to be prepared under
sub-section (1) of section 14;
(iv) the manner of auditing the accounts of the Commission;
(v) any other matter as is, or may be, required to be prescribed.
18. Power to remove difficulties.–– If any difficulty arises in giving effect
to the provisions of the Act, the Government may, by order published in the
*[Government Gazette], make such provisions, not inconsistent with the
provisions of the Act and the rules, as appear to it to be necessary or expedient
for removing the difficulty :
Provided that no such order shall be made after the expiry of the period
of two years from the date of commencement of the Act.
–––––––
* Now “Official Gazette”.

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