Chapter II. Constitution Alteration and Conversion of Municipalities

4. Constitution, alteration and conversion of Municipalities.—

(1) The Government shall, by notification in the Gazette, constitute with effect from such dare as specified in the notification, -

(a) a "Town Panchayat" for a transitional area;

(b) a "Municipal Council" fora smaller urban area; and

(c) a "Municipal Corporation" for a larger urban area, and specify the name of such Municipalities.

(2) The Government may, by notification,-

(a) exclude any municipal area from the operation of this act; or

(b) exclude from a municipal area comprised therein and defined in the notification ; or

(c) divide any municipal area into two or more municipal areas; or

(d) unite two or more municipal areas; or

(e) unite the territorial area of a Panchayat geographically lying adjacent to a Municipal area, with the Municipality; or

(f) convert a Village Panchayat into a 5[Town Panchayat or a Municipal Council]; or

(g) convert a Town Panchayat into a Municipal Council; or

(h) convert a Municipal Council into a Municipal Corporation:

6[Provided that, before issuing such a notification the requirements under Article 243Q and sub-section (1) shall be fulfilled and the suggestions and opinions of the Village Panchayat or Town Panchayat or Municipal Council or Municipal Corporation concerned, shall be considered.] Provided further that any notification issued under this sub-section shall not be brought into force except in such a way as to coincide with the expiry of the term of the existing Municipal Council or Village Panchayat in that territorial area.

(3) The Government may at the request of a Municipality or after consultation with the Municipality, at any time, alter the name of a Municipality, after previous publication of the proposal by notification in the Gazette.

(4) Where any Village Panchayat area is constituted as, or included in, a 7[Municipality], the Government may pass such orders as they may deem fit as to the transfer to the Municipality or disposal otherwise of the assets or institutions of such Panchayat in that area, and as to

the discharge of the liabilities if any, of such Panchayat relating to such assets or institutions. 

(5) Where any village Panchayat area is constituted as, or included in a 8[Municipality], all taxes, fees or other charges levied in that area under the enactments or regulations then in force shall, from the date of constitution or inclusion, as the case may be, cease to have effect and all such taxes, fees or other charges shall be levied in that area in accordance with the provisions of this Act and the rules, regulations and bye-laws made thereunder.

5. Substituted for the words "Town Panchayat" by Act 14 of 1999, w.e.f. 24-3-1999.

6. First provision substituted by Act 14 of 1999, w.e.f. 24-3-1999.

7. Substituted for the words "Town Panchayat" by Act 14 of 1999, w.e.f. 24-3-1999.

8. Substituted for the words "Town Panchayat" by Act 14 of 1999, w.e.f. 24-3-1999.

(6) Where a Municipality is abolished, this Act and all notifications, rules, regulations, bye-laws, orders, directions and powers issued, made or conferred under this Act shall cease to apply to the area comprised within the Municipality, the balance of the Municipal fund and all other property vested in the Municipality at the time of its abolition shall vest in the succeeding local authority coming into existence or if a local authority does not come into existence in that area, in the Government and the liabilities of the Municipality shall be transferred to such local authority or as the case may be, the Government.

(7) All funds and property vested in the Government under sub-section (6) shall be applied to discharge the liabilities transferred to the Government under that sub-section and for the promotion of the safety, health, welfare or convenience of the inhabitants of the area comprised in the Municipality.