# MUNICIPAL COMMITTEE, AMRITSAR & ORS v. STATE OF PUNJAB & ANR

- **Citation:** [1970] 2 S.C.R. 375
- **Court:** Supreme Court of India
- **Decided:** 1969-09-12
- **Case number:** Civil Appeal No. 1321 of 1966
- **Bench:** J. C. Shah, V. Ramaswami, A. N. Grover
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/municipal-committee-amritsar-ors-v-state-of-punjab-anr-4824
- **Pages:** 15

## Headnote

Constitution of India, 1950, Art. 31A(l)(b) and 31(2)-Management
of schools taken over for limited period-Property pertaining also acquir·
ed-Acquisition in violation of Art. 31(2)-/f protected by Art. 3!A(l)
(b)-Punjab Municipal Act (3 of 1911), ss. 52(1)(g) and 59-Constitutional validity of-Punjab Local Authorities (Aided Schools) Act (22 of
1959), ss. 3(2) and 6-Scope of-Act retrospective-Whether notification
issued thereunder also retrospective.
The appellant-Committee was constituted under the Punjab Municipal
Act 1911, and was running a number of municipal schools, for some of
which it was ~el.ting grant-in-aid from the respondent-State.
The respon-.
dent took an administrative decision. without any statutory authority, to
provinciali•e all the schools run by the local bodies in the State with
effect from October I, 1957, and till June 1959, various steps in the process
of.provincialisation were taken. In June 1959. the Punjab Local Authorities (Aided Schools) Act. 1959. was passed after obtaining the assent of
the President. The Act was deemed to have come into force with effect
from October 1, 1957.
The scheme of the Act is that it is initially left to the local authority
to pass a resolution to t'ransfer the management and control of aided
schools to the State Government.
In order to employ compulsive persuasion the State Government can withdraw the grant-in-aid in respect of the
aided schools if such authority does not pass a resollltion in· terms of s. 3
within a period of 3 months from the date of the enactment of the
statute. Section 5 gives power to the State Government to take over aided
schools where the local authority neglects to perform its duty or if it is
conSidered ·necessary in public interest to take over the management for
a period not exceeding ten years, but only after giving the local authority
a rea·sonable oppOrtunity for showing cause.
The proviso to the section
arm-s the State Government with powers, in case of emergency and in the
interests of students, to take over the management straight away
after
publica1ion df a notification to that effect. There is no provision, however,
for an automatic retransfer of the property after lapse of the period of
10 years.
Section 6 introduces amendments in ss. 52 and 59 of the
Punjab MuniCip
Act.
Clause (g), introduced in s. 52(1), enables ;he
State Government t
et an annual contribution from the local bodies, and
the amendments to s.
9, vest in the State not only the management of
the schools t'!l<en over but also the interests in the movable and immovable properties pertaining thereto.
As the appellant decided not to pass the resolution under s. 3 the
respondent issued a notitkation 'on September 26, 1960. taking over .. for
a pe{iod of 10 years, the management of the aided schools specified in
the schedule' to the notification. On the auestion of payment of the contribution it was resolved on Januarv 3, 1962, that the payment be made
with effect from October 1, 1957, While retaining the prop-ietary rights in
the schools; ·but_ the appellant subsequently passed seve'ral
resolutions
practically resdniling this resolution with respect to the payment of any
376
SUPREME COURT REPORTS
[1970] 2 S.C.R.
contribution. On April 10, 1964, the appellant was required by order to
pay about Rs. 53 lakhs on account of the tontribution for the maintenance of the provincialised schools for the period 1957-58 to 1963-64.
Thereupon, the appellant filed a petition undelr Arts. 226 and 227 in the
High Court, challenging the orders and the constitutional validity of the
Act.
The petition was dismissed.
In appeal to this Court it was contended : (1) The taking over of the
movable and immovable property of the appellant did not fall within Art.
31A(l)(b) and the action was in direct contravention of Art. 31(2); (2)
The . notification dated September 26, 1960, was not protected by the
provis.o to s. 5, because, there was no question of any emefgericy, nor was
such emergency pleade

## Text

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375
MUNICIPAL COMMITTEE, AMRITSAR & ORS.
v.
STATE OF PUNJAB & ANR.
September 12, 1969.
[J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.]
Constitution of India, 1950, Art. 31A(l)(b) and 31(2)-Management
of schools taken over for limited period-Property pertaining also acquir·
ed-Acquisition in violation of Art. 31(2)-/f protected by Art. 3!A(l)
(b)-Punjab Municipal Act (3 of 1911), ss. 52(1)(g) and 59-Constitutional validity of-Punjab Local Authorities (Aided Schools) Act (22 of
1959), ss. 3(2) and 6-Scope of-Act retrospective-Whether notification
issued thereunder also retrospective.
The appellant-Committee was constituted under the Punjab Municipal
Act 1911, and was running a number of municipal schools, for some of
which it was ~el.ting grant-in-aid from the respondent-State.
The respon-.
dent took an administrative decision. without any statutory authority, to
provinciali•e all the schools run by the local bodies in the State with
effect from October I, 1957, and till June 1959, various steps in the process
of.provincialisation were taken. In June 1959. the Punjab Local Authorities (Aided Schools) Act. 1959. was passed after obtaining the assent of
the President. The Act was deemed to have come into force with effect
from October 1, 1957.
The scheme of the Act is that it is initially left to the local authority
to pass a resolution to t'ransfer the management and control of aided
schools to the State Government.
In order to employ compulsive persuasion the State Government can withdraw the grant-in-aid in respect of the
aided schools if such authority does not pass a resollltion in· terms of s. 3
within a period of 3 months from the date of the enactment of the
statute. Section 5 gives power to the State Government to take over aided
schools where the local authority neglects to perform its duty or if it is
conSidered ·necessary in public interest to take over the management for
a period not exceeding ten years, but only after giving the local authority
a rea·sonable oppOrtunity for showing cause.
The proviso to the section
arm-s the State Government with powers, in case of emergency and in the
interests of students, to take over the management straight away
after
publica1ion df a notification to that effect. There is no provision, however,
for an automatic retransfer of the property after lapse of the period of
10 years.
Section 6 introduces amendments in ss. 52 and 59 of the
Punjab MuniCip
Act.
Clause (g), introduced in s. 52(1), enables ;he
State Government t
et an annual contribution from the local bodies, and
the amendments to s.
9, vest in the State not only the management of
the schools t'!l<en over but also the interests in the movable and immovable properties pertaining thereto.
As the appellant decided not to pass the resolution under s. 3 the
respondent issued a notitkation 'on September 26, 1960. taking over .. for
a pe{iod of 10 years, the management of the aided schools specified in
the schedule' to the notification. On the auestion of payment of the contribution it was resolved on Januarv 3, 1962, that the payment be made
with effect from October 1, 1957, While retaining the prop-ietary rights in
the schools; ·but_ the appellant subsequently passed seve'ral
resolutions
practically resdniling this resolution with respect to the payment of any
376
SUPREME COURT REPORTS
[1970] 2 S.C.R.
contribution. On April 10, 1964, the appellant was required by order to
pay about Rs. 53 lakhs on account of the tontribution for the maintenance of the provincialised schools for the period 1957-58 to 1963-64.
Thereupon, the appellant filed a petition undelr Arts. 226 and 227 in the
High Court, challenging the orders and the constitutional validity of the
Act.
The petition was dismissed.
In appeal to this Court it was contended : (1) The taking over of the
movable and immovable property of the appellant did not fall within Art.
31A(l)(b) and the action was in direct contravention of Art. 31(2); (2)
The . notification dated September 26, 1960, was not protected by the
provis.o to s. 5, because, there was no question of any emefgericy, nor was
such emergency pleaded or proved by the respondent; ( 3) The notification could not_ and did not validate the action prior to the date when it
was issued; ( 4) Section 6 of the Act whirh effected amendments of the
provisions of the Punjab Municipal Act could not be attracted; and (5)
Section 3 (2} and the amendments which would become operative under
s. 6 in respect of ss. 52( I) and 59 of the Punjab Municioal Act, are
void and unconstitutional.
HELD: (1) Under Art. 3!A(l)(b) it is only the management and
control of the aided schools, that could be taken over for a limited period
in the public interest or inorder to secure their proper management, but
pr9prietary interests in movable and immovable properties pertaining to
the schools and belonging to the appellant could not be acquired. Jn the
present case in view of the terms·of the resolution of January 3, 1962 and
the subsequent resolutions of the appellant it coμld not be said that the
resolution fell within the first part of s. 3 and that action was taken by the
State pursuant to such resolution. The action was taken by the respondent
only under s. 5 and when once action was si:> taken all the Properties,
movable and immovable, belonging to the local body pertaining to
the
schools taken over, became the property of the State, by virtue of the
arr endments made in s. 59 of the Punjab Municipal Act.
When the
proprietary interest in the movable and
immo\"able
property pertaining
to the schools and belonging to the Committee is Illus acquired, the action
is not protected by A\'t. 31A(l)(b) as it is nothing short of compulsory
acquisition within the meaning of Art. 31(2) of the Constitution and is
in violation of that .Article _when there is no provision
for payment of
compensation. [386 A-F; 387 F--0]
'
(2) Jn the notification there was no indication that the management
of the schools was being taken over because any emergency existed. The
State could not sh0w hv placin~ material before the court that it was a
case of emergency justifying the action under the proviso to s. 5, when
no foundation in that behalf had been lai~. in the writ petition. (388 ~;
D-El
(3) The mere fact that the Act in terms was feiiOSpective would not
make the notification issued under the proviso to s. 5, retrospective,
in
the absence of express words or aporopriate language from which ret'roactivity would he implied.
The notification only meant that the manage·
·rnent was taken over from the date of the notification and not from any
orior date. Therefore. whatever was done before the date of the notificatioq
·regarding the assumption of management and vesting of the Committee's
property was void and illegal. (389 A-CJ
( 4) Under s. 6 of the Act it is only after the local authority has
passed a resolution under s. 3 or the State Government .has taken over
manaw,nwnt of the aided schools under s. 5, that ss. 52. and 59 of the
Punjab Municipal Act would be deemed to have been amended tn the
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MUNICIPAL COMMITTEE v. PUNJAB (Grover, !.) 377
manner specified in the Schedule with effect from October I 1957. If
t~e notification in the p~esent case, .could. no~ ?e given retrospe~tive,opera
tion, the amendments in the Pun.1ab Municipal Act would be effective
only after the date of the notification and not for the prior period. Thus,
even on the assumption that the provisions of the Act are valid the State
could not ask for any contribution from the Committee for thz period
prior to the date of the notification. [389 Ii-FJ
(5) By asking the Committee to make contributions fro~ its funds
under the newly introduced cl. g in s. 52(1), to the cost of the schools
which have been taken over by the State, part of its funds are being compulsorily acquired by the State, ''"hich could not be done except in accordance with the provisions contained in Art. 31(2). [390 C-D, E-FJ
When the State Government makes a direction under s. 3(2) that the
aided schools shall be taken over, the proprietary and ownership rights of
the Committee also vest in the State Government.
Further, s. 6 comes
into operation as soon as a local authority has passed a resolution under
s. 3 or the State Government has taken over management under s. 5, and
the provisions relating to acquisition of property of the Committee as also
of its funds by way of c·ontribution, come immediately into operation by
virtue of the amendments effected in ss. 52(1) and 59 of the Puniab
Municipal Act. [391 A-DJ
Since there is no provision for compensation in the Aided Schools Act
or s. 59 of the Municipal Act, s. 3(2) of the Aided Schools Act and the
amendments in ss. 52(1) and 59 of the Punjab Municipal Act are void
and unconstitutional. [391 DJ
Hence, the order ~I which, the movable. and immovable property of the
Committee has been transferred to the State contribution was sought be
recovered, and the sum of Rs. 53 lakhs was demanded, is illegal. [391 DE]
Municipal Co1nmittee, Antritsar v. State of Punjab, [1969] 3 S.C.R.
447, followed.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1321 of
1966.
Appeal by special leave from the judgment and order dated
November 15, 1965 of the Punjab High Court in Civil Writ No.
878 of 1964.
Niren De, Attorney-General and Naunit Lal, for the appellants.
Hardev Singh and R. N. S.ichthey, for the respond~nts.
The Judgment of the Court was delivered by
Grover, J. · This is an appeal by special leave from a judg·
ment of the Punjab High Court dismissing a petition under Arts.
226 and 227 of the Constitution which had been filed by the appellant Municipal Committee challenging the taking over by the
State of all the schools which were being run by it together with all
the buildings in which the schools were functioning and other movable and immovable properties connected with these institutions
378
SUPREME COURT REPORTS
(1970] 2 S.C.R.
which belonged to the Committee.
The order of the State for
payment of an annual contribution which upto the date of the
filing of the writ petition i.e. May 10, 1964 had reached the figure
of 53 Jakhs was also challenged.
The appellant Committee is a first cla0 3 Municipal Committee
and has been ill' existence from a long time. It has been manag,
ing its local affairs through the elected representatives from the
city who are calied Municipal Commissioners.
It is qmstituted
~nd functions under the provisions of the Punjab Municipal Act
1911. A number of primary schools were bei11g run by the Committee within the municipal limits of the town of Amritsar for
which it was getting grant-in-aid from the Punjab Government.
It was, however, running schools upto the middle and high standards for girls and boys for which all the expenses were incurred
by itself without any grant from the Government.
The primary
liability, however, for incurring the extra expenditure even in connection with the aided ~chools was of the Committee. The Punjab
Government took an administrative decision to provincialise all
the schools run by all local bodies in the State with effect from
October 1, 1957.
This information was conveyed by means of
a letter dated July 19, 1957 by the Secretary to the Government,
Education Department, through
the Deputy Commissioners in
Jullundur and Ambala Divisions.
At a meeting of the appellant
Committee held on July 31, 1957 a resolution was passed that a
strong representation be made to the Government against the decision to provincialise the schools run by the local bodies.
On
September 26, 1957 the Assistant Director of Schools wrote to
the District Inspector that "as all the local body schools are being
provincialised with effect from October 1, 1957 the tuition fees
etc. to be realized in such schools after that date should be credited to the Government in the treasury under the head ........ "
Without enacting any legjslation the State took over all the schools
!'Un by the local bodies on Octol;>er 1, 1957.
A memorandum
from the Director of Public Instructions, Punjab to the District
Inspector of Schools sent on October 5, 1957 conveyed the following direction :
"All the erstwhile Local Body Schools which have
been provincia!ised with effect from the !st October,
1957 will henceforth be known as Government High/
Middle/Primary Schools for Boys or Girls as the case
may be".
The Executive Officer of the appellant Committee (appointed under
the Punjab Municipal Executive Officers Act 1931) wrote to the
Deputy Commissioner, Amritsar on November 21, 1957 that no
formal orders had been received from the Government requirin)!;
the Committee to give up possession of the schools and it appeared
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MUNICIPAL COMMITTEE v. PUNJAB (Grover, J.)
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that no procedure had so far been devised in that behalf or for
the settlement of terms and conditions on which the buildings, furniture, fittings and other materials were to be transferred.
He
pressed for proper steJ.>S being taken. The Secretary to the Government, Punjab, Health and Local Government Department sent
a memorandum dated Seotember 10, 1958 to all the Deputy Commissioners saying that the work
of proper maintenance of the
buildings of the provincialised schools of the local bodies would
be entrusted
to the Public Works Department,
Buildings and
Roads.
A letter was addressed by the same authority dated September 30,/0ctober 4, 1958 to the Deputy Commissioners requesting them to supply immediate information showing the contributions actually deposited into the treasuries by the local bodies in
respect of the provincialisation of the schools. This was followed
by the memorandum dated December 12, 1958 to the effect that
all local bodies "be advised to execute the transfer notes in respect
of the school buildings etc by their respective Engineering Establishments in favour of the Superintending Engineers concerned".
By means of anoth'er memorandum dated December 26,
1958
orders of the Government were conveyed that immediate steps
should be taken for getting the contribution from local bodies and
also for obtaining transfor of buildings and equipment. The Deputy Commissioners were requested to get the requisite resolutions
passed by the local bodies in the prescribed form.
The appellant
Committee at its meeting held on January JO, 1959 decided not
to pay any contribution for the time bting. It was also resolved
that the Committee was not in favour of transferring the proprietary ri~hts in movable and immovable property which was in possession of the ·schools.
It appears that up till June 17, 1959 the State continued the
process of provincialisation of the schools mentioned before without any authority of law. There was no statutory provision which
entitled the State to tak~ over the school' of the local bodies including the buildings in which the schools were being run as also
furniture etc which belonged to the local bodies.
Moreover the
extraordinary step of demanding annual contribution was also
taken ~ithout .any. sanction or authority of law.
The appellant
Committee wh1ch.1s one of the biggest Committees in the State
seems to have resisted the attempt on the part of the Government
to take ovrr the sch?ols. and acquire or requisition its properties
1~ the manne~ m which 1t was done.
Legislation was for the first
time '~nacted m the shape of the Punjab Local Authorities (Aided
Schonls) Act 1959, (Act No. XXII of 1959), hereinafter ~ailed the
Act.
I.t received the assent of the President on June 9, 1959.
According to the preamble the Act was enacted to provide for the
manag~mem and control of local authorities'
schools receiving
grants m aid from the State of Punjab. By a deeming provision
380
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(1970] 2 S.C.R.
the Act was to come into force with effect from October l, 1957.
Section 2 gave the definition of "aided schools", "local authority".
and "school".
"School" has been defined to include land, buildings, pl~y-grounds and- hostels of the school and the movable property such as fu•niture, books, apparatus, maps and equipment
pertaining to the school. The following provisions of the Act as
amended may be reproduced :
S. 3 "Power of local authorities to transfer management and control of aided schools to State Government.
(1) A local authority may pass a resolution to transfer the management and control of aided school to the
State Government and communicate
the same to the
State Government.
(2) On receiving such a resolution, the State Government may direct that the aided schools shall be taken
over under its management and control and thereafter
all r'ghts and interests including the right of maintenance, management and control shall be transferred to
and vest in the State Government and the rights and interests of the local authority in respect of such schools
shall cease."
·
S. 4 "Power to withdraw grant-in-aid.-The State
Government may withdraw the grant-in-aid from any
local authority in respect.tof aided schools if the resolution mentioned in section 3, has not been passed and
communicated to the State Government within a period
of three n;;:mths from the date on which this Aet is published in the Official Gazette."
S. 5 "Power to take over aided schools where local
authority neglects to perform duty.-(!) Whenever the
State Government is satisfied that a local authority has
neglected to perform its duties in respect of aided schools
or that it is necessary in public interest to take over their
management for a period not exceeding ten year;. it may
after giving the local authority a reasonable opportunity
for showing caus~ against the proposed action, make an
order to take over the management :
Provided that in cases of emergency, where the State
Government is satisfied that such a course is necessary
in the interests of the students, it may, without giving
such notice, take over the management of such schools
after publication of a notification to that effect in the
Official Gazette."
(2) & (3) ........................... .
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S. 6 "Amendment of Punjab Acts No. III of 1911
and No. XX of 1883.-Where a local authority has
passed a resolution under s. 3 or the State Government
has taken over management of aided schools of a local
authority under section 5, the Punjab Municipal Act,
1911, and the Punjab District Boards Act, 1883, shall
be deemed to have been amended in the manner specified
in the Schedule apoended to this Act with effect from
the !st October, 1957."
Section 52(1) of the Punjab Municipal Act relates to the setting
apart of the municipal funds and apply the same for different purposes as mentioned in clauses (a) to (f). By means of the Schedule
to the Act after clause (f) of sub-s. (I ) , cl. (g) was added which
is in the following terms :
" ( g) seventhly, such sum to be paid annually by
the committee to the State Government by way of contribution as is equivalent to-
(i) the total provision made in the budget for the
year 1957-58 under the main head 'J:Oducation'
excluding educational grants and the provision
made for 'original works' relating to schools; and
(ii) a sum representing one per centum of the total
income from its own resources
for the year
1957-58, in lieu of the deductions made for 'original works' made under clause (i) :
Provided that in respect of the financial year 195758 the committee shall make a payment to the State
Government of the sums which have remained unexpended on 31st March, 1958, out of the provisions under
t!ie head 'Education' in the budget of 1957-58".
Section 59 of the Punjab Municipal Act provides that the Committee may with the sanction of the State Government transfer
to the Government any property vesting in the Committee under
s. 56 or s. 57 but not so. as to affect any trusts or public rights
G 'subject to which the property is held.
A proviso was added ta
the section by the Schedule which was as follows :--
H
"Provided thu.t where a committee has passed a resolution under section 3 of the Punjab Local Authorities (Aided Schools) Act, l 9j9, or the State Government has taken over the management of aided schools
of a committee under section 5 of that Act, all rights
and interests in the establishment, maintenance and
mapagement of the aforesaid schools immediately before
th~ Isl October 1957, including all interests in the lands,
382
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[ 1970) 2 S.C.R.
buildings, play grounds, hostels of the said schools as
also in the movable properties like furniture, books, apparatus, maps and equipment pertaining thereto shall be
deemed to have been transferred to the Stat~ Government on that date, and all unspent balances in respect
of grants ~'Id contributions received for the maintenance
and promotion of these schools shall be deemed to have
been surrendered to the State Government."
After the promulgation of the above legislation the appellant
Committee passed a resolution on February 24, 1960 reiterating
the decision taken in the Local Bodies Conference held at Jullun·
dur and its own decision to requ~st the Punjab Government to
restore the schools run by the local bodies to them. At another
meeting held on June 9, 1960 the appellant Committee decided
not to pass the resolution under s. 3 of the Act transfering its
schools and property to the State Government. The Punjab Government, however, issued a notification dated September 26, 1960
saying that the Governor was satisfied that it was necessary in
the interests of the students to t_ake over for a period of ten years
the management of the schools specified in the schedule and ad·
ministered by the Municipal Committee. Amritsar, and therefore
in exercise of the powers conferred by the proviso to s. 5 of the
Act the Government took over for a period of ten years
the
management of the said schools. The schedule contained the list
of 42 such schools.
The question of the payment of the contri·
bution which was bein.2 demanded by the Government came up
for consideration at a meeting of the appellant Committee on
January 3, 1962. It was decided that the payment be made on
the basis of a formal laid down by the State Government in that
behalf with effect from October 1, 1957 but that the propr•ccary
rights of the Committee in the school buildings be retained and
the use of these buildings free of charge be allowed to the Gov·
ernment for the purpose of running the schools.
At a subsequent
meeting held on MarclJ. 28. 1963. the appellant Committee. how·
ever, revised its previous decision in view of a resolution passed in
the meeting of the Standing Committee of Urban Local Bodies
Conference held on June 2 I. 1962. It was uecided that the State
Government was not entitled to charge contributions from the
Municipal Committee.
On April I 0. J 964 the Deputy Comm is·
sioner. Amritsar. made an order in exercise of the powers vested
in him under s. 234(1) of the Punjab Municipal Act requiring the
appellant Committee to pay an amount of Rs. 53,66,146/-
c:1
account of contribution for the maintenance of the provin·:biised
schools for the period 1957-58 to 1963-64 failing which realization
was to be made under sub-s. (2) of that secti<'n.
Thereupon the
petition under Arts. 226 and 227 of the Constitution was filed by
the appellant Committee in which apart from other matters the
validity and constitutionality of the Act were challenged. In the
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MUNICIPAL COMMITTEE v. PUNJAB (Grvver, J.)
383
return filed on behalf of the State reliance was placed on the pro-·
visions of the Act, the resolution passed by the Committee itself on.
January 3, 1962 agreeing to pay the-contribution and allow the·
use of school buildings to the Government free of charge and the
notification which had been issued under s. 5 of the Act on September 26, 1960 whereby the management of the schools of the
Committee had been taken over for a period of I 0 years_.
The High Court was of the view that since the Government !•ad.
taken over the control and management of the aided schools !•. was
considered necessary that the property in possession of these insti-.
tutions should also be taken over and managed for a limited period
of 10 years. Since no compensation was being paid for what may
be called compulsory acquisition the legislation could be struck
down as being in contravention of Art. 31(2) of the Constitution.
In the preser.t case, however, the management of the property in
possession of the schools was being taken over for a period of 10
years in the public interest by virtue of the provisions of Art. 31A(l )(b ), and the contravention of Art. 31 (2) was of no consequence. The argument raised on behalf of the State that the resolution cf the appellant Comrr;ittee dated January 3, 1962 consenting to the payment of the contribution with effect from Ortober
1, 1957 had been passed in terms of s. 3 of the Act was refutec.l.
As regards the notification issued on September 26, 1960 under
the Act the High Court was of the opinion that although it did not
contain any provision for retrospective operation it should be considered that it had retroa~tive effect since the Act itself had been
enforced from October 1, 1957. It was conceded before the High
Court that the notification did not apply to those schools which
did not receive any aid from the Government.
The learned Attorney General for the appellant Committee·
raised the following main contentions : (1) The material provisions of ·the Act were ultra vires Art. 31 (2) of the Constitution
(2) The taking oyer of movable and immovable property of the·
Committee could not possibly fall within Art. 31A(l)(b) and
such action was in direct rnntravention of Art. 31(2). (3) The
notification dated September 26, 1960 could not have been issued
under the proviso to s. 5 because there was no question of any
emergency nor such an emergency has been pleaded or proved by
the State.
(4) The said notification could not and did not validate the action taken prior to the date when it was issued nor s.
6 of the Act could be attracted which effected amendments C'f the
provisions of the Punjab Municipal Act as per the Scheduie. (5)
The annual contributions which were being demanded from the
appellant Committee were. wholly illegal and could not be levied
on account of legislative incompetence.
Now the scheme of the Act is that it is initially left to the local
authority to pass a resolution to transfer the management and con-·
384
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(1970] 2 S.C.R.
trol of aided schools to the State Government. In order to employ
compulsive persuasion the State Government can withdraw the
grant-in-aid from any local authority in respect of aided schools
if such authority does not pass a resolution in terms of s. 3 within
a period of three months from the date of enactment of the Act
( vide s. 4). Section 5 gives the power to the State Government to
take over aided schools where the local authority neglects to perform the duty but that can be done only after the local authority
has been given a reasonable opportunity for showing cause against
the proposed action and also if it is considered necessary in public
interest to take over the management for a period not exceeding
10 years. The proviso, however, arms the State Government with
powers in case of emergency and in the interests of students to take
over the management straightaway after publication of a notification to that effect.
The amendments which are effected in ss. 52
and 59 of the Punjab Municipal Act enable the State Government
to get an annual contribution from the local bodies and further to
vest in the State not only the management of th" school taken over
but also all interests in the lands, buildings etc. of the school al,mg
with the movable properties pertaining thereto which shall be deemed to have been transferred to the State.
There is no provision
w~hatsoever for an automatic retransfer of these properties after a
lapse of a period of I 0 years for which the taking over of the schools
can be effective. This means that once actiun is taken under s. 5
which can be done pursuant to a resolution passed under s. 3 or
after giving a notice to the local authority or without giving such
notice in case of emergency all the properties movable and immovable belonging to the local body pertaining to the schools taken
over become the property of the State.
This is nothing short of
compulsory acquisition within the meaning of AT!. '01(2) of the
Constitution. Under that Article no property can be so acquired
or tequisitioned unless it is under an authority of law which either
fixes the amount of compensation or specifies the principles on
which and the inanner in which the compensation is to be determined and given. There is no provision in the Act or in the amendment of s. 59 of the Punjab Municipal Act made by the Act for
payment of any compensation. On the assumption that taking over
of the property for a period of 10 years would be an act of requisitioning, the requirements of Art. 31(2) ·must be satisfied to
sustain the validity of the law.
The High Court entertained no
doubt that under that Article property could not be acquired or
requisitioned without complying with its provisions but it fel! into
an error in applying Art. 31(A)(l)(b) to the provisions under
consideration.
Under the above Article it is only the management of any
property which can be taken over for a limited period either in the
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MUNICIPAL COMMITTEE v. PUNJAB (Grover, J.)
385
cording to the High Court the Committee was indisputably theowner of the property which was being taken over by the Statebut P. C. Pandit J., wh_o delivered the judgment of the division.
bench proceeded to say :-
"In the present case, tl:e management of the property
in possession of the schools was being taken over for ten·
years in public interest and, as such, by virtue of tlie provisions of Article 31A(l)(b), the contravention of Art.
31 (2) was of no consequence.
Learned Counsel for the
petitioner submits that Art. 31A(l)(b) does not apply
to the facts of the instant case, because here the management and control of an institution namely, the school,
was being taken over by the Government, whereas this
Article applied where the management of any property
was b~ing taken over by the Government for a limited
period in the public interest. This argument is without
any merit, because the property
may
belong to anybody, whether it be an individual, or a Committee or an
industrial or commercial undertaking or any kind of
other institution. In all these cases, where the manage-·
ment of the property is taken over for a limited period
in public interest, this Article would be attracted and
the legi>la•ion would not b~ hit by the provisions
of
At ticle 31 of the Constitution".
Clause (b) in Art. 31 A(!) came to be inserted for the first time by
the Constitution (Fourth Amendment) Act 1955. It was intended
apparently to counteract the effect of the decisions in the two
Sholapur c3'e,. Charanjit Lal Chowdhuri v. The Union of India
& Or.d 1 ) and Dwarkadas Shrinivas of Bombay v. The Sho/apur
Spinning & Weoving Co. Ltd., & Ors.('\. The purpose, therefore,
of inserting this provision was to remove any legislation from the
pale of :1ttack on the ground of contravention not only of Art. 31
but also of Arts. 14 and 19.
Although management and control
of the aided schools under the impugned legislation could be taken
over for a limited per!9d in the public interest it is not possible
to understand how even the proprietary interests in the movable
and immovable property pertaining to the schools, which have
been found to belong to the Committe.e, could have been acquired
under clause (b) of Art. 31-A(I ) . With all deference to the High
Court we have not been able to properly appreciate t~e decision
on this point given in the paragraph extracted above.
The High
Court did not consider the true import and effect of the amendme!lt mad~ in s. 59. of the ~uniab Municipal Act by virtue of
)Vhtch all n~hts and interests m the lands, buildings, plavgrounds,
hostels of the schools as also in the movable property like furniture, books, apparatus. maps and equipment pertaining thereto
II) 1195P] S.C.R. Fr.9.
(2\ 11954] S.C.R.476.
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SUPREME COURT REPORTS
[1970] 2 S.C.R.
'shall be deemed to have been transferred to the State Government
with effect from October 1, 1957. We are, therefore, unable to
uphold th.~ view which leads to the result that property can
be
.acquired while taking over management and control under Art.
.31-A(l)(b) in complete negation and contravention of Art. 31(2)
·Of the Constitution.
The next question is whether there was due compliance with
.the provisions of the proviso to s. 5 of the Act. In the notification
which was issued on September 26, 1960 there is no indication
that the management of the schools was being taken over because
·Of certain emergency having arisen. If any emergency existed ii
was the creation of the government itself which had proceeded to
take over management a_nd control of the aided schools along with
the properties pertaininr to them without any authority of law
prior to the enactment of the Act. That was the reason why the
Act had to be given retrospective operation.
According to the
High Court the moment the State Government was satisfied that
it was in the interest of the students to take over the management
-0f the schools it became a case of emergency.
It also relied on
the principle that it was not necessary to mention the actual emergency which had arisen in the
notification itself or to
make a
recital that an emergency had arisen. The State could not show
by placing material before the court that it was a case of emergency justifying the action under the proviso to s. 5 because no
foundation in this behalf had been laid in the writ petition. The
third point pressed by the learned Attorney General, therefore,
cannot be acceded to.
The fourth point of the lean.~d Attorney General may now be
·considered. There was SQme argument before the High Court and
the same has been repeated before us on behalf of the State that
the question of validity of the notification and the action taken
thereunder did not arise because the Committee itself had passed
a resolution on January 3, 1962 which should be regarded as having been passed under the provisions of s. 3 transferring the management and control of the schools to the Government and agreeing
to pay the contribution with effect from October l, 1957.
The
High Court has rightly pointed out that a reading of the resolution
would show that the Committee agreed to the payment of contribution with effect from October I, 1957 in accordance with the
formula laid down by the State Government.
It was. however.
made clear that the "proprietary rights of the Committee in the
movable and immovable property pertaining to the schools would
be retained by it. The Committee had subsequently passed several
resolutions which had the effect of almost rescinding the previous
resolution. The submission on behalf of the State that the resolution dated January 3, 1962 passed by the Committee fell within
the first part of s. 3 of the Act is wholly devoid of merit and has
rightly not b~en accepted.
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MUNICIPAL COMMITTEE -v. PUNJAB (Grover, !.)
387
As regards the notification having retrospective operation we
are unable to agree with the High Court that any such effect could
be given to it. There is nothing to indicate in the notification that
it was intended to opera!(,' retroactively.
The mere fact that the
Act in terms was retrospective would not make the notification
issued under the proviso to s. 5 retrospective in the absence of
express words or appropriate language f1om which retrospectivity
would be implied.
~II that the notification
says is that the
Governor of Punjab is taking over for a period of 10 years the
management of the schools of the Committee in exercise of the
powers conferred by the μroviso to s. 5 of the Act.
This clearly
means that the management is taken over from the date of the
notification and not from any prior date.
It would follow that
whatever was done before the date of the notification regarding
the assumption of management and vesting of the Committee's
properties was wholly void and illegal.
Under s.6 of the Act it is only after the local authority has
passed a resolution under s.3 or the State Government has taken
over management of the aided schools under s.5 that ss. 52 and 59
of the Punjab Municipal Act would be deemed to have been amended in the manner specified in the
schedule with effect from
October 1, 1957 or from the date aided schools are taken over
as the case may be. If the notification dated September 26, 1960
could not be given retrospective operation the amendments in
the aforesaid provisions of the Punjab Municipal Act would be
effective only after the date of the
notification and not for the
prior period.
Thus even on the assumption that the provisions
of the Act are valid the State could not ask for any contribution
from the committee for the period prior to the date of the notification.
Bu~ the addition of cl.(g) after cl.(f) in sub-s.(1) of s.52
of the Punjab Municipal Act is void and wholly ineffective for th.e
reasons which will be presently noticed.
Chapter IV of the Punjab Municipal Act relates to municipal fund and property.
Section 51
deal~ with the constitution
of the municipal fund.
Section 52 provides for the application
of the fund.
Before the amendment made by the Act sub-s.(l)
had six clauses containing the provisions for the application of
the fund.
It is noteworthy that although the State Government
has been empowered to require the Committee to make
contributions but in each case that is
confined to
an
eventuality or a situation wr·~re certain cost has been incurred by the
Government which had to be defrayed by the Committee, e.g.,
clauses (b), (d) and (f).
According to clause (e), however, the
Committee may be required by the State Government to contribute towards the maintenance of pauper lunatics or lepers sent
from any place in the State to mental hospitals or public asylums
388
SUPREME COURT REPORTS
[ 1970]2 S.C.R.
whether in or outside the State. Sub-section (2) says that subject
to the charges specified in sub-s. ( 1) the municipal fund shall be
applicable to ·the payment of the matters set out in clause (a) to
( 1). Clause ( c) is in these terms :
"the constitution; establishment and
maintenance
of schools, hospitals and dispensaries, and other institutions for the promotion of education or for the benefit
cf the public health ...................... "
In the ~ontext of s.52 it is difficult to envisage that the municipal
fund of a particular Committee could be diverted to such institutions which had no connection with the Committee. We are,
however, aot called upon to pronounce upon the true scope, ambit and validity of all the provisions in s. 52. Clause (g) which
has now been inserted bv means of s. 6 of the Act has to be tested by the guarantees in· Part III of the Constitntion. By asking
the Committee to make contributions from its iJnds to the cost
of the schools which have been taken over by the State part of its
funds are being compulsorily acquired by the State.
This is
something which could not be done except in accordance with
the provision. contained in Art. 31 ( 2) of the Constitution.
In
Writ Petition No. 295 of 1968, Municipal Committee, Amritsar
v.