# STATE OF HARYANA v. MOHAN LAL & ORS

- **Citation:** [1970] 3 S.C.R. 202
- **Court:** Supreme Court of India
- **Decided:** 1969-10-30
- **Case number:** Civil Appeal No. 1121 of 1966
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-haryana-v-mohan-lal-ors-4902
- **Pages:** 6

## Headnote

202
STATE OF HARYANA
A
v.
MOHAN LAL & ORS.
October 30, 1969
rs. M. SIKRI, G. K. MITTER AND P. JAGANMOHAN REDDY, JJ.]
B
Punjab Town Improvement Act (Punj. 4 of 1922), ss. 1 (3) 3, 4, 4A
and 1()3(1) and Punjab Municipal Act,
1911, s. 238-Supers.,sion of
Municipality-Power of Government to set up Improvement Trust under
1922 Act-Power of Government to reconstitute dissolved Trust after re·
.constitution of Municipal Committee.
The Rohtak Municipal Committee was superseded in August 1954,
.and an Administrator was apP<>inted under s. 238 of the Punjab Municipal
Act, 1911. In June 1958 the provisions of the Punjab Town Improvement
Act, 1922, were extended to the Municipality and the Rohtak Improve·
ment Trust was set up undelr the Act. In August 1961, the Government
issued a notification under s. 103 ( 1) of the 1922 Act dissolving the Trust.
The Municipal Committee w~s reconstituted in January· 1962
and
in
October 1962 the Government decided to reconstitute the Trust.
The
~funicipal Committee .. thereupon passed a resolution opposing the reconsituation of the Trust.
In
January 1963, however, the
Government reconstituted the Trust and the Municipal Committee was asked to name its
l'epresentatives to be appointed as trustees.-
The rate·payers filed a writ
petition challenging the reconstitution of the trust and the High Court
allowed the petition.
c
n
In appeal to .this Court,
E
HELD : (I) The attention of the High Court was not drawn to s.
4A of the 1922 Act and therefore it erred in holding that the Trust could
not be set up in 1958 because, under s. 1(3) of the 1922 Act a Trust cannot be created in a Municipal area unless the committee was functioning.
Under s. 4A, where the Municipal Committee was superseded the State
Government could appoint the trustees, and there was no anomaly in the
Govelrnment nominating the trustees, because, the Administrator who had
F
all the powers and duties of the Committee under s: 238 of the 1911
Act was competent to say to the Government that the 1922 Act should
not be applied to the Municipality. [205 C-D 206 BJ
(2) Once the 1922 Act had come into operation under s. 1(3), it
continues to apply and it was not necessary to apply it again \Vhen the
Municipal Committee was reconstituted in 1962. (206 DJ
(3) Under ss. 3 and 4 of the 1922 Act and
the General Clauses
(Punjab) Act, t 898, Government has the power to create a new trust or
reconstitute a Trust which was dissolved. [206 H]
CML APPELLATE JURISDICTION: Civil Appeal No. 1121 of
1966.
Appeal by special leave from the judgment and order dated
August 17, 1965 of the Punjab High Court, in Letters Patent
Appeal No. 110 of 1965.
·
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HARYANA V. MOHAN LAL (Sikri, J.)
Janardan Sharma and R. N. Sachthey, for the appellant.
The respondent did not appear.
The Judgment of the Court -was delivered by
263
Sikri, J.-This appeal by special leave is directed against the
judgment of the High Court of Punjab accepting the petition filed
by the rate-payers of Municipal Committee, Rohtak, respJndents
before us, and ordering that the State Government shalJ not proceed with the constitution of the Rohtak Improvement Trust under
the notification of August 30, 1961.
The High Court allowed
the petition because it held ( I ) that sub-s. ( 3) of s. I of the
Punjab Town Improvement Act (Punjab Act IV of 1922)-hereinafter referred to _as the Act--only envisages the creation of a
Trust in a Municipal area where a Committee is fonctioning and
so is in a position to hold a special meeting to decide whether or
not it considers the creation of a trust desirable, and (2) that once
a trust ceases to exist under s. I 03 (I ) of the Act in order to
recreate the trust the Act has to be applied again, and as the
Municipal Committee had at a special meeting held on November 9, 1962, decided unanimously that the Act should not be
applied the Government was bound to give effect to that decision.
The learned counsel for the appellant, Mr. Sachthey, contends
that

## Text

202
STATE OF HARYANA
A
v.
MOHAN LAL & ORS.
October 30, 1969
rs. M. SIKRI, G. K. MITTER AND P. JAGANMOHAN REDDY, JJ.]
B
Punjab Town Improvement Act (Punj. 4 of 1922), ss. 1 (3) 3, 4, 4A
and 1()3(1) and Punjab Municipal Act,
1911, s. 238-Supers.,sion of
Municipality-Power of Government to set up Improvement Trust under
1922 Act-Power of Government to reconstitute dissolved Trust after re·
.constitution of Municipal Committee.
The Rohtak Municipal Committee was superseded in August 1954,
.and an Administrator was apP<>inted under s. 238 of the Punjab Municipal
Act, 1911. In June 1958 the provisions of the Punjab Town Improvement
Act, 1922, were extended to the Municipality and the Rohtak Improve·
ment Trust was set up undelr the Act. In August 1961, the Government
issued a notification under s. 103 ( 1) of the 1922 Act dissolving the Trust.
The Municipal Committee w~s reconstituted in January· 1962
and
in
October 1962 the Government decided to reconstitute the Trust.
The
~funicipal Committee .. thereupon passed a resolution opposing the reconsituation of the Trust.
In
January 1963, however, the
Government reconstituted the Trust and the Municipal Committee was asked to name its
l'epresentatives to be appointed as trustees.-
The rate·payers filed a writ
petition challenging the reconstitution of the trust and the High Court
allowed the petition.
c
n
In appeal to .this Court,
E
HELD : (I) The attention of the High Court was not drawn to s.
4A of the 1922 Act and therefore it erred in holding that the Trust could
not be set up in 1958 because, under s. 1(3) of the 1922 Act a Trust cannot be created in a Municipal area unless the committee was functioning.
Under s. 4A, where the Municipal Committee was superseded the State
Government could appoint the trustees, and there was no anomaly in the
Govelrnment nominating the trustees, because, the Administrator who had
F
all the powers and duties of the Committee under s: 238 of the 1911
Act was competent to say to the Government that the 1922 Act should
not be applied to the Municipality. [205 C-D 206 BJ
(2) Once the 1922 Act had come into operation under s. 1(3), it
continues to apply and it was not necessary to apply it again \Vhen the
Municipal Committee was reconstituted in 1962. (206 DJ
(3) Under ss. 3 and 4 of the 1922 Act and
the General Clauses
(Punjab) Act, t 898, Government has the power to create a new trust or
reconstitute a Trust which was dissolved. [206 H]
CML APPELLATE JURISDICTION: Civil Appeal No. 1121 of
1966.
Appeal by special leave from the judgment and order dated
August 17, 1965 of the Punjab High Court, in Letters Patent
Appeal No. 110 of 1965.
·
G
H
' '
I-
A
ll
c
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E
F
G
H
HARYANA V. MOHAN LAL (Sikri, J.)
Janardan Sharma and R. N. Sachthey, for the appellant.
The respondent did not appear.
The Judgment of the Court -was delivered by
263
Sikri, J.-This appeal by special leave is directed against the
judgment of the High Court of Punjab accepting the petition filed
by the rate-payers of Municipal Committee, Rohtak, respJndents
before us, and ordering that the State Government shalJ not proceed with the constitution of the Rohtak Improvement Trust under
the notification of August 30, 1961.
The High Court allowed
the petition because it held ( I ) that sub-s. ( 3) of s. I of the
Punjab Town Improvement Act (Punjab Act IV of 1922)-hereinafter referred to _as the Act--only envisages the creation of a
Trust in a Municipal area where a Committee is fonctioning and
so is in a position to hold a special meeting to decide whether or
not it considers the creation of a trust desirable, and (2) that once
a trust ceases to exist under s. I 03 (I ) of the Act in order to
recreate the trust the Act has to be applied again, and as the
Municipal Committee had at a special meeting held on November 9, 1962, decided unanimously that the Act should not be
applied the Government was bound to give effect to that decision.
The learned counsel for the appellant, Mr. Sachthey, contends
that the High Court has placed a wrong interpretation on the two
provisions mentioned abov~ and somehow s. 4-A of the Act was
not noticed by the High Court.
Before we deal with the interpretation of the provisions mentioned above it is necessary to state a few facts.
The Rohtak
Municipal Committee was superseded on August 2, 1954. The
Government purported to extend the provisions of the Act to the
whole of the area of the Municipality on May 21. 1958. The
notification to this effect reads :
"In pursuance of the provisions of sub-section ( 3) of
Section 1 of the Punjab Town Improvement Act, 1922
(Punjab Act No. IV of 1922), the Governor of Punjab
proposes to apply the provisions of the said Act to the
whole of the area of the municipalities specified below
with effect from 9th June, 1958 :-
1.
2 .....
3. Rohtak,
"
Sub-section ( 3) of s, 1 of the Act reads as follows :
"!. (3) This section and section 66 shall come into
force at O!lce.
The State Government may by notification propose to apply the rest of the Act to the whole or
any part of any municipality and to any locality adjacent
204
SUPREME COURT REPORTS
· [1970] 3 S.C.R.
thereto, on such date as may be specified in such
notification; and the Act shall come into operation after
the lapse of three months unless within' that period the
municipal committee concerned at meeting convened for
the purpose of considering the application of the Act
resolve by a majority of two-thirds that the Act should
not be so applied."
In pursuance of this notification a trust was set up.
But on
August 30, 1961, the Government issued a notification in exercise
of its powers under sub-s. ( 1) of s. 103. of the Act and declared
that the Rohtak Improvement Trust shall be dissolved with effect
from August 30, 1961 from which the Chairman and the trustees
of the aforesaid Trust ceased to· function.
Section 103 ( 1) of the Act reads as follows :
"103. (1) When all schemes sanctioned under this
Act have been executed or have been so far executed
as to render the continued existence of the trust, in the
opinion of the State Government, unnecessary, or when
in the opinion of the State Government it is expedient
that the trust shall cease to exist, the State Government
may by notification declare that the trust shal! be dissolved from such date as may be specified in this behalf
1n such notification; and the trust shall be deemed to be
dissolved accordingly."
It 'appears that on the supersession of the Municipality of
Rohtak in 1954 an Administration was appointed under s. 238 of
the Punjab Municipal Act, 1911. This section, inter alia, provides:
"238. (1) ....
( 2) When a committee is so superseeded. the
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following consequences shall ensue :-
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(a) ....
(b) all powers and duties of the committee may.
until the committee is reconstituted, be exercised and
performed by such persons as the State Government
may appoint in that behalf;" ·
Fresh elections of the Municipal Committee, Rohtak, were held
in July 1961, and the Municipal Committee reconstituted o,n
January 10, 1962. On October 23, 1962, the Government
informed the Deputy Commissioner, Rohtak, that it had decided
to reconstitute Rohtak Improvement Trust ;mmediately and asked
the Deputy Commissioner to recommend a panel of six names of
suitable persons for appointment as trustees and the Government
also asked him to call upon the Municipal Committee, Rohtak, to
elect its representatives as trustee!!.
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HilYANA V. MOHAN LAL (Sikri, J.)
205
This was not to the liking of the Municipal Committee and the
Mu.nicipal Committee unanimously passed a resolution on November 9, 1962, strongly opposing the reconstitution of the Improvement Trust, Rohtak.
The Government by notification dated January 10, 1963, in
exercise of powers conferred by sub-s. (2) of s. 4 of the Act
appointed one Major S. K. Mehta as Chairman, Rohtak Improvement Trust.
The Municipal Committee was again requested to
send two names of three members of the Municipal Committee to
be appointed as trustees as required by cl. (b) of sub-s. ( 1) of s. 4
of the Act.
Thereupon 32 rate-payers filed the petition under
Art. 226 of the Constitution challenging the reconstitution of the
Rohtak Improvement Trust.
Coming to the first point decided by the High -Court, it seems
to us that s. 4-A of the Act was not brought to its notice and if it
had been brought to its notice the High Court may well have come
to the contrary conclusion.
Section 4-A, which was inserted by
Punjab Act VIII of 1936 reads :
"4-A.
During the period of supersession of a
Municipal Committee under section 238 of the Punjab
Municipal Act, 1911, the three seats allotted to the
Municipal Committee on the trust under clause (b) of
sub-section ( 1) of section 4 shall be filled by the State
Government by appointing any three persons by !llOtification in the Official Gazette.
The term of office of
every trustee so appointed shall be three years or until
the Trust is dissolved, whichever period is less, provided
that if the Municipal Committee is reconstituted three
members of the Municipal Committee shall be elected or
appointed in accordance with the provisiQns of section
4, and on their election or appointment the three trustees
appointed by the State Government under this section
shall cease to be members of th~ Trust."
Readings. 1(3) ands. 4A of the Act, and s. 238 of the
Pu.njab Municipal Act, 1911, together, it seems to us that the true
meaning of the latter portion of sub-section ( 3) of s. 1 is that
when the Government ·applies the section and the Municipal Committee has been superseded before that date it is the Administrator
who would exercise the powers given under the latter part of that
sub-section; in other words, the Admmistrator would be competent
to say to the Government that the Act shall not come into operation.
The words of s. 238 of the Punjab Municipal Act are very
wide and it is difficult to liniit the expression "all powers and duties
of the co!Illllittee" in any manner.
The Municipality exercise?
powers by resolution passed by majority. and ~e . fact that this
particular resolution had to be by two-third ma3onty does not lead
206
SUPREME COURT REPORTS
[1970] 3 S.C.R.
to the conclusion that the power to oppose the application of the
Act vesting in the Municipal Committee cannot be exercised by
the Admi,nistrator under s. 238, Punjab Municipal Act.
Section 4A of the Act clearly proceeds on the oasis that while
the Municipal Committee stands superseded the appointment of
trustees which was originally to be made by the Municipal Committee would be made by the State Government.
As the High
Court did not have s. 4-A before it had relied on the anomaly
that where a Municipal Committee was suspended the Governmtmt
could nominate some members of the suspended Committee as
members of the Trust or otherwise fill these vacancies, and the·
High Court felt that it could not believe that it was the intention
of the Legislature.
Coming to the second point made by the High Court, it seems
that the High Court has wrongly. held that 0J11Ce the Act has been
applied it is necessary that it should be applied again when the
Municipal Committee is reconstituted.
There is nothing in the
words of sub-s. ( 3) of s. 1 to warrant this conclusion.
Once
the Act has come into operation in accordaince with the provisions
of sub-s. ( 3) o,f s. 1 there is no provision by which the Act can
cease to apply.
The only point that remains is : when a trust has been dissolved under s. 103 of the Act, can it be reconstituted under the
Act? The only provisio,ns under which a trust can be reconstituted under the Act are sections 3 and 4. Section 3 reads :
"3. The duty of carrying out the provisions of this
Act in any local area shall, subject to the conditions
and limitations hereinafter contained, be vested
~n a
board to be called "The (name of town) Improvement
Trust" hereinafter referred to as the "The Trust"; and
every such board shall be a body corporate and have
perpetual succession and common seal, and shall by the
said name sue atid be sued."
Section 4 reads;
"4. (1) The trust shall consist of seven trustees,
namely:-
"
The other sub-sections of s. 4 provide how the trustees are to be
appointed.
It seems to us that if the trust could originally be created under
ss. 3 and 4, reading ss. 3 and 4 and s. 12 o.f the General Clauses.
Act, the Government has the power to create a 1riew
trust or
reconstitute a new trust.
We may mention that s. 12 of the GeneA
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HARYANA v. MOHAN LAL (Sikri, /.)
207
A
ral Clauses (Punjab) Act, 1898, provides that "where by any
Punjab Act any power is conferred then that power may be exercised from time «> time as occasion requires."
In the result the jtidgment of the High Court is set aside, the
appeal allowed a,nd the writ petition disniissed.
There will be no
8
order as to costs throughout.
Y.P.
Appeal allowed.