Allowed

Sri Chirala Veera Raghava Reddy v. The Chief Secretary Government of Andhra Pradesh

Telangana HC18 Nov 2008WP/12147/2008

Case brief

AI extract

What is this about?

In these writ petitions, the Hon'ble Court examined the validity of notifications upgrading Anaparthy Gram Panchayat to Nagar Panchayat. The court held that conflicting reports on the Percentage of Employment in Non-Agricultural activities (PENA) rendered the upgradation exercise unsustainable due to lack of verified parameters.

What did the court decide?

The impugned notifications issued under Section 3 of the A.P. Panchayat Raj Act, 1994 and Section 2(42a) of the A.P. Municipalities Act, 1965 were set aside.

Sri Chirala Veera Raghava Reddy Vs… — Constitutional and Fundamental Rights | Telangana HC (2008)

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**_THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY_*

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+ Writ Petition No12147 & 20643 of 2008

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% Dated 18.11.2008

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# Sri Chirla Veera Raghava Reddy and others.

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….Petitioners

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$ The Chief Secretary and others.

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….Respondents

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! Counsel for the petitioners : Sri Gani Reddy & Sri Satyam Reddy ^ Counsel for respondents : G.P. for Municipal Administration &

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G.P. for Panchayat Raj

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< GIST:

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> HEAD NOTE:

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? Cases referred:

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THE HON'BLE MR JUSTICE L.NARASIMHA REDDY

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WRIT PETITION Nos. 12147 & 20643 of 2008

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COMMON ORDER:

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Anaparthy Village of East Godavari District had a Gram Panchayat constituted under the A.P. Panchayat Raj Act, 1994 (for short ‘the P.R.Act’). It has grown in size and activity. Therefore, proposals were mooted for upgrading it into Nagar Panchayat. This required the

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steps of denotification of the Gram Panchayat under Section 3 of the P.R.Act and a consequential notification under Section 2(42a) of the A.P. Municipalities Act, 1965 (for short ‘the Act’). While the notification under Section 3 of the P.R.Act draws a curtain on the Gram Panchayat, the notification under Section 2(42a) of the Act would bring into existence, what is known as “transitional or smaller urban area”. On such notification being published, the consequences provided for under Section 2-A of the Act ensue.

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In respect of Anaparthy Gram Panchayat, a notification under Section 3 of the P.R.Act was published in G.O.Ms.No.216, dated 07.06.2008. On the same day, the Government in Municipal Administration Department published a notification under Section 2(42a) of the Act in G.O.Ms.No.402. Through another order passed on the same date i.e., G.O.Ms.No.403, the Government appointed a special officer for the newly constituted Nagar Panchayat.

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W.P.No.12147 of 2008 is filed by a Member of the erstwhile Anaparthy Gram Panchayat, challenging the notifications referred to above, issued by the Government. W.P.No.20643 of 2008 is filed by two residents of the same village.

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The contention of the petitioners is that the parameters prescribed by the Legislature for

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constituting a Nagar Panchayat do not exist and still, the notifications were issued. They harp upon the percentage of employment in non-agricultural activities (PENA), which according to them is 20%, which is far below than the minimum requirement under the Rules issued in G.O.Ms.No.39, Municipal Administration Department, dated 03.02.1995 (for short ‘the Rules’) viz., 50%. It is also urged that other factors were not properly verified and the entire exercise was undertaken in undue haste.

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The authorities of the Panchayat Raj Department, on the one hand, and the Municipal Administration Department, on the other, have filed separate counter affidavits. They state that the prescribed procedure was duly followed and it was only on finding that the prescribed factors are satisfied that the notifications were issued.

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Sri Gani Reddy and Sri Satyam Reddy, learned counsel appearing for the petitioners in the respective writ petitions, submit that not only Section 2(42a) of the Act stipulates the requirements to be fulfilled before an existing Gram Panchayat is upgraded into Nagar Panchayat, but also the Government had framed the Rules, wherein the parameters, in terms of figures, are prescribed. They contend that even if one goes by the facts and figures furnished by the respondents in their

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counter affidavits, it emerges that no proper exercise was undertaken as contemplated under law.

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Learned Government Pleader for Municipal Administration and the learned Government Pleader for Panchayat Raj, on the other hand, submit that the notifications were issued only after ensuring proper compliance with the prescribed norms. It is urged that there existed a small discrepancy as to PENA and further steps were taken only after the verification of record.

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The petitioners do not dispute the power of the Government either to de-notify an existing Gram Panchayat or to upgrade the same into a Nagar Panchayat. The only controversy is as to whether the necessary parameters prescribed by the Government for undertaking such exercise exist in the instant case.

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Section 3 of the P.R.Act Act confers power on the Government to de-notify a Gram Panchayat. The power is almost unbridled and no parameters are prescribed for exercise thereof. Obviously it is treated as a prelude either to upgrade an existing gram panchayat or to reconstitute it. Before an erstwhile Gram Panchayat is upgraded into a Nagar Panchayat, it is essential that a notification under Section 2(42a) of the Act is issued. Such a notification would bring about what is known as “transitional or smaller urban area” and once the

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notification is issued, by operation of Section 2-A of the Act, it becomes a Nagar Panchayat. Sections 2(42a) and

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2-A of the Act read as under:

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2(42a) ‘ transitional area’ or ‘a smaller urban area’ means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in non-agricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Act, subject to such rules as may be made in this behalf.

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2-A Constitution of Nagar

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Panchayats:-

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(1) Where an area is specified as a transitional area under Clause (42a) of Section 2, a Nagar Panchayat shall be deemed to have been constituted for such transitional area.

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(2) The provisions of this Act shall apply to a Nagar Panchayat deemed to have been constituted under this section as they apply to a Municipality and to facilitate such application a Nagar Panchayat shall be deemed to be a Municipality.

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From a perusal of Section 2(42a) of the Act, it becomes clear that an area can be declared or notified as transitional or smaller urban area, only on being satisfied that the requirements as to (a) population (b) density of population (c) revenue generated for local administration (d) PENA and (e) economic importance, are fulfilled. While the sub-Section makes a reference to these parameters, in general terms, the actual figures are required to be prescribed by the Rules. It was in this

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context that the Government issued the Rules, which are very brief. Rule (2) thereof stipulates the parameters for constitution of Nagar Panchayat, which reads as under:

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2. Criteria for constitution of Nagar Panchayts:An area may be notified as Transitional Area (Nagar Panchayat) under Clause (42-A) of Section 2 of the Andhra Pradesh Municipalities Act, 1965 if the following criteria is satisfied.

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(a) Populatin 40000	: 25000 to
(b) Density of population per sq. K.M.	: 1000 and
above	Provided that
a local area wit	h a lesser density of
population may	also be
	considered
if it has acquired urban	characteristics
(c) Revenue	: Rs.40.00
lakhs and more per
annum	Provided that
a local area with	a lesser income may also be
considered if	it has
	acquired
urban characteristics
(d) Percentage of employment in Non-Agricultural activities	: 50% and
above
(e) Economic importance	: Availability
of market facilities	and potentialities to attract
industries
(f) Other Factors	: Local area
acquiring urban characteristics

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Therefore, it needs to be seen as to whether these requirements are fulfilled vis-à-vis the erstwhile

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Anaparthy Gram Panchayat. The petitioners have categorically pleaded that the activity in the village is predominately agriculture, though there is substantial industrial and commercial development. It is also pleaded that most of the residents are dependant upon agricultural activities. It is mentioned that the District Collector reported to the Commissioner of Municipal Administration that the PENA is only 21% and still, the notifications were issued.

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In the counter affidavit filed by the Assistant Secretary to Government in Panchayat Raj Department, the following facts and figures are mentioned:

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a) Population	25000 to 40000	25533
b) Density of p o p u l a t i o n as per sq.km	1000 and above. P ro v i d ed that a local area with a large density of population may also be considered if it has acquired urban characterstics	1413 per Sq.Km
c) Revenue	Rs.40.00 Lakhs and more per annum provided that a local area with a lesser income may also b e considered if it has acquired urban characteristscs	a) Land Revenue:: Rs.8,13999/- b) NALa :: 1,40,000/- c) Normal income Rs.45,95,000/- d)Total income Rs. 55,48,999/-
d) Percentage of employment in non-agriculture activities	50% and above	21%

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e) Economic	Availability of	Rice mills,
	m a r k e t facilities	poultries, ITC
importance	and potentialities	Ltd., Ammireddy
	to attract	Oils, Brick
	industries	industries, Egg exports, steel industries, Engg. Works and transport companies
f) Other	Local area acquiring urban	Anaparthi Gr. Pt. i s specially
factories	characteristics	developed economically i.e., business, agriculture & i n d u s t r i e s also there is a railway station in Anaparthy village and some express
		t r a i n s are also stopped, also having commercial
		banks, co-
		operative banks a n d community
		health center,
		private eye
		hospitals and
		other private hospitals and also having educational institutional i.e.,
		private Degree
		colleges and 3
		government High Schools.

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However, in the counter affidavit filed by the Assistant Secretary of Municipal and Urban Development Department, reference is made to the facts and figures said to have been submitted by the Divisional Panchayat Officer, which put the PENA at 75%. Learned

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Government Pleader for Municipal Administration has made available to this Court the entire record, in view of the discrepancy in the facts and figures. A perusal of the same discloses that after the procedure for upgradation of the Gram Panchayat was initiated, the Divisional Panchayat Officer addressed a letter, dated 05.05.2008 to the District Panchayat Officer, wherein he mentioned PENA at 75%. The latter, in turn, repeated the same figures in his communication, dated 12.05.2008, to the Commissioner of Panchayat Raj.

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On receipt of the report from the Panchayat Raj Department, the Commissioner and Director of Municipal Administration started exercise in his Department. He in turn addressed a letter to the District Collector to furnish the remarks on the proposals. When the District Collector addressed the Divisional Panchayat Officer to furnish the facts and figures, the latter addressed a letter, dated 18.05.2008, wherein he mentioned the PENA at 21%. The District Collector had mentioned the same in his report, dated 18.08.2008, submitted to the Commissioner and Director of Municipal Administration. The note file discloses that at one stage, doubt was expressed as to the feasibility, in view of the figures furnished by the District Collector, whereas the proposal was cleared, by making a reference to the facts furnished by the Divisional Panchayat Officer in his communication, dated 05.05.2008.

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From the above, it becomes clear that the Divisional Panchayat Officer himself has furnished conflicting facts and figures on an important parameter. It is not as if there was much gap between the two communications. On 05.05.2008, in his communication to the District Panchayat Officer, he mentioned PENA at 75%, whereas hardly within two weeks, he slashed down the same to 21%. There is some discrepancy about population and other figures also.

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It hardly needs any mention that howsoever attractive the upgradation of a Gram Panchayat into a Nagar Panchayat or Municipality may be, it would have its own impact upon the lives of citizens in terms of tax regime, their freedom to undertake constructions etc. It is not without reason that the Legislature insisted that the PENA must be not less than 50% for a Gram Panchayat to be upgraded as Nagar Panchayat. Even if a particular Gram Panchayat is flourishing and large in size, it cannot be converted into a Nagar Panchayat, in case, the population is predominately dependant upon agriculture. The upgradation of a Gram Panchayat into a municipality would have its own adverse effect upon agriculture. So many restrictions come to be imposed and the culture brought about in the habitat would not only discourage but also, in a way, make it impossible for the agriculture to be carried on in the normal course.

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Therefore, the respondents ought to have been more careful and certain in ensuring the fulfillment of the parameters, before the Gram Panchayat was upgraded into Nagar Panchayat. Since it has emerged that the facts and figures on an important aspect were totally at variance, the notifications cannot be sustained.

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The writ petitions are accordingly allowed and the impugned notifications are set aside. It is, however, made clear that in case, the respondents intend to repeat the exercise, they shall undertake thorough verification of the relevant parameters and the record must reflect the same. There shall be no order as to costs.

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_________ 18.11.2008

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Note: Issue C.C. in three days. L.R.Copy to be marked. (B/o) JSU

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THE HON'BLE MR JUSTICE L.NARASIMHA REDDY

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WRIT PETITION Nos. 12147 & 20643 of 2008

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Date: 18.11.2008

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JSU