Satish Chandra, J. - (1.) On 18th November, 1971 the State Govt. published a notification Under Section 3(1)(a) of the U.P. Municipalities Act, 1916, constituting the Town Area, Chhibra Mau, as a Nagarpalika: Municipality with effect from 22nd November, 1971. The boundaries of the municipality were confined to the boundaries of the pre-existing town area. The DM threatened to take over the affairs of the Board. The town area, its Chairman and one of its elected members came to this Court and challenged this notification and prayed for a direction to the DM, (the Appellant No. 3) not to oust or interfere with the elected members and the Chairman from functioning. A learned single Judge of this Court accepted this plea and issued the requisite directions. Hence this appeal.
(2.) The learned Advocate-General Appearing for the Appellants urged that Section 333 of the Municipalities Act applies. The DM alone was competent to function as the Board. The learned Single Judge was in error in holding that Clause (viii) of Section 333-A applied to the case.
(3.) Section 3 of the Municipalities Act provides for declaration and definition of municipalities and cities. Section 4 lays down the procedure preliminary to the notification. Under Section 3(1)(a) the State Govt. may by notification declare any local area to be a municipality. Section 6 of the Act provides that in every municipality there shall be a municipal board which will be a body corporate. Section 333 runs as follows:- "333 Exercise by District Magistrate of board's power pending establishment of board.- When a new municipality is created under this Act, the District Magistrate, or other officer, or committee, or authority appointed by him in this behalf, may, until a board is established, exercise all powers and perform the duties and functions of the board, and, he or it shall, for the purpose aforesaid, be deemed to be the board: Provided always that the District Magistrate or such other officer, or committee, or authority shall, as early as possible, make preliminary arrangements for the holding of first elections and generally for expediting the assumption by the board of its duties when constituted." S. 333-A states: "333A. Consequences of establishment of a municipality in place of town area or notified area.- Where a municipality is created in place of a town area or notified area, the following consequences shall, notwithstanding anything contained in Section 34 of the Town Areas Act, 1914 (U.P. Act 11 of 1914), or Section 339, of this Act, follow as from the date of the creation of the municipality : (i) all taxes, fees, licences, fines or penalties imposed, prescribed or levied, on the date immediately preceding the said date, by the Town Area Committee or the Notified Area Committee, as the case may be, be deemed to have been imposed, prescribed or levied by the board under or in accordance with the provisions of this Act and shall, until modified or changed, continue to be so realizable : (ii) any expenditure incurred by the Town Area Committee, or the Notified Area Committee, on or before the date immediately preceding the said date from its funds shall continue to be so incurred by the Board as if it was an expenditure authorised by or under the said Act : (iii) all property including the rights or benefits subsisting under any deed, contract, bond, security or choses-in-action vested in the town area or notified area, as the case may be, on the date immediately preceding the said date, shall be transferred to and vested in and enure for the benefit of the board; (iv) all liabilities, whether arising out of contract or otherwise which have accrued against the Town Area Committee or the Notified Area Committee and are outstanding on the date immediately preceding the said date, shall thereafter be the liabilities of the board; (v) the fund of the town area or the notified are and all the proceeds of any unexpended taxes, tolls, fees or fines, levied or realised, as the case may be, by Town Area Committee or the Notified Area Committee shall be transferred to and form part of the Municipal fund of the municipality; (vi) all legal proceedings commenced by or against the Town Area Committee or the Notified Area Committee and pending on the date immediately preceding the said date, shall be continued by or against the board; (vii) any officer or servant, who, on the date immediately preceding the said date, was employed by the Town Area Committee or the Notified Area Committee in full time employment shall be transferred to and become an officer or servant of the board as if he had been appointed by it under the provisions of this Act; and (iii) anything done or any action taken, including any appointment or delegation made, notification, order or direction issued, rule, regulation, form, by-law or scheme framed, permit or licence granted or registration effected under the provisions of the United Provisions Town Areas Act, 1914 (U.P. Act II of 1914), or the provisions of this Act as applied to the notified area shall be deemed to have been done or taken under the corresponding provisions of this Act and shall continue in force accordingly unless and until superseded by anything done or any action action taken under this Act.";