Important points
1. Creation of a separate administrative unit i.e. Industrial Township excluding areas from Gram Panchayat is not contrary to the scheme of Parts IX and IXA of the Constitution of India since Article 243Q provides for the creation of such a separate administrative unit in the form of Industrial Township.
2. Although proviso to clause (1) of Article 243Q of the Constitution of India refers to ‘such urban area or part thereof’, this urban area also covers a transitional area, in transition from rural to urban and as such it cannot said that the proviso applies to only to urban area.

Headnote:Gujarat Industrial Development Act, 1962 - Section 16 - Gujarat Municipal Act, 1963-Section 264A -Constitution of India, Part IX, and IXA - Industrial township-Creation by excluding areas from Gram Panchayat - Constitutional validity-By virtue by power under Gujarat Industrial Development Act (GIDA) certain areas of villages declared as industrial area-Subsequently area declared as notified area-Thereafter by notification areas in question excluded from Gram Panchayats in question and declared as industrial township-Writ petition by Gram Panchayats to quash notification-Plea that notification under Section 16 of GIDA and Section 9(2) of Gujarat Panchayat Act contrary to Part IX and IXA of Constitution-Contention that area forming part of a Panchayat under Part IX of Constitution cannot be treated as an Industrial township under Part IX of Constitution - Not sustainable-Industrial area developed by GIDA can hardly be looked upon as rural area governed by Part IX of Constitution-If by a notification issued under Section 16 of GIDA these area are deemed as notified area under Gujarat Municipalities Act it is equated with Industrial township under Part IXA, proviso to clause (1) of Article 243Q-Creation of industrial area as a separate administrative unit is not contrary to scheme of Parts IX and IXA of Constitution.
       Held : The Gram Panchayats affected have contended that the notification of 7.9.1993 issued under Section 16 of the Gujarat Industrial Development Act is contrary to Parts IX and IXA of the Constitution brought into force by the 73rd and 74th Amendments. Hence the notification is illegal and void. The said Gram Panchayats also contend that the notification of 7.9.1993 issued under Section 9(2) of the Gujarat Panchayat Act, 1961 excluding the notified area from the gram panchayat is also contrary to Parts IX and IXA of the Constitution. The contention appears to be that if any area forms a part of a panchayat under Part IX of the Constitution it cannot be treated as an industrial township under Part IXA of the Constitution.
       16. The contention is based on a misconception about the relationship of the provisions of Parts IX and IXA of the Constitution with any legislation pertaining to industrial development. The Gujarat Industrial Development Act operates in a totally different sphere from Parts IX and IXA of the Constitution as well as the Gujarat Panchayats Act, 1961 and the Gujarat Municipalities Act, 1962 - the latter being provisions dealing with local self Government while the former being an Act for industrial development, and orderly establishment and organisation of industries in a State. The industrial areas which have been notified under Section 16 of the Gujarat Industrial Development Act on 7.9.1993 were notified as industrial areas under the Gujarat Industrial Development Act long back in the year 1972. These industrial areas have been development by the Gujarat Industrial Development Corporation and they can hardly be looked upon an rural areas covered by Part IX of the Constitution. It is only such industrial areas which can be notified under Section 16 of the Gujarat Industrial Development Act, 1963. If by a notification issued under Section 16, these industrial areas are deemed to be notified areas under the Gujarat Municipalities Act and are equated with industrial townships under the proviso to Clause (1) of Article 243Q, the constitutional scheme is not violated. In fact, under Chapter 3 of the Gujarat Industrial Development Act, 1962, the Gujarat Industrial Development Corporation has been given power, inter alia, to develop land for the purpose of facilitating the location of industries and commercial centres. It has also been given the power to provide amenities and common facilities in such areas including provision of roads, lighting, water supply, drainage facilities and so on. It may do this neither jointly with Government or local authorities or on an agency basis in furtherance of the purposes for which the corporation is established. The industrial area thus has separate provision for municipal services being provided by the Industrial Development Corporation. Once such an area is a deemed notified area under the Gujarat Municipalities Act, 1964, it is equated with an industrial township under Part IXA of the Constitution, where municipal services may be provided by industries. We do not see any violation of a constitutional provision in this scheme. (Paras 15 and 16)
       A municipal corporation Act and an industrial development Act have distinct fields of operation and there is no inter se conflict between the two. By reason of the notifications of 7.9.1993, the industrial area developed under the Gujarat Industrial Development Act is also deemed to be an industrial township for the purposes of local self Government. Any possible conflict is also removed by the second notification on 7.9.1993 removing this area from the ambit of the Gujarat Panchayats Act, 1961. The contention, therefore, that an area forming a part of a panchayat under the Gujarat Panchayats Act, 1961 cannot be a notified area under the Gujarat Municipalities Act loses all force. (Para 17)
       Explaining the purpose behind Section 16 the High Court has rightly held that having regard to the power conferred upon the Gujart Industrial Development Corporation in the matter of provision of amenities and common facilities in industrial estates and industrial areas, on levy of certain charges upon those who set up industries therein, an industrial area would ordinarily be a self-sufficient township in itself which provides its own amenities and recovers charges therefor. A local authority having jurisdiction over such area will have to perform very few of its statutory or discretionary duties in respect of such area. Yet it may levy and collect taxes from those who set up industries in the area. It is to avoid this virtual dual control and administration which might impede the growth and development of industries that provision has, been made in Section 16 for constituting an industrial area into a notified area and thereby converting it into a separate administrative unit. As we have stated earlier, creation of such a separate administrative unit is not contrary to the scheme of Parts IX and IXA of the Constitution when Article 243Q provides for the creation of such a separate administrative unit in the form of an industrial township. (Para 20)
       (ii) Constitution of India-Article 243Q-Constitution of municipalities-Industrial township-Creation of-Proviso to clause (1) of Article 243Q-Whether applies to transitional area-Although proviso refers to such urban area, this urban area also covers transitional area, in transition from rural to urban.
       Held : It is contended that the proviso to Clause (1) of Article 243Q applies only to urban areas. It does not apply to a transitional area. Since the industrial areas in question have been subsequently notified as transitional areas they cannot be equated with industrial townships. This contention also cannot be accepted. Article 243Q deals with constitution of municipalities. Municipality is defined under Article 243P(e) to mean “an institution of self-government constituted under Article 243Q. Article 243Q constitutes three types of municipalities- (a) a Nagar Panchayat (b) a Municipal Council and (c) a Municipal Corporation. The proviso to Artcile 243Q deals with all three types of municipalities constituted under Clause (1). It provides that a municipality under Clause (1) may not be constituted in certain circumstances. This would refer to any of the three types of municipalities. Although the proviso refers to such urban area or part thereof, this “urban” area also covers a transitional area, in transition from rural to urban. It is because this area is also in the process of turning into an urban area that it is put under Part IXA which deals with municipalities in urban areas. Therefore, in respect of any of these three types of areas set out in Clause (1) of Article 243Q, having regard to the size of the area, the municipal services being provided or proposed to be provided by an industrial establishment in that area, and such other factors as the Governor will deem fit to consider, he may, by public notification specify such area to be an industrial township. All these relevant factors would be in operation in an industrial area already notified many years back under an Industrial Development Corporation Act as in the present case. Therefore, there is no breach of Article 243Q if such an area is, under the provisions of an Industrial Development Act, equated with an industrial township under Article 243Q. (Paras 18)
       (iii) Gujarat Industries Development Act, 1962 (GIDA)-Sections 16 and 68-Gujarat Municipalities Act, 1963 (GMA)-Section 264-Notified Area-Notification of-Under GIDA an Industrial Area can be declared as Notified Area which will be Governed by GMA-Procedure prescribed under GMA to declare an area as Notified Area not applicable when GIDA notifies an industrial area as Notified Area.
       Held : Section 16 gives power to the State Government to issue a notification under which it can declare that an industrial area as defined in the Gujarat Industrial Development Act, 1962 would also be a deemed notified area under the Gujarat Municipalities Act, 1963. This can be done simply by a notification issued by the State Government and it does not require the formalities prescribed under the Gujarat Municipalities Act, 1963 for creating a notified area, because the section begins with the words “notwithstanding anything contained in the provisions for the time being in force relating to notified areas in the Gujarat Municipalities Act, 1963”. Therefore, there are two important aspects of Section 16 of the Gujarat Industrial Development Act, 1962. First, it enables the State Government to equate an industrial area under the Gujarat Industrial Development Act, 1962 with a notified area under the Gujarat Municipalities Act, 1963 by a fiction. This fiction can be brought into existence by a notification. Therefore, the provisions of the Gujarat Municipalities Act, 1963 for the creation of the notified area will not apply to a notified area created under Section 16. Also, a notified area, so created, would be governed by all the provisions of the Gujarat Municipalities Act, 1963, applicable to notified areas under that Act. (Para 6)

Judgment

Mrs. Sujata V. Manohar, J.-Leave granted.

2. All these appeals raise common questions of law. For the sake of convenience we are referring to the facts pertaining to Saij Gram Panchayat in appeal arising from SLP(C) No. 3765 of 1998.

3. The Gujarat Industrial Development Act, 1962 was enacted to make special provisions for securing the orderly establishment and organisation of industries in industrial areas and industrial estates in the State of Gujarat and for the purpose of establishing commercial centres in connection with the establishment and organisation of such industries; and for that purpose to establish an Industrial Development Corporation and, for purposes connected with these matters. This is the avowed purpose of the Act as set out in the preamble. Under Section 2(g) of the Gujarat Industrial Development Act, 1962, “industrial area” means “any area declared to be an industrial area by the State Government by notification in the Offical Gazette, which is to be developed and where industries are to be accommodated”.

4. On 29.9.1972 a notification was issued by the State Government under Section 2(g) of the Gujarat Industrial Development Act, 1962, declaring certain lands of village Saij, Kalol Taluka, District Mehsana as Kalol Industrial Area. By a subsequent notification of 24.8.1978 issued by the State Government under Section 2(g), the Survey numbers described in the earlier notification pertaining to Kalol Industrial Area were notified.

5. Under Section 16 of the Gujarat Industrial Development Act, 1962 which was in force at all material times it is provided as follows :-

“Section 16 : Notwithstanding anything contained in the provisions for the time being in force relating to notified areas in the Gujarat Municipalities Act, 1963, the State Government may, by notification, in the official gazette, (a) declare that the provisions relating to notified areas and any other provisions of that Act shall extend to and be brought into force in any industrial area, and thereupon such area shall be deemed to be a notified area under that Act;

6. Section 16 gives power to the State Government to issue a notification under which it can declare that an industrial area as defined in the Gujarat Industrial Development Act, 1962 would also be a deemed notified area under the Gujarat Municipalities Act, 1963. This can be done simply by a notification issued by the State Government and it does not require the formalities prescribed under the Gujarat Municipalities Act, 1963 for creating a notified area, because the section begins with the words “notwithstanding anything contained in the provisions for the time being in force relating to notified areas in the Gujarat Municipalities Act, 1963”. Therefore, there are two important aspects of Section 16 of the Gujarat Industrial Development Act, 1962. First, it enables the State Government to equate an industrial area under the Gujarat Industrial Development Act, 1962 with a notified area under the Gujarat Municipalities Act, 1963 by a fiction. This fiction can be brought into existence by a notification. Therefore, the provisions of the Gujarat Municipalities Act, 1963 for the creation of the notified area will not apply to a notified area created under Section 16. Also, a notified area, so created, would be governed by all the provisions of the Gujarat Municipalities Act, 1963, applicable to notified areas under that Act.

7. Section 264-A(1) of the Gujarat Municipalities Act, 1963 as it stood prior to its amendment on 20.8.1993, dealt with the creation of a notified area. It provided that the State Government could, by notification declare that the respect to some or all of the matters upon which a municipal fund may be expended, improved arrangements are required within a specified area, which, neverthless, it is not expedient to constitute as a municipal borough under Section 4. On such declaration by a notification, under sub-section (2), an area in regard to whic

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1999 Supreme(SC) 84

Cases Referred (4)