Judgement

RANGANATH MISRA, J.:- This appeal is by special leave. The appellants are residents of four villages being Bhota, Hatera, Morsu Garla and Dhamani Chambala within Hamirpur District of Himachal Pradesh. These villages are inhabited by agriculturists and have rural set-up. They used to be parts of Gram Panchayats duly constituted under the relevant statute prevalent within the State. An attempt was made to constitute a notified area as provided under S. 256 of the Himachal Pradesh Municipal Act, 1968 by including portions of these four villages for such purpose. Initially the Sub Divisional Officer of the area reported against such a move by saying that the villages were inhabited by agriculturists, the population was small, panchayats were already functioning in the area and there was not sufficient non-agricultural activity in the area which would justify these villages to come under a notified area but later the State Government decided to constitute a notified area within the meaning of S. 256 of the Act and on 31-3-1982 such a notification was published. Petitioners thereupon challenged the validity of the notification by filing an application under Art. 226 of the Constitution before the High Court. That application has been summarily dismissed and thereupon with leave from this Court, the present appeal has been filed.

2. Several affidavits have been filed on either side in support of the respective stands. There cannot be any serious dispute to the proposition that whether a particular area would be declared as notified area or not under the Act is ultimately an administrative decision. Section 256 of the Himachal Act provides :-

"256. Constitution of notified area. The State Government may, by notification, declare that with respect to some or all of the matters upon which a municipal fund may be expended under S. 51, improved arrangements are required within a specified area, which nevertheless, it is not expedient to constitute as a municipality.

(2) An area in regard to which a notification has been issued under sub-s. (1) is hereinafter called a notified area.

(3) No area shall be made a notified area unless it contains a town or bazar and is not a purely agricultural village.

(4) The decision of the State Government that a local area is not an agricultural village within the meaning of sub-sec. (3) shall be final, and a publication in the Official Gazette of a notification declaring an area to be a notified area shall be conclusive proof of such decision."

Though detailed guidelines are not indicated in the section yet from the provisions contained therein it is clear that purely agricultural villages are not to be included in a notified area and there must be a town to form the nucleus of a notified area. It is not disputed that these four villages from out of which portions have been taken out to constitute the notified area were already within Gram Panchayat duly constituted under statute. Once these areas are constituted into a notified area under the Municipal Act, the areas now included in the notified area would necessarily be taken out from the jurisdiction of the Gram Panchayats. The villagers who were elected to the Gram Panchayats and were holding office would, as a consequence of the constitution of the notified area, cease to be in office so far as the Gram Panchayats are concerned. Chapter XII of the Municipal Act dealing with notified areas provides that once a notified area is constituted, taxes would be imposed and it has not been disputed before us that the rates of such taxes would involve higher incidence and the people living within the area would be subjected to higher tax burden. From an agricultural society, the inhabitants of the area will have to switch over into a semi-urban community. There has been a serious dispute as to whether there is really a town or bazar in existence within the area. Undoubtedly, the reports in the record indicate that there are some shops and a good number of