JUDGMENT

S. SAGHIR AHMAD, J. - Whether the Haryana Housing Board is a "Local Authority" within the meaning of Section 32(iv) of the Payment of Bonus Act, 1965 is the question to be decided in these appeals. If it is held that it is a "Local Authority", this Act, namely, the Payment of Bonus Act, would not apply to its employees, as it is provided in Section 32(iv) that it would not apply to those categories of employees (including the employees of the "Local Authority") enumerated, specified and categorised therein.

2. "Local authority" has not been defined in the Payment of Bonus Act, 1965 but it has been defined in section 3(31) of the General Clauses Act, 1897 as under :

"3. (31) local authority shall mean a municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund."

3. Incidentally, "local authority" has also been defined in Section 2(j) of the Haryana Housing Board Act, 1971 as under :

"(j) Local authority means a municipality constituted under the Punjab Municipal Act, 1911 (Punjab Act 3 of 1911), or a Gram Panchayat constituted under the Punjab Gram Panchayat Act, 1952 (Punjab Act 4 of 1953), or a Panchayat Samiti or a Zila Parishad constituted under the Punjab Panchayat Samitis and Zila Parishads Act, 1961 (Punjab Act 3 of 1961), or an Improvement Trust constituted under the Punjab Town Improvement Act, 1922 (Punjab Act 4 of 1922)."

4. Both the definitions are conclusive in nature and only those bodies including the Municipal Board or a Gram Panchayat etc. will be treated as "local authority" as are mentioned therein. But there is a significant difference inasmuch as the words "authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund" which are found in the definition contained in the General Clauses Act are not found in the definition of "local authority" in the Haryana Housing Board Act, 1971.

5. Concept of "local authority" is also found contained in Entry 5, List II of the Seventh Schedule of the Constitution which provides as under :

"5. Local government, that is to say, the constitution and powers of municipal corporations, improvement trusts, district boards, mining settlement authorities and other local authorities for the purpose of local self-government or village administration."

6. The entry empowers the State Legislature to make law with respect to any subject relating to Local Government including the constitution of "local authorities". The State Legislature can also confer such powers as it itself possesses upon a "local authority", including the power of taxation (within the limits of List II) for the purposes of local self-government. The "local authority", undoubtedly, is a representative body but notwithstanding its representative character, it remains a subordinate authority created by a statute and, therefore, it cannot claim the power of taxation which belongs to the State Legislature except to the extent it is conferred upon it by the statute which creates it.

7. The Municipal Committees, the District Boards, Gram Panchayats and Panchayat Samitis etc. represent the units of local self-government where people of a local area govern themselves through their elected representatives in respect of a large number of matters including construction of buildings, roads, parks, lighting of streets, sewerage, conservancy and waterworks etc. These local self-governments, namely, the Municipal Boards and the District Board etc. are constituted under statutory provisions which elaborately provide for the election, through adult franchise, of persons who, on being elected, become members of the Municipal Boards or the District Board. These Boards are basically independent bodies with very little or minimal of Government control and that too in a limited field. They formulate their own policies and implement thos