( 1 ) THE appellant-Government has questioned validity of the judgment delivered in Special Civil Application No. 1565 of 1997 dated 25th July 1997 [reported in 1998 (1) GLR 321] whereby the learned single Judge has quashed and set aside order dated 12th February 1997 passed by appellant No. 1-Government under provisions of S. 263 (1) of the Gujarat Municipalities Act, 1963 (hereinafter referred to as the Act) whereby Kalol Municipality was superseded by the appellant- government. Parties in the appeal have been described as arrayed in the petition for the sake of convenience.

( 2 ) KALOL Municipality, respondent No. 3 in the petition, was superseded by respondent No. 1-Government, by an order dated 12th February 1997 and, therefore, the petitioners, some of the Councillors of Kalol Municipality, had challenged the order of supersession. The petitioners had mainly submitted before the learned single judge in Special Civil Application No. 1565 of 1997 that the impugned order of supersession was unjust, illegal and was passed without any application of mind. The said order was also alleged to be violative of principles of natural. It was submitted by the petitioners that even if some illegalities were committed, the same were committed by the office-bearers of the Municipality and not by the municipal Councillors. It was, therefore, submitted that the Municipality could not have been superseded under provisions of S. 263 (1) of the Act.

( 3 ) AFTER hearing the concerned Advocates and looking to the facts of the case, the learned single Judge was pleased to allow the petition by setting aside order dated 12-2-1997 on the ground that the impugned order superseding the Municipality was violative of principles of natural and it suffered from the vice of nonapplication of mind.

( 4 ) BEING aggrieved by the above-referred to judgment delivered in Special Civil application No. 1565 of 1997, the State of Gujarat and the Collector, Mehsana, have filed the present appeal. The learned Government Pleader appearing for the authorities has submitted the facts of the case as under.

( 5 ) AS respondent-Government was of the view that Kalol Municipality was not competent to perform or was deliberately making defaults in performance of its duties imposed under the Act, the respondent-Government had issued a show-cause notice dated 7-1-1997 calling upon Kalol Municipality to show cause as to why Kalol municipality should not be superseded in the public interest as, because of careless and negligent working of Kalol Municipality, residents of the Municipality were put to difficulties. In the said show-cause notice 14 different grounds were narrated by the respondent-Government. It has been stated in the said show-cause notice that kalol Municipality had to perform its duties as trustee as provided in S. 80 of the act but the Municipality and the office-bearers of the Municipality had acted in a manner which was not in the interest of the Municipality. It was also alleged that in the matter of giving a contract for collection of octroi to M/s. Pravin Corporation, the Municipality had done undue favour to the contractor which ultimately resulted into loss to the tune of Rs. 77. 00 lakhs to the Municipality. The said contract was given in contravention of an order passed by the Director of Municipalities. Without getting proper permission from the Director of Municipalities, 190 persons were given employment. The said appointments were beyond the sanctioned strength of the cadre and against the guidelines prescribed by the Finance Department of the respondent-Government with regard to economy drive. Moreover, several employees were given promotions though no specific rules with regard to recruitment and promotion were framed by the Municipality. In spite of the fact that the Collector, mehsana had passed an order suspending recruitment and promotion of certain employees, the Municipality had defied the said order in the matter of giving