The court affirmed that the Governor's discretion in designating municipalities must adhere to specified constitutional parameters, and the provisions of the Act of 2009 prevail over those of the Act of 1994.

Order :

1. Learned Senior Advocate and Additional Advocate informs the Court that the present writ petition is covered by the judgment passed by this Court in D.B. Civil Writ Petition No.20142/2024 (Motan Das & Ors. V/s The State of Rajasthan & Ors.) and other connected cases, decided on 28.02.2025. The operative portion of the said judgment reads as under:-

“9. This Court also observes that for the purpose of this case, it is relevant to refer to Article 243-P(e) of the Constitution of India which defines the term “Municipality” to mean an institution of self-government constituted under Article 243-Q.

10. Article 243-Q of the Constitution of India reads as follows:

“243-Q. Constitution of Municipalities. - (1)

There shall be constituted in every State-

(a) Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural to an urban area;

(b) a Municipal Council for smaller urban area; and

(c) a Municipal Corporation for a larger urban area, in accordance with the provisions of this Part:

Provided that a Municipality under this clause may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit by public notification, specify to be an industrial township.

In this article, “a transitional area”, “a smaller urban area” or “a larger urban area” means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in non agricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part.”

11. This Court is conscious of the judgment rendered in the case of Champa Lal (supra), relevant portions of which are reproduced as follows:

“Article 243-Q contemplates the constitution of three different categories of bodies known as (1) Nagar Panchayat for transitional area (2) Municipal Council for a smaller urban areas, and (3) Municipal Corporation for a larger urban area. It is declared under Article 243-Q(2) that the expressions “a transitional area”, “a smaller urban area” and a “larger urban area”

(hereinafter collectively referred to as “Areas”) would mean such areas as may be specified by the Governor by a public notification for the purpose of Part IX-A of the Constitution of India. Article 243-Q(2) further obligates the Governor to have due regard to the various factors mentioned therein before specifying the Areas i.e., the population of the area, the density of the population, the revenue generated in the area for local administration, percentage of employment in non-agricultural activities, the economic importance or such other factors as he may deem fit.

8. It, therefore, appears from the scheme of Article 243-Q(2) that the Governor is not free to notify “Areas” in his absolute discretion but is required to fix the parameters necessary to determine whether a particular AREA is transitional area or a smaller urban area or a larger urban area with due regard to the factors mentioned above. It is implicit that such parameters must be uniform for the entire State. It is only after the determination of the parameters, various municipal bodies contemplated under Article 243-Q(1) could be constituted.”

12. This Court is also conscious of the judgment rendered in the case of Ashok Khetoliya (supra), wherein while explaining the scope of legislative power vis-a-vis Article 243-Q, the Hon’ble Supreme Court held as follows: “16. Since the local Government falls in entry 5 of List II of the Seventh Schedule, therefore, it is the State Legislature alone which is competent to legislate in respect of the municipalities with only one limitation that the provisions of the State Act cannot be